Jan 25, 2021 - Economy

Scoop: Red Sox strike out on deal to go public

Illustration of a baseball with the stitching coming apart revealing a dollar bill inside

Illustration: Sarah Grillo/Axios

The parent company of the Boston Red Sox and Liverpool F.C. has ended talks to sell a minority ownership stake to RedBall Acquisition, a SPAC formed by longtime baseball executive Billy Beane and investor Gerry Cardinale, Axios has learned from multiple sources. An alternative investment, structured more like private equity, remains possible.

Why it matters: Red Sox fans won't be able to buy stock in the team any time soon.

Background: Deal talks first leaked last October, with RedBall seeking to acquire between a 20-25% stake of Fenway Sports Group at around an $8 billion valuation.

  • It would have been funded by $575 million that RedBall raised in its IPO, plus up to $950 million Redball sought to raise from Cardinale's private equity firm (RedBird Capital Partners) and outside investors.
  • Neither FSG nor RedBall ever confirmed their talks, nor would regulatory restrictions have allowed them to do so.

What happened: RedBall couldn't raise enough outside capital at the asking price, at least via the SPAC structure.

  • Forbes last year estimated that the Red Sox were valued at $3.3 billion, compared to the $380 million that its ownership group paid back in 2002. That total does not include Liverpool or some of Fenway Sports Group's other assets, which include a NASCAR team and regional sports network that airs Red Sox and Boston Bruins games.

What happens now: Cardinale and FSG still may try to negotiate a private investment deal, but not one that would immediately result in a public stock listing.

  • RedBall will continue to seek out an acquisition target, possibly in pro soccer or gaming.
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