ESPN sells majority stake in X Games to private equity firm
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A woman walks into a store to buy a ticket to X Games, Saturday, March 19, 2014, in Los Angeles.
Updated at 2:28 PM PDT on Wednesday, Aug 1, 2014
X Games, an Anaheim-based company that has hosted some of the biggest competitive sports competitions, has hired a private equity firm to help it turn around the troubled company, the Associated Press reported.
The company said it is negotiating with the firm to buy X Games from the company’s shareholders for well over $700 million, bringing its losses to more than $3 million since 2009.
The deal would effectively give the company a new owner for the first time in its history.
The company has struggled to turn a profit after it spent millions of dollars acquiring more than 10,000 tickets each year to hold the X Games, which sells the rights to the biggest competitive sports events in the world.
The company has never made an operating profit from the events, which have consistently failed to draw a bigger crowd than they received.
The company’s stock has plunged from over $13 a share in 2009 to less than $2 now. It has fallen for two straight years. Shares have fallen 35 percent so far this year.
The private equity firm is led by former X Games CEO and co-founder, Dave DeMatteis, who played major roles in the company before he co-founded DeMatteis Partners, the company that now owns the X Games.
“We are pleased to be in a position to offer a new opportunity to X Games and its partners and fans,” the firm said in a statement.
DeMatteis, who had no role in X Games’ operations, said in a statement that the company had made a “very long journey” to find a new owner.
X Games is expected to announce a new business plan to help