Client: Chicago Red Stars

Source: Sports Business Journal

A group of investors led by Cubs co-owner and WNBA Chicago Sky minority owner Laura Ricketts has agreed in principle to purchase the NWSL Chicago Red Stars in a deal that will pay the club’s current owners, led by majority stakeholder Arnim Whisler, up to $35.5M. Most of that sum is guaranteed, but whether the current owners receive the full figure is based on the club hitting some unspecified short-term business performance incentives. The Ricketts-led group also plans to invest an additional $25M directly into the club. If the current owners receive the full $35.5M, it would be the highest price ever paid for an existing NWSL franchise, narrowly exceeding the $35M that Michele Kang paid to purchase the Washington Spirit last year. The Spirit sale served as a key data point used by the league to fetch a $53M expansion fee for a new franchise in the Bay Area from a group led by Sixth Street Partners. Equity investments in Angel City FC at a valuation of more than $100M and in Gotham FC at a valuation of $40M have also helped drive up the market for NWSL clubs.

CLOSURE APPROACHES: The Red Stars had been on the market since December, when Whisler announced he would sell the club after an investigation led by former U.S. Acting Attorney General Sally Yates found he had minimized complaints by players about the allegedly abusive behavior of former Red Stars coach Rory Dames. The rest of the Red Stars’ current investors will also see their stakes in the club sold as part of the deal.

STARS ALIGN: Ricketts’ group consists primarily of fellow female business leaders, including Penguins investor and Ventas Inc. Chair and CEO Debra Cafaro; IDEO Chief Legal Officer Angela E.L. Barnes; Chicago-based urologist Traci Beck; Chair and CEO Laura Desmond; Loop Capital Partner Sidney Dillard; LaCrosse Milling Company Owner Megan Murphy; non-profit executive Editha Paras; Tawani Enterprises President and CEO Jennifer Pritzker; strategic communications consultant Hilary Rosen; and Impact Engine Partner and CEO Jessica Droste Yagan. Also in the group are entrepreneur Tom O’Reilly and the Engelhardt Family Office.

CLEAN BREAK: Ricketts’ group and the Red Stars hope to finalize the deal in short order. The NWSL BOG would also need to greenlight the sale. Eric Geffner and Luisa Lizoain from Chicago-based Sidley and Austin have served as legal counsel for Ricketts’ group, while the banking was done by in-house and family office resources. N.Y.-based sports investment bank Inner Circle Sports facilitated the sale on Whisler’s behalf.