Blackstone’s $5.65B Cosmopolitan Sale – Front Office Sports

Blackstone’s $5.65B Cosmopolitan Sale – Front Office Sports

The NHL and adidas teamed up to produce an eco-friendly sweater made partly with recycled materials, retailing for just over $150. The Seattle Kraken’s white jerseys have already sold out.

The Cosmopolitan/Design: Alex Brooks

MGM Resorts is moving aggressively into mobile sports betting, but it hasn’t forgotten its roots: It’s buying Las Vegas’ Cosmopolitan casino and resort operations as part of a $5.6 billion deal.

The Las Vegas strip destination was purchased by private equity firm Blackstone in 2014 for about $1.8 billion and will change hands when the transaction closes in 2022. The Cosmopolitan hosts a sportsbook run by Caesars Entertainment-owned William Hill.

  • MGM will pay $1.63 billion to become The Cosmopolitan’s casino and resort operator. The physical property is being sold to an investor group including a Blackstone trust, Stonepeak Partners, and the Cherng Family Trust for around $4 billion.
  • MGM will enter a 30-year lease, with three decade-long options for renewal.
  • Blackstone said it invested $500 million in the property in renovations and additions. It is turning a $4.1 billion profit on the investment, including cash flow generated by The Cosmopolitan.

MGM is looking to take full control of BetMGM, the sports betting outfit it owns 50-50 with Entain. The online sportsbook is available in 14 states, and MGM has sponsorship deals with the NFL, NBA, MLB, and NHL.

In July, Blackstone acquired a majority stake in Certified Collectibles Group, valuing the collectible platform at over $500 million. In April, it joined an $80 million funding round for sports media and startup basketball league Overtime. In May 2019, it took a $204.9 million minority stake in betting platform SuperBet. 

It previously explored buying stakes in Serie A and Sportradar.

Peloton/Design: Alex Brooks

Peloton has had a dramatic year, but its financing options are nonetheless prized for their stability by the banking industry.

Peloton contracts with lender Affirm to offer zero-interest loans on its connected bikes and other fitness machines, which are then often packaged and sold to financial institutions in search of a safe bet.

  • Peloton, Affirm’s biggest client, generated around 20% of the lender’s $870.5 million in revenue for the fiscal year ending June 30.
  • Unsecured loans to Peloton customers formed the bulk of the $845 million Affirm has garnered since 2020 from packaging zero-interest loans. The interest from these loan packages starts at just over 1%.
  • In August, the at-home fitness giant lowered the price of its signature bike to $1,495 from $1,895. Its treadmill retails for $2,495. It resumed treadmill sales on Aug. 30, following a costly recall. 

The company recently released its own apparel line and is believed to be working on a rowing machine.

While Peloton’s revenue related to product sales dipped in the second quarter, subscriptions to its workout service have grown steadily. 

The company more than doubled its connected fitness subscribers to 2.3 million in the fiscal year ending June 30, bringing in $541.7 million from that segment.

Washington Spirit/Design: Alex Brooks

Last month, the NWSL’s Washington Spirit named former D.C. United player, coach, and executive Ben Olsen president. Now, there could be a shift in ownership, as co-owner Y. Michele Kang is calling on majority owner and CEO Steve Baldwin to step down.

Baldwin’s leadership looked promising in 2019 when he said professional women’s soccer players should be paid more than men and predicted the NWSL could reach $30 million to $50 million in annual sponsorships.

A recent investigation by the league into multiple allegations of verbal abuse by the team’s former coach Richie Burke turned into a wider discussion from female employees about a misogynistic workplace. 

  • The team has lost 40% of its female staff listed on its website since the start of the season.
  • Late last week, fans launched a protest, limiting “game day activities” including the “flying of flags, chants, and playing of drums” until there is new ownership.

Baldwin reportedly told Kang in August that he would sell his stakes to her but has since changed his mind.

Kang bought a stake in the team last year, adding to the Spirit’s list of other predominant owners including Chelsea Clinton, Jenna Bush Hager, and Briana Scurry, the former U.S. women’s goalkeeper. In May, Washington Capitals star Alex Ovechkin became an investor.

The growing number of investors comes as the league spikes in popularity among fans — by the end of the 2020 season, there was a 500% jump in TV viewership.

Kelley L Cox-USA TODAY Sports/Design: Alex Brooks

Less than two weeks after the Los Angeles Clippers made a 23-year, $500 million deal with Intuit for naming rights to its new arena, the team has reportedly secured more than $300 million in an agreement with Aspiration.

The online bank is the first funding partner of Intuit Arena and will display ads throughout the venue. The building, set to open in Inglewood in 2024, costs a reported $1.2 billion, adding to the $66.2 million owner Steve Ballmer paid for the land and $300 million for The Forum.

Aspiration is focused on being green-friendly, matching well with the Clippers’ goal of making the Intuit Dome a 100% carbon-free venue.

  • Philadelphia 76ers coach Doc Rivers is an investor in Aspiration. The company has raised $450 million to date.
  • Last month, the financial services firm entered an agreement to go public via SPAC merger with InterPrivate III Financial Partners, which will value the combined company at $2.3 billion.

Ballmer, who purchased the Clippers for $2 billion in 2014, wants to make Intuit Dome the most sustainable arena in the world. It will reportedly save 10 million gallons of water per year and reduce vehicle trips by 15% through carpool incentives. 

Aspiration will also partner with the team to launch a fund, providing “fans the opportunity to offset their own carbon impact whenever they purchase a ticket.”

Intuit Dome will generate an estimated $260 million in annual economic activity for Inglewood. The Clippers are valued at $2.75 billion.

  • Famous cricket tournament The Ashes may not take place, as COVID-19 continues to spread in Australia and England is reluctant to tour.
  • The Sacramento Kings confirmed that Arctos Sports Partners acquired a minority stake in the franchise, with majority owner Vivek Ranadivé also increasing his stake in the team.
  • GNC has secured an exclusive retail partnership with Podium Nutrition, whose products will be available at and in stores nationwide.
  • The Yankees arrived in Boston outside the postseason picture, but thanks to Giancarlo Stanton’s historic weekend of hitting, they left Fenway with the top AL Wild Card spot. Get more stories like this in Sports Section, a free daily newsletter. Click here to subscribe.

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