January 23, 2025 • 25 mins
In this episode of The Deal, Alex Rodriguez and Jason Kelly sit with Steve Pagliuca to discuss his ownership principles for the Boston Celtics and Atalanta Bergamasca Calcio. Pagliuca explains how he ended up with a successful career as an investor at Bain Capital, what lessons he applied to growing sports teams and why he’s proud to be called the Italian Ted Lasso.
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Speaker 1 (00:03):
Bloomberg Audio Studios, podcasts, radio News.
Speaker 2 (00:13):
On this episode of The Deal, we're bringing you an
interview we recorded live at Bloomberg Power Players Summit. We
sat down with Steve Peluca. He's the owner of the
Boston Celtics and the Italian football club Atalanta. Both teams
have brought home trophies in the past year, and we
got to pick Steve's brain about how he builds winning
franchises and the deals behind it all. Here's Steve Peluca.
(00:48):
All right, let's jump right into this because one of
the reasons we wanted to talk to you, Steve is,
I think the technical term, Alex is You've had a
hell of a year.
Speaker 1 (00:56):
This has been a really good.
Speaker 2 (00:57):
Year for you.
Speaker 1 (00:58):
Yeah, I'm still pinching myself.
Speaker 2 (01:00):
So two championships. As you look back, what's the most
memorable moment?
Speaker 1 (01:04):
Oh man, that's really hard. I mean probably two of
them were the championship game the Celtics. You know, we
came so close for so many years. I was very
happy for Jason and Jalen specifically getting over the hump,
so that was very emotional. And then for Atalanta, they
had not won the European Championship for one hundred years,
So that kind of revolutionized Bergamo and the players. We
had a parade there. The Celtics parade was amazing, millions
(01:26):
of people with a parade in Milan took five hours
because there were so many people, so many people on
the streets. They had to have a one hundred policemen
moving people out of the way as this this double
decker bus went down the hill to only go three
miles five hours. It became dark. They're lighting off flares.
It looked like apocalypse now. So those were just just memorable.
(01:48):
Remember parade, I do New York, not Boston.
Speaker 3 (01:51):
But you know, but Steve, you've done You've had such
an iconic career and I've admired you for so long.
You've been so kind to me. But thinking about you
Korean Bane and all the great deals you've done in
private equity. But take us back to two thousand and two,
because if Boston Celtics is a little different and a
lot more special in many ways, take us back to
that and what did that mean to you at that time?
Speaker 1 (02:11):
It seems like yesterday. It's interesting because I had been
in bank capital and we had done billion dollar deals
and five billion dollar deals, and the Celtics was a
three hundred and sixty million dollar deal. And we do
a billion dollar deal, they be one or two reporters.
And the odd thing about the Celtics peck then is
there were no leaks. This was a very private deal
from a private seller to a private seller, so there
were zero leaks. It's almost unheard of.
Speaker 2 (02:33):
Wow.
Speaker 1 (02:33):
And so it was a very hot day in September
or August, whatever that day was. And we drove over
to the Celtics facility and the previous owner hadn't even
told the coach that the team had been sold. Whoa wow.
And he was up in the balcony staring down at us,
and it was incredibly So I drove over with Wick Grosspec,
who's our CEO and the partner. It was incredibly hot.
(02:56):
He bounded out of the car and then I was
nervous and I couldn't open the door of the car.
I was locked in the car. It was ninety degrees.
I'm sweating and we're going to press conference. I thought
there'd be a couple of reporters there, so thank god,
you know, I kind of etched on the window. Help
and he came back, got me got out of the car.
I'm telling what we go to sit at place like
this and I look up and there's reporters the same
number about in the room today. I mean, there are
(03:17):
one hundred reporters there right to report on this. I said, okay,
this is this is really different. You know the intersection
of sports and business. You know, when you put the
entertainment into it, it's really different.
Speaker 2 (03:28):
And so before we get to because I know you've
got some like owner to owner questions. I do not
own a professional team. I'm a humble journalist here, but
I did get to know you, Steve pre Celtics like
covering private equity, I mean, tell us a little bit
about translating that work to ownership. And you stayed in
(03:52):
private equity during all of this time, and you're still
an active investor. But like, what was it about ban
because Bane was you know, many people in this room
were very familiar with that story, very special and different
sort of partnership. What did you bring from that experience
to your partnership with Wick and your other parties the.
Speaker 1 (04:10):
Southwick and I had been in venture capital and I'd
been in buyouts, and actually the concepts are very similar.
So The first thing we did was do kind of
a bane study on what were kind of the key
objectives that we would have going forward. But the good
news isn't consulting. They always bought it down at three things.
I told Alex like fifteen years ago, it's always about
(04:31):
three things, not two three things. And the first was,
you know, you want to win a championship, so build
a championship team. The second thing we needed to do
was make it a more fan friendly environment. Back in
those days in Boston, you know, the Celtics were the
only team of the thirty teams that didn't have a
dance squad or cheerleading squad who was really old school
and not a lot of connectivity with the fans. It
(04:52):
was kind of like they want to keep the fans
away from the players. So that was the second objective
is really, you know, make it a better fan experience.
The third was use it as a community asset, because
you don't really you know, like you don't really own
these teams. They're kind of owned by the city and
they can do enormous amount of goods. So we set
up the first day, we set up something called the
Boston Celtic Shamrock Foundation. And you can't win a championship
(05:13):
every year, but you can you can do a lot,
you know, for the people of Boston and New England
off the court. And so those were the three pillars
that that we found on and we did that study
and executed on that, and the Globe came out with
an article which we just got under the wire. They said,
if they idolized every team that won a championship, and
I guess at that time, no new owners that came
(05:34):
in if they didn't win within the first five years,
they never won. Oh boy, so we wanted the fifth year.
Oh we had a five year plan and we wanted
two thousand.
Speaker 2 (05:42):
Yeah, that's that's good Bain work, So Steve.
Speaker 3 (05:45):
Every time, whether it was when we were trying to
buy the mats, you werelways so gracious, So was Bain,
and you always wanted to offer advice with nothing. You
didn't have a pony in the race, but you always
such a great mentor to so many people. Every time
we went to Boston when the Timbers went to play,
you and work were so gracious. You made me feel
so like very You were very hospital and made me
feel at home. You're probably the first person ever that
(06:07):
made me feel at home in Boston.
Speaker 1 (06:09):
So thank you for that. I'm a little weird.
Speaker 3 (06:13):
But in how seriousness, if it was one thing that
you would say, with that over twenty years of experience
in the NBA, now with two championships, what's one thing Mark, Lorie,
my partner and I have to do, and what's one
thing we have to avoid oning?
Speaker 1 (06:26):
Well, I think the number one thing you have to
do is be you know, be a fan and you
played pro sports. I never played pro sports. I played
in college, but but I realized I played a lot
of basketball. But in getting involved with the team, you know,
the team shows up every day. There's one hundred games
if you count the playoffs. It's amazing strain on the body.
You get back to backs. The fans don't understand that.
(06:47):
They don't know that this might be the guy who's
played forty minutes the last five games, and that guy's
got to go out there like it's the first time
that he went out there. It's a show every night.
So I think be passionate about your players, the team,
the community. That'd be number one thing to do. And
then what not to do? You know, I think The
biggest problem new owners have is they want to come
(07:08):
in and win too quickly. And we studied all the
teams and drafts we did. We did another band study
on drafting and all the all the we're very very
analytic based. We started something called the b I A,
the Basketball Intelligence Agency. There's a little sign it's like
the FBI the CIA sign, but it says b I N.
And we have we have PhD from Duke, we have
we have we have m I T. We have the
whole whole crew in there. We're on our twentieth kind
(07:30):
of regression model now in terms of how do you
pick players, strategy and the rest. But but I would
say you you you need to take a long term
venture capital like approach to it rather than turn it overnight.
So you've seen many situations where you buy the team, uh,
they trade all the draft picks, bring in one or
(07:50):
two old players that probably have something left but maybe
one year or two years left, and then if they
get hurt and they don't win, you're out of draft
picks and then you're starting over it. So we always
took this kind of five year plan approach of building
by the draft, doing trades where they made sense. We
didn't try to turn around overnight.
Speaker 2 (08:22):
One of the fascinating things, especially if you think about
sort of the intervening years between the championships from eight
right to twenty four, it's a long time. Especially in
the NBA, the league has utterly transformed. What do you
think is the most meaningful thing that's happened in those
intervening years, other than like new owners coming in, How
(08:46):
is the business of basketball changed?
Speaker 1 (08:49):
Well, if you look back at twenty years ago, you
would count fans in the hundreds of thousands. The Celtics
didn't really have even emails with the fans. There was
no Instagram, was no Facebook, so it was very traditional.
It was radio and broadcast television. So what's happened in
that twenty years is media and technology has changed dramatically.
(09:09):
You can now count fans in the billions, and the
Celtics reach and the NBA reach is global. You know,
Adam Silver and David Stern did an incredible job getting
out ahead of the curve. I mean people used to
criticize them for having an office in China, putting up
early infrastructure in Europe, and now that's paid off big time.
Thirty percent of our players are from overseas and they've
done a phenomenal job just brought in the appeal and
(09:31):
the product of the game. So technology and media have
changed dramatically, and that has led to more abilities to
monetize players, to create their own brands, more engagement on websites,
and now you have a big battle between what I
called old media and new media for those eyeballs. And
that's why sports properties are so valuable.
Speaker 3 (09:49):
You have a great passion for the game of basketball.
You played a duke for one year, so.
Speaker 1 (09:53):
I was the worst player on the worst duke team.
Every kind of like Bob Bevens long jump. No one
will ever ever exceed that.
Speaker 3 (10:02):
Two of your kids played at Duke.
Speaker 1 (10:03):
Yeah, I play to your boys. Okay.
Speaker 3 (10:05):
So you went want Ambers okay, and you went to Duke.
You went to Harvard Business School. You were thinking about
getting your PhD. At what point did you know that
you were just built a little different.
Speaker 1 (10:16):
Well, the funny story was, I wasn't that strategic. The
reason I didn't get the PhD is my grandfather was
a shoemaker and made eight dollars an hour. I had
lots of student debt. I was going to be a
professor at Harvard. So I went to get the doctorate,
and I didn't have enough money. So I looked down
the list and what was the highest paying jobs. It
was investment banking, consulting, and for a summer job. So
(10:39):
so I had an offer down here, an offer in Boston.
I wasn't that strategic because I said, well, I don't
know if to get a new apartment. I already had
my lease in Boston. So I took consulting. Wow, and
then that turns out to be very transformational for me.
So after the summer, I was going to go back
and get the doctorate, and they said, we'd love you
to join you know this this small company maaning company
then and and if you if you stay here for
(10:59):
three years, will pay for the doctorate. So I said that,
you know, that's a great deal. I have no money,
A one hundred thousand of dead I had nothing, so
so so I took that job. And then that was
about forty years ago, and I've never really left the
Bane system. And Bill Baine is unfortunately passed away. But
because I thought maybe I get my doctorate again, he
would pay for it. But they probably don't have that
document anywhere.
Speaker 2 (11:19):
Yeah, He's like no, but seriously, Bill promised me I
could get a doctorate. You know what's funny is, I'm
sitting here they talk about all the New York Boston stuff.
It's like, so maybe if you had taken the job
in New York, everyone in here is like, wait, could
they own the Knicks instead. It's like, that's a sliding
doors moment if I've ever seen it. I want to
talk about Atlanta a little bit because the story there
(11:43):
is fascinating in terms of like sort of how you
get there. Tell us that story of like how you
get into that business of football.
Speaker 1 (11:51):
Well, it goes way back again. When I got out
of school, my grandfather and father said I had a
major in accounting. I hated accounting, but sorry if there's
accounts out there. But I didn't really like accounting, but
they said it was the only people employed during the depression.
They both lived through depression, and they thought, you know,
every year another depression was coming, you know, nineteen twenty
nine was coming. So I said, fine, So I got
(12:14):
the accounting degree at Duke. But then I didn't realize
to get the CPA, which they wanted me to get,
you had to work three years in accounting. So I
had six or seven offers and I went to all
those firms. I was twenty two and I didn't tell
them why. The reason why is I didn't really want
to really do accounting. But I said, anybody who sends
me overseas, I'll take that job. And in those days,
you know, they would never send a twenty two year
(12:34):
old person with no experience overseas. But one firm wanted
me to batten up Pete Mark Mitchell KPMG. Today they sent
me to Holland. So I never been out of kind.
I jumped on a plane and in those days, this
is incredible. In those days, the only sports scores you
could get was International Herald Tribune three days later. So
to figure out if you if who won the World Series,
you'd have to get a paper this three days old.
(12:54):
But anyway, the only thing I could do is I
was a sports guy. So as soccer was huge and
the Dutch went to the the finals in nineteen seventy eight,
I became a big soccer fan. Fast forward four years later,
one of my partners from Italy called and said, hey,
there's a family that wants to meet you. The Percassi
family in Italy, in the right outside of Milan, and
they like some help, maybe you buy a minority position
in the team, you know, you know, help globalize it.
(13:15):
So I went there, I got on a plane, I
got off the plane and I looked around. Everybody looked
like me because my grandfather is from there, and I said,
this is a great place. And so I really hit
it off with the family and we ended up, you know,
putting a major investment in there. And they wanted they
had the same goals we did. They wanted to make
it bigger, they wanted to globalize. And it's been a
great synergy between the Celtics and them because we've used
(13:37):
our stat guys. We have a stat guy there now.
We share marketing ideas, we share training ideas, we share
player development ideas. So it's been fantastic.
Speaker 3 (13:45):
So I heard this ted Lasso comparison, which I love
a little bit about that.
Speaker 1 (13:51):
I mean it was like ted Lasariria Italian ted Lasso.
Yeah yeah, but really it really is is like that,
and the Italians have a fantastic culture. And I hadn't
spent any time growing up there. My grandparents were both
from Italy, I never really been to Italy before, and
they welcomed me there and it's just a great culture
(14:12):
and the food is great. The soccer is just a
huge passion a lot. Atalanta's a light light a lot
like the Celtics. They have a kind of a national
brand in Italy. It's everybody's second favorite team, except if
you're from Bergamo. People love Atalanta because it's been the
little team that could. It's kind of overachieved for a
number of years. Acrosseas have done amazing job building one
of the best academies in Europe. The reason we invested
(14:34):
is we wanted to compete, and with that academy you
compete every year because they crank out so many good players.
At one time when we bought the team, I think
they had five players on the under under twenty three
national team, and that means the other nineteen clubs had
the other fifteen players. We had five.
Speaker 3 (14:50):
I do want to go back to that because you
have such an embedded competitive advantage. Number One, you know,
forty years of beying one of the best consultant private
equity firms in the world, and then Boston Celtics, one
of the most iconic franchisees in the world as well
run as anyone. So when you take those two practices,
what best practices do you take to your thesis investment
and take it to Europe.
Speaker 1 (15:11):
Well, I think what you take is is we were
trying to bring it to a more analytic approach and
they're behind in soccer and that in general, and so
the Precossi's wanted that. They're very receptive of that. So
we brought in a stats team. We just expanded that team,
and Mike Zarin, who really kind of runs our whole
stat operations, come over many times and he turns out
(15:31):
to be a big soccer unfortunate he's an Arsenal fan,
but in Italy he's Anta fan. But he's come over
and helped us set that up. The second thing is
more global brands, So we're doing some deals with some
global brands right now that we'll an now soon that
a're gonna be very transformational for Atalanta. And then looking
at fandomenities. We expanded the stadium, built the new ends
(15:53):
on both ends, and built a new club like we
have here for the Celtics. That's fantastic and I have
to say that the food is greater the Celtics. But
the chef at our restaurant is a chef from Davitorio,
which is the number one rating restaurant all Vidaly. It's
right in Bergamo, and so that is an incredible experience.
People will just come there. It takes two years to
(16:14):
get a reservation at the restaurant, but you can come
to our club and you get his food.
Speaker 3 (16:18):
Invitation was lost in the Yeah, exactly, I was.
Speaker 2 (16:21):
I mean, I love Bloomberg, I love this power Players event,
but why aren't we taping this?
Speaker 1 (16:27):
This is we open up the new stadium. Actually, you
invite to September fifteenth, Okay, we asked for you. Feel
it up.
Speaker 2 (16:48):
So we heard earlier today from Tony Wrestler talking about
this like three trillion dollar opportunity in like global sports.
I mean, are you a buyer and in this in
this market? Like do you and do you buy into
that thesis that it's that big?
Speaker 1 (17:05):
Yeah, it's big and expanding. You know. I started we
started talking in the beginning about you know, the the
the old media new media war that's only intensifying. And
I think if you look up television programs, the top
one hundred in the United States, and last year ninety
seven of them were sports events, either NFL or championships
or whatever. So number one. Number two, streaming has revolutionized everything.
(17:30):
Streaming and the and and and kind of the the
distribution on Internet, Instagram, TikTok, et cetera. And so that
allows fans more connectivity and more time you know, on
those screens and eyeballs outside of the game itself, and
shoulder shoulder programming, shoulder internet shows, et cetera. Podcasts. Podcasts
are booming, you know, this incredible podcast and number one
(17:52):
podcast in the world. Honored to be here, by the way,
and so and so we are. We're at the start
of I think kind of a me a revolution where
it's only going to get better and better with technology.
You look at the stadium that Steve Bomber's built out there,
that's going to be an incredible thing and spur other
stadium development. Three D is going to come in someday,
you know, where you can be immersed in the sports
(18:13):
of any even more with round screens or big screens
or glasses. So, yes, I think it's an incredible product
and it is now globalized. Yeah, you know, we went
we played in Barcelona, walking in that place that they
have the people at Celta Jours. You said, we went
to Rome. You go all over the world. You go
(18:34):
to China in the subway in the morning, the games
are out in the morning. You see them watching NBA games,
especially when Yao Ming was here. But they love basketball
over there. So so basketball, soccer, the global sports, the
global competition. I think someday you'll see teams NBA teams
in Europe. We already have NBA Africa. These will all
rise up and you'll get you now have global gold,
global championships of these teams.
Speaker 2 (18:56):
You know, we always you know, the show is called
The Deal, Like, what are the deals on the horizon
for you beyond basketball and football? I mean, I have
to think, especially to your point, given all the success
you've had in those two sports. I know you've looked
at some other football clubs, like what what strikes you
as interesting out there?
Speaker 1 (19:15):
Well, I think the whole business sport is interesting that
you know. That's why this pet podcast is booming. They're
such interest in it, and so we've looked at things
as far ranging as women's sports are going to be big.
You look at the evaluations out in La and and
you know Caitlin Clark coming into the league, you know,
getting getting all that interest out there. Women's soccer, that's
always been a great Olympic sport. Now that's expanded, so
(19:37):
so people want to see that and they've changed those
rules to bring better players in. So I think women's
sports is a big category just emerging sports. A cricket
is huge in Indian they're starting to bring that out.
So we're looking at all sorts of opportunities and then
there's and silliar opportunities in terms of support for that.
So I'm invested in an AI company. You know, the
AI can help sports both from a fan perspective and
(19:58):
also from a management perspective. So so I think technology, you
know slash sports, slash emerging sports, women's sports, those will
all be very exciting areas that that right now, you're
scratching the surface, right.
Speaker 3 (20:10):
You know, one of the things about private equity, before
private equity was called you know the LBO business, as
you said many times, but what has been synonymous with
you know, PE or even leverage biotic. You come in
and you like destroyt you know, fire everybody, and you
guys have done exactly opposite with the Celtics. I mean,
continuity has been a real competitive advantage and arbitrage for you.
Talk a little bit of why it's that so important
(20:32):
for you guys.
Speaker 1 (20:32):
That's a really great question. I should have mentioned that before.
That's that's about that long term approach. So Bain Capital,
you know, we believe in long term value. It's always
been a misnomer of private equity, by the way, I
think because the industry started out maybe in the late
sixties early seventies, there were a lot of fat companies
in the US that had six planes and you know,
(20:53):
restaurants and golf courses, stuff that really not appropriate for
corporate America. So I think there were some early buyouts
done where they would slash those things and it got
known for cost cutting. But the real successful firms, the Blackstones,
the Bains, the Carlisles, they realized that if you if
you're going to going to really make a profit, you've
got to build businesses, and you don't build businesses by cutting.
(21:15):
You have to grow. So Bains always had a growth
focus from day one, the consulting kind of growth focus.
How can we bring these products overseas, you know, how
can we build new factories. How can we serve the
customer better? And that's that's what's really driven our record.
But part of that is long term continuity. So back
back in two thousand and seven, Paul Pierce got hurt.
He was our best player, We were on the rise.
(21:36):
He got hurt. I think we lost fifty five painful games,
and I went to all of them, was bed, and
there were people with signs, you know, fire, Doc Rivers,
you know fire Danny Ainge, you know fire the owners,
and so we met and we said, gee, Doc's do
an amazing job developing this young talent we have, and
no one's going to win without Paul Pirison. We had
I think another good two of our best players hurt
(21:57):
for the whole season. We had a great draft for
us coming up. We love what Doc was doing, we
love what Danny was doing, and so we made no changes.
So we've in huge value to that continuity. When you
bring in new people, they always have new ideas, and
then a lot of new ideas don't work. But we
want to stick with the guys that had good ideas
that we're going to work. So then the very next year,
Danny made that trade and we got Garnet, we got
(22:19):
Ray Allen, and we won the championship after all the
signs were out the whole season. You know, fired Doc,
fired Danny, you know, fired the owners. So that continuity
for us has been huge. And most of the selling
employees we count their their things in increments of twenty
five years, I mean we've had we've had the same
We've only had Danny and then Brad Stevens as the
GM right in all those years. And Danny retired, we
(22:42):
want to go back to Utah, his home, and so
we promoted Brad from the coach and then we took
a coach that was a young coach for Brad and
there and made him the coach. So I think we've
only had three coaches in the twenty three years and
we've only had and none of them fired. And we
have the same Rich Gotham, the same president. This is
solely the same ed of marketing, Bill Reichfelder, the same CFO.
(23:03):
So we have enormous history. Trust back to the point
of you know what you need to do is you
need to build a players, to build an a team
and then keep them in place and don't worry about
what the media says, or fire this guy, fire that guy,
because they only have ten percent of the data, so
you've got to stick to your convictions.
Speaker 2 (23:22):
Well that's unfortunately where we have to end, but a
good place to end. See, Pelly, you could thank you
so much for your championship wisdom. Appreciate it and thank
you guys.
Speaker 4 (23:41):
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Speaker 2 (00:13):
On this episode of The Deal, we're bringing you an
interview we recorded live at Bloomberg Power Players Summit. We
sat down with Steve Peluca. He's the owner of the
Boston Celtics and the Italian football club Atalanta. Both teams
have brought home trophies in the past year, and we
got to pick Steve's brain about how he builds winning
franchises and the deals behind it all. Here's Steve Peluca.
(00:48):
All right, let's jump right into this because one of
the reasons we wanted to talk to you, Steve is,
I think the technical term, Alex is You've had a
hell of a year.
Speaker 1 (00:56):
This has been a really good.
Speaker 2 (00:57):
Year for you.
Speaker 1 (00:58):
Yeah, I'm still pinching myself.
Speaker 2 (01:00):
So two championships. As you look back, what's the most
memorable moment?
Speaker 1 (01:04):
Oh man, that's really hard. I mean probably two of
them were the championship game the Celtics. You know, we
came so close for so many years. I was very
happy for Jason and Jalen specifically getting over the hump,
so that was very emotional. And then for Atalanta, they
had not won the European Championship for one hundred years,
So that kind of revolutionized Bergamo and the players. We
had a parade there. The Celtics parade was amazing, millions
(01:26):
of people with a parade in Milan took five hours
because there were so many people, so many people on
the streets. They had to have a one hundred policemen
moving people out of the way as this this double
decker bus went down the hill to only go three
miles five hours. It became dark. They're lighting off flares.
It looked like apocalypse now. So those were just just memorable.
(01:48):
Remember parade, I do New York, not Boston.
Speaker 3 (01:51):
But you know, but Steve, you've done You've had such
an iconic career and I've admired you for so long.
You've been so kind to me. But thinking about you
Korean Bane and all the great deals you've done in
private equity. But take us back to two thousand and two,
because if Boston Celtics is a little different and a
lot more special in many ways, take us back to
that and what did that mean to you at that time?
Speaker 1 (02:11):
It seems like yesterday. It's interesting because I had been
in bank capital and we had done billion dollar deals
and five billion dollar deals, and the Celtics was a
three hundred and sixty million dollar deal. And we do
a billion dollar deal, they be one or two reporters.
And the odd thing about the Celtics peck then is
there were no leaks. This was a very private deal
from a private seller to a private seller, so there
were zero leaks. It's almost unheard of.
Speaker 2 (02:33):
Wow.
Speaker 1 (02:33):
And so it was a very hot day in September
or August, whatever that day was. And we drove over
to the Celtics facility and the previous owner hadn't even
told the coach that the team had been sold. Whoa wow.
And he was up in the balcony staring down at us,
and it was incredibly So I drove over with Wick Grosspec,
who's our CEO and the partner. It was incredibly hot.
(02:56):
He bounded out of the car and then I was
nervous and I couldn't open the door of the car.
I was locked in the car. It was ninety degrees.
I'm sweating and we're going to press conference. I thought
there'd be a couple of reporters there, so thank god,
you know, I kind of etched on the window. Help
and he came back, got me got out of the car.
I'm telling what we go to sit at place like
this and I look up and there's reporters the same
number about in the room today. I mean, there are
(03:17):
one hundred reporters there right to report on this. I said, okay,
this is this is really different. You know the intersection
of sports and business. You know, when you put the
entertainment into it, it's really different.
Speaker 2 (03:28):
And so before we get to because I know you've
got some like owner to owner questions. I do not
own a professional team. I'm a humble journalist here, but
I did get to know you, Steve pre Celtics like
covering private equity, I mean, tell us a little bit
about translating that work to ownership. And you stayed in
(03:52):
private equity during all of this time, and you're still
an active investor. But like, what was it about ban
because Bane was you know, many people in this room
were very familiar with that story, very special and different
sort of partnership. What did you bring from that experience
to your partnership with Wick and your other parties the.
Speaker 1 (04:10):
Southwick and I had been in venture capital and I'd
been in buyouts, and actually the concepts are very similar.
So The first thing we did was do kind of
a bane study on what were kind of the key
objectives that we would have going forward. But the good
news isn't consulting. They always bought it down at three things.
I told Alex like fifteen years ago, it's always about
(04:31):
three things, not two three things. And the first was,
you know, you want to win a championship, so build
a championship team. The second thing we needed to do
was make it a more fan friendly environment. Back in
those days in Boston, you know, the Celtics were the
only team of the thirty teams that didn't have a
dance squad or cheerleading squad who was really old school
and not a lot of connectivity with the fans. It
(04:52):
was kind of like they want to keep the fans
away from the players. So that was the second objective
is really, you know, make it a better fan experience.
The third was use it as a community asset, because
you don't really you know, like you don't really own
these teams. They're kind of owned by the city and
they can do enormous amount of goods. So we set
up the first day, we set up something called the
Boston Celtic Shamrock Foundation. And you can't win a championship
(05:13):
every year, but you can you can do a lot,
you know, for the people of Boston and New England
off the court. And so those were the three pillars
that that we found on and we did that study
and executed on that, and the Globe came out with
an article which we just got under the wire. They said,
if they idolized every team that won a championship, and
I guess at that time, no new owners that came
(05:34):
in if they didn't win within the first five years,
they never won. Oh boy, so we wanted the fifth year.
Oh we had a five year plan and we wanted
two thousand.
Speaker 2 (05:42):
Yeah, that's that's good Bain work, So Steve.
Speaker 3 (05:45):
Every time, whether it was when we were trying to
buy the mats, you werelways so gracious, So was Bain,
and you always wanted to offer advice with nothing. You
didn't have a pony in the race, but you always
such a great mentor to so many people. Every time
we went to Boston when the Timbers went to play,
you and work were so gracious. You made me feel
so like very You were very hospital and made me
feel at home. You're probably the first person ever that
(06:07):
made me feel at home in Boston.
Speaker 1 (06:09):
So thank you for that. I'm a little weird.
Speaker 3 (06:13):
But in how seriousness, if it was one thing that
you would say, with that over twenty years of experience
in the NBA, now with two championships, what's one thing Mark, Lorie,
my partner and I have to do, and what's one
thing we have to avoid oning?
Speaker 1 (06:26):
Well, I think the number one thing you have to
do is be you know, be a fan and you
played pro sports. I never played pro sports. I played
in college, but but I realized I played a lot
of basketball. But in getting involved with the team, you know,
the team shows up every day. There's one hundred games
if you count the playoffs. It's amazing strain on the body.
You get back to backs. The fans don't understand that.
(06:47):
They don't know that this might be the guy who's
played forty minutes the last five games, and that guy's
got to go out there like it's the first time
that he went out there. It's a show every night.
So I think be passionate about your players, the team,
the community. That'd be number one thing to do. And
then what not to do? You know, I think The
biggest problem new owners have is they want to come
(07:08):
in and win too quickly. And we studied all the
teams and drafts we did. We did another band study
on drafting and all the all the we're very very
analytic based. We started something called the b I A,
the Basketball Intelligence Agency. There's a little sign it's like
the FBI the CIA sign, but it says b I N.
And we have we have PhD from Duke, we have
we have we have m I T. We have the
whole whole crew in there. We're on our twentieth kind
(07:30):
of regression model now in terms of how do you
pick players, strategy and the rest. But but I would
say you you you need to take a long term
venture capital like approach to it rather than turn it overnight.
So you've seen many situations where you buy the team, uh,
they trade all the draft picks, bring in one or
(07:50):
two old players that probably have something left but maybe
one year or two years left, and then if they
get hurt and they don't win, you're out of draft
picks and then you're starting over it. So we always
took this kind of five year plan approach of building
by the draft, doing trades where they made sense. We
didn't try to turn around overnight.
Speaker 2 (08:22):
One of the fascinating things, especially if you think about
sort of the intervening years between the championships from eight
right to twenty four, it's a long time. Especially in
the NBA, the league has utterly transformed. What do you
think is the most meaningful thing that's happened in those
intervening years, other than like new owners coming in, How
(08:46):
is the business of basketball changed?
Speaker 1 (08:49):
Well, if you look back at twenty years ago, you
would count fans in the hundreds of thousands. The Celtics
didn't really have even emails with the fans. There was
no Instagram, was no Facebook, so it was very traditional.
It was radio and broadcast television. So what's happened in
that twenty years is media and technology has changed dramatically.
(09:09):
You can now count fans in the billions, and the
Celtics reach and the NBA reach is global. You know,
Adam Silver and David Stern did an incredible job getting
out ahead of the curve. I mean people used to
criticize them for having an office in China, putting up
early infrastructure in Europe, and now that's paid off big time.
Thirty percent of our players are from overseas and they've
done a phenomenal job just brought in the appeal and
(09:31):
the product of the game. So technology and media have
changed dramatically, and that has led to more abilities to
monetize players, to create their own brands, more engagement on websites,
and now you have a big battle between what I
called old media and new media for those eyeballs. And
that's why sports properties are so valuable.
Speaker 3 (09:49):
You have a great passion for the game of basketball.
You played a duke for one year, so.
Speaker 1 (09:53):
I was the worst player on the worst duke team.
Every kind of like Bob Bevens long jump. No one
will ever ever exceed that.
Speaker 3 (10:02):
Two of your kids played at Duke.
Speaker 1 (10:03):
Yeah, I play to your boys. Okay.
Speaker 3 (10:05):
So you went want Ambers okay, and you went to Duke.
You went to Harvard Business School. You were thinking about
getting your PhD. At what point did you know that
you were just built a little different.
Speaker 1 (10:16):
Well, the funny story was, I wasn't that strategic. The
reason I didn't get the PhD is my grandfather was
a shoemaker and made eight dollars an hour. I had
lots of student debt. I was going to be a
professor at Harvard. So I went to get the doctorate,
and I didn't have enough money. So I looked down
the list and what was the highest paying jobs. It
was investment banking, consulting, and for a summer job. So
(10:39):
so I had an offer down here, an offer in Boston.
I wasn't that strategic because I said, well, I don't
know if to get a new apartment. I already had
my lease in Boston. So I took consulting. Wow, and
then that turns out to be very transformational for me.
So after the summer, I was going to go back
and get the doctorate, and they said, we'd love you
to join you know this this small company maaning company
then and and if you if you stay here for
(10:59):
three years, will pay for the doctorate. So I said that,
you know, that's a great deal. I have no money,
A one hundred thousand of dead I had nothing, so
so so I took that job. And then that was
about forty years ago, and I've never really left the
Bane system. And Bill Baine is unfortunately passed away. But
because I thought maybe I get my doctorate again, he
would pay for it. But they probably don't have that
document anywhere.
Speaker 2 (11:19):
Yeah, He's like no, but seriously, Bill promised me I
could get a doctorate. You know what's funny is, I'm
sitting here they talk about all the New York Boston stuff.
It's like, so maybe if you had taken the job
in New York, everyone in here is like, wait, could
they own the Knicks instead. It's like, that's a sliding
doors moment if I've ever seen it. I want to
talk about Atlanta a little bit because the story there
(11:43):
is fascinating in terms of like sort of how you
get there. Tell us that story of like how you
get into that business of football.
Speaker 1 (11:51):
Well, it goes way back again. When I got out
of school, my grandfather and father said I had a
major in accounting. I hated accounting, but sorry if there's
accounts out there. But I didn't really like accounting, but
they said it was the only people employed during the depression.
They both lived through depression, and they thought, you know,
every year another depression was coming, you know, nineteen twenty
nine was coming. So I said, fine, So I got
(12:14):
the accounting degree at Duke. But then I didn't realize
to get the CPA, which they wanted me to get,
you had to work three years in accounting. So I
had six or seven offers and I went to all
those firms. I was twenty two and I didn't tell
them why. The reason why is I didn't really want
to really do accounting. But I said, anybody who sends
me overseas, I'll take that job. And in those days,
you know, they would never send a twenty two year
(12:34):
old person with no experience overseas. But one firm wanted
me to batten up Pete Mark Mitchell KPMG. Today they sent
me to Holland. So I never been out of kind.
I jumped on a plane and in those days, this
is incredible. In those days, the only sports scores you
could get was International Herald Tribune three days later. So
to figure out if you if who won the World Series,
you'd have to get a paper this three days old.
(12:54):
But anyway, the only thing I could do is I
was a sports guy. So as soccer was huge and
the Dutch went to the the finals in nineteen seventy eight,
I became a big soccer fan. Fast forward four years later,
one of my partners from Italy called and said, hey,
there's a family that wants to meet you. The Percassi
family in Italy, in the right outside of Milan, and
they like some help, maybe you buy a minority position
in the team, you know, you know, help globalize it.
(13:15):
So I went there, I got on a plane, I
got off the plane and I looked around. Everybody looked
like me because my grandfather is from there, and I said,
this is a great place. And so I really hit
it off with the family and we ended up, you know,
putting a major investment in there. And they wanted they
had the same goals we did. They wanted to make
it bigger, they wanted to globalize. And it's been a
great synergy between the Celtics and them because we've used
(13:37):
our stat guys. We have a stat guy there now.
We share marketing ideas, we share training ideas, we share
player development ideas. So it's been fantastic.
Speaker 3 (13:45):
So I heard this ted Lasso comparison, which I love
a little bit about that.
Speaker 1 (13:51):
I mean it was like ted Lasariria Italian ted Lasso.
Yeah yeah, but really it really is is like that,
and the Italians have a fantastic culture. And I hadn't
spent any time growing up there. My grandparents were both
from Italy, I never really been to Italy before, and
they welcomed me there and it's just a great culture
(14:12):
and the food is great. The soccer is just a
huge passion a lot. Atalanta's a light light a lot
like the Celtics. They have a kind of a national
brand in Italy. It's everybody's second favorite team, except if
you're from Bergamo. People love Atalanta because it's been the
little team that could. It's kind of overachieved for a
number of years. Acrosseas have done amazing job building one
of the best academies in Europe. The reason we invested
(14:34):
is we wanted to compete, and with that academy you
compete every year because they crank out so many good players.
At one time when we bought the team, I think
they had five players on the under under twenty three
national team, and that means the other nineteen clubs had
the other fifteen players. We had five.
Speaker 3 (14:50):
I do want to go back to that because you
have such an embedded competitive advantage. Number One, you know,
forty years of beying one of the best consultant private
equity firms in the world, and then Boston Celtics, one
of the most iconic franchisees in the world as well
run as anyone. So when you take those two practices,
what best practices do you take to your thesis investment
and take it to Europe.
Speaker 1 (15:11):
Well, I think what you take is is we were
trying to bring it to a more analytic approach and
they're behind in soccer and that in general, and so
the Precossi's wanted that. They're very receptive of that. So
we brought in a stats team. We just expanded that team,
and Mike Zarin, who really kind of runs our whole
stat operations, come over many times and he turns out
(15:31):
to be a big soccer unfortunate he's an Arsenal fan,
but in Italy he's Anta fan. But he's come over
and helped us set that up. The second thing is
more global brands, So we're doing some deals with some
global brands right now that we'll an now soon that
a're gonna be very transformational for Atalanta. And then looking
at fandomenities. We expanded the stadium, built the new ends
(15:53):
on both ends, and built a new club like we
have here for the Celtics. That's fantastic and I have
to say that the food is greater the Celtics. But
the chef at our restaurant is a chef from Davitorio,
which is the number one rating restaurant all Vidaly. It's
right in Bergamo, and so that is an incredible experience.
People will just come there. It takes two years to
(16:14):
get a reservation at the restaurant, but you can come
to our club and you get his food.
Speaker 3 (16:18):
Invitation was lost in the Yeah, exactly, I was.
Speaker 2 (16:21):
I mean, I love Bloomberg, I love this power Players event,
but why aren't we taping this?
Speaker 1 (16:27):
This is we open up the new stadium. Actually, you
invite to September fifteenth, Okay, we asked for you. Feel
it up.
Speaker 2 (16:48):
So we heard earlier today from Tony Wrestler talking about
this like three trillion dollar opportunity in like global sports.
I mean, are you a buyer and in this in
this market? Like do you and do you buy into
that thesis that it's that big?
Speaker 1 (17:05):
Yeah, it's big and expanding. You know. I started we
started talking in the beginning about you know, the the
the old media new media war that's only intensifying. And
I think if you look up television programs, the top
one hundred in the United States, and last year ninety
seven of them were sports events, either NFL or championships
or whatever. So number one. Number two, streaming has revolutionized everything.
(17:30):
Streaming and the and and and kind of the the
distribution on Internet, Instagram, TikTok, et cetera. And so that
allows fans more connectivity and more time you know, on
those screens and eyeballs outside of the game itself, and
shoulder shoulder programming, shoulder internet shows, et cetera. Podcasts. Podcasts
are booming, you know, this incredible podcast and number one
(17:52):
podcast in the world. Honored to be here, by the way,
and so and so we are. We're at the start
of I think kind of a me a revolution where
it's only going to get better and better with technology.
You look at the stadium that Steve Bomber's built out there,
that's going to be an incredible thing and spur other
stadium development. Three D is going to come in someday,
you know, where you can be immersed in the sports
(18:13):
of any even more with round screens or big screens
or glasses. So, yes, I think it's an incredible product
and it is now globalized. Yeah, you know, we went
we played in Barcelona, walking in that place that they
have the people at Celta Jours. You said, we went
to Rome. You go all over the world. You go
(18:34):
to China in the subway in the morning, the games
are out in the morning. You see them watching NBA games,
especially when Yao Ming was here. But they love basketball
over there. So so basketball, soccer, the global sports, the
global competition. I think someday you'll see teams NBA teams
in Europe. We already have NBA Africa. These will all
rise up and you'll get you now have global gold,
global championships of these teams.
Speaker 2 (18:56):
You know, we always you know, the show is called
The Deal, Like, what are the deals on the horizon
for you beyond basketball and football? I mean, I have
to think, especially to your point, given all the success
you've had in those two sports. I know you've looked
at some other football clubs, like what what strikes you
as interesting out there?
Speaker 1 (19:15):
Well, I think the whole business sport is interesting that
you know. That's why this pet podcast is booming. They're
such interest in it, and so we've looked at things
as far ranging as women's sports are going to be big.
You look at the evaluations out in La and and
you know Caitlin Clark coming into the league, you know,
getting getting all that interest out there. Women's soccer, that's
always been a great Olympic sport. Now that's expanded, so
(19:37):
so people want to see that and they've changed those
rules to bring better players in. So I think women's
sports is a big category just emerging sports. A cricket
is huge in Indian they're starting to bring that out.
So we're looking at all sorts of opportunities and then
there's and silliar opportunities in terms of support for that.
So I'm invested in an AI company. You know, the
AI can help sports both from a fan perspective and
(19:58):
also from a management perspective. So so I think technology, you
know slash sports, slash emerging sports, women's sports, those will
all be very exciting areas that that right now, you're
scratching the surface, right.
Speaker 3 (20:10):
You know, one of the things about private equity, before
private equity was called you know the LBO business, as
you said many times, but what has been synonymous with
you know, PE or even leverage biotic. You come in
and you like destroyt you know, fire everybody, and you
guys have done exactly opposite with the Celtics. I mean,
continuity has been a real competitive advantage and arbitrage for you.
Talk a little bit of why it's that so important
(20:32):
for you guys.
Speaker 1 (20:32):
That's a really great question. I should have mentioned that before.
That's that's about that long term approach. So Bain Capital,
you know, we believe in long term value. It's always
been a misnomer of private equity, by the way, I
think because the industry started out maybe in the late
sixties early seventies, there were a lot of fat companies
in the US that had six planes and you know,
(20:53):
restaurants and golf courses, stuff that really not appropriate for
corporate America. So I think there were some early buyouts
done where they would slash those things and it got
known for cost cutting. But the real successful firms, the Blackstones,
the Bains, the Carlisles, they realized that if you if
you're going to going to really make a profit, you've
got to build businesses, and you don't build businesses by cutting.
(21:15):
You have to grow. So Bains always had a growth
focus from day one, the consulting kind of growth focus.
How can we bring these products overseas, you know, how
can we build new factories. How can we serve the
customer better? And that's that's what's really driven our record.
But part of that is long term continuity. So back
back in two thousand and seven, Paul Pierce got hurt.
He was our best player, We were on the rise.
(21:36):
He got hurt. I think we lost fifty five painful games,
and I went to all of them, was bed, and
there were people with signs, you know, fire, Doc Rivers,
you know fire Danny Ainge, you know fire the owners,
and so we met and we said, gee, Doc's do
an amazing job developing this young talent we have, and
no one's going to win without Paul Pirison. We had
I think another good two of our best players hurt
(21:57):
for the whole season. We had a great draft for
us coming up. We love what Doc was doing, we
love what Danny was doing, and so we made no changes.
So we've in huge value to that continuity. When you
bring in new people, they always have new ideas, and
then a lot of new ideas don't work. But we
want to stick with the guys that had good ideas
that we're going to work. So then the very next year,
Danny made that trade and we got Garnet, we got
(22:19):
Ray Allen, and we won the championship after all the
signs were out the whole season. You know, fired Doc,
fired Danny, you know, fired the owners. So that continuity
for us has been huge. And most of the selling
employees we count their their things in increments of twenty
five years, I mean we've had we've had the same
We've only had Danny and then Brad Stevens as the
GM right in all those years. And Danny retired, we
(22:42):
want to go back to Utah, his home, and so
we promoted Brad from the coach and then we took
a coach that was a young coach for Brad and
there and made him the coach. So I think we've
only had three coaches in the twenty three years and
we've only had and none of them fired. And we
have the same Rich Gotham, the same president. This is
solely the same ed of marketing, Bill Reichfelder, the same CFO.
(23:03):
So we have enormous history. Trust back to the point
of you know what you need to do is you
need to build a players, to build an a team
and then keep them in place and don't worry about
what the media says, or fire this guy, fire that guy,
because they only have ten percent of the data, so
you've got to stick to your convictions.
Speaker 2 (23:22):
Well that's unfortunately where we have to end, but a
good place to end. See, Pelly, you could thank you
so much for your championship wisdom. Appreciate it and thank
you guys.
Speaker 4 (23:41):
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, Stacey Wong, Lizzie Phillip, and Victory Veyez.
Original music and engineering by Blake Maples. Our managing editor
is David E.
Speaker 1 (23:59):
Revel.
Speaker 4 (24:00):
Our executive producers are Jason Kelly, Brendan Francis, Noonham, Jordan Opplinger,
Trey Shallowhorn, Kyle Kramer, Andrew Barden, Kelly Laferrier and Ashley Hoenig.
Sage Bauman is our head of Podcasts. Additional support from
Matt Prophet, Micah Rondo, Mark Dawson, Chelsea Hoon, Jennifer Yelverton,
(24:25):
Matt Knight, Rachel Carnavali, and Elena sos Angeles. Joshua Devou
is our director of photography, camera operation by Tom Conners.
Rubob Shakir is our creative director. Art direction is from
Jacqueline Kessler. Casting by Adrian Tuscano. Our associate producer is
(24:45):
Natasha Abelard. Alex Diacanis is our 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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