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RBAC - RedBall Acquisition News Story

$10.04 -0.1  -0.8%

Last Trade - 16/04/21

Sector
Financials
Size
Mid Cap
Market Cap £626.1m
Enterprise Value £625.0m
Revenue £n/a
Position in Universe 2968th / 6850

BREAKINGVIEWS-Moneyball SPAC could turn bats and balls into gold

Tue 13th October, 2020 9:14pm
(The authors are Reuters Breakingviews columnists. The opinions expressed are their own.) By Anna Szymanski and Lauren Silva Laughlin NEW YORK, Oct 13 (Reuters Breakingviews) - Billy Beane may be throwing a curveball. The baseball executive who used analytics to identify underpriced talent may help take the Boston Red Sox baseball franchise and Liverpool Football Club’s holding company public. Paying up for marquee names using an alternative financing vehicle in the midst of a bubble doesn’t exactly sound like the bargain hunting that made Beane famous. But the game plan might hit a sweet spot. Sports valuations have been on a streak as of late, according to Forbes, even though the pandemic has cut into ticket sales and TV viewership has recently dwindled. Last month hedge fund star Steven Cohen set a record buying baseball's New York Mets at a $2.5 billion valuation. And on the face of it, Beane’s deal is on steroids. The check that he could write through RedBall Acquisition RBAC.N , a listed special purpose acquisition company he co-chairs with Gerald Cardinale of RedBird Capital Partners, would value billionaire owner John Henry’s holding company, Fenway Sports, at $8 billion, according to the Wall Street Journal. Valuing Liverpool’s sales for the year ending May 2019 on Manchester United’s MANU.N modest 4 times enterprise value-to-sales multiple implies the Red Sox and a few ancillary properties would be worth double the price of the Mets. Even a diehard Boston fan would have to balk at that. Yet U.S. valuations make the deal look more reasonable. Madison Square Garden Sports MSGS.N , the parent company of the New York Knicks and New York Rangers, has an enterprise value of roughly 6.4 times revenue, already one-third lower than before the pandemic. If that could be applied to Liverpool, the implied value of the Red Sox in the possible SPAC deal would be under $4 billion. Switch up to MSG’s pre-Covid valuation multiple and the Red Sox would only need to be worth $2 billion to justify Beane’s price. If that type of international arbitrage doesn't materialize, Beane and Henry could have another trick up their sleeve. If a deal with Beane's SPAC gives Fenway Sports U.S.-listed shares, the company could use that currency to roll up European soccer teams that are cheap, relatively speaking. As they say in baseball, you have to swing for the fences. On Twitter https://twitter.com/Three_Guineas and https://twitter.com/thereallsl CONTEXT NEWS - RedBall Acquisition, a listed special purpose acquisition company launched by private equity firm RedBird Capital Partners and baseball executive Billy Beane, is considering buying a stake in Fenway Sports, a holding company that owns the Boston Red Sox baseball franchise, Liverpool Football Club and other properties, according to a Wall Street Journal report on Oct. 9. The combination would take the holding company public. - The deal with Red Sox owner John Henry would value the company at around $8 billion, including debt, according to the newspaper. It also reported that the SPAC – which raised $575 million in August to purchase businesses in sports, media and data analytics – plans to raise another $1 billion to buy the stake in Fenway Sports. - The SPAC is co-chaired by former Goldman Sachs banker Gerald Cardinale and Oakland Athletics’ executive Beane, who was featured in the book “Moneyball: The Art of Winning an Unfair Game” by Michael Lewis. - For previous columns by the authors, Reuters customers can click on SZYMANSKI/ and SILVA/ - SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Red Sox owner to take Fenway Sports public through merger with RedBall - source urn:newsml:reuters.com:*:nL1N2H1014 WSJ article https://www.wsj.com/articles/red-sox-owner-in-talks-for-deal-with-redball-acquisition-11602286661 BREAKINGVIEWS-Steve Cohen’s Mets win could rewrite comeback tale urn:newsml:reuters.com:*:nL1N2GC0VT BREAKINGVIEWS-Liverpool has one more financial peak to conquer urn:newsml:reuters.com:*:nL8N2E31RI ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Richard Beales and Amanda Gomez) ((anna.szymanski@thomsonreuters.com; Lauren.SilvaLaughlin@thomsonreuters.com))
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