Liverpool FC owner looks at stock market listing

Liverpool FC owner looks at stock market listing

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John Henry, owner of Liverpool FC and Boston Red Sox, is in talks to publicly list his sports holdings in a merger with a blank-cheque company, two people familiar with the matter said.

The move would value his company at $8bn in a proposed tie-up with Billy Beane, the US baseball executive depicted by Brad Pitt in the film Moneyball.

The potential listing of Fenway Sports Group LLC, the holding company for the reigning English Premier League football champions and the 2018 World Series baseball champions, would be one of the most high-profile sports offerings on the stock market in recent years. 

RedBall Acquisition Corp, a special purpose acquisition company, or Spac, set up by Mr Beane and Gerry Cardinale, founder of the private equity firm RedBird Capital Partners, raised $575m in August with the aim to acquire a sports franchise. The shell company said it would use data analytics, made famous by Mr Beane through his management of the Oakland Athletics baseball club, to improve on-field and revenue performance at the target it acquired. 

RedBall plans to acquire a 25 per cent stake in Fenway, said two people briefed about the talks. As part of the discussion, Redball will raise a further $1bn in addition to the $575m it has already attracted through its Spac to complete the transaction, said those people. 

The talks are at an early stage and there is no guarantee they will lead to a transaction but one person said Fenway’s principal backer, Mr Henry, is keen to get a deal done and take his sports empire into the public markets. 

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If a deal was reached, the listed vehicle could be used to acquire other teams across Europe, said one person briefed on the matter. 

A spokeswoman for RedBall declined to comment. Representatives for Fenway Sports Group did not immediately respond to a request for comment.

The potential for a public listing comes as sports leagues and franchises are grappling with the effects of the coronavirus pandemic, leading to substantial losses this season and the search for creative financing. The Red Sox are projected to lose $338m this year from the loss of ticket sales alone, according to analysis from Team Marketing Report. 

A consortium of UK sports leagues, including the Premier League, have written to Prime Minister Boris Johnson in recent weeks seeking a bailout for pandemic-imposed revenue shortfalls. 

While many top-tier European clubs, including England’s Manchester United and Italy’s Juventus, list shares on open markets, few US clubs have public ownership. The Atlanta Braves baseball club is wholly owned by Liberty Media Group, the publicly listed conglomerate founded by John Malone.

Most US sports franchises have private ownership whose ranks form a rarefied club of financiers, celebrities and other power players. Steven Cohen, the hedge fund titan, recently agreed to buy the New York Mets for more than $2bn, subject to approval by other league owners, a prolonged process involving layers of vetting.

Basketball star LeBron James has been a minority owner of Liverpool since 2011.

Mr Cardinale, a former Goldman Sachs banker, recently acquired Toulouse FC, a French club that was relegated into the European country’s second division. Earlier this year Mr Cardinale held talks with AS Roma to buy the Italian Serie A team but the discussions did not lead to a deal. 

Since launching the Spac with Mr Beane, who owns a minority stake in the English second-tier team Barnsley FC, the duo have been on a hunt to acquire a European club. Condoleezza Rice and Robert Gates, two former officials in the George W Bush administration, are advising RedBall on the transaction.

Spacs, which promise companies a faster and less onerous route to public markets than traditional initial public offerings, have raised a record $51.1bn so far this year, quadrupling last year’s volume. The blank-cheque vehicles raise money on the stock market with the aim to acquire a private company, thereby taking it public through a so-called reverse merger. 

News of the talks was earlier reported by The Wall Street Journal.

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