Billionaire Marc Lasry and Avenue Sports Fund back out of NC Courage deal

The GIST: Per Sportico, billionaire sports investor Marc Lasry and his sports-focused private equity (PE) firm Avenue Sports Fund are no longer pursuing the purchase of the NC Courage, citing “NWSL restrictions for private equity investment as a control[ling] owner in teams.” With the NWSL being a sports league that uniquely allows PE investment, let’s dive into what we know.

The context: The NWSL has uniquely opened the door for widespread PE investment, but it does have rules, which were finalized in February. The NWSL is the only U.S. sports league that allows PE firms to own controlling stakes of a single team, like Sixth Street Partners’ ownership of Bay FC — the league’s fourth-highest valued team at $121M.

• But if a PE fund wants to own stakes in multiple teams, things can get complicated. A firm can’t own passive minority stakes in more than three NWSL franchises, and one fund can only hold between 5% to 20% of a club’s equity as a minority owner. Plus, clubs can only have 30% of their total equity owned by multiple PE funds.

The firm: Lasry is a billionaire investor who previously owned the NBA’s Milwaukee Bucks before selling his stake in 2023. Shortly after, Lasry launched his Avenue Sports Fund, which has a dedicated effort to invest in women’s sports and international leagues, like 3v3 pro women’s basketball league Unrivaled.

The issue: In September, Avenue Sports signed a letter of intent to buy 60% of the Courage at a $108M team valuation. Lasry and NC Courage owner Steve Malik were very interested in crossing the finish line, but the two parties and the NWSL couldn’t agree on the deal structure, according to Sportico.

Lingering questions: Lasry’s citation of the NWSL’s PE rules as a dealbreaker begs the question: Are the NWSL’s rules helping or hurting investment in the league? And does the NWSL need to update its requirements to accommodate PE interest, or is it critical that the league protects itself from overly-powerful sports firms? Watch this space.