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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.

Go deeper

Dan Primack, author of Pro Rata
Jan 25, 2021 - Economy & Business

Merger Monday has been overrun by SPACs

Illustration: Aïda Amer/Axios

Five companies this morning announced plans to go public via reverse mergers with SPACs, at an aggregate market value of more than $15 billion. And there might be even more by the time you read this.

The bottom line: SPAC merger activity hasn't peaked. If anything, it's just getting started.

FBI, Homeland Security warn of increasing threat to Capitol

Photo: Eric Baradat/AFP via Getty Images

The FBI and Department of Homeland Security predict violent domestic extremists attacks will increase in 2021, according to a report reviewed by Axios.

Driving the news: The joint report says an unidentified group of extremists discussed plans to take control of the Capitol and "remove Democratic lawmakers" on or about March 4. The House canceled its plans for Thursday votes as word of the possible threats spread.

19 mins ago - World

Pope Francis set to make first papal visit to Iraq amid possible turmoil

Data: Vatican News; Map: Danielle Alberti/Axios

Pope Francis is forging ahead with the first papal trip to Iraq despite new coronavirus outbreaks and fears of instability.

The big picture: The March 5–8 visit is intended to reassure Christians in Iraq who were violently persecuted under the Islamic State. Francis also hopes to further ties with Shiite Muslims, AP notes.

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