Deal for Formula 1 team reflects growing American interest in the sport
As media companies and big tech companies compete for sports viewership, investors are starting to look beyond the traditional avenues to teams and sports that were unremarkable in the United States just a few years ago.
The latest deal, for a fifth-place Formula 1 team owned by one of France’s largest automakers, involves actor Ryan Reynolds and his investment firm Maximum Effort Investments; as well as the private equity firm RedBird Capital Partners and its investment partner Capital. They buy a 24 percent stake in Renault Group-owned Alpine F1 Team. The investors are paying about 200 million euros ($218 million) for the stake, valuing the team at about $900 million.
Formula 1 has exploded in popularity in the United States since its sale to Liberty Media in 2017. The Netflix documentary “Drive to Survive” brought new attention to the sport and attendance has skyrocketed as it expanded to cities such as Las Vegas and Miami.
For Renault, the Alpine deal aims to increase the visibility of its Alpine electric vehicle line, as it should more than half sales of EVs by 2030. In a press release, Renault CEO Luca de Meo said the deal would increase the value of the Alpine F1 brand.
Laurent Rossi, Alpine’s CEO, said in the press release that the company would invest additional money into the team if it looked to move up the rankings.
The Alpine deal came about in the past 18 months, Alec Scheiner, the head of Otro Capital, said in an interview. As part of the deal, he will join Alpine’s board.
“They looked at us like, ‘Maybe you can help us in the industries where you’ve had success in the US – ticketing, hospitality, sponsorship, licensing, merchandising, content,'” said Mr. Scheiner.
Formerly a partner at RedBird Capital, Mr. Scheiner served as vice president of the NFL’s Dallas Cowboys and later ran the business of the Cleveland Browns. The deal is the first for Otro, which spun out of RedBird to raise money exclusively for sports-focused deals.
Founded by Gerry Cardinale, RedBird has acquired interests in Fenway Sports Group, the Yankees’ YES Network, the Italian soccer team AC Milan and the production company founded by Ben Affleck and Matt Damon. In 2021, it paid $37.5 million for a stake in Indian Premier League cricket team Rajasthan Royals. Last year, Indian Cricket’s broadcasting rights were sold for a record price, making the league one of the most valuable sporting properties in the world.
Maximum Effort, which has also invested in Aviation Gin and Wales football team Wrexham AFC, has not disclosed the size of its investment. Other investors include actor Michael B. Jordan and Rob McElhenney, co-owner of Wrexham AFC.