Boston Red Sox owner John Henry is in talks with a newly formed investment vehicle that would take the parent company of the Boston Red Sox and Liverpool Football Club public, according to a person with knowledge of the matter.
The talks between Henry’s Fenway Sports Group and RedBall Acquisition Corp., a special purpose acquisition company started by Gerry Cardinale, may lead to a deal that values the iconic teams at about $8 billion, said the person, who was granted anonymity because the matter is private.
The deal could still fall apart, and likely won’t happen until the end of the year, the person said.
Cardinale, whose SPAC includes Oakland A’s executive Billy Beane, declined to comment. Fenway Sports Group didn’t immediately respond to an email seeking comment. But the deal will get the attention of the sports world as more teams explore public ownership.
“A marquee baseball team together with a top tier soccer team going public together is unprecedented,” said Marc Ganis, founder of SportsCorp., which advises sports leagues and teams.
RedBall started trading in August, giving it $575 million dollars and two years to complete an acquisition in the sports business. It plans to raise another $1 billion to pursue a stake in Fenway Sports Group, the person said.
Cardinale, founder of private equity firm RedBird Capital, and Beane formed RedBall with the intent of targeting “Sports franchises, including European football clubs, with intrinsic brand value that could be enhanced by our management team through improvement of (a) on-field performance through an analytics-based approach, and (b) business and revenue operations,” according to its prospectus.
SPACs, which have flocked to market this year, hold an IPO and then find a business that wants to go public without the time and expense of holding its own IPO. Some of the year’s hottest new issues, including DraftKings, space travel outfit Virgin Galactic and clean-tech vehicle company Nikola have come public by blank check. The amount of capital a SPAC can spend can be magnified, since a company needs only to sell a portion of itself to a blank check acquirer to gain a public listing. That means in theory RedBall could acquire a team at a much higher valuation than $575 million.
Talks were first reported by the Wall Street Journal.
Henry bought the Red Sox in 2002, and the team has won the World Series four times since 2004, when it snapped an 86-year drought. Liverpool, meantime, won the English Premier League title this season, and counts LeBron James among its ownership group. Fenway also owns Fenway Park, where the Red Sox play, and the New England Sports Network, while Henry is the principal owner of the Boston Globe.
“The assets John Henry assembles are incredible properties,” Ganis said. “Also great international, media and crossover appeal with LeBron James, NESN and the sports facilities. This is a big deal. It will be interesting to see how investors value it.”
The deal, if completed, could open the door to more publicly owned professional sports teams, a rarity in the major U.S. sports leagues. Liberty Media Corp. owns the Atlanta Braves, and the NFL’s Green Bay Packers are owned by a shareholder group consisting mostly of fans.
RedBird’s recent acquisitions include the XFL, whose ownership group also includes Dwayne “The Rock” Johnson and his business manager, Dany Garcia. The private equity firm also bought a second division French soccer team.
Richard Scudamore, the former EPL executive, is a member of RedBall’s board.
(This story has been updated with comments from SportsCorp.’s Marc Ganis in the fifth and twelfth paragraphs.)