Funds News

New York Yankees, Dallas Cowboys seek to sell Legends Hospitality -sources

March 12 (Reuters) - The New York Yankees and the Dallas Cowboys are exploring a sale of Legends Hospitality in a deal they are hoping could value the U.S. stadium operations company at more than $1 billion, including debt, according to people familiar with the matter.

The move comes three years after investment firm New Mountain Capital LLC acquired a stake in Legends Hospitality, joining the sports teams as owners. It may not result in a deal, as sports events get canceled in the wake of the coronavirus outbreak, weighing on Legends Hospitality’s prospects.

Investment bank Moelis & Co is advising on an auction for Legends Hospitality, the sources said, asking not to be identified because the matter is confidential.

The Cowboys, New Mountain, Legends Hospitality and Moelis declined to comment. The Yankees did not respond to requests for comment.

The Yankees and Cowboys formed Legends Hospitality in 2008 to operate concessions, catering and merchandising services at sports stadiums. Goldman Sachs Group Inc’s merchant banking division was also a founding investor but sold its stake in 2012.

Legends Hospitality has since expanded the list of stadiums it supports to include the likes of U.S. baseball team the Los Angeles Angels and British soccer club Manchester City.

The company has also expanded into areas such as stadium planning and sponsorship sales, including in 2018 being hired to secure sponsorships for the Los Angeles 2028 Olympic and Paralympic Games.

New Mountain purchased its stake in Legends Hospitality in 2017 at a $700 million valuation, according to industry tracker PitchBook.

In recent years, media rights have overtaken gate receipts as the largest revenue segment for North American sports, according to a report by PwC.

Nevertheless, ticket sales are seen rising from $19.2 billion in 2018 to a $21.8 billion in 2023, according to PwC estimates.

Much of the sector is now at threat from the economic fallout of the coronavirus pandemic. The National Basketball Association said on Wednesday it would suspend game play after a Utah Jazz player tested positive for coronavirus. (Reporting by Joshua Franklin in New York; Editing by Steve Orlofsky)