Cardinale explains IP-based investment philosophy and Milan’s use of ‘ROI on goal efficiency’ | OneFootball

Gerry Cardinale has shed a bit more light on how he likes to operate the assets that are under the management of RedBird Capital, talking about being ‘an IP monetisation engine’.

Calcio e Finanza reported last month that RedBird has ‘renewed its arsenal of deals’ with $4.7bn (at current exchange rates, €4.3bn) to invest in more sports, media and financial services businesses after two years filled with some high-profile transactions.

The latest big deal handled by RedBird’s number one is another that is on the media frontier. It allowed Skydance Media – an American production company – to reach an agreement with Paramount for the acquisition of a majority shareholding, quantifiable at around two thirds of the total stake.

As Fortune write in their feature with Cardinale, the businessman has set about on a mission to invest in the best intellectual property whether that be the Marvel Cinematic universe or ‘an adored Italian soccer team’ which is of course Milan.

“If you have the right intellectual property, you can absorb the transitional changes from one distribution model to another,” Cardinale said.

“We’re an IP monetisation engine. That’s what we do. I’m able to look at the industry of sports, media and entertainment as ecosystems. And then I look for dislocations. I look for areas where there is a need to improve, evolve and professionalise.

“Each move is a derivative of the same play. It’s all a portfolio construction around core, premium intellectual property. If you start with the best intellectual property, it intrinsically rejuvenates itself.

“IP is such a good business because it is insulated from technological disintermediation. Right now, technology and the way content is distributed has everybody discombobulated.”

Cardinale has convinced A-listers like Dwayne ‘The Rock’ Johnson (the two bought the XFL together) and Ryan Reynolds (Cardinale’s co-investor in a Formula 1 team) that he can help them in business.

“They appreciate my desire to add value to them. I kind of look at them all as legitimate IP in and of themselves—and I can help them do more with their career than they could if I wasn’t in their life.”

However Cardinale rejects the notion of himself as a mogul, preferring the label ‘investor’ while he added that it is hard to invest in private equity because ‘the supply-demand imbalance pretty much drives you to levered beta’. He adds that Milan win games by utilising ‘ROI on goal efficiency’.

Cardinale admits some of his success was good timing, especially the opportunity to work with George Steinbrenner and the New York Yankees.

“Look, I’m not a genius. I mean, I just got lucky in my career that Steinbrenner came calling in 2001. Sports wasn’t an asset class back then. Next thing you know the world caught up to me, and I just kept going with sports, not knowing that it was going to become what it became.”

On being seen a relatively small amount at big events in the public eye, Milan’s owner added: “I really think being from outside that ecosystem – or at least one foot in, one foot out – is a huge competitive advantage.

“I don’t get caught up in the headlines. I don’t get caught up in the emotionalism. I’m not running to go to the Oscars.”