https://www.smh.com.au/sport/soccer/a-leagues-set-for-130-million-payday-with-equity-sale-to-us-firm-20211023-p592jm.html
A-Leagues set for $130 million payday with equity sale to US firm

By Dominic Bossi

October 24, 2021 — 5.30amSaveShareNormal text sizeLarger text sizeVery large text size0The A-Leagues are set to receive a game-changing payday by selling a stake of the competition to an American private equity firm for $130 million, in what will be the biggest single injection of cash into Australian club football.

The Sun-Herald and Sunday Age can reveal the Australian Professional Leagues, the new owners and operators of the A-League Men and A-League Women, are in the advanced stages of talks to sell a significant stake of the competitions to US-based firm Silver Lake.

While a deal is yet to be finalised, several sources with knowledge of the negotiations suggest an in-principle agreement has been reached to sell a stake of about 30 per cent of the competitions for a fee understood to be about $130 million, valuing the A-Leagues at more than $430 million.The two parties have been deep in negotiations for an equity sale for several months but are now on the cusp of finalising a deal that would give the once financially strapped competition a massive cash reserve.Many of the competition’s major stakeholders were briefed about the proposed sale this week. The deal would also need federal government regulatory approval.The APL declined to comment when contacted on Saturday, however sources with knowledge of the deal say Football Australia is unlikely to stand in the way of the sale, as the governing body would also benefit financially from the transaction. FA retains shares in the competition after control of the A-Leagues was transferred to the clubs in December last year.Should the equity deal go through, it would represent the biggest commercial deal in the history of Australian club football and allow the A-Leagues to pursue lofty off-field and marketing ambitions while providing long-term financial stability.While A-League clubs will likely receive some of the windfall of the proposed sale, most of the funds will be put towards building a new digital media platform, as well as covering the costs of the competition’s promotion, long-term operating costs, future investments and, potentially, enabling clubs to buy more marquee players.If the sale goes through, Silver Lake will join broadcaster CBS Viacom (owners of Network Ten and Paramount+) as commercial partners with equity stakes in the A-Leagues, while the 12 clubs will remain the majority owners of the competition.

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The impending partnership with the A-Leagues is not Silver Lake’s first venture in professional football with the California-based company having purchased shares in City Football Group, owners of EPL club Manchester City and A-League side Melbourne City. The group paid $US500 million in 2019 for a 10 per cent stake in CFG.

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Silver Lake has also shown significant interest in investing in other sporting codes in the region, having made an offer to purchase a 12.5 per cent stake in New Zealand Rugby and commercial rights to the All Blacks in April. However, that deal stalled after New Zealand Rugby’s Players Association blocked the plan, citing concerns around the commercialisation of the team’s branding.Silver Lake’s proposed equity purchase of the A-League follows several major commercial partnerships the APL has forged since gaining its independence from Football Australia, including a landmark broadcast deal with Ten and Paramount+ that sees the A-League shown on a major free-to-air network for the first time in the competition’s 16-year history. The A-League Men’s competition has also struck a new naming rights deal with Isuzu Utes. Sources with knowledge of the deal suggest the value of that arrangement is about $4 million a season.

For better or worse BIG $ is starting to flow for Australian Football which is unprecedented. Hopefully next few years sees the AL standards creep up higher

Not happy with this... interestingly most of the money will be spend on international communications...

Given the already 30 million plus most of the 130 million on the hub.... seems to me APL are setting up to sell direct .... 

Potential conflict of interest with City Football Group? 

It's a very big pay day.
Remember that initially they were trying to sell a 10% stake for $30 mill, and it's become a 30% stake for $130 million.
In other words, they've extracted a much larger price out of Silver Lake, but for a much bigger chunk of the action.
CFG already has some sort of joint venture agreement with Silver Lake, so effectively, this means CFG now has 30% plus its existing 8.33% interest, now giving them a 38.33% interest.
Also worth remembering that Viacom now owns a 2.5% stake in the APL via the broadcast agreement.
What does it all mean at the end of the day?
Well, who knows?
In all likelihood, a chunk of the $130 mill will be used to reimburse the losses current owners incurred during the last corona infested season.  That might take $30 mill on its own, and if they are expecting the same thing for the current season, that might take another $30 mill.
They wanted to invest $30 mill in digital technology (Silver Lake is meant to be a technology comglomerate).
That still leaves $40 mill in the kitty.
It's a lot of money.

I’m sure we’ll find a way to waste that in consultation fees.

The good news keeps on coming for Aus football, great stuff and a much needed investment kick for the sport especially for the aleague. 

It will open up for the aleague clubs to invest in their much needed infrastructure as well as open up in bringing in more marquee players to the league as well.

Might want to edit that first post so it's readable.

This is possibly the biggest moment in Aus club football since the A-League was launched and we qualified for the '06 WC, we need to ride this and make sure it's not wasted. I'm optimistic but we've all seen firsthand how quickly sports leagues burn through money (ARU after the '03 WC and the AFL with their blackhole to support the franchises in NSW/QLD).

Sounds to me  like they've already spent most  of the money before they  will even get it,  at  a  cost of   30%  of the  farm.

I  wouldn't  be  expecting   any  new  stadiums  or  state-of-the-art   facilities being  built, if I  were  you.

Maybe  a Rodwell or  two,  but  that's  about  it.

This is what Silver Lake do. They build and trade off underperforming industries with their huge capabilities in directing ICT investments to monetize content. Content is the single biggest and underdeveloped asset the APL own. This is a very smart partner choice, and this strategy goes directly to that I speculated about in another thread about the APL going the way Supercars did. The APL are building a content production and distribution business and my money is on them the use that to monetize their leagues and a DIV2 and maybe some smaller Asian leagues. This is all about revenue growth and diversification. Futureproofing professional football in Australia.

I see you've remembered to place the extra spaces between the words this time.  

I hope that the majority of the A-league clubs consider building their own stadiums with some of the monies they may get from this deal to help defray some of the costs associated with running a football club. .............charliecat . as you can guess I'm still alive & kicking.

Where do you get this? The article says the money will be spent on the following things:

"While A-League clubs will likely receive some of the windfall of the proposed sale, most of the funds will be put towards building a new digital media platform, as well as covering the costs of the competition’s promotion, long-term operating costs, future investments and, potentially, enabling clubs to buy more marquee players."

To be honest the worst thing they could do with the money is sign marquee players. It needs to be invested for long-term gains, not a short-term sugar rush.

It's only about $10m per club, which is not enough to even begin building a stadium, and only a fraction of the total will be distributed to the clubs, most of it will be used for league-wide investment: the digital platform most notably. There's also the potential to set up a commercial marketing body like MLS's SUM, which could for instance bankroll tours by overseas clubs, the profits from which can be invested back into the A-League.

$130 million sounds like a lot, but it won't go very far at all. Lets hope its spent wisely.  

I think marquees as a strategy can work, the MLS has shown you need to sign a new one each season in order to grow the league and are now at the point where the league is popular enough to go after younger talented south americans who are less about marketing and more about talent. If the AL just sign sporadic marquees then it is a waste of money. I do agree that other areas of the league need attention way before we worry about marquees though, but it is worth exploring. It will really comes down to costings of everything. A marquee who will move the dial will cost about 4 -8 mil AUD a season going off what the MLS pay. So if we were to get a new marquee a season you are looking at about that much per year (not counting what clubs will contribute which may be enough to extend it to two season). It will all come down to how much clubs will contribute towards it and have all the other more important areas been addressed. 

I would actually like to see clubs use this money for club houses that they can use as a source of income through functions, bars, etc. It would be a good consistent way they could generate income year round

By my reckoning, about half the money is going straight back to the owners to defray losses incurred across two covid infested seasons.
That still leaves some $65 mill to $70 mill, but about $30mill will be invested in digital media.
So that leaves about $35 mill to $40 mill.
A marquee at $4 mill per season is hardly worth it, won't be high enough calibre player, so you start talking about $8 mill per season, or $16 mill in two seasons.
Ok, there's enough to pay for that, but which club is getting the benefit?
Maybe it's a 50/50 arrangement, so two clubs can afford that calibre marquee because they can contribute $4 mill per annum.
Newcastle will not be one of the beneficiaries, as they are currently owned by three other clubs.  Mariners and the Nix, and probably Macarthur are unlikely to be beneficiaries, so that whittles it down to 8 candidates, and of those 8, four look more likely than the other four.
Either way, inevitably it becomes a question of fairness.

4 million gets you someone the calibre of Matuidi (per MLS he is actually being paid 2mil AUD) whilst 8 mil gets you Higuain calibre. So 4 mil is definitely doable, but tbh the league cant worry about fairness atm. It needs to worry about growing the league which will benefit all the clubs in the long term.

Can someone break this down for a dopey me this morning. What's in it for the buyers?

Surely the club (or foreign despot that owns the club and has a current employee on the board of FA) that has an equity stake in Silver Lake would be the major beneficiary financially? APL sold themselves cheap in my opinion.... 30% & 1/12th of the remaining "pie" is a pretty decent outcome for the CFG - How long before "his highness the Sheikh" starts getting some positive press on channel 10 do you reckon? 
For the "good of the game" ...... ofcourse.

Redemption maybe bud? A whole league they can use to do whatever they want with maybe? 25 million western world consumers they can beam messages into every night?  Who knows?

can you please expand on the supercars mention please ?
I don't know the other thread you mention of so I can relate their deal and this.

Very worried this money will be wasted. Central allocated funds should be distributed to clubs (such as the Roar) to build assets that contribute long term, such as clubhouses on club owned land that has potential to grow into a stadium complex. Just my 1Cents worth. 

Not an expert but i believe a return on investment when they sell or through profit margins. Best example (even if its extreme) is lets say they invested the Premier league when it started, that has grown into a behemoth today which would be be able to today give a yearly dividend or they could sell for a lot more than they bought. 

About half of it will go back directly to the owners to defray losses made over last two years, and to help with current season.
Note:  that's not really the same thing as the money going back to the "club".

Agree with Jay above that if they can re-sell their stake within the decade for double what they paid, they are probably happy.
It's hard to imagine that they are expecting to pull an annual dividend when the league has been averaging approx $20 million in average losses across all clubs since inception (and new broadcast deal is generating less cash, and new major sponsorship is generating less cash) - and that's before we even get to the impact of COVID on all other revenue sources.
From the perspective of at least one of the owners, it guarantees a closed league in perpetuity.
But yeh, it's a lot of money.

Yes some of this money should eb used for a second div and for marquees.

Also lol at the dopes who think this deal gives City 38% ownership of the aleague. I suppose we're also worried by what Airbnb, Alibaba, GoDaddy and Skype have in mind for the code?? This is an investment company. They're worried about money. They invest to help other companies make more money and then they in turn get richer. https://en.wikipedia.org/wiki/Silver_Lake_(investment_firm)#Investments

Correct.
Meaning they will use their controlling interest to make sure that all APL decisions further their one primary interest.