Gerry Cardinale, the founder of RedBird Capital Partners, a firm that has amassed an impressive $8.6 billion sports and entertainment empire, credits basketball legend LeBron James with a pivotal insight that broadened his investment strategy. For years, Cardinale operated under the belief that the synergy between sports and media was the core of RedBird’s approach. However, conversations with LeBron James and his long-time business partner Maverick Carter revealed a crucial missing element.
The LeBron James-RedBird Capital Partnership: Recognizing the “Culture” Factor
Cardinale explained at the Variety and Sportico Sports & Entertainment Summit in Los Angeles that LeBron James and Maverick Carter highlighted a third, equally vital component to their investment thesis: culture. Initially, Cardinale envisioned a two-pronged approach focusing on sports and media. However, James and Carter persuasively argued for the inclusion of culture as an essential pillar, completing a three-legged stool. This perspective shift, influenced directly by LeBron James, has significantly shaped RedBird Capital Partners’ investment decisions.
This expanded understanding is evident in RedBird’s recent investments, most notably in Springhill, the production powerhouse founded by LeBron James and Maverick Carter. Springhill is behind successful ventures like The Shop, the acclaimed HBO unscripted interview series set in a barbershop, and Uninterrupted, a dynamic sports and culture media company. Further demonstrating this “culture-first” approach, RedBird recently joined forces with actors Ryan Reynolds and Michael B. Jordan, among others, in a deal to acquire a 24% stake in the Formula 1 team Alpine Racing for approximately $218 million (€200 million).
Beyond Private Equity: RedBird’s “Solutions-Based Capital” Approach
As private equity increasingly permeates the sports landscape, with athletes launching their own funds and major leagues like the NBA, NHL, and MLB adapting regulations to accommodate institutional ownership, RedBird Capital distinguishes itself. Cardinale eschews the traditional “private equity” label, preferring to describe his firm’s approach as “solutions-based capital.” His investment philosophy extends beyond merely providing financial capital; RedBird aims to integrate scalable capital with institutional and operational expertise to foster business growth and development. “If I can bring scalable capital, and integrate it with operating capability and build a business,” he stated, “I’ve always found that’s a much better way to go.”
Founded in 2014, RedBird Capital boasts an impressive $8.6 billion in assets under management. Their diverse sports portfolio includes prominent names such as Italian soccer giant AC Milan, French soccer club Toulouse, cricket’s Rajasthan Royals, the XFL, and a 10% stake in Fenway Sports Group, the parent company of the Boston Red Sox, Pittsburgh Penguins, and Liverpool FC. Complementing this robust sports portfolio is a significant media arm, featuring investments in the YES Network, David Ellison’s Skydance Media, and Everpass Media, a burgeoning streaming platform created in partnership with the NFL.
The Sports & Entertainment Summit, co-hosted by Variety and Sportico, served as a platform to explore the converging worlds of sports and entertainment. The event featured a distinguished lineup of speakers, including Gerry Cardinale, NBA MVP Joel Embiid, college football standout Chase Griffin, and NBA All-Star Jaylen Brown, further emphasizing the growing intersection of these dynamic industries and the strategic insights of figures like LeBron James in shaping investment strategies within this space.
In conclusion, LeBron James’s emphasis on “culture” has been instrumental in refining RedBird Capital Partners’ investment approach, guiding their strategic decisions and contributing to their significant success in the sports and entertainment sectors. This insight has allowed RedBird to move beyond traditional investment models and embrace a more holistic and culturally attuned strategy, solidifying their position as a leader in the evolving landscape of sports and entertainment investment.
