New York Yankees and LA fund join investors in AC Milan
Announcement comes as US group RedBird prepares to close acquisition of Italian football club
The New York Yankees baseball franchise and a Los Angeles investment fund are investing in AC Milan alongside US private equity group RedBird, which is closing in on the €1.2bn acquisition of Italy’s football champions, two people with direct knowledge of the matter said.
The baseball team, owned by the Steinbrenner family, and Main Street Advisors, the LA-based fund that counts among its investors basketball star LeBron James, famed music producer Jimmy Iovine and rapper Drake, will become shareholders in the Serie A team, those people said.
RedBird is set to announce the entry of its new partners as early as Wednesday when it is expected to officially take control of the club from its current owner, US hedge fund Elliott Management, those people said.
The deal, orchestrated by RedBird’s founder Gerry Cardinale, highlights the continued appetite among US investors to buy into the world’s favourite sport and particularly teams in Italy’s top-flight league.
The Yankees are among the biggest brands in sport, with a Major League Baseball-record 27 World Series championships. The team has been owned by the Steinbrenner family since 1973 when late patriarch George paid $8.8mn for the franchise, which is now valued at $6bn by Forbes.
The Yankees are co-owners, with Manchester’s City Football Group, of the New York City FC franchise of US-based Major League Soccer.
Cardinale has worked with the New York Yankees for decades, including during his years at Goldman Sachs, which advised and was an early investor in the formation of the team’s regional sports channel, the YES Network.
The Yankees will work closely with AC Milan as Cardinale tries to increase the Italian club’s revenues and on-field successes, people familiar with the matter said. Part of the collaboration could include AC Milan programming on the YES Network, a regional sports network owned by a consortium of the Yankees club, Amazon, RedBird and Sinclair Broadcast Group.
Cardinale’s existing business network of high-profile athletes and celebrities helped facilitate the deal with Main Street, said people briefed on the matter. James, Iovine and Drake are passive investors in Milan through the fund and have not taken direct stakes, two people said.
James, a four-time National Basketball Association champion, and business partner Maverick Carter have an existing relationship with Cardinale. RedBird is a shareholder in the pair’s media group, SpringHill, and each already own minority stakes in Fenway Sports Group, which controls Liverpool Football Club and the Boston Red Sox.
Cardinale, who agreed to take over Milan in May, sees the northern Italian team as a “sleeping giant” and wants to build on an Elliott turnround project that restored the club to the lucrative Uefa Champions League tournament and captured its first league since 2011 title last season.
Elliott agreed to lend RedBird €600mn to help fund the takeover. With interest charged at 7 per cent, Cardinale had spent the summer talking to potential co-investors aiming to slash the size of the loan. It is unclear how much of the club the Yankees and Main Street will own.
RedBird’s sports investments also include French football club Toulouse FC and a 15 per cent stake in the Rajasthan Royals, one of 10 cricket franchises in the Indian Premier League, which has become an economic powerhouse in the sport.