January 3, 2025 • 38 mins
Join hosts Michael Barr, Scarlet Fu, Damian Sassower and guest hosts Bloomberg Originals chief correspondent Jason Kelly and Bloomberg Originals sports correspondent Vanessa Perdomo for a look at some of the latest headlines and stories in the business of sports.
On this special New Year edition of the show, we look back at some key conversations from 2024 and what big stories we're watching for in the new year.
Featuring:
- Boston Celtics lead owner Wyc Grousbeck and his wife and business partner Emilia Fazzalari about their Cincoro Tequila business and the future of the Celtics.
- NBA legend Julius Erving and National Thoroughbred League co-founder Randall Lane about Erving's new investment into horse racing
- US soccer president Cindy Parlow Cone about soccer's growth and a big investment from NWSL franchise owner Michele Kang
- Velocity Capital Management founding partner David Abrams and Texas Permanent School Fund CEO and CIO Bob Borden on the state's major investment into Velocity's Opportunity Fund
- Acclaimed sports journalist John Feinstein about his latest work on college football's "Ancient Eight"
- Bloomberg News global business of sports reporter Ira Boudway for a look at some of the big stories we'll be following in the new year
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:07):
This is the business of sports.
Speaker 3 (00:09):
The business of sports can be intimidating or hard for
a starting to break into.
Speaker 4 (00:13):
We really appreciate when our owners are actually there, you know,
with us through the journey.
Speaker 1 (00:18):
Teams ours especially have been very intentional to diversify at
all levels of the company.
Speaker 5 (00:22):
I think we're in bolden years for the NFL and
college football.
Speaker 6 (00:25):
Our demographic reach has continued to explode.
Speaker 7 (00:29):
This is going to be really unlocking the streaming platform
for sports fans.
Speaker 3 (00:33):
Sports evaluations arising. We'll see when they peak.
Speaker 6 (00:36):
You don't have to be the best in your sports
and make a whole ton of money.
Speaker 2 (00:42):
Bloomberg Business of Sports from Bloomberg Radio.
Speaker 3 (00:47):
This is the Bloomberg Business of Sports, where Whigs floor
the big money issues in the world of sports. Michael
Barr along with my colleagues Damian Sasaur and Bloomberg Original
Sports correspondent Vanessa Perdomo. We'll hear from Scarlett Food later
in the program. Coming up on the show, we take
a look back at some of our favorite conversations from
twenty twenty four and look ahead at some of the
(01:07):
storylines that will matter most in the new year, we
hear a conversation with the Claim Sports and journalists and
author John Feinstein. We spoke with him about his latest work,
The Ancient Eight, College Football's IVY League and the game
they play.
Speaker 6 (01:22):
The one thing I know for sure is the IVY
League's not realigning. They will not The Ancient Eight will
never be the Ancient ten, or the Ancient six or
what it will always be the Ancient Eight. The same
aid schools that formed the league in nineteen fifty four
are the same eight schools that are in the league.
Speaker 3 (01:37):
Today, and with private equities involvement in sports continuing to grow,
we'll look back at a conversation with Velocity Capital Management
founding partner David Abrams. All that and more is straight
ahead on a special edition of The Bloomberg Business of Sports.
But we start in Boston and a friend of the
show with Grossback and his wife Emilia Fazalari cart Damien
(02:00):
and I spoke with them about their venture in the
spirits industry with Sincoro Tequila and about the future of
the Celtics.
Speaker 5 (02:10):
Let's listen in So it all started. It was one
summer night in twenty sixteen when now now partners, and
I decided to get together for dinner. And my partners
are my husband, Wick Grossback, Michael Jordan, who owned the
Charlotte Hornets at the time, Genie Buss, owner of the
(02:30):
Los Angeles Lakers, West s Eden's owner of the Milwaukee Bucks,
and so here we were representing four NBA teams got
together for dinner and something pretty magical happened that night.
We bonded as friends and it was all over tequila,
and we started talking about how much we all love tequila,
(02:50):
and we had this shared love for it, and we
started to talk about what we wanted in a tequila,
and we wanted something that was really delicious and it's
it's not a word you use to describe tequila normally,
and we started talking about how great it would be
if there were was a tequila that was super smooth
(03:11):
and had a long, beautiful finish, like a fine cognac
or a bourbon. And after that night we decided to
get together for dinner again. It was all around NBA
Board of Governor meetings that were taking place in New York,
and so after several more dinners and lots more tequila drinking,
we decided to create our own and that it was
(03:33):
going to be delicious and we weren't going to stop
until we created this incredible liquid. And so that's really
how it started, and it took us three years. That was,
like I said, the summer of twenty sixteen. We launched
the company in twenty nineteen, and it was because our
focus was creating this delicious liquid and we made a
(03:54):
thousand tequilas in that timeframe and then we launched. We
had it, We nailed it.
Speaker 1 (04:00):
That's a pretty incredible story and just topped by the
fact that it's competitors getting together to do this together.
Can you talk a little bit about how you plan
to leverage or what your original plan was to leverage
athletes and marketing this brand because athletes or celebrities and
spirits is something that you know, there's a lot of
competition in the space.
Speaker 5 (04:22):
Yeah, so that's a great question, Scarlett, And for us,
it was not about leveraging celebrity. But what's interesting is
the athlete mindset. And so you know, athletes work very
hard and always strive for greatness, and that is really
at the ethos of this brand. It was our approach.
(04:45):
It was the sort of athlete mindset, if you will,
in the way we approached creating the liquid, creating the company,
and so you may hear about Cincoro because of the
incredible team that's involved Michael Jordan. We've Derek Jeters, Serena
Williams and Michael Strahan, many people involved in you know,
(05:08):
part of the team. Now we've expanded it from the
five of us, and you may hear about the brand
because of a celebrity that's part of the team. But
you're going to buy your first bottle, your second bottle,
and hopefully cases thereafter because of the liquid and this
course bottle.
Speaker 3 (05:25):
Weck.
Speaker 8 (05:25):
You've been awfully quiet over there, and you know, I'm
sitting here and I'm watching guys like Peyton Pritchard throwing
in twenty eight points, five rebounds and three assists. I mean,
this guy's a six man candidate of the year. I'm
seeing Tatum, He's shooting fifty percent from three point range.
You guys are passing out championship brings at home in
front of the Knicks.
Speaker 9 (05:41):
Talk to us.
Speaker 8 (05:42):
About your defense of the championship, what comes next for
the Celtics. It's such an exciting time for you on
the team.
Speaker 3 (05:47):
Don't worry, he's snarky right now.
Speaker 10 (05:50):
Thanks blood Daman. Well if the video we're working on
this podcast to be able to see the ring right here.
But let's say we were very worried about the most
respectful of the next They are coming for us, for sure.
They're coming for the league. They have rebuilt and are
added to their team which was very strong last year.
And I mean this very sincerely. And we knew they
(06:11):
were sitting in that locker room that cramped unpleasant sort
of sitting locker room like every NBA visiting locker room,
and they were cooped up in there while we were
having this big banner and ring celebration, and then they
came out and they came out hard. So we got
them that night. But there's three more games to go
and then maybe the playoffs. Tom Thibodeau, by the way,
the head coach, was our assistant head coach in two
(06:33):
thousand and eight. We want a ring team. Tims and
I are neighbors out in the suburbs and have dinner
together occasionally, were friendly rivals, just like Sincoro. So it
all works out in the end.
Speaker 3 (06:43):
See now, I don't want anybody calling this show with this,
it's like you didn't ask them anything about the Boston
Celtics and the sale because they can't talk about the
sale right now. That's that's you.
Speaker 1 (06:56):
Know, the talks are ongoing.
Speaker 3 (06:59):
Yeah, you don't discuss business at the dinner tape. Now
back to.
Speaker 10 (07:03):
Giving just the brief update on what's going on. Out
of respect to Bloomberg and out of respect to you guys.
So if you'd like, I can give you a short
paragraph about hours. Yeah, I just want to be helpful
if I can. So the process is ongoing, and we
have hired a couple of great bankers banking firms. Mary
(07:24):
Urdos is the lead over at JP Morgan for US
and Greg lemcow O Red Bead and T two terrific,
well known people. They're very enthusiastic about helping the Celtics
find their next home. It's been twenty two years for me.
I'm going to end up transitioning out after twenty five years,
is the plan. And so we're meeting people right now,
beginning the process, put a book together in a data
(07:45):
room and meeting buyers and there's been a lot of
interest actually from lots of lots of great people. So
We're just getting started, but the process.
Speaker 3 (07:53):
Is underway and I'm not going to lie. That's in
coral tequila was good. That's a portion of our conversation
the Bolton Celtics lead owner with Grossbeck and his wife
and business partner, Emilia Vassalari. Sticking with basketball, we go
from today's reigning champions to one of the game's legends
and doctor Jay Julius Irving. He and National Thoroughbred League
(08:17):
co founder Randall Lane sat down with Scarlett fu and
our Bloomberg Television colleague Romain Bostik about his investment in
horse racing. Let's take a listen to a portion of
that conversation.
Speaker 1 (08:29):
Doctor g I got to start with you because you're
a legend in the NBA, of course, Philadelphia seventy six er,
the King of slam Dunks. How did you first get
involved in horse racing and specifically the National Thoroughbred League.
Speaker 11 (08:43):
Well, you know, I've been out of basketball for a
long time and I've explored other activities, golf being one
of them and is probably my main post basketball activity.
But I have a history of going to the Kentucky
Derby on the invite of junior Bridgeman for about a
(09:05):
dozen times, and they've even let me start the race,
so that's that's kind of a big deal. I grew
up in Long Island. You know, there's Belmont Park near there,
and there are plenty of race trucks in and around
New York, so always heard about racing. And I actually
(09:26):
came from a community called Roosevelt, and there's a Roosevelt
Raceway right there in Long Island as well.
Speaker 3 (09:32):
So this was probably my destiny.
Speaker 11 (09:35):
And when I had a conversation with Randall a couple
of months ago, my son and I and a friend
of his, you know, all decided that we wanted in.
Speaker 1 (09:46):
Got it. Well, it sounds like like you said that
this was destined to happen at some point. Randall, I
want to bring you into the conversation because NTL brings
team competition to one of America's oldest sports, and the
intention is to make cours more like track meets. What
are the benefits of a team format? Because Doctor J
mentioned golf, I know golf is doing something similar with
(10:07):
the TGL using a team format rather than individual players.
Speaker 12 (10:11):
Sure, well, it's really taking what's one of America's great
not just one of great America's great sports, one of
America's great cultural institutions, and taking what works in modern sports,
which is right now, you go to a track you
don't even know unless you're betting on the horse. You
don't even you know, you don't even know the name
of the horse you're betting on. And what we want
to do is take what's working in every other sport
(10:32):
and creating tremendous wealth in every other sport and bring
up the thurbd racing which is a great, amazing sport,
but it needs teams to root for, it needs stars,
and then we need more events, you know. I think
our parallel is Formula one, which is a circuit that's
going around with teams racing against each other and you
root for the drivers and you root for the teams,
and you know who you're rooting for, but it has
(10:54):
that similar spectacle. I mean, one hundred and fifty thousand
people go to Kentucky Derby. They're just not enough of
those right now. What we're bringing is that kind of
mini Kentucky Derby's with teams that you root for, teams
that you know, and stars that come back and race
time after time. Instead of going out to stud are.
Speaker 13 (11:10):
There any parallels to kind of what we saw back
in the old basketball days. I mean, obviously we all
remember you from the Sixers, but you know, there are
people of a certain generation that remember you from the ABA,
and the ABA did things for basketball that have now
basically become the de facto standard. It was a more
exciting league, at least for those of us who are
old enough to remember it. And I am curious about
(11:31):
how sports leagues position themselves and saying true to I
guess there are traditions of that sport, but at the
same time doing more creative things doc to drive people
into the stands or into TV viewership.
Speaker 11 (11:43):
Well, you have a lot of people on the ownership
side and the employees of the owners who at the
end of each season they sit down and they do
an evaluation. What are we going to change? You know,
because sports is in a constant state of change. Some
people like the changes, some people don't like the changes.
But there's going to be change, and it's better if
(12:04):
you have a say so. So, you know, I think
fans should have always been verbal and vocal in terms of,
you know, the social media presence. They got an opinion
about different players and sometimes players fire back. So it's
it's moving forward, and this NTL is just a step
(12:27):
in moving horse racing forward, and not just in the US,
but globally.
Speaker 3 (12:33):
That's NBA legend Julia serving Doctor j along with National
Thoroughbred League co founder Randall Lane, speaking with Scarlett Foo
and Romaine Bostik. Up next on this special edition of
the show, we tak college football and the Ancient eight
with the claimed sports journalist John Feinstein. For my colleagues
Scarlett Food, Damien Sassauer, and Vanessa Perdomo, I'm Michael Barr.
(12:56):
You're listening to the Bloomberg Business of Sports from Bloomberger
Radio the world.
Speaker 2 (13:04):
This is Bloomberg Business of Sports from Bloomberg Radio.
Speaker 3 (13:09):
This is the Bloomberg Business of Sports where we explore
the big money issues in the world of sports. Michael Barr.
It is a special edition of the show as we
tie twenty twenty four up in a boat and look
ahead to some of the big sports headlines for the
new year. Still ahead, we'll check in on the world
of private equity in sports with Velocity Capital's founding partner
(13:31):
David Abrams. But first twenty twenty four saw soccer continue
to grow in the US. Not too long ago, Bloomberg
Original's Chief correspondent Jason Kelly, Bloomberg Original Sports correspondent Vanessa
Berdomo and Damien Sassaur spoke with the US Soccer President,
Cindy Parlow Cone about soccer's growth, its future, and a
(13:52):
big investment from NWSL team owner Michelle Kang into the
national team. Let's take a listen to some of that conversation.
Speaker 7 (14:01):
Michelle is continuously breaking down barriers and setting new expectations,
and I think her gift does exactly this.
Speaker 14 (14:12):
You know, my ninety nine World Cup teammates and I
we all thought the ninety nine World Cup happened and
then it was going to be this massive explosion, but
it ended up being a moment, right. I think Michelle
and what she has done is she started a movement,
(14:33):
right and it has been sustained. You know, her donation
to us is going to be so impactful. So she's
contributing to three main areas. One is enabling us to
increase our number of youth national team camps. So we
have eight youth national teams, so we'll have more camps
(14:55):
with us, so more opportunities for young girls and women.
She's also putting money into expand improving our talent identification,
so regardless of where you live in play, you will
have the opportunity to be seen by our scouts. And
then third, and I think this is really important, is
she's putting money towards fueling the professional development of the coaches,
(15:17):
the referees, and executives. We all know to develop the
best players in the world, you have to develop everyone
around them too. For instance, right now we're looking with
this donation to double the number of female coaches and referees,
which would be significant.
Speaker 3 (15:32):
That's my colleagues Jason Kelly, Vanessa Bernomo, and Damien sas
Hour speaking with US Soccer President Cindy Parlow Cone. Now
we turn to another space in the sports world that
we saw grow a lot in twenty twenty four, private equity. Jason,
Damien and I spoke with Velocity Capital Management founding partner
(15:52):
David Abrams and Texas Permanent School Fund CEO and CIO
Bob Borden. We spoke just after it was announced that
Texas will be investing two hundred million dollars into Velocities
flagship opportunity fund let's take a listen to that conversation.
Speaker 8 (16:09):
David tell us a little bit about what's going on
with X games, some of the you know, portfolio holdings,
how the fund is structured, and you know what wise ahead.
Speaker 4 (16:16):
Well, I think Elevate is a perfect example of this
partnership and why we're so excited. There was some news
out the other day about both Velocity and Texas Permanent
School Fund and Levy putting significant capital on the balance sheet.
But I think one of the big differentiators of this
partnership is how Texas Permanent School Fund is not just
(16:42):
a typical asset allocator. And the reason they'll bring that
up is we have the ability to provide holistic solutions
to various intellectual property rights holders. And if I think
about Elevate, you know, one of the big initiatives for
us as a company is what did the disruption is
going to lead to in college athletics? And so there's
(17:05):
lots of different ways to figure out how to work
with the university. Whether it's the NIL space, whether it's
helping build the stadium, whether it's helping monetize their ticketing inventory.
Elevate can do a lot of different things but Texas
Permanent School Fund can provide capital that's private equity oriented, credit,
real estate. The name permanent is there for a reason
(17:30):
because it's permanent capital where you can hold an asset
for thirty years. There's very few examples of other investment
firms who had access to that capital, and that allows
us to solve problems for rights holders.
Speaker 15 (17:46):
Well, you know, I was mentioned earlier, what our peers do.
We're the largest educational endowment in the country and actually
knocking on sixty billion today. The lessons that I learned
over the years when you've got you know, good partners
and investment firms, and I think that you know, we're
(18:08):
where my peers have you know, left a lot of
meat on the bone. Is putting everything in boxes, you know,
hiring talented firms to manage one, you know, very narrowly
defined aspect of the fund, and you know, kind of
report back on that. And I found that, you know,
there's incredible talent at some of these firms, and they're
(18:28):
doing a lot of interesting things, not just the little
slice that you may have hired them for. And necessity
being the mother of invention. In the mid two thousands,
I was tapped to run the South Carolina Investment Commission.
It was thirty five billion dollars and I was hired
and given an attorney and an admin and said build
a cutting edge endowment style pension solution. And I realized
(18:56):
that we were going to have to really leverage partners
a lot more more than have traditionally been done, and
by providing more free form capital that can be put
to use, and not only in funds, but in co investments,
direct investments, both in debt, inequity and real assets, seating platforms,
et cetera. A much more fungible form of capital that
(19:19):
makes you a true partner with that group is a
key to success there. It's a way to access a
lot of opportunities. And using those lessons along with the
experience that I had with David, you know, I see
this space as ripe for development. Consolidation is almost you know,
(19:42):
a late stage word. You know, this is still very
nascent in some of the technologies and other services in
and around entertainment, just not only the hospitality, but you know,
the branding and naming rights and a lot of these things.
And those who who figure it out out and can
do it at reasonable scale, you know will come out ahead.
Speaker 1 (20:07):
So David, can you give us some more of an
idea of what specific opportunities look like as we head
into twenty twenty five. I think about the college space
because Velocity focuses on middle market companies. So we're not
talking NFL teams, right, that's no longer middle market. But
if you're talking about businesses or opportunities within college athletics,
(20:28):
obviously that space is growing by leaps and bounds. You
have Bill Belichick, who led the Patriots to multiple Super
Bowl victories, now joining the United Excuse me, the University
of North Carolina's football team. College athletics is becoming more
and more professionalized. It's no longer going to just be
middle market anymore.
Speaker 4 (20:45):
Well, I think the Belichick announcement is interesting, but it's
a lot more than just hiring a football coach to
build the football program.
Speaker 1 (20:55):
You and C is, what do you see then, starting
with Bill Belichick joining UNC and how what kind of
opportunities does that open your eyes up to college athletics.
Speaker 4 (21:06):
You can use the word professional sports, but they're entertainment
and media businesses. It just so happens that the talent
is also going to get a college education. At the
same time, Bill Belichick is away for North Carolina to
build a global brand which will attract athletes, which drives
the revenue generation of the intellectual property rights of University
(21:31):
of North Carolina. So when people want to come to
North Carolina now, it's I get access to one of
the most successful NFL coaches of all time his network
of contacts around the world. So if I'm coming to play,
they have a fantastic women's soccer team, I'm going to
get access to Bill Belichick. Maybe you can't build my
brand even and that is where college.
Speaker 3 (21:53):
Sports is going.
Speaker 4 (21:54):
You just saw the example of what happened at University
of Michigan, where all the resources was Tom Brady and
Dave Portney were put into attracting talent for the university.
It's the same exact reason why this happened at North
Carolina because it's a way for them to present an
opportunity to talent that other universities can't match.
Speaker 3 (22:17):
That's Damien Jason Me speaking with Velocity Capital Management founding
partner David Abrams and Texas Permanent School Fund CEO and
CIO Bob Borden. You're listening to a special edition of
The Bloomberg Business of Sports. As we go through some
of our favorite conversations in twenty twenty four and look
ahead at some of the stories that will matter in
(22:38):
the new year. And now we turn to college football
and the Ancient Eight. We spoke with John Feinstein. He
has written nearly fifty books, and his latest, The Ancient Eight.
College Football's Ivy League and the Game they played Today
was the subject of our conversation. Let's take a listen
to that conversation with Jason, Damien and Vanessa.
Speaker 8 (22:59):
To talk to us a little bit about the book,
the IVY League, talk to us a little bit about
you know what non scholarship offering schools are going to
do in a world of NIL here.
Speaker 6 (23:08):
Well, at for the moment, the IVY League has been
largely unaffected because they never wanted to be part of nil's.
They never wanted to be part of the transfer portal.
You do get an occasional transfer, you do get an
occasional player with some NIL money, but that's the exception,
not the rule. In fact, last season, when I was
researching the book, Princeton had their first transfer since Jason
(23:32):
Garrett in nineteen eighty eight. That's how rare transfers are
generally across the IVY League.
Speaker 16 (23:37):
And what was it about the ache and eight and this,
you know, this IVY League system that you wanted to
write a book about.
Speaker 15 (23:43):
You know, when I was skimming.
Speaker 16 (23:44):
Through your book, I I one of the things that
struck me was how you said the age and eight
is something that will never change. And because when you
look at the Big ten and the way that's expanded
and the way that Big twelve is retracted and all
these things, those schools and conferences are so fluid, but
this will always stay the same. So why was you know,
what was the inspiration behind this book?
Speaker 6 (24:05):
Well, that was exactly it, Vanessa, To be honest with you,
I grew up going IVY League football games in New
York City at Columbia.
Speaker 3 (24:13):
They were terrible, but.
Speaker 6 (24:14):
I enjoyed riding the subway to the tip of Manhattan
and walking three blocks to Bakerfield. So I always followed
the IVY League. And as you mentioned realignment in college football,
which seems to happen every fifteen minutes. The one thing
I know for sure is the IVY League's not realigning.
Speaker 3 (24:31):
They will not.
Speaker 6 (24:32):
The ancient eight will never be the ancient ten, or
the ancient six, or what it will always be, the
ancient eight. The same eight schools that formed the league
in nineteen fifty four are the same eight schools that
are in the league today. They have rules that are
different from the power schools. They only played ten games,
They played ten weeks in a row. There are no
bye weeks, they're not the champions are not allowed to
(24:53):
participate in postseason, which I disagree with. Every other IVY
league sport sends its champion to postseason. You know, Princeton
just two years ago was in the Sweet sixteen in basketball,
So that's one thing I do disagree with.
Speaker 3 (25:07):
But for the.
Speaker 6 (25:08):
Rest of it, it's like a throwback to the old
days when you played in the same league, you had
the same rivals, and you didn't play as many as
sixteen or seventeen games as teams in the championship game
will play this year with the twelve team playoff.
Speaker 3 (25:23):
That was Jason, Damien and Vanessa speaking with acclaimed sports
journalist John Feinstein. Up next, we look ahead to some
of the big stories that we'll be tracking in twenty
twenty five. I'm Michael Barr. You're listening to the Bloomberg
Business of Sports from Bloomberg Radio. Around the borough.
Speaker 2 (25:54):
This is Bloomberg Business of Sports from Bloomberg Radio.
Speaker 3 (25:59):
Thanks for joining us on the Bloomberg Business of Sports,
where we explore the big money issues in the world
of sports Michael Barr along with my colleagues Damian Sassauer
and Bloomberg Original Sports correspondent Vanessa Bernomo. It is a
special edition of the show where we wrap up some
of the big stories from twenty twenty four and look
ahead at some of the storylines that might matter most
(26:20):
heading into the new year. For a look ahead to
what could be in store for twenty twenty five, we
bring in friend of the show, Bloomberg News Global Business
reporter Ira Budway. So I'm going to start first of all,
I guess one of the big things that I see
is that the NBA they kind of answered pre holiday
worries with Lebron and Curry with the ratings and the splash.
Speaker 17 (26:44):
Ira, Yeah, I mean there was a lot in the
fall of handwringing about the decline in their ratings. You know,
on ESPN they were down by like a quarter year
over year, down a little bit on TNT and there
was a lot of talk, you know, is it too
many three point shots? Are the big stars getting old?
And the Christmas Day games on ESPN did great and
(27:05):
brought them mostly back to level. I think there are
still some long term issues they really do not have.
I think airs to Curry and obvious ones to Curry
and Lebron when they retire. And then you just got
the attrition of cable TV. Right, there's just fewer households
carrying ESPN. But they are dealing with that in their
new bucket of deals that starts this coming year.
Speaker 8 (27:26):
Well, all right, let's put some numbers around it, right,
Lebron versus Steph Curry peaked at eight point three two
million viewers at ten thirty pm Eastern Time, according to
the league, And that makes it, if I'm not mistaken,
the most viewed regular season NBA game in five years. So,
I mean, what are we looking for? Are we looking
for pre COVID comparisons here? Are we ever going to
(27:47):
get back to that level? Or I mean, like, I mean,
how do you kind of evaluate the performance during this
holiday season?
Speaker 9 (27:52):
It's tricky.
Speaker 17 (27:53):
That's a very good result for them, given that over
those five years, the distribution's gone down pretty dramatically, right,
So you're getting a bigger slice of a smaller pie.
So I think that's good news for the league that
it's not a crisis, it's not an emergency. But you know,
you look at the way they structured their deal starting
in the fall, they brought in Amazon, right, that's a
move into the streaming future. They did a deal with
(28:16):
NBC that means about half of the games that NBC
is going to get about one hundred games, at least
fifty of those have to go on NBC broadcast, meaning
you know, the channel you can get for free over
the air. And that's a move to deal with the
fact that there's not as many house soulds getting cable.
So they know that and they're working on it in
the distribution side. But I think they also got to
(28:37):
look at like the you know, they're trying to get
games of consequences. With Adam Silver's phrase, that's why he
did this n season tournament thing. It's been a decent success,
the second year not as good as the first, but
you know, they've got an issue where basically until Christmas,
people don't really care. They're still watching all the fall sports.
The games don't really matter when an eighty two game season,
(28:58):
and they're not going to chop games off the schedule
because that's fewer tickets and less ad sales. So they
got to figure out a way to make people tune
in in October November.
Speaker 16 (29:07):
And do you know ara this year obviously being the
first with the NFL Christmas games as well, and obviously
it didn't hurt them this year, but do you think
it could hurt them going forward where more people are
now going to get used to watching NFL games on
Christmas and they'll actually be willing to watch them on
Netflix and things like that.
Speaker 17 (29:25):
Yeah, I mean Netflix did great, the NFL did great.
It seems like there was enough to go around. You know,
people basically just had the TV on all day one
way or another, and they know where to find what
they're looking for. But I think the NFL's encroachment on
the holidays in general and on Christmas Day is not
a welcome development for the NBA, and they are going
to be, you know, wishing for days of the week
(29:48):
where the NFL can't do as much, you know, for
christ to really depends where Christmas falls, so that will
that will help them a little bit, but I think
they look at Christmas Day for the NBA's based the
kickoff for the casuals, right, this is when a lot
of fans come in and start watching. And as you know,
for them to do this well for this first year
(30:10):
with the NFL competing with them on Netflix, I think
it's a sign that they're pretty They're resilient that way,
and I think they'll do even better under the new
media deals.
Speaker 3 (30:21):
There's another topic to talk about. This one. I don't
know what to make of this Florida State basketball is
they're suing the coach over unpaid NIL cash ira. Yeah.
Speaker 17 (30:32):
I mean this is just a sign of where things
are right now with nil. It is an unregulated market
and it is a proxy for pay to play, and
so there's no limits on it. That's the good news
for players. They can basically shop themselves as free agents
every season and make a lot more money than they
used to. The bad news is there's a lot of
broken promises and this is an example of that. A
(30:54):
coach basically saying, hey, stick around, don't leave, and I'll
give each a quarter million dollars which didn't materialize. And
there's a lot of that, and this is why the
NCAA is trying to get control of NIL through these
big settlements coming down the pipe in the house and
the other class actions that are supposed to get finalized
this coming year. And the trade off there is we'll
(31:17):
start paying you directly. We're going to have the big
power five schools to have a bucket of twenty million.
Speaker 9 (31:21):
Dollars to pay out to their players.
Speaker 17 (31:22):
Directly, not NIL deals coming from collectives. But in return,
we want to get our hands around NIL. We want
to make it fair market value. We want to have
a registry no more wild West.
Speaker 3 (31:33):
And I should add coach Leonard Hamilton said he was
going to pay them through his business partners and apparently
it never.
Speaker 17 (31:42):
Materialized, right, because that's the way NIL has to work.
It's this weird three party thing. You've got the school,
the player, and somebody in between, some company, some collective,
some business partner because it's not coming directly from the schools.
And that is just a recipe for you know, all
kinds is a fraud and corruption.
Speaker 8 (32:01):
Well, let's kind of put some context around it. Six
former FSU men's basketball players are claiming coach Leonard Hamilton
cheated them out of one point five million dollars in
commitment sweeteners. Here's my question if this is really indeed
the wild Wild West, Ira. You know, what's the legal
premise that these players have to get any reclamation whatsoever?
Speaker 3 (32:17):
Right?
Speaker 17 (32:17):
I mean it's contract law, right right? Say where was
this written down? Was it a handshake?
Speaker 8 (32:21):
So now you're trying to write you're trying to sue
and say and prove that he actually said that. Right,
So they were recording right, So we're at that point.
It's it's like it's like it's like a TV show
and they're going to trying to find.
Speaker 9 (32:31):
Out so many what it's incredible.
Speaker 3 (32:33):
I mean, this is crazy word against your word.
Speaker 8 (32:36):
Yeah, I mean, and you know this is big money
we're talking about here, and the government really can't do
anything about it, Canada, IRA.
Speaker 3 (32:42):
Right.
Speaker 17 (32:43):
So the NCAA knows that they can't come in and
say this is how NIL has to work. They'll just
lose lawsuit after lawsuit after lawsuit. So they are trying
to get a hold of it through this clack Sashion settlement.
They're going to say, look, we if you guys will
all agree to this two point eight billion dollar payout
back damages and a new system where you get paid directly.
(33:03):
Then we want to be allowed to clamp down on
nil because it's just out of control. It's too much
player movement, too much corruption, too much cost, and we
just have no we have no way to control what
happens in this marketplace.
Speaker 9 (33:17):
So they are going to try.
Speaker 17 (33:19):
I'm very curious to see how in the new year,
if this gets finalized its supposed to happen in April,
this House settlement gets finalized, whether there will just be
more legal challenges, whether they're able to make it work,
whether they can use a class action suit to do
what mostly what professional leagues do through collective bargaining. So
it's going to be very interesting to see how that
(33:39):
plays out.
Speaker 16 (33:41):
Is there a world where this, you know, gets settled
also in that class action lawso like, is there a
world where that back pay then becomes this two hundred
and fifty thousand dollars each for this play for these players,
or is this just going to be completely separate these
players don't really No, that's.
Speaker 17 (33:56):
The idea is direct to do just that, to basically
say we're going to pay there's a framework in the
settlement to pay players directly. It comes out to twenty
two percent of their athletic revenue essentially, and so in
the coming season, if it happens, it'll be about twenty
and a half million that they're allowed to pay up
to that amount, split it across. They're athletes in various sports,
(34:20):
and most of that's going to go to men's football
and basketball players.
Speaker 9 (34:23):
So that is the deal.
Speaker 17 (34:25):
They're saying, Hey, sign on for this, and then we
will start saying that your nil deals have to be
real nil deals, meaning you're paid a fair market value
for some kind of endorsement rather than you're paid to
play here, and we call it an endorsement too.
Speaker 8 (34:41):
Ira, What if one of these players does have a
smoking gun on coach Hamilton? What if they have a
recording where he did indeed promise to pay this?
Speaker 9 (34:48):
What next?
Speaker 8 (34:48):
I mean, will he have to go out of pocket?
Will the school then have to pay? I mean, like again,
it's one thing to show that he was liable and
that he was at fault. It's another thing entirely to
figure out who's going to compensate these players for the damages?
Speaker 9 (35:01):
Right right?
Speaker 17 (35:01):
And I think you know in most cases like this,
you're not going to get that money because it never
really existed.
Speaker 9 (35:08):
Right.
Speaker 17 (35:08):
You might that coach might be found liable, but he
probably doesn't have one point two five million sitting.
Speaker 8 (35:14):
Around correct and personally liable because right time.
Speaker 17 (35:19):
So they are going to they'll get something probably in
that scenario, right, but it won't be the amount they
were promised, would be my guest, And so that's why
you want to create something different, right, And I think
that's we'll see if if a class action settlement can
do that. I'm skeptical myself. I think at some point
they're going to have to get to employment status and
that's going to be a battle n LRB, federal cases,
(35:42):
maybe federal legislation. I don't know, but I don't see
how you square this circle without some kind of collective bargaining.
Speaker 16 (35:49):
When I was a college athlete, we had to sign
letters of intent, right, and basically it said what our
scholarship was, we were going to that school, blah blah blah.
This is before everything changed. Why, like, can there be
a world in which they do sign like these contracts
again and it does say what their nil money would
be from that exact school or from the collectives or
(36:13):
is that all just going to go away if this lawsuit.
Speaker 17 (36:16):
They will still do nil, but they will also have
contracts with the schools that include money.
Speaker 9 (36:21):
That won't be nil money. It'll be money for playing.
Speaker 16 (36:25):
So we'll be an actual contract.
Speaker 2 (36:27):
That they signed.
Speaker 17 (36:27):
They will have a contract with the school that says
we're paying you X to play.
Speaker 9 (36:32):
You know, here's here's a million dollars.
Speaker 3 (36:35):
Speaking of money, any money, money, money, money, money money.
I'm sure all the other Major League Baseball owners are
looking at Steve Cohen saying, thanks man, thanks a lot.
Now you've saddled up one. So too. The deal, in
case you haven't heard, seven hundred and sixty five million
dollars over fifteen years. This is huge money, which means
(36:58):
at some point are the owners on the low end
going to have to like pay up.
Speaker 17 (37:05):
Yeah, I mean this is a problem for baseball. It's
a great deal for soda, one of the best deals
any athlete ever got. Everything in it. You know, he
gets an opt out after five years, no trade clause,
huge signing bonus, he gets as sweet at City Field,
he gets his own suite when they travel, he's promised
his number. I mean, they said yes to everything, and
Coan was willing to do this because he's super rich
and he wants the Mets to win. And it's a
(37:26):
problem for baseball because even the Yankees in the end
couldn't really compete with that. And so they've already tried
to restrict Cone through these luxury taxes. They added a
special tier known as the Coen Tax, that if you
go over this threshold by a certain amount, right you pay.
It's basically the only team doing it is the Mets.
They add a surcharge to the existing tax. I mean,
(37:46):
you can be paying as much as like one hundred
and ten percent on a tax on the amount that
he goes.
Speaker 9 (37:52):
Over the salary threshold.
Speaker 17 (37:54):
That has not been enough to stop him, and so
I think what you're going to see is resurrection of
the idea of a hard cap, a salary cap in
Major League Baseball, which of course would be a problem
for the players' union. So baseball's headed for, I think,
for some real friction, and it's not going to be
so much a war between players and owners as a
war between owners or.
Speaker 3 (38:13):
Thanks to Ira Bodway, he covers global business for Bloomberg News,
and most importantly, thank you for joining us on a
special edition of the Bloomberg Business of Sports. Check out
our podcasts and subscribe on your favorite podcast platform so
you never miss an episode. For my colleagues, all of them,
Scarlett Boot, Damian Sas Salary, Jason Kelly, and Vanessa Pernomo,
(38:35):
I'm Michael Barr. Tune in again next week for the
latest on the stories moving big money in the world
of sports. You're listening to Bloomberg Business of Sports from
Bloomberg Radio around the world.
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:07):
This is the business of sports.
Speaker 3 (00:09):
The business of sports can be intimidating or hard for
a starting to break into.
Speaker 4 (00:13):
We really appreciate when our owners are actually there, you know,
with us through the journey.
Speaker 1 (00:18):
Teams ours especially have been very intentional to diversify at
all levels of the company.
Speaker 5 (00:22):
I think we're in bolden years for the NFL and
college football.
Speaker 6 (00:25):
Our demographic reach has continued to explode.
Speaker 7 (00:29):
This is going to be really unlocking the streaming platform
for sports fans.
Speaker 3 (00:33):
Sports evaluations arising. We'll see when they peak.
Speaker 6 (00:36):
You don't have to be the best in your sports
and make a whole ton of money.
Speaker 2 (00:42):
Bloomberg Business of Sports from Bloomberg Radio.
Speaker 3 (00:47):
This is the Bloomberg Business of Sports, where Whigs floor
the big money issues in the world of sports. Michael
Barr along with my colleagues Damian Sasaur and Bloomberg Original
Sports correspondent Vanessa Perdomo. We'll hear from Scarlett Food later
in the program. Coming up on the show, we take
a look back at some of our favorite conversations from
twenty twenty four and look ahead at some of the
(01:07):
storylines that will matter most in the new year, we
hear a conversation with the Claim Sports and journalists and
author John Feinstein. We spoke with him about his latest work,
The Ancient Eight, College Football's IVY League and the game
they play.
Speaker 6 (01:22):
The one thing I know for sure is the IVY
League's not realigning. They will not The Ancient Eight will
never be the Ancient ten, or the Ancient six or
what it will always be the Ancient Eight. The same
aid schools that formed the league in nineteen fifty four
are the same eight schools that are in the league.
Speaker 3 (01:37):
Today, and with private equities involvement in sports continuing to grow,
we'll look back at a conversation with Velocity Capital Management
founding partner David Abrams. All that and more is straight
ahead on a special edition of The Bloomberg Business of Sports.
But we start in Boston and a friend of the
show with Grossback and his wife Emilia Fazalari cart Damien
(02:00):
and I spoke with them about their venture in the
spirits industry with Sincoro Tequila and about the future of
the Celtics.
Speaker 5 (02:10):
Let's listen in So it all started. It was one
summer night in twenty sixteen when now now partners, and
I decided to get together for dinner. And my partners
are my husband, Wick Grossback, Michael Jordan, who owned the
Charlotte Hornets at the time, Genie Buss, owner of the
(02:30):
Los Angeles Lakers, West s Eden's owner of the Milwaukee Bucks,
and so here we were representing four NBA teams got
together for dinner and something pretty magical happened that night.
We bonded as friends and it was all over tequila,
and we started talking about how much we all love tequila,
(02:50):
and we had this shared love for it, and we
started to talk about what we wanted in a tequila,
and we wanted something that was really delicious and it's
it's not a word you use to describe tequila normally,
and we started talking about how great it would be
if there were was a tequila that was super smooth
(03:11):
and had a long, beautiful finish, like a fine cognac
or a bourbon. And after that night we decided to
get together for dinner again. It was all around NBA
Board of Governor meetings that were taking place in New York,
and so after several more dinners and lots more tequila drinking,
we decided to create our own and that it was
(03:33):
going to be delicious and we weren't going to stop
until we created this incredible liquid. And so that's really
how it started, and it took us three years. That was,
like I said, the summer of twenty sixteen. We launched
the company in twenty nineteen, and it was because our
focus was creating this delicious liquid and we made a
(03:54):
thousand tequilas in that timeframe and then we launched. We
had it, We nailed it.
Speaker 1 (04:00):
That's a pretty incredible story and just topped by the
fact that it's competitors getting together to do this together.
Can you talk a little bit about how you plan
to leverage or what your original plan was to leverage
athletes and marketing this brand because athletes or celebrities and
spirits is something that you know, there's a lot of
competition in the space.
Speaker 5 (04:22):
Yeah, so that's a great question, Scarlett, And for us,
it was not about leveraging celebrity. But what's interesting is
the athlete mindset. And so you know, athletes work very
hard and always strive for greatness, and that is really
at the ethos of this brand. It was our approach.
(04:45):
It was the sort of athlete mindset, if you will,
in the way we approached creating the liquid, creating the company,
and so you may hear about Cincoro because of the
incredible team that's involved Michael Jordan. We've Derek Jeters, Serena
Williams and Michael Strahan, many people involved in you know,
(05:08):
part of the team. Now we've expanded it from the
five of us, and you may hear about the brand
because of a celebrity that's part of the team. But
you're going to buy your first bottle, your second bottle,
and hopefully cases thereafter because of the liquid and this
course bottle.
Speaker 3 (05:25):
Weck.
Speaker 8 (05:25):
You've been awfully quiet over there, and you know, I'm
sitting here and I'm watching guys like Peyton Pritchard throwing
in twenty eight points, five rebounds and three assists. I mean,
this guy's a six man candidate of the year. I'm
seeing Tatum, He's shooting fifty percent from three point range.
You guys are passing out championship brings at home in
front of the Knicks.
Speaker 9 (05:41):
Talk to us.
Speaker 8 (05:42):
About your defense of the championship, what comes next for
the Celtics. It's such an exciting time for you on
the team.
Speaker 3 (05:47):
Don't worry, he's snarky right now.
Speaker 10 (05:50):
Thanks blood Daman. Well if the video we're working on
this podcast to be able to see the ring right here.
But let's say we were very worried about the most
respectful of the next They are coming for us, for sure.
They're coming for the league. They have rebuilt and are
added to their team which was very strong last year.
And I mean this very sincerely. And we knew they
(06:11):
were sitting in that locker room that cramped unpleasant sort
of sitting locker room like every NBA visiting locker room,
and they were cooped up in there while we were
having this big banner and ring celebration, and then they
came out and they came out hard. So we got
them that night. But there's three more games to go
and then maybe the playoffs. Tom Thibodeau, by the way,
the head coach, was our assistant head coach in two
(06:33):
thousand and eight. We want a ring team. Tims and
I are neighbors out in the suburbs and have dinner
together occasionally, were friendly rivals, just like Sincoro. So it
all works out in the end.
Speaker 3 (06:43):
See now, I don't want anybody calling this show with this,
it's like you didn't ask them anything about the Boston
Celtics and the sale because they can't talk about the
sale right now. That's that's you.
Speaker 1 (06:56):
Know, the talks are ongoing.
Speaker 3 (06:59):
Yeah, you don't discuss business at the dinner tape. Now
back to.
Speaker 10 (07:03):
Giving just the brief update on what's going on. Out
of respect to Bloomberg and out of respect to you guys.
So if you'd like, I can give you a short
paragraph about hours. Yeah, I just want to be helpful
if I can. So the process is ongoing, and we
have hired a couple of great bankers banking firms. Mary
(07:24):
Urdos is the lead over at JP Morgan for US
and Greg lemcow O Red Bead and T two terrific,
well known people. They're very enthusiastic about helping the Celtics
find their next home. It's been twenty two years for me.
I'm going to end up transitioning out after twenty five years,
is the plan. And so we're meeting people right now,
beginning the process, put a book together in a data
(07:45):
room and meeting buyers and there's been a lot of
interest actually from lots of lots of great people. So
We're just getting started, but the process.
Speaker 3 (07:53):
Is underway and I'm not going to lie. That's in
coral tequila was good. That's a portion of our conversation
the Bolton Celtics lead owner with Grossbeck and his wife
and business partner, Emilia Vassalari. Sticking with basketball, we go
from today's reigning champions to one of the game's legends
and doctor Jay Julius Irving. He and National Thoroughbred League
(08:17):
co founder Randall Lane sat down with Scarlett fu and
our Bloomberg Television colleague Romain Bostik about his investment in
horse racing. Let's take a listen to a portion of
that conversation.
Speaker 1 (08:29):
Doctor g I got to start with you because you're
a legend in the NBA, of course, Philadelphia seventy six er,
the King of slam Dunks. How did you first get
involved in horse racing and specifically the National Thoroughbred League.
Speaker 11 (08:43):
Well, you know, I've been out of basketball for a
long time and I've explored other activities, golf being one
of them and is probably my main post basketball activity.
But I have a history of going to the Kentucky
Derby on the invite of junior Bridgeman for about a
(09:05):
dozen times, and they've even let me start the race,
so that's that's kind of a big deal. I grew
up in Long Island. You know, there's Belmont Park near there,
and there are plenty of race trucks in and around
New York, so always heard about racing. And I actually
(09:26):
came from a community called Roosevelt, and there's a Roosevelt
Raceway right there in Long Island as well.
Speaker 3 (09:32):
So this was probably my destiny.
Speaker 11 (09:35):
And when I had a conversation with Randall a couple
of months ago, my son and I and a friend
of his, you know, all decided that we wanted in.
Speaker 1 (09:46):
Got it. Well, it sounds like like you said that
this was destined to happen at some point. Randall, I
want to bring you into the conversation because NTL brings
team competition to one of America's oldest sports, and the
intention is to make cours more like track meets. What
are the benefits of a team format? Because Doctor J
mentioned golf, I know golf is doing something similar with
(10:07):
the TGL using a team format rather than individual players.
Speaker 12 (10:11):
Sure, well, it's really taking what's one of America's great
not just one of great America's great sports, one of
America's great cultural institutions, and taking what works in modern sports,
which is right now, you go to a track you
don't even know unless you're betting on the horse. You
don't even you know, you don't even know the name
of the horse you're betting on. And what we want
to do is take what's working in every other sport
(10:32):
and creating tremendous wealth in every other sport and bring
up the thurbd racing which is a great, amazing sport,
but it needs teams to root for, it needs stars,
and then we need more events, you know. I think
our parallel is Formula one, which is a circuit that's
going around with teams racing against each other and you
root for the drivers and you root for the teams,
and you know who you're rooting for, but it has
(10:54):
that similar spectacle. I mean, one hundred and fifty thousand
people go to Kentucky Derby. They're just not enough of
those right now. What we're bringing is that kind of
mini Kentucky Derby's with teams that you root for, teams
that you know, and stars that come back and race
time after time. Instead of going out to stud are.
Speaker 13 (11:10):
There any parallels to kind of what we saw back
in the old basketball days. I mean, obviously we all
remember you from the Sixers, but you know, there are
people of a certain generation that remember you from the ABA,
and the ABA did things for basketball that have now
basically become the de facto standard. It was a more
exciting league, at least for those of us who are
old enough to remember it. And I am curious about
(11:31):
how sports leagues position themselves and saying true to I
guess there are traditions of that sport, but at the
same time doing more creative things doc to drive people
into the stands or into TV viewership.
Speaker 11 (11:43):
Well, you have a lot of people on the ownership
side and the employees of the owners who at the
end of each season they sit down and they do
an evaluation. What are we going to change? You know,
because sports is in a constant state of change. Some
people like the changes, some people don't like the changes.
But there's going to be change, and it's better if
(12:04):
you have a say so. So, you know, I think
fans should have always been verbal and vocal in terms of,
you know, the social media presence. They got an opinion
about different players and sometimes players fire back. So it's
it's moving forward, and this NTL is just a step
(12:27):
in moving horse racing forward, and not just in the US,
but globally.
Speaker 3 (12:33):
That's NBA legend Julia serving Doctor j along with National
Thoroughbred League co founder Randall Lane, speaking with Scarlett Foo
and Romaine Bostik. Up next on this special edition of
the show, we tak college football and the Ancient eight
with the claimed sports journalist John Feinstein. For my colleagues
Scarlett Food, Damien Sassauer, and Vanessa Perdomo, I'm Michael Barr.
(12:56):
You're listening to the Bloomberg Business of Sports from Bloomberger
Radio the world.
Speaker 2 (13:04):
This is Bloomberg Business of Sports from Bloomberg Radio.
Speaker 3 (13:09):
This is the Bloomberg Business of Sports where we explore
the big money issues in the world of sports. Michael Barr.
It is a special edition of the show as we
tie twenty twenty four up in a boat and look
ahead to some of the big sports headlines for the
new year. Still ahead, we'll check in on the world
of private equity in sports with Velocity Capital's founding partner
(13:31):
David Abrams. But first twenty twenty four saw soccer continue
to grow in the US. Not too long ago, Bloomberg
Original's Chief correspondent Jason Kelly, Bloomberg Original Sports correspondent Vanessa
Berdomo and Damien Sassaur spoke with the US Soccer President,
Cindy Parlow Cone about soccer's growth, its future, and a
(13:52):
big investment from NWSL team owner Michelle Kang into the
national team. Let's take a listen to some of that conversation.
Speaker 7 (14:01):
Michelle is continuously breaking down barriers and setting new expectations,
and I think her gift does exactly this.
Speaker 14 (14:12):
You know, my ninety nine World Cup teammates and I
we all thought the ninety nine World Cup happened and
then it was going to be this massive explosion, but
it ended up being a moment, right. I think Michelle
and what she has done is she started a movement,
(14:33):
right and it has been sustained. You know, her donation
to us is going to be so impactful. So she's
contributing to three main areas. One is enabling us to
increase our number of youth national team camps. So we
have eight youth national teams, so we'll have more camps
(14:55):
with us, so more opportunities for young girls and women.
She's also putting money into expand improving our talent identification,
so regardless of where you live in play, you will
have the opportunity to be seen by our scouts. And
then third, and I think this is really important, is
she's putting money towards fueling the professional development of the coaches,
(15:17):
the referees, and executives. We all know to develop the
best players in the world, you have to develop everyone
around them too. For instance, right now we're looking with
this donation to double the number of female coaches and referees,
which would be significant.
Speaker 3 (15:32):
That's my colleagues Jason Kelly, Vanessa Bernomo, and Damien sas
Hour speaking with US Soccer President Cindy Parlow Cone. Now
we turn to another space in the sports world that
we saw grow a lot in twenty twenty four, private equity. Jason,
Damien and I spoke with Velocity Capital Management founding partner
(15:52):
David Abrams and Texas Permanent School Fund CEO and CIO
Bob Borden. We spoke just after it was announced that
Texas will be investing two hundred million dollars into Velocities
flagship opportunity fund let's take a listen to that conversation.
Speaker 8 (16:09):
David tell us a little bit about what's going on
with X games, some of the you know, portfolio holdings,
how the fund is structured, and you know what wise ahead.
Speaker 4 (16:16):
Well, I think Elevate is a perfect example of this
partnership and why we're so excited. There was some news
out the other day about both Velocity and Texas Permanent
School Fund and Levy putting significant capital on the balance sheet.
But I think one of the big differentiators of this
partnership is how Texas Permanent School Fund is not just
(16:42):
a typical asset allocator. And the reason they'll bring that
up is we have the ability to provide holistic solutions
to various intellectual property rights holders. And if I think
about Elevate, you know, one of the big initiatives for
us as a company is what did the disruption is
going to lead to in college athletics? And so there's
(17:05):
lots of different ways to figure out how to work
with the university. Whether it's the NIL space, whether it's
helping build the stadium, whether it's helping monetize their ticketing inventory.
Elevate can do a lot of different things but Texas
Permanent School Fund can provide capital that's private equity oriented, credit,
real estate. The name permanent is there for a reason
(17:30):
because it's permanent capital where you can hold an asset
for thirty years. There's very few examples of other investment
firms who had access to that capital, and that allows
us to solve problems for rights holders.
Speaker 15 (17:46):
Well, you know, I was mentioned earlier, what our peers do.
We're the largest educational endowment in the country and actually
knocking on sixty billion today. The lessons that I learned
over the years when you've got you know, good partners
and investment firms, and I think that you know, we're
(18:08):
where my peers have you know, left a lot of
meat on the bone. Is putting everything in boxes, you know,
hiring talented firms to manage one, you know, very narrowly
defined aspect of the fund, and you know, kind of
report back on that. And I found that, you know,
there's incredible talent at some of these firms, and they're
(18:28):
doing a lot of interesting things, not just the little
slice that you may have hired them for. And necessity
being the mother of invention. In the mid two thousands,
I was tapped to run the South Carolina Investment Commission.
It was thirty five billion dollars and I was hired
and given an attorney and an admin and said build
a cutting edge endowment style pension solution. And I realized
(18:56):
that we were going to have to really leverage partners
a lot more more than have traditionally been done, and
by providing more free form capital that can be put
to use, and not only in funds, but in co investments,
direct investments, both in debt, inequity and real assets, seating platforms,
et cetera. A much more fungible form of capital that
(19:19):
makes you a true partner with that group is a
key to success there. It's a way to access a
lot of opportunities. And using those lessons along with the
experience that I had with David, you know, I see
this space as ripe for development. Consolidation is almost you know,
(19:42):
a late stage word. You know, this is still very
nascent in some of the technologies and other services in
and around entertainment, just not only the hospitality, but you know,
the branding and naming rights and a lot of these things.
And those who who figure it out out and can
do it at reasonable scale, you know will come out ahead.
Speaker 1 (20:07):
So David, can you give us some more of an
idea of what specific opportunities look like as we head
into twenty twenty five. I think about the college space
because Velocity focuses on middle market companies. So we're not
talking NFL teams, right, that's no longer middle market. But
if you're talking about businesses or opportunities within college athletics,
(20:28):
obviously that space is growing by leaps and bounds. You
have Bill Belichick, who led the Patriots to multiple Super
Bowl victories, now joining the United Excuse me, the University
of North Carolina's football team. College athletics is becoming more
and more professionalized. It's no longer going to just be
middle market anymore.
Speaker 4 (20:45):
Well, I think the Belichick announcement is interesting, but it's
a lot more than just hiring a football coach to
build the football program.
Speaker 1 (20:55):
You and C is, what do you see then, starting
with Bill Belichick joining UNC and how what kind of
opportunities does that open your eyes up to college athletics.
Speaker 4 (21:06):
You can use the word professional sports, but they're entertainment
and media businesses. It just so happens that the talent
is also going to get a college education. At the
same time, Bill Belichick is away for North Carolina to
build a global brand which will attract athletes, which drives
the revenue generation of the intellectual property rights of University
(21:31):
of North Carolina. So when people want to come to
North Carolina now, it's I get access to one of
the most successful NFL coaches of all time his network
of contacts around the world. So if I'm coming to play,
they have a fantastic women's soccer team, I'm going to
get access to Bill Belichick. Maybe you can't build my
brand even and that is where college.
Speaker 3 (21:53):
Sports is going.
Speaker 4 (21:54):
You just saw the example of what happened at University
of Michigan, where all the resources was Tom Brady and
Dave Portney were put into attracting talent for the university.
It's the same exact reason why this happened at North
Carolina because it's a way for them to present an
opportunity to talent that other universities can't match.
Speaker 3 (22:17):
That's Damien Jason Me speaking with Velocity Capital Management founding
partner David Abrams and Texas Permanent School Fund CEO and
CIO Bob Borden. You're listening to a special edition of
The Bloomberg Business of Sports. As we go through some
of our favorite conversations in twenty twenty four and look
ahead at some of the stories that will matter in
(22:38):
the new year. And now we turn to college football
and the Ancient Eight. We spoke with John Feinstein. He
has written nearly fifty books, and his latest, The Ancient Eight.
College Football's Ivy League and the Game they played Today
was the subject of our conversation. Let's take a listen
to that conversation with Jason, Damien and Vanessa.
Speaker 8 (22:59):
To talk to us a little bit about the book,
the IVY League, talk to us a little bit about
you know what non scholarship offering schools are going to
do in a world of NIL here.
Speaker 6 (23:08):
Well, at for the moment, the IVY League has been
largely unaffected because they never wanted to be part of nil's.
They never wanted to be part of the transfer portal.
You do get an occasional transfer, you do get an
occasional player with some NIL money, but that's the exception,
not the rule. In fact, last season, when I was
researching the book, Princeton had their first transfer since Jason
(23:32):
Garrett in nineteen eighty eight. That's how rare transfers are
generally across the IVY League.
Speaker 16 (23:37):
And what was it about the ache and eight and this,
you know, this IVY League system that you wanted to
write a book about.
Speaker 15 (23:43):
You know, when I was skimming.
Speaker 16 (23:44):
Through your book, I I one of the things that
struck me was how you said the age and eight
is something that will never change. And because when you
look at the Big ten and the way that's expanded
and the way that Big twelve is retracted and all
these things, those schools and conferences are so fluid, but
this will always stay the same. So why was you know,
what was the inspiration behind this book?
Speaker 6 (24:05):
Well, that was exactly it, Vanessa, To be honest with you,
I grew up going IVY League football games in New
York City at Columbia.
Speaker 3 (24:13):
They were terrible, but.
Speaker 6 (24:14):
I enjoyed riding the subway to the tip of Manhattan
and walking three blocks to Bakerfield. So I always followed
the IVY League. And as you mentioned realignment in college football,
which seems to happen every fifteen minutes. The one thing
I know for sure is the IVY League's not realigning.
Speaker 3 (24:31):
They will not.
Speaker 6 (24:32):
The ancient eight will never be the ancient ten, or
the ancient six, or what it will always be, the
ancient eight. The same eight schools that formed the league
in nineteen fifty four are the same eight schools that
are in the league today. They have rules that are
different from the power schools. They only played ten games,
They played ten weeks in a row. There are no
bye weeks, they're not the champions are not allowed to
(24:53):
participate in postseason, which I disagree with. Every other IVY
league sport sends its champion to postseason. You know, Princeton
just two years ago was in the Sweet sixteen in basketball,
So that's one thing I do disagree with.
Speaker 3 (25:07):
But for the.
Speaker 6 (25:08):
Rest of it, it's like a throwback to the old
days when you played in the same league, you had
the same rivals, and you didn't play as many as
sixteen or seventeen games as teams in the championship game
will play this year with the twelve team playoff.
Speaker 3 (25:23):
That was Jason, Damien and Vanessa speaking with acclaimed sports
journalist John Feinstein. Up next, we look ahead to some
of the big stories that we'll be tracking in twenty
twenty five. I'm Michael Barr. You're listening to the Bloomberg
Business of Sports from Bloomberg Radio. Around the borough.
Speaker 2 (25:54):
This is Bloomberg Business of Sports from Bloomberg Radio.
Speaker 3 (25:59):
Thanks for joining us on the Bloomberg Business of Sports,
where we explore the big money issues in the world
of sports Michael Barr along with my colleagues Damian Sassauer
and Bloomberg Original Sports correspondent Vanessa Bernomo. It is a
special edition of the show where we wrap up some
of the big stories from twenty twenty four and look
ahead at some of the storylines that might matter most
(26:20):
heading into the new year. For a look ahead to
what could be in store for twenty twenty five, we
bring in friend of the show, Bloomberg News Global Business
reporter Ira Budway. So I'm going to start first of all,
I guess one of the big things that I see
is that the NBA they kind of answered pre holiday
worries with Lebron and Curry with the ratings and the splash.
Speaker 17 (26:44):
Ira, Yeah, I mean there was a lot in the
fall of handwringing about the decline in their ratings. You know,
on ESPN they were down by like a quarter year
over year, down a little bit on TNT and there
was a lot of talk, you know, is it too
many three point shots? Are the big stars getting old?
And the Christmas Day games on ESPN did great and
(27:05):
brought them mostly back to level. I think there are
still some long term issues they really do not have.
I think airs to Curry and obvious ones to Curry
and Lebron when they retire. And then you just got
the attrition of cable TV. Right, there's just fewer households
carrying ESPN. But they are dealing with that in their
new bucket of deals that starts this coming year.
Speaker 8 (27:26):
Well, all right, let's put some numbers around it, right,
Lebron versus Steph Curry peaked at eight point three two
million viewers at ten thirty pm Eastern Time, according to
the league, And that makes it, if I'm not mistaken,
the most viewed regular season NBA game in five years. So,
I mean, what are we looking for? Are we looking
for pre COVID comparisons here? Are we ever going to
(27:47):
get back to that level? Or I mean, like, I mean,
how do you kind of evaluate the performance during this
holiday season?
Speaker 9 (27:52):
It's tricky.
Speaker 17 (27:53):
That's a very good result for them, given that over
those five years, the distribution's gone down pretty dramatically, right,
So you're getting a bigger slice of a smaller pie.
So I think that's good news for the league that
it's not a crisis, it's not an emergency. But you know,
you look at the way they structured their deal starting
in the fall, they brought in Amazon, right, that's a
move into the streaming future. They did a deal with
(28:16):
NBC that means about half of the games that NBC
is going to get about one hundred games, at least
fifty of those have to go on NBC broadcast, meaning
you know, the channel you can get for free over
the air. And that's a move to deal with the
fact that there's not as many house soulds getting cable.
So they know that and they're working on it in
the distribution side. But I think they also got to
(28:37):
look at like the you know, they're trying to get
games of consequences. With Adam Silver's phrase, that's why he
did this n season tournament thing. It's been a decent success,
the second year not as good as the first, but
you know, they've got an issue where basically until Christmas,
people don't really care. They're still watching all the fall sports.
The games don't really matter when an eighty two game season,
(28:58):
and they're not going to chop games off the schedule
because that's fewer tickets and less ad sales. So they
got to figure out a way to make people tune
in in October November.
Speaker 16 (29:07):
And do you know ara this year obviously being the
first with the NFL Christmas games as well, and obviously
it didn't hurt them this year, but do you think
it could hurt them going forward where more people are
now going to get used to watching NFL games on
Christmas and they'll actually be willing to watch them on
Netflix and things like that.
Speaker 17 (29:25):
Yeah, I mean Netflix did great, the NFL did great.
It seems like there was enough to go around. You know,
people basically just had the TV on all day one
way or another, and they know where to find what
they're looking for. But I think the NFL's encroachment on
the holidays in general and on Christmas Day is not
a welcome development for the NBA, and they are going
to be, you know, wishing for days of the week
(29:48):
where the NFL can't do as much, you know, for
christ to really depends where Christmas falls, so that will
that will help them a little bit, but I think
they look at Christmas Day for the NBA's based the
kickoff for the casuals, right, this is when a lot
of fans come in and start watching. And as you know,
for them to do this well for this first year
(30:10):
with the NFL competing with them on Netflix, I think
it's a sign that they're pretty They're resilient that way,
and I think they'll do even better under the new
media deals.
Speaker 3 (30:21):
There's another topic to talk about. This one. I don't
know what to make of this Florida State basketball is
they're suing the coach over unpaid NIL cash ira. Yeah.
Speaker 17 (30:32):
I mean this is just a sign of where things
are right now with nil. It is an unregulated market
and it is a proxy for pay to play, and
so there's no limits on it. That's the good news
for players. They can basically shop themselves as free agents
every season and make a lot more money than they
used to. The bad news is there's a lot of
broken promises and this is an example of that. A
(30:54):
coach basically saying, hey, stick around, don't leave, and I'll
give each a quarter million dollars which didn't materialize. And
there's a lot of that, and this is why the
NCAA is trying to get control of NIL through these
big settlements coming down the pipe in the house and
the other class actions that are supposed to get finalized
this coming year. And the trade off there is we'll
(31:17):
start paying you directly. We're going to have the big
power five schools to have a bucket of twenty million.
Speaker 9 (31:21):
Dollars to pay out to their players.
Speaker 17 (31:22):
Directly, not NIL deals coming from collectives. But in return,
we want to get our hands around NIL. We want
to make it fair market value. We want to have
a registry no more wild West.
Speaker 3 (31:33):
And I should add coach Leonard Hamilton said he was
going to pay them through his business partners and apparently
it never.
Speaker 17 (31:42):
Materialized, right, because that's the way NIL has to work.
It's this weird three party thing. You've got the school,
the player, and somebody in between, some company, some collective,
some business partner because it's not coming directly from the schools.
And that is just a recipe for you know, all
kinds is a fraud and corruption.
Speaker 8 (32:01):
Well, let's kind of put some context around it. Six
former FSU men's basketball players are claiming coach Leonard Hamilton
cheated them out of one point five million dollars in
commitment sweeteners. Here's my question if this is really indeed
the wild Wild West, Ira. You know, what's the legal
premise that these players have to get any reclamation whatsoever?
Speaker 3 (32:17):
Right?
Speaker 17 (32:17):
I mean it's contract law, right right? Say where was
this written down? Was it a handshake?
Speaker 8 (32:21):
So now you're trying to write you're trying to sue
and say and prove that he actually said that. Right,
So they were recording right, So we're at that point.
It's it's like it's like it's like a TV show
and they're going to trying to find.
Speaker 9 (32:31):
Out so many what it's incredible.
Speaker 3 (32:33):
I mean, this is crazy word against your word.
Speaker 8 (32:36):
Yeah, I mean, and you know this is big money
we're talking about here, and the government really can't do
anything about it, Canada, IRA.
Speaker 3 (32:42):
Right.
Speaker 17 (32:43):
So the NCAA knows that they can't come in and
say this is how NIL has to work. They'll just
lose lawsuit after lawsuit after lawsuit. So they are trying
to get a hold of it through this clack Sashion settlement.
They're going to say, look, we if you guys will
all agree to this two point eight billion dollar payout
back damages and a new system where you get paid directly.
(33:03):
Then we want to be allowed to clamp down on
nil because it's just out of control. It's too much
player movement, too much corruption, too much cost, and we
just have no we have no way to control what
happens in this marketplace.
Speaker 9 (33:17):
So they are going to try.
Speaker 17 (33:19):
I'm very curious to see how in the new year,
if this gets finalized its supposed to happen in April,
this House settlement gets finalized, whether there will just be
more legal challenges, whether they're able to make it work,
whether they can use a class action suit to do
what mostly what professional leagues do through collective bargaining. So
it's going to be very interesting to see how that
(33:39):
plays out.
Speaker 16 (33:41):
Is there a world where this, you know, gets settled
also in that class action lawso like, is there a
world where that back pay then becomes this two hundred
and fifty thousand dollars each for this play for these players,
or is this just going to be completely separate these
players don't really No, that's.
Speaker 17 (33:56):
The idea is direct to do just that, to basically
say we're going to pay there's a framework in the
settlement to pay players directly. It comes out to twenty
two percent of their athletic revenue essentially, and so in
the coming season, if it happens, it'll be about twenty
and a half million that they're allowed to pay up
to that amount, split it across. They're athletes in various sports,
(34:20):
and most of that's going to go to men's football
and basketball players.
Speaker 9 (34:23):
So that is the deal.
Speaker 17 (34:25):
They're saying, Hey, sign on for this, and then we
will start saying that your nil deals have to be
real nil deals, meaning you're paid a fair market value
for some kind of endorsement rather than you're paid to
play here, and we call it an endorsement too.
Speaker 8 (34:41):
Ira, What if one of these players does have a
smoking gun on coach Hamilton? What if they have a
recording where he did indeed promise to pay this?
Speaker 9 (34:48):
What next?
Speaker 8 (34:48):
I mean, will he have to go out of pocket?
Will the school then have to pay? I mean, like again,
it's one thing to show that he was liable and
that he was at fault. It's another thing entirely to
figure out who's going to compensate these players for the damages?
Speaker 9 (35:01):
Right right?
Speaker 17 (35:01):
And I think you know in most cases like this,
you're not going to get that money because it never
really existed.
Speaker 9 (35:08):
Right.
Speaker 17 (35:08):
You might that coach might be found liable, but he
probably doesn't have one point two five million sitting.
Speaker 8 (35:14):
Around correct and personally liable because right time.
Speaker 17 (35:19):
So they are going to they'll get something probably in
that scenario, right, but it won't be the amount they
were promised, would be my guest, And so that's why
you want to create something different, right, And I think
that's we'll see if if a class action settlement can
do that. I'm skeptical myself. I think at some point
they're going to have to get to employment status and
that's going to be a battle n LRB, federal cases,
(35:42):
maybe federal legislation. I don't know, but I don't see
how you square this circle without some kind of collective bargaining.
Speaker 16 (35:49):
When I was a college athlete, we had to sign
letters of intent, right, and basically it said what our
scholarship was, we were going to that school, blah blah blah.
This is before everything changed. Why, like, can there be
a world in which they do sign like these contracts
again and it does say what their nil money would
be from that exact school or from the collectives or
(36:13):
is that all just going to go away if this lawsuit.
Speaker 17 (36:16):
They will still do nil, but they will also have
contracts with the schools that include money.
Speaker 9 (36:21):
That won't be nil money. It'll be money for playing.
Speaker 16 (36:25):
So we'll be an actual contract.
Speaker 2 (36:27):
That they signed.
Speaker 17 (36:27):
They will have a contract with the school that says
we're paying you X to play.
Speaker 9 (36:32):
You know, here's here's a million dollars.
Speaker 3 (36:35):
Speaking of money, any money, money, money, money, money money.
I'm sure all the other Major League Baseball owners are
looking at Steve Cohen saying, thanks man, thanks a lot.
Now you've saddled up one. So too. The deal, in
case you haven't heard, seven hundred and sixty five million
dollars over fifteen years. This is huge money, which means
(36:58):
at some point are the owners on the low end
going to have to like pay up.
Speaker 17 (37:05):
Yeah, I mean this is a problem for baseball. It's
a great deal for soda, one of the best deals
any athlete ever got. Everything in it. You know, he
gets an opt out after five years, no trade clause,
huge signing bonus, he gets as sweet at City Field,
he gets his own suite when they travel, he's promised
his number. I mean, they said yes to everything, and
Coan was willing to do this because he's super rich
and he wants the Mets to win. And it's a
(37:26):
problem for baseball because even the Yankees in the end
couldn't really compete with that. And so they've already tried
to restrict Cone through these luxury taxes. They added a
special tier known as the Coen Tax, that if you
go over this threshold by a certain amount, right you pay.
It's basically the only team doing it is the Mets.
They add a surcharge to the existing tax. I mean,
(37:46):
you can be paying as much as like one hundred
and ten percent on a tax on the amount that
he goes.
Speaker 9 (37:52):
Over the salary threshold.
Speaker 17 (37:54):
That has not been enough to stop him, and so
I think what you're going to see is resurrection of
the idea of a hard cap, a salary cap in
Major League Baseball, which of course would be a problem
for the players' union. So baseball's headed for, I think,
for some real friction, and it's not going to be
so much a war between players and owners as a
war between owners or.
Speaker 3 (38:13):
Thanks to Ira Bodway, he covers global business for Bloomberg News,
and most importantly, thank you for joining us on a
special edition of the Bloomberg Business of Sports. Check out
our podcasts and subscribe on your favorite podcast platform so
you never miss an episode. For my colleagues, all of them,
Scarlett Boot, Damian Sas Salary, Jason Kelly, and Vanessa Pernomo,
(38:35):
I'm Michael Barr. Tune in again next week for the
latest on the stories moving big money in the world
of sports. You're listening to Bloomberg Business of Sports from
Bloomberg Radio around the world.
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