The other development introduced another new FSG partner that needs no introduction: LeBron James.
James, one of the most famous, influential and wealthy athletes on the global stage, now owns an undisclosed amount of FSG shares, after previously owning approximately 2 percent of the shares in the Liverpool football franchise since 2011.
Upon becoming an FSG partner, the Los Angeles Lakers star will also become a co-owner of Red Sox, as well as other FSG subsidiaries, including NESN, Roush Fenway Racing and Fenway Sports Management.
James’s potential to increase the brand value of FSG properties is significant, and even more so considering that RedBird’s investment will help give FSG the purchasing power it needs to expand its portfolio and start adding to its list of properties .
Also joining James as a new FSG partner is Maverick Carter, James’ longtime friend and business partner. Carter and James became the first black partners in FSG’s history.
FSG’s shopping wish list includes franchises from the NFL and NBA, another European football club, NHL, MLS, WNBA and NWSL teams, as well as sports betting, e-sports and data analysis companies.
The injection of money from RedBird will give the New York-based company an 11 percent stake in FSG, which will have a company value of approximately $ 7.35 billion. FSG will have a debt of $ 600 million to $ 700 million, with more than $ 600 million in cash going to existing partners.
FSG’s principal owner, John Henry (who also owns the Boston Globe), will retain control of the Boston-based sports conglomerate, with governance remaining unchanged between FSG President Tom Werner and FSG President Michael Gordon. Werner’s stake in FSG remains the second largest, while Gordon’s shares will fall to fourth position.
FSM, the consultancy and marketing arm of FSG, has worked with James for more than a decade on various marketing and endorsement ventures.
Much of RedBird Capital Partners’ investment will go to the WSF, the latest sign that James is about to play a more important role in FSG operations. In the fall of 2019, FSG successfully switched Liverpool’s uniform sponsorship to Nike after ending a long-standing relationship with Boston-based shoe and clothing company New Balance.
James is a Nike customer and in 2015 signed a lifetime contract with the world’s leading shoe and sportswear company, which is believed to exceed $ 1 billion.
Last year, FSG received an undisclosed investment from one of its newest partners, Dallas-based Arctos Sports Partners.
According to the source, FSG sees RedBird’s investment as a first step in its search for new acquisitions and partnerships.
Forbes’ most recent valuation of the FSG put it at $ 6.6 billion, good for a fourth place on the sporting empire list, a place ahead of the parent company of the Yankees ($ 6.4 billion). In this assessment, FSG was behind the $ 6.98 billion stake of Jerry Jones (Dallas Cowboys plus real estate, hospitality services, e-sports), Kroenke Sports & Entertainment ($ 8.73 billion) Angeles Rams, Arsenal FC (Premier League), Denver Nuggets and Colorado Avalanche and Liberty Media ($ 13 billion), owner of Formula 1, Atlanta Braves and the Drone Racing League.
FSG, then known as New England Sports Ventures, started with the purchase of the Red Sox for $ 700 million in 2002. Forbes last valued the Red Sox at $ 3.3 billion.
FSG’s second significant impact came in 2010, when it snatched Liverpool for $ 493 million shortly after a global recession left its previous owners penniless.
KPMG recently valued Liverpool at $ 2.6 billion, which would mean that the initial 2% investment of $ 6.5 million reported by James has grown to around $ 52 million.
RedBird Capital is led by investor Gerry Cardinale.
Last fall, Cardinale and Billy Beane, Oakland A’s famous “Moneyball” executive, launched RedBall Acquisition Corp., a special-purpose acquisition company that is looking for a company to invest and go public, which it was supposed to be eyeing. at a $ 1.5 billion investment in FSG, that would have made the FSG public at a valuation of more than $ 8 billion.
The public company RedBall-FSG gambit did not work after FSG decided to remain a private company when SPAC encountered price resistance from public investors.
Still believing that they shared similar views of growth opportunities in the sports industry, FSG and Cardinale, which also sits on the boards of the Yankees’ parent company and its YES network, have switched to a private approach that has led to current investment.
According to SEC filings last year, one of Fenway Sports Group’s limited partners, Seth Klarman, and its hedge fund Baupost Group recently invested $ 52 million in RedBall.
Last July, Cardinale and RedBird bought 85 percent of the French second division football team Toulouse FC. Cardinale has since spoken about the multiple investment opportunities that can be found in European football leagues.
Michael Silverman can be reached at [email protected]. Follow him on Twitter: @MikeSilvermanBB.