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Oak View Group Lands $100M Private-Equity Investment

It costs a lot of money to build and renovate arenas as well as invest in sports franchises, so Oak View Group — committed to the $600-million renovation of KeyArena and more — has an investment from private-equity firm Silver Lake for more than $100 million in exchange for a stake in the rapidly growing company.

To say that Oak View Group has upending the economics of the arena world is an understatement: to come up with a $600-million renovation of Seattle’s venerable KeyArena, backed with private capital, is breathtaking, to say the least. Add to that a potential ownership stake in an NHL team playing out of the renovated arena, and you’re looking at some serious coin. Oak View Group reportedly has relationships with 27 arena and stadium in terms of operational support and security consulting, and could end up being involved in a new Belmont Park New York Islanders arena as well as an expansion of Norfolk’s Scope arena and a new University of Texas arena in Austin. From the Wall Street Journal:

Silver Lake is offering more than $100 million in exchange for an undisclosed equity stake in the two-year-old company, according to a person familiar with the matter, who said additional investment could follow….

Silver Lake, though a relative newcomer to the venues business, has viewed entertainment as an important investment area in the digital age. It backs Endeavor, parent of talent agency WME-IMG, a major power in sporting events and athlete representation that also owns the UFC mixed martial-arts organization. Last month it disclosed a 4.9% stake in Madison Square Garden Co.

Silver Lake sees opportunities to bring more social and mobile elements to the live business and rethink how venues are designed and constructed to change how consumers interact at events, according to a person familiar with the matter. It sees a growing market for live experiences and could leverage relationships with its other portfolio companies.

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