Solving “Impossible” Problems Starts With Sequencing, Not Superheroes (for academic purposes only; this is not a solicitation for capital raising).
One of the most common reactions I hear when the topic of an MLB return to Montreal comes up is simple: the numbers sound impossible.
Billions of dollars. A league controlled by incumbent owners. A long process. On the surface, it feels like a problem that requires a single savior or an extraordinary stroke of luck.
In practice, most seemingly impossible problems are solved the same way. By understanding timing, sequencing, and capital choreography.
This is not a solicitation for capital. It is an analytical exercise as part of my upcoming Academy of Entrepreneurship using a case study that many have tried to crack, but failed. It is meant to illustrate how context, structure, and time can change what appears infeasible into something merely difficult.
The Reality of MLB Expansion Payments
MLB expansion is not a lump sum transaction where someone wires billions of dollars and gets handed a team.
Historically, leagues structure expansion as a multi year gated process with capital called in tranches. Approvals precede most payments. The largest checks are written late, not early.
A realistic payment timeline for a modern MLB expansion franchise looks like this:
- Now through 2027: no cash due. This phase is about relationships, credibility, and alignment.
- 2027 to 2028: application deposit of roughly $10 to $25 million.
- Mid to late 2028: conditional award triggers roughly 10 to 15 percent of the expansion fee, approximately $250 to $400 million.
- Late 2028 to mid 2029: additional build out payments of roughly $400 to $700 million.
- Late 2029: final expansion payment representing the remaining 50 to 60 percent, roughly $1.2 to $1.6 billion.
- 2030: first season begins and revenues start flowing.
The headline expansion fee may be $2.5 to $3.0 billion, but the economic reality is spread over time.
That distinction matters. And it boils down to the concept of the time value of money (TVM).
A Note on Track Record and Assumptions
Historically, my own investment track record has included annual returns of approximately 45%, 65%, and 80% over the past 3 years. When you work in an industry, much of the research & analysis that investment professionals undertake comes to you naturally, i.e. you can see why it’s worth loading up the truck when Nvidia was a $25 stock, or load up on Roblox at $30 if you have conviction that it could be the next YouTube. Those figures are factual, backward looking, and context specific.
They are not promises, projections, or guarantees.
For the purpose of this exercise & case study for our forthcoming Academy of Entrepreneurship, I intentionally step below that history and use two conservative analytical assumptions: 50% annual returns and a more modest 30% annual returns.
While rare, history shows that a small number of investors and operators have compounded capital at extraordinary rates over extended periods, usually by combining concentration, timing, and structural advantage. This analysis doesn’t assume that outcome. It simply shows how time and sequencing change what is required. For example:
Legendary Compounding / Macro & Trading Titans
- Stanley Druckenmiller – ~30%+ annualized over three decades, virtually no down years; widely considered the gold standard.
- George Soros – Quantum Fund delivered ~30% annualized over decades; famous for asymmetric macro bets.
- Paul Tudor Jones – Long-term high returns with strong downside protection; crisis alpha.
- Bruce Kovner – Caxton Associates; elite macro returns over decades.
- Ray Dalio – Not as explosive annually, but extraordinary risk-adjusted returns and scale over time.
Equity Investors With Long-Term Outperformance
These investors compounded capital at rates that dwarf the market over long horizons.
- Bill Miller – Famously beat the S&P 500 for 15 consecutive years; strong cyclicality but real long-term alpha.
- Peter Lynch – ~29% annualized at Fidelity Magellan over 13 years.
- Joel Greenblatt – Gotham Capital; very high long-term returns using disciplined value frameworks.
- Chris Davis – Davis Funds; multi-decade outperformance with concentrated conviction.
- Terry Smith – Fundsmith; high-quality compounding at scale.
Hedge Fund / Multi-Strategy Legends
These delivered extraordinary returns while managing institutional-scale capital.
- Jim Simons – Renaissance Technologies; Medallion Fund reportedly ~60%+ gross over decades (closed, internal capital).
- David Tepper – Appaloosa; massive long-term returns driven by crisis investing.
- Steve Cohen – SAC / Point72; exceptional trading returns over long periods.
- Ken Griffin – Citadel; strong long-term compounded returns with institutional robustness.
Concentrated / Asymmetric Capital Allocators
Often overlooked, but critical to your framing about “solving hard problems.”
- Michael Burry – Extreme asymmetric bets; episodic but enormous alpha.
- John Paulson – Crisis-driven returns; very high peak performance.
- Seth Klarman – Baupost; lower headline returns than Druckenmiller but elite risk-adjusted compounding over decades.
Owner-Operators / Capital Builders
Not traders, but builders whose capital allocation skill drove sustained outsized returns.
- Warren Buffett – ~20% annualized over 50+ years; lower than Druckenmiller but unmatched longevity and scale.
- Henry Singleton – Teledyne; arguably the greatest capital allocator ever.
- John Malone – Extraordinary value creation through leverage, tax efficiency, and structure.
- Mark Leonard – Constellation Software; one of the best modern capital allocators.
The goal is not to predict outcomes. The goal is to show how different return environments change what is required today.
What Capital Is Actually Required Today
Using the payment timeline above and discounting future cash needs back to today, the picture becomes clearer.
Scenario One: 50% Annual Returns
At a 50% annual compound return, which is below my historical experience but still aggressive by institutional standards, the present value of the entire expansion payment schedule is approximately:
- Application phase: about $6 million
- Conditional award phase: about $79 million
- Build out phase: about $109 million
- Final expansion payment: about $185 million
In total, this implies roughly $380 million of assets under management today to be positioned to meet the full expansion cash flow schedule over time.
Not billions. Hundreds of millions.
Scenario Two: 30% Annual Returns
At a far more modest 30 percent annual return assumption, the math changes but the conclusion does not.
Under this scenario, the present value of the same payment schedule is approximately:
- Application phase: about $9 million
- Conditional award phase: about $130 million
- Build out phase: about $193 million
- Final expansion payment: about $377 million
In total, this lower target implies roughly $710 million of assets under management today.
Still not a single heroic check. Still not a lump sum bet.
The Broader Point
This exercise is not about returns. It is not about fundraising. And it is certainly not about promising outcomes.
It is about reframing the problem. And this is the difference between first generation entrepreneurs, and those who are descendants of successful entrepreneurs who both lack risk-taking but are also endowed with capital & legacy preservation.
When you respect the actual sequencing of payments, the time value of money, and the flexibility that professional capital structures allow, the question changes.
It is no longer “who can write a multibillion dollar check.”
It becomes “what platform, vehicle, or ownership structure can responsibly compound capital over time and meet obligations as they arise.”
That platform could be a family office. It could be a group of long horizon partners. Or it could be a dedicated investment vehicle designed for patience, optionality, and discipline.
For what it’s worth, in this purely academic exercise, had I invested $380M three years ago, at annual returns of 65%, 45% and 80%, that would have grown to $1.6B, $500M more than the amount needed from an anchor investor today. Food for thought.
Seemingly impossible problems often remain impossible only because they are framed incorrectly.
Context is king.