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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: The latest on Direct TV and Disney is still struggling

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Speaker 2: to reach a dale. Millions of subscribers were blacked down

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Speaker 2: of ESPN's Monday Night Football featuring the New York Jets

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Speaker 2: and San Francisco forty nine Ers. The dispute highlights and

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Speaker 2: the shifting power balance in sports and TV. Steve valueucre

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Speaker 2: of Bank Capital and co owner of the Boston Celtics

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Speaker 2: and Atalanta Football Club, joined us now for more. Steve,

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Speaker 2: It's going to see us, sir, Thanks for joining us,

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Speaker 2: Thank you for being here. Let's talk about this standoff.

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Speaker 2: What do you make of this current standoff at the

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Speaker 2: moment between Direct TV and Disney.

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Speaker 3: Well, this is in a long series of kind of

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Speaker 3: the war and media right now, the old media versus

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Speaker 3: the new media, and distributors versus content providers.

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Speaker 4: And we've seen this before.

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Speaker 3: I was involved directly with the Weather Channel that had

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Speaker 3: a big battle, you know, long fought battle with Direct

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Speaker 3: TV as well. And you know, content providers want the

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Speaker 3: appropriate money for their content, but the distributors are between

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Speaker 3: rock hard plays because the distributors they don't have content

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Speaker 3: and they want to maximize the price they can get.

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Speaker 4: So that's what you're seeing.

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Speaker 2: Now, what do you think the future of sports distribution is?

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Speaker 2: Which is a highly broad question, I know, but what

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Speaker 2: do you think the future is?

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Speaker 3: Well, I think the future is good because sports is

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Speaker 3: the most watched programs. I think ninety three of the

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Speaker 3: top top one hundred programs in the USA last year

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Speaker 3: were sports events, and so you have to have sports

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Speaker 3: events if you're a distributor to get get eyeballs.

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Speaker 2: Do you see a future where they skip the traditional

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Speaker 2: distributors and these sports franchises just stream directly themselves. Is

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Speaker 2: that the direction of travel for you?

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Speaker 4: Well, it's a great question.

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Speaker 3: It's going to be a battle between convenience and bundling,

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Speaker 3: you know, versus trying to get all the carde anything

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Speaker 3: that you want to watch.

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Speaker 4: So we'll have to watch that over the next ten years.

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Speaker 3: The good news is that the content providers like the

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Speaker 3: NBA are in good shape no matter which way it goes,

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Speaker 3: because because content, as I think Eisner said a long time.

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Speaker 4: Ago, content is king.

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Speaker 1: Well, just to sort of push that a little further,

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Speaker 1: there's this issue and I see this with my son

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Speaker 1: says they digest sports and they have access to some

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Speaker 1: and not access to others. And do you rather have

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Speaker 1: a generation that is brought up with easily accessible sports

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Speaker 1: and being able to tune in in the popularity increases,

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Speaker 1: or would you rather hire fees from specific streaming sites.

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Speaker 3: Well, that's the balancing act, and I think you want

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Speaker 3: both because you obviously won't have new fans unless you

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Speaker 3: have broader distribution. If the charges are high, you're going

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Speaker 3: to really shut off your fan universe to the fanatic fans.

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Speaker 4: So you're seeing many deals now where people go on

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Speaker 4: AIRTV plus the distribution channel.

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Speaker 3: So it's kind of like the movies promote things going

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Speaker 3: you onto cable, are going onto satellite, and so you're

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Speaker 3: gonna have to have a balance of both.

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Speaker 1: The international sports scene, I guess if there's a question

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Speaker 1: about the US and how sort of isolated it is,

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Speaker 1: we've seen an increasing sort of internationalization with respect to soccer, football,

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Speaker 1: with respect to basketball, or with respect to even baseball.

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Speaker 1: How much do you see that continuing even with some

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Speaker 1: of the direct streaming et cetera. Some of the new

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Speaker 1: agreements that are coming out.

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Speaker 3: Well, direct streaming is actually going to increase that because

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Speaker 3: now you can access any sports from anywhere at any time.

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Speaker 3: And if you think about, you know, the NBA audience,

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Speaker 3: the global sports like football and basketball, huge international market

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Speaker 3: things are blending together. I think thirty percent of the

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Speaker 3: players in the NBA are from foreign markets, and people want.

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Speaker 4: To see those players.

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Speaker 3: So we're only tip of the iceberg, and that's going

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Speaker 3: to grow dramatically over the next twenty years.

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Speaker 5: Can we see more sports teams do what the Yankees

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Speaker 5: did say with the Yes Network, you.

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Speaker 3: Know, that will help defend, you know, creating kind of

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Speaker 3: regional espns. So that's a compelling reason. If, for example,

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Speaker 3: you're in New York and you want to see all

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Speaker 3: the New York teams, that's probably a defensible mode that

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Speaker 3: you can have a cable business. But not having that

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Speaker 3: and people being on go direct is a real problem.

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Speaker 5: So how hard is that if you're not saying the

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Speaker 5: Yankees are the Boss and Celtics, if you're the smaller

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Speaker 5: team trying to break in, yeah, it's.

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Speaker 4: A little more difficult.

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Speaker 3: But on the other side of it, the smaller teams

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Speaker 3: have really profited by the fact you have so much

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Speaker 3: social media and clips and accessibility. So it used to

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Speaker 3: be to be a star, you'd have to be in

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Speaker 3: New York or Boston or LA You can be a

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Speaker 3: star anywhere right now because people can talk with you directly,

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Speaker 3: see your market yourself, see the small team.

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Speaker 4: So the small teams are actually on the rise.

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Speaker 2: You've got a footprint in two major markets. You've got

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Speaker 2: a footprint over in Europe and European football and here

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Speaker 2: in the NBA here in America. How different are things

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Speaker 2: in the European market versus say, the US one when

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Speaker 2: it comes to sports TV distribution.

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Speaker 3: There's some similarities, but they're different in the fact that

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Speaker 3: you have different countries, you have leagues coming together, and

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Speaker 3: certainly in football is very confusing. It's hard to understand

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Speaker 3: in America that you're playing in kind of three different

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Speaker 3: leagues at the same time. You've got your Italian national

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Speaker 3: team players that leave your team for a while and

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Speaker 3: go to that team.

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Speaker 4: You have the Champions League, the Europa League, and then.

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Speaker 3: You have each nation has a league of its own,

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Speaker 3: So you have to be a very fascif fan to

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Speaker 3: understand what you're playing for in these different cups and

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Speaker 3: things in the US is much simple that the league

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Speaker 3: is very simple. You're going for a championship and that's it.

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Speaker 3: There's one championship in Europe. There are Championship Cups and

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Speaker 3: Europa Cups and all sorts of things.

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Speaker 2: The Europeans might say, that's a feature, not a buck.

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Speaker 2: It's part of the beauty of European foot I think

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Speaker 2: it is.

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Speaker 4: I think it is.

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Speaker 3: And look, the NBA has really learned from that, and

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Speaker 3: we have the n Season Tournament and many people were skeptics.

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Speaker 3: Adam Silver was very courageous and pushing that through. That

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Speaker 3: had amazing ratings last year. The games were early in

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Speaker 3: the season. It made it be like late seasons. So

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Speaker 3: it's been a big success.

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Speaker 2: So I would extend that thought and say the Europeans

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Speaker 2: might think it is a feature, not a bug. I

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Speaker 2: wonder if certain people think it's a buck and not

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Speaker 2: a feature, given that it might actually prevent them from

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Speaker 2: being able to really unlock franchise value. One thing that

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Speaker 2: I've noticed, without a doubt, football is the biggest sport

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Speaker 2: on the planet. But when you get a list that

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Speaker 2: the biggest franchise is buying faunue top ten, it is

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Speaker 2: dominates it by American sports teams. Why are Americans an

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Speaker 2: American sports team so much better at unlocking franchise FOUNDUS.

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Speaker 2: Is the European counterpats Well.

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Speaker 3: That's a great question, John, and I think Europe's got

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Speaker 3: to start to go more towards the American model. The

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Speaker 3: American model basically has a very strong central control of

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Speaker 3: the league, so the league can negotiate the television deals.

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Speaker 3: It's all unified. You can have a unified cost structure.

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Speaker 3: It's been much more difficult. Soccer kind of grew up

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Speaker 3: from the minor leagues to the major leagues. It's a

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Speaker 3: very different system and so you have a hard time

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Speaker 3: unifying it because it's in different countries. So that's the

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Speaker 3: advantage of being in a large footprint like the United States,

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Speaker 3: where there's one approach and you can have a strong

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Speaker 3: commissioner and it really smart commissioner like Adam Silver really

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Speaker 3: map out how do we get the product and most

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Speaker 3: people at the most effective cost to get the most

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Speaker 3: eyeballs on it.

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Speaker 4: In Europe, it's very fragmented right now.

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Speaker 1: What private equity bring to the US sphere, particularly I'm

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Speaker 1: talking about football. The idea of private equity investment now

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Speaker 1: that are looking at it now that the potential for

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Speaker 1: a ten percent ownership is available.

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Speaker 3: Well, I think, I think, you know, it's a misnomer

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Speaker 3: to call it private equity, a classic private equity, because

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Speaker 3: private equity really comes in buyas a company, tries to

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Speaker 3: grow a company, build a strategic plan, globalize a company.

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Speaker 3: A ten percent investment in an NBA team is more

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Speaker 3: like investing in gold or not bitcoin because it'svulnerable, but

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Speaker 3: it's more like gold. Its value in its value has

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Speaker 3: never gone down in the last twenty five years. It's

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Speaker 3: been a you know, a double digit returner for twenty

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Speaker 3: five years. So specific funds will be raised and are raised,

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Speaker 3: funds like Arctose and Dial. They are raised to be

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Speaker 3: put into these clubs. And if someone wants a safe

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Speaker 3: investment and to participate in the NBA in their own way,

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Speaker 3: they can go to these funds. But that's not really

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Speaker 3: classic private equity. So the stir in the newspapers of

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Speaker 3: private equity is taking.

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Speaker 4: Over football teams. It's going to call the plays. That's

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Speaker 4: not happening.

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Speaker 3: It's a ten percent passive stake in what is a

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Speaker 3: fantastic asset.

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Speaker 4: You know, the NFL has again grown for.

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Speaker 3: Twenty five years, all the values and it allows people

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Speaker 3: to invest in It's non correlated to the market, so

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Speaker 3: that's how it's sold. It's really specific sports related media funds.

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Speaker 5: How fantastic are these investments. If we were to see

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Speaker 5: a twenty eight percent capital gains.

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Speaker 3: Tax, well that's going to apply to everything, So it's

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Speaker 3: all on a relative basis.

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Speaker 4: So on a relative basis it'll be the same. You know.

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Speaker 3: I think inevitably taxes will go up given the deficits

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Speaker 3: that we have, and probably should go up, and hope

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Speaker 3: they do it in a thoughtful way, so it doesn't,

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Speaker 3: you know, kill the economy.

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Speaker 5: What is a thoughtful way as a businessman.

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Speaker 3: Well, if you look at if you look at nations

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Speaker 3: that have a total tax it's the same on capital

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Speaker 3: gains as it is on ordy income, you'll find that

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Speaker 3: they rank much lower. In terms of venture capital, you know,

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Speaker 3: business formation. The United States is number one in that,

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Speaker 3: and it has contributed the fact that you know, if

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Speaker 3: you invest in venture capital and you go for the

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Speaker 3: long term, you have capital gains. A whole industry has

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Speaker 3: been created around that. Europe's behind in that, Chinese behind

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Speaker 3: in that, and it's not perfect, but with some asymmetry

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Speaker 3: between those rates helps that industry grow and then helps

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Speaker 3: companies grow.

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Speaker 2: Do you see some contradictions in the democratic platform that

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Speaker 2: they seem to want to foster start up culture and

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Speaker 2: at the same time there is this constant, and I

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Speaker 2: would say constant effort to think of the best way

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Speaker 2: to text unrealized gains. Is that a high contradiction from

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Speaker 2: your standpoint?

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Speaker 3: Well, you know, I think, as you guys know, John,

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Speaker 3: I think I see contradictions and politics on all sides,

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Speaker 3: and I think we're in a very rough period right now.

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Speaker 3: We're in a very rough period where things have become polarized,

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Speaker 3: you know, you know, populism has taken over, and I

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Speaker 3: hope we'll get back to some rationality where both sides

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Speaker 3: can sit down and say, Okay, what is a relevant

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Speaker 3: tax policy that we can fill the deficit but not

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Speaker 3: kill the economy. Let's compromise and get something in the middle,

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Speaker 3: and hopefully that's where we're going.

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Speaker 2: Then we always share that. I hope Steve's going to

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Speaker 2: see it. Thanks says this morning, Thank you, sir, Steve

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Speaker 2: Paluke of Bank Capital