🔁 FSG Partner Resigns from Board Ahead of Potential Showdown with Liverpool
Gerry Cardinale, managing partner at RedBird, has resigned from the Toulouse board of directors.
One of Fenway Sports Group’s most important partners has stepped down from Toulouse’s board of directors ahead of next season’s Champions League.
Gerry Cardinale, the founder and managing partner of New York-based investment firm RedBird Capital Partners, has stepped down from the board of directors of the Ligue 1 club as part of a series of steps to create a clear separation between Toulouse and another RedBird-owned club, AC Milan, which they acquired last year.
Toulouse earned a spot in the Europa League next season, where they could face Liverpool, by winning the French Cup last season. The club, whose president is former Liverpool sporting director Damien Comolli, will compete in European competition for the first time since the 2007/08 season.
However, with AC Milan having qualified for the Champions League for the next season, there has been fear that the two clubs being controlled by the same company could present severe complications for the French club’s European ambitions. Article 5 of the UEFA regulations prohibits the participation of two clubs controlled by the same stakeholder in the same European competition. While Toulouse and Milan will compete in different leagues, there is a chance that the Italian side will drop into the Europa League if they quit the Champions League early, perhaps forcing the two teams to meet each other.
This has necessitated some board-level change, with Cardinale’s resignation the first in a likely succession of actions aimed at assuaging UEFA’s concerns about a conflict of interest.
There is precedent for such alterations, as witnessed by the Red Bull-owned clubs RB Leipzig and Red Bull Salzburg in 2017, when the two teams were scheduled to clash in the Champions League. That particular impasse was overcome by revisions to shareholder agreements and the departure of some key personnel on the board. The Red Bull issue was particularly pronounced since there were several difficulties, including identical club branding, large levels of income from Red Bull sponsorship deals, a formal collaboration agreement, and exceptionally high numbers of player loans and transfers. Both AC Milan and Toulouse have functioned independently of one another thus far, with no sponsorship crossover or cooperation agreements in place, in the expectation that a solution will be found quickly to keep both clubs in UEFA play this year.
In March 2021, RedBird paid $750 million for 11% of Liverpool owner FSG. There is, however, no concern with Liverpool in terms of a conflict of interest, given that RedBird has an indirect investment in the Reds through FSG and no RedBird executives serve on the football club’s board of directors.