Liverpool FC owner valued at $7.4bn in deal with LeBron James and RedBird

Basketball star LeBron James and private investment group RedBird Capital have taken minority stakes in Fenway Sports Group in a deal that places the enterprise value of the Liverpool FC and Boston Red Sox ownership vehicle at $7.35bn.

The deal, expected to close on Wednesday, follows months of talks between sport-focused RedBird and FSG. The Financial Times previously reported that the two sides were in discussions about a minority stake after earlier attempts to list FSG through a RedBird-affiliated special-purpose acquisition company fell apart. 

James, the four-time National Basketball Association champion and current Los Angeles Lakers star, and business associates Maverick Carter and Paul Wachter previously held minority positions in Liverpool FC. The deal will see them exchange those for a minority ownership position in FSG.

The transaction solidifies FSG as among the most valuable entities in sports, while also underscoring a rush by private capital groups into the industry.

John Henry, the self-made billionaire and principal owner of FSG, welcomed the new partners in a statement and said the investment “will enhance our ability to pursue future growth opportunities in a more accelerated way but with the same selectiveness that has served us so well”.

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Ever-increasing league and club valuations have limited the pool of potential investors able or willing to buy majority stakes at multibillion-dollar price tags. At the same time, challenges posed by the pandemic have made existing owners and leagues more open to fresh capital.

The deal comes after RedBird failed to reach a deal that would have taken FSG public by merging with the investment group’s special purchase acquisition company, RedBall.

RedBird Capital was founded in 2014 by former Goldman Sachs executive Gerry Cardinale. Last year he teamed up with Billy Beane — the baseball executive who was the subject of the best-selling Michael Lewis book, Moneyball, which was later made into a film starring Brad Pitt — to launch RedBall and raise $575m on the NYSE for the purpose of buying a sports company. The blank-cheque group still planned to do a deal this year, said a person briefed about the matter.