FSG and Liverpool partners RedBird are about to make…

FSG and Liverpool partners RedBird are about to make major $600m move

RedBird Capital Partners, the private equity firm that holds an 11 per cent stake in Liverpool owners Fenway Sports Group, is to sell its 40 per cent stake in One Team Partners in a deal that will book profits of around $600m (£527m) for the New York-based fund.

RedBird were a founding investor in OneTeam back in 2019, the company created to look after the licensing and commercial rights for more than 10,000 athletes represented through the MLB Players' Association, NFL Players' Association, MLS Players' Association, US Women’s National Team PA, WNBAPA, NWSLPA, US Rugby PA, and the LCSPA, as well as college athletes.

The sale of RedBird's stake sees the three-year-old OneTeam valued at $1.9bn, meaning that RedBird have seen more than a 500 per cent return on their investment, a return that has far outpaced the average private equity return over the same period, which analysts at Pitch Book, via Sportico, had pegged at around 99 per cent.

The creation of OneTeam and RedBird's early involvement came just ahead of the opening up of the NIL (name, image, likeness) rights for college athletes, partnering with firms such as Fanatics to maximise the potential for a revenue stream that has previously been off limits to college athletes.

It is the latest success for RedBird, the private equity firm founded by former Goldman Sachs executive Gerry Cardinale back in 2014.

RedBird's raison d'être is to play at active role in building the businesses that they become involved with, an active investor in a market where there are many passive investors.

Key to their plan has been hiring the right people to guide elements of their business, with former Cleveland Browns president Alec Scheiner heading their sporting investments, which as well as indirect stakes in FSG-owned Liverpool and the Boston Red Sox, also includes majority ownership of French Ligue 1 side Toulouse as well as the more recent acquisition of Italian giants AC Milan from fellow New York investment fund Elliott Management. RedBird also added Kevin LaForce last year, the NFL executive who was key to the league securing a record $100bn 10-year broadcasting deal.

The OneTeam stake sale reaffirms RedBird's position at the vanguard of private equity in sport, the firm having been one of the most active in the market over the past two years, clinching the FSG stake, Toulouse purchase, acquisition of Indian Premier League cricket team Rajasthan Royals and the takeover of AC Milan.

In addition to that RedBird has also taken stakes in the SpringHill Entertainment Company business owned by LeBron James and Maverick Carter, both FSG partners, with FSG also taking a stake alongside Nike and Epic Games. RedBird are also relaunching the XFL in the US with Hollywood star Dwayne Johnson.

RedBird are one of the biggest stakeholders in FSG and sources close to the firm have intimated that their partnership is one for the long haul, with the potential for more capital to be deployed into the business to aid potential future growth plans that could benefit the sporting entities that exist within the FSG portfolio.

The RedBird stake for 11 per cent of FSG when it was concluded in March 2021 was valued at $750m, but based on recent estimates on the overall value of FSG's empire at $10bn through new additions such as the Pittsburgh Penguins, that investment could be now worth as much as $1.1bn, a 47 per cent rise on the investment made.

RedBird's view for FSG is one of a long-term plan, with more teams set to be added to the portfolio, with an NBA expansion franchise that is likely to be helmed by James when he retires at the top of the list, with all signs suggesting it will land in Las Vegas.

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