The former Premier League boss Richard Scudamore has been appointed to the board of a US-listed company that has been set up to invest in European football, with a Premier League club understood to be top of its wish list.
RedBall Acquisition Corp’s founders had been hoping to raise $500 million in an initial public offering (IPO) last week but high demand from investors meant underwriters sold another $75 million’s worth of shares, bringing the total to $575 million (almost £440 million).
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The special purpose acquisition company (SPAC), which is registered in the Cayman Islands, started trading on the New York Stock Exchange this week, with a current share price just over the initial offer of $10.
Also known as blank-check companies, SPACs are publicly listed shell companies created to buy or merge with another company, with the money raised from an IPO. That money is held in trust for a specified period — in RedBall’s case, two years — and will be returned to investors if the company fails to complete a deal.
RedBall’s launch is significant for two main reasons: the amount of money it has to invest (a sum that can be greatly increased once a deal is struck) and the calibre of people involved.
Joining Scudamore, who led the Premier League’s rise as to global prominence during his 19 years as chief executive and then executive chairman, on the company’s seven-strong board are co-chairmen Billy Beane and Gerry Cardinale, Volkert Doeksen, Deborah Farrington, Professor Richard Thaler and Lewis Wolff.
Beane is a minority shareholder in Major League Baseball’s (MLB) Oakland Athletics, their former general manager and current executive vice-president of baseball operations. He is perhaps best known for Moneyball, Michael Lewis’s 2003 book about Beane’s data-based approach to baseball. The book was turned into a successful 2011 film, with Brad Pitt playing Beane.
Doeksen and Farrington are leading investors, Thaler is an eminent economist and Wolff is a property developer and veteran sports entrepreneur, having previously owned stakes in the National Hockey League’s St Louis Blues, the National Basketball Association’s (NBA) Golden State Warriors and the Oakland Athletics at a time Beane worked for them. He co-owns Major League Soccer’s San Jose Earthquakes.
The main decision-makers at RedBall, though, will be Beane and Cardinale: a combination of ambition, expertise and financial firepower that has prompted considerable speculation on the British side of the Atlantic as to the nature of their targets.
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Cardinale is the founder of RedBird Capital, a New York-based private equity firm that has a proven record in North American sport, having invested in subsidiaries of the National Football League and MLB. It has also recently partnered wrestler turned actor Dwayne “The Rock” Johnson in his purchase of the XFL, the American football league that was shut down by COVID-19 in April weeks into its debut season.
Last month, RedBird FC, the firm’s “European football and analytics platform”, bought 85 per cent of French club Toulouse, who had just been relegated from Ligue 1, and installed Damien Comolli as club president. Comolli was Arsenal’s European scout for seven years before becoming director of football at Tottenham Hotspur and later Liverpool.
Speaking at a football conference in London in 2017, Beane said he was a “huge fan” of Arsenal because of the way the club was run and a few months later, he became a minority shareholder in Championship club Barnsley, who have subsequently pursued a Moneyball approach by investing in youth while running a tight financial ship.
Beane has also been a consultant for AZ Alkmaar, who sat second in the Dutch top flight last season, behind Ajax on goal difference as the league was ended in April with no champions crowned.
It is his partnership with Cardinale that gives the company its name: RedBird (the cardinal bird, native to the Americas, has red feathers) + Moneyball = RedBall.
Speaking to The Athletic, an experienced football dealmaker described the firm as “fascinating” but added “they will need to spend their money wisely rather than on Barnsley or Nice” — the French side being another of the clubs the Barnsley ownership group invested in, although they have since sold their stake.
“If they can leverage more money, £300 million on Newcastle United looks like a bargain,” says another British source in the football takeover business.
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But RedBall’s high-profile roster goes deeper than the boardroom. Its management team includes Alec Scheiner, a former executive with NFL teams Cleveland Browns and Dallas Cowboys, and Luke Bornn, a statistics and analytics expert who helped Roma recruit Mohamed Salah from Chelsea in 2016 and now works for the NBA’s Sacramento Kings.
The company is being advised by Rice, Hadley, Gates & Manuel, a strategic consultancy set up by former US secretary of state Condoleezza Rice, former national security advisor Stephen Hadley, ex-US secretary of defence Robert Gates and former US diplomat Anja Manuel.
Their speciality is overseas investment, leaving Scudamore to provide the more football-specific know-how.
Scudamore, who worked in US media for three years before joining the English Football League as chief executive in 1997, has known Cardinale for several years and has been acting as a sounding board to RedBird Capital since leaving the Premier League in November 2018. For his trouble, he has been given 30,000 shares and will receive $100,000 on what a recent stock-market filing describes as the “successful consummation of a business combination”.
The 60-year-old Bristol City fan’s appointment to the board is a result of RedBird Capital needing to satisfy stock-exchange rules on the new company’s independence but it is also an indication of where the firm will be looking.
“I know what you’re thinking — $575 million isn’t enough to buy the biggest Premier League clubs — but they could buy £800 million worth of Spurs, for example, £500 million of which is the SPAC, the other £300 million would be from someone else; an anchor investor with their name on the door.
“If you want to sell Spurs but there’s no buyer for the whole thing, you might do this deal. You can sell half the company and, over time, you can do what you want with the rest. It depends how desperate you are to sell. Alternatively, they could potentially go and buy someone like Newcastle.”
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While there is no suggestion that RedBall has any interest in either Newcastle or Tottenham, the fact there is a company with this much money burning a hole in its pocket, a deadline for completing a deal, a clear goal in mind and a star-studded cast of potential executives has got tongues wagging.
Six of the Premier League’s 20 clubs are owned or partly owned by Americans, with US investors also in charge or involved at several EFL clubs, including Portsmouth, Swansea City and Wycombe Wanderers.
“The European football economy is in good shape — its commercial revenues are growing, club valuations are growing, the players’ values are growing, the TV ratings are up,” explains American sports business expert Bruce Bundrant, who has worked for Liverpool and Monaco, and now runs Riviera Sports Marketing.
“American interest in European football isn’t new but it’s ramped up recently because some organisations are struggling and existing owners are trying to get out. Another factor is that it’s hard to get into US sport — the valuations are astronomical and minority stakes are rare. But for £200 million, you could buy Southampton, for example. The prices are appealing.”
(Photos: Getty Images)
