RedBird Capital Partners and Fenway Sports Group's £530m Investment

– RedBird Capital Partners –

RedBird Capital Partners is a private investment firm focused on building high-growth companies with flexible, long-term capital in partnership with its entrepreneur & family office network. The Company’s investments focus principally on sports, TMT, financial services, and consumer.

SECTOR: Financials

INDUSTRY: Financial Services

SUB-INDUSTRY: Asset Management

FOUNDED: 07/24/2013

ADDRESS: 667 Madison Avenue 16th Floor New York, NY 10065 United States

PHONE: 1-212-235-1000

WEBSITE: www.redbirdcap.com

NO. OF EMPLOYEES: 11-50 employees

About RedBird Capital Partners

Founded in 2014, RedBird Capital Partners is a private equity firm based in New York, New York. The firm seeks investments in growth-stage companies.

The firm prefers to make investments in sports, financial services technology, media, telecommunication, energy and industrials, and consumer sectors.

RedBird Capital Partners is a principal investment firm that provides flexible, long-term capital to help entrepreneurs grow their businesses.

RedBird seeks investment opportunities in growth-oriented private companies where its long-term capital, investor network, and strategic relationships enable business owners to achieve their corporate objectives.

Founded by former Goldman Sachs Partner Gerald Cardinale, RedBird has over $3.0 billion of equity under management to support its entrepreneur-led platforms, connecting patient, flexible capital with business founders to help them outperform operationally, financially and strategically. For more information, please go to www.redbirdcap.com.

Fenway Sports Group, RedBird Capital, and the £530m Investment

Liverpool owners Fenway Sports Group are in advanced negotiations to sell 10 percent of their business to private equity firm RedBird Capital Partners.

It’s been a rather open secret for some time that FSG had been looking for outside investment in the business and talks with special purpose acquisition company (SPAC) RedBall Acquisition Corp fell away last month after the SPAC were unable to raise the second tranche of investment needed for a £950m deal and a 20 to 25 per cent stake in FSG that would have taken the company public.

RedBall, headed up by American billionaire and former Goldman Sachs banker Gerry Cardinale, and the pioneer of baseball analytics, Billy Beane, has turned its attention to trying to invest in another sporting enterprise.

Cardinale’s RedBall deal may have moved on but his RedBird Capital Partners investment vehicle stepped into the breach to continue talks with John W. Henry and FSG in an attempt to still take a slice of the action.

According to Sportico that deal is set to be concluded in the next six weeks, the level of investment around £540m ($750m) in FSG’s business interests, which include Liverpool, the Boston Red Sox, NASCAR team Roush Fenway Racing and US regional cable sports network NESN.

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What are the Implications of this

An injection of capital is something that FSG has been seeking for some time, something that the failed deal with RedBall would have brought to the tune of around £450m via share issue if they had been floated on the stock market.

And there is the chance that FSG may be able to release more funds to aid sporting success for their teams due to the deal, but any thoughts of such investment meaning an all guns blazing assault on the transfer market this summer are likely to be met with some disappointment.

This is investment. The idea is to increase the value of the business by further monetising the intellectual property that exists around the likes of Liverpool and the Red Sox, that in turn should translate to more money to spend for Klopp further down the line, available funds in sync with what the business actually makes and not simply throwing money away. That has seldom been the FSG way.

FSG know that sporting success is good for business and they have been able to leverage that success to great effect in the past two years at Liverpool, a business that has been thriving thanks to the sterling efforts of Klopp and his charges.

This season has been one of relative struggle and they are by no means locked into a Champions League spot, something that will have significant ramifications should they be unable to make the top four.

Financially it would have a big impact as well as be detrimental to their transfer market plans and their ability to engage with their existing stars to keep them away from the clutches of Europe’s other top clubs.

What More Should You Know?

He started his working life at Goldman Sachs in New York, spending 20 years there and rising to partner before leaving in 2012, spending a few months at BDT Capital Partners before setting up private investment firm RedBird Capital Partners.

The Philadelphia native has espoused his interest in sport and business several times, being a board member of YES (Yankee Entertainment & Sports Network) since 2001.

Cardinale is a major stakeholder in the YES Group, America’s biggest regional sports TV network, which broadcasts the live games of the New York Yankees, Brooklyn Nets, New York City FC and WNBA team New York Liberty.

He has also served as a board member of Yankee Global Enterprises, the corporate holding company of the MLB franchise the New York Yankees and its affiliated businesses.

He also sits on the board of a number of other organizations such as Skydance Media and One Team Partners, which works in partnership with the Players Associations of the NFL and MLB to monetize the name, image, and likenesses of the collective players.

RedBird FC, part of his RedBird Capital business, purchased a controlling stake in French Ligue 2 side Toulouse last summer with the early signs looking promising in terms of turning around the fortunes of Les Violets, while RedBird themselves bought a ’30 to 40 percent stake in talent agency Wasserman Media earlier this month, an agency that looks after high profile entertainment and sporting stars including Liverpool’s Joe Gomez.

Cardinale also entered into a business venture with Hollywood actor Dwayne Johnson to purchase the XFL spring football league in the US, a competition to start in 2022.

His CV is one that points to the sharpest of business minds allied with a major interest in sports and the unique position teams have for growth.

Is Mbappe joining or not?

Well that would be a stretch, and while in football you can never say never the reality is that for Cardinale this is a venture that enables him to bring his expertise in monetising different parts of the sporting business as well as potentially offering Liverpool a multi-club option, something that will become commonplace among English Premier League sides before long.

Cardinale, in an interview with Sportico in December said: “Making an investment is easy, what’s not so easy is owning these things well. What we really look for in what we do is owning it well.

FSG will hope to Cardinale’s experience in that side of the business will be of great benefit to both Liverpool and the Red Sox in terms of adding further revenue streams to their operations – and enhancing existing ones.

For FSG the potential link up with Toulouse could be an important one.

The new rules around non-UK player acquisition following Brexit are more strict than previous ones, players required to meet a 15-point Governing Body Endorsement test, something that can be prohibitive in signing younger European talent.

For Liverpool, signing players for another European side means that they can keep players in their system and provide opportunities for growth and experience before shifting those who fit the bill over to Anfield when they meet the points requirements, and for a more favorable fee.

What the investment does point to is FSG trying to approach the next phase of their ownership and meeting the demands of building infrastructure around both Anfield and Fenway Park as well as attempting to put out teams that challenge for the highest honors year in, year out.

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