Earlier this month RedBird Capital Partners clinched a deal to acquire a majority stake in Italian giants AC Milan.
It saw Milan become the second European football club to have majority ownership by RedBird, who had paid $750m in March 2021 to acquire an 11 per cent stake of Fenway Sports Group, Liverpool FC's owners. That deal saw the New York-based investment become the third largest shareholders in FSG and, ergo, minority owners of Liverpool FC, the Boston Red Sox, the Pittsburgh Penguins and RFK Racing, among other related businesses.
RedBird, founded by managing partner Gerry Cardinale in 2014, had already entered into European football before the acquisition of Milan and the part ownership of the Reds through FSG, buying a controlling stake in French second-tier side Toulouse in the summer of 2020. Cardinale installed former Liverpool sporting director Damien Comolli to head up that operation and 'Les Violets' have returned to Ligue 1 after securing the Ligue 2 title last month.
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A small shareholding in Spanish side Malaga, one that remains on the backburner due to ownership wrangles in the Spanish court, forms a small part of RedBird's sporting portfolio, but deals to acquire a stake in the Indian Premier League cricket franchise Rajasthan Royals last year showed their eye for what was happening in the market, with the IPL TV rights fetching a record $6.2bn at auction earlier this month, a figure more than double the value of the previous deal.
Then there is the ownership of the XFL alongside Hollywood superstar Dwayne Johnson and Johnson's ex-wife Dany Garcia. The XFL was purchased by RedBird out of bankruptcy for $15m and next year it is expected to launch to great fanfare and with a multi-year broadcasting deal with Disney.
The deal to purchase AC Milan for around £1bn ($1.2bn) from another US investment fund, Elliott Management, was concluded swiftly. The Bahraini investment fund Investcorp had been attempting for some time to strike a deal and even entered into a period of exclusivity, but once that passed it allowed RedBird to swoop in and make their own play, one that took a matter of weeks to resolve.
The club is now in the hands of Cardinale and his team, and the plan is to keep technical director and club legend Paolo Maldini in situ and build on the success of the title-winning Serie A side, who won their first Scudetto in 11 years under Stefano Pioli this past season.
RedBird want to see a new stadium come to fruition for Milan, one that provides not only the club with a home befitting of their status but a stadium that can serve as an arena for Italy to look to when hosting major music and entertainment events. They also want to leverage the standing that the city has in the fashion world to try and find ways to add new revenue streams and tap into the lifestyle brands in the way that Paris Saint-Germain have attempted to do with their Air Jordan/Nike link-up.
They will have a keen eye on cost control and are likely to operate in a similar fashion to what FSG do at Liverpool, looking to maximise player profit to aid reinvestment and ensuring that growth of transfer spend and wage liabilities falls in line with growth of revenues, something that UEFA will be clamping down on with new financial regulations introduced this month, where squad cost ratio to revenues must not exceed 70 per cent by the 2025/26 season. Milan presently stand at 85 per cent, according to figures presented by football finance expert Swiss Ramble.
The price point for a club of AC Milan's stature may have seemed low in comparison to the £2.5bn that Chelsea were sold for to Todd Boehly and Clearlake Capital earlier this month, but with Serie A media revenues dwarfed by the Premier League, something Cardinale wants to try and address, it means that there is considerably less money flowing into Italian clubs.
But having seen the growth opportunities in cricket and the XFL, RedBird believe that AC Milan has the potential to grow exponentially, something that the latest data from sports industry brand analysts at Brand Finance would support.
Brand Finance annually puts 5,000 of the biggest brands to the test, and publishes around 100 reports, ranking brands across many sectors and countries. The football industry’s top 50 most valuable and strongest brands are included in the annual Brand Finance Football 50 ranking. This valuation, generated by professional accountants in compliance with ISO brand valuation standards, seeks to estimate the net economic benefit that a brand owner would achieve by licensing the brand in the open market. It determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. It isn't a report that includes the value of the squad or its stadium etc.
In AC Milan's case the Rossoneri trail significantly behind Juventus' top performing team in the 2022 report. Juventus' brand value stands at €705m (£608m) while Milan's was pegged at €269m (£232m). While that is a sizeable gap in brand value, it masks that AC Milan, who had regressed during the 2010s, have achieved the highest percentage improvement in brand value in world football over the last 12 months, seeing a 76 per cent rise. The brand value increase over the period equates to around £176m.
The Brand Finance report noted: "As the fastest growing football brand in the world, AC Milan have made steps to regain former glory, achieving the fasted growth in both brand value and brand strength. The club’s Brand Strength Index increased by 6.8 points to 77.2 out of 100, earning a rating of AA+. In doing so, AC Milan improved its brand valuation ranking by 12 places, up from 29th to 17th, as it passed several closely ranked clubs.
"AC Milan’s brand value is still 16 per cent below their pre-pandemic 2019 brand value high of €321m, but the club will hope that this time it can maintain the brand value, having endured significant brand value variance since featuring at seventh in Brand Finance’s first ranking in 2010."
Liverpool leapfrogged rivals Manchester United in the 2022 report as the success on the pitch for Jurgen Klopp's side in recent seasons saw the value of the club's brand push into the billions.
Having seen their brand badly impacted by the pandemic in the May 2021 report, where they placed sixth, Liverpool have seen their brand value over the last 12 months improve by 31 per cent, taking them to £1.1bn, a figure that is now higher than Manchester United's, with the Old Trafford outfit having seen an 11 per cent drop in their own brand value over the course of the last year.
The rise of Livepool's compared to United's has been driven by the success on the field and off it respectively. The Red Devils has never previously been below third since analysts at Brand Finance began compiling the list.
Brand Finance's data sees Liverpool having recorded the highest growth in brand value over the past 12 months, seeing their brand value reach a score of 92.9, securing a AAA+ brand rating, increasing by 3.9 points this year - more than any other club in the top 10.
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