Raine Group is joining the SPAC pack.
The investment bank that has been a player in media and entertainment for the past dozen years has teamed with Marquee Sports, owner of the Chicago Cubs regional sports network, in a special purpose acquisition company that aims to acquire firms valued at $1 billion or more.
Marquee Raine Acquisition Corp. raised $373.8 million last month, giving it a war chest that has to be spent within two years or the money is returned to shareholders. Although Marquee is closely tied to the Cubs and the sports world, Marquee Raine is looking for ripe prospects in entertainment. One area of interest is live events, as the team behind Marquee Raine has experience in refurbishing Chicago’s landmark Wrigley Field.
“We are much broader than sports,” says Brett Varsov, partner and head of M&A at Raine Group and co-CEO of Marquee Raine Acquisition Corp.
Despite speculation to the contrary, Marquee Raine is not in the hunt for other sports teams per se, according to Crane Kenney, president of business operations for the Cubs and co-CEO of Marquee Raine.
“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.
“At our core is deep industry expertise and relationships across all of the TMT sectors,” says Varsov. “What we do is build businesses around that expertise.”
The rising popularity of SPACs, which are an alternative to IPOs for companies to raise money from public markets, opens a new door for Raine, whose investments have included stakes in Imagine Entertainment and Vice.
Raine in the past has made investments of $50 million-$100 million in companies through its growth equity fund. But the SPAC is designed to allow it to make bigger bets on companies with the ability to operate as public entities. Raine’s team has a good sense of where the market is headed through its advisory arm, according to Raine partner Erik Hodge.
“We’ve done a lot of business in the digital media/entertainment/sports ecosystem,” says Hodge. “Those sectors will be in focus.”