Milan, Gerry Cardinale all over the pitch
The number one of RedBird and Milan, Gerry Cardinaletalks about his adventure in European football and obviously first and foremost as owner of the club in via Aldo Rossi in Bloomberg’s podcast The Deal. “Buying Milan was the hardest thing I’ve ever faced, but also the best”, has explained. Then revealing: “Every time I raised the topic of AC Milan internally or here in the United States, everyone said, “You’re crazy.” His approach to the Rossoneri world was light: “Different from what I usually do: for the first year I didn’t do anything.” Then the revolution last summer (while in these hours the rumors about thearrival of Damien Comolli, president of Toulouse at Milan)
Gerry Cardinale: “Buying Milan was the hardest and best thing I’ve ever faced”
“Buying Milan was the hardest thing I’ve ever faced, but also the best. But the irony is that it was all imposed by myself. I had an entrepreneurial need that I needed to fill, and it was just the kind of thing we do more and more at RedBird. I like playing the shadow entrepreneur and I like solving problems with capital. And it just so happens that there is a bit of luck in people’s careers. I happened to find a turning point in the sport that I could never have predicted in 2000/2001. If we look back at the last 20 years, we realize that it was truly a great fortune. I really found an air gap where I took off. Now the challenge is to navigate this situation, because now everyone has discovered sport.”
Gerry Cardinale in European football thanks to Billy Beane (Mister Moneyball)
“He was the one who encouraged me to start looking at European football. I said to myself: why should I consider European football? An ecosystem in which there are sovereign governments and Russian oligarchs cannot be an ecosystem worth considering. He said to me, “You’re missing the point.” He argued that the relegation transfer market, the cornerstone of European football’s economics, was tailor-made for Moneyball. It is built, bought at a low price and sold at a high price. So we did research on European football, we met 150/200 teams in all the countries of the continent and in England.”
Gerry Cardinale and the Toulouse model
“Toulouse’s price was around 60 million euros. It was relegated to the second series. We bought it for 15 million euros within three months. Within three months, with Billy, Luke Bornn and our team, our data analytics team, we sold our first player for around 15 million euros. And then, after the first year, we got promoted to Ligue 1. And now Toulouse sails steadily in mid-table and has a very reasonable wage bill. This would suggest that we would have to spend a lot more to be as mid-table as we are. European football is about spending that incremental dollar of capital better than the next guy. Then we invested in Fenway Sports Group during COVID, because I believed in this type of intellectual property and we focused on sport as the rights holder. With FSG I got to know the greats with Liverpool. So that was the next step in the tutorial, and it was one of the first deals I made in sports.”
Gerry Cardinale and the AC Milan signing: “They told me ‘you’re crazy’. Singer? Phenomenal work by Elliott”
“Every time I brought up AC Milan internally or here in the United States, everyone said, “You’re crazy.” “Don’t ever think about investing in Italy.” But the answer to your question is that, in the end, we found ourselves going around the circle. Elliott was the owner of Milan. Milan was in debt, originally there was a Chinese owner, who made a hole in the water and Elliott came in, enforced the pledge and became the owner. But I have to say that the thing that changed my mind was meeting Paul and Gordon Singer, his son, who led Elliott’s investments and team. And I can’t say enough good things about them. I am very knowledgeable about how they did a phenomenal job in the four years they owned Milan, from 2018 to when we bought it in 2022, to restore it. We own 100% of the capital with a vendor loan. And we bought Milan in a very interesting way. I think we paid a fair price, especially compared to other prices you see. We bought it at a multiple of four times revenue and when we bought it it was just below cash flow positive or breakeven. Now the cash flow is significantly positive.”
Gerry Cardinale: “First year at Milan? I just watched”
“We reached the semi-finals of the Champions League. When I took over, it was a challenge because they had just won the scudetto. So I actually took a different approach than I usually do: for the first year I did nothing. Really, I just watched. But I’ll tell you that the best thing you can do is not enter the field with guns blazing.”
Gerry Cardinale and the new home of Milan: “It will be an American-style stadium”
“It will be the first built in Italy since 2011. It will be an American-style stadium, with 70,000 seats. We will bring music to Milan and build something. A great live event, an entertainment campus for Milan, really linked to the team, but something similar to Milan. It’s interesting, because we’re going to have to find a way to crystallize the value. But it’s something that you should probably own forever, which is the height of iconicity and opportunity, as a platform. And we will build this new stadium. When we finish building the stadium, I promise you that we will have a company that will build stadiums.”
Gerry Cardinale and TV rights in European football
“Milan is truly one of the most important clubs. I believe it is one of the top four brands globally in football. And now, with the breaking down of barriers thanks to streaming and the possibility of broadcasting these matches in the United States live, the younger kids today know everything, not just the Premier League: I can only tell you that I have received more comments from people , people I know, people I didn’t know, when we bought Milan from New York and from the United States than from Europe. TV rights will also be an evolution. There isn’t much competition for TV rights in Europe.”
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