Is LeBron James Gearing Up For Future NBA Ownership?

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Friends,

This week, US-based investment firm RedBird Capital officially completed their $750 million investment in Fenway Sports Group (FSG), the holding company for various amateur & professional sports organizations like the Boston Red Sox and Liverpool F.C.

Here are the details (Source):

• RedBird Capital invested $750M into Fenway Sports Group

• The investment gave FSG a $7.3 billion valuation

• RedBird Capital received an 11% stake in the business

The interesting part?

LeBron James and his business partner Maverick Carter have been named partners at Fenway Sports Group, not only becoming the company’s first black partners but doing it without putting any additional capital into the deal.

Today’s email breaks down how they did it and what it means for Fenway Sports Group and LeBron James's future.

Let’s start in 2011…

Fenway Sports Group, which bought Liverpool F.C. for $493 million a year prior but didn’t represent any professional athletes at the time, partnered with James’ sports marketing group, LRMR, to become the exclusive representation for his global marketing and brand rights.

Instead of cash payment, LeBron James and his marketing team accepted a 2% equity ownership stake in Liverpool F.C. valued at $6.5 million.

That proved to be the right decision. In the years since Liverpool F.C.’s value has exploded, and James’ ownership stake is now worth about $45 million — or 7x his original investment.

Now, with RedBird investing $750M into FSG and the organization being restructured, LeBron James and Maverick Carter have transferred their 2% equity stake in Liverpool F.C. into a 1% ownership stake in the parent company — Fenway Sports Group. No new money has been put into the deal.

As partners in Fenway Sports Group, one of the most powerful sports entities globally, LeBron James and Maverick Carter have expanded their ownership role from just Liverpool F.C. to a growing list of assets.

FSG Assets Include:

• Boston Red Sox

• Liverpool F.C.

• Fenway Park

• Anfield

• Roush Fenway Racing (50% ownership)

• Pawtucket Red Sox (10% ownership)

• Salem Red Sox

• Fenway Sports Management

• New England Sports Network (80% ownership)

• MGM Music Hall at Fenway

• Fenway Sports Group Real Estate

• Fenway Music Company

That’s obviously super cool, but what does it mean for LeBron James and Fenway Sports Group moving forward?

Here’s where it gets interesting…

The Boston Globe has reported that the $750M cash infusion from RedBird will help “launch FSG’s efforts to acquire more teams,” including a “shopping list” of franchises across various professional leagues like the NFL, NBA, NHL, MLS, WNBA, esports, and European soccer.

My guess?

An NBA franchise is coming, eventually.

Here’s what LeBron James said in 2019 about his desire to own an NBA franchise upon retirement (Source).

Sure, LeBron James has made over $1B in career on-court earnings alone, but with the average NBA franchise now worth almost $2.5B (and growing), the problem with LeBron owning an NBA franchise was always going to be finding partners that awarded him a controlling ownership interest without him putting up the most cash.

With Fenway Sports Group and RedBird Capital as partners, that becomes a much more likely possibility.

In the end, only time will tell the true intention of this partnership. Maybe it’s just LeBron doubling down on his existing bet that professional sports franchises will continue to appreciate in value. Or maybe it’s something much bigger.

We’ll see.

Have a great day, and we’ll talk tomorrow.

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Extra Credit

In case you missed it, I announced a partnership with Roundhill Investments yesterday and the official launch of $MVP, the first ETF that will allow you to invest in professional sports teams & leagues.

Here’s a short video with all the details. You can read more here.

For a full list of holdings and other information please visit Roundhill Investments. MVP holdings include professional sports teams, leagues, and companies in the sports media and sports apparel industries.

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