Ex-Goldman Sachs banker buys AC Milan for 1.2 billion euros

New York On May 22, Gerald “Geri” Cardinale stood in the square in front of Milan’s cathedral and celebrated new Italian football champion AC Milan surrounded by red and black flags. At the time, the 53-year-old American investor’s negotiations to buy the club were already in their final stages.

Cardinale signed preliminary agreements with his investment firm Redbird Capital Partners on Wednesday: Redbird will pay an impressive €1.2 billion to the association, which was once owned by businessman and former Prime Minister Silvio Berlusconi.

The former Goldman Sachs banker of Italian descent was missing an Italian soccer hero in his group. With Milan, Cardinale now buys one of the most famous clubs in the world with a huge fan base outside of Italy. Final contracts are expected to be signed in the coming weeks.

Thanks to his investment company Redbird, the businessman already controls the French football club FC Toulouse. He also acquired a 10 percent stake in Fenway Sports Group in 2021 for $735 million. This possession includes the Boston Red Sox baseball team and English Premier League club Liverpool.

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So now Milan is coming. For a long time, “Milan” was Berlusconi’s pride and joy. He also knew how to use fan loyalty for campaign purposes when he entered politics. Unlike domestic Milan rivals Inter, with their more elite fans, AC Milan has always been the club for the common people.

Cardinale prevailed against investors from Bahrain

But financially, the club has not done well under Berlusconi. And so the politician initially sold the club to Chinese investors in 2017, who in turn transferred it to Paul Singer Elliott’s hedge fund shortly after it went bankrupt. He paid a total of $700 million for the purchase and subsequent investments. Now, just four years later, Singer is passing the majority of the club through with big profits.

Bahraini financial firm Investcorp also attempted to acquire AC Milan. But Singer, still involved in a small stake, ultimately preferred fellow American Cardinale, who has long been considered a dignitary in sports and show business.

“When we took over Milan in 2018, we inherited a club with a tremendous history, but with serious financial problems and mediocre sporting performance,” Gordon, son of Singer, the hedge fund’s managing partner, said on Wednesday. “Our plan was simple: create financial stability and return Milan to its place in European football.” Today we achieved both.

“We are honored to be part of Milan’s illustrious history,” Cardinale said of the deal on Wednesday at the top of Italian, European and world football.

Redbird’s investment philosophy and team results have shown that football clubs can be successful and sustainable. “We look forward to a long-term partnership with the club, its management team and Milanisti around the world to continue to drive Milan forward in the years to come.”

Jerry Cardinale

His investment company Redbird pays 1.2 billion euros to the club.

(Image: Bloomberg/Getty Images)

Cardinale grew up in suburban Philadelphia. The sentimental rower later did not study economics at Harvard and Oxford, but studied social sciences and then political science. His financial career began in 1993 at New York investment bank Goldman Sachs, there he became a partner and was responsible for the $100 billion private equity business.

During this time, he worked, among other things, for a television station about the New York Yankees baseball team, which was later bought by Rupert Murdoch for four billion dollars. He later developed a marketing platform called Legends Hospitality for the Yankees and Dallas Cowboys.

In 2014, he became self-employed with his investment firm Redbird. The company also invests in gas and finance companies. But the focus is on sports and the interaction between technology, sports, media and culture. Today, it’s true again: “Content is king,” Cardinale said recently at a Bloomberg conference in New York. Content is king and not distribution channels as many have long believed. The teams as the trademark rights holders play the main role for him.

Partnership with LeBron James

But content alone is not enough. At least LeBron James taught him that, Cardinale says. When Cardinale invested in the basketball star’s Spring Hill film, television and events company with Redbird, he thought he was investing in a media company. “But they taught me better: It’s a cultural institution,” Cardinale says. It’s about the whole culture around the team and the athletes. Thanks to technology and live events, Cardinale explains, “Fans are more active today, not passive.”

At AC Milan, he now wants to use his marketing expertise when it comes to opting out of the joint stadium project with Inter Milan, and positioning himself in his own arena.

According to media reports, Cardinale should choose its sports investments using sophisticated software that measures financial sustainability and performance in the field. But sometimes it is difficult for him to understand the right price for the club. “This is a multibillion dollar industry and there is no research into its stocks,” Cardinale says. What are you doing there? “You look at the last deal and pay an extra fee,” he explains.

He himself has always shown a good talent for timing. And when it comes to football issues, Cardinal can confidently turn to Liverpool boss Jurgen Klopp.

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