Exclusive: Jonathan Nelson and Don Cornwell’s next sports bet
Jonathan Nelson, founder of Providence Equity Partners, and Don Cornwell, a partner at the investment bank PJT Partners, are starting a new investment firm called Dynasty, DealBook is first to report. The firm, which aims to raise more than $1 billion, will invest in professional sports teams around the globe. Nelson will remain the executive chairman of Providence, and Cornwall will remain affiliated with PJT.
The firm is trying to profit from a new asset class: minority investments in professional sports. Sports leagues have been adjusting their bylaws to allow for private equity investment, in part in response to the pressure the pandemic put on the industry. Historically, though, investing in teams was limited to wealthy families and individuals, who were mostly mostly interested in perks like courtside seats. Pension funds, meanwhile, have rarely had access. Nelson is the most prominent executive in private equity to lead a fund teams exclusively focused on minority stakes in. (Dyal has a fund that invests exclusively in NBA teams, while other investors like Arctos Sports have emerged too.) And Dynasty says Cornwell is the first Black co-owner of a fund of this kind. The firm has hired about 10 employees from companies including Blackstone and Silver Lake.
Both Nelson and Cornwell have long histories with professional sports teams. At Providence, Nelson made the original investment in YES, the Yankees’ pay television network, which was copied throughout baseball. He also helped create Hulu, which ultimately brought together Disney, Fox and Comcast as partners. Cornwell, who will become CEO of the new firm, has been a sports banker for decades, working on deals that included the recapitalization of the Tennessee Titans and the sale of the Buffalo Bills.
The new firm is the latest example of money flooding into sports. There were more than $1 trillion worth of deals last year, according to PitchBook, $2 billion of which was spent by private equity. Last year, Arctos Sports took a 13 percent stake in the Golden State Warriors that reportedly valued the team at roughly $5.5 billion. Earlier this month, Rob Walton and members of the Walton and Penner families paid $4.65 billion to buy the Denver Broncos — more twice than the price of the previous record for an NFL franchise.
Crypto’s loudest influencers go silent
The sudden suspension of withdrawals by the lending platform Celsius started a crypto market meltdown yesterday. Celsius works by lending out its customers’ Ethereum deposits to invest in decentralized finance projects and offering extreme yields, as high as 18 percent. But its high yields required another cryptocurrency, stETH, to maintain its close peg to Ethereum. The two became unglued. Late on Sunday, Celsius announced it was freezing withdrawals, prompting a sell-off that exacerbated the recent downward spiral of crypto prices in general.