Today was the first day of the Buyouts conference here in New York.
David Rubenstein, CEO and co-founder of the Carlyle Group, spoke again about the importance of China. Scott Sperling, the co-president of Thomas H. Lee Partners, said they are “basically” comfortable with Carlyle owning AlpInvest.
But I had my own take on the big issue facing the industry: Will private equity make a play for the Dodgers?
Sports teams aren’t a new investment for PE firms. Earlier this month, Tom Gores and Platinum Equity announced a deal (I was told it was a little more than $300 million) for the Detroit Pistons.
In terms of a play for the Dodgers, PE firms likely won’t be serious contenders for the team, executives at the Buyouts conference said. It wouldn’t work for private equity, said Rick Schifter, a partner with TPG Capital, who spoke to me on the sidelines. “It’s a rich man’s game,” he said. “To a certain extent, it’s more of a vanity play.”
Rick Reisner, a principal at TVV Capital, said that football is a better investment than baseball because the NFL has a superior business model. “They have collectively negotiated a salary or expense cap which gives owners complete visibility (in)to their major expense item.”
Baseball revenue is more localized, Schifter added. In football, TV rights fees and sponsorship fees are negotiated by the league, not by the individual teams, said Reisner. “This has resulted in a much bigger pie for football owners to split,” Reisner said.