January 16, 2025 • 49 mins
In this episode of The Deal, Alex Rodriguez and Jason Kelly sit with former professional lacrosse player Paul Rabil to discuss the evolving business of the sport. Rabil tells the hosts how he managed to develop a new lacrosse league, why he's investing in its digital media presence and how he plans for the league's future growth.
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Speaker 1 (00:03):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:13):
Hi, I'm Jason Kelly and I'm Alex Rodriguez on this
episode of The Deal.
Speaker 1 (00:17):
Paul Rabel. All right, Paul Rabel, Alex.
Speaker 2 (00:21):
Is I dare say an a Rod or the a
Rod of the lacrosse world.
Speaker 1 (00:26):
I mean this guy.
Speaker 2 (00:27):
You talk to anyone in the lacrosse world, they know
who he is. But here's the next step that he took.
He not only played the game, then he created his
own league when there was another league in existence. Can
you even imagine that?
Speaker 1 (00:41):
Hell? No, he is so impressive.
Speaker 3 (00:44):
But Jason, when you and I co founded this program
to Deal right this podcast a couple of years ago, and.
Speaker 1 (00:49):
You said, what is the perfect guest look like?
Speaker 3 (00:51):
Yes, Paul, and I don't think I would ever say
this about anyone else but Paul. He reminds me of
a combination of these three folks, Adam Silver, Roger Goodell,
and Tom Brady.
Speaker 1 (01:02):
He's an athlete, He's a champion. It's awesome. He's unbelievable.
Speaker 2 (01:06):
And what's interesting is he's done some really big deals
over the course of his career. One of the things
that's also really interesting about him is he knows that
even six years in, this is a nascent league. It's
got to make big moves, bold moves in order to
secure the media rights, in order to grow the audience,
in order to grow the game. They're looking ahead to
(01:27):
the twenty twenty eight Olympics when lacrosse is going to
be a part of it. So a lot of runway
for lacrosse as a game. And I mean, you can't
bet against Paul Rabel.
Speaker 1 (01:37):
You definitely can't. I would never do that either, would you.
Speaker 3 (01:40):
So here's a guy that has big belief, big ambitions,
and the tireless work ethic and surrounding himself with great people.
Speaker 1 (01:47):
I think he's gonna win big here on this episode
of the Deal.
Speaker 2 (01:51):
Paul Rabel, all right, we like to start the show
by having the guests introduce themselves and what they do,
So go ahead.
Speaker 1 (02:09):
First of all, I love your show. Thank you.
Speaker 4 (02:11):
I am co founder and president of the Premier Lacrosse League,
former professional athlete. I'm a writer, I'm a producer, and
I'm an investor.
Speaker 2 (02:20):
And did you come to all of those just organically
or is this what you set out to do?
Speaker 1 (02:25):
Is this what you imagined you'd be doing? No, absolutely not.
I Actually, most of my.
Speaker 4 (02:31):
Adolescence into adulthood, I've just been hyper focused on the
task at hand and trying to be the best at that.
So for most of my life it was lacrosse so
much that I didn't even realize that the professional league
while I was playing in high school in college was
dying on a vine. I just wanted to win a
high school championship, and then in college just win a
(02:53):
college championship. I wanted to win four of them, and
I came up short. Most of the time, you come
up short on those big goals that you set for yourself,
but there's no way of getting those big goals if
you don't set them. I would consider myself project based.
As a worker, I like to think that I can
(03:13):
drive pound for pound a lot of value, intellectual curiosity
and focus at any moment on any side screen. So
if that's the movie business, I want to first understand
its history. If that's being a great writer, I know
it comes down to practice and reading other great writers business,
(03:35):
same thing. So no long goal of saying, hey, I
want to do a bunch of stuff, because most people
would say, hey, if you're gonna do a bunch of
things you're not gonna be good at anyone.
Speaker 3 (03:44):
Right, this whole concept about not whine and shallow but
narrown deep, it sounds like you do it very well.
My question is, when you were in high square, college
or even in the pros, when was that moment that
you said, uh, huh, this is what I want to
do next.
Speaker 4 (03:59):
Well, it came at an inflection point where I was
just about to bail on pro lacrosse because my rookie
wage was sixty five hundred dollars. I was drafted number
one to the Boston Cannons in two thousand and eight.
I had just played in front of fifty five thousand
fans at Chollette Stadium in a National Championship game against Syracuse,
(04:20):
and my first game into the pros was in front
of about four hundred fans at a backfield at Rutgers University.
So yeah, that was sort of That was the little
did I know business reaction like, huh, that doesn't seem
to work out. But my immediate reaction, as any twenty
two year old who's looking to advance their lives and
(04:42):
careers are now on their own without the support of
the university of parents, I had to get a job.
So I get a job as an analyst for a
real estate firm called Cassidy and pinkered. I did that
for seven months, and then I left because I realized
that I wasn't and finished with pro lacrosse. And I
knew in my heart of hearts that if I wanted
(05:05):
to be the greatest lacrosse player ever, which was just
my goal, I don't believe I am that that I
needed to go all in and not be distracted by
wages or income and that type of stuff. If you
go all in and anything, I believe figures itself out.
Speaker 2 (05:23):
So I want to pick up on something you said
because I'm seeing a little some parallels here. It's my
job to sort of do a little pattern recognition as
a journalist. And you know, I have two people who were,
you know, widely considered the best at the game that
they've ever played, certainly among the best of the game
that they ever played.
Speaker 1 (05:42):
And so Alex talks a lot.
Speaker 2 (05:43):
About, you know, these moments where you realized, oh, I
can only be a professional athlete.
Speaker 1 (05:47):
I could be a top tier professional athlete. Yeah, he
obviously had that.
Speaker 2 (05:52):
I mean, you had that moment what with your high
school coach or was it before.
Speaker 3 (05:56):
Probably fifteen sixteen, I thought I saw a real vision.
Always say back the future, you see that blurry picture.
The picture started getting more clear once I went back
to back years to play in the US Olympic team
and playing for the US Olympic team, it wasn't just Miami.
It was the greatest players across the whole US. And
I looked around as a rising junior, I was like, hey,
(06:19):
I can hold my own. And then when I went
back as the only you know, those only rising junior,
everybody else was rising seniors.
Speaker 1 (06:27):
The following year I came.
Speaker 3 (06:28):
Back, I said, holy smokes, like these guys that are
my age, they look like kids because I was so
used to playing with kids older than me. That's the
moment ago, I have a real path to the big leagues. Yeause,
when was that moment for you?
Speaker 1 (06:39):
Yeah?
Speaker 4 (06:39):
There was a midfielder at Landon, which is sort of
the one of the top perennial high schools in Maryland,
and they ranked number one in the country and lacrosse.
For you know, as long as I was playing, and
his name is Peter Lammitdy, and I would study the
way that he played, even the way that he cradled,
the way that he'd run and shoot on the run,
and when I was out practicing on my own, I
(07:02):
wanted to not only.
Speaker 1 (07:03):
Get his skill set, but beat him.
Speaker 4 (07:05):
And there we used to have this base state tournament,
which sounds similar to what Alex was referring to. If
you made the base state team, you were among the
best high school lacrosse players in Maryland. And then there
was another one in New York and the two would play.
It was called Empires in New York. So I was
on the field with Peter and then him and I
essentially going back and forth. I came home that day
(07:25):
going all right, I'm here, I've got a chance to
be the best midfielder in the state. That mindset carried
me all the way through my career. When I was
signed to go play at Johns Hopkins and I was
a freshman, I would look at Kyle Harrison, Greg Pizer,
and Matt Rakowski, the top three midfielders on the team,
and I would just practice every single day to acquire
(07:47):
what I saw them doing and ultimately beat them. You know,
I grew up playing Rex sports. We don't see much
Rex sports today, right, And I'm sure, we'll get to
that in a second.
Speaker 1 (07:57):
Yeah.
Speaker 2 (07:57):
I mean because just to be I mean, I think
it is interesting for you to hear this as a
lax dad, which.
Speaker 1 (08:02):
You know that I am.
Speaker 2 (08:02):
I mean, the infrastructure that exists today did not exist
when you were coming.
Speaker 1 (08:09):
You weren't playing travel pros and cons of both.
Speaker 4 (08:12):
It's incumbent on leaders at the premier lacrosse league to
what I would say, revitalize REX Sports. So that means privately,
out of our balance sheet, invest in it. You create
a shift in momentum by making something that you're investing
in cool, which I think is part of the challenge
you're talking about eleven, twelve, and.
Speaker 1 (08:31):
Thirteen year olds.
Speaker 4 (08:32):
Yeah, and what I learned in the business world is
most people aren't like Alex and I that want to
be the best of the best.
Speaker 1 (08:38):
That's like sort of one percent. A lot of people
just love to play sports.
Speaker 4 (08:41):
It's fun, it's competitive, you learn, you interact with your friends,
there's social status.
Speaker 1 (08:47):
There's a lot of peer pressure on young boys and
girls right now, and.
Speaker 4 (08:51):
So REX sports is the lowest barrier opportunity to learn
all these skills. So that has been impinged by you know,
privatized sports over the last ten to fifteen years.
Speaker 2 (09:07):
You know, from our history together, I'm an existing fan,
I'm a lacrosse dad, I'm a collegiate lacrosse player in
my household.
Speaker 1 (09:16):
And so we crowdsourced, like what do these guys want
to know?
Speaker 2 (09:19):
And interestingly enough, one of the questions that kept coming
back was this idea of accessibility to the game. And interestingly,
these are you know, these are college players who you know,
we're fortunate to play the game growing up, but they're
also really smart future business people and they see that
for the game to grow, you've got to grow the
(09:40):
top of the funnel too, in terms of the players
and the fans.
Speaker 1 (09:44):
So how do you do that?
Speaker 4 (09:46):
Well, Kevin Durant, Rich Climb and our investors out of
thirty five V and when they came in, they said,
let's build a property together, just solve this problem. So
we launched Street Lacrosse. And Kevin and I both grew
up in the DMV playing hoops. Because you have the
access to a court outside of every neighborhood like you
do a baseball diamond, and I believe that you're going
to get more participants and you also get more fans
because through osmosis, you see a baseball diamond, you go cool,
(10:08):
I know what that is when I just see it
on TV. How many people still in the grand scheme
of things around the world know what lacrosse is and
looks like. So Street Lacrosse said, let's take what we
have and make something out of it. So we built
a version of the game with just a stick and
a tennis ball can be played on any surface, but
we focus on basketball courts, and we want to invite
(10:30):
communities of all shapes and sizes in any look from
around the country because we're good at promoting and capturing
that media to say, oh, I don't have to have
a helmet, gloves, elbow pads, cleats and sign up for
my club team to play this game, and I want
more sticks and hands. Top of funnel is like is everything,
and lacrosse stereotypically has this image as if it's this
(10:55):
Northeast private school sport. Ironically, it is the first team
sport of North America, indigenous game and it was played
without pads and the sticks were shaped from hickory tree.
So what happened along the way is I think what
you've seen America evolve into from class to race to accessibility,
(11:16):
and we are not different than hockey or golf. In fact,
we have more black and indigenous players in our league
than both of those pro leagues. However, we have reputational challenges.
The sport that I left out is actually American football.
It's an expensive sport to play, but in the early
nineteen hundreds a couple presidents really liked it, so they
(11:38):
went the path of working with local government to subsidize
our equipment. So when we played pee wee football, we
didn't have to play for a helmet. If you have
to pay for pads to play football, you're going to
see participation or what we have today, the NFL won't
be what it is today. And so understanding the participation
game is important. And then the last thing is understanding
the entertainment game. Because none of us sit around and
(12:00):
talk with Dana White about mixed martial arts participation. They've
bought an entertaining product. They're a gladiator sport, and so
you can't draw a business model, which is I think
what our processors did wrong in MLL around number of
participants to number of attendants and viewers on screen you've
got to work both angles right, all.
Speaker 2 (12:19):
Right, So let's pivot to arguably the biggest deal that
you do, which is you decide which I can't even
describe to you, but because you're going to get the
magnitude of it wild, the idea of starting an entirely
new league, win a league exists. So it's literally a
(12:39):
Rod saying, Hey, Steinbrenner's this has been great. I'm going
to go start my own league, though, and we'll see
you down the line. Tell us about that moment when
you and your brother Mike decide to do that.
Speaker 4 (12:53):
Well, it was about ten years into my professional across careers,
so I'd been learning about the business of sport along
the way in the business media because I didn't want
to be arrant in the approach. My brother is a
serial entrepreneur, so we had the chops between the two
of us and the diversity around what we had learned,
his on the management and financial structuring side and me
on the media, marketing and athletics side. So I say
(13:16):
that because if pro lacrosse was working, I would have
built a strategy much like we see a lot of
professional athletes doing in the Big four sports of owning
a team one day. It's far more difficult and challenging
and a lot of easier ways to make money than
starting a new league, especially in the face of an
existing one.
Speaker 1 (13:35):
So we study it. We studied it, study.
Speaker 4 (13:37):
We actually first went the private equity route to get
a bunch of overhead capital to acquire the existing league.
Because sports are full of context, we knew that lacrosse
not just in its twenty years prior to pro history,
but at thousands of years of history. Starting from scratch
was going to be really difficult to capture that narrative.
But I wanted to own twenty years of pro lacrosse history,
(14:00):
even if the wages were low and there wasn't a
lot of network games. We ended up putting together an
offer for about thirty five million dollars, which was a mixture.
Speaker 1 (14:09):
Of cash and stock. And this is for Major League lacrosse.
Speaker 4 (14:13):
Every team was losing money, the league was losing money
at the top co. This was in twenty seventeen, so
it was before like the real craze that we see
here today around pro sports. And I'm not sure whether
they were trying to negotiate or if they were really
like and some of this is my stuff that I've
learned to unpack in therapy and sports psychology as a
(14:33):
as an athlete grown up, you're told that you're dumb,
dumb jock, And I think if I put on my
empathetic hat, you walk into a room with a bunch
of seasoned business executives. Right, Jim Davis bought New Balance
for fifty grand has built it into a multi billion
dollar empire. He owned four of the teams.
Speaker 1 (14:52):
What is this athlete doing walking in here? What does
he know? He hasn't own abilities? Now hard, this is
I can feel the nodding by the way hunting event.
Speaker 4 (15:00):
Yeah right, And so however that process, they didn't say shoo.
They said, okay, let's go into what the entrepreneurs listening
is a data room. So we went into diligence, and
we learned about the business, and we learned more about
what didn't work and why because there wasn't a lot
that was working. We had a few more attempts at
(15:20):
striking a deal. The Achilles heel of Major League lacrosse
myself included. Of the two hundred and fifty players or so,
ninety five percent of us were under a one year deals,
so sort of like you know, a team getting picked
up overnight out of Baltimore moved Indianapolis. There was a
moment in time where we knew, oh, we could actually
(15:41):
start a new league and sign all the players overnight,
and our investment strategy had to shift from private equitya
comes in and buys a distressed asset and fixes it
to venture. So then we rent a whole new fundraising
path to start what now is the poll And we
(16:02):
struggled because how can you value something doesn't exist? So
we at first put together a safe note, which is
essentially a simpler version of convertible note.
Speaker 1 (16:10):
We went out to market and people are like, I
get it.
Speaker 4 (16:13):
But since nineteen ninety, about two hundred pro sports leagues
have started with a one percent success rate, and that's
based on making it.
Speaker 1 (16:19):
Beyond three years. So I know. We've talked a lot
about spring football.
Speaker 4 (16:24):
It's a decent business, but it turns over because the
cost structures too heavy. They get a million people watching
a game. You can figure that out, but it's just hard.
There's been a huge moat around pro sports for decades
because of broadcast cable, and then once that gets democratized
through streaming in the Internet and social media, the attention
economy opens up to nascent stage sports like the UFC,
(16:48):
MLS and WSLWNBA. All this over the last thirty years.
So we couldn't get the term sheet signed. We decided
to go a price round, went to rain Ventures. I
want to give a shout to Colin Neville was on
our board. Now, Colin played lacrosse at Yale. That's why
he took the meeting, but he will admit he had
the same thought like, we'll see anyway. That meeting was
(17:11):
scheduled for thirty minutes whent about two and a half hours.
They were still hesitant. Incomes Drew McKnight, who now runs
Fortress Investment Group, and he played lacrosse at EVA and
he loved it.
Speaker 1 (17:23):
He saw the same thing like, hey, if this is.
Speaker 4 (17:26):
Working at the high school level, college level was once
an Olympic sport, it's the fastest growing on the participatory side,
ages nine to eighteen boys and girls.
Speaker 1 (17:36):
Why can't we figure this out the pro level.
Speaker 4 (17:38):
So he actually wrote our first term sheet personally, not
out of Fortress, knowing that hey, this might help get
as you know, an actual term shoot over the goal
line we brought it to Rain, Rain said.
Speaker 1 (17:51):
We'll do it.
Speaker 4 (17:52):
Drew came on as a personal investor. That was our
first seed round, but it was not enough to run
the first season. They were like, we got to put
some triggers in front of this and then we can
go do a Series A. And that was get a
network deal, sign the players to MoU's at the time,
because we were all still under our MLL contracts MOUs
in this case, memorandum of understanding, right, so it was like,
(18:15):
this is what we're going to do, and if.
Speaker 1 (18:17):
You're meaning the players will commit yep. Okay.
Speaker 4 (18:20):
So we had them UNDERMUS and then they said court
some sponsors.
Speaker 1 (18:24):
We were able to get those three done. That led
to our Series A.
Speaker 4 (18:27):
Income Joe Tie, who I consider the godfather of lacrosse,
co founder of Ali Baba runs the Brooklyn Nets, also
played lacrosse at Yale.
Speaker 1 (18:36):
We had conversations with him going back to twenty sixteen
on this.
Speaker 4 (18:39):
But Joe, as many like really top tier executives, they
want to stay out of the crossfire, especially if it's unnecessary.
So he knew that this was going to be a
little bit of a heated battle out of the gates.
And wanted to see as if Mike and I could
get out, and once we did, he came on, and
we've had subsequent rounds and brought on folks like Arctoscia,
(19:01):
Churning Group.
Speaker 1 (19:02):
Right and Paul.
Speaker 3 (19:15):
Before you get into like those blue chippers, going back
to the safe note, can you share or at least
what you could share, what were the terms on that
note versus when you brought in CIA and Churnin Group
and others.
Speaker 1 (19:28):
Yeah, Well, what you do is you put a.
Speaker 4 (19:32):
Cap on the convertible note and you say like, okay,
look we want to raise I'll give you ballpark numbers.
We weren't raising away from three to ten million bucks
so that we can build the structure of this company.
We don't know what the valuation is and that's why
you put a cap on. How it converts, and so
then you agree around like what the cap is, or
you disagree. That didn't work. So our price round was
(19:56):
like we raised X amount of dollars, but I can
give you ballpark around when it's multiple since about fifteen
x sixteen x since our Wow, those who came in.
Speaker 1 (20:03):
The seed round, So it was a low valuation.
Speaker 4 (20:06):
But again we hadn't brought in any revenue yet, and
you think about the nearest comparisons, probably TGL that has
been selling teams at really high prices.
Speaker 1 (20:16):
Which is the new golf concept.
Speaker 4 (20:18):
Yeah, run by Mike who's his former NBC executive ran
the Golf Channel's great dude. He has been able to
tell a really good story and also pull on case
studies of other leagues since then to say, hey, this
is what it's worth without playing a match yet, right,
which is extraordinarily difficult to do and really high risk
because in the end, like we're all playing the long game,
(20:40):
the PLL is not going to be my last business, right,
you know.
Speaker 2 (20:44):
So you're going in as an athlete, you've got to
tell a story that says not just I think there's
a lot of potential here, but like I know what
I'm doing. Like, how did you convince people that you
know this was the right path forward?
Speaker 1 (21:02):
Well?
Speaker 4 (21:02):
I looked at the history of inflection points in pro sports,
and you go all the way back to Major League Baseball,
and we asked the question too, like why are team
sports home and away while they have stadiums, what are
the revenues tied to such Baseball and nearly nineteen hundreds
was a ticket sales business a lot of games. For
that reason, it became an RSN media business, and then
it became a concessions business merchandise business. But you play
(21:24):
one hundred and sixty two games, a lot of games.
Speaker 1 (21:27):
He's aware, I'm just making sure s yeah.
Speaker 4 (21:32):
So so you get to a business that was built
around very much. So even even the day to day
worker was born in New York City and lived their
life in New York City. And there's so much community
that actually lives today right, And it's important to get
that right in pro sports. If you look at what
the turning point was the NFL for Pete Roselle in
(21:54):
the nineteen sixties, it was deciding to go on broadcast cable,
which seems like, oh, home run. Wasn't the case then
because the worry was in a ticketing business. If you
broadcast games, people won't.
Speaker 1 (22:06):
Go, they won't show up.
Speaker 4 (22:07):
They jumped the TV faster and Major League Baseball did.
I think the NBA and David Stern and Adam Silver
in the eighties and nineties better than anyone else, has
created culture and entertainment and this connectivity around the NBA
that is star led for team sports. So what we
said is like, okay, cool, this is twenty seventeen.
Speaker 1 (22:30):
We're raising money.
Speaker 4 (22:31):
I'm a testament to this as an athlete that's built
a profile because those wages didn't change, by the way,
but my income did. Because I got sponsors signed up,
because I started a YouTube channel, a podcast, I was
active on social. I knew modern media what I felt
better than anyone else. So I was like, these are
the leagues of X, Y, and Z. We're going to
be the league of digital. And that's why you're going
(22:52):
to invest. We know how to leverage the new attention economy,
we know how to storytell. Our large business unit at
the poll from day one is going to be our
production house because right now every team and league outsources
media and marketing. We're gonna take that inside. We're gonna
make us fast and more agile. And we believe we're
(23:13):
not building CrossFit or slam ball, which are new sports
really from scratch. This is a sport that already has
product market fit. Our job is to get it to
the red zone and then over the goal line.
Speaker 3 (23:24):
So just to expand on that a little bit, if
you go back a little bit, Paul, tell us a
little bit about the two or three things that you
thought that the prior league that you played in was underachieving,
and what was your thesis to the investors, besides what
you just mentioned with the media, that you can do
better and ultimately build a successful, sustainable business.
Speaker 4 (23:43):
Number one is your most important part is your network.
You have to have a media company, not only invested, which,
by the way, one of our board members is David O'Connor,
who used to be a partner at CA, was running
MSG at one point and now is co founder of
Arctos YEP.
Speaker 1 (23:56):
Brilliant Doc o'kind love Doc.
Speaker 4 (23:59):
As everyone knows, and Doc told us about a few
years ago, the most difficult thing to do in sports
is get a media rights deal. Most of those two
hundred leagues that I had mentioned from the nineties that
started all the way through, they're in revshare deals or
time buyse We were a revshare partnership with NBC Sports
when we first launched. Why would they give us a
(24:19):
media rights deal? It's not tested yet, and so the
former league really struggled with that chicken and egg theory,
which is you sort of need a network to develop
an audience and score rating, but they have all the
leverage until you score rating and then whether it's entertainment,
which I always referenced Seinfeld to Cheer where Seinfeld got
(24:41):
its first pilot, big rating on the heels of that
fifty million audience, and so entertainment you test new shows.
We don't really see pilots anymore based on lead ins.
Speaker 1 (24:53):
Sports.
Speaker 4 (24:54):
With a great network, you get a good lead in,
you get introduced to a new audience, which is really
important for a sport like lacrosse. So we knew we
needed to get that and we might have to fight
to get that and really dig in as a network
partner to drive viewership. And that's what NBC noticed, and
they decided to invest into the production.
Speaker 1 (25:16):
We did a revshare.
Speaker 4 (25:17):
It was a profitable business at the time, which three
years later led to that media rights deal with the
Gang at ESPN.
Speaker 1 (25:25):
So one of the things that fascinates me and Alex
has this too.
Speaker 2 (25:29):
You just have this ability and willingness to just walk
in to these meetings with these massive executives and just
be like, here, I am, I've got this idea, I
believe in it.
Speaker 1 (25:43):
You should too.
Speaker 2 (25:45):
Let's do that and then you're so, where does that
engine come from? Because that's different. That's different from like
being good on the field.
Speaker 4 (25:54):
I think that, you know, I had mentioned the stereotype
that I felt for most of my career and still
do at times.
Speaker 1 (26:01):
You don't have that.
Speaker 4 (26:02):
When you meet with sports executives, they love they love it,
they understand that. And sure, another thing that we had
to work on that the former league didn't have is
get real corporate partners in that are willing to spend.
And we had Gatorade and Adidas in Capital one in
our first year and now it's stretched like Ticketmaster and
cash App and Progressive and so many different categories. Now,
(26:24):
going into those meetings is hard. But when you sit
with Jeff Carney, who was one of the three Jeffs
at Gatorade, who knows what it's like to sit for
a meal with Abby Wombox, Aerena Williams and Michael Jordan.
They know that work ethic. Yeah, I don't feel pressure there.
I actually feel welcomed. I feel community. But make no mistake,
(26:45):
I think what we've learned and you go next, is that,
oh man, we can defy odds.
Speaker 1 (26:52):
If we were to look at the.
Speaker 4 (26:54):
Percentages of becoming a Major League baseball player, a professional
acrosse player, or an international player in whatever sports. Love
it's under one percent. So when you do it, you
sort of trick your mind into believing that you can
manifest in anything. And I believe in manifestation, by the way,
So that's not enough on its own.
Speaker 1 (27:12):
You've got it and do the work. And so man,
I study.
Speaker 4 (27:16):
I study you guys before even walking in here, and
I know both of you, so I think it's just
so important to come prepared. And that's another sport attribute. Yeah,
I mean does that resonate with you?
Speaker 1 (27:24):
I mean, what's your mindset when you go in Well,
I think it's two things.
Speaker 3 (27:27):
I think Paul and I are not afraid of the work,
and the numbers will tell you that over our long careers.
But the other thing is we've proven that we're able
to surround ourselves, check the ego at the door, and
surround ourselves with the best.
Speaker 1 (27:39):
Minds in the world.
Speaker 3 (27:40):
So when you go and talk to these titans, that's
exactly what they've done. Now, they have fancier degrees, they
have better returns and all that, but when you look
at our resume or you look in at a LinkedIn account.
We're looking at a trajectory, right, and when you look
at Paul's trajectory, it screams champion. Right from the time
you're in college to where you are today, it's been
(28:02):
like this. No, it hasn't been straight up, I'm sure
for both of us we've had this, but we're not
afraid of the work. We surround ourselves with the right
people and we're never going to give up until we
win the title. And I think that's what they recognize.
And the other part is we're talking about sports. We're
not talking about gas and oil or something that's really
like not as sexy. Everybody will take the meeting a
(28:22):
because your Paul b because you're doing something big and bold,
and see you and Mike have a real thing here.
Speaker 1 (28:28):
Why not? Why not?
Speaker 4 (28:30):
I'd add to it one more thing that Alex had
me think of, which is in the startup community, they'll say,
what's your unfair advantage? Our unfair advantage is that I
had a relationship with the players. I can't run a
league and play in a league against myself, And the
unfair advantage was, okay, you could have hypothetically a few
(28:52):
other folks come in and pitch starting a pro lacrossely,
but they don't have the players. It's all for nothing, right,
So in any line of work, what's your unfunded advantage
table stakes?
Speaker 1 (29:02):
You have to be a subject matter expert.
Speaker 2 (29:05):
But that relationship with the players is a critical one.
I mean, it's interesting because you've now sat on both
sides of the table of like being an athlete being
an owner. You know, you were essentially doing both at
the same time. Well, Alex said it, and it's not.
I think it's actually really really underrated in the entertainment world,
(29:25):
which is what we're in as a pro athlete, or
you know, if you're in cinema and you're an actor
or even a writer, is being humble and having a
level of self awareness and being kind to your peers.
That actually doesn't exist everywhere. But the people that I
try to surround myself with have that. They also have
(29:48):
the freedom to check me when I get over my skis.
I notice Alex has that.
Speaker 4 (29:53):
And you know, now an owner of the Timberwolves, you
probably have a really natural and authentic way about going
and talking to the players on the team. And that's
different than traditional sports owners. You know, where there is
a pretty clear and distinct wall between ownership and players,
and that's why a lot of times unions started.
Speaker 3 (30:13):
Let me add this, I think what Paul and I
can do very well is we can be the bridge
between institutional capital and the athletes because we now know
how they both think. Yeah, and that is really I
want to underscore that because, especially as an owner of
the Timbles and the Lynks, I see how valuable it
is to have empathy for the players to understand how
(30:36):
difficult it is today. It's never been harder to be
an athlete in today's world. At twenty twenty four. Thank
god social media wasn't around. I got myself in enough trouble. God,
you know, with social media it was in the heyday
when I played, it would have been that much more challenging.
So having empathy for the today's player, I think is crucial.
Speaker 4 (30:52):
And sometimes empathy is just sitting with emotions and not jurisdicting,
which is you know, as executives, is what you feel
like is now.
Speaker 3 (31:01):
One question when you think, I love what you're thinking,
But when you're describing what you did, which is beautiful,
and this what makes you kind of Paul one of
one is Adam Silver is the same way. He's just
a tremendous commissioner. Any commissioners or leaders out there domestically
ori internationally that you look and study to see how
you can apply to your league.
Speaker 4 (31:22):
Adam is a friend, is a mentor. I try to
get with him a couple times a year. He is
absolutely that. Whether it's Adam, whether it's Jimmy Pittarro, whether
it's Don Garber. The best executives I've noticed in sports
and sports media, they have velocity, you know, but it's
(31:44):
not just returning your email or your text fast. It's
doing it thoughtfully. And I think that to your point,
when you're a senior executive, your job is to keep
the wheel going. You know, talent really matters. You can't
forget what business you're in. You know, we run the PLL.
(32:05):
We have to think about and spend a lot of
time with our players. Is that revenue driving You could
like throw dotted lines to such, sure, but it's the
essence of what you do. So I think being able
to understand that is of utmost importance.
Speaker 2 (32:32):
One of the things that strikes me is that both
of you are quite evolved, and I also know have
done a lot of work on yourselves. You talk pretty
openly about being in therapy. You've talked about that a
lot as well. How has that changed you? And I'm
going to turn it on this guy too, but how
(32:52):
has that changed you as a leader?
Speaker 4 (32:56):
It's a great question. I asked Alex about this in
the past because my concern about originally about sports psychology
and therapy is that it would make me soft. And
now I think about the soft masculine and how that's
the most powerful version of ourselves where we can be
(33:17):
empathetic and then also turn up the dial on our competitiveness.
Speaker 1 (33:22):
And it's not a light switch.
Speaker 4 (33:24):
So I had to learn that because I wanted to
be the A Rod of lacrosse. I wanted to be
the MJ of Lacrosse. I wanted to be you know
what Tom Brady was, And I see these fierce competitors,
fierce and you know on the cover of the book
that runs in at direct odds with understanding or having
(33:46):
perspective around losing being okay or part of the process,
and we will heal, we will actually grow. So it
was a challenge for me to get into it and
then once and I want to give a shout out
to my sports psychologists, formerly doctor John Elliott. Once I
got into sports psychology and understood that actually know it's
a superpower and you're not going to lose that and
(34:09):
kind of that metaphorical dial versus switch, and that you're
going to become a better leader, which is what helps
teams win, it was just all in for me from there.
Speaker 1 (34:21):
So I was doing therapy like twice.
Speaker 4 (34:22):
A week every week for seven years, and it became
like practice, and like practice going back to what we
do in sport. When we love in sports, you can
feel yourself improve and learn about psychology, and that psychology
on the business side has been a big unlock for me.
What I've learned the difference therapeutically between being an athlete
(34:45):
and a business person is this, in sports, you can
win with sheer willpower and effort and strength, and it's
designated to do such.
Speaker 1 (34:56):
Yeah, like we're going to square.
Speaker 4 (34:57):
Off, one of us is going to win, in one
of is going to lose. So Mike comes into play.
In business, that's the absolute wrong idea. You don't want
to go into a partnership where you won the deal
and the other person feels really bad because guess what,
that partnership ain't going to renew, right, and you want
to be in the renewal business. And I know that
(35:19):
we've discussed that before, so I'd be curious what any
you think of it.
Speaker 1 (35:22):
No, I always say the ninety percent.
Speaker 3 (35:23):
Rule, right, if you know, in order to get a deal,
both sides, I feel have to hurt a little bit
and win a little bit.
Speaker 4 (35:29):
Right.
Speaker 3 (35:29):
It can be like all one side, or that'll be
the last deal. But let me bring you inside because
I agreed with everything you said about the stigma around
therapy or on sports.
Speaker 1 (35:40):
And we've come a long ways.
Speaker 3 (35:41):
I mean we're now twenty twenty four, but bring you
back about call it twenty years back into our club.
I was when George Steinberner was still running the team.
So George Steinberner says, I want to introduce Chad. He
is a very very good sports psychologist. His office will
be right next to mine. Come see him anytime. Okay,
two years we had zero people walking that run.
Speaker 1 (36:02):
Wow.
Speaker 3 (36:03):
So then he reintroduced him and he said, hey, I
want to introduce Chad. He did is a reintroduce. Reintroduced Chad.
He's a performance coach. Twenty three out of twenty five
of us went in there. But Chad is such a
great guy became still a very close personal friend and
an integral part of a two thousand and nine championship team.
But talk about how you label something and the way
(36:25):
to go around it goes from psychologists to performance coach. Yeah, athletes,
we bought into performance coach, and.
Speaker 4 (36:32):
That's just also underscores culture, which is set at the
top and mister Steinbrenner's focus on and his belief and
how that could help the team.
Speaker 2 (36:43):
How do you apply all these lessons that you have
learned to what feels like a critical moment? Maybe there
are a lot of critical moments, but this one feels
like a critical moment in the business of lacrosse. Like
you're looking ahead to twenty eight in the Olympic. You've merged,
as you said, the PLL and the MLL, you've absorbed
(37:04):
the league that you essentially usurped.
Speaker 1 (37:07):
What needs to happen now?
Speaker 2 (37:10):
Things are trending the right direction, But what are those
key decisions you have to make? Are the key things
that need to happen next?
Speaker 1 (37:16):
Yeah, well, a few highlights.
Speaker 4 (37:17):
So when we launched our league, we were wholly owned,
still our single entity. We changed to a touring model,
which is part of what got to send the door
with these investors unique. And so we looked at the
UFCF one tennis golf and said, okay, if you can
bring all of your teams and descend upon a major
market city and a professional venue one time a season,
(37:40):
then you're going to flip the supply and demand curve
because lacrosse fans aren't as big as basketball, football, or
soccer fans in America. So we have a different model.
I'll come back to that. If you looked at what
we did from a media standpoint, we were able to
grow year of a year double digits. Since we've launched
and own and operated social and digital and now with
our media deal with ESPN, we hare to raise great capital,
(38:02):
support our players and new business initiatives like we just
talked about for us as we look into now getting
lacrosse back into the Olympics in twenty twenty eight. If
those are the goalposts, how does this league transform into
a top six team sports league in North America And
what that transformation may look like. Is no longer tour
(38:27):
And if you think about what we had talked about
we worked with Major League Baseball and still does with
team sports leagues. It's community and so we are working
pretty actively on dual scenarios, continuing to build out the
Holy owned model that's tour based with our teams in
home markets and going to those home markets, expanding our schedule,
(38:47):
which is in our business called tonnage, which means you
get more hours on television, which helps your media right
steal to then path two, which is selling our teams.
We have eight of them, and if you have great
owners in markets like Minnesota, like down in Utah, like
we have in New England, the crafts are investors and
(39:08):
you find the right ownership group with the package of
owning a venue with other sports properties that they can
cross promote against effectively their lead INDs. As I had
talked about the value of networks. That's a real path
and it doesn't stop at eight. If we choose that
shift maybe to a trade association model or with Don
Garbage in MLS which you maintain a single entity. And
(39:31):
he had Soccer United marketing and owners came in. They
owned the right to their team and up and their
pro out of position of forty one percent of some
which owned US and Mexican soccer rights. Our version of
call it some marketing is women's lacrosse ownership. We own
the largest media company called TLN Youth Lacrosse Investing. We
(39:52):
have these other properties that are really valuable and big
in addition to just owning a team. So that's how
that model could flex. And then you go from eight
to ten to twelve to fourteen to sixteen, and you're
really leaning into community in real estate, where if I
think about what makes sports high multiple businesses, enterprise businesses,
it's attention right through your partnerships and everything else I
(40:15):
talked about. It's revenue, so it's your corporate relationships, it's tickets,
it's merchandise, it's youth community and then real estate.
Speaker 3 (40:24):
So Paul, when you think about that model, and you're
going kind of two different paths at the same time,
which I think is super smart to give you options
as an entrepreneur in five years, what do you think
is the north star and if you can have a
year way, what is the perfect comp that in the
league is doing that where they're hunting right now?
Speaker 4 (40:44):
So for touring, our players will be full time and
living in markets, practicing every single day averaging six figures
in wages. We will be playing instead of fourteen weekends
of the year upwards of twenty four. If it's individually owned,
(41:05):
then we'll have our players in those markets. Their salaries
are passed through to team owners. They have their venues
that they're part of. The tonnage moves from fourteen to
twenty four weekends, which is looking like probably forty eight
upwards of eighty games, and that's a really good business
for us. From a breath of properties. We're entering a
(41:29):
new rights negotiation. Our four year deal with ESPN goes
through twenty twenty five. I think the media environment is
really exciting. People look at what would often be considered
the best business model over the last sixty years in America,
the cable bundle, as an indictment on media companies. They're
(41:50):
just losing that frothy business model which used to have
one hundred and ten million. But they're in the business
of content ownership, content licensing, and distribute.
Speaker 3 (42:00):
I have one on that. So, Paul, when you think
about it, I just want to get it. I'm thinking
of you like if I'm an investor, right, so I'm
literally pitching you like you're looking for my capital even
though you're not in five to seven years. Is it
fair to say that you're either something like the NBA model, Yeah,
or something like the UFC model.
Speaker 1 (42:20):
Yes? Is that fair? Yeah? And I think both both
paths are really valuable. I agree.
Speaker 4 (42:26):
You know, the UFC sold to Endeavor as they staged
up for about four billion, and then Bob and will
Iger just bought Angel City at a two hundred and fifty
million dollar post. So I think it would probably be
NWSL or UFC. And I believe our enterprise value as
a league will be in the multi billions over the
(42:47):
next five years.
Speaker 1 (42:48):
Where is it today? Approximately under one billion. I can't
give you more than that. That's fair number.
Speaker 4 (42:58):
But look sports sports leagues and teams on average trade
for eight to ten times revenue, right, And the reason
why is all that we had just discussed. Warren Buffett
calls them monopolies because of scarcity. That's that and what
the technologists would say. Our LTV is thirty plus years.
You know, you get someone into a game, you get
(43:19):
them to be a Yankees fan, it lasts a lifetime.
That's way different than even the streaming business. LTV For
those who are lifetime value.
Speaker 1 (43:27):
There you go.
Speaker 4 (43:27):
So you figure out how much getting Alex to be
a fan of the PLL is worth to us from
a revenue standpoint, and then you do what's called a
customer acquisition cost analysis, so you build your CAC. How
much then would it cost me from a marketing and
investing into getting Alex? And is that a profitable difference? Right?
Speaker 1 (43:48):
Right?
Speaker 4 (43:49):
So if we're running a software business, which kind of
talking about would be intimidating to walk into a room
because it's not our cup of tea like sports was,
then I would be pitching our next round of financing
around how how low our CAC is and how big
our LTV is, and then you just pour it on
customer acquisition. We're in that stage right now where we
have a good idea around where we need to spend
(44:10):
on awareness and casual sports fans. There's two hundred and
sixty million in the US. When we launched the PLL,
we had fifteen million lacross fans in the US. Now
we have forty six million, scorting to an MRI Simmons report.
That's in just five years of operating. So we'll do this,
this this all the way through LA twenty eight. Which
one more stat When I started playing, there were eighteen countries.
(44:32):
Now there are ninety two.
Speaker 1 (44:33):
Wow, all right, we're going to do our rapid fire now.
A lot of pressure, a lot of pressure. Keep it tight. Okay,
all right? What's one word to describe your deal making style? Compassionate?
Speaker 3 (44:53):
What's more important to you? Instant gut or data gut?
Speaker 1 (44:57):
Who's your dream deal making partner? Mark Cuban? Good one?
What's the best deal you've ever made? The next one.
What's the best piece of advice you've received on deal
making your business?
Speaker 4 (45:10):
I think actually from Alex and making sure that everyone
feels a little pain and they also see the big
picture of why they're letting go of something for something
much bigger.
Speaker 3 (45:20):
What's the worst piece of advice? And don't say Jason,
please win the deal, Win the deal, Win the deal.
Speaker 2 (45:28):
What's your hype song before you go into a big
meeting or negotiation?
Speaker 4 (45:32):
I fall back to nineties rock honestly, Like I listened
to Rage against the Machine before workouts. Still, but before
a meeting, like I didn't listen to Rage walking into this?
Speaker 1 (45:42):
Okay? I try, yeah, I try.
Speaker 4 (45:46):
You know what I'll say that try to listen to
something that has to do with the meeting in advance. Huh,
I countlessly, whether it's interviews or pitches. I've picked up
something in the last minute walking into the door that
was seminal to closing it interesting.
Speaker 3 (46:07):
Take lacrosse out. There's only one sport you can watch
for the rest of your life.
Speaker 1 (46:11):
Which one is it? I'd call it football, but the
English Premier League.
Speaker 2 (46:16):
Okay, what team do you want to see win a
championship more than any The Boston Cannons my first team,
first team and revived now for the New York Blo.
Speaker 3 (46:27):
A fun fact about yourself that your colleagues will be
surprised to hear about.
Speaker 1 (46:33):
I'm a failed musician. Ooh, that's a good one.
Speaker 4 (46:36):
I've always wanted to play. I've tried to play the piano. Well,
you used to get lessons when I was younger. I've
tried to pick up the guitar as an adult, watch
YouTube videos. Just haven't been able to get the and
even drums, like as an athlete. I'm embarrassed to say,
because you think we're really well coordinated, I just can't
figure out the multi movements of music. So you guys
can bet that it won't be musician in there.
Speaker 1 (46:58):
At some point. Paul Rabel failed musicians next time on
the Deal. This has been really fun. Thank you, thank
you good. I started sweating on the rapid Fire.
Speaker 2 (47:12):
Yeah yeah, listen, pressure and its psychology.
Speaker 4 (47:15):
Man, I learned that too, by the way, is that
you know your body. You feel nerves in big moments.
And I remember John Elliott tell me it's a good thing.
He's like, if you're not feeling it, he was like, whoa.
Speaker 1 (47:28):
I thought.
Speaker 4 (47:29):
He was like, no, no, don't say nervousness. That means
you're not prepared. Nerves are bodies as athletes were walking
on the field.
Speaker 1 (47:35):
He heats up.
Speaker 4 (47:37):
That's our muscle fibers and twitching beginnings so that when
a defender is coming at me to take my head off,
I can react and dodge by him.
Speaker 1 (47:45):
Yeah.
Speaker 4 (47:45):
And that's just the feeling that you're feeling, right, And
that was a change of framing, which if I didn't
give that answer on one of those rapid Fire questions,
I'm sure it's like frame differently and always optimistically.
Speaker 1 (48:01):
M beautiful here the man. Thank you so much, Thanks
you guys.
Speaker 5 (48:11):
The Deal is a production from Bloomberg Podcasts and Bloomberg Originals.
The Deal is hosted by Alex Rodriguez and Jason Kelly.
Our producers are Anamazarakus, Stacy Wong, Lizzie Phillip, and Victory Veyees.
Original music and engineering by Blake Maples. Our managing editor
is David E. Ravella. Our executive producers are Jason Kelly,
(48:33):
Brendan Francis Newnham, Jordan Opplinger, Trey Shallowhorn, Kyle Kramer, Andrew Barden,
Kelly Laferrier, and Ashley Hoenig. Sage Bauman is our head
of podcasts, Additional support from Rachel Scaramazzino and Elena Los Angeles.
Joshua Devaux is our director of photography. Rubob Shakir is
(48:55):
our creative director. Art direction is from Jacqueline Kessler. Casting
by Julia Manns. Our associate producer is Natasha Abbilard. Camera
operation by Ryan Cavatero, Jesse Ridner and Suma Hussein. Our
gaffer is Alex Brown, and our grip is Max Garstak.
Our production assistant is Gabriella Demataes. Katia Vanoy is our
(49:18):
video editor. Listen to the Deal on Apple Podcasts, Spotify,
or wherever you get your podcasts. You can also tune
into the Video Companion on Bloomberg Originals and on Bloomberg TV.
Thanks for listening.
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:13):
Hi, I'm Jason Kelly and I'm Alex Rodriguez on this
episode of The Deal.
Speaker 1 (00:17):
Paul Rabel. All right, Paul Rabel, Alex.
Speaker 2 (00:21):
Is I dare say an a Rod or the a
Rod of the lacrosse world.
Speaker 1 (00:26):
I mean this guy.
Speaker 2 (00:27):
You talk to anyone in the lacrosse world, they know
who he is. But here's the next step that he took.
He not only played the game, then he created his
own league when there was another league in existence. Can
you even imagine that?
Speaker 1 (00:41):
Hell? No, he is so impressive.
Speaker 3 (00:44):
But Jason, when you and I co founded this program
to Deal right this podcast a couple of years ago, and.
Speaker 1 (00:49):
You said, what is the perfect guest look like?
Speaker 3 (00:51):
Yes, Paul, and I don't think I would ever say
this about anyone else but Paul. He reminds me of
a combination of these three folks, Adam Silver, Roger Goodell,
and Tom Brady.
Speaker 1 (01:02):
He's an athlete, He's a champion. It's awesome. He's unbelievable.
Speaker 2 (01:06):
And what's interesting is he's done some really big deals
over the course of his career. One of the things
that's also really interesting about him is he knows that
even six years in, this is a nascent league. It's
got to make big moves, bold moves in order to
secure the media rights, in order to grow the audience,
in order to grow the game. They're looking ahead to
(01:27):
the twenty twenty eight Olympics when lacrosse is going to
be a part of it. So a lot of runway
for lacrosse as a game. And I mean, you can't
bet against Paul Rabel.
Speaker 1 (01:37):
You definitely can't. I would never do that either, would you.
Speaker 3 (01:40):
So here's a guy that has big belief, big ambitions,
and the tireless work ethic and surrounding himself with great people.
Speaker 1 (01:47):
I think he's gonna win big here on this episode
of the Deal.
Speaker 2 (01:51):
Paul Rabel, all right, we like to start the show
by having the guests introduce themselves and what they do,
So go ahead.
Speaker 1 (02:09):
First of all, I love your show. Thank you.
Speaker 4 (02:11):
I am co founder and president of the Premier Lacrosse League,
former professional athlete. I'm a writer, I'm a producer, and
I'm an investor.
Speaker 2 (02:20):
And did you come to all of those just organically
or is this what you set out to do?
Speaker 1 (02:25):
Is this what you imagined you'd be doing? No, absolutely not.
I Actually, most of my.
Speaker 4 (02:31):
Adolescence into adulthood, I've just been hyper focused on the
task at hand and trying to be the best at that.
So for most of my life it was lacrosse so
much that I didn't even realize that the professional league
while I was playing in high school in college was
dying on a vine. I just wanted to win a
high school championship, and then in college just win a
(02:53):
college championship. I wanted to win four of them, and
I came up short. Most of the time, you come
up short on those big goals that you set for yourself,
but there's no way of getting those big goals if
you don't set them. I would consider myself project based.
As a worker, I like to think that I can
(03:13):
drive pound for pound a lot of value, intellectual curiosity
and focus at any moment on any side screen. So
if that's the movie business, I want to first understand
its history. If that's being a great writer, I know
it comes down to practice and reading other great writers business,
(03:35):
same thing. So no long goal of saying, hey, I
want to do a bunch of stuff, because most people
would say, hey, if you're gonna do a bunch of
things you're not gonna be good at anyone.
Speaker 3 (03:44):
Right, this whole concept about not whine and shallow but
narrown deep, it sounds like you do it very well.
My question is, when you were in high square, college
or even in the pros, when was that moment that
you said, uh, huh, this is what I want to
do next.
Speaker 4 (03:59):
Well, it came at an inflection point where I was
just about to bail on pro lacrosse because my rookie
wage was sixty five hundred dollars. I was drafted number
one to the Boston Cannons in two thousand and eight.
I had just played in front of fifty five thousand
fans at Chollette Stadium in a National Championship game against Syracuse,
(04:20):
and my first game into the pros was in front
of about four hundred fans at a backfield at Rutgers University.
So yeah, that was sort of That was the little
did I know business reaction like, huh, that doesn't seem
to work out. But my immediate reaction, as any twenty
two year old who's looking to advance their lives and
(04:42):
careers are now on their own without the support of
the university of parents, I had to get a job.
So I get a job as an analyst for a
real estate firm called Cassidy and pinkered. I did that
for seven months, and then I left because I realized
that I wasn't and finished with pro lacrosse. And I
knew in my heart of hearts that if I wanted
(05:05):
to be the greatest lacrosse player ever, which was just
my goal, I don't believe I am that that I
needed to go all in and not be distracted by
wages or income and that type of stuff. If you
go all in and anything, I believe figures itself out.
Speaker 2 (05:23):
So I want to pick up on something you said
because I'm seeing a little some parallels here. It's my
job to sort of do a little pattern recognition as
a journalist. And you know, I have two people who were,
you know, widely considered the best at the game that
they've ever played, certainly among the best of the game
that they ever played.
Speaker 1 (05:42):
And so Alex talks a lot.
Speaker 2 (05:43):
About, you know, these moments where you realized, oh, I
can only be a professional athlete.
Speaker 1 (05:47):
I could be a top tier professional athlete. Yeah, he
obviously had that.
Speaker 2 (05:52):
I mean, you had that moment what with your high
school coach or was it before.
Speaker 3 (05:56):
Probably fifteen sixteen, I thought I saw a real vision.
Always say back the future, you see that blurry picture.
The picture started getting more clear once I went back
to back years to play in the US Olympic team
and playing for the US Olympic team, it wasn't just Miami.
It was the greatest players across the whole US. And
I looked around as a rising junior, I was like, hey,
(06:19):
I can hold my own. And then when I went
back as the only you know, those only rising junior,
everybody else was rising seniors.
Speaker 1 (06:27):
The following year I came.
Speaker 3 (06:28):
Back, I said, holy smokes, like these guys that are
my age, they look like kids because I was so
used to playing with kids older than me. That's the
moment ago, I have a real path to the big leagues. Yeause,
when was that moment for you?
Speaker 1 (06:39):
Yeah?
Speaker 4 (06:39):
There was a midfielder at Landon, which is sort of
the one of the top perennial high schools in Maryland,
and they ranked number one in the country and lacrosse.
For you know, as long as I was playing, and
his name is Peter Lammitdy, and I would study the
way that he played, even the way that he cradled,
the way that he'd run and shoot on the run,
and when I was out practicing on my own, I
(07:02):
wanted to not only.
Speaker 1 (07:03):
Get his skill set, but beat him.
Speaker 4 (07:05):
And there we used to have this base state tournament,
which sounds similar to what Alex was referring to. If
you made the base state team, you were among the
best high school lacrosse players in Maryland. And then there
was another one in New York and the two would play.
It was called Empires in New York. So I was
on the field with Peter and then him and I
essentially going back and forth. I came home that day
(07:25):
going all right, I'm here, I've got a chance to
be the best midfielder in the state. That mindset carried
me all the way through my career. When I was
signed to go play at Johns Hopkins and I was
a freshman, I would look at Kyle Harrison, Greg Pizer,
and Matt Rakowski, the top three midfielders on the team,
and I would just practice every single day to acquire
(07:47):
what I saw them doing and ultimately beat them. You know,
I grew up playing Rex sports. We don't see much
Rex sports today, right, And I'm sure, we'll get to
that in a second.
Speaker 1 (07:57):
Yeah.
Speaker 2 (07:57):
I mean because just to be I mean, I think
it is interesting for you to hear this as a
lax dad, which.
Speaker 1 (08:02):
You know that I am.
Speaker 2 (08:02):
I mean, the infrastructure that exists today did not exist
when you were coming.
Speaker 1 (08:09):
You weren't playing travel pros and cons of both.
Speaker 4 (08:12):
It's incumbent on leaders at the premier lacrosse league to
what I would say, revitalize REX Sports. So that means privately,
out of our balance sheet, invest in it. You create
a shift in momentum by making something that you're investing
in cool, which I think is part of the challenge
you're talking about eleven, twelve, and.
Speaker 1 (08:31):
Thirteen year olds.
Speaker 4 (08:32):
Yeah, and what I learned in the business world is
most people aren't like Alex and I that want to
be the best of the best.
Speaker 1 (08:38):
That's like sort of one percent. A lot of people
just love to play sports.
Speaker 4 (08:41):
It's fun, it's competitive, you learn, you interact with your friends,
there's social status.
Speaker 1 (08:47):
There's a lot of peer pressure on young boys and
girls right now, and.
Speaker 4 (08:51):
So REX sports is the lowest barrier opportunity to learn
all these skills. So that has been impinged by you know,
privatized sports over the last ten to fifteen years.
Speaker 2 (09:07):
You know, from our history together, I'm an existing fan,
I'm a lacrosse dad, I'm a collegiate lacrosse player in
my household.
Speaker 1 (09:16):
And so we crowdsourced, like what do these guys want
to know?
Speaker 2 (09:19):
And interestingly enough, one of the questions that kept coming
back was this idea of accessibility to the game. And interestingly,
these are you know, these are college players who you know,
we're fortunate to play the game growing up, but they're
also really smart future business people and they see that
for the game to grow, you've got to grow the
(09:40):
top of the funnel too, in terms of the players
and the fans.
Speaker 1 (09:44):
So how do you do that?
Speaker 4 (09:46):
Well, Kevin Durant, Rich Climb and our investors out of
thirty five V and when they came in, they said,
let's build a property together, just solve this problem. So
we launched Street Lacrosse. And Kevin and I both grew
up in the DMV playing hoops. Because you have the
access to a court outside of every neighborhood like you
do a baseball diamond, and I believe that you're going
to get more participants and you also get more fans
because through osmosis, you see a baseball diamond, you go cool,
(10:08):
I know what that is when I just see it
on TV. How many people still in the grand scheme
of things around the world know what lacrosse is and
looks like. So Street Lacrosse said, let's take what we
have and make something out of it. So we built
a version of the game with just a stick and
a tennis ball can be played on any surface, but
we focus on basketball courts, and we want to invite
(10:30):
communities of all shapes and sizes in any look from
around the country because we're good at promoting and capturing
that media to say, oh, I don't have to have
a helmet, gloves, elbow pads, cleats and sign up for
my club team to play this game, and I want
more sticks and hands. Top of funnel is like is everything,
and lacrosse stereotypically has this image as if it's this
(10:55):
Northeast private school sport. Ironically, it is the first team
sport of North America, indigenous game and it was played
without pads and the sticks were shaped from hickory tree.
So what happened along the way is I think what
you've seen America evolve into from class to race to accessibility,
(11:16):
and we are not different than hockey or golf. In fact,
we have more black and indigenous players in our league
than both of those pro leagues. However, we have reputational challenges.
The sport that I left out is actually American football.
It's an expensive sport to play, but in the early
nineteen hundreds a couple presidents really liked it, so they
(11:38):
went the path of working with local government to subsidize
our equipment. So when we played pee wee football, we
didn't have to play for a helmet. If you have
to pay for pads to play football, you're going to
see participation or what we have today, the NFL won't
be what it is today. And so understanding the participation
game is important. And then the last thing is understanding
the entertainment game. Because none of us sit around and
(12:00):
talk with Dana White about mixed martial arts participation. They've
bought an entertaining product. They're a gladiator sport, and so
you can't draw a business model, which is I think
what our processors did wrong in MLL around number of
participants to number of attendants and viewers on screen you've
got to work both angles right, all.
Speaker 2 (12:19):
Right, So let's pivot to arguably the biggest deal that
you do, which is you decide which I can't even
describe to you, but because you're going to get the
magnitude of it wild, the idea of starting an entirely
new league, win a league exists. So it's literally a
(12:39):
Rod saying, Hey, Steinbrenner's this has been great. I'm going
to go start my own league, though, and we'll see
you down the line. Tell us about that moment when
you and your brother Mike decide to do that.
Speaker 4 (12:53):
Well, it was about ten years into my professional across careers,
so I'd been learning about the business of sport along
the way in the business media because I didn't want
to be arrant in the approach. My brother is a
serial entrepreneur, so we had the chops between the two
of us and the diversity around what we had learned,
his on the management and financial structuring side and me
on the media, marketing and athletics side. So I say
(13:16):
that because if pro lacrosse was working, I would have
built a strategy much like we see a lot of
professional athletes doing in the Big four sports of owning
a team one day. It's far more difficult and challenging
and a lot of easier ways to make money than
starting a new league, especially in the face of an
existing one.
Speaker 1 (13:35):
So we study it. We studied it, study.
Speaker 4 (13:37):
We actually first went the private equity route to get
a bunch of overhead capital to acquire the existing league.
Because sports are full of context, we knew that lacrosse
not just in its twenty years prior to pro history,
but at thousands of years of history. Starting from scratch
was going to be really difficult to capture that narrative.
But I wanted to own twenty years of pro lacrosse history,
(14:00):
even if the wages were low and there wasn't a
lot of network games. We ended up putting together an
offer for about thirty five million dollars, which was a mixture.
Speaker 1 (14:09):
Of cash and stock. And this is for Major League lacrosse.
Speaker 4 (14:13):
Every team was losing money, the league was losing money
at the top co. This was in twenty seventeen, so
it was before like the real craze that we see
here today around pro sports. And I'm not sure whether
they were trying to negotiate or if they were really
like and some of this is my stuff that I've
learned to unpack in therapy and sports psychology as a
(14:33):
as an athlete grown up, you're told that you're dumb,
dumb jock, And I think if I put on my
empathetic hat, you walk into a room with a bunch
of seasoned business executives. Right, Jim Davis bought New Balance
for fifty grand has built it into a multi billion
dollar empire. He owned four of the teams.
Speaker 1 (14:52):
What is this athlete doing walking in here? What does
he know? He hasn't own abilities? Now hard, this is
I can feel the nodding by the way hunting event.
Speaker 4 (15:00):
Yeah right, And so however that process, they didn't say shoo.
They said, okay, let's go into what the entrepreneurs listening
is a data room. So we went into diligence, and
we learned about the business, and we learned more about
what didn't work and why because there wasn't a lot
that was working. We had a few more attempts at
(15:20):
striking a deal. The Achilles heel of Major League lacrosse
myself included. Of the two hundred and fifty players or so,
ninety five percent of us were under a one year deals,
so sort of like you know, a team getting picked
up overnight out of Baltimore moved Indianapolis. There was a
moment in time where we knew, oh, we could actually
(15:41):
start a new league and sign all the players overnight,
and our investment strategy had to shift from private equitya
comes in and buys a distressed asset and fixes it
to venture. So then we rent a whole new fundraising
path to start what now is the poll And we
(16:02):
struggled because how can you value something doesn't exist? So
we at first put together a safe note, which is
essentially a simpler version of convertible note.
Speaker 1 (16:10):
We went out to market and people are like, I
get it.
Speaker 4 (16:13):
But since nineteen ninety, about two hundred pro sports leagues
have started with a one percent success rate, and that's
based on making it.
Speaker 1 (16:19):
Beyond three years. So I know. We've talked a lot
about spring football.
Speaker 4 (16:24):
It's a decent business, but it turns over because the
cost structures too heavy. They get a million people watching
a game. You can figure that out, but it's just hard.
There's been a huge moat around pro sports for decades
because of broadcast cable, and then once that gets democratized
through streaming in the Internet and social media, the attention
economy opens up to nascent stage sports like the UFC,
(16:48):
MLS and WSLWNBA. All this over the last thirty years.
So we couldn't get the term sheet signed. We decided
to go a price round, went to rain Ventures. I
want to give a shout to Colin Neville was on
our board. Now, Colin played lacrosse at Yale. That's why
he took the meeting, but he will admit he had
the same thought like, we'll see anyway. That meeting was
(17:11):
scheduled for thirty minutes whent about two and a half hours.
They were still hesitant. Incomes Drew McKnight, who now runs
Fortress Investment Group, and he played lacrosse at EVA and
he loved it.
Speaker 1 (17:23):
He saw the same thing like, hey, if this is.
Speaker 4 (17:26):
Working at the high school level, college level was once
an Olympic sport, it's the fastest growing on the participatory side,
ages nine to eighteen boys and girls.
Speaker 1 (17:36):
Why can't we figure this out the pro level.
Speaker 4 (17:38):
So he actually wrote our first term sheet personally, not
out of Fortress, knowing that hey, this might help get
as you know, an actual term shoot over the goal
line we brought it to Rain, Rain said.
Speaker 1 (17:51):
We'll do it.
Speaker 4 (17:52):
Drew came on as a personal investor. That was our
first seed round, but it was not enough to run
the first season. They were like, we got to put
some triggers in front of this and then we can
go do a Series A. And that was get a
network deal, sign the players to MoU's at the time,
because we were all still under our MLL contracts MOUs
in this case, memorandum of understanding, right, so it was like,
(18:15):
this is what we're going to do, and if.
Speaker 1 (18:17):
You're meaning the players will commit yep. Okay.
Speaker 4 (18:20):
So we had them UNDERMUS and then they said court
some sponsors.
Speaker 1 (18:24):
We were able to get those three done. That led
to our Series A.
Speaker 4 (18:27):
Income Joe Tie, who I consider the godfather of lacrosse,
co founder of Ali Baba runs the Brooklyn Nets, also
played lacrosse at Yale.
Speaker 1 (18:36):
We had conversations with him going back to twenty sixteen
on this.
Speaker 4 (18:39):
But Joe, as many like really top tier executives, they
want to stay out of the crossfire, especially if it's unnecessary.
So he knew that this was going to be a
little bit of a heated battle out of the gates.
And wanted to see as if Mike and I could
get out, and once we did, he came on, and
we've had subsequent rounds and brought on folks like Arctoscia,
(19:01):
Churning Group.
Speaker 1 (19:02):
Right and Paul.
Speaker 3 (19:15):
Before you get into like those blue chippers, going back
to the safe note, can you share or at least
what you could share, what were the terms on that
note versus when you brought in CIA and Churnin Group
and others.
Speaker 1 (19:28):
Yeah, Well, what you do is you put a.
Speaker 4 (19:32):
Cap on the convertible note and you say like, okay,
look we want to raise I'll give you ballpark numbers.
We weren't raising away from three to ten million bucks
so that we can build the structure of this company.
We don't know what the valuation is and that's why
you put a cap on. How it converts, and so
then you agree around like what the cap is, or
you disagree. That didn't work. So our price round was
(19:56):
like we raised X amount of dollars, but I can
give you ballpark around when it's multiple since about fifteen
x sixteen x since our Wow, those who came in.
Speaker 1 (20:03):
The seed round, So it was a low valuation.
Speaker 4 (20:06):
But again we hadn't brought in any revenue yet, and
you think about the nearest comparisons, probably TGL that has
been selling teams at really high prices.
Speaker 1 (20:16):
Which is the new golf concept.
Speaker 4 (20:18):
Yeah, run by Mike who's his former NBC executive ran
the Golf Channel's great dude. He has been able to
tell a really good story and also pull on case
studies of other leagues since then to say, hey, this
is what it's worth without playing a match yet, right,
which is extraordinarily difficult to do and really high risk
because in the end, like we're all playing the long game,
(20:40):
the PLL is not going to be my last business, right,
you know.
Speaker 2 (20:44):
So you're going in as an athlete, you've got to
tell a story that says not just I think there's
a lot of potential here, but like I know what
I'm doing. Like, how did you convince people that you
know this was the right path forward?
Speaker 1 (21:02):
Well?
Speaker 4 (21:02):
I looked at the history of inflection points in pro sports,
and you go all the way back to Major League Baseball,
and we asked the question too, like why are team
sports home and away while they have stadiums, what are
the revenues tied to such Baseball and nearly nineteen hundreds
was a ticket sales business a lot of games. For
that reason, it became an RSN media business, and then
it became a concessions business merchandise business. But you play
(21:24):
one hundred and sixty two games, a lot of games.
Speaker 1 (21:27):
He's aware, I'm just making sure s yeah.
Speaker 4 (21:32):
So so you get to a business that was built
around very much. So even even the day to day
worker was born in New York City and lived their
life in New York City. And there's so much community
that actually lives today right, And it's important to get
that right in pro sports. If you look at what
the turning point was the NFL for Pete Roselle in
(21:54):
the nineteen sixties, it was deciding to go on broadcast cable,
which seems like, oh, home run. Wasn't the case then
because the worry was in a ticketing business. If you
broadcast games, people won't.
Speaker 1 (22:06):
Go, they won't show up.
Speaker 4 (22:07):
They jumped the TV faster and Major League Baseball did.
I think the NBA and David Stern and Adam Silver
in the eighties and nineties better than anyone else, has
created culture and entertainment and this connectivity around the NBA
that is star led for team sports. So what we
said is like, okay, cool, this is twenty seventeen.
Speaker 1 (22:30):
We're raising money.
Speaker 4 (22:31):
I'm a testament to this as an athlete that's built
a profile because those wages didn't change, by the way,
but my income did. Because I got sponsors signed up,
because I started a YouTube channel, a podcast, I was
active on social. I knew modern media what I felt
better than anyone else. So I was like, these are
the leagues of X, Y, and Z. We're going to
be the league of digital. And that's why you're going
(22:52):
to invest. We know how to leverage the new attention economy,
we know how to storytell. Our large business unit at
the poll from day one is going to be our
production house because right now every team and league outsources
media and marketing. We're gonna take that inside. We're gonna
make us fast and more agile. And we believe we're
(23:13):
not building CrossFit or slam ball, which are new sports
really from scratch. This is a sport that already has
product market fit. Our job is to get it to
the red zone and then over the goal line.
Speaker 3 (23:24):
So just to expand on that a little bit, if
you go back a little bit, Paul, tell us a
little bit about the two or three things that you
thought that the prior league that you played in was underachieving,
and what was your thesis to the investors, besides what
you just mentioned with the media, that you can do
better and ultimately build a successful, sustainable business.
Speaker 4 (23:43):
Number one is your most important part is your network.
You have to have a media company, not only invested, which,
by the way, one of our board members is David O'Connor,
who used to be a partner at CA, was running
MSG at one point and now is co founder of
Arctos YEP.
Speaker 1 (23:56):
Brilliant Doc o'kind love Doc.
Speaker 4 (23:59):
As everyone knows, and Doc told us about a few
years ago, the most difficult thing to do in sports
is get a media rights deal. Most of those two
hundred leagues that I had mentioned from the nineties that
started all the way through, they're in revshare deals or
time buyse We were a revshare partnership with NBC Sports
when we first launched. Why would they give us a
(24:19):
media rights deal? It's not tested yet, and so the
former league really struggled with that chicken and egg theory,
which is you sort of need a network to develop
an audience and score rating, but they have all the
leverage until you score rating and then whether it's entertainment,
which I always referenced Seinfeld to Cheer where Seinfeld got
(24:41):
its first pilot, big rating on the heels of that
fifty million audience, and so entertainment you test new shows.
We don't really see pilots anymore based on lead ins.
Speaker 1 (24:53):
Sports.
Speaker 4 (24:54):
With a great network, you get a good lead in,
you get introduced to a new audience, which is really
important for a sport like lacrosse. So we knew we
needed to get that and we might have to fight
to get that and really dig in as a network
partner to drive viewership. And that's what NBC noticed, and
they decided to invest into the production.
Speaker 1 (25:16):
We did a revshare.
Speaker 4 (25:17):
It was a profitable business at the time, which three
years later led to that media rights deal with the
Gang at ESPN.
Speaker 1 (25:25):
So one of the things that fascinates me and Alex
has this too.
Speaker 2 (25:29):
You just have this ability and willingness to just walk
in to these meetings with these massive executives and just
be like, here, I am, I've got this idea, I
believe in it.
Speaker 1 (25:43):
You should too.
Speaker 2 (25:45):
Let's do that and then you're so, where does that
engine come from? Because that's different. That's different from like
being good on the field.
Speaker 4 (25:54):
I think that, you know, I had mentioned the stereotype
that I felt for most of my career and still
do at times.
Speaker 1 (26:01):
You don't have that.
Speaker 4 (26:02):
When you meet with sports executives, they love they love it,
they understand that. And sure, another thing that we had
to work on that the former league didn't have is
get real corporate partners in that are willing to spend.
And we had Gatorade and Adidas in Capital one in
our first year and now it's stretched like Ticketmaster and
cash App and Progressive and so many different categories. Now,
(26:24):
going into those meetings is hard. But when you sit
with Jeff Carney, who was one of the three Jeffs
at Gatorade, who knows what it's like to sit for
a meal with Abby Wombox, Aerena Williams and Michael Jordan.
They know that work ethic. Yeah, I don't feel pressure there.
I actually feel welcomed. I feel community. But make no mistake,
(26:45):
I think what we've learned and you go next, is that,
oh man, we can defy odds.
Speaker 1 (26:52):
If we were to look at the.
Speaker 4 (26:54):
Percentages of becoming a Major League baseball player, a professional
acrosse player, or an international player in whatever sports. Love
it's under one percent. So when you do it, you
sort of trick your mind into believing that you can
manifest in anything. And I believe in manifestation, by the way,
So that's not enough on its own.
Speaker 1 (27:12):
You've got it and do the work. And so man,
I study.
Speaker 4 (27:16):
I study you guys before even walking in here, and
I know both of you, so I think it's just
so important to come prepared. And that's another sport attribute. Yeah,
I mean does that resonate with you?
Speaker 1 (27:24):
I mean, what's your mindset when you go in Well,
I think it's two things.
Speaker 3 (27:27):
I think Paul and I are not afraid of the work,
and the numbers will tell you that over our long careers.
But the other thing is we've proven that we're able
to surround ourselves, check the ego at the door, and
surround ourselves with the best.
Speaker 1 (27:39):
Minds in the world.
Speaker 3 (27:40):
So when you go and talk to these titans, that's
exactly what they've done. Now, they have fancier degrees, they
have better returns and all that, but when you look
at our resume or you look in at a LinkedIn account.
We're looking at a trajectory, right, and when you look
at Paul's trajectory, it screams champion. Right from the time
you're in college to where you are today, it's been
(28:02):
like this. No, it hasn't been straight up, I'm sure
for both of us we've had this, but we're not
afraid of the work. We surround ourselves with the right
people and we're never going to give up until we
win the title. And I think that's what they recognize.
And the other part is we're talking about sports. We're
not talking about gas and oil or something that's really
like not as sexy. Everybody will take the meeting a
(28:22):
because your Paul b because you're doing something big and bold,
and see you and Mike have a real thing here.
Speaker 1 (28:28):
Why not? Why not?
Speaker 4 (28:30):
I'd add to it one more thing that Alex had
me think of, which is in the startup community, they'll say,
what's your unfair advantage? Our unfair advantage is that I
had a relationship with the players. I can't run a
league and play in a league against myself, And the
unfair advantage was, okay, you could have hypothetically a few
(28:52):
other folks come in and pitch starting a pro lacrossely,
but they don't have the players. It's all for nothing, right,
So in any line of work, what's your unfunded advantage
table stakes?
Speaker 1 (29:02):
You have to be a subject matter expert.
Speaker 2 (29:05):
But that relationship with the players is a critical one.
I mean, it's interesting because you've now sat on both
sides of the table of like being an athlete being
an owner. You know, you were essentially doing both at
the same time. Well, Alex said it, and it's not.
I think it's actually really really underrated in the entertainment world,
(29:25):
which is what we're in as a pro athlete, or
you know, if you're in cinema and you're an actor
or even a writer, is being humble and having a
level of self awareness and being kind to your peers.
That actually doesn't exist everywhere. But the people that I
try to surround myself with have that. They also have
(29:48):
the freedom to check me when I get over my skis.
I notice Alex has that.
Speaker 4 (29:53):
And you know, now an owner of the Timberwolves, you
probably have a really natural and authentic way about going
and talking to the players on the team. And that's
different than traditional sports owners. You know, where there is
a pretty clear and distinct wall between ownership and players,
and that's why a lot of times unions started.
Speaker 3 (30:13):
Let me add this, I think what Paul and I
can do very well is we can be the bridge
between institutional capital and the athletes because we now know
how they both think. Yeah, and that is really I
want to underscore that because, especially as an owner of
the Timbles and the Lynks, I see how valuable it
is to have empathy for the players to understand how
(30:36):
difficult it is today. It's never been harder to be
an athlete in today's world. At twenty twenty four. Thank
god social media wasn't around. I got myself in enough trouble. God,
you know, with social media it was in the heyday
when I played, it would have been that much more challenging.
So having empathy for the today's player, I think is crucial.
Speaker 4 (30:52):
And sometimes empathy is just sitting with emotions and not jurisdicting,
which is you know, as executives, is what you feel
like is now.
Speaker 3 (31:01):
One question when you think, I love what you're thinking,
But when you're describing what you did, which is beautiful,
and this what makes you kind of Paul one of
one is Adam Silver is the same way. He's just
a tremendous commissioner. Any commissioners or leaders out there domestically
ori internationally that you look and study to see how
you can apply to your league.
Speaker 4 (31:22):
Adam is a friend, is a mentor. I try to
get with him a couple times a year. He is
absolutely that. Whether it's Adam, whether it's Jimmy Pittarro, whether
it's Don Garber. The best executives I've noticed in sports
and sports media, they have velocity, you know, but it's
(31:44):
not just returning your email or your text fast. It's
doing it thoughtfully. And I think that to your point,
when you're a senior executive, your job is to keep
the wheel going. You know, talent really matters. You can't
forget what business you're in. You know, we run the PLL.
(32:05):
We have to think about and spend a lot of
time with our players. Is that revenue driving You could
like throw dotted lines to such, sure, but it's the
essence of what you do. So I think being able
to understand that is of utmost importance.
Speaker 2 (32:32):
One of the things that strikes me is that both
of you are quite evolved, and I also know have
done a lot of work on yourselves. You talk pretty
openly about being in therapy. You've talked about that a
lot as well. How has that changed you? And I'm
going to turn it on this guy too, but how
(32:52):
has that changed you as a leader?
Speaker 4 (32:56):
It's a great question. I asked Alex about this in
the past because my concern about originally about sports psychology
and therapy is that it would make me soft. And
now I think about the soft masculine and how that's
the most powerful version of ourselves where we can be
(33:17):
empathetic and then also turn up the dial on our competitiveness.
Speaker 1 (33:22):
And it's not a light switch.
Speaker 4 (33:24):
So I had to learn that because I wanted to
be the A Rod of lacrosse. I wanted to be
the MJ of Lacrosse. I wanted to be you know
what Tom Brady was, And I see these fierce competitors,
fierce and you know on the cover of the book
that runs in at direct odds with understanding or having
(33:46):
perspective around losing being okay or part of the process,
and we will heal, we will actually grow. So it
was a challenge for me to get into it and
then once and I want to give a shout out
to my sports psychologists, formerly doctor John Elliott. Once I
got into sports psychology and understood that actually know it's
a superpower and you're not going to lose that and
(34:09):
kind of that metaphorical dial versus switch, and that you're
going to become a better leader, which is what helps
teams win, it was just all in for me from there.
Speaker 1 (34:21):
So I was doing therapy like twice.
Speaker 4 (34:22):
A week every week for seven years, and it became
like practice, and like practice going back to what we
do in sport. When we love in sports, you can
feel yourself improve and learn about psychology, and that psychology
on the business side has been a big unlock for me.
What I've learned the difference therapeutically between being an athlete
(34:45):
and a business person is this, in sports, you can
win with sheer willpower and effort and strength, and it's
designated to do such.
Speaker 1 (34:56):
Yeah, like we're going to square.
Speaker 4 (34:57):
Off, one of us is going to win, in one
of is going to lose. So Mike comes into play.
In business, that's the absolute wrong idea. You don't want
to go into a partnership where you won the deal
and the other person feels really bad because guess what,
that partnership ain't going to renew, right, and you want
to be in the renewal business. And I know that
(35:19):
we've discussed that before, so I'd be curious what any
you think of it.
Speaker 1 (35:22):
No, I always say the ninety percent.
Speaker 3 (35:23):
Rule, right, if you know, in order to get a deal,
both sides, I feel have to hurt a little bit
and win a little bit.
Speaker 4 (35:29):
Right.
Speaker 3 (35:29):
It can be like all one side, or that'll be
the last deal. But let me bring you inside because
I agreed with everything you said about the stigma around
therapy or on sports.
Speaker 1 (35:40):
And we've come a long ways.
Speaker 3 (35:41):
I mean we're now twenty twenty four, but bring you
back about call it twenty years back into our club.
I was when George Steinberner was still running the team.
So George Steinberner says, I want to introduce Chad. He
is a very very good sports psychologist. His office will
be right next to mine. Come see him anytime. Okay,
two years we had zero people walking that run.
Speaker 1 (36:02):
Wow.
Speaker 3 (36:03):
So then he reintroduced him and he said, hey, I
want to introduce Chad. He did is a reintroduce. Reintroduced Chad.
He's a performance coach. Twenty three out of twenty five
of us went in there. But Chad is such a
great guy became still a very close personal friend and
an integral part of a two thousand and nine championship team.
But talk about how you label something and the way
(36:25):
to go around it goes from psychologists to performance coach. Yeah, athletes,
we bought into performance coach, and.
Speaker 4 (36:32):
That's just also underscores culture, which is set at the
top and mister Steinbrenner's focus on and his belief and
how that could help the team.
Speaker 2 (36:43):
How do you apply all these lessons that you have
learned to what feels like a critical moment? Maybe there
are a lot of critical moments, but this one feels
like a critical moment in the business of lacrosse. Like
you're looking ahead to twenty eight in the Olympic. You've merged,
as you said, the PLL and the MLL, you've absorbed
(37:04):
the league that you essentially usurped.
Speaker 1 (37:07):
What needs to happen now?
Speaker 2 (37:10):
Things are trending the right direction, But what are those
key decisions you have to make? Are the key things
that need to happen next?
Speaker 1 (37:16):
Yeah, well, a few highlights.
Speaker 4 (37:17):
So when we launched our league, we were wholly owned,
still our single entity. We changed to a touring model,
which is part of what got to send the door
with these investors unique. And so we looked at the
UFCF one tennis golf and said, okay, if you can
bring all of your teams and descend upon a major
market city and a professional venue one time a season,
(37:40):
then you're going to flip the supply and demand curve
because lacrosse fans aren't as big as basketball, football, or
soccer fans in America. So we have a different model.
I'll come back to that. If you looked at what
we did from a media standpoint, we were able to
grow year of a year double digits. Since we've launched
and own and operated social and digital and now with
our media deal with ESPN, we hare to raise great capital,
(38:02):
support our players and new business initiatives like we just
talked about for us as we look into now getting
lacrosse back into the Olympics in twenty twenty eight. If
those are the goalposts, how does this league transform into
a top six team sports league in North America And
what that transformation may look like. Is no longer tour
(38:27):
And if you think about what we had talked about
we worked with Major League Baseball and still does with
team sports leagues. It's community and so we are working
pretty actively on dual scenarios, continuing to build out the
Holy owned model that's tour based with our teams in
home markets and going to those home markets, expanding our schedule,
(38:47):
which is in our business called tonnage, which means you
get more hours on television, which helps your media right
steal to then path two, which is selling our teams.
We have eight of them, and if you have great
owners in markets like Minnesota, like down in Utah, like
we have in New England, the crafts are investors and
(39:08):
you find the right ownership group with the package of
owning a venue with other sports properties that they can
cross promote against effectively their lead INDs. As I had
talked about the value of networks. That's a real path
and it doesn't stop at eight. If we choose that
shift maybe to a trade association model or with Don
Garbage in MLS which you maintain a single entity. And
(39:31):
he had Soccer United marketing and owners came in. They
owned the right to their team and up and their
pro out of position of forty one percent of some
which owned US and Mexican soccer rights. Our version of
call it some marketing is women's lacrosse ownership. We own
the largest media company called TLN Youth Lacrosse Investing. We
(39:52):
have these other properties that are really valuable and big
in addition to just owning a team. So that's how
that model could flex. And then you go from eight
to ten to twelve to fourteen to sixteen, and you're
really leaning into community in real estate, where if I
think about what makes sports high multiple businesses, enterprise businesses,
it's attention right through your partnerships and everything else I
(40:15):
talked about. It's revenue, so it's your corporate relationships, it's tickets,
it's merchandise, it's youth community and then real estate.
Speaker 3 (40:24):
So Paul, when you think about that model, and you're
going kind of two different paths at the same time,
which I think is super smart to give you options
as an entrepreneur in five years, what do you think
is the north star and if you can have a
year way, what is the perfect comp that in the
league is doing that where they're hunting right now?
Speaker 4 (40:44):
So for touring, our players will be full time and
living in markets, practicing every single day averaging six figures
in wages. We will be playing instead of fourteen weekends
of the year upwards of twenty four. If it's individually owned,
(41:05):
then we'll have our players in those markets. Their salaries
are passed through to team owners. They have their venues
that they're part of. The tonnage moves from fourteen to
twenty four weekends, which is looking like probably forty eight
upwards of eighty games, and that's a really good business
for us. From a breath of properties. We're entering a
(41:29):
new rights negotiation. Our four year deal with ESPN goes
through twenty twenty five. I think the media environment is
really exciting. People look at what would often be considered
the best business model over the last sixty years in America,
the cable bundle, as an indictment on media companies. They're
(41:50):
just losing that frothy business model which used to have
one hundred and ten million. But they're in the business
of content ownership, content licensing, and distribute.
Speaker 3 (42:00):
I have one on that. So, Paul, when you think
about it, I just want to get it. I'm thinking
of you like if I'm an investor, right, so I'm
literally pitching you like you're looking for my capital even
though you're not in five to seven years. Is it
fair to say that you're either something like the NBA model, Yeah,
or something like the UFC model.
Speaker 1 (42:20):
Yes? Is that fair? Yeah? And I think both both
paths are really valuable. I agree.
Speaker 4 (42:26):
You know, the UFC sold to Endeavor as they staged
up for about four billion, and then Bob and will
Iger just bought Angel City at a two hundred and fifty
million dollar post. So I think it would probably be
NWSL or UFC. And I believe our enterprise value as
a league will be in the multi billions over the
(42:47):
next five years.
Speaker 1 (42:48):
Where is it today? Approximately under one billion. I can't
give you more than that. That's fair number.
Speaker 4 (42:58):
But look sports sports leagues and teams on average trade
for eight to ten times revenue, right, And the reason
why is all that we had just discussed. Warren Buffett
calls them monopolies because of scarcity. That's that and what
the technologists would say. Our LTV is thirty plus years.
You know, you get someone into a game, you get
(43:19):
them to be a Yankees fan, it lasts a lifetime.
That's way different than even the streaming business. LTV For
those who are lifetime value.
Speaker 1 (43:27):
There you go.
Speaker 4 (43:27):
So you figure out how much getting Alex to be
a fan of the PLL is worth to us from
a revenue standpoint, and then you do what's called a
customer acquisition cost analysis, so you build your CAC. How
much then would it cost me from a marketing and
investing into getting Alex? And is that a profitable difference? Right?
Speaker 1 (43:48):
Right?
Speaker 4 (43:49):
So if we're running a software business, which kind of
talking about would be intimidating to walk into a room
because it's not our cup of tea like sports was,
then I would be pitching our next round of financing
around how how low our CAC is and how big
our LTV is, and then you just pour it on
customer acquisition. We're in that stage right now where we
have a good idea around where we need to spend
(44:10):
on awareness and casual sports fans. There's two hundred and
sixty million in the US. When we launched the PLL,
we had fifteen million lacross fans in the US. Now
we have forty six million, scorting to an MRI Simmons report.
That's in just five years of operating. So we'll do this,
this this all the way through LA twenty eight. Which
one more stat When I started playing, there were eighteen countries.
(44:32):
Now there are ninety two.
Speaker 1 (44:33):
Wow, all right, we're going to do our rapid fire now.
A lot of pressure, a lot of pressure. Keep it tight. Okay,
all right? What's one word to describe your deal making style? Compassionate?
Speaker 3 (44:53):
What's more important to you? Instant gut or data gut?
Speaker 1 (44:57):
Who's your dream deal making partner? Mark Cuban? Good one?
What's the best deal you've ever made? The next one.
What's the best piece of advice you've received on deal
making your business?
Speaker 4 (45:10):
I think actually from Alex and making sure that everyone
feels a little pain and they also see the big
picture of why they're letting go of something for something
much bigger.
Speaker 3 (45:20):
What's the worst piece of advice? And don't say Jason,
please win the deal, Win the deal, Win the deal.
Speaker 2 (45:28):
What's your hype song before you go into a big
meeting or negotiation?
Speaker 4 (45:32):
I fall back to nineties rock honestly, Like I listened
to Rage against the Machine before workouts. Still, but before
a meeting, like I didn't listen to Rage walking into this?
Speaker 1 (45:42):
Okay? I try, yeah, I try.
Speaker 4 (45:46):
You know what I'll say that try to listen to
something that has to do with the meeting in advance. Huh,
I countlessly, whether it's interviews or pitches. I've picked up
something in the last minute walking into the door that
was seminal to closing it interesting.
Speaker 3 (46:07):
Take lacrosse out. There's only one sport you can watch
for the rest of your life.
Speaker 1 (46:11):
Which one is it? I'd call it football, but the
English Premier League.
Speaker 2 (46:16):
Okay, what team do you want to see win a
championship more than any The Boston Cannons my first team,
first team and revived now for the New York Blo.
Speaker 3 (46:27):
A fun fact about yourself that your colleagues will be
surprised to hear about.
Speaker 1 (46:33):
I'm a failed musician. Ooh, that's a good one.
Speaker 4 (46:36):
I've always wanted to play. I've tried to play the piano. Well,
you used to get lessons when I was younger. I've
tried to pick up the guitar as an adult, watch
YouTube videos. Just haven't been able to get the and
even drums, like as an athlete. I'm embarrassed to say,
because you think we're really well coordinated, I just can't
figure out the multi movements of music. So you guys
can bet that it won't be musician in there.
Speaker 1 (46:58):
At some point. Paul Rabel failed musicians next time on
the Deal. This has been really fun. Thank you, thank
you good. I started sweating on the rapid Fire.
Speaker 2 (47:12):
Yeah yeah, listen, pressure and its psychology.
Speaker 4 (47:15):
Man, I learned that too, by the way, is that
you know your body. You feel nerves in big moments.
And I remember John Elliott tell me it's a good thing.
He's like, if you're not feeling it, he was like, whoa.
Speaker 1 (47:28):
I thought.
Speaker 4 (47:29):
He was like, no, no, don't say nervousness. That means
you're not prepared. Nerves are bodies as athletes were walking
on the field.
Speaker 1 (47:35):
He heats up.
Speaker 4 (47:37):
That's our muscle fibers and twitching beginnings so that when
a defender is coming at me to take my head off,
I can react and dodge by him.
Speaker 1 (47:45):
Yeah.
Speaker 4 (47:45):
And that's just the feeling that you're feeling, right, And
that was a change of framing, which if I didn't
give that answer on one of those rapid Fire questions,
I'm sure it's like frame differently and always optimistically.
Speaker 1 (48:01):
M beautiful here the man. Thank you so much, Thanks
you guys.
Speaker 5 (48:11):
The Deal is a production from Bloomberg Podcasts and Bloomberg Originals.
The Deal is hosted by Alex Rodriguez and Jason Kelly.
Our producers are Anamazarakus, Stacy Wong, Lizzie Phillip, and Victory Veyees.
Original music and engineering by Blake Maples. Our managing editor
is David E. Ravella. Our executive producers are Jason Kelly,
(48:33):
Brendan Francis Newnham, Jordan Opplinger, Trey Shallowhorn, Kyle Kramer, Andrew Barden,
Kelly Laferrier, and Ashley Hoenig. Sage Bauman is our head
of podcasts, Additional support from Rachel Scaramazzino and Elena Los Angeles.
Joshua Devaux is our director of photography. Rubob Shakir is
(48:55):
our creative director. Art direction is from Jacqueline Kessler. Casting
by Julia Manns. Our associate producer is Natasha Abbilard. Camera
operation by Ryan Cavatero, Jesse Ridner and Suma Hussein. Our
gaffer is Alex Brown, and our grip is Max Garstak.
Our production assistant is Gabriella Demataes. Katia Vanoy is our
(49:18):
video editor. Listen to the Deal on Apple Podcasts, Spotify,
or wherever you get your podcasts. You can also tune
into the Video Companion on Bloomberg Originals and on Bloomberg TV.
Thanks for listening.
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