Gerry Cardinale’s US private equity firm has taken an 11% stake in the owners of Liverpool with the deal worth around £ 538million with the capital to be used to advance a number planned projects and mitigate the impact of the coronavirus pandemic.
The deal gave RedBird a foot in the door, with FSG ready to harness Cardinale’s skills to create revenue growth around the content, as well as his interest in football, with the US financier already owning the French side of Toulouse. through his company RedBird FC.
FSG wants to add more sports teams to its portfolio. And while they look for potential franchises in the NBA and NHL, a multi-club model – like Red Bull with RB Leipzig and City Football Group with Manchester City – is one potential avenue.
Investment in Spain’s second tier of Malaga is low, with around 600 shares purchased for a value of just £ 15,500 (€ 18,000).
Quarter-finalists of the Champions League in 2013, three years after the club’s takeover by Sheikh Abdullah bin Nasser Al Thani where heavy investments in the playing team arrived, the years that followed saw financial chaos unfold. degrade to La Rosaleda, the club unable to support their heavy expenses and slide to the Segunda División by 2018.
Charges were laid against Al Thani in 2020 for his role in the embezzlement, to the tune of around £ 7million according to reports, with the sale of small shareholder stakes funneled into the family’s personal and business accounts Al Thani.
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The charges saw him dismissed as president for the first six months by a Spanish regional court last year, a suspension that was extended as the club’s future is determined.
A club’s receiver, José María Muñoz, has been on site since last year as legal disputes between Al Thani and the Blue Bay hotel group, shareholders in Malaga with Al Thani, continue.
Al Thani and Blue Bay faced off in court in 2019 following a contract dispute relating to 2013, a time when Malaga needed heavy investments to meet its growing debts due to its pursuit of success.
A judge in 2019 issued that 97% of the club’s shares, which were under Al Thani’s control, were to be returned to the company jointly owned by Al Thani and Blue Bay, NAS Spain, where the owner of Malaga and Blue Bay held a 51 percent and 49 percent stake, respectively.
Al Thani appealed and legal proceedings continued, leading to the appointment of a receiver to find a way forward for the beleaguered football club which had touted talents such as Jeremy Toulalan, Ruud van Nistelrooy and Santi Cazorla during the reign of Al Thani.
The administrator’s problem is that with the heavily indebted club, the pandemic only worsening an already bad situation, guarantees are sought before their competition next season.
For this, the club must raise capital, and one of the stipulations stated by the administrator was that any capital injection received must come from an individual or company that has a stake in the club and can sit on the board. board of directors and attend shareholder meetings.
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This is the reason for RedBird’s low participation at present, with the company ready to inject capital into the business in the coming months to provide them with the necessary collateral.
Such a move also positions RedBird well when it comes to trying to increase that stake when the time comes and the legal process is done between Al Thani and Blue Bay.
Malaga’s share capital is said to be around 17 million euros (£ 14.6 million), divided into around 485,000 shares, of which NAS Spain owns almost 97%.
According to Spanish media, the required capital increase would be around 30 million euros (£ 25.8 million), meaning that RedBird would be positioned to become the majority shareholder of Malaga if NAS Spain did not participate. not to the capital increase.
Others are also interested in a potential takeover, which is impossible until the Al Thani and Blue Bay litigation is resolved, with smaller shareholders such as the Association of Small Shareholders of Malaga CF buying 100 actions between three of its members.
Cardinale is no stranger to working with stars, his investment in RedBird tying him closer to LeBron James via FSG and his XFL ownership being alongside Hollywood star Dwayne Johnson, with launch slated for 2022.
And he used a Hollywood connection to get involved with La Rosalada, Malaga-born actor Antonio Banderas presenting RedBird at the club, according to Spanish media outlet Cope.es.
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Cardinale and RedBird have been outspoken about their desire to acquire more European football clubs to move forward and add to Toulouse.
And by taking a small stake in Malaga at that point, they are positioning themselves for a club buyout, which could be for a relatively small sum. A former Champions League quarter-finalist with a large following, a large stadium and marketing potential, he is a perfect fit for RedBird.
For now, RedBird Capital simply has a stake in FSG, but adding more clubs to the portfolio could well have an effect on FSG and Liverpool.
Having a club sitting atop a multi-club platform is essential, as RB Leipzig do for Red Bull and Man City for City Football Group.
Leipzig showed how well the model can work, bringing in talent through its network of clubs at different levels, including Erling Haaland, Dayot Upamecano, Naby Keita and Timo Werner.
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Advancing talent after buying it cheaply and nurturing it so that it can be sold for major profits with the FSG model, especially when not going to face figures like Paris Saint-Germain and Man City in the transfer market financially.
Developing these top players with Liverpool as the final destination could save FSG hundreds of millions of dollars and also offers the potential to give young Reds players a better base when they send them on loan, making sure time is up. by maximizing their development at heart.
On the business side, this adds more revenue to the overall business through media rights and business partnerships, while best practices can be shared across a multitude of clubs in areas such as data analytics and processing. medical.
Some believe that the investment in RedBird could be increased later and that if John Henry and his partners chose to donate more of the business, someone like Cardinale and RedBird would be well placed to take over given their seemingly simpatico. relationship.
Malaga could be a RedBird fit going forward which means Liverpool could find they have some common ground.