US private equity firms see lucrative opportunity to invest in European football.

Fenway Sports Group, the owner of English Premier League champions Liverpool, is reportedly on the verge of selling over 10% of the club to US investor RedBird Capital Partners for around £540 million.

RedBird appears intent on building a global network of football investments. This would be on the back of the £4.7 million recently invested into the club by basketball superstar Lebron James.

In December, ALK Capital – another American sports investment business – acquired the English club  Burnley via a leveraged buyout (similar to how the Glazer Family bought Manchester United in 2005). 

The situation is similar elsewhere. RedBird already holds a stake in French club Toulouse, while Bordeaux (General American Capital Partners and King Street Capital Management) and AS Nancy (New City Capital) are also US-owned. Meanwhile, Troyes FC was bought last year by City Football Club in which Californian private equity investor Silver Lake owns shares.

The story is the same in Italy, where the Elliott Management Corporation owns AC Milan and where a private equity consortium consisting of CVC Capital Partners, Advent Capital Management and FSI Capital are pursuing the acquisition of a £1.5 billion stake in the new media business of premier league Serie A.

CVC and Advent are reportedly keen on striking a similar deal with German Football’s Bundesliga International, which handles overseas media rights sales.

It is apparent that this private equity investment is not just restricted to Europe or to football. For example, Silver Lake has connections to City Football Group franchises in India, China, Tokyo and Australia. And RedBird’s activities also extend to baseball, through the Boston Red Sox and the New York Yankees.

Such investments are part of broader equity portfolios linked to sports like basketball, American football and wrestling. Silver Lake also appears keen to use football as the means of joining the dots between businesses operating in other sectors such as sports retail (like Fanatics, an online licensed clothing store) and entertainment (such as Endeavour, a talent representation agency).