Explain It To The Five-Year-Olds with Eben Novy-Williams

Episode Transcript
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Speaker 1 (00:00):
Welcome to Good Game with Sarah Spain, where we're practicing
our moves before the big audition tomorrow. Valkyries are hiring
a mascot, and our patented combination of the Elaine into
the Splits is a show stopper. It's Thursday, May twenty second,
and on today's show, we'll be chatting with Eben Noby Williams,
Sportco's deputy editor and co host of the Sportacast podcast.

(00:21):
We talk about the Connecticut Suns potential sale and relocation,
the relationship between sports team valuations and revenue, and how
the complicated WNBA ownership structure affects investment and expansion. Plus,
Game two of the PWHL Finals is on deck, and
our show Soccer Side plays its first home match. It's
all coming up right after this welcome back slices. Here's

(00:53):
what you need to know today. Let's start with the
PWHL Finals, where Emily Clark scored two minutes and forty
seven seconds into overtime to lead the Ottawa Charge to
a two to one win over the defending champion Minnesota
Frost on Tuesday night in Game one. Minnesota has yet
to win a season opener across four series in their
two seasons of playoff action. Meantime, Ottawa is a perfect

(01:16):
three to zero on home ice in this year's playoffs.
They host again tonight Game two, a seven pm Eastern
puck drop at TD Place. More Hockey Team USA legend
Hillary Knight says the twenty twenty six Milan Courtina Olympics
will be her final games. Knight, who turns thirty six
in July, is currently tied for the most Olympic medals
of any American hockey player. A fifth medal in Milan

(01:38):
would make her the sole record holder, a ten time
world champ and the career leader in points, goals, and
assists at the World Championships. Knight has been one of
the most influential women in hockey for over a decade.
She talked a friend of the show, Nancy Armor at
USA Today Sports about the decision to make Milan her
last games, saying, quote, it's time. I have grown up
in this program and it's just given me so much.

(02:00):
I'm at peace. I just have this feeling that it's time,
and I'm grateful that hopefully I can stay healthy and everything,
I can go out when i'd like to be done
that is such a privilege that only a handful of
competitors get end quote. Night isn't retiring just yet, though
she does plan to play in the PWHL after Milan
to Soccer. The US women's national team officially announced the

(02:21):
twenty four player training camp roster for its upcoming friendlies
against China and Jamaica. Defender Naomi Germa is back in
the fold after missing every contest this calendar year due
to injuries. She returns after winning the Women's Super League
title and FA Cup with Chelsea FC, the side that
made her the first ever player in women's soccer with
a million dollar transfer fee. Seattle Rain forward lynd Biandolo

(02:42):
also makes an appearance after missing. The squad's April games.
Also had coach Emma Hayeses granted a few players their
first ever senior national team call ups, including Orlando Pride
defender Carriabello and Kansas City current midfielder she of the
iconic twerk celebration Low Labanta. If thirty two year old
Leabonta plays in either of the matches, she'll become the

(03:02):
oldest player to debut for the US women's national team
program ever. In its forty year history. I heard friends
of the show sam Us and Becky Sowerbrun on the
women's game advocating for a Grandma seally if Lebonta scores,
so here for it, fake Caine limping walk the whole thing,
Let's see it. We'll link to the full training camp
roster in our show notes. The US women's national team

(03:23):
will face China on May thirty first at Alion's Field
in Saint Paul, Minnesota, and then Jamaica June third at
Energizer Park in Saint Louis. That second match, we'll also
see a pregame retirement celebration, including bobbleheads for Soerbrun, Saint
Louis Native and US Women's national team legend. More soccer slices.
We want to let you know that our show side,

(03:44):
Minnesota Aurora FC, plays its home opener tonight, facing off
against Rochester FC. Kickoff is at eight pm Eastern, and
we are so excited to cheer them on as they
try to dominate the USLW league. Thanks again to everybody
who bought a slice of this community owned team, and
we hope you're taking as much pride in them as
we do. Also, some more details to come on my

(04:06):
visit to Aurora FC, but it's almost certainly going to
be the June twelfth game against the Chicago City Dutch Lions.
There also might be some cool Aurora good game merch
to look forward to, so we'll keep you updated on
that as well. Moving on to a different pitch, we're
approaching the tenth weekend of women's Elite rugby action. The
Denver Onyx are leading the league with a perfect six

(04:27):
and zero record, followed closely by the Boston Banshee's at
five and two and the New York Exiles at four
and three. My Chicago Tempest are, how shall we say,
suffering from a bit of a drought, oh and seven,
y'all zero wins. To quote Billy Shakespeare's The Tempest, Hell
is empty and all the devils are here. We'll keep

(04:49):
an eye on the standings as the league championship, the
Legacy Cup is just a little over a month away,
and we'll link to the full league schedule and to
where you can purchase tickets in our show notes to hoops.
The wa NBA's opening weekend was a smashing success, and
one game in particular had incredible viewership. The Indiana Fever's
home opener against the Chicago Sky on Saturday averaged two

(05:10):
point seven million viewers, making it the most watched WNBA
regular season game since two thousand. Per Sports Media Watch,
the game peaked at three point one million viewers, good
for the second biggest average audience for any league event,
behind only last year's WNBA All Star Game. No official
numbers on how many dumbass talking heads who don't say
shit about the w until there's some sort of Fracice

(05:32):
just had to chime in on Angel versus Caitlin all week,
but it feels like three point one million. The Fever
looked like world beaters in that game against the Sky,
but they came down to Earth pretty quickly. On Tuesday night,
the Atlanta Dream got the best of them in Indy,
winning a nail bier ninety one to ninety. Britney Grinder
led Atlanta with twenty one points and eight rebounds before
she fouled out. Ryan Howard put up twenty points and

(05:53):
three assists, and Brianna Jones posted a dominant nineteen point
thirteen rebound double double. Indiana had some bright spots two
in the loss in the form of some more broken
records for Kaitlin Clark and Dewana Bonner. Clark notched her
tenth career game with more than twenty points in tennisis,
tying Courtney Vandersloot for the most such games in WNBA history.
And get this, Clark did it in forty two games.

(06:15):
Slute achieved the milestone in three hundred and ninety four.
Caitlyn also recorded her sixth career twenty five plus point
tennisist game, passing Sabrina and Nascue for the most in
WNBA history, and she became the first player in WNBA
history to open a season with back to back twenty
plus point ten plus assist games. Last, but not least,
Clark is now the first player in WNBA history with
multiple games of twenty five plus points, ten plus assists,

(06:38):
five plus rebounds, and five plus three pointers made. Who
She is off to a hot start. Meanwhile, de Wana
Bonner moved up a spot on the league's career rebounds list,
leaprogging Tina Thompson to secure sole possession of eighth most
boards all time. She's now got three thousand and seventy
one eighth and rebounds third in points. Bonner is leaving

(06:59):
her mark more basketball news On Monday, Minnesota Linkstar and
if He Sikalier appeared on ESPN's NBA Today alongside Boniever
frontman Justin Vernon, who announced that he's collabing with the
Links franchise on a first of its kind partnership focused
on gender equity and community impact. The team offered more
details in a release, noting that the multi year collaboration

(07:19):
starting this season, will quote focus on addressing gender inequities
as a result of domestic and sexual violence, sex trafficking,
health care disparities, and barriers within education and leadership end quote. Vernon,
a longtime Links fan with family ties to both Minnesota
and Wisconsin, has been a big advocate for gender equity.
He assisted in creating Boniver's two a Billion campaign, which

(07:40):
raises support and awareness and creates interpersonal connections in an
effort to end gender inequity, domestic violence, and sexual abuse. Now,
Boniyver's two AB and the Links will collaborate on a
variety of things, including shining a spotlight on local nonprofits
and activations throughout the season. The two AB campaign will
also donate two hundred and fifty thousand dollars in total
grant money to ten Minnesotan and Western Wisconsin nonprofits and shelters.

(08:03):
This partnership packs even more of a punch than what
we've said, so we'll link to the Lynx's full release
explaining all the details in our show notes. Also a
link to Fee and Vernon's five minute segment on NBA Today.
In that links release, Vernon summed up why he's so
excited to get involved. He said, quote, basketball is exactly
like music. It's a group and individual improvising to create
moments of vision, excitement, and joy. Simply said, the Minnesota

(08:26):
Lynks team is my favorite band in the world right now.
As Boney Verra, we also saw an unprecedented opportunity to
not only support this band of incredible women on the court,
but by combining forces to more urgently support the communities
of women in the Upper Midwest end quote. As if
I didn't already love him enough, What a mention. Finally,
in hoops, Seattle Storm players Dominique Maloga and Gabby Williams

(08:47):
have announced that they'll skip this summer's EuroBasket competition, which
is slated to begin June eighteenth. Both players were part
of the French national team that earned a silver medal
at the Paris Olympics, but they'll stick around in the
States to help build with Seattle. Williams hasn't play. I
had a full WNBA season since twenty twenty two, and
staying in the US offers her a chance to do so.
Malonga spoke about her own choice on Monday, saying, quote,

(09:07):
it was a difficult decision because the French jersey is
very important for me. I decided to stay here because
I think my rookie season is really important and I
wanted to leave it all with the team end quote.
This is great news for Seattle, who started the year
a little shorthanded because of the league's hard salary cap
and because of unfortunate knee injuries to Nica Mule, Jordan
Horsten and Katie lu Samuelson, who suffered hers just weeks

(09:29):
before the regular season tipped off. The French team will
also be without Marin Johannes, who shared that she'll skip
euro Basket as well to focus on her time with
the New York Liberty. We got to take a quick
break slices when we come back. Evan Novie Williams explains
a bunch of stuff to me like I'm five, stick
around joining us now. He's sport of Ghost, deputy editor

(09:59):
and co host of sport a Cast podcast. Prior to
joining Sportico, he was at Bloomberg News for almost a decade,
covering everything from media deals and team sales to e
sports and the Olympics. He played sprint football for the
Princeton Tigers, and when we wrote this bio was the
first time Alex ever heard that there is a sport
called sprint football. It's Evan Noby Williams.

Speaker 2 (10:18):
Hi, Evan, Hey, Sarah, how are you good.

Speaker 1 (10:21):
I'm quite familiar with sprint football because was the sprint
football team at Cornell, But for those who don't understand,
give us a brief synopsis.

Speaker 2 (10:29):
Sprint football is varsity football. Had a few institutions in
the Northeast, Cornell being one of them with a weight limit,
so everybody on the field when I played was weighing
in at one hundred and seventy two pounds. It feels
like the vestiges of a very privileged people who could
not play full weight football but got to college and
were likey, I want to keep doing this. How do

(10:51):
we structure something so that my one hundred and sixty
five pound body can still be competitive. And they built it.
And I will say I played on I played on
a Princeton team that was went twenty years without winning
a game and was losing games by very, very large sums.
Cornell Army and Navy are in the Sprint League, and
you can imagine they've got one hundred guys that are

(11:12):
one hundred and seventy two pounds exactly and are quite athletic,
and we were losing games like seventy to nothing or
like eight to five and things like that. So it
was amazing. The guys were great. It was very fun
for me, and it was a good learning life lesson
that sometimes you know you're gonna lose before you take
the field.

Speaker 1 (11:30):
You know. We were pretty nice about it. I don't
remember there being and maybe there was between the football
guys and the sprint football guys. Maybe there was like
beef about, like you're not real football, but we never
we never like heard that. We definitely knew who was
on the football team and who was on sprint football,
but we accepted everyone. We loved everyone. I also love
how men always come up with the best names like

(11:51):
euphemisms for their sizes, Like you know, if you're in
a heavy set man, your suit is called executive. Did
you know that that that's the name of the size, Like, oh,
you must be very important because you're larger. And then
like sprint football, like you're not sprinting the whole time, Like,
but you didn't want to call it like small ball

(12:12):
or like tiny man football, so they had to go
with something that sounded impressive.

Speaker 2 (12:18):
The I do. I do triathlon sometimes, and there's a
triathlon category for larger people. And I think it is
like Clyde Gale and Athena. I think to your point
of money, like choose. I love that choose terms that
we call the main Princeton team the heavies. The heav
differentiate them from the sprint folks.

Speaker 1 (12:37):
Well, you were not here to talk football, though it
seems we could. We're going to talk a whole bunch
of stuff, and I want to start with the news
you recently broke about the Connecticut Sun. What is the latest,
if anything after the report you released about the team
being engaged in talks about potentially selling Yeah.

Speaker 2 (12:53):
I think this is a fascinating one because it comes
in the middle of the WNBA's expansion talks also, and
there's very few people that I have talked to that
think that that team is going to stay in Connecticut
if it is sold. It's certainly possible, but you can
see a world where someone who pays hundreds of millions
of dollars to buy this asset decides that, hey, maybe Uncasville,

(13:13):
Connecticut is not the market that I want this team
to play in, and maybe playing in a venue owned
by the former owner is not the situation that I
really want. So if this team is indeed sold, then
the person who buys it is looking to potentially move it.
What does that mean for the already ongoing expansion talks?
And there were dozens of I'm sure you know this Thereah,
there was more than a dozen different groups and different

(13:36):
cities that really wanted and put together bids and offers
for WNBA expansion. My understanding is that a lot of
those groups that learned they were not getting expansion are
now in talks with the Sun as well. So I
think it all kind of comes together at a critical
time for the WNBA where they're deciding how many new
teams they want to add. How many is too many

(13:56):
because there's only so much talent, right, and you can
expand to quickly. It's certainly a possibility. And then they've
done it before exactly. So in the middle of all that,
also this team that's on the market that could move
to any one of these other cities as well, So
a lot going on behind the scenes from a team
sales and expansion standpoint.

Speaker 1 (14:15):
For the W couple things there. I assume that the
league still has to approve a sale. So these expansion
groups that are looking to buy both have to convince
the Connecticut Sun ownership group that they have the best
offer and have the Mohegan suntribe want to take their offer.
But then the W also has to approve. Will they
have to approve where the buyers take the team.

Speaker 2 (14:36):
I'm sure that's all part of the conversation. The other
interesting aspect here is price, and from what I understand,
the conversation around expansion got up to, at least in
Cleveland's case with Dan Gilbert, two hundred and fifty million
dollars cash for expansion. It seems inconceivable to me that
the Sun would sell for two hundred and fifty million dollars.
So in some ways you now also have an expansion

(14:57):
opportunity on the market that costs less than the actual
ex expansion that the league is selling, which again creates
a kind of interesting dynamic there.

Speaker 1 (15:05):
But we'll probably benefit the Sun and it will go
for more than it's worth because it will be the
only way for someone who wasn't awarded a team to
get the team that they want in the place that they.

Speaker 2 (15:15):
Want totally, and just to go one step further. Perhaps
even let's say that w decided on three expansion teams,
maybe the league tries to push and I should say
Allen and Company, the bank is doing both these transactions,
Maybe they push one of the ones they wanted for
expansion just towards the Sun. Right. There's a whole bunch
I think possible iterations. But this process has been going

(15:36):
on for a very long time in the W As
you know, there are new teams that have been announced,
new teams that have joined, new teams that are going
to join. I think a lot of people in the
league are looking forward to this being in the rearview mirror,
having set the expansion conversation and then trying to figure
out the fun stuff about how these teams join. What
the player situation looks like. There's a labor deal looming
in the background as well, which is obviously a big

(15:58):
piece of the business puzzle for the double. So there's
a lot going on and a mid rapid change. This
league is going to look very different in a few years.

Speaker 1 (16:06):
How does the fact that there's expected to be a
new CBA and eighty percent of the league's contracts and
in twenty twenty five affect the conversations around expansion or
even buying, because what exactly are you buying? What players,
who plays for whom right? All of those things are
kind of going to be tossed in the air at
the same time.

Speaker 2 (16:24):
I think this is such a good question, and it's
something that I am also kind of confused about. The
traditional way that most leagues have looked at expansion is
you do your media deals, you get your labor piece,
and then you hit the market with expansion. When you
know that there's a certain amount of you know the
rules of the game for player contracts and the relationship
with the union, you know what the basically contracted revenue

(16:47):
is coming in from media, that's the time to strike.
And if you listen to Adam Silver, over the past
few years, every time he was asked about NBA expansion,
he was like, we're going to get our media deals done,
We're going to get our labor piece locked in, and
then sometime around literally right now, we're going to start
talking about expansion. Formally, you would think that that is
when your teams are most valuable, when there's that kind
of comfort in the marketplace about long term revenue. But

(17:11):
the W has done something differently right that W has
had the expansion talks. The media deals are done, but
the W had expansion talks before before the labor deal
at least was signed and executed. And this is a
potentially thornier labor deal than most other men's leagues at
least have seen in the past few years. I can't

(17:31):
tell if that says something about the way both the
NBA and the WNBA think this labor deal is going
to pan out, that they think that maybe selling a
team teams now and expansion now is better. But I
do think it's definitely interesting that the kind of traditional
way you think about maximizing your value as to do
labor first, and instead in the W we see teams
hitting the market and expansion conversations happening before that labor

(17:54):
deal gets signed.

Speaker 1 (17:55):
A couple more quick things about this Sun team. We
did see them play a sellout game in Boston at
the Garden last summer. It was a huge success. It
had a lot of Sun fans nervous about the potential
of them taking the team elsewhere, and of course den
Risotti said no, no, we're very committed, and the Mohiget
suntribe is very committed. And then here we are today
talking about how they're taking calls about potentially leaving. Does

(18:16):
it seem like Boston would have any priority or that
there'd be any feeling about the existing fan base and
not taking the team so far away that current Connecticut
Sun fans couldn't root for whatever team it becomes in
the same general area.

Speaker 2 (18:31):
I think it's certainly it's a great question, and I'm
sure it's something that will come up. My understanding is
that of the let's just call them twelve expansion groups
that were really interested in this process, Boston was not
a name I heard very often, and my understanding of
the three kind of leading horse finalists right now, Boston

(18:52):
was certainly not one of them. So not to say never,
and who knows, the W could announce it's three expansion
teams and then the Sun are not part of that.
The Sun gets sold to a group in Boston. There's
an NBA transaction obviously that is in the works potentially
and in Boston at the same time, which either makes
that more complicated or makes that potentially easier, depending on
who the group is. But it would not be the

(19:13):
first place that I would have thought, even given the
proximity and obviously the fact that, as you said, they've
played games there and have had good, good crowds. The
interesting thing about the W to me is that the
league is so small that there's so many good markets
that don't have teams. And when you think about like
baseball expansion, they're talking about like Portland, Oregon and maybe Nashville,

(19:34):
and not to say those are bad markets, but there's
just so many massive markets that don't have WNBA teams
right now, right Philadelphia. So yeah, in some ways the
competition is way fiercer because the options for the W
in terms of huge markets, big sports cities that they
can go to. It's just way wider than we see
in these thirty or thirty two team men's leagues.

Speaker 1 (19:54):
You mentioned that there are three front runners.

Speaker 2 (19:56):
Give them to us, Yeah, I mean the three that
I think are in the best place right now. Cleveland's
been written about. Philadelphia seems very likely as well, particularly
given that Adam Silver basically broke he to an agreement
between the hockey and basketball teams there for their for
their stadiums, and when they announced that agreement, they made

(20:16):
it very clear that W was their priority. Wanda Sykes
and her wife were on the stage when they announced it.
She has been a very very vocal proponent of bringing
w to Philadelphia, and then Detroit, I think is an
interesting one as well, backed by both Tom Gores, who
owns the Pistons, and then a whole host of local
business women, businessmen, celebrities, athletes in the Detroit area. Detroit

(20:41):
had a WNBA team at one point. Obviously, Adam Silver
has set on the record before that he could totally
see that team getting revived at some point. So if
I was a betting person, those would be those would
be the three that I would I would expect. But
what everyone keeps telling me is that nothing is final, final, final,
and everyone's kind of still waiting for the final decision.
So I guess take that with a little bit of

(21:02):
a grain of salt.

Speaker 1 (21:03):
You mentioned that Adam Silver is very clear in the
way he's doing business on the NBA side, what needs
to be in order before expansion, etc. That the W
does things a little differently. Now this might be in
part because the W has a very unique ownership structure.
And as we get into this next topic, I want
to get into it and do like an almost comically
accessible way. Some real explain it to me like I'm

(21:25):
five years old. Shit, because not just for me, I
think I am someone who definitely loves to skip the
math portion of assignments and isn't particularly interested in the
business side, which is why it's great that I got
into ownership and didn't know much about the place I
was investing in, which explains why a lot of things
went the way they did. But also just for listeners
who are maybe learning this stuff for the first time.

(21:45):
So when we talk about the WNBA and its ownership,
we've got the WNBA, the NBA, and an independent investor
group that are all three a part of this larger ownership.
So can you tell us, and you just recently wrote
a story about this, can you explain the three ownership
groups and how expansion and decision making affects them differently.

Speaker 2 (22:08):
Yeah, you nailed it. Essentially. When the WNBA launched, it
was essentially fifty percent owned by the NBA, which put
up a lot of the money in the working capital
to get the league off the ground, and then the
other fifty percent of that equity pool was divvied up
among the owners. Some of them are NBA owners, some
of them are independent owners. And then three years ago,

(22:29):
I think twenty twenty two, they did a capital raise
from a group of and it's a who's who of
important people in sports. A lot of them are also
NBA owners, some of them are investors in sports. Nike
is one of them, right, So there's companies in there
as well. They raised a bunch of money. They sold
sixteen percent of the equity in the league, diluting both

(22:50):
the NBA portion and the owner's portion equally. So right now,
from my understanding, the NBA owns forty two percent of
the league. This investment group owned sixteen percent of the league,
and then the WNBA owners as a collective, own the
other forty two percent of the league. And interestingly, and
this surprised me when I heard it. When the W expands,

(23:11):
they are only diluting that forty two percent piece that
are owned by the owners. The NBA will continue to
own forty two percent, these investors will continue to own
sixteen percent, which is obviously different when the NFL. If
the NFL were ever to expand, owners would go from
having a thirty second of the slice to a thirty
third of the slice. Right, that's how most of the
leagues work. But because the equity structure in the W

(23:34):
is so different, and because of the way they raise money,
which was essentially to protect these people that gave the
money and and to protect them from dilution, yeah, you
end up with a world where the W going from
fourteen to sixteen or if it's ever a twenty, you're
not an owner owning one to twentieth of the league.
You're an owner owning way, way, way way less than that.

(23:57):
So when money comes into the league, for it's not
split thirty two ways like it is in other leagues.
The revenue sharing obviously is different because you have the
NBA sitting there, you have these other owners sitting there,
So it's definitely a more complex structure. I would imagine
some people of the WNBA would maybe have done things
a little bit differently in retrospect. But this was a league,

(24:19):
as you know, that spent twenty years kind of trying
to get a foothold and trying to kind of break
into both the thing that fans wanted to talk about
and fans wanted to pay to see. And the glow
up has happened very quickly, right, and some people in
the league would say, yeah, we knew this was happening
all along. I think some people were surprised by how
fast it took.

Speaker 1 (24:37):
Well, it started out really strong, and then there was
some intention from some folks to vary it in ways
that really affected the numbers that it started out with.
I mean, it was huge when it started.

Speaker 2 (24:47):
The first two years. The numbers are bonkers. You're right,
the attendance and viewership numbers are. We kind of always
have to remind ourselves here that when you see a
huge number from an attendance or a TV ratings, which
we just saw for the the opening game of the
Fever versus the Sky, Yeah, it's probably not a record
because there's probably a record from two thousand or nineteen

(25:08):
ninety seven or what right or a I did exactly? Yeah,
that that that that broke it. So, yeah, the first
couple of years, and I would say that despite the
fact that numbers may have been higher back then, the
league isn't a way healthier right business place right now? Yeah,
it's not a new novelty, it's a It is a
real thing that people really want to see and want
to watch, and that companies are finally coming around to.

Speaker 1 (25:28):
Yeah, you mentioned that investment group. I was not a
part of that. I got invited and now I'm thinking,
what a bit a good time to get involved, but
a good investment I was. I was otherwise engaged with
the with the red Stars now color neutral Stars, and
you know you mentioned that group though coming in. One
of the things that's interesting about the Connecticut Sun ownership
is that there are teams that it feels like are

(25:51):
not capable of continuing on the pace that the league
is growing at. And that's one of them, right. The
size of the venue, the investment required, the practice facility
that we meet make fun of where kids are having
birthday parties while they're trying to practice for a playoff game, Like,
there's an inevitable growth that some people won't be able
to keep up with So that investment group was partly
to help shoulder the load and to carry things and

(26:13):
growth things while the original owners had invested years earlier
and were continuing to put a ton of money in.
Do you see that happening more across the league where
there will be old owners that either have to do
a capital race to bring in new folks to help,
or will choose to sell at this moment while the
league is blowing up.

Speaker 2 (26:30):
Yes, I think it's a great question and a great point.
And this is the and the NWSL is going through
this in the same way, and it's just way more
further along because they have essentially turned over their entire
league from an ownership structure in the past five years.
But there's no question, as valuations sore, it's great for
all the older owners, but a lot of the older

(26:51):
owners bought into a league that was not this, didn't
have a forty million dollar practice facility requirement right, and
didn't whatever the new CB says, wasn't expecting suddenly salaries
to be at this point, And there's often a lot
of ten You see it in men's leagues too. MLS
has dealt with us for the last twenty years. There's
often a lot of tension between older owners who got
in at a very small price and have just have

(27:13):
gravy on their valuations glow up and no matter what,
they're making money and they don't feel they need to
spend a ton. And you have young owners who came
in recently paid the recent sticker price and they're like, look,
if I bought this team for an NWOSLF, I bought
this team for eighty million dollars or one hundred and
ten million dollars in San Diego, I want to make
that money back, right I. I Am not going from

(27:35):
one million to a hundred million. I'm going from one
hundred million to whatever it looks like next. So there's
definitely tension in ownership groups. And yeah, I think both
these leagues are are looking to turn over. The owners
that look at a forty million dollar practice facility and
don't say, heck, yeah, I want to do that right now,
say I'm not sure if that's in the budget or
that's yeah, I'm not sure if we want to do that.

(27:56):
So the WNWSL, very of the situation players have been
in the past, they're very aware that the fans care
about it, because that's not true in every league WNBA
and really care about the way players are treated. And
it's going to impact the w labor talks for sure,
just like it impacted the NWSL ones last year. But

(28:19):
all of that comes together to say, yeah, absolutely WNBA owners,
some of them would like nothing more than to have
a whole bunch of deep pocketed owners who bought it
at high prices and really want to make that league
soar in all the ways, as opposed to having this
mix of people who came in at high prices, or
people who bought these teams for thirty years ago for

(28:41):
five hundred thousand dollars and they've lost a lot of
money in the past twenty years and are just kind
of trying to get their money back out of that
and capture the appreciation as it happens. So there's a
really interesting dynamic there, which again exists in MLS less
so I think in other leagues, just because valuations have
been so high for a while. But certainly something that's
happening at the w level and certainly something that happened

(29:02):
at the NWSL level for the past five years.

Speaker 1 (29:05):
You mentioned valuations. Let's talk about it pro sports team valuations.
Let's start with the basics of like what goes into
when you see that team is worth X million dollars?
What are they using to calculate that?

Speaker 2 (29:18):
Yeah, it's it's part of it is science, right, and
is like looking at a P and L sheet and
seeing how many season ticket holders do they have, how
long are those contracts, what does their local media deal
look like, what does the national media deal look like
for the league? And what shared does the team get.
Some of it is that, and then some of it
is kind of this more ephemeral idea of how many

(29:40):
people want to own these teams and when one hits
the market, how rare is it and how much kind
of how much ego is involved in it, and and
how many teams are their period because they're scarcity value
involved in all these leagues. So at Sportco we do
these valuations and we like to say it's like part art,
part science, and the science part in some ways is

(30:02):
the easier part because you do have a sense of
what these teams are making and what the economics look like.
Kind of the harder part is is that is that
other stuff? It's that it's the the w and NWS
are hot right now right, and when one one team
goes for sales, it's okay, great there, I may not
have an opportunity to get into this league for another
three years, or when I do have an opportunity again,

(30:23):
the price may be five x now because they've ten
x in the past, uh in the in the past
two years. That stuff is is a little bit harder.
But the biggest thing that helps us in our valuations
is that every time a team sells and we know
the price, we have a new data point. So every
time there's a new sale, you now have like an
anchor price with which to kind of hinge every team
above and below it on in some kind of way.

(30:46):
So yeah, all of that, I guess to say that
leagues like the NWSL actually quite easy to value because
every team sells. So again, every team is sold in
the past, in the past five years, so so every
time that happens, it's like, okay, great, we can now it.
Just all these numbers.

Speaker 1 (31:00):
Accordingly, so evaluation. You mentioned most of these, but revenue streams,
so that's media rights, licensing, merchandise, tickets, corporate sponsorships, market
size comes into play. How much growth could they have
based on where they are? Brand value, how do people
know their logo, their stuff, whatever, assets, stadium facilities, intellectual property.
That comes into play to what do they own? What

(31:22):
do they already have built? So we kind of get that.
That makes sense to me. Where I get lost sometimes
and you kind of articulated a little bit you started
is the relationship between valuation and revenue and how we
can have leagues and teams losing money valued in the
hundreds of millions of dollars. And I think the scarcity,

(31:43):
the vibes, all of that is part of it. But
can you walk us through that because it is sort
of fascinating to me, And the lack of transparency, especially
in the WNBA in terms of financials, makes it very
hard to argue with people who are like, look at
how much money they lose every year, and you want
to be like, look at how valuable they are, and
you're like, how do those go together? And how do

(32:05):
you have a thoughtful and smart conversation about why you
could lose money and still be very valuable.

Speaker 2 (32:11):
You're totally right, and American business, business worldwide is littered
with companies like this, right, Uber lost money forever, right,
Draft Cacks, Netflix. Right, there's a very and a lot
of people who give you that argument that, oh, we
lose money are doing that knowing that they're kind of
it's smoking mirrors to a degree, right, because yeah, if
your team pick an NWSLF team goes from two million

(32:33):
dollars to one hundred million dollars of net worth in
in in five years, right of valuation. Yeah, that's ten
years of ten million dollar losses operating losses every year, right,
just captured in that appreciation. So a lot of people
who make that argument, I think are know what they're doing, right,
and are trying to kind of rhetorically shift the conversation.
I think the other side of that is that the

(32:55):
NBA has lost a lot of money on the w
in the past thirty twenty five thirty years, Right, It's
hundreds of millions of dollars. But yeah, I think the
easy answer is, like some of this is just sports economics.
Manchester United loses money. It's one of the most valuable
sports teams in the world. It's worth four or five,
six billion, whatever you want to call it. It's worth

(33:16):
billions of dollars. Yeah, that team loses money. Angel City,
the most valuable NWSEL team, loses a lot of money
a year. This is the thing that maybe scares me
about Nwoslifi was an investor, is like, this team is
like the paragon business wise. Everybody points to them. They're
super valuable, even they're not making money, right, They're making
so much in revenue, but they're also spending so much.

Speaker 1 (33:39):
But you just said that about Manchester United. Are you
worried about them?

Speaker 2 (33:42):
Honestly? Yeah, I think the economics of European soccer for
an investor terrifying. There's no cap on pay right right?

Speaker 1 (33:49):
So do you think there could be a bubble burst?
Because it feels to me and this is something I
said ten years ago. I think at ESPN they did
a survey of like would what's a good idea you
think someone should do it? Deep dive on? And I
was like, will the bubble ever burst? Like how is
it possible that it's the only market that seems to
grow exponentially every single year?

Speaker 2 (34:09):
Yeah, I think there's I've been saying a resets coming
for a while. I wrote a column last year called
Divest from Sports that a lot of people criticize me
for yeah, the changes in media are the big thing
that I would point to, right, that's so much of
and in a way kind of the w and NWSL
are not. They're valued on something that's more than just
the media, whereas, like you look at the NFL, like

(34:31):
the media deals are are the central thing. But the
way that local media is changing, and a lot of
teams in baseball and in the NBA and the NHL
are cashing a much smaller local media check than they were,
and who knows what that looks like. And then the
layer on top of that the fact that every league
now is talking increasingly with Amazon and Netflix and Apple,

(34:54):
and in ten years when they are the bidders and
the local traditional broadcast cable networks are doing less of
the bidding. That would really scare me if I'm a league,
because Amazon doesn't need the NFL and Netflix doesn't need
the NFL, Fox needs the NFL, CBS needs the NFL.
The companies that used to bid for sports rights the

(35:15):
big deals were companies that they're essentially livelihood depended on
them getting these deals. We wrote something a number of
years ago, right after the previous NFL deals were signed,
someone at Fox told us my priority the day after
these deals are signed, are extending my NFL deal in
eight years, right, Like, that's still my priority. There's no rest. Yeah,

(35:36):
but when you're talking to Apple and Amazon, these companies
don't need you, right, and that gives them a leverage
at the negotiating table that kind of flips the dynamic
a bit. So Yeah, I am I bullish on sports
team valuations long term. I honestly I'm not again because
I think that there's a root awakening coming for one
of the biggest revenue streams.

Speaker 1 (35:56):
It's complicated because everything you just said is accurate, and
also when we have a divided attention where almost nothing
has brand recognition anymore because there's eight thousand pieces of content.
The few things we do rally around watch live care about,
sit through the commercials for our sportsndred percent and so
it has this elevated presence in a much more bifurcated landscape.
But it also is, you know, still affected by all

(36:19):
the changes that you just mentioned.

Speaker 2 (36:20):
And there's scarcity, just real quick, They're scarcity. So there
may be thirty four NFL teams in twenty years, but
there's probably going to be thirty two maximum there's going
to be thirty six, right, Like, we're not going to
create a ton more of these things and for the
men's side, and that really that drives it, right that
that is one of the things the NFL has going
for it is that there's you can't just create a

(36:41):
football team and eventually hope to be the Dallas Cowboys.
We know what they are and they only sell once
every five years. And that's the thing.

Speaker 1 (36:50):
Yeah, Okay, so couple follow ups for you. And this
might be a dumb question, but I did tell you
I prefer to skip the math portion of the assignment
as often as possible. So, if the teams are losing
millions of dollars every year, and they have been for
some time, how are they operating? How do you pay
your bills? How do you pay your employees? How do
you So they're just it's like the US government, We're

(37:12):
just incurring debt until we like, do we have a
clock somewhere?

Speaker 2 (37:15):
For women's sports, most teams are not just like occruing
this in debt. Most teams are just paying the losses, right.
I think I think if you were to ask anyone
who's buying into an NWSL team now, yeah, they're thinking about, yeah,
I know, I'm going to lose X million dollars a
year hopefully for the next five years and not the
next thirty five years. But they understand that there are

(37:37):
losses associated.

Speaker 1 (37:39):
So it's essentially another investment, but not an investment because
it's gone immediately to pay off.

Speaker 2 (37:44):
Yes, and as we said, if things continue to grow
valuation wise for these women's leagues, these owners are going
to get their money back. Right. The five million or
ten million dollar annual loss is going to kind of
wash out in the the LP stake that you can
sell or when you sell the team in the future.

Speaker 1 (38:01):
And this is why it's so important and perhaps why
the NWSL and it was criticized at the time and
part because it pushed out a lot of women that
were interested in ownership. But they changed their policy and
required that the majority owner be able to shoulder all
of the financial load buying a new team, and that
they had to be a billionaire, which is like, we're
down to like Oprah, whichever jen or is currently selling

(38:23):
a lip kit from then life on, that's really it, right,
And so that sucked when there were groups of women
who wanted to come into ownership and operate the way
that women's sports have promised and want to instead of
it always being dependent on one super rich dude and
the culture and toxicity that sometimes follows. But you also
understand why they do that because essentially, not only do

(38:44):
you have to have enough to buy it, but you
have to have enough to keep pouring in when you're
not making anything back year after year for the foreseeable future.

Speaker 2 (38:52):
We had an interesting conversation with Jess Berman, the NWSL
commissioner after Sixth Street bought the essentially was the control
owner of the the Bay Area expansion team, and asking
some of these questions about why are you comfortable with
a kind of nameless, faceless institutional fund as the person
and her What she said is that they basically put

(39:13):
in guardrails to make six Street more like a person,
and they wanted Alan Waxman, who runs Sixth Street, they
wanted him sitting on the board, and they wanted him
personally tied to the money decisions so that instead of
if something were to if COVID were to happen again
and suddenly like the league shuts down for a year
and now every owner has to there's capital calls and
every owner has to put in twenty million of their

(39:34):
own money just to float the league to the next year.
That that's a one person's decision. That's Allen's decision. That's
not the cow fund that at Sixth Street kind of
deciding as a board to make those decisions. So in
some ways, yeah, they are treating some of these institutional
funds like individuals for a lot of the reasons that
that that that you're talking about.

Speaker 1 (39:53):
It's like the corporate personhood argument totally. And that is
super PA.

Speaker 2 (40:00):
And you mentioned earlier the kind of the rhetoric around
losing money. It's one of the main things that a
lot of these groups use in their labor talks, right
and it's central in the NBA labor talks right now.

Speaker 1 (40:11):
But right so, I want that was one of my
other follow ups is when Adam Silver talks about losing
money publicly in a way that most other leagues, like
the MLS otherwise won't offer up. Is he doing that
to be intentional about lowering their costs and getting leverage,
but also doesn't it hurt the product he's ultimately trying
to sell.

Speaker 2 (40:32):
I think it's maybe a little bit of both. The
w is slightly. As I said, it's kind of a
different situation that the NBA has like really lost money, right,
They've really lost money, and their owners, the ones who
owned teams, have really made money from at least from
evaluation standpoint, in the last few years, right. And I
think the W is in this place where things are
really strong right now. I think a lot of fans

(40:54):
think it stronger than it is financially. And the opposite
is also true that like the rhetoric around the way
some NBA owners talk about what they've lost, et cetera,
is maybe underselling just how strong things are right now.
And this is what all labor negotiations are. It's like
trying to meet in the middle, right and trying to
figure out And someone told me once that that basically
all of these labor talks you basically know where they're

(41:14):
gonna end the minute you start, and sometimes they take years,
and sometimes you lose preseason games or you lose parts
of seasons, and it like kind of ends up roughly
in the middle. So I yeah, my feeling on the
W labor is that like they're gonna get players are
gonna get a great deal, everyone's gonna get paid a lot,
a lot more, which they very much deserve. It's going

(41:34):
to be less than what players I think probably think
they want or what they deserve right now. It's going
to be more than what the league right now wants
to give them, I think. But they're gonna meet in
the middle, and I think they're gonna do so because
this is just such a moment, right and it would
be such a catastrophic shame and also business mailpractice, I think,
to lose games at this moment when nobody is there's

(41:56):
never been more talk and more conversation about the league.
I will say that within that context, WNBA players have
more leverage and more power than any modern men's union.

Speaker 1 (42:07):
Why are the valuations in the NWSL so much higher
than the WNBA Angel cities at two hundred and fifty million,
the aces I think are the current highest at one
hundred and forty million. What contributes to that?

Speaker 2 (42:18):
I think there's a few things. I think we've talked
about some of them. One, the equity structure of the
WNBA is different than it is in NWSL, so I
think that's one. I think, in some kind of long
term tail, if both these leagues become insanely popular. Let's
say the fan base doubles in the next five years.
The WNBA teams are going to be playing in fifteen

(42:40):
thousand seed venues, right. NWSL teams can play in way
bigger venues, Right, So there's upside economics. I think they're
to a degree. I think the NWSL's getting through its
its labor talks and also a totally different structure than
we've seen in any other major American sport at all,
but of hewing its way more towards the way that

(43:01):
that labor exists in European soccer, both men's and women's.
I think that's a big opportunity.

Speaker 1 (43:07):
Getting rid of the draft, putting themselves on.

Speaker 2 (43:10):
Yeah, I think all that stuff I think gives gives
a lot of upside. I wouldn't be shocked to see
the w NBA numbers continue to tick up. And who
knows it is? It is funny to me. I've talked
to it Kurt, who does our valuations about this that
for a while they were like basically the same numbers.
You could like interlace the NWSL and the w NBA
like this, And I was like, that doesn't like all
they have in common is that they're just women's leagues, like,

(43:31):
doesn't doesn't make sense that they're basically all worth the same.
And you're right that the NWSL has has ticked upwards. Yeah, again,
I also think that if in a world where like
the NWSL, the W NBA ownership turns over and it
can't happen in the full way because there's NBA owners
involved here.

Speaker 1 (43:47):
But right, that's part of it too, is it gets
bigger by virtue of just the resale.

Speaker 2 (43:52):
Of exactly and and the and the NWSL ownership meetings
right now have very impressive, powerful people like Willow and
Michelle Kang and Alan Waxman, and people who have made
a lot of money both in other sports and also
in other parts of business, and that's really valuable. Yeah.
So yeah, I think there's a there's a few things
that at play there. But again I wouldn't I wouldn't

(44:14):
be shocked to see w numbers continue to tick up.
The power of Caitlin Clark and and Angel Rees and
others as well. There's nothing like that in in the NWSL,
right the name.

Speaker 1 (44:27):
Recognition the individual players yep.

Speaker 2 (44:31):
So and more people watch on TV the W than
watch NWSL at least right now. So there's definitely some
business levers that are interesting. But if you're looking to
buy a w NBA team, again, the fact that that
that you're only buying into a forty two percent pool
of the league and not one hundred percent pool of
the league which you are in NWSL, Yeah, I think
that also serves as kind of a not a cap,

(44:53):
but it's definitely pressuring down valuations to a degree.

Speaker 1 (44:58):
I learned a billion trillion, Evan. Thank you for saying
it in a way that even I could understand, and
hopefully our listeners to thank you so much for the time.

Speaker 2 (45:06):
We'll do the Lightweight Football Pod next time, right, Okay.

Speaker 1 (45:09):
Yes, yes, we got to take another break. When we
come back, I bid farewell to the show that gave
me my favorite job ever. Welcome back, slices. We always

(45:32):
love to hear from you, so hit us up on
email good game at wondermedianetwork dot com or leave us
a voicemail at eight seven two two four fifty seventy
and don't forget to subscribe, rate and review. It's real easy.
Watch the final episode of Around the Horn, airing tomorrow,
rating zero out of zero stars to whoever canceled this
legendary show review The Show that Changed My life will

(45:55):
air one final time tomorrow after twenty three years on ESPN.
Some of you may be around the horn, diehards watching
since the early days of Woody Page, and others may
be newer fans just catching the recent days of still
somehow Woody Page. And maybe a few of you have
just caught a glimpse of the show, maybe at the gym,
the airport, at the bar, the now instantly recognizable snapshot

(46:18):
of four panelists in boxes surrounding a handsome, smiley Italian
host wearing all black. Well, the show is ending, and
not because of ratings. They're still great. In fact, no
one seems to have a good answer as to why
the show won't continue past tomorrow. And while we're all
very sad that host, the incredible Tony Reality and everyone
else involved, from producers to panelists to fans, have at

(46:39):
least been given time to mourn and to celebrate. The
last several weeks have seen the return of old panelists
like yours truly, and the opportunity to remember the funniest
and most ridiculous moments as well as the times Tony
shared his humanity and heartbreak and made everyone watching feel
seen and less alone. We all everyone involved with the
show call it a family, and really it was a

(47:02):
rare space in this business that felt supportive, empathetic, nuanced, clever,
and also always in search of diverse, thoughtful opinions. It
was somehow a game show with a winner, and yet
still the least competitive space in sports. Everyone wanted everyone
else to shine, mostly thanks to Tony, who knew not
only every sports stat, score and reference, but also every

(47:24):
pop culture joke or reference we would drop on him,
from Whitesnake to Animal House, West Side Story to Austin Powers.
The show was the best. It changed my career and
it changed my life. And no matter what mood I
was in when I went to sit down, I always
left happy. So I'm really going to miss it. Go
watch tomorrow five pm Eastern on ESPN. There are some
pretty awesome surprises planned. At least one of them is

(47:48):
someone you're gonna really really like. Now it's your turn,
rate and review. Thanks for listening, See you tomorrow. Good game, Eban,
good game around the Horn, you whoever decided to cancel
Around on the Horn. Good game with Sarah. Spain is
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(48:10):
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