RedBird chief Gerry Cardinale explains why so many foreign investors are looking to get into Serie A clubs and football in general. ‘Sports have a tremendous resiliency’ and they are ‘looking to make a minimum of double our investments.’
His company completed the takeover in June for circa $1.3 billion, leaving Elliott Management with a minority stake in the side that had just won the Serie A title.
They are just one of many American investors who have decided to lay down roots in Italian football and Cardinale explains why this is the place to be in a period of overall global uncertainty in financial markets.
“We’re known for our sports investing, because sports today gets all the profile,” he told The Australian.
“We look to make a minimum of a double on our investments and we underwrite two and a half to three times our money over a reasonable period of time.”
RedBird also own Toulouse in France and have a stake in Premier League giants Liverpool, although Cardinale assured they won’t be aiming to increase that even after Fenway Sports Group announced they’ve put Liverpool up for sale.
“Sports have a tremendous resiliency to it [and] what’s great about it is it is a real shock absorber that can withstand technological disintermediation. So even though the way fans and consumers consume this content is evolving and changing … that content is even valuable and is as omnipresent as it’s ever been.”
While football clubs complain they have still not recovered from the damage done by the COVID-19 pandemic and almost a full year without full stadiums, Cardinale looks at the bigger picture.
“The assets weren’t necessarily distressed but we got the benefits in pricing … given they were adjusting to exogenous events. But the content (sport) was doing just fine. It had a blip, but the only blip was the monetising the live event.”
On the other hand, foreign investors are also quickly learning that Italy is not like America, where team-owned stadiums represent a large part of their value.
“You’re kind of overpaying and then you have to find a way to work your way into the money. In the US it is real estate. That’s not as prevalent in Europe where the infrastructure is much older.”
The controversy continues to drag on over Milan and Inter’s plans to build a new stadium, as it would mean knocking down the iconic Stadio Giuseppe Meazza, commonly known as San Siro.