RedBird will sell their OneTeam Partners investment for a profit of more than 500%.
RedBird Capital Partners, a private equity firm that owns an 11% holding in Fenway Sports Group, the owners of Liverpool, is selling its 40% stake in One Team Partners in a deal that will generate earnings of about $600 million (£527 million) for the New York-based fund.
RedBird was one of the original investors in OneTeam, a company established in 2019 to handle the licensing and commercial rights for more than 10,000 athletes, including college athletes, who are represented by the MLB Players’ Association, NFL Players’ Association, MLS Players’ Association, US Women’s National Team PA, WNBAPA, NWSLPA, and the LCSPA.
With the sale of RedBird’s stake, the three-year-old OneTeam is now valued at $1.9 billion, giving RedBird a return on their investment of more than 500%. This rate of return is significantly higher than the average private equity return over the same time period, which analysts at Pitch Book, via Sportico, had estimated at around 98%.
In order to maximize the potential for an income stream that had previously been off-limits to collegiate players, companies like Fanatics partnered with RedBird to create OneTeam just prior to the opening up of the NIL (name, image, likeness) rights for athletes.
It is RedBird’s most recent achievement. Gerry Cardinale, a former executive at Goldman Sachs, started the private equity company in 2014.
RedBird’s mission is to actively participate in the development of the companies they partner with, acting as an active investor in a market dominated by passive ones.
Alec Scheiner, a former president of the Cleveland Browns, is in charge of their sporting investments, which also include majority ownership of the French Ligue 1 team Toulouse and the more recent purchase of Italian powerhouses AC Milan from fellow New York investment fund Elliott Management. Hiring the right people to lead various aspects of their business has been a key component of their strategy. The NFL executive Kevin LaForce, who was crucial in helping the league land a record $100 billion 10-year television agreement, was also hired by RedBird last year.
The sale of the OneTeam stake solidifies RedBird’s position at the forefront of private equity in sport. Over the past two years, the company has been one of the most active in the market, acquiring the FSG stake, Toulouse purchase, Rajasthan Royals cricket club acquisition, and AC Milan takeover.
Additionally, RedBird has acquired holdings in the SpringHill Entertainment Company company that is run by FSG partners LeBron James and Maverick Carter and in which FSG has also acquired stakes alongside Nike and Epic Games. Along with Dwayne Johnson, RedBird is relaunching the XFL in the United States.
RedBird is one of the largest investors in FSG, and sources close to the company have hinted that their partnership is for the long term, with the possibility of more money being invested in the company to support potential future growth plans that could benefit the sporting entities that are part of the FSG portfolio.
When it was finalized in March 2021, the RedBird stake for 11% of FSG was valued at $750 million. However, given recent estimates placing the value of FSG’s empire as a whole at $10 billion due to new acquisitions like the Pittsburgh Penguins, that investment may now be worth as much as $1.1 billion, a 47% increase from the original investment.
RedBird sees FSG as having a long-term strategy, with more teams expected to be added to the portfolio, including an NBA expansion team that is most likely to be led by James after he retires and is widely believed to be relocating to Las Vegas.