Private equity interest in sports teams has led to “massively inflated” valuations based on “facile notions” about the sector’s future growth, according to Gerry Cardinale who is the AC Milan owner, as relayed via Financial Times.
The RedBird founder and AC Milan owner, took a swipe against rivals, saying that the sector’s move into sport had been “bad for the ecosystem” because money was simply being parked in the sector with little effort to improve the performance of the underlying business.
“This is about my crowd coming into sports. The problem with my crowd is they are asset managers”, he said on stage at the IMG x RedBird Summit on Wednesday. "They just want to buy stuff, and that’s not great for intellectual property based businesses”, he said.
Cardinale continued:
“What do [the private equity players] bring? They bring liquidity, but there’s a better way of doing it. We’re going to need to soft land this because right now it’s massively inflated.”
Cardinale said that RedBird, with its decades of experience in sport, was different from other investors. "What I’m trying to do there is bring what I’ve learned over 30 years in America to European football. There’s a huge opportunity to return AC Milan back to where it was”, he said.
Cardinale added:
“The reason why there’s this demand for sports exposure is because of these facile notions that sports always goes up. It’s not correlated to the macro, it’s outperformed the S&P for the last decade”, he said. “There’s merit to those arguments, but they’ve just peddling that now and everybody wants exposure to it.”
Source: Ft.com
