Investment

Qatari Wealth Fund Buying Into Wizards Parent in $4.05B Deal

Published

1 year ago

June 23, 2023

The Qatar Investment Authority is buying a passive minority stake in Washington Wizards and Capitals parent Monumental Sports & Entertainment, according to multiple people familiar with the details. It marks the first time a sovereign fund has invested in major U.S. team sports.

QIA, as the Qatari state fund is known, is buying about 5% of Monumental, which includes the WNBA’s Washington Mystics, Capital One Arena and NBC Sports Washington, according to one of the people, who was granted anonymity because the details are private. The deal values the group at $4.05 billion, the source said.

It’s a landmark deal for U.S. sports, which has gradually opened its ranks to investment from institutional money such as private equity, family offices and sovereign wealth. The NBA’s rules, for example, state that no fund can own more than 20% of a franchise and that institutional investors can only buy passive stakes.

The investment comes as U.S. sports teams appreciate dramatically—the average NBA team is now worth $3 billion—making it harder for even the world’s richest people to buy them outright. QIA has more than $450 billion under management, making it one of the 10 largest sovereign wealth funds in the world. It is already a prominent investor in the U.S. The fund’s portfolio includes a 10-acre development project just a few blocks from Capital One Arena.

Representatives for both Monumental and QIA declined to comment. Sportico values the Wizards at $2.7 billion and the Capitals at $1.22 billion. NHL owners have approved the transaction, which must still be OK’d by the NBA Board of Governors.

Led by managing partner Ted Leonsis, Monumental will retain all operational control in the deal, according to the people. QIA will not have a board seat, nor any voting power within the organization. The investment will be used to fuel growth in the group’s existing properties and future acquisitions.

The NBA in 2020 became the first major U.S. league to approve private equity investments—a move soon matched by the NHL, MLB and MLS. Last year, that was expanded to include endowments, family offices and sovereign wealth funds.

The influence of sovereign money has become a controversial topic in sports. Qatar received criticism when it hosted the World Cup last year amid concerns over human rights abuses. Earlier this month, meantime, the PGA Tour announced its plans to merge its commercial assets with those of the Saudi-backed rival LIV Golf. The deal includes additional investment from the Saudi sovereign wealth fund (PIF), which has prompted criticism from golfers, fans and politicians.

“In November 2022, the NBA Board of Governors decided to permit passive, non-controlling, minority investments in NBA teams by institutional investors, including university endowments, foreign and domestic pension funds, and sovereign wealth funds, subject to a set of policy guidelines adopted at that time,” said Mike Bass, an NBA spokesman. “All such investments require league review, NBA board approval and compliance with the policy. The NBA board is currently reviewing a potential investment by QIA in Monumental Sports & Entertainment, the parent company of the Washington Wizards, among other sports properties. In accordance with the policy, if approved, QIA would have a passive, minority investment in the team, with no involvement in its operations or decision-making.”

Founded in 2005, QIA is a separate entity from Qatar Sports Investments (QSI), which owns French soccer team Paris Saint-Germain. Though QSI chairman Nasser Al-Khelaifi sits on the QIA board, the two groups share no ownership or broader governance. QIA wasn’t directly involved in the 2022 World Cup, and it isn’t involved in Qatari Sheikh Jassim bin Hamad Al-Thani’s pursuit of Manchester United. QIA is an investor in a number of global sports properties, including MMA platform ONE Championship, and Viacom18, which holds cricket streaming rights in India, via the fund’s partnership with Bodhi Tree Systems.

QIA, which opened a New York City office in 2015, has said it is committed to investing $45 billion in the United States. Its portfolio includes a number of American companies across healthcare, tech, AI, and sustainability. It is also an investor in Peter Chernin’s production studio North Road.

QIA’s CityCenterDC development gives it a presence in a city with obvious geopolitical significance. It’s not uncommon for companies to partner with D.C. sports teams because of their proximity to the city’s political power structures.

Monumental is structured in the mold of modern sports ownership—a handful of prominent franchises are at the center of a wider business that includes real estate, media and technology. The portfolio also includes the Wizards’ G League team, esports franchise Team Liquid, and Monumental Sports Network, plus a number of other gaming clubs and facilities.

Monumental investors include billionaires Jeffrey Skoll and Laurene Powell Jobs; BET co-founder Sheila Johnson; and Nationals owner Mark Lerner. QIA’s equity is not coming from a single seller, the people said, meaning all Monumental equity holders will be diluted evenly.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

1 day ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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