The other development has introduced a new FSG partner that needs no introduction: LeBron James.
James, one of the most recognizable, influential and richest athletes on the world stage, now owns an unknown amount of FSG shares after having previously owned around 2 per cent of the Liverpool football franchise since 2011.
By becoming a partner in FSG, the star in Los Angeles Lakers will also become a co-owner of the Red Sox, as well as other FSG subsidiaries, including NESN, Roush Fenway Racing and Fenway Sports Management.
James’ potential to increase the brand value of FSG properties is significant, and even more so, as RedBird’s investment will help give FSG the spending power to expand its portfolio and start adding to its list of properties.
Maverick Carter, James’ longtime business partner and friend, is also joining James as a new FSG partner. Carter and James become the first black partners in the history of FSG.
On the FSG’s shopping list are NFL and NBA franchises, another European football club, NHL, MLS, WNBA and NWSL teams, plus sports betting, sports and data analysis companies.
The RedBird cash infusion gives the New York company an 11 percent stake in FSG, which will have an operating value of approximately $ 7.35 billion. FSG owes $ 600 to 700 million, with more than $ 600 million in cash to existing partners.
FSG chief owner John Henry (who also owns the Boston Globe) will retain control of the Boston-based sports conglomerate, with management remaining unchanged under FSG chairman Tom Werner and FSG president Michael Gordon. Werner’s FSG stake remains second largest, while Gordon’s shares will drop to fourth.
FSM, the advisory and marketing division of FSG, has been working with James on various marketing and endorsement businesses for over a decade.
A large portion of the RedBird Capital Partners investment will be earmarked for FSM, the latest sign that James will play a more prominent role in FSG operations. In the fall of 2019, FSG successfully switched Liverpool’s uniform sponsorship to Nike after ending a long relationship with the New Balance shoe and clothing company in Boston.
James is a Nike customer and in 2015 entered into a lifelong agreement with the world’s leading shoe and sportswear company worth more than $ 1 billion.
Over the past year, FSG has received an unknown investment from one of its newer partners, the Dallas-based Arctos Sports Partners.
According to the source, FSG considers the RedBird investment as a first step in the pursuit of new acquisitions and partnerships.
Forbes’ latest valuation of FSG put it at $ 6.6 billion, which is good for a fourth place on the sports-rich list, one place ahead of the Yankees parent company ($ 6.4 billion). FSG was behind the valuation behind Jerry Jones’ property (Dallas Cowboys plus real estate, hospitality service, sports) worth $ 6.98 billion, Kroenke Sports & Entertainment ($ 8.73 billion), owner of the Los 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, began its $ 700 million purchase of the Red Sox in 2002. Forbes last valued the Red Sox at $ 3.3 billion.
FSG’s second major blow came in 2010, when it snatched Liverpool for $ 493 million shortly after a global recession struggled in cash.
KPMG recently valued Liverpool at $ 2.6 billion, which would mean that James’ initial investment grew by 2% from $ 6.5 million to $ 52 million.
RedBird Capital is led by investor Gerry Cardinale.
Last fall, Cardinale and Billy Beane, the Oakland A’s CEO of “Moneyball” fame, launched RedBall Acquisition Corp., a specialty procurement company that wants to invest and publish a company that is reportedly eyeing had an investment of $ 1.5 billion. in FSG, FSG would have been public at a valuation of more than $ 8 billion.
The public enterprise RedBall-FSG did not succeed after FSG decided to remain a private company when the SPAC gained price resistance from public investors.
Because FSG and Cardinale, who also sit on the boards of both the Yankees’ parent company and their YES network, have moved to the belief that they shared similar visions of growth opportunities in the sports industry, they have taken a private approach that has led has to the current investment.
According to an SEC filing last year, one of the limited partners of Fenway Sports Group, Seth Klarman, and its hedge fund Baupost Group recently invested $ 52 million in RedBall.
Last July, Cardinale and RedBird bought 85 per cent of French second-team Toulouse FC. Cardinals have since spoken out 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.