Ares Makes $1 Billion Wager on Sports From MLB to Formula One

(Bloomberg) -- Ares Management has invested more than $1 billion in sports-related properties, including in teams such as Formula One's McLaren Racing and Major League Baseball's San Diego Padres.

The alternative asset manager said in a statement reviewed by Bloomberg News that it struck several deals over the past six months in sports. It didn't disclose the terms of the transactions, which range from Ares taking a minority ownership stake to refinancing bank debt.

In McClaren, Ares is making a minority investment as part of a consortium, according to the statement. It's the first time the Los Angeles-based firm is investing in Formula One, Ares partner and co-head of U.S. direct lending Jim Miller said in an interview.

Ares also made its first foray into Major League Baseball, agreeing to lend to the Padres franchise, said partner and co-head of U.S. direct lending Kort Schnabel. The firm additionally helped baseball equipment manufacturer Rawlings finance its acquisition of Easton Diamond Sports.

Firms like Ares have become a growing source of capital for companies looking for financing that is more customized than banks can offer. The sports industry, meanwhile, has drawn in some of the biggest names on Wall Street, who are attracted by the soaring valuation of professional franchises. That includes Tony Ressler, the billionaire chairman and co-founder of Ares, who is the principal owner of the National Basketball Association's Atlanta Hawks.

Hockey, Rugby

Among the other Ares transactions, the firm is lending money to the National Hockey League's Ottawa Senators, Rugby Australia and the Professional Fighters League, a mixed martial arts promoter. It also took a minority equity interest in Meadowlark Media, a sports media company started by former ESPN employees.

The coronavirus pandemic shuttered stadiums across the world, leaving team owners looking for new sources of capital. Ares is taking a long term view on its relationships with these teams and organizations and not merely looking to help them rebound from the past 15 months, said Mark Affolter, partner and co-head of U.S. direct lending.

“We believe the strong secular demand for content in the sports, media and entertainment sector is driving the need for flexible capital,” he said in an interview.

Ares announced last week that it had invested in Club Atletico de Madrid, a team that plays in Spain's elite soccer league La Liga.