Do athletes or hedge fund managers know more about buying sports teams? The baseball business might find out. Basketball legend LeBron James is taking a stake of undisclosed size in Fenway Sports Group, owner of the Boston Red Sox, alongside RedBird Capital Partners. The $7.4 billion valuation that puts on the team, roughly 3 times what hedgie Steve Cohen paid for the Mets, seems rich. But James has a leg up.
Fenway Sports owns other assets, like Liverpool FC, and Redbird bought French soccer team Toulouse FC last year. So the two could have back-office overlap. The Red Sox are also worth $3.3 billion now, according to Forbes—50% more than Cohen paid for the Mets.
That could mean the chairman of Point 72 found a good deal. But a key part of owning a ball club, as James knows, is recruiting players at a bargain. Cohen just paid $341 million to extend shortstop Francisco Lindor’s 10-year contract, almost twice as much as any prior Mets package. James’ salary shooting hoops for the Los Angeles Lakers is higher, annually, so he of all people should know that buying into a team is only the first test of a good sports investor.