- Aser Ventures is a sports and media investment firm known for acquiring English soccer team Leeds United.
- Aser’s investment helped propel the team into the top-tier Premier League, resulting in a large windfall.
- The CEO explains his 3 sports investing themes to watch and how to break into the industry.
- See more stories on Insider’s business page.
Aser Ventures isn’t a traditional private investment firm. It doesn’t claim to be a venture capital firm or a private equity company.
“We are fairly stage agnostic in the type of investments that we want to make, we look at things that we think can be synergistic with a portfolio that we have,” Aser Ventures CEO Massimo Marinelli said.
Launched in 2015, Aser Ventures focuses its investments in sports and media entities.
“I would say that the key difference here relative to any traditional investment firm is that it is made up of expert management teams in the field,” Marinelli said.
The gem in Aser’s portfolio, however, is Leeds United.
Aser invested in Leeds United in 2017 when the company’s founder and chairman Andrea Radrizzani became a co-owner with a 50% stake. A few months later, he took full ownership of the club.
The team experienced significant changes under Radrizzani, who also bought the women’s team, Leeds Ladies, and the Elland Road stadium.
By the 2019/2020 season, Leeds United had won the second-tier Championship League and returned to the Premier League for the first time in 16 years.
“The Championship final is named the richest game in football,” Marinelli said.
“If you go up, you can suddenly make 10 times, or even more money, from TV revenues to being in the championship,” he said.
It was a high-risk strategy that paid off, Marinelli said.
“It was certainly an opportunity that Andrea spotted and effectively put us on the map, in terms of recognition,” Marinelli said. “I don’t think it’s easy to recognize this potential [and] although people can see what happens on the pitch, there’s so much more that happens outside of the pitch.”
There were changes in management teams on both the business and the sports side, Marinelli said.
“It’s definitely been a full-on activity for the group,” said Marinelli, who is a Leeds United board member.
Sports investing themes to watch
One key part of the firm’s investing thesis is looking at secular growth prospects. Marinelli highlight three major themes to watch:
1) Private equity
In recent years, private equity firms have been entering the sports world in search of financial returns.
For example, private equity firm CVC Capital is looking to purchase a 14.3% stake in the Six Nations rugby tournament, while US firm Silver Lake Capital has investments in Madison Square Garden Sports and Manchester City FC owner, City Football Group, among others.
“I definitely think that is going to continue,” Marinelli said. “Overall, it comes down to the fact that we do have a lot of opportunities for professionalization in this space, and that starts from indeed, investing in sports teams.”
A sports industry report from consulting firm PWC highlighted how the pandemic had “severely tested” the financial model for sports, which is “characterized by short-termism and fragile cash flows.”
“Nobody wants to see teams having financial difficulties and one goal has to be to keep professional teams sustainable,” Marinelli said.
“There’s so much opportunity for additional professionalization in the sector,” Marinelli said.
Investors look at how they can professionalize functions in sports organizations to run them like a company. This could include making operational adjustments, or strategic acquisitions.
Marinelli highlighted there could be an increasing focus on technology functions, such as CRM systems.
Esports is a form of competition using video games. What was once considered a niche business sector is now a multi-million dollar industry.
Total esports viewership is expected to grow at a 9% compound annual growth rate (CAGR) between 2019 and 2023, according to Insider Intelligence. This puts the esports audience on pace to nearly double over that period.
Marinelli expects esports to be a major focus for sports investors in coming years.
“We should not forget the various activities around esports, in order to further make sure that the ongoing activities and operations of the more traditional sports are extended to the younger generations,” Marinelli said.
Breaking into sports investing
Getting into sports investing is a dream for most sports fans.
Marinelli joined Aser after spending 15 years in investment banking including as the head of EMEA Media & Internet at UBS.
“There are many ways to make the path successful,” Marinelli said.
Two key ways he sees to break in are either to:
- Get involved with a firm that focuses on sports investing, or work on the business side of sports organization, such as a soccer club.
- Gain experience at a large organization, such as a consultancy or investment bank, then leverage that broader corporate experience to break in.
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