Seven Bucks Cos., RedBird Capital to pay $15M for troubled league
Seven Bucks Companies, the film and TV production entity headed by Dwayne “The Rock” Johnson and his ex-wife Dany Garcia, and RedBird Capital, the private equity company led by former Goldman Sachs partner Gerry Cardinale, have agreed to buy troubled sports league the XFL in a deal valued at about $15 million.
The XFL filed for bankruptcy protection in April, shortly after it canceled its season due to the coronavirus pandemic. At the time, the league reported assets of between $10 million and $50 million.
The bid came on the day the bankruptcy court was scheduled to begin an auction for the XFL assets. In light of the bid, that auction will not take place.
The XFL, created by World Wrestling Entertainment chairman and CEO Vince McMahon, has struggled to eke out a niche as an alternative to the NFL. While the earlier version of the XFL crashed and burned after one season in 2001 amid low ratings and a string of bad luck, the latest iteration was supposed to be a more serious, fast-paced, fan-centric and family-friendly football league. In June 2018 McMahon hired former NFL and NCAA executive Oliver Luck as commissioner and CEO of the league, and tapped sports business consultant Jeffrey Pollack as president and chief operating officer.
Pollack was in charge of the auction process. In a press release he was pleased with the outcome.
“We are grateful for today’s outcome,” Pollack said. “This is a Hollywood ending to our sale process and it is an exciting new chapter for the league. Dwayne, Dany and Gerry are a dream team ownership group and the XFL is in the best possible hands going forward.”
Johnson and Garcia, a former Merrill Lynch exec, formed Seven Bucks Companies in 2012, which has mainly produced films and television properties for Johnson. This will be the company’s first foray into live sports.
The deal is expected to close quickly. Seven Bucks said in a press release that the bankruptcy court will hold a hearing to approve the transaction on Aug.7, and with a favorable ruling the deal could close on or shortly after Aug. 21.
“For Dwayne, Gerry and myself, this property represents an incredible opportunity. It is the confluence of great passion, tradition and possibility” Garcia said in a press release. “Sports and entertainment are the foundations of the businesses I have built. Melding our expertise combined with our commitment to deliver exciting and inspiring unique content, has us all focused on developing the XFL brand into a multi-media experience that our athletes, partners and fans will proudly embrace and love.”
Johnson, a former professional wrestler, parlayed his fame into a career as an actor and entrepreneur. In addition to starring in blockbuster films like Jumanji and TV shows like HBO series Ballers, he is CEO of Seven Bucks Cos.
“The acquisition of the XFL with my talented partners, Dany Garcia and Gerry Cardinale, is an investment for me that’s rooted deeply in two things – my passion for the game and my desire to always take care of the fans,” Johnson said in a press release. “With pride and gratitude for all that I’ve built with my own two hands, I plan to apply these callouses to the XFL, and look forward to creating something special for the players, fans, and everyone involved for the love of football.”
Cardinale and RedBird have been involved in several sports deals — it was part of the team that purchased YES Network last year and last month purchased an 85% interest in French soccer club Toulouse. Also in July, RedBird formed a special purpose acquisition corporation — RedBall Acquisition Corp. — with Oakland A’s executive Billy Beane to raise $500 million to invest in sports properties.
“It is a privilege to partner with Dany and Dwayne on the acquisition of the XFL,” Cardinale said in the press release. “Their track record in building dynamic businesses speaks for itself, and their vision and passion for developing the XFL as a world class sports and entertainment property will enable a new future for this organization. As their partner in acquiring and relaunching the XFL, RedBird will bring its own track record and experience in building world class companies in sports and live entertainment to help realize their vision.”