Latest news with #Cardinale
CNBC
29-05-2025
- Business
- CNBC
CNBC Sport: Why one prominent investor thinks team valuations are way too high
A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox. It took nine months, but I finally found a high-profile investor who says professional sports team valuations are too high. This week's "On The Record" guest is Gerry Cardinale , the founder of RedBird Capital Partners. RedBird is a private equity firm that focuses on media and sports investments. RedBird has been the controlling owner of AC Milan, the Italian professional football (soccer) club, since 2022. It's also an investor in Skydance Media and one of the driving forces behind Skydance's still-pending merger with Paramount Global. Cardinale says he's "pencils down" on all major U.S. sports team acquisitions right now as valuations soar. "If you're a student of history, you know that always going up is not is not a great arbiter for making an investment," said Cardinale. "There needs to be some normalization in what I see as a bit of an asset bubble." Since we started this newsletter in September, I've spoken with many people who have touted the benefits of sports team ownership. They've pointed out investing in a franchise tends to be recession proof. The assets are scarce and appeal to rich people's vanity – a constant in all macroeconomic environments. The values are largely tied to media rights deals, which keep going up and up , at least for the big U.S. sports. The influx of private equity owners has added potential bidders, which boosts prices. The private equity firm Arctos Partners created an index with the Ross School of Business at the University of Michigan that tracks team transactions over the past 60 years. The results are clear: team valuations have risen for six decades in a row, including a stunning jump in recent years. The phrase "up and to the right" has never been more accurate. Arctos is one of the firms that's now allowed to buy a piece of a National Football League team – a rule that changed last year. Arctos quickly acquired a 10% stake in the Buffalo Bills. Ares Management, another authorized PE firm, has bought a 10% stake in the Miami Dolphins. RedBird isn't on the NFL's list of accepted private equity limited owners, but Cardinale told me he's uninterested in buying a minority stake in any major U.S. team right now. "I don't think that's a great investment," Cardinale said. "I want to have an involvement, a partnership, in the actual governance, in the underwriting of the business plan." A 10% ownership stake gives firms little control over day-to-day team operations. Minority investments come with no voting rights. Cardinale told me one of the major red flags for team ownership is a lack of generally accepted equity research for the asset class. Almost all sports teams aren't publicly traded. That has limited the insight into cash flow projections for how they'll perform. He noted Forbes Magazine and CNBC Sport's team valuations (led by our Michael Ozanian ) are the primary way investors research valuations given the lack of options. Cardinale says he's more interested in being the majority owner of a U.S. sports team one day – just not at today's prices. "I don't like the entry prices right now, because the underlying business plans are not there to really pay for it, and it relies on a certain assumption on media rights trajectory," he said. Cardinale noted that while NBA and NFL media rights have soared for decades, the question will become "the slope of the curve" for future deals. The NFL can opt out of its current media rights deal after the 2029-30 season. The NBA has its TV deal locked up until the end of the 2036-37 season. He predicted we'll see rights payments fall for sports with lower ratings – though perhaps not Major League Baseball. Cardinale is invested in New England Sports Network (NESN), which carries local Boston Red Sox games, through RedBird's minority stake in Fenway Sports Group. RedBird is also a minority owner in the YES Network, which owns the New York Yankees' local rights. That puts Cardinale in an unusually strong position to help dictate the future of local MLB rights. MLB Commissioner Rob Manfred has been vocal about his desire to take back local rights from regional sports networks in 2028 to sell a new nationalized product. Manfred will need buy-in from the big-market clubs like the Red Sox and the Yankees, whose RSNs bring in tens of millions more in annual revenue than those of smaller markets. Cardinale said one idea being discussed is to form a new company that could own local rights and negotiate with distributors. "The challenge baseball always has is there's a subtle tension between the big markets and the small markets. They both need each other," Cardinale said. "I think that baseball will do very well having groups like the YES Network and NESN – the Yankees, the Red Sox – and there are others like the Cubs and LA [Dodgers] anchor what ultimately will be a centralized media company." At this point, Cardinale's idea is hypothetical. MLB has talked to many people about different plans for regional games, according to people familiar with the league's conversations. A company that controls media but grants different amounts of equity in the venture to clubs isn't part of the league's current thinking, the people said. Still, Cardinale points out that teams should think of themselves as their own live entertainment entities and that there would be clear value in a company that could see distribution rights to all games at a national level. An MLB spokesperson declined to comment. On the record With RedBird Capital Partners founder Gerry Cardinale ... I spoke with Cardinale about several of RedBird's investments, including the UFL – that's the name of the combined USFL-XFL spring football league, which came together last year. I gave Cardinale an impassioned plea for the UFL to rebrand itself as an NFL developmental league that could service players such as Trey Lance , a quarterback who desperately needs live reps but can't get them because there's no forum for him to play what essentially should be minor-league football. The NBA has the G League, and the MLB and NHL have minor league affiliated clubs that offer the ability to develop talent for major league teams. The NFL doesn't have this same system, and the UFL could be that … Watch the entire interview here . Or listen to it here and follow the CNBC Sport podcast if you prefer the audio version. And if you go the audio route, a bonus: I also discuss the week's biggest sports and media news including my thoughts on Cardinale's interview with my colleague Lillian Rizzo . CNBC Sport highlight reel The best of CNBC Sport from the past week: One of those stories I talked about with Lillian was her report that high school sports at PBS stations are at risk with potential federal funding cuts. You can read that story right here. It's been a rough go recently for apparel companies, but the Swiss brand On is slowly gaining market share at the expense of Nike and Adidas, reports CNBC's Merritt Enright . CNBC contributor Karen Finerman joined "Fast Money" to talk about her investment, alongside Alibaba founder Jack Ma and supermodel Karlie Kloss , in the WNBA's New York Liberty, valuing the team at about $450 million. A CNBC Sport exclusive: Private equity firm Valeas Capital has acquired a majority stake in TicketManager, a company that specializes in managing corporate ticket sales, for $110 million. Have you heard of Hyrox? It's a series of fitness races that are drawing hundreds of thousands of athletes — both professional and amateur — and also more than $100 million in revenue. CNBC's Brandon Gomez has the details. The big number: 7.05 million A mammoth ratings number for Sunday's Indianapolis 500 is a clear win for Fox. The broadcast network took the TV rights from NBC beginning this year. Last year's race on NBC drew 5.02 million viewers. This year's race had the biggest TV audience for the event in 17 years. Quote of the week "It would be extremely prejudicial to Disney for Connolly to breach the contract which he negotiated just a few months ago and switch teams when Disney is working on a new licensing deal with the company that is trying to poach him." – Disney has filed a breach of contract lawsuit against YouTube for poaching veteran ESPN executive Justin Connolly . YouTube is making Connolly the steamer's global head of media and sports. Disney claims YouTube knew Connolly was under contract but offered a job to him anyway and "induced Connolly to breach the Employment Agreement," at a time when Connolly was working on a new licensing agreement between Disney and YouTube. "Connolly has intimate knowledge of Disney's other distribution deals, the financial details concerning Disney's content being licensed to YouTube, and Disney's negotiation strategies, both in general and in particular with respect to YouTube," the lawsuit claims. I'm going to crowdsource this one – what's the best sports/athlete analogy for this? I'm thinking of an athlete on one team who is traded mid-season to an arch rival to work for the other team. The one that came to mind will be a winner with my younger audience – the Chicago Cubs trading Lou Brock to the St. Louis Cardinals in June 1964. Around the league WNBA players want to get paid more, and that quest will be driven by additional revenue coming into the league. A key component of that will be advertising. The WNBA has struck a deal with Nielsen to measure its television viewership across traditional TV and streaming – the largest commercial measurement deal Nielsen has ever struck with a women's sports league, Axios's Sara Fischer reports . The College Football Playoff needs to figure out its next iteration, which could include moving to a 16-team field. ESPN has more details on the latest thinking about different big-time college football programs. One of 54 T206 Honus Wagner cards is currently up for auction, but you're going to need to pay at least $3.2 million, Sportico reports . The 1909 American Tobacco Company T206 is the gold standard for baseball card collectors. The last T206 Wagner up for auction sold in 2022 for $7.25 million by Goldin Auctions.
Yahoo
25-05-2025
- Business
- Yahoo
‘British bidder' for Telegraph vows to fight on
The leader of a bid to disrupt the £500m sale of The Telegraph to a consortium led by RedBird Capital Partners has vowed to fight 'to the very end'. Dovid Efune, the publisher of The New York Sun website, made an appearance on Sky News on Sunday to insist that his 'British bid for The Telegraph is alive and well, and not going anywhere'. Mr Efune has secured financial backing from the hedge fund manager Jeremy Hosking and Nadhim Zahawi, the former cabinet minister. They are attempting to contrast their Britishness with RedBird, an American private equity firm which is seeking to acquire The Telegraph alongside British minority investors. Mr Efune faces a steep challenge. On Friday RedBird announced an agreement in principle to take majority ownership of The Telegraph from IMI, the UAE's media investment arm. The British-born publisher said: 'What's been announced is an agreement in principle. And if the history of The Telegraph's ownership saga teaches us anything, it's that the ownership of The Telegraph and, frankly, any other crown jewel of British public life, will not be determined by means of a press release. 'The British public will yet have their say via their elected representatives, The Telegraph's staff and The Telegraph's readers will have their say, as will the rest of the British press.' RedBird IMI, a joint venture between RedBird and the UAE, majority funded by the Gulf state, was blocked from taking full control of The Telegraph last year following an outcry over press freedom. Now, RedBird's founder Gerry Cardinale is working to make RedBird the controlling shareholder, with IMI expected to retain a passive stake of up to 15pc. Mr Efune said: 'There are quite a lot of questions surrounding RedBird themselves, obviously – where does their capital come from?' Mr Cardinale, who also controls AC Milan and is set to become a major shareholder in the Hollywood studio Paramount, has said none of the money that RedBird will use to acquire The Telegraph will be drawn from sovereign sources. Mr Efune added: 'I suspect that because of all of these questions that surround it, there will need to be a public interest intervention, likely an in-depth investigation, which means the saga of The Telegraph could take another year to resolve.' Enders Analysis, a media industry research firm, said last week that Mr Cardinale's status as a newcomer to news publishing meant the regulatory process could be smooth and complete by September. The potential involvement of Lord Rothermere, the owner of The Daily Mail, as a minority shareholder alongside RedBird could complicate matters. But it is unclear how in practice Mr Efune hopes to disrupt the sale. IMI has publicly endorsed RedBird's planned takeover of The Telegraph, saying it will 'secure its future and enable it to thrive for years to come'. Mr Efune, who prior to acquiring the defunct New York Sun and reviving it as a subscription website was the publisher of Algemeiner, a Jewish community newspaper, has shown great persistence in his pursuit of The Telegraph, however. He emerged as the winner of an auction back in early October last year, but has struggled since to raise the necessary funds. Even now, by his own account Mr Efune's consortium has only 'the bulk' of the capital, although he has said he remains in talks with potential backers. His 11th-hour appeal for more time has come wrapped in the Union flag. He said: 'At the end of the day, I expect that most Britons would want to see The Telegraph in British hands should there be a choice – and there is a choice, a clear choice, and we are 100pc committed to seeing it through.' The approach won rhetorical support this weekend from Lord Ashcroft, the Conservative donor and publisher. In a post on X he said Mr Efune was 'seeking British investors for an alternative to foreign ownership … I wish him well'. Mr Efune has not said whether he envisages the UAE retaining a stake and has not always been so focused on securing British finance. He initially sought to raise funding from American hedge funds. They all declined to invest in his proposed deal after he was named preferred bidder. In November it was reported that Sir Mohamed Mansour, the Egyptian-born billionaire and former Conservative party treasurer, was in advanced discussions to bankroll the bid. A former minister under the dictatorship of Hosni Mubarak, Sir Mohamed ruled out participating, following questions from The Telegraph. They covered topics including the regulatory scrutiny his political past and business interest might face. Mr Efune then turned to Leon Black, the billionaire former boss of the Wall Street giant Apollo Global Management. Mr Black pulled out of detailed discussions to back the bid after The Telegraph asked questions about potential regulatory scrutiny of his regrettable relationship with the paedophile financier Jeffrey Epstein, and legal problems related to it. These incidents appear to have frustrated Mr Efune, who on Friday complained that the 'turbulent undertaking' of raising finance had faced 'unwanted interference'. One possible tactic for Mr Efune's consortium is a legal challenge against the Government's handling of The Telegraph if and when it decides to approve the RedBird takeover. Mr Hosking is said by those who have worked directly with him to have an unusually strong appetite for litigation. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
San Francisco Chronicle
24-05-2025
- Sport
- San Francisco Chronicle
AC Milan supporters organize protests after disappointing season
MILAN (AP) — Thousands of AC Milan supporters protested outside the club headquarters on Saturday as the Rossoneri wrapped up a season in which they failed to qualify for Europe and lost to Bologna in the Italian Cup final. 'Singer, Cardinale, Furlani, Ibra, Moncada: everyone leave, free Milan from this agony,' read a banner held by fans. They named the team's key management members and owners. Milan began the season as a potential title contender but was in ninth place, 22 points behind champion Napoli. The seven-time European champion was eliminated by Feyenoord in the Champions League playoffs in February. ___
Hamilton Spectator
24-05-2025
- Sport
- Hamilton Spectator
AC Milan supporters organize protests after disappointing season
MILAN (AP) — Thousands of AC Milan supporters protested outside the club headquarters on Saturday as the Rossoneri wrapped up a season in which they failed to qualify for Europe and lost to Bologna in the Italian Cup final. 'Singer, Cardinale, Furlani, Ibra, Moncada: everyone leave, free Milan from this agony,' read a banner held by fans. They named the team's key management members and owners. Inside the San Siro later for Milan's final Serie A match against last-placed Monza, there were more protests. Fans on the upper level at one end positioned themselves to form the words, 'Go home.' Milan began the season as a potential title contender but was in ninth place, 22 points behind champion Napoli. The seven-time European champion was eliminated by Feyenoord in the Champions League playoffs in February. Meanwhile, city rival Inter Milan will play Paris Saint-Germain in the Champions League final next Saturday. ___ AP soccer:
Washington Post
24-05-2025
- Sport
- Washington Post
AC Milan supporters organize protests after disappointing season
MILAN — Thousands of AC Milan supporters protested outside the club headquarters on Saturday as the Rossoneri wrapped up a season in which they failed to qualify for Europe and lost to Bologna in the Italian Cup final . 'Singer, Cardinale, Furlani, Ibra, Moncada: everyone leave, free Milan from this agony,' read a banner held by fans. They named the team's key management members and owners.
