One of the largest shareholders in Fenway Sports Group, whose founder and managing partner was denied a chance to acquire Liverpool in 2009, has recounted his story.
RedBird Capital Partners, a New York-based investment firm, joined forces with Liverpool’s owners FSG in March 2021, securing an 11% stake in FSG and its entire portfolio for a fee of about $750 million. The money raised through the deal helped FSG maintain cashflow across their assets during the pandemic and assisted them in their November 2021 purchase of the NHL team Pittsburgh Penguins.
RedBird, who have a diverse investment portfolio that spans sports, technology, media, finance and energy, among other things, have been major players in the sports investment market over the past two and half years, purchasing a controlling interest in French side Toulouse in the summer of 2020, taking a stake in FSG and, in September, clinching a $1.2bn deal to acquire Italian giants AC Milan. RedBird have also been a co-investor with Hollywood actor Dwayne Johnson in reviving the XFL in the US.
Gerry Cardinale is the founder and managing partner of RedBird. Prior to starting RedBird in 2014, Cardinale spent some time working for Goldman Sachs. He got his first taste of sports investing at Goldman Sachs, where he played a key role in developing multi-billion dollar businesses including Legends Hospitality and the Yankees Entertainment & Sports (YES Network) network.
Cardinale pleaded with Goldman three years before he left the firm to seize the chance to buy a majority stake in Liverpool, which was then controlled by the notoriously unpopular George Gillett and Tom Hicks. At the time, the club was valued at about $450 million (£300 million), which is what FSG ultimately paid in October 2010.For FSG it has been a deal that has seen their investment grow to one valued at around $4bn (£3.3bn) at present, although it will likely take a sum considerably in excess of that for FSG to pivot from their plan to source outside investment into the club at a time when they have opened themselves up to offers for their full shareholding.
In a candid interview with Business Insider, Cardinale said, “We were ahead of our time in making a run at Liverpool, but in hindsight, I understand the choice. I frequently make fun of my coworkers at Goldman by saying, “You people are expensive.”
After Cardinale had succeeded in swaying the first judgment of the Goldman investment committee by bringing on board both the Yankees and the Dallas Cowboys ownership organizations as co-investors, it was former Goldman CEO Lloyd Blankfein who ultimately killed the plan. Business Insider claims that the team’s demise was actually brought on by Blankfein’s worry that the bank would face criticism for owning a group with such a sizable, ardent, and devoted fan base.
However, according to Business Insider it was Blankfein’s concern that the bank would open themselves up to negative press by owning a team with such a large, passionate and die-hard fan base that ended up being the death knell for the deal.
Twelve years later, Cardinale owns a stake in Liverpool through the 11% of FSG’s overall empire that it holds, and RedBird has increased its presence in European football with AC Milan. The club’s top priorities include building a new stadium to replace the storied but aging San Siro and ensuring that the 201/22 Serie A champions remain a formidable force both at home and abroad.
Growing businesses has very much been in RedBird’s wheelhouse and after the acquisition of Milan a tie-up was quickly concluded with the New York Yankees, with the YES Network to broadcast AC Milan programming as part of its schedule. Yankee Global Enterprises acquired a small stake in Milan after RedBird concluded the deal in September, with the partnership to also see Milan merchandise will be available for purchase at the Yankee Stadium, while Yankees products will be sold at the Rossoneri’s team stores in Milan.
RedBird and Cardinale will aim to repeat the kind of success that FSG have produced with the Reds in terms of building the business and producing trophies, according to Liverpool chairman Tom Werner, who also spoke to Business Insider.
Werner stated, “I think Gerry saw the value we created in Liverpool and I think he intends to emulate the success that Liverpool has had with AC Milan in the Premier League.
RedBird won’t be making a move for Liverpool because of their ownership of AC Milan and the obvious conflict of interest that would result, but they are believed to desire to play a long-term role within FSG as it expands its empire.
While the Liverpool owners are open to offers at the right price, sources have told the ECHO that there is little that has changed since the revelations first appeared in early November and that a partial sale to a “strategic partner” would be the preferred outcome, with FSG principal John W. Henry not overly keen for his organisation to rid themselves of their most valuable asset, one that would see them almost certainly leave money on the table with sale now due to valuations still creeping ever higher.
Given the inexperience of their FSG investment, RedBird is unlikely to want to sell today unless the price is extremely high, however certain minority investors might be more interested. The next move might be to pool any minority shareholders who want to sell and give them the possibility to buy the company from a partner that can supply scalable funding.