£380m news from AC Milan speaks volumes about what FSG have got planned for Liverpool

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The connections between AC Milan and Liverpool run deep both on and off the pitch.

The two sides have met on five occasions, with the most recent being Liverpool’s 3-1 win over Milan at the San Siro in September.

The most famous, of course, was the 2005 Champions League final, where Rafa Benitez’s Liverpool came back from three down to win their fifth European crown on penalties.

The AC Milan side of that era, who later beat Liverpool in the 2006-07 final, is widely considered one of the greatest in the modern game.

But Milan endured a lean period in subsequent years. Their Serie A triumph in 2021-22 was their first in over a decade, with the club spending the eight previous seasons outside the Champions League.

Just a few months after they reclaimed the Serie A crown in 2022, the Rossoneri were taken over by the private equity firm RedBird Capital.

As it happens, RedBird Capital are a major investor in Liverpool’s owners, Fenway Sports Group (FSG).

And the latest news from RedBird HQ is a sign of what the investment group are in the sports investment racket to do.

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AC Milan post record financial results under Liverpool investors

A private equity company through and through, RedBird Capital’s M.O is to cut costs, increase efficiency and ensure commercial growth.

At AC Milan, that approach appears to be yielding results.

They have just announced a profit for the second successive year in their annual financial results despite a rise in wages and investment in the transfer market.

They also posted club-record revenue of £380m.

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RedBird Capital: The private equity firm’s long-term plan with FSG

RedBird spent over £530m to acquire an 11 per cent stake in FSG in 2021.

For context, that is almost twice what FSG paid to buy Liverpool in a deal labelled the ‘bargain of the century‘ by finance expert Kieran Maguire.

RedBird’s stake in FSG also sees them oversee Major League Baseball outfit the Boston Red Sox, NHL franchise the Pittsburgh Penguins, and stakes in the PGA Tour and NASCAR among other investments.

Their strategy, like any private company involved in sport, is simple: buy low, sell high.

That is the same reason that another private equity firm in the sports-specific fund Dynasty Equity have invested directly in Liverpool.

The New York-headquartered investment firm thinks that Liverpool, the Red Sox and the rest of FSG’s portfolio will one day be worth far more than its circa £10bn valuation.

For that to be the case with Liverpool specifically, they are banking on a major breakthrough in revenue.

Previously, FSG hope this would be the European Super League. But their fans, as well as those of the rest of the so-called Big Six, put pay to that idea.

Now, most private equity companies believe that technology holds the key to the next big revenue plane.

They think that Web3, the metaverse and mixed or augmented reality setups can help monetise the huge overseas following that Liverpool have cultivated.