June 27, 2022

A report has emerged from England documenting what has been learned about RedBird Capital during their one-year involvement with Liverpool.

The Echo of Liverpool writes how RedBird Capital entered the European football market in the summer of 2020 by acquiring a majority stake in Toulouse in the French Ligue 2. They were in chaos at the time and needed a rebuild, and last month they returned to Ligue 1.

RedBird has bought shares in Indian Premier League T20 cricket team Rajasthan Royals and also in Spanish second division club Malaga. Following this, they bought an 11% stake in Liverpool owners FSG for $750 million.

Gerry Cardinale’s fund has partnered with Dwayne Johnson for the relaunch of the XFL in the United States – an American football for the NFL’s offseason – and FSG has invested in the Penguins ice hockey team of the NHL’s Pittsburgh, then buying it for more than $900 million. value of their empire beyond the $10 billion mark.

Earlier in June, RedBird made their biggest hit when they agreed a €1.3 billion deal to buy Milan, aiming to move to “the forefront of football investment” with ” the opportunity to grow a brand that they believe can expand far beyond its current state.” .

RedBird are described in the report as “business builders” who use their vast experience in American sport to increase revenue streams among clubs in Europe, growing the brand globally and increasing cash flow of the company, hence the focus on media and entertainment.

When considering how FSG have run Liverpool and what RedBird have learned they don’t think it’s wise to ‘use capital to support player transfer expenses’ and although the silverware is excellent , “winning trophies are something like espresso to clubs”. by giving “a short-term boost without really addressing the question of how they generate this type of income from year to year”.

Essentially, the focus is on growing and maximizing revenue that can then be invested in new players to create trophy success that can happen more consistently and sustainably, from the money they have generated as a business.

The report mentions how Sam Kennedy – the president of the Boston Red Sox and one of the FSG’s most influential partners – told American sports company website Sportico last year how RedBird’s investment has “ oversized” the ambitions of the owners of Liverpool.

Thanks to FSG’s close ties with LeBron James, their next big ambition is to have an NBA team in Las Vegas in the years to come and it’s a project that RedBird “will be involved in”.

The Echo adds that RedBird’s position is to help FSG pursue “growth opportunities that deliver greater value to Reds owners and allow them to make capital expenditures on infrastructure projects that can have a direct impact on revenue at the team level”.

Cardinale now has the Rossoneri to manage and one of their priorities is a new stadium which ‘can become Italy’s first outdoor arena’. They also plan to use Milan’s status as a fashion capital by increasing revenue streams by reaching new demographics with Milan-branded products, as Paris Saint-Germain did with their Air collaboration. Jordan.

RedBird will operate Milan more like “the way FSG operates at Liverpool than what QSI does at PSG”, meaning there will be “cost control and a desire to be net positive eventually when it comes to transfer expenses”.

Sources told the Echo that RedBird’s investment in Milan is something long-term and there are no plans to sell for a quick profit, nor are there any conflict of interest regarding their involvement with Liverpool. Also, being a multi-club platform like City Football Group or Red Bull is undesirable.

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