Private equity bids lodged for A-League stake as club owners consider selling a minority stake

Melbourne Victory’s Gbenga Folami battles WSW’s Jordon Mutch on April 23. Picture: Getty Images

Forget the European Super League, it seems Australia could be where the action is for soccer investment.

The struggling A-League — which from July will be owned by the 12 entrepreneurs, investment groups and, in the case of Melbourne City, a city state — is in the market for private equity investment that is said to value the competition at more than $200m.

That would be a hefty valuation, given the league’s 12 teams are losing tens of millions of dollars annually, television ratings have slumped and COVID-19 has hit already falling attendances.

But officials are said to have been in talks with various parties to inject some much-needed capital into the league in a move that might also be tied to a new streaming broadcast deal from next season.

Sources say the owners group, which has fought for control of the league for years, is unlikely to be prepared to relinquish majority control but would be willing to sell down as much as 29 per cent to a buyer.

One party said to have looked at the numbers is US firm Silver Lake, which put $US500m into City Football Group in 2019 for a 10 per cent stake. Majority-owned by Abu Dhabi, CFG owns a global network of clubs headed by English Premier League giant Manchester City and including Melbourne City.

CFG director Simon Pearce is a major mover and shaker in Australian soccer, and numerous former CFG officials are now running the sport in Australia.

One mooted deal would see Silver Lake take a 25 per cent stake in the A-League, valuing it at $200m-$250m.

Sources say there might even be another unsolicited offer on the table from other investment parties, which could involve a global streaming service such as DAZN or other broadcasters.

That offer is said to value the league at up to $400m, surely a bet on future growth rather than current financial performance. Outside observers suggest that number is probably at the more speculative end of the spectrum.

Nine Entertainment and its streamer Stan have also shown interest in the A-League rights, currently held by Fox Sports.

The league is hopeful of getting other interest, including the likes of Optus Sport, which currently holds EPL rights, though its ratings are down.

Foxtel walked away from a six-year deal with Football Federation Australia reportedly worth $60m a year last year as the pandemic threatened leagues worldwide, instead signing up for one year worth about half the previous annual value. Sources close to key A-League clubs say a new TV deal is likely to be put to owners in tandem with an equity injection, with offers from streaming services said to be well ahead of Foxtel’s best current offer.