FSG and RedBird Capital set for first showdown after Liverpool takeover ‘shut down’

John Henry and Gerry Cardinale are usually allies in the boardroom. Yet on Thursday evening, the business partners will turn from friends to foes for a couple of hours when Liverpool face Toulouse in the Europa League.

Fenway Sports Group (FSG) will go head-to-head with RedBird Capital Partners for the first time, having been in cooperation for the past two-and-a-half years.

In April 2021, FSG made the decision to sell an 11% stake in their company to RedBird for a reported £535 million. As a result, the firm - founded by former Goldman Sachs partner Cardinale - became an indirect investor in Liverpool, as well as Major League Baseball team the Boston Red Sox.

During FSG’s ownership, Liverpool have been restored to the elite of European football. After appointing Jurgen Klopp in October 2015, the Reds have won six major trophies - including a sixth Champions League in 2019 and claiming a maiden Premier League title the following year. Meanwhile, major investment of around £200 million has been spent to increase the capacity of Anfield to 61,000 when work on the Anfield Road stand will be complete, while £50 million was spent on the state-of-the-art AXA Training Centre.

Before purchasing a stake in FSG, RedBird had already turned their attention to football by purchasing an 85% stake in Toulouse. At the time, Les Violets were preparing for life in the French second tier after suffering relegation, with RedBird paying a reported €20 million for the club.

RedBird, much like FSG, have adopted a data-driven approach at Toulouse. They employed former Liverpool director of football strategy Damien Comolli as president and Toulouse earned promotion back to Ligue 1 in the 2021-22 season. And last campaign, having claimed a respectable 13th-placed finish, they also won the Coupe de France - the country’s equivalent to the FA Cup - for the first time in their history. As a result, they earned qualification to the Europa League.

However, Cardinale was forced to step down from Toulouse’s board during the summer. In August 2022, RedBird followed in FSG’s footsteps by purchasing a European powerhouse. They splashed out a reported €1.2 billion for seven-time Champions League winners AC Milan - which was the chief reason why RedBird did not look to buy a direct stake in Liverpool when FSG were searching for fresh capital.

Cardinale is hoping to move the Rossoneri from their historic San Siro stadium they share with rivals Inter Milan and find a home of their own. Dynasty Equity became FSG’s minority partner when a deal between £100-200 million was announced last month.

With Milan playing in the Champions League and Toulouse in Europe’s secondary tournament, UEFA rules are clear when it comes to multi-club ownership. Article 5 states that ‘no-one may simultaneously be involved, either directly or indirectly, in any capacity whatsoever in the management, administration and/or sporting performance of more than one club participating in a UEFA club competition’.

Still, Cardinale will hold a vested interest in the encounter. Toulouse travel to Anfield as major underdogs as they face a Liverpool side who are favourites to win the Europa League and have shown the early signs they can challenge for the Premier League title this season.

Indeed, Cardinale has admitted that when working for Goldman Sachs that he recommended the investment bank to purchase Liverpool for $350 million in 2008 - but was shut down. The Reds are now valued at $5.3 billion by Forbes.

Speaking at the 2023 MIT Sloan Sports Analytics Conference, Cardinale said: “The advice to my 20-year-old self? I started the YES Network with George Steinbrenner when I was 33 years old, so the advice to my 33-year-old self would have been the inkling that we had a few years later to go and buy Liverpool at a $350m valuation. Goldman (Sachs) shut me down on that and we would have done that a lot earlier and that would have been pretty good."

Still, if Toulouse are to pull off an unlikely upset, there may be some gentle ribbing from Cardinale to John Henry and the rest of the FSG top brass whenever they’re next together around the business table.