A mutual fund with LeBron James and Drake buys Milan for 1200 million

A mutual fund with LeBron James and Drake buys Milan for 1200 million

A mutual fund with LeBron James and Drake buys Milan

AC Milan, current Serie A champions, announced this Wednesday that the investment fund RedBird Capital Partners is its new owner after paying 1,200 million euros. Club Rossoneri had accumulated economic difficulties over several years and its previous owner, the American Paul Elliot, had been looking for a buyer for some time. After weeks of negotiations, the company — which includes Lakers player LeBron James and rapper Drake — has completed the takeover of the club for a sum nearly six times AC Milan’s earnings, nearly $216 million, according to the latest Football Money League report.

In addition to the mutual fund, the New York Yankees will also hold a minority stake in the Italy team. The company Yankee Global Enterprises, owner of the US baseball team worth almost 5,000 million euros, has been associated with the RedBird fund for years and plans to jointly combine the potential of both teams. “Together we will seek opportunities to expand our reach and expand business opportunities that are only available to franchisees operating at the highest level of sport around the world,” said Gerry Cardinale, founder and director of RedBird, in the statement released for Milan .

Cardinale has $7.5 billion in other esports investments through RedBird. The fund owns 85% of Toulouse, the Ligue 1 team that got promoted last season, as well as 10% of Fenway Sports Group, another mutual fund with assets in Liverpool, as well as the Boston Red Sox baseball team and Pittsburgh Penguins ice hockey. According to the Italian press, three months ago Cardinale offered a figure of almost 1,000 million euros, but then an offer from a Bahraini investment fund appeared, and the Americans decided to increase the offer. There are currently five American-owned clubs in Serie A: Milan, Roma, Fiorentina, Atalanta and Spezia.

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In this way, in just five years, Milan will have their fourth owner. In 2017, Chinese businessman Li Yonghong bought the Rossoneri club from former Italian Prime Minister Silvio Berlusconi for nearly €740 million. Supporters hoped that the arrival of foreign capital would revitalize a club that had not been in contention for a title in several years, but that hope was quickly dashed. Far from reviving the club, Yonghong piled up in debt and was forced to leave the club in just a year as he could not make the payments. That’s how Paul Elliot ended up at the head of the team almost by accident. The American had loaned Yonghong 180million to buy the club on top of other transfers which, when he didn’t collect them, he settled with the club’s change of ownership.

This year Milan won Serie A again after an 11-year drought and are playing their second consecutive season in the Champions League after seven years. In terms of sport, the team is back on its feet, but financially the situation is critical. Losses totaled €126m in 2018, when Elliot took over the club, and the situation worsened the following year with the outbreak of the pandemic. In the 2019-20 season, due to the crisis caused by the coronavirus pandemic and not being classified in European competitions, Milan were in the red of 194.6 million euros and the following year losses were another 93 million. Elliot has implemented a pay cut policy over these years, focusing his investment in the club on eliminating debt and managing to stabilize the situation to end fiscal 2021 with $70 million in positive equity. According to Forbes magazine, AC Milan is valued at $1,200 million (around €1,194 million).

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