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RedBird Capital teams with Billy Beane on sports SPAC

A private equity firm and a famed baseball executive are aiming to rise $500 million for a new vehicle that blends two red-hot investing trends.

Billy Beane, now an executive vice president with the franchise, was general manager of the Oakland Athletics from 1997 to 2015. (Justin Sullivan/Getty Images)

Deals pumping millions into professional sports franchises and special-purpose acquisition companies have been two of the financial world’s hottest trends in recent months. Now, a private equity firm and the man who inspired “Moneyball” are offering investors a chance to do both at the same time.

A new SPAC called RedBall Acquisition filed for an IPO on Tuesday, with plans to raise $500 million that it hopes to deploy in the eventual acquisition of a pro sports team. The co-chairmen of the blank-check company are Gerald Cardinale, the founder of RedBird Capital Partners, a private equity firm that frequents the sports space, and Billy Beane, a longtime executive with the Oakland Athletics who was chronicled by Michael Lewis and depicted by Brad Pitt.

The popularity of SPACs has exploded amid the pandemic, offering companies a quicker and easier route to the stock market than traditional IPOs. Famed hedge fund leader Bill Ackman raised $4 billion last week in the biggest blank-check listing of all time, while privately backed companies such as Nikola, Fisker and MultiPlan have all struck deals to go public in 2020 via multibillion-dollar mergers with SPACs.

Blank-check listings have raised $19.2 billion so far in 2020, according to SPAC Research, already more than 40% higher than last year’s total, which at the time was the highest annual sum on record.

Institutional investors have also been flocking to pro sports, eager to tap into booming valuations in the sector. It’s a shift that’s been accelerated by the pandemic, and one that could be further sped up by potential changes in ownership rules for the NBA and MLS that could make it easier for private equity firms and other institutional backers to acquire stakes.

Axios reported earlier this year that a private equity firm called Arctos Sports Partners was raising up to $1.5 billion for a new fund to stake sports teams. Dyal Capital Partners is believed to be raising up to $2 billion to invest in NBA franchises. The Straus Group is in talks to purchase the Minnesota Timberwolves, Bloomberg reported Tuesday. And several of private equity’s biggest names—including Silver Lake, CVC Capital Partners, Bain Capital, Blackstone and Saudi Arabia’s Public Investment Fund—have all either executed or been linked to deals in European soccer and rugby.

RedBird has also been getting in on the act. Just last week, it agreed to acquire an 85% stake in Toulouse FC, a soccer club currently in France’s second division. The firm’s new SPAC also has other ties to European soccer. Beane is best known for his work in baseball, but since 2015, he has worked as an advisor for AZ Alkmaar, a Dutch club. In 2017, he acquired a minority stake in Barnsley, a team in England’s second division.

Beane’s new co-chairman, Cardinale, founded RedBird in 2014 after two decades as a private equity banker at Goldman Sachs. He has a long history with the sports world: In 2001, he partnered with the New York Yankees to create the Yankees Entertainment & Sports Network, and he remains on the network’s board to this day.

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    Written by Kevin Dowd

    Kevin Dowd wrote The Weekend Pitch newsletter for PitchBook, covering startups, buyouts and the rest of the private market.

    A native of the Pacific Northwest, he’s an alumnus of the University of Washington with a degree in creative writing and journalism. He enjoys books and basketball and, most especially, books about basketball. He feels uncomfortable writing about himself in the third person.

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