The founder and managing partner of one of Fenway Sports Group's biggest shareholders has shared how he was denied a shot at a Liverpool takeover in 2009.
New York-based investment firm RedBird Capital Partners came on board with Liverpool owners FSG in March 2021, clinching an 11 per cent stake in FSG and its whole portfolio for a fee of around $750m, the capital raised through the deal aiding cashflow across their assets for FSG during the pandemic and helping them with the November 2021 purchase of the Pittsburgh Penguins NHL team.
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.
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RedBird's founder and managing partner is Gerry Cardinale, who had worked for Goldman Sachs for a number of years prior to striking out on his own with RedBird in 2014. At Goldman Sachs he had his first taste of sports investment and was central to helping to build multi-billion dollar companies such as the New York Yankees' Yankees Entertainment & Sports (YES Network) and Legends Hospitality.
Three years before leaving Goldman, Cardinale had implored the bank to take advantage of the chance to purchase a controlling stake in Liverpool, then under the ownership of the deeply unpopular George Gillett and Tom Hicks, with the valuation at the time standing at around $450m (£300m at the time), the price that FSG ended up paying 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.
"We were ahead of our time in taking a run at Liverpool, but in hindsight, I understand the decision," Cardinale told Business Insider in a revealing interview. "I always joke to my friends at Goldman, 'You guys cost us a lot of money."
It was former Goldman CEO Lloyd Blankfein that ended up killing off the deal after Cardinale had managed to sway the initial opinion of the Goldman investment committee by bringing onboard both the Yankees and the Dallas Cowboys ownership organisations as co-investors. 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 on and Cardinale has a stake in Liverpool via the 11 per cent held in FSG's overall empire and RedBird has expanded its reach into European football with AC Milan, where top of the agenda is for them to deliver a new stadium to replace the famous but ageing San Siro, as well as making sure the 201/22 Serie A champions remain a competitive force 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.
Also speaking to Business Insider, Liverpool chairman Tom Werner said that RedBird and Cardinale will seek to replicate the kind of success that FSG have delivered with the Reds in terms of growing the business and delivering trophies.
"I think that Gerry saw the value we created in Liverpool, and I think he hopes to replicate the success that Liverpool has had in the Premier League with AC Milan," said Werner.
RedBird's ownership of AC Milan and the obvious conflict of interest that would arise means that they won't be making a play for Liverpool, although they are understood to want to play a long term role within FSG as it continues to grow 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.
RedBird, given the immaturity of their FSG investment, are unlikely to want a sale now unless at a huge price, although some minority investors may be more keen. Pooling any minority shareholders that want to cash out and offering the chance to purchase to a partner that can provide scalable capital could well be the next play.
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