Liverpool owners Fenway Sports Group could make a play for an NFL team in the future if rules around private equity in America's biggest sporting league change.
With the NHL, NBA MLS and MLB having all cleared the way for private equity to own minority stakes in teams, the NFL has remained the outlier thus far with ownership rules tighter around private equity. But with the changes that have already been seen across the major US sports leagues there could be scope for FSG to enter the fold in the future.
FSG, owner of the Boston Red Sox baseball team as well as the Reds, the Pittsburgh Penguins and NASCAR team RFK Racing, welcomed New York-based RedBird Capital Partners into the fold in March 2021, the private equity firm that sealed a takeover of AC Milan at the start of September, acquiring an 11 per cent stake in the Liverpool owners in a $750m deal.
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That deal came after the MLB relaxed its rules around private equity, and with the NBA having also followed suit there have been a number of private equity firms who have taken minority stakes, including FSG partner Arctos Partners.
FSG have an NBA franchise on their wish list potentially an expansion franchise in Las Vegas, with any project likely to be helmed by FSG partner and basketball icon LeBron James when the 37-year-old decides to call time on his glittering playing career. The Phoenix Suns being put up for sale by owner Robert Sarver last week following an NBA investigation into racism and misogyny in the workplace at the team. That is an opportunity that FSG are likely to assess, the ECHO understands.
More football teams are also a possibility for FSG, whose empire is now valued at around $10bn, both in Europe and South America.
An NFL move would, however, be an expensive one, with the average valuations of teams in the league standing at around $4..5bn in 2022. The cost certainty of a closed league, the capping of salaries and a 10-year broadcasting deal that is worth $100bn means that to enter into the market now does not come cheap, although franchise valuations continue to grow.
Speaking at the Leaders Week sports business conference in London, RedBird founder and managing partner Gerry Cardinale addressed his future involvement with FSG, saying: "I think we’ve been clear with Fenway Sports Group, we’re going to continue to look at that as a platform for aggregating blue chip teams,” he said. “We’ve got baseball, we’ve got European football, we have hockey, we have content production. You should expect that we’re going to take a hard run at the NBA, we’ll see if we can ever get there with the NFL if the rules evolve.
"But for the most part we’ve put a lot of money to work across a variety of parts of the value chain in sports and sports media. So I think you should expect that we’re just going to be going back to the less sexy part of owning well. I don’t think you can buy well enough to just sit there, park the money and assume it’s all going to go up.
"I think you’ve got to go after it, roll up your sleeves, integrate operating personnel, invest in personnel in partnership with the rights holder, and own better. So what I’m really going to be focused on in the next period of time is owning better."
Cardinale’s RedBird firm acquired AC Milan earlier this year in a £1bn deal, adding a second club to their portfolio having acquired French side Toulouse back in the summer of 2020 following a long period of due diligence in European football that saw them assess over 200 clubs, a process Cardinale described as RedBird "going to school for five years".
"AC Milan, in my view, is one of the most exciting things that we’ve done," Cardinale said.
"I think AC Milan is a sleeping giant. I think we bought it well, I think that if you look at its position globally as a brand in European football, it’s one of the big ones. And it’s under-monetised. If you look at the differential in England and Spain and LaLiga with Serie A, there’s a tremendous opportunity here to further work our way into the money on AC Milan and Serie A in general.
"So our interest in AC Milan was really about AC Milan as a brand and what we could do with it. And it was also about Serie A and what we think the possibilities are for that as a league."
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