Milan owner Gerry Cardinale has described the differences in ownership of American sports franchises compared to European football clubs and explained how Billy Beane and his Moneyball approach has been his inspiration.
The RedBird Capital founder was speaking on a panel of experts at the Michigan Institute of Technology’s ‘Investing in Global Sports’ seminar as part of their Sports Analytics Conference on Monday.
In response to the moderator’s question about his involvement in European football, Cardinale confessed that his interest in the sport has been a relatively recent realisation.
He explained: “My euphoria around European football is relatively recent. For years I wasn’t interested. My business model was always around the business of sports, partnering with the rights holders and creating terminal value businesses around those rights.
“It started with the Yankees, then the Dallas Cowboys, then the NFL. Five or six years ago we asked ourselves: ‘Why don’t we think about vertically integrating and becoming rights holders ourselves?’”
The difference, Cardinale divulged, lies with the comparatively fewer restrictions on potential investors in Europe in contrast to the stronger regulations in the United States.
“Doing so in the United States is difficult due to restrictions on institutional investment funds, while in Europe there are none,” he continued. “When you see that there is an ecosystem that attracts sovereign states and oligarchs you have to ask yourself: ‘what are you doing?’”
RedBird Capital, of which Cardinale is the managing partner, purchased Milan in August 2022 off the back of their Scudetto success in the 2021-22 season.
Prior to taking over the Rossoneri, Cardinale had brief spells in France with Toulouse, before becoming involved with Fenway Sports Group who own Liverpool in the Premier League.
His inspiration and unofficial advisor has been compatriot Billy Beane, who is renowned for revolutionising the world of baseball with his Moneyball approach, before transitioning into the world of European football.
“I have to give credit to Billy Beane, he was the one who educated me,” Cardinale said. “He’s been in European football for 20 years and he told me I wasn’t looking at the situation in the right way. I had to approach European football with the ‘Moneyball’ mentality, which says there is no need to sacrifice the level of performance on the field for cash flow or vice versa.
“We spent five years studying and learning. We met with around 200 teams in all countries, we made our first investment with Toulouse, driven mainly by data.
“It was a really great experiment, the starting price was around €60m, the team was relegated and we bought it for €15m. The first year we sold the first player for €15m and now we’re in Ligue 1, It was a good experiment, we learned a lot.
“Fenway was something similar, a move to a bigger club, and in the end we arrived at Milan”.
Cardinale also spoke of the unsuccessful attempt at launching the European Super League, of which Milan would have been a founding member.
The Milan owner explained that there have also been similar tensions between clubs in the United States and hinted that the financial disparity between clubs in England and the rest of Europe might have been part of what caused the attempted breakaway.
“The Super League phenomenon was a failure. However, one must ask why this happened, and it is the same phenomenon that we have had in the United States in certain championships. In baseball, there is tension between the small and big markets, as well as in MLS. There is the same thing in Europe, the tension is between the Premier League and the rest of the continent,” Cardinale declared.