AC Milan: New York Yankees take a swing at Italian champions

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Good morning from the 7 train to the US Open in Queens, where I’ve been spending each day this week on the very eventful and fulfilling assignment I’ve described as “Serena Watch”. When Serena Williams announced her intent to step away from tennis after this year’s tournament, the sport wasn’t sure what to expect of the 23-time Grand Slam champion — who largely hasn’t competed in a year leading up to this swan song. The atmosphere at Arthur Ashe Stadium pivoted from reverent on Monday to electric by late Wednesday, when the 40-year old upset world no. 2 Anett Kontaveit. But on Friday night the fairytale ended, with Williams knocked out by Ajla Tomljanović. “It’s been a fun ride”, a tearful Williams told the adoring crowd.

It’s no wonder Williams is this week’s FT Person in the News, for her one-of-a-kind legacy not only in the sport but across business, motherhood, and fashion. Stay tuned for more updates from the Open next week, but first we have a digest on another New York story — the Yankees taking a stake in AC Milan — and we look beyond the big spenders in the football transfer window to those coining it from selling. Do read on — Sara Germano, US sport business correspondent

Start spreading the news: the Bronx Bombers back AC Milan

This week RedBird Capital closed on its €1.2bn acquisition of AC Milan, placing the American investment group in control of the Serie A champions.

In doing so, founder Gerry Cardinale brought in some longtime associates as minority shareholders, none other than the New York Yankees and a Los Angeles-based investment fund backed by LeBron James and the rapper Drake.

Cardinale, the former Goldman Sachs banker, is seeking to leverage his longtime relationships with celebrity athletes and the Yankees in particular to guide his vision for the Rossoneri. During his time at the investment bank, Cardinale helped start the Major League Baseball team’s regional sports channel, the YES Network, starting a two-decade relationship with the owning Steinbrenner family.

Their closeness informed the Yankees organisation’s decision to take a minority interest in AC Milan, according to people familiar with the matter. But the view from New York, where the 27-time World Series champions remain one of the most valuable clubs in sport ($6bn as estimated by Forbes), is that Milan are still a niche interest that can benefit from the halo of the Bronx Bombers’ brand.

“No one really knows them here”, said one person familiar with the investment. While the Yankees organisation will be limited partners without strategic input in Milan, they plan to help promote the Italian champions by broadcasting match reruns on YES and inviting the Rossoneri to play friendlies at Yankee Stadium.

Cardinale and RedBird are still seeking limited partners to help pay down the €600mn loan from Elliott Management, the previous stewards of AC Milan, to purchase the club. Main Street Advisors, a Los Angeles-based investment group which counts James and Drake as well as Maverick Carter and Jimmy Iovine as backers, joined the minority stakeholders at the close of the deal this week.

While the athletic and entertainment glitterati aren’t direct investors in Milan, Cardinale has shown his ability to follow through on working his existing connections to back his vision. The greater question will be if he can win over Italians.

How the Premier League funds Europe

When Antony Santos announced his arrival at Manchester United this week, he thanked his family, his friends and the legion of United fans who messaged him on social media. “It was your call that brought me here!!” he said.

Little mention, however, of the €95mn required to prise the Brazilian winger away from Ajax, a figure the player’s own coach described as “absurd”. The Dutch champions generated almost €225mn from player sales this summer, the highest in Europe. The bulk of that came from Man United, who also forked out nearly €60mn for Antony’s teammate Lisandro Martinez.

These deals highlight the ever increasing financial muscle of English football. The Dutch champions can offer Champions League football this season, something Antony won’t get in Manchester. And while United has a rich history in the competition, Ajax has been crowned champions of Europe four times; that’s once more than the English side.

But this summer was no one-off event. Ajax has been producing top talent and selling it for big fees for years as one of Europe’s pre-eminent football factories supplying top clubs in England, Spain, Germany and Italy. In the past decade the Amsterdam club’s player sales have generated €900mn, according to Transfermarkt, yielding a positive balance of €480mn.

Ajax is not alone. Portuguese clubs Benfica, Sporting Clube de Portugal and Porto have similar stories to tell, as do Lyon and Lille in France. Benfica tops the lot, with €1.2bn of sales in the past 10 years, with an annual surplus from players of around €66mn.

All these clubs have built a system of identifying talent, often from South America, developing players at their elite finishing schools, and then showcasing them — typically in Champions League matches against would-be buyers. Wealthy Premier League teams and their top European rivals then swoop in, paying high fees backed by bumper TV revenue.

This successful production line model is gaining attention from investors looking to build a multi-club football business, like John Textor. He’s already the biggest shareholder in Premier League side Crystal Palace, and owner of Botafogo in Brazil and RWD Molenbeek in Belgium. He recently agreed a deal to buy Lyon, one of Europe’s top talent-producing centres, and has previously been linked with investments in Portugal.

For all their decades of history, a number of European clubs now thrive on being production hubs for the all-consuming Premier League. With transfer spending by England’s top clubs approaching £2bn this summer, there are growing opportunities to make money in football beyond TV deals.

Highlights

• Dana White is the face of Ultimate Fighting Championship, the mixed martial arts series owned by entertainment group Endeavor. But UFC is accused of vastly underpaying its athletes in a class-action lawsuit that is likely to reach the US Supreme Court, while congressman Markwayne Mullin wants an outside body to rank fighters. Joel Stein profiles the mixed martial arts boss in an FT Mag cover story.

• The new owners of Chelsea splashed out in the transfer market. But media rights, not just players, are at the heart of the investment thesis.

• Indian Premier League cricket teams are buying up franchises around the world, from the Gulf to the US, as the sport’s most dominant league drives for global influence. The growth of franchises is piling pressure on the international game.

• Cameron Smith, winner of the Open at St Andrews in July, joined LIV Golf, the Saudi-backed circuit’s battle against the US PGA Tour. Ranked second in the world, the Australian is one of the game’s brightest young prospects.

• A review of women’s football will focus on growing audiences, boosting revenues and examining its ties to the men’s game, as the UK government and the domestic governing body aim to build on England’s victory at Euro 2022.

Final drive

King Bloopy 👑 pic.twitter.com/UXcBp64526

— 🍦Blooper🍦 (@BlooperBraves) August 27, 2022

If you thought team mascots were just there to entertain the kids, think again. Meet Blooper, official mascot of the Atlanta Braves baseball franchise. According to Major League Baseball’s website, “He is big. He is fuzzy. He is funny. He is mischievous. He loves the Braves. And he DEFINITELY will make you laugh.”

And to widespread hilarity, it turns out he’ll also knock over your child to score a touchdown in a friendly game of football. Check it out here.