For many investors in sport the default option has long been to ride its growth and reap the rewards down the line.
With broadcast rights having boomed over the past 20 years, sport opening up more globally thanks to the advent of social media and a plethora of new ways to monetise the business makes for an enticing proposition for investment into successful teams.
When basketball superstar LeBron James bought a two per cent stake in Liverpool back in 2011 for £4.6m he would have hoped for a healthy return on that investment. As of last year, according to reports, that stake is now worth in excess of £40m.
Success on the pitch, the growth of the Premier League over the decade and the additional commercial revenue streams that have been tapped have all helped achieve such a return. That is why investors invest, to see returns further down the line. Business and football has long had an uneasy relationship, and football clubs as investment vehicles are seldom seen as a good thing by fans, the notion of clubs being simply businesses not sitting well.
That, however, is a point to be made at another time.
The correlation between success on the pitch and heavy financial investment cannot be ignored, and to be in the market for the best players each window then there either needs to be an owner with deep pockets born from oil and gas or a business plan that yields the necessary financial results in order to allow that.
For Fenway Sports Group's ownership of Liverpool and the Boston Red Sox it is very much a case of the former. The club is run like a business, it has clear strategic goals, utilises ways to minimise risk in the transfer market and spends what it can afford. For some it is a model to be admired, for others it is a handbrake on ambition while others spend more freely.
FSG aren't universally popular on either side of the Atlantic with fans, there are detractors on both sides with similar questions over why they can't financially compete and how the teams are more about delivering financial results than trophies.
In Boston that has heightened since their 2018 World Series win, a win that has been followed by their best player being traded to a team that took their title and two miserable years where they failed to reach the post-season play-offs, last season even finishing with the fourth worst record in Major League Baseball.
In Liverpool the feeling is similar. Last year's stellar performance that brought an end to a 30-year wait for a title, the biggest shame being that they weren't able to physically share that Premier League success with fans owing to the pandemic.
The season before was, of course, the Champions League success. The past two years have been two of the best in a generation, the execution of the task before him near flawless from Jurgen Klopp. Without him do the past two years happen?
This season has been one of struggle thus far, well in comparison to last season anyway.
Injuries to huge assets such as Virgil van Dijk and a treatment room that has seldom been empty has hurt the Reds' chances of even making the top four when this campaign draws to a close. A lack of support in the transfer window for Klopp in terms of bringing in replacements who could hit the ground running and help immediately address the deficiencies hasn't helped matters, though.
But the FSG approach won't make some dramatic u-turn, it won't start to become an organisation of frivolous spend.
FSG also show no signs of relinquishing their control any time soon, in fact the pieces are being put in place for the next phase of their ownership. The moves made over the last 12 months or so, and those made in recent days and weeks, do point to a concerted effort to achieve much more growth for the business, and when their business interests and sports teams are so entwined that ultimately has an impact on Liverpool and the Red Sox.
FSG pushed so hard on the Nike deal because of its long term commercial value to their Liverpool operation, the results that it yields likely to be seen in full effect in the 2022 financial accounts, with the 20 per cent royalty payments on the sale of licensed merchandise likely to be a boon.
Then there is the ability to try and monetise that relationship with James, also a Nike client. Since his investment there has been little seen in terms of mutual benefit aside from him wearing a Liverpool shirt on the pre-game NBA walk on the odd occasion.
James has close ties with Fenway Sports Management and the potential £536m ($750m) investment in FSG from Gerry Cardinale's RedBird Capital private equity firm could help expand that relationship to the benefit of both FSG and Liverpool.
Cardinale's plans for a reverse merger with FSG through his RedBall Acquisitions Corp special purpose acquisition company with 'Moneyball' guru Billy Beane ended up hitting the buffers last month for a few reasons, namely a disagreement over the valuation of the business from investors, an inability to raise the second tranche of funding after their IPO and, chiefly, that FSG had gone cold on the idea of going public, preferring instead to get the capital they needed privately through RedBird.
"A constant has been FSG's desire to grow, expand and expand their portfolio and acquire more properties," said Michael Silverman, sports business correspondent at the Boston Globe.
"Capital is capital. If they can get the same capital through private means then all the better for them. I think there is a real simpatico sentiment when it comes to working with Gerry Cardinale. When you look at his portfolio of companies and his viewpoint on sport and sports properties it makes sense. It is one of the hallmarks of FSG's thinking."
American billionaire financier Cardinale, a former Goldman Sachs banker, has developed a portfolio that shows a keen interest, and great success, in monetising the intellectual property around sports teams.
In the US he has espoused his interest in sport and business several times, being a board member of YES (Yankee Entertainment & Sports Network) since 2001. Cardinale is a major stakeholder in the YES Group, America’s biggest regional sports TV network, which broadcasts the live games of the New York Yankees, Brooklyn Nets, New York City FC and WNBA team New York Liberty.
He has also served as a board member of Yankee Global Enterprises, the corporate holding company of the MLB franchise the New York Yankees and its affiliated businesses.
He also sits on the board of a number of other organisations such as Skydance Media and One Team Partners, which works in partnership with the Players Associations of the NFL and MLB to monetise the name, image and likenesses of the collective players.
More recently he has acquired the XFL, going into business with Hollywood actor Dwayne Johnson, and also bought '30 to 40 per cent' of Wasserman Media, a talent agency that looks after entertainment and sports stars including Liverpool's Joe Gomez and Manchester City's Aymeric Laporte.
He also owns French Ligue 2 side Toulouse through his RedBird Capital subsidiary, RedBird FC.
FSG know they need to continue to grow if they are going to continue to deliver success within the confines of their model. If they don't continue to move forward and find new ways of adding more revenue then it won't be long before those ripple effects reach Anfield and Fenway Park.
Real estate development around Fenway Park is underway and they have plans for redeveloping the Anfield Road End following the work done on the Main Stand at Anfield. All that is very much in their wheelhouse.
The RedBird deal likely won't represent a chunk of money to be handed to Klopp for this summer, as much as fans may wish that to be the case.
There has long been a desire for FSG principal owner John W. Henry and Cardinale to find a way to work together. Cardinale possesses a different skill set, one that Henry, Tom Werner and Mike Gordon et al will want to lean on in order to find them new ways to bring more money into the business, ergo more money for strengthening their on-field efforts.
Cardinale has spoken previously on his admiration for firms like Disney, able to use their brand and plug in other elements to the business to achieve huge growth.
Last year he, through RedBird Capital, went into business with Hollywood superstar Johnson and businesswoman, and Johnson's ex-wife, Dany Garcia. They purchased the business out of bankruptcy from WWE founder and CEO Vince McMahon, who had run with the idea back in 2001.
The idea behind the XFL, which failed miserably through it's first incarnation 20 years ago and has been hit with financial stresses and litigation battles in its second try under McMahon, was to offer NFL fans a product during the off-season, providing more razzmatazz than a heavyweight world title bout at Caesar's Palace.
Cardinale, Johnson and Garcia bought the rights to the XFL for $15m (£10.7m) last year with the idea to get the competition up and running in 2022. The trio see value in the product and there is a strong chance that they may leverage Johnson's superstardom to help lift the product off the ground, possibly by way of more reality television that has become so prevalent among sports teams in recent seasons on streaming services.
Klopp rejected such an idea back in 2018, although FSG were more keen, and it is unlikely that stance has softened since so it doesn't seem on the table that such ideas would return.
But leveraging those kind of relationships is something that Cardinale knows and sees value in, and there aren't too many bigger than James when it comes to influence.
Whether these potential additions to the revenue streams allow Liverpool to have a weightier transfer kitty remains to be seen. It certainly won't provide the magic bullet to success and allow them the unlimited wealth of some of their rivals.
FSG would dearly love reform to the Premier League and European football to allow for more avenues of wealth generation and enhancing their commercial activities. That will likely be on the way in some form in the coming years, until that point they know they need to continue to try and work smarter as owners to ensure that they keep up with their competitors within the confines of their business model.
