SPAC May Target European Soccer Club
Special purpose acquisition companies, or SPACs, have surged in popularity this year. In the last week alone, two more electric vehicle startups—Lidar and Canoo, announced they will go public via a merger with a SPAC, while even Former House speaker Paul Ryan announced he is starting a SPAC.
A recently funded SPAC appears likely to be going after a European soccer team. Sports banker Gerry Cardinale and MLB executive Billy Beane announced last week that they have raised $575 million through a "blank check" company called RedBall Acquisition Corp.
A source told The New York Post that the SPAC would be "elephant-hunting in European soccer." Given that Richard Scudamore, who is the former executive chairman of the English Premier League, is on the board of RedBall Acquisition Corp., a deal for a European soccer club could make sense.
Cardinale and Beane appear to be taking advantage of the money pouring into SPACs, as well as the troubles facing professional sports as a result of the coronavirus pandemic.
"The Premier league has gone through a difficult time with Project Restart," said Daniel Geey, who is a partner at law firm Sheridans, who specializes in sports. "Clubs will have COVID-related budget shortfalls. There might be cash flow issues coming up."
Sources believe the SPAC could be targeting Liverpool, which won the European Champions League tournament last year and were crowned Premier League Champions earlier this summer.
Beane, who is most popularly known for being the subject of the book and movie Moneyball, is a Liverpool fan and close friend of current Liverpool owner John Henry. Henry, who also owns the Boston Red Sox, is likely to see losses from both teams as Liverpool could reportedly lose $250 million this year.
Liverpool is rumored to have been seeking a sale of a minority stake since before the coronavirus. Liverpool was recently estimated to be worth $2.18 billion by Forbes.
"Liverpool has to be their primary target," a sports banker said. "It's a top brand and a huge club. It's also looking for a deal like this."
With sports leagues around the world feeling financial pressure from the coronavirus, it will be interesting to see if more SPACs are formed to take advantage of easy money and acquire sports teams.
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