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Volume 21 No. 34
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In hot market, MP & Silva latest to shop stake

European sports agency MP & Silva, which recently opened its first U.S. office, is shopping a stake in the firm, financial sources said.

The London-based firm, best known for handling media rights sales throughout Europe, especially in soccer, is the latest company looking to tap the financial market’s appetite for entities that hold sports rights. Major firms that sold in the past few years include Infront Sports & Media and IMG.

The stake in MP & Silva has been available for a few months, and UBS out of Italy, the home country of the agency’s founders, is brokering the potential sale, sports finance sources said. The company is seeking a valuation of 12 times cash flow, which would put a value of around $1 billion on the company, these financial sources said.

“MP & Silva is evaluating options to add a partner to continue its growth trajectory,” a company spokeswoman wrote in an email. “UBS is assisting us. We have no comments regarding value or partner.”

KEY MP & SILVA CLIENTS

Arsenal
■ ESPN
■ NBA
■ English Premier League
■ French Open
                                                 Source: MP & Silva website

The company’s website said it has annual revenue of $720 million and provides more than 10,000 hours of programming to over 200 broadcasters in 215 countries. The company is controlled by Andrea Radrizzani and Riccardo Silva, who own a combined 80 percent of its shares, according to the website.

Over the past year, the company has made significant inroads in the U.S., led by the company’s third founding partner, Carlo Pozzali, since 2005. It recently opened a New York City office and named Daniel Cohen senior vice president and managing partner of the Americas. The agency also won the bid to sell the NFL’s media rights in most of Europe in a five-year deal.

Private equity is flowing into sports because it is one of the last bastions of must-see content. Billions of dollars from private equity firms over the last few years have been invested in sports, attracted by the media, marketing and event companies in the sector. And agencies, by representing leagues and players, are well-positioned to take advantage.

“There is a lot of interest in the agency business. The bloom is not off the rose,” said David Moross, a private equity executive with deep experience in the sports space through his Falconhead Capital. “This is still a very attractive industry that has a lot of money chasing sports.”

Will Wynperle, a partner with Shamrock Capital Advisors, which invests in and buys sports companies, added, “Given the proliferation of mobile and other digital distribution channels, there are many more ways to monetize sports rights than there were just a few years ago. These agencies are well-positioned to continue to drive increasing value through these new channels.”

Just this month, Moody’s Investors Service issued a glowing report on Creative Artists Agency, noting, “Sports representation has been a source of strong growth for the company benefiting from the increasing value of sports content.

“Growth in sports has been driven by advertisers desire to reach a large number of consumers on a real time basis (instead of time shifted via DVR), strong sports ratings in an era of audience fragmentation from traditional broadcast networks, and the ramp up of Fox Sports and NBC Sports channels,” the Moody’s report added. Private equity firm TPG Capital owns CAA.

MP & Silva is not selling a majority stake in the company, and is looking for a financial investor, not a strategic partner, the financial sources said. That likely will reduce how much the company can raise.

“There will be a considerable reduction in valuation if it is a minority,” Moross said. “People in this business want some say.”