777 Partners to take over reins of Hertha BSC

Article posted by Coliseum, November 25^th, 2022

Image: Olympiastadion Berlin

The Miami (US)-based alternative investment platform 777 Partners LLC is adding to its string of football acquisitions this year with a deal to buy a majority stake in the Bundesliga club Hertha BSC Berlin (Germany) from German entrepreneur Lars Windhorst.

‘Bloomberg’ stated that the US private equity investor has agreed to purchase a 64.7 percent stake in the Bundesliga team from Windhorst’s Tennor Holdings, it said in a statement on November 23^rd. The transaction will mark the largest purchase by a foreign company in Germany’s top football league to date, it said.

777 Partners is a Miami (US)-based alternative investment platform that invests across a number of high-growth attractive verticals with a strong focus on financial services.

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Hertha BSC Berlin, or simply Hertha, is a German professional football club based in the locality of Westend of the borough of Charlottenburg-Wilmersdorf of Berlin, Germany. It plays in Bundesliga, the top of the German football league system.

The 74,475-capacity Olympiastadion is a sports stadium at Olympiapark Berlin in Berlin, Germany. It was originally built by Werner March for the 1936 Summer Olympics. During the Olympics, the record attendance was thought to be over 100,000. Today, the stadium is part of the Olympiapark Berlin and is the home facility of Hertha BSC.

Lars Windhorst is a German entrepreneur and Co-Founder of the Sapinda Group. In 2015, he was ranked in the Sunday Times Rich List, with his net worth reported as being £320 million.

‘Bloomberg’ further stated that the above development is also the latest example of the growing trend of multiclub ownership that’s spreading through the world’s most popular sport. Miami-based 777, led by Co-Founders Steven Pasko and Josh Wander, are among the firms that have been buying up clubs to try and tap into the riches of football.

The strong appetite among these investors has even brought them to Germany, where strict ownership rules prioritizing fan needs over financial excess have for years deterred buyers.

Americans, in particular, are drawn by the growth potential and lower valuations in European football compared with sports franchises back home. This year, 777 have struck deals for Paris (France)-based Red Star F.C. and Belgium’s Standard Liège, as well as CR Vasco da Gama in Brazil.

The firm, which targets historic clubs with deep connections to fan bases, also owns Italy’s oldest football team, the Genoa Cricket and Football Club, and stakes in Spain’s Sevilla FC and Melbourne Victory FC in Australia.

Proponents of the multiclub model point to cost synergies and the potential to strike more lucrative sponsorship deals. Its critics say it stifles competition and creates feeder teams with no real prospect of success.

Hertha BSC currently sits in the 15^th place in the German Bundesliga – just above the relegation zone.

Windhorst paid about €375 million ($387 million) for his stake in Hertha BSC. The controversial investor has faced allegations he hired an Israeli spy outfit to help oust the football club’s former President.

Windhorst said in a statement, “The sale to 777 Partners is an excellent solution and we are very happy with this outcome.”

The 777 acquisition is subject to the approval of both Hertha BSC’s Board and German football body Deutsche Fussball Liga – the governing body of football in Germany.

Cash-strapped Hertha BSC

‘Bild’ stated that Hertha has a right of first refusal and a right of veto. The cash-strapped Berliners will probably not be able to make use of the right of first refusal for financial reasons. However, it is unclear how much 777 Partners wants to pay to Windhorst.

In order to be in a position to veto the sale, there would have to be special reasons that go against the buyer – that does not seem to be the case with the US investor.

‘Bild’ further stated that Windhorst, who had acquired 64.7 percent of Hertha BSC GmbH & Co. KGaA for 374 million euros since the Summer of 2019, had been looking for a successor for his shares since the beginning of October. On November 23^rd, Windhorst stated that he was long looking for a buyer for Hertha BSC but did not think it would “happen so quickly”.

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