Billy Beane's Sports SPAC Rumored To Be Seeking Liverpool Stake

Sports manager Billy Beane's analytics-based approach of using low-cost players to get wins became the subject of the bestselling book “Moneyball: The Art of Winning an Unfair Game.”

Beane is now co-chairman of RedBall Acquisition Corp. RBAC, a sports-based specialty purpose acquisition company that is seeking to find a sports company to merge with.

The First Sports SPAC: RedBall Acquisition Corp sold 57.5 million shares at $10 each for $575 million. Each share includes one-third of a warrant that can be redeemed to buy RedBall shares at $11.50 each.

RedBall can acquire a company in any industry, but has said from the start that it is focusing on professional sports franchises or sports media. The company will have over $1 billion to invest in the company it selects.

The new SPAC is sponsored by RedBird Capital, which has $4 billion invested in 23 portfolio companies.

Beane The Key: Beane is the executive vice president of operations for the Oakland Athletics.

During his 18 seasons as general manager of the Athletics, the team had the seventh-most wins in MLB despite being in the bottom quarter of payrolls.

The team also had eight postseason appearances, which ranked fifth in the league. The Athletics went from a $118-million valuation in 1998 to $1.1 billion in 2019.

Football Looks To Be The Winner: New reports say Liverpool F.C. is the leader for an investment by RedBall.

Liverpool owner John Henry, who also owns the Boston Red Sox, tried to hire Beane years ago to help the Red Sox and Liverpool.

Liverpool has been rumored to be seeking a minority investment and could need it even more after a high payroll in 2019-2020 and declining ticket revenue.

The Boston Red Sox will also see lower revenue, with no ticket or concession revenue, due to the coronavirus pandemic. 

Liverpool has a valuation of $2.18 billion, according to Forbes. It is unlikely RedBall would acquire complete ownership in Liverpool.

AS Roma, an Italian club, was recently sold for $700 million, with a Forbes valuation of $622 million.  

RedBall's recent hiring of Richard Scudmore is a likely sign a football team is the SPAC's target. Scudmore served as an executive of the English Premier League from 1999-2019.

Scudmore is receiving 30,00 shares in RedBall and will receive an additional $100,000 if a successful business combination is reached.

What’s Next: Both Beane and RedBird Capital co-chairman Gerry Cardinale have success at building brands in the sports market.

Beane has the leadership experience. Cardinale helped create the Yes Network with the Yankees in 2011. He also helped launch Legends Hospitality with the Yankees and the NFL’s Dallas Cowboys in 2014.

If RedBall acquires a sports team or partial stake in any league, it could see an influx of investors and a new legion of dedicated fans thanks to a feeling of actual ownership.

Investors should also keep an eye on Manchester United MANU shares if an investment in a football club is made.

Photo by Ruaraidh Gillies via Wikimedia.