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The Boston Red Sox missed the playoffs this year, but champagne showers may still be in the cards.
John Henry, the owner of the Red Sox and European football club Liverpool FC, is in talks to bring his sports teams to the public markets in yet another 2020 SPAC merger.
According to the WSJ, Henry's Fenway Sports Group is contemplating a merger with a special purpose acquisition company called RedBall Acquisition Corp.
RedBall, the brainchild of former Goldman Sachs partner Gerry Cardinale and MLB legend Billy Beane, raised $575 million in August to acquire and optimize sports teams through an analytics-heavy approach.
John Henry bought the Red Sox in 2002 and Liverpool FC in 2010. And he's had a nice run:
- After an 86 year drought, the Red Sox have won the World Series four times since 2004 and, pre-COVID, regularly packed the stands with a devoted fan base.
- Liverpool won its first English league title in 30 years this summer and last year won the prestigious UEFA Champions League to become champions of Europe.
Deal Details: RedBall will raise another $1 billion to purchase a 25% stake in Fenway Sports Group, which is being valued at roughly $8 billion.
Why It Matters
While many top-tier European football clubs are publicly listed (including England's Manchester United and Italy's Juventus), publicly traded sports teams are a relatively untested concept in the U.S. The few exceptions include:
- Liberty Media owns the Atlanta Braves, but the baseball team is a subsidiary of a much larger company.
- The NFL’s Green Bay Packers are owned by shareholders who mostly consist of fans.
A deal for Fenway Sports would be a significant endorsement for the MLB, which has been the hardest hit of the professional sports leagues because of its heavy reliance on ticket revenue.
The Takeaway: RBIs, home runs, strikes, outs, and… return on invested capital. Add financial returns to the list of stats to track.