Liverpool owners Fenway Sports Group still have their eyes on acquiring a Brazilian football team, although meaningful discussions are yet to take place, according to reports in the South American country.
FSG are keen to expand their sporting empire having added the Pittsburgh Penguins NHL team to their stable of clubs that includes the Boston Red Sox baseball team and NASCAR outfit RFK Racing as well as the Reds.
And while an NBA team is believed to be top of their wish list in 2022, they are reportedly still eyeing football clubs to add, with Brazil seen as ripe for investment due to a pending change to the organisational structure that would allow a greater say for clubs on revenue distribution, fairly cheap valuations of clubs and an enormous, passionate fan base who hold the game of football above all others.
Liverpool were linked with a potential takeover deal for Cruzeiro in December, a deal that was eventually done by former Barcelona hero and Brazil legend Ronaldo. Since then there have been deals struck at Botafogo by Crystal Palace investor John Textor and at Vasco da Gama by 777 Partners, the private equity firm that owns Italian side Genoa. Manchester City owners City Football Group have been linked with a move to take over at Bahia in recent weeks.
A number of Brazilian clubs are changing the way they are governed, which has opened up opportunities for outside investment.
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With some having the need to find funds to deal with the impact of the pandemic, some clubs are now switching from a non-profit entity to a corporate one in a bid to restructure its finances, forming a ‘Sociedade Anônima’ (SA) to attract investors. That has alerted interested parties, a number of them from the US.
And reports from one of Brazil’s biggest sports media outlets, UOL Esporte, suggest that it is something on the agenda for FSG.
The report stated: “As Fenway’s entry into Brazilian football is something embryonic, which is under study, there is still no more substantial negotiations underway with any national team.
“What is known so far is that the group does not intend to buy a club in Brazil just to mine players in the local scene and profit from their sale to Europe (perhaps to Liverpool itself).
“The North American fund, if it really makes its visit to the ‘country of football’, would like to assemble a team to fight for the most important titles and also earn money from awards and merchandising. Therefore, the preference is to buy a club that is already in Serie A and is minimally well structured.”
The report also states that FSG did not formally take part in the bidding process for Cruzeiro prior to Ronaldo acquiring the side, nor did they make a proposal. They do, however, note Fortaleza and Club Athletico Paranaense as two clubs that could well be on the radar, although no formal discussions have taken place.
Ever since the arrival of RedBird Capital Partners at FSG following a $750m deal for 11 per cent of the Reds’ owners in March 2021, FSG have been eyeing new sporting properties.
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The influx of capital was designed to do two things; to help them manage their way through the pandemic, remaining on course on projects, and also to help them grow the business through acquisitions. That is something that already transpired with the takeover of the Penguins in November in a deal that valued the Pittsburgh team at close on $900m.
“The bar has never been higher in terms of what really fits in the (FSG) portfolio,” explained Gerry Cardinale, founder and managing partner at RedBird Capital, when speaking to the Boston Globe last week.
“You should think about us looking to add other teams and the businesses around them, you should look at us building businesses within the platform itself.
Cardinale, who told the Globe that another football team, potentially from another continent could be on the agenda, added: “Everything’s in play, I would say.”
The next 12 to 18 months will see FSG add more sporting teams to their empire, with a potential NBA expansion franchise in Las Vegas a rumoured landing point.
It will be a period of growth for the business, one where the aim will be to drive up values, maximise existing revenue streams and create new ones, potentially acquiring businesses to help them achieve that, with re-investment back into their teams for revenue generating projects part of the plan. For Liverpool, that is where their growth will arrive from within.
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