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Red Sox Owner in Talks to Take Sports Holdings Public
Deal with RedBall Acquisition would value Fenway Sports Group at around $8 billion including debt
Boston Red Sox owner John Henry is in talks to join with an investment vehicle for an $8 billion deal that would take his famed sports holdings public, according to people familiar with the matter.
The deal being discussed would merge Fenway Sports Group LLC, which also owns English soccer team Liverpool Football Club, with RedBall Acquisition Corp. RBAC 0.20% , the people said. RedBall is a so-called special purpose acquisition company launched by private-equity firm RedBird Capital Partners and Oakland Athletics executive Billy Beane.
RedBall, which raised $575 million in August to buy businesses in sports and sports-related media and data analytics, plans to raise an additional $1 billion to purchase a stake that will total less than 25% in Fenway Sports Group and value it at $8 billion including debt, some of the people said.
The talks are in the early innings and could still fall apart. Fenway’s investors had a meeting recently to discuss the potential transaction, one of the people said.
Also known as blank-check companies, SPACs effectively turn the traditional model for initial public offerings on its head by raising money before they develop a business. They use the proceeds to make an acquisition—usually within a couple of years—that converts the target into a public company.
There has been an unexpected boom this year in blank-check deal making, which has gone in and out of favor over the years, as an increasingly large stable of startups and other private companies seek a more expeditious route to the public markets and sponsors hunt for opportunities in the economic dislocation caused by the coronavirus pandemic.
Mr. Henry, who founded investment firm Henry & Co., bought the Red Sox in 2002 and also owns the Boston Globe newspaper. Fenway Sports owns two of the most iconic teams in their respective leagues. The Red Sox, which have won the World Series four times since 2004 after going without a championship for 86 years, regularly pack the stands at Fenway Park with their devoted fan base. Liverpool sealed its first English league title in 30 years over the summer and in 2019 won the prestigious UEFA Champions League to become champions of Europe. The group also has a controlling stake of the New England Sports Network, the regional sports network that airs Red Sox games, and owns Fenway Park, the team’s stadium since 1912.
As a public company, Fenway could look to buy up more clubs in Europe, where a number have been on the block, according to a person familiar with the matter.
A publicly traded sports organization would be a relatively untested concept in the U.S. Liberty Media Corp. owns the Atlanta Braves, but the baseball team is a subsidiary of a much larger company. The NFL’s Green Bay Packers is owned by shareholders who mostly consist of fans.
New York-based RedBird, run by former Goldman Sachs Group Inc. banker Gerry Cardinale, made its first foray into European soccer in July by acquiring a majority stake in Toulouse FC, a club in France’s second tier. Immediately after the takeover, it installed a team president, Damien Comolli, who had previously worked at Liverpool and is close to Mr. Beane, who is best known for his analytics-driven approach as depicted in the book and movie, “Moneyball.”
RedBall’s board includes former Premier League Executive Chairman Richard Scudamore, during whose 20 years in charge English soccer turned into a global export and a television-rights cash cow. Premier League matches air in more than 190 countries every weekend of its 10-month season.
Because of the league’s reach, it’s not uncommon for top clubs to be valued in the billions of dollars on the rare occasions they hit the market. Manchester City set a new bar in 2019 after private-equity firm Silver Lake purchased a $500 million stake that valued the club’s sprawling umbrella group at $4.8 billion.
A deal for Fenway would be a significant endorsement of baseball, which has been hit the hardest among major professional sports leagues by the coronavirus pandemic because of its greater reliance on ticket revenue. Last month, billionaire hedge-fund manager Steven A. Cohen reached an agreement to purchase the New York Mets for just short of $2.5 billion, the most ever for an American professional sports franchise. That deal is pending the approval of the other baseball owners.
—Jared Diamond and Joshua Robinson contributed to this article.
Deal with RedBall Acquisition would value Fenway Sports Group at around $8 billion including debt
Boston Red Sox owner John Henry is in talks to join with an investment vehicle for an $8 billion deal that would take his famed sports holdings public, according to people familiar with the matter.
The deal being discussed would merge Fenway Sports Group LLC, which also owns English soccer team Liverpool Football Club, with RedBall Acquisition Corp. RBAC 0.20% , the people said. RedBall is a so-called special purpose acquisition company launched by private-equity firm RedBird Capital Partners and Oakland Athletics executive Billy Beane.
RedBall, which raised $575 million in August to buy businesses in sports and sports-related media and data analytics, plans to raise an additional $1 billion to purchase a stake that will total less than 25% in Fenway Sports Group and value it at $8 billion including debt, some of the people said.
The talks are in the early innings and could still fall apart. Fenway’s investors had a meeting recently to discuss the potential transaction, one of the people said.
Also known as blank-check companies, SPACs effectively turn the traditional model for initial public offerings on its head by raising money before they develop a business. They use the proceeds to make an acquisition—usually within a couple of years—that converts the target into a public company.
There has been an unexpected boom this year in blank-check deal making, which has gone in and out of favor over the years, as an increasingly large stable of startups and other private companies seek a more expeditious route to the public markets and sponsors hunt for opportunities in the economic dislocation caused by the coronavirus pandemic.
Mr. Henry, who founded investment firm Henry & Co., bought the Red Sox in 2002 and also owns the Boston Globe newspaper. Fenway Sports owns two of the most iconic teams in their respective leagues. The Red Sox, which have won the World Series four times since 2004 after going without a championship for 86 years, regularly pack the stands at Fenway Park with their devoted fan base. Liverpool sealed its first English league title in 30 years over the summer and in 2019 won the prestigious UEFA Champions League to become champions of Europe. The group also has a controlling stake of the New England Sports Network, the regional sports network that airs Red Sox games, and owns Fenway Park, the team’s stadium since 1912.
As a public company, Fenway could look to buy up more clubs in Europe, where a number have been on the block, according to a person familiar with the matter.
A publicly traded sports organization would be a relatively untested concept in the U.S. Liberty Media Corp. owns the Atlanta Braves, but the baseball team is a subsidiary of a much larger company. The NFL’s Green Bay Packers is owned by shareholders who mostly consist of fans.
New York-based RedBird, run by former Goldman Sachs Group Inc. banker Gerry Cardinale, made its first foray into European soccer in July by acquiring a majority stake in Toulouse FC, a club in France’s second tier. Immediately after the takeover, it installed a team president, Damien Comolli, who had previously worked at Liverpool and is close to Mr. Beane, who is best known for his analytics-driven approach as depicted in the book and movie, “Moneyball.”
RedBall’s board includes former Premier League Executive Chairman Richard Scudamore, during whose 20 years in charge English soccer turned into a global export and a television-rights cash cow. Premier League matches air in more than 190 countries every weekend of its 10-month season.
Because of the league’s reach, it’s not uncommon for top clubs to be valued in the billions of dollars on the rare occasions they hit the market. Manchester City set a new bar in 2019 after private-equity firm Silver Lake purchased a $500 million stake that valued the club’s sprawling umbrella group at $4.8 billion.
A deal for Fenway would be a significant endorsement of baseball, which has been hit the hardest among major professional sports leagues by the coronavirus pandemic because of its greater reliance on ticket revenue. Last month, billionaire hedge-fund manager Steven A. Cohen reached an agreement to purchase the New York Mets for just short of $2.5 billion, the most ever for an American professional sports franchise. That deal is pending the approval of the other baseball owners.
—Jared Diamond and Joshua Robinson contributed to this article.
