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New SPAC leverages ballpark expertise

Chicago CubsWe have more well-funded players entering the sports and entertainment world, as the Raine Group and Marquee Sports are teaming up on a special purpose acquisition company (SPAC) for billion-dollar acquisitions.

The Raine Group is a merchant investment bank that’s made high-profile deals in the media and sports worlds, working with the likes of FIFA and MLS teams on financing arrangements. Marquee Sports is the separate cable outlet for the Chicago Cubs. But the new SPAC, Marquee Raine Acquisition Corp., will include plenty of folks from the Cubs front office, including Crane Kenney, president of business operations for the Cubs and co-CEO of Marquee Raine.

In December Marquee Raine Acquisition Corp. announced the closing of its initial public offering of 37,375,000 units, at $10 per unit. According to the press release announcing the closing, the new SPAC will focus on interactive entertainment and games, real money gaming, digital media, sports and sports-enabled assets, health and wellness, out-of-home and live entertainment, audio content and podcasting, technology, or other opportunities in adjacent sectors. (For the record, a SPAC is a company formed to raise capital and take another company public. It’s a very trendy financial tool at the moment.)

That’s a pretty broad portfolio, but Kenney told Variety his angle was live events, extending his team’s expertise beyond the baseball world and into new areas. With COVID-19 shutting down the live-music industry and many venues in financial distress, there’s no doubt there are investment opportunities in distressed properties, with some efforts already announced and certainly more in the planning stages. From Variety:

“What we’re looking at is all of the economics around live events — music, ticket rights, sports rights for pay TV — those are some of the spaces that we’re looking to invest in. As we got done with our work at Wrigley Field, we looked around at our team and started to think about what else we could do outside of baseball.”

For sure, Marquee Raine’s pitch to investors leans on the management capabilities that both partners bring to the SPAC. The Marquee team has a successful track record in rehabilitating the Cubs franchise. Raine has about 150 employees who are focused on pouncing on opportunities in a fast-changing market. Raine and Marquee executives have worked together for years on projects, adding to the comfort level between the companies.

A large entity moving beyond the Cubs–but taking advantage of the Cubs on a business front–is sure to come to the attention of the players union and Scott Boras, who has argued that MLB team revenues need to include these non-baseball revenues. As the next MLB labor deal comes up for debate later this month, the fact that many MLB teams are leveraging baseball assets to create non-baseball revenue, mostly on the real-estate front, is sure to be brought up by MLB labor negotiators and agents seeking a larger pie.

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