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Keegan McDonald, 30, drives OVG’s creative move to manage billions in financing deals in-house for 5 arenas, saving millions

By Bret McCormick

Somehow, Keegan McDonald will have time to get married next July. And somehow, Francesca Bodie will have time to officiate the ceremony. Such is the closeness of the Oak View Group business development team, which Bodie oversees and McDonald spearheads.

 

McDonald is the 30-year-old most responsible for the $5.5 billion of debt and equity that OVG has raised and poured into five buildings, including UBS Arena and several more in the pipeline, an unprecedented run of development in American sports business. He helped shepherd Silver Lake’s roughly $500 million equity investment in OVG, the company’s acquisition of Spectra, and supports OVG’s Global Partnerships team on many of its biggest deals, including the UBS naming-rights deal on Long Island. Hence McDonald’s crowded pre-nuptials schedule.

McDonald

“I cannot understate Keegan’s importance to the company,” said Bodie, OVG’s president of business development.   

Fresh out of Michigan, McDonald worked in Goldman Sachs’ Sports Investment Banking group, including on financing transactions involving Allegiant Stadium, Barclays Center, Fiserv Forum, Golden 1 Center and Tottenham Hotspur Stadium. He envisioned staying there for years, but that changed after a 2016 meeting with Bodie in Las Vegas. Like her dad, OVG CEO Tim Leiweke, Bodie has the rare gift of selling a vision, and McDonald asked for a job immediately after hearing her plans.

McDonald moved from New York to Los Angeles in 2017, becoming one of the first 10 OVG employees just as the company’s venue-building boom was revving up. Given the volume and size of deals OVG was planning, one of McDonald’s primary focuses was bringing in-house the services for which third-party middlemen charge substantial fees, like debt syndication, preparation of marketing materials, or financial consulting. OVG wanted only partners with skin in the game.

Bodie

“Look at all the people in our ecosystem in sports that have no risk [and yet] benefit,” Bodie said. “If you aren’t in control of the conversation, then you end up having people with no risk defining your business over the next 25 years.”

Most teams need venue financing deals once every 20 to 30 years, but OVG’s strategy produced a half-dozen deals in less than five years, which normally would have accrued tremendous fees. Saving the 1% to 2% that debt syndicators often charge per transaction could result in immense savings for OVG on each venue financing deal. Using OVG’s recent $700 million construction loan refinancing deal for Climate Pledge Arena in Seattle as an example, eliminating the 1% to 2% fee would mean savings of between $7 million and $14 million.

McDonald and OVG have gone straight to lenders and investors to explain the company’s belief in live music’s economics and its overall plan, a smart move given the undeniable oratorical gifts and proven results of co-founders Leiweke and Irving Azoff. McDonald, who was an English and economics double major at Michigan, sourced and cultivated the relationships with the dozen lenders that provided $1.5 billion of initial construction financing to OVG for arenas in Austin, Long Island and Seattle — the latter of which didn’t have an anchor tenant at the time — during one 12-month stretch. The deals’ terms preserved OVG’s short-term financial flexibility as the pandemic hit.

Direct outreach led OVG to find new investment partners, like MUFG Bank, Japan’s largest bank, and Truist, which has led financing on four OVG venues — Climate Pledge Arena, Coachella Valley Arena, Moody Center and UBS Arena. No one at OVG had relationships with Truist — nor what was formerly SunTrust before its merger with BB&T— prior to McDonald cold-calling Peter Dorfman, the bank’s sports and entertainment specialty group senior corporate relationship director. Dorfman, who previously worked on venue financing deals for the Atlanta Braves and Atlanta Falcons, said that OVG is “very relationship-oriented.”

Deep-pocketed venue equity partners with access to capital and debt, like former Mets owner Jeff Wilpon (UBS Arena) and City Football Group (Co-Op Live in Manchester, England), have been critical components of the strategy. But OVG is writing checks, too, so McDonald pushes for competitive financing and floats bond offerings that are investment grade, rated BBB or higher by Moody’s or Standard & Poor’s, including the Climate Pledge Arena construction loan refinancing just executed. McDonald would neither confirm nor deny that deal’s 3.5% interest rate, which he said would be lower than what the Bucks, Raiders or Kings got on their arena and stadium refinancing deals in the past five years.

“We are not interested in over-levering or doing high-yield deals or anything like that,” said McDonald. “I know sometimes when people hear the amount of debt we’re using to fund these projects they might say, ‘oh, that’s too much. What are they doing?’ We are ultimately structuring these to be investment grade. That is a key, core ethos of our company that will never change.”

Dorfman said that working with OVG differs from his team work because of OVG’s intimate familiarity with the complex and obtuse venue financing process. It’s rare for a team to have someone in a role like McDonald’s, which includes sourcing debt capital, creating financial models and marketing materials, and managing transaction processes. That might begin changing as team owners’ holdings expand into live entertainment, retail and real estate.

With two arenas open and Enmarket Arena, in Savannah, Ga., and Moody Center, in Austin, due to open in the next six months, OVG’s strategy can start producing financial results, and putting revenue back into the company. If the results are what OVG expects, the proofs of concept should make McDonald’s job easier in the coming years.   

“With great responsibility comes great stress,” he joked. “They placed a great deal of faith in me at a young age, and I will always be grateful for that.”

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