Providence’s Karim Tabet: AI ‘fatigue’ provides indirect boost for live events; Sports dealmaking in focus

Good morning, Nina Lindholm here with the Europe Wire from the London newsroom. I’m covering for Craig McGlashan as he enjoys a couple of days off.

While the era of AI makes content production and access to it easier than ever, it also drives people to seek more human experiences, such as live events. Those and the communications sector are in focus this morning, as Providence Equity Partners’ Karim Tabet tells PE Hub about his outlook for the exit market and the firm’s sector focus areas.

Live entertainment and sports are segments PE Hub has been keeping an eye on for some time now. To finish, we revisit some of that coverage, as well as look at Houlihan Lokey’s report on the Indian Premier League and why it presents an opportunity for dealmakers.

Digital fatigue

The adoption of artificial intelligence is creating new opportunities in the communications sector, while the technology’s ability to produce and distribute digital content at the touch of a button is putting more value on live events, Karim Tabet, senior managing director and head of Europe at Providence Equity Partners, told PE Hub’s Craig McGlashan.

The firm, which generally invests in North American and European businesses with enterprise values of less than $1.5 billion, also sees opportunities from AI in the education sector, its third area of focus.

Meanwhile, Tabet notes signs of a thaw in the backlog of private equity assets waiting to be sold, even though the exit market is still bifurcated between top assets and everything else.

At the top end, the firm had three binding bids at an executable price on a recent transaction – a “situation we haven’t really seen in the past few years,” said London-based Tabet. “It’s a very bifurcated market where what’s investable in the context of the AI disruption and high quality gets a ton of interest, and for the rest, people sit on the sideline because of a mismatch of expectation and risk assessment.”

When it comes to selling “the rest,” Tabet expects things to normalize because of the “huge” backlog of exits, as well as GPs’ need to raise funds, and LPs “putting on a lot of pressure.”

But while those factors have been in place for a while, “the frog is being boiled in some ways. We’re seeing some people get very realistic on assets that they just have to move.”

Dealmakers agree that businesses fall into three buckets in the age of AI: those that will grow by supporting AI build-out and adoption; those that will be immune to AI disruption; and those whose business models are under threat.

It’s in that middle category where another area of Providence’s focus falls: live events. Providence and Searchlight Capital Partners agreed to sell Hyve, a global B2B business, to Hellman & Friedman in June.

Providence teamed up with Searchlight again in May, when the latter agreed to invest in Providence-backed CloserStill Media, another B2B events company, taking co-control with Providence. The deal gave Providence the opportunity to reinvest in the company.

The GP also has a series of investments in companies in live entertainment, including Ambassador Theatre Group and Superstruct Entertainment, a global operator of large-scale festivals and live music events.

While subscription prices for streaming services have not increased much over the past 15 years, the same cannot be said for live event ticket prices, which have grown substantially.

“The paradox of digitalization is that it makes physical scarcity even more important and more valuable,” said Tabet. “There is so much content available everywhere and that increases the need to go see the real, premium thing. It’s a function of digital fatigue, of desire for shared in-person experiences. That’s driven the growth of the live businesses in which we’ve been investing for the last 15 years.

“AI is just an amplification. Digital content is available even more freely because it can be produced and distributed for almost nothing. And therefore, there’s a desire to see the real thing.”

Take a look at the full piece to learn more about Providence’s recent exit activity and how it plans to navigate AI disruption.

In the game

Providence is not the only firm betting on digital fatigue. Just last month, my colleague Iris Dorbian wrote a piece looking at why private equity is banking on live entertainment and events.

“Despite all the digital and AI tools we now have at our disposal, the covid recovery highlighted the importance of in-person interaction,” Shahid Bosan, managing director at Apollo Global Management, told Iris at the time. “Authentic face-to-face connection is only becoming more valuable, which is why the B2B events space is such a large and structurally growing market.”

Another key area of entertainment is sports – a segment my colleague Rafael Canton keeps a close eye on. Most recently, Rafael caught up with former New York Giants quarterback and two-time Super Bowl MVP Eli Manning about youth sports investing.

We focus on a particular sport today: cricket. Indian Premier League’s business value has risen to $20.6 billion, according to Houlihan Lokey’s latest valuation report.

“From a dealmaker’s lens, the IPL remains a near-perfect blend of predictable cash flows and cost discipline – a rarity in the global sports universe,” said Harsh Talikoti, director, corporate valuation advisory at Houlihan Lokey, in the report.

“Services revenues are underwritten by long-term media rights contracts and front-loaded sponsorships, a hard salary cap protects margins from the wage inflation that burdens other leagues, and a capital-light model with no stadium debt to service translates into structurally high returns on employed capital.”

CVC is one firm that has been transacting in the IPL. In 2021, the firm won the right to own and operate a new franchise based in Ahmedabad in Gujarat province. CVC built a team, Gujarat Titans, and in 2025 agreed to sell a majority stake in the franchise to Torrent Group.

Since the CVC transaction, inquiries from private equity investors in the US and Europe have intensified, according to Houlihan’s Talikoti. This year’s sales reinforce the investment bank’s view that the “IPL model can, under the right conditions, generate substantial, durable profit. On a per-match basis, the league today trails only the NFL.”

That’s all from me. Rafael Canton will be with you later today with the US edition, and I’ll be back on Europe duty tomorrow.

Cheers,

Nina