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RedBall interested in minority stake in Liverpool FC

According to the New York Post, special purpose acquisition company (SPAC) RedBall Acquisition Corp. are interested in purchasing a minority stake in English Premier League Champions Liverpool FC.

Formed by Oakland A’s executive, Billy Beane, and managing director of RedBird Capital Partners, Gerry Cardinale, the reds are a ‘primary target’ for RedBall. Last week, the SPAC confirmed they raised US$575 million from their initial public offering (IPO).

Former executive chairman of the Premier League, Richard Scudamore has been appointed to the board of the US-listed company that has been set up to invest into European football. He joins former Cleveland Browns president, Alec Scheiner, and vice president of strategy and analytics at Sacramento Kings, Luke Bornn. RedBall currently have 24 months to purchase a company in any industry, though intend to specialise in sport, media and analytics. Beane, a reported Liverpool fan, has links to Reds and Boston Red Sox owner, John W. Henry.

The New York Post report that RedBall have over US$1 billion at their disposal, which is enough to purchase a minority stake in the Merseyside club.

Before the outbreak of Covid-19, Liverpool had been reported to have been shopping for a minority stake. Which, under the current economic climate, would financially help the club moving forward.

At the moment, Liverpool are treading cautiously while other Premier League clubs are spending vast amount of money on player transfers. Forbes values the reds at US$2.18 billion as the club announced a pre-tax profit of US$54.9 million (£42 million) for the 2018/19 financial year.

But, FSG could face further losses due to the Major League Baseball (MLB) season being cut short and initially played behind-closed-doors. Therefore, the reds may have to rely upon RedBall providing an opportunity to enter the sport industry.

If RedBall are to be successful they will join basketball star, Lebron James, who has owned a two percent stake in the club since 2011. Reported to be worth around US$43.6 million in May 2019, Lebron’s stake is expected to have increased following recent league and cup triumphs.

The Athletic reports RedBall had a Premier League club on their wish list as Gerry Cardinales’ RedBird currently own 85 percent of French football side Toulouse FC.

A report published by Deloitte predicted football clubs could lose up to US$654 million (£500 million) from broadcast rebates and matchday revenue as a result of the Covid-19. Consequently, clubs may need to rely upon cash injections to help them in the short to medium term. According to reports from the Mirror, Liverpool alone could lose over US$250 million because of coronavirus.

However, with Liverpool’s current Nike deal, the reds could be a financial force moving into the future. Yet, moves the Premier League champions into unchartered territory as the club are not typically known for regularly spending large sums of money on player transfers like their Manchester City and United rivals.

Over the last two seasons, the on-field performance of the reds has been one to admire. Champions League Winners, World Champions and now Premier League Champions, Liverpool have come out of the shadow of the one they once were.

Now perceived to be a final destination, the cash injection may be the next piece of the puzzle for the future of the reds.

Author: James Parker