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Speaker 1: Hello, Welcome to the Bloomberg Business of Sports podcast. We

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Speaker 1: explore some of the big money issues in the world

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Speaker 1: of sports. I'm Michael Barn, I'm Scarlett and Don Damien

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Speaker 1: sass Hour. Oh look, we got an old friend of

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Speaker 1: the show. David Edelman is the chairman of seventies six

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Speaker 1: dev Corp. And also partner of h B s E. Uh.

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Speaker 1: He's been on our show before and he has always

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Speaker 1: laid some knowledge on us, and we appreciate it because

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Speaker 1: we had a lot of questions to ask him, especially

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Speaker 1: about all the stuff developing for the Philadelphia seventies Sixers. David,

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Speaker 1: thank you so much for joining us here on the

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Speaker 1: Bloomberg Business of Sports. Thanks for having me excited to

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Speaker 1: us reconnect with you guys. Well, let's talk about that

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Speaker 1: the Philadelphia seventy sixers. Of course. Uh, it's always happening

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Speaker 1: down in Philly, right if they've been going through one

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Speaker 1: heck of a summer so far into the season. I mean,

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Speaker 1: you had the Phillies and they're going through and then

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Speaker 1: the Eagles right now they're playing some good ball now

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Speaker 1: the seventies sixers, uh, and more importantly, the development of

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Speaker 1: a new downtown arena for the seventy sixers. Can you

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Speaker 1: talk about that. Yeah, look it it is certainly great

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Speaker 1: to be a sports fan. You know, obviously had fun

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Speaker 1: watching the Phillies and uh, yeah, look, the the arena

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Speaker 1: is you know something I'm really excited about. My partners,

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Speaker 1: Josh Harrison David Blitzer approached me a couple of years

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Speaker 1: ago about wanting to do something really world class in

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Speaker 1: the city of Philadelphia. Uh. They realized having you know,

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Speaker 1: a local partner would be helpful, uh in doing this,

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Speaker 1: and uh, we spent a year looking for the best

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Speaker 1: site in Philadelphia, and I'm really happy that we found it.

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Speaker 1: And the defining point for me at least is that

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Speaker 1: this project is not seeking any public financing, which I'm

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Speaker 1: sure taxpayers are grateful for. Can you talk a little

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Speaker 1: bit about that and where you're going to make up

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Speaker 1: that difference. Yeah, So what's really important to note is,

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Speaker 1: you know, Philadelphia is one of the poorest big cities

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Speaker 1: in the country. Our school system has tons of deferred

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Speaker 1: maintenance on its buildings. Um, there's you know, poverty and

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Speaker 1: crime and things like that. It would be in a

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Speaker 1: appropriate for us to take city resources. As great as

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Speaker 1: we think this project is and will be for economic development.

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Speaker 1: It's just not something that Josh, David or I are

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Speaker 1: interested in doing. So David, look, I mean I have

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Speaker 1: to switch gears on you here because it's an interesting

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Speaker 1: time we live in. You know, you're very involved in

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Speaker 1: the city of Philadelphia. You're also the past chairman of

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Speaker 1: Philadelphia Holocaust Rememberance Foundation, and we remember what happened and

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Speaker 1: what you did for Dishawn Jackson Jackson back in and

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Speaker 1: it's an interesting time, right. We had Kyrie irving all

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Speaker 1: the things that are going on there. I'm just curious

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Speaker 1: to hear your thoughts and what kind of advice you

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Speaker 1: might lend to Kyrie and some of the other stars

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Speaker 1: out there that you know this is impacting. Yeah, you know, look,

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Speaker 1: I think first and foremost UM, and you know I've

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Speaker 1: been tracking it is you know education. You know, does

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Speaker 1: someone know when they say something that you know, the

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Speaker 1: Jewish community views is inappropriate or unkind or anti Semitic,

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Speaker 1: do they understand the message they're delivering? And that is

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Speaker 1: UM because we we found a lot new in the

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Speaker 1: Deshaunt case. I I think it was just a lack

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Speaker 1: of understanding, and you know, I is willing to instead

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Speaker 1: of just you know, a lot of people in our

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Speaker 1: community were you know, just like ready to you know,

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Speaker 1: kind of throw the baby out with the bathroom. And

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Speaker 1: I said, well, why don't we have a discussion first.

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Speaker 1: And so my view is, let's talk first, let's educate

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Speaker 1: on why you know, this is hurtful speech, um, and

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Speaker 1: see if we can help people, you know, kind of

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Speaker 1: change their ways. And you know, to Shaun, to his

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Speaker 1: credit and I say it all the time, you know,

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Speaker 1: he not only did he understand, but he came down

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Speaker 1: and said, you know, could you give me a tour

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Speaker 1: of the Holocaust Memorial and plaza and teach me about it.

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Speaker 1: I want to expand more about that too, because when

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Speaker 1: Adidas or already does uh decided hey, uh, we're pretty

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Speaker 1: much done with the YA line from Kanye West. What

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Speaker 1: people may not understand is that they had to go

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Speaker 1: to a bond sale, is what I'm trying to say.

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Speaker 1: It cost I know, you hear about all it cost

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Speaker 1: Kanye West money, but it costs Audi US a lot

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Speaker 1: of money. Also. Yeah, look, I think that unfortunately, you've

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Speaker 1: seen this in other brands over the years, where you

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Speaker 1: know someone they're aligned with your chooses to go in

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Speaker 1: a different direction, and you know, the company is forced

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Speaker 1: to make a decision. But you know, look, I think

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Speaker 1: it's at some point companies have to stand up for,

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Speaker 1: you know, what's right, and UH, I think you know,

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Speaker 1: put people in this in the place of understanding that

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Speaker 1: you know, you can't do all these things and get

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Speaker 1: rewarded for you know, being a bad actor or you know,

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Speaker 1: hurting people. I miss switch gears here and turned back

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Speaker 1: to real estate, UM, specifically real estate in Philadelphia. Obviously,

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Speaker 1: the economy, UH is in a state where we've had

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Speaker 1: a series of interest rate increases that have made property

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Speaker 1: UH a lot more dicey of a proposition than it

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Speaker 1: was a year ago. At this time, when you're looking

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Speaker 1: at investing in a new arena project, when you're developing

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Speaker 1: a new arena project, do you tie that valuation of

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Speaker 1: that project more to what's going on in the broader

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Speaker 1: real estate market or two sports, which is of course

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Speaker 1: what it's adjacent to, because the valuation of that just

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Speaker 1: keeps going up. Yeah, that that you're you're asking a

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Speaker 1: great question. I think, first and foremost, I have to

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Speaker 1: wear my real estate developer hat on this project. And

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Speaker 1: so the way I look at it is, and I'll

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Speaker 1: take you through it. You know. One and for those

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Speaker 1: who don't know Philadelphia, we're taking a portion of a

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Speaker 1: old mall that was built forty nine years ago in

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Speaker 1: the heart of Philadelphia. But it's a really big mall.

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Speaker 1: It's three blocks long. UM and in my opinion, it's

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Speaker 1: just been too big and never lived up to its

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Speaker 1: full potential. Um. We're gonna take a third of that site,

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Speaker 1: one square block, knock that down and build the arena,

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Speaker 1: which is on top of the busiest train station in Philadelphia. UM.

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Speaker 1: And so you know, trans oriented development, all of that.

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Speaker 1: And so first and foremost, I look at it, you know,

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Speaker 1: what's the cost of the land, what do we think

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Speaker 1: the cost to build the real estate will be? And

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Speaker 1: then layer in the economics of you know, collecting rent

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Speaker 1: from the sixers and concerts and things like that. You know,

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Speaker 1: then you know, Josh David and I look at the

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Speaker 1: fact of the economics that we believe this will really

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Speaker 1: be a game change revitalization of a part of the

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Speaker 1: city that just hasn't lived up to its full potential. Uh.

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Speaker 1: It's a really unique thing if you know Philadelphia, but

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Speaker 1: kind of this area between eleventh and eighth on Market Street.

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Speaker 1: Everything else around it's redeveloped, but we still have single

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Speaker 1: story boarded up retail across from the mall. And so

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Speaker 1: if this can be a catalyst to kind of redevelop

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Speaker 1: that neighborhood, uh and create you know, which we think

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Speaker 1: will help reduce crime by creating activity. Um, what's that

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Speaker 1: worth to us? And you know, honestly, we're just worth

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Speaker 1: We're willing to make a little less on our return

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Speaker 1: than a traditional real estate developer would and for our audience,

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Speaker 1: that's we're talking about the seventi six arena project. That's

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Speaker 1: a one point three billion dollar, eighteen thousand, five hundred

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Speaker 1: seat arena that may be coming in one But I

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Speaker 1: just wanted to kind of hit on that point you made.

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Speaker 1: You look at you put in your real estate hat, right,

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Speaker 1: and you know, increasingly in today's day and age, you

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Speaker 1: find owners can just throw money at the situation and

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Speaker 1: make us better. But you're talking about it from a

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Speaker 1: business perspective. When you and you know took me this investment,

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Speaker 1: you're investing in the seventies sixers and the New Jersey apples,

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Speaker 1: you know, do you look at that from the perspective

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Speaker 1: of a business investor or for someone who has a

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Speaker 1: genuine love for the game. Yeah. Look, you know, I'm

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Speaker 1: fortunate that I was able to get involved in the

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Speaker 1: Sixers and Devils. You know, my closest friend, Michael Rubin

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Speaker 1: had to I'm sure you guys have talked about it,

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Speaker 1: had to sell UM and you know, we struck a

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Speaker 1: deal for me to buy his interests. And uh, you

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Speaker 1: know that obviously is a Philadelphia guy, you know, growing

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Speaker 1: up with the Sixers, and you know, it's a dream

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Speaker 1: come true for me to be involved in sports. UM.

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Speaker 1: I was previously involved with Josh and David and Crystal

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Speaker 1: Palace in the Premier League, and so I really love

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Speaker 1: the sports entertainment business. I think it's a great business.

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Speaker 1: I think it it's a convener for people to bring

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Speaker 1: them together. I look at what sports did during COVID

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Speaker 1: to get people together. So for me to be part

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Speaker 1: of that is very exciting. Um. Obviously, there's only you know,

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Speaker 1: there's a scarcity value to professional teams, UM, and we

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Speaker 1: you know that creates interest and supply. But I do

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Speaker 1: think it's a little different. You know that the arena

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Speaker 1: itself and you know, just to kind of spin on

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Speaker 1: that if you look where we're playing right now, we're

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Speaker 1: at tenant in someone else's building. We're the third choice

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Speaker 1: of scheduling right now. So you have the Flyers, who

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Speaker 1: are owned by Comcast to own the building, they get

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Speaker 1: the first pick. Then you get concerts and the Sixers

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Speaker 1: get third place. And what does that mean is consistently

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Speaker 1: we have more back to back games and more five

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Speaker 1: out of seven night games than any other team in

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Speaker 1: the league. And so you know as you follow playoff

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Speaker 1: time in basketball and you see that the difference between

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Speaker 1: the number two seed and the number four or five

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Speaker 1: seed is one or two games. Well though, you know

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Speaker 1: that wear and tear on our players really adds up, right,

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Speaker 1: and so um so that you know, there's a couple

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Speaker 1: of reasons, um, not just getting that. You know, economics

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Speaker 1: is one of them, but one being able to control

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Speaker 1: your own building, control your schedule is certainly first and

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Speaker 1: foremost for us number two. You know, when in this

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Speaker 1: day and age, when all of the teams can really

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Speaker 1: pay the same amount for players, um, what makes a

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Speaker 1: player pick us for someone else? And we think the

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Speaker 1: facilities are really important and you know we're just not

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Speaker 1: you know, where we need to be compared to the

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Speaker 1: rest of the league in the newer venues, and then

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Speaker 1: to our fans deserve to win championships and deserve and

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Speaker 1: experience commensurate with that. And that's really kind of the

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Speaker 1: goal of creating a you know, a world class facility.

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Speaker 1: I want to go more into the fans because in

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Speaker 1: Philly you have a passionate fan base and the clientele

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Speaker 1: is there. And there's a quick story, Uh, when the

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Speaker 1: Phillies and the Astros there in the World Series. The

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Speaker 1: Astros are in Philadelphia and a couple of the Astro

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Speaker 1: players wanted to go to a pizzeria, and the pizzeria

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Speaker 1: guys says, there isn't no way in West Hell. I

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Speaker 1: want to serve these guys. This is Philadelphia. They are

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Speaker 1: very passionate in Philadelphia, and it must help you when

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Speaker 1: you're trying to get into ventures like this. Yeah, I think. Look,

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Speaker 1: the goal is to energize our fan base. Uh. You

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Speaker 1: know what's unique about what we're doing here is, you know,

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Speaker 1: right now in Philadelphia, and I'm sure you've been to

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Speaker 1: some games. Our sports complex is located kind of outside

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Speaker 1: of the city in South Philadelphia, and so this is

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Speaker 1: really new for the city. To understand and you know,

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Speaker 1: get in the groove of understanding that you were going

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Speaker 1: to locate the arena in downtown Philly, UM and get

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Speaker 1: people programmed to think about you know, how does public

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Speaker 1: transit play into that? How does the ability to be

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Speaker 1: able to pregame by going out to eat, going to

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Speaker 1: bars and restaurants, things like that, UM and having an

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Speaker 1: after game experience which you know our fans don't really

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Speaker 1: have right now. So there's Philly and there's also new

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Speaker 1: work where the Devil's Play, And there were reports that

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Speaker 1: UM Josh Harris and David Blitzer wanted to perhaps invest

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Speaker 1: in Chelsea UM. That didn't work out in the end,

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Speaker 1: but there is talk that Liverpool might be a possibility. However,

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Speaker 1: Josh Harrison David Blitzery also own stakes in Crystal Palace.

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Speaker 1: How would that work if HBS were to pursue Liverpool. Yeah, look,

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Speaker 1: I think you know, it'd be great to talk to

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Speaker 1: Josh and David about that. I think obviously it was

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Speaker 1: no secret that you know, they looked at Chelsea UM

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Speaker 1: and I think you know, we would have figured something

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Speaker 1: out at that time. UM. Regarding the Palace UM, you know,

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Speaker 1: I think you know, the teams come for sale all

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Speaker 1: the time, and I think just taking a look and

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Speaker 1: seeing what's out there and if it fits our investment thesis, um,

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Speaker 1: so be it. Why do you think it is right

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Speaker 1: now that there are so many teams are coming up

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Speaker 1: for sale at this time? What does it say about

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Speaker 1: the state of the assets of these sports teams? Yeah? Look,

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Speaker 1: I think Look, obviously Chelsea was a unique situation when

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Speaker 1: you look at you know, who the owner was and

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Speaker 1: what was going on with you know, sections and everything. Yeah,

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Speaker 1: so I like, my my guess is if you asked

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Speaker 1: Abramovich that you know he never had intentions of selling

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Speaker 1: that team, right right? But Liverpool, Yeah, look, I think

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Speaker 1: the economics are so you have things in sports where

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Speaker 1: you might have owners that you know, there's a generation

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Speaker 1: of owners that as they get to an age, maybe

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Speaker 1: their kids aren't as interested in the business or you know,

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Speaker 1: the Broncos were an example of an a state issue

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Speaker 1: right where you know, the Pat Bollan died and his kid,

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Speaker 1: you know, his kids were kind of trying to sort

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Speaker 1: that out. And so I think every you have to

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Speaker 1: look at each team as its own separate situation. You know,

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Speaker 1: obviously the prices are also like, you know, getting to

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Speaker 1: a point where maybe some of these owners are like, wow,

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Speaker 1: you know I have a number in the back of

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Speaker 1: my mind, and if someone hits my bid, I'm out, David,

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Speaker 1: And we've have to have the hard questions. Can you

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Speaker 1: one more? I mean, Joel embiide, I mean a quadruple

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Speaker 1: double man, I mean fifty nine points? And then what

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Speaker 1: do you have? I mean, what are the chances this year?

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Speaker 1: What do we like? I mean, do we think we

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Speaker 1: have a chance? Yeah? Look, you know Doc and dnal Moore.

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Speaker 1: You know, I think they've just put together an unbelievable squad.

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Speaker 1: I really do. I think. You know, Joel's you know,

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Speaker 1: was reported earlier the Planet FASTI it s he's getting

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Speaker 1: past that. Now he's hitting his stride. You know, tough

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Speaker 1: break on having James out for a few weeks. He'll

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Speaker 1: be back. But you know, you saw the rotation that

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Speaker 1: Doc put into play where he got some of the

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Speaker 1: young guys in, and I think that was just great

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Speaker 1: and so uh, I couldn't be more excited. I know

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Speaker 1: the team is really excited. The organization is excited about

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Speaker 1: what this season could be for us. I have to

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Speaker 1: bring something up by the way too. And it was

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Speaker 1: something that you got involved in earlier this year, Neutral Foods,

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Speaker 1: and it's uh the first carbon neutral food company in

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Speaker 1: America and it brought in a number of celebrities including

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Speaker 1: Lebron James and Kevin Love. First of all, tell us

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Speaker 1: more about Neutral Foods and and how can a food

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Speaker 1: company be carbon neutral? Yeah. So you know, my my

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Speaker 1: family office, Darko Capital, we've been taking a position in uh,

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Speaker 1: you know, kind of climate tech, carbon capture companies and

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Speaker 1: you know what I'll say, you know, you know, anything

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Speaker 1: to kind of prevent climate change. Lately, we did that

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Speaker 1: deal Neutral along with Bill Gates's group, Breakthrough Energy Ventures.

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Speaker 1: They brought us in, I brought in some of the

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Speaker 1: guys that you mentioned and you know John Legend and

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Speaker 1: a few other friends that we do things with. And

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Speaker 1: what the way I see it is years ago people

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Speaker 1: didn't understand what the category of organic was. And you

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Speaker 1: know it's not that long ago you'd walk into a

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Speaker 1: supermarket and there was just this one little section of

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Speaker 1: organic or gluten free or you know, non gmo, right,

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Speaker 1: and so you know the goal with Neutral and we

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Speaker 1: have a great guy, Marcus Smith, who's the CEO, is

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Speaker 1: how can you do things. Here's an interesting stat for

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Speaker 1: your your listeners is that cows produce a huge amount

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Speaker 1: of methane. Okay, I don't know. I have had along

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Speaker 1: with Philly fans after us Sunday. Okay, well right, you

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Speaker 1: hear me. Right. So, so what we've done is partner

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Speaker 1: with select farmers. Uh, there's technology you can use both

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Speaker 1: on what you feed the cows to reduce the carbon

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Speaker 1: and then number two actually you know, focus on the

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Speaker 1: carbon foot print related to the logistics and transport of

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Speaker 1: the materials in the milk. And so you know, we're

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Speaker 1: starting with milk. You'll see other dairy products and you'll

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Speaker 1: eventually see other foods. And my my thesis of this

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Speaker 1: is that you know, it starts with this and then

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Speaker 1: you'll see that food I'll expand one day to a

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Speaker 1: carbon neutral That is I really the thing about when

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Speaker 1: we think about cows and we think about how uh

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Speaker 1: you know they're out there and yes they produce milk,

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Speaker 1: and yes they produce meat and stuff like that. But yeah,

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Speaker 1: I mean there, you know, there are ways we can

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Speaker 1: do that and hopefully uh you know, bring a cleaner America. Well, David,

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Speaker 1: I have to just cut in here, you know, and

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Speaker 1: I love how Michael asks you about carbon neutral foods.

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Speaker 1: I want to ask you about American Harvest Voca Beach whiskey.

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Speaker 1: I want to ask about We don't have a lot

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Speaker 1: of time, but I love it. Well, you'll you'll have

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Speaker 1: to give us your address. We'll send it to all

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Speaker 1: you guys. Um, you know it's happy. It's always happy

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Speaker 1: hour somewhere. So yeah, I got into the alcohol space,

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Speaker 1: you know, by kind of dabbling in a few different investments.

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Speaker 1: I'm involved in Lobos Tequila, Lebron and a bunch of

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Speaker 1: other guys are in that. Um, you know, a couple

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Speaker 1: ready to drink called Vibe, which is vodka based, you know,

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Speaker 1: not seltzer based flavored drink. And um, long story short,

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Speaker 1: I wound up buying control of these two brands, American

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Speaker 1: Harvest Vodka, and my thesis was, you know your listeners

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Speaker 1: will appreciate you know, a call comes down to kind

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Speaker 1: of every spirits category has a clear number one to

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Speaker 1: three four, like you know, where they're all on top

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Speaker 1: of each other, US made, American made vodka. There's you know,

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Speaker 1: a clear leader in Tito's that does ten million cases

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Speaker 1: a year, and there's really no number two or three

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Speaker 1: or four. And I just couldn't get my head around

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Speaker 1: the fact that when I look at all the other spirits,

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Speaker 1: from tequila to bourbons to everything else, there's always kind

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Speaker 1: of like people all on top of each other there.

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Speaker 1: And so my thesis is, you know, uh, not everyone

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Speaker 1: likes to, you know, stay at you know, the big

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Speaker 1: chain hotels, and some people like a boutique hotel. Why

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Speaker 1: can't you have a boutique vodka? UM? And so American

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Speaker 1: harvest it's organic, which we think people are really appreciate,

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Speaker 1: gluten free, made in Idaho. The farms where we make

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Speaker 1: the wheat Thousand Springs Mill farms. Uh, they use solar

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Speaker 1: power to help harvest the wheat UM. And I'm not

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Speaker 1: just saying this, you know, but the profile of this

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Speaker 1: vodka is really smooth. And for years people try to

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Speaker 1: market vodka as being odorless and tasteless. Why would you

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Speaker 1: want to buy something that's odorless and tasteless that you

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Speaker 1: just have to mix with something like like you can

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Speaker 1: drink this on the rocks, you can drink need like

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Speaker 1: it's actually like we tried to like pronounce its flavor

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Speaker 1: um and then beach whiskey is a really fun drink

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Speaker 1: that we created. It's um it's flavored whiskey, goes down

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Speaker 1: really easy on ice or mixed with with uh with juice.

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Speaker 1: And then we created a kind of canned format of

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Speaker 1: that which is launching now that by the summertime will

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Speaker 1: be at all your beach towns. And uh yeah, we're

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Speaker 1: just trying to have some fun in the spirit space,

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Speaker 1: not take it so seriously. It's like the large companies,

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Speaker 1: and you know, I just wanted to see if I

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Speaker 1: could bring my entrepree o real spirit to the spirits world. Well,

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Speaker 1: David Edelman has described my evening. Thank you so much,

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Speaker 1: Chairman of seventies Corps. We really do appreciate it. Good

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Speaker 1: luck to you, sir. You've been so kind to take

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Speaker 1: time out and talk with us. Thank you again anytime.

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Speaker 1: Thank you. This has been the Bloomberg Business of Sports

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Speaker 1: podcast where we explore some of the big money issues

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Speaker 1: in the world of sports. I'm Michael barn I'm Scarlett,

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Speaker 1: and I'm Damien's has Hour and hey, you can get

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Speaker 1: this show every Monday, Wednesday and Thursday our podcast and

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Speaker 1: you can download the show wherever you get them.