Legends Valued At $1.35 Billion on Sixth Street’s Control of Hospitality Joint Venture

Via Sportico

Private equity firm Sixth Street is said to be buying a controlling share of Legends, the sports hospitality, sponsorship and sales consultancy co-founded by the New York Yankees and Dallas Cowboys, according to people familiar with the sale.

The deal values Legends at $1.35 billion, said the people, who were granted anonymity because the terms are private. Sixth Street will own 51% following the close of the transaction. The Yankees and Cowboys will split the rest.

The deal should help accelerate Legends’s long-term growth. It also comes at a critical time. After nearly 12 months of pandemic-disrupted seasons, matches and tours, the sports and entertainment industries are starting to prepare for life after COVID-19. The new business reality could upend stadium construction, merchandise sales, concessions and ticketing, all areas of focus for Legends.

New Mountain Capital—which in 2017 bought roughly a third of Legends in a deal that valued the company at more than $700 million—is exiting as part of the Sixth Street transaction. The current Legends management team, which includes CEO Shervin Mirhashemi and COO Mike Tomon, will remain in place.

Sixth Street, which has $50 billion under management, was founded in 2009 as an arm of TPG, a private equity firm part-owned by Seattle Kraken owner David Bonderman. The business was spun off of TPG last year, and Sixth Street immediately began raising money for its flagship fund, named TAO. The group raised $10 billion between April and the end of August, one of the largest pools of private equity ever gathered so quickly, according to the Wall Street Journal.

TAO is prioritizing assets that can grow double-digits annually and tend not to be subject to the moves of the broader stock market, according to a presentation given last summer. It also favors investments in which it is the only private equity owner—80% of the fund’s gains, according to that presentation, are from such companies.

The firm likely sees Legends as capable of growing fast enough to produce at least a 13% internal rate of return each year—the average for the TAO fund over its lifetime—without being correlated to stocks, a feature of sports-team related investments generally. And while most private equity investments are made with an eye toward cashing out in three, five or 10 years, TAO’s philosophy is more open-ended, an approach that should satisfy Legends’s long-term horizon.

Legends was co-founded in 2008 by the Yankees and Jones Concessions LP, an affiliate of the Cowboys. The company started primarily as a concession and hospitality service, but over time expanded its offerings to include sponsorship valuations, naming rights sales, hospitality, ticketing, fundraising, e-commerce and merchandising.

The company works with a number of teams, venues and entertainment companies, such as Liverpool FC, the University of Notre Dame, Ohio State University, UFC, the Cleveland Browns, Wimbledon and SoFi Stadium. It is also the sponsorship sales agent for the 2028 Los Angeles Olympics.

Moelis & Company and Herrick & Feinstein advised Legends on the deal, which is expected to close in the first quarter. Sixth Street was advised by Ropes & Gray and Goldman Sachs. (Goldman was a founding Legends investor but sold its stake in 2012.)

(This story has been corrected and updated to show when Goldman sold its stake in Legends in the last paragraph.)

Sixth Street Nears Deal To Take Control Of Sports Group Legends Hospitality

via Financial Times 


The private investment group Sixth Street Partners is nearing a deal to take a majority stake in Legends Hospitality, the sports and entertainment company co-owned by New York Yankees and the Dallas Cowboys, that would value the group at $1.35bn, according to people briefed on the discussions.

The deal, which could be announced as soon as Monday night, would give Sixth Street a majority ownership of the company, which offers services including stadium concessions, naming rights and merchandise sales for a variety of professional and college sports teams. Baseball team Yankees and American football’s Cowboys would continue their involvement in the company, the people said.

The transaction underscores the influx of private capital into the realm of professional sports during the pandemic, as leagues and teams look to shore up financing as they contend with depressed or nonexistent ticket sales and associated concessions. 

News of the deal was earlier reported by The Wall Street Journal. 

The Legends deal by Sixth Street Partners, which has more than $50bn in assets under management, is its latest investment into an industry hard-hit by pandemic restrictions. In April the firm joined Silver Lake in raising $1bn in debt and equity for Airbnb, the short-term accommodations platform. In addition to Legends’ businesses for sport franchises, whose clients include the University of Notre Dame and Spain’s Real Madrid, the company also provides sales and experience planning at attractions including London’s View from the Shard and the One World Observatory at New York’s World Trade Center. 

Sports leagues across the US and around the world have been hamstrung by the surging Covid-19 pandemic, particularly Major League Baseball, which relied on ticket sales and stadium concessions for almost 40 per cent of its revenues in 2019. 

At the same time, valuations of clubs have only accelerated over the past year. In October the hedge fund titan Steve Cohen bought baseball team New York Mets for more than $2.4bn, a North American record. Last month Qualtrics founder Ryan Smith finalised a purchase of basketball team Utah Jazz for more than $1.6bn, according to a person familiar with the deal, up from the $24m paid by the previous owners in the mid-1980s. 

In recent months private capital has been undeterred by pandemic distress and encouraged by steady or increasing appreciation of sports assets, seeking investments in the industry in anticipation of an eventual return to normalcy. “People are going to want to go to sports events, they’re going to want to go to concerts — whether that’s six months from now or 12 months from now, it’s going to come back at some point,” said one of the people briefed on the Legends deal.