One of Fenway Sports Group’s most significant partners has stepped down from the board of directors at French side Toulouse ahead of next season’s Champions League.
Gerry Cardinale, founder and managing partner of New York-based investment firm RedBird Capital Partners, has removed himself from the board at the Ligue 1 side as part of a series of measures to create clear separation between Toulouse and another RedBird-owned side, AC Milan, which they acquired last year.
Toulouse booked their place in the Europa League next season, where they could end up meeting Liverpool, by virtue of winning the French Cup last season. It is the first time that the club, whose president is former Liverpool sporting director Damien Comolli, will have played in European competition since the 2007/08 season.
But with AC Milan having qualified for the Champions League next season there has been concern that the two sides being owned by the same firm could cause serious problems for the French club’s European ambitions. Article 5 of the UEFA regulations prohibits two clubs owned by the same shareholder from participating in the same European competition. While Toulouse and Milan will play in different tournaments the risk exists that should the Italian side exit the Champions League early then they would drop into the Europa League, potentially creating a scenario where the two teams play each other.
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That has required some movement at board level, with the stepping down by Cardinale the first of a likely series of moves that RedBird hope will satisfy UEFA around any concerns they may have over a conflict of interest.
There is a precedent for such changes, as was seen by the Red Bull owned sides RB Leipzig and Red Bull Salzburg in 2017, when both sides were to meet each other in the Champions League. That particular impasse was resolved through changes to shareholder agreements, the removal of some linked personnel at board level with decisive influence. The Red Bull issue was more pointed given that there were a number of issues such as similar club branding, high levels of income from Red Bull sponsorship deals, a formal cooperation agreement and unusually high levels of player loans and transfers. Both AC Milan and Toulouse have thus far operated independently of one another, with no sponsorship crossover or cooperation agreements in place, with the hope being that a resolution will be able to be found swiftly to preserve the status of both clubs in UEFA competition this year.
RedBird acquired 11 per cent of Liverpool owners FSG back in March 2021 in a $750m deal. There is, however, no issue related to Liverpool with regards to any conflict of interest given that RedBird have an indirect stake in the Reds through FSG and no RedBird personnel hold a place on the board of directors at the football club.
