The Goldman Alum Who Reimagined the Yankees and AC Milan | The Deal

06 Apr 2024 (7 months ago)

Gerry Cardinale's Investment Philosophy

Gerry Cardinale, founder and managing partner of Redbird Capital, emphasizes the importance of starting with great intellectual property to navigate the cyclicality and volatility in the way technology disrupts monetization methods.
Cardinale focuses on arbitraging dislocations and inefficiencies in sports, closing the gap between valuations and infrastructures through his company, Redbird.
He recently decided to vertically integrate and become a rights holder himself.

Cardinale highlights the creation of the YES Network as a revolutionary concept in monetizing intellectual property in the late 1990s and early 2000s.
The partnership with the New York Yankees and the Steinbrenner family has been instrumental in Cardinale's career and has shaped his investment strategy.
Legends Hospitality was created as the economic engine of the Yankees and Cowboys' new stadiums, capturing the intellectual property and generating revenue through seat licenses, merchandising, and hospitality.
YES Network was launched on September 10th, 2001, just before the 9/11 attacks, but it still managed to succeed despite the challenging circumstances.
YES Network faced a challenge in its first year when it couldn't reach an agreement with Cablevision, which represented three-eighths of its subscriber base.
Despite this setback, YES Network remained cashflow positive due to its strong revenue streams.

Alex Rodriguez discusses his relationship with Gerry Cardinale and how it began.
Cardinale invested a few million dollars in the YES Network deal and did extraordinarily well.
In 2008, the Yankees did not make the postseason, and Rodriguez sought advice from Cardinale on how to improve the team.
Cardinale set up a lunch with Randy Levine, the Yankees president, and Rodriguez to discuss potential solutions.
Rodriguez was hesitant to be fully honest with Levine due to his intimidating nature and similarities to George Steinbrenner.
Cardinale encouraged Rodriguez to be open, and they discussed potential player acquisitions.
The Yankees went on to win the World Series that year.
Rodriguez reflects on his unique role as a connective tissue between the Steinbrenners and Randy Levine.

Alex Rodriguez describes his first encounter with George Steinbrenner, the owner of the New York Yankees, as intimidating but also disarming.
Steinbrenner had old-school values, prioritizing making money and winning while maintaining integrity.
Steinbrenner's loyalty stemmed from his positive experience with Gus Levy, the CEO of Goldman Sachs, who had helped him when he first arrived in New York.
Rodriguez's decision to leave Goldman Sachs and pursue entrepreneurship was driven by his desire to solve problems with capital and his passion for sports.

Gerry Cardinale, the founder and managing partner of Redbird Capital Partners, discusses his journey in the sports industry and the key investments that led to his success.
Cardinale highlights the importance of taking a contrarian approach and investing in undervalued markets, which led him to explore European football despite initial skepticism.
He describes the acquisition of Toulouse FC in Ligue 1 as a "training wheels investment" that allowed Redbird to gain experience in European football and ultimately sell a player for a significant profit within three months.
Cardinale emphasizes the value of intellectual property in sports and explains his decision to invest in Fenway Sports Group during the COVID-19 pandemic, gaining exposure to top clubs like Liverpool FC.
He discusses the opportunity to partner with LeBron James and Maverick Carter's SpringHill Company and the acquisition of the Pittsburgh Penguins, showcasing Redbird's diverse portfolio in the sports industry.

Gerry Cardinale discusses his experience as the new owner of AC Milan and the strategies he is implementing to revitalize the club.
Cardinale emphasizes the importance of building a world-class stadium and entertainment campus in Milan, which will serve as a platform for various events and potentially lead to the creation of a stadium-building company.
He draws inspiration from successful sports owners like George Steinbrenner and Jerry Jones, learning from their approaches to team management and avoiding fraternizing with players to maintain objectivity.
Cardinale acknowledges the significance of the fans in Italian football and the need to establish credibility and trust with them. He reflects on the visceral reactions to his initial changes but believes he is gaining their support as they witness the team's improvement.

Cardinale discusses his investment in the XFL, seeing an opportunity to provide quality football throughout the year and meet the demand for spring football in local markets. He draws parallels to the successful MLS model and aims to bring NFL-quality football to these markets.
The XFL aims to produce a national-quality football product in local markets, complementing the NFL rather than competing with it.
The XFL has a respectful relationship with the NFL and collaborates on rules, innovation, and player health and safety.
The XFL serves as a development league for the NFL, with 80 players from the past season making it to the NFL.