F1 Owner Enlists Chernin For Sports Giant Bid
The owner of Formula One (F1) motor racing has drafted in one of the world's most prominent media executives to strengthen its bid for control of IMG, the sports rights and talent management giant.
Sky News has learnt that CVC Capital, which owns roughly one-third of F1's parent company, has joined forces with an investment group headed by Peter Chernin, a former News Corporation executive, to mount a $2bn offer.
Mr Chernin is understood to have agreed to join CVC's bid in recent days, partnering him with a consortium that also includes Mumtalakat, a Bahrain-based fund.
The former News Corp chief operating officer, who stepped down in 2009, would join the board of IMG if the CVC offer is successful.
Since setting up his investment firm The Chernin Group (TCG), he has ploughed money into an array of media companies, including Tumblr, a blogging platform, and Flipboard, a social magazine for browsing media content on tablets.
TCG is backed by money from Qatari interests as well as the US private equity group Providence Equity.
Mr Chernin's decision to ally himself with CVC provides a boost to its hopes of clinching one of the most coveted names in global sports.
The remaining bidders for IMG, which counts the men's world tennis number one, Novak Djokovic, among its biggest clients, have been narrowed to about ten parties, according to US media reports last week.
Under the plans drawn up by CVC's consortium, the UK-based private equity firm would hold a 60% stake in IMG, while Mumtalakat and The Chernin Group would own interests of about 20% each, according to a person close to the auction.
It is unclear whether the Abu Dhabi Investment Authority, which had been part of the consortium earlier in the process, still plans to invest alongside CVC, they added.
CVC's consortium is in a strong position to win control of IMG, which has been owned by Forstmann Little, a US buyout firm, since 2004.
Its decision to sell has triggered interest from potential bidders around the world, including a joint offer from KKR and New Mountain Capital, which was established by a former IMG executive.
CAA, a rial talent agency backed by private equity group TPG, is also bidding.
Set up in 1960 by the late Mark McCormack, who wanted a vehicle to represent the golfing legend Arnold Palmer, IMG has gone on to become one of the biggest names in sport.
Earlier this year, it signed a deal to act as stadium consultant to the organisers of the 2022 FIFA World Cup in Qatar. It also counts Wembley and the Maracana in Rio de Janeiro among its other stadium clients.
The agency has also diversified in recent years into the worlds of fashion and entertainment, now employing 3500 people around the world and striking joint ventures with big media companies in key emerging markets such as Brazil, China and India.
In 2010, IMG made $78m (£51.3m), while this year it is expected to make more than double that amount, with its emerging markets exposure providing a platform for future growth.
The entry of hundreds of millions of people into the world's middle classes in Africa, Asia and Latin America over the next two decades will further expand demand for access to live sport, agencies such as IMG believe.
CVC declined to comment.