Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio.
Speaker 2: You've got the Washington Capitals, the Wizards, the Washington Mystics,
Speaker 2: You've got Team Liquid, You've got the Capital One Arena,
Speaker 2: You've got NBC Sports Washington and so much more.
Speaker 3: Add it all up.
Speaker 2: You get Montamen, Monumental Sports and Entertainment, a four billion
Speaker 2: dollar sports empire headed by Ted Leonsis. He's a New Yorker,
Speaker 2: he's a businessman and more. But with us right now
Speaker 2: ahead of Tonight's episode of Chief Future Officer airing at
Speaker 2: nine thirty pm Wall Street Time on Bloomberg Television is
Speaker 2: Peter bsche He's the CFO of Monumental Sports and Entertainment.
Speaker 2: He joins us on zoom from Washington, d C. Peter,
Speaker 2: it is really great to have you here on Bloomberg
Speaker 2: Business Week. First of all, you know, talk to us
Speaker 2: about your life on a daily basis and what it's
Speaker 2: like to be a CFO of monumental sports. And I
Speaker 2: ask you on a day when we have been laser
Speaker 2: focused on something like the FED, and I'm curious about
Speaker 2: the macro We're going to get into what you guys
Speaker 2: are doing and everything under the Monumental brand. But what
Speaker 2: is it on a macro basis that you guys talk
Speaker 2: about with you and your team.
Speaker 1: So we talk about our consumers, our customers.
Speaker 4: We talk about what's happening in the economy, obviously, and
Speaker 4: whatever happens there in fact that impacts our customers. We're
Speaker 4: in the media business. We're in the disposable income business.
Speaker 4: People have different ways to spend their money, so we
Speaker 4: are We think about that a lot. Jobs inflation, interest rates,
Speaker 4: not so much impacting us directly, but impacting our customers.
Speaker 1: That's something we talk a lot about.
Speaker 3: What does disposable income look like right now? You know,
Speaker 3: I often bring up the stats of excess savings left
Speaker 3: in consumers accounts right now. We put it at about
Speaker 3: one point two trillion dollars essentially left over from stimulus. Now,
Speaker 3: a lot people strike back on Twitter. Let's say you're wrong.
Speaker 3: You know, we don't have any money, and I get
Speaker 3: that some people don't, But what do you what does
Speaker 3: what does your client base have?
Speaker 4: Yeah, you know, we're in an interesting business. We're in
Speaker 4: the media business. If you really think about it, and
Speaker 4: so again disposable income, but we are also so much
Speaker 4: a part of the fabric of our community. People have
Speaker 4: grown up in sports, whether it's.
Speaker 2: On the.
Speaker 4: Youth level, the high school, collegiate, professional level, so it's
Speaker 4: really part of their life in a way that a
Speaker 4: lot of businesses or products aren't so coming out of
Speaker 4: For example COVID, where we were essentially shut down for
Speaker 4: two years, the demand back was phenomenal. We came back
Speaker 4: instantly again because I think people like sports, They like
Speaker 4: it live, they of course like it on their screens,
Speaker 4: where the vast majority of them to consume us. The
Speaker 4: other part of our business, and you mentioned all our teams,
Speaker 4: but we're really alive entertainment business, and that we have
Speaker 4: a lot of events here at the arena and our
Speaker 4: other facilities that aren't just our teams. Tonight we have
Speaker 4: a major wrestling event. So that side of the business,
Speaker 4: that side of the live entertainment business that occupies our
Speaker 4: buildings came back very strong as well.
Speaker 1: The concert business.
Speaker 4: We all So what's happened certain very high profile acts
Speaker 4: our businesses, I won't say with a recession proof what
Speaker 4: impacts us more as our team performance. So if we
Speaker 4: have a downcycle on the teams. That's much more impactful
Speaker 4: than a downcycle into the economy.
Speaker 2: Peter, we want to get more deeper into sports. But
Speaker 2: when you look at the economic outlook, does it say
Speaker 2: to you recession? Does it say now we're going to
Speaker 2: skip it out?
Speaker 4: You know? I think that's what you all and your
Speaker 4: other guests down Bloomber get paid.
Speaker 1: To a pine on that's not really my area.
Speaker 4: If you want to ask who we should pick in
Speaker 4: the next draft, which is coming up, I might have
Speaker 4: a view on that.
Speaker 3: I don't believe it. I don't believe Listen. We do
Speaker 3: spend a lot of time talking about J. Powell, but
Speaker 3: I guarantee that if J. Powell ran into you, he
Speaker 3: would want to pick your brain to figure out what's
Speaker 3: going on in the economy, because you're the kind of
Speaker 3: people he wants to talk to.
Speaker 1: Now, I think, as I said, we've done well.
Speaker 4: We are concerned, like many people are, with cities commercial
Speaker 4: real estate that impacts us here, particularly in a market
Speaker 4: like Washington, so we pay close attention to that. We
Speaker 4: have a lot of our corporate partners. Obviously we have
Speaker 4: people buy tickets, but we have sponsors and their businesses
Speaker 4: are impacted by what's going on in the economy. Again,
Speaker 4: the commercial real estate world concerns us a little bit.
Speaker 4: We're downtown. We need fans comfortable coming here, their fan experience,
Speaker 4: fan safety, all those things are very important to us.
Speaker 4: I don't know whether mister Powell would focus on that,
Speaker 4: but that's what we focus on, our fan experience. We
Speaker 4: think of it as driveway to driveway, when they leave
Speaker 4: their driveway to come here, and then when they return,
Speaker 4: we've got to make that a seamless and experience as possible. Obviously,
Speaker 4: we control what happens in the building here, but silly
Speaker 4: things like traffic and public transportation and all that that
Speaker 4: really matters to us.
Speaker 2: Well, we're just thinking he might. I don't know, is
Speaker 2: the Grateful Dead playing at the Capitol Arena because he
Speaker 2: might come to see it because he does like the Dead.
Speaker 4: Well, the Dead no longer exists, But what do they
Speaker 4: call themselves?
Speaker 3: Dead and Company? I think they play the Coastal City
Speaker 3: Music Theater.
Speaker 1: I don't know whether they're on tour or not.
Speaker 4: We're sort of the only game in town, so if
Speaker 4: they play in Washington, they would be playing here.
Speaker 3: They are on tour, they're playing City field on next
Speaker 3: Wednesday and Thursday.
Speaker 4: So people play indoor buildings, particularly older acts tend to
Speaker 4: play indoor buildings like Hours they're an older act. But
Speaker 4: in the summertime, obviously the football and baseball stadiums can
Speaker 4: hold a lot more people than we can with twenty
Speaker 4: thousand dollars here, But come a rainy night or a
Speaker 4: cold November day, they'd be very happy to be inside
Speaker 4: with us. Peter.
Speaker 2: One thing that is certainly a great economic and market
Speaker 2: indicator is when companies are willing to expand grow their business,
Speaker 2: you know, take on debt to build out their business
Speaker 2: or possibly you know, expand their franchises. And I'm just
Speaker 2: wondering along those lines. The Washington Nationals are said to
Speaker 2: be coming up for sale, reports that you guys might
Speaker 2: be interested. Are you enthusiastic maybe about doing something like that?
Speaker 2: Is that a possibility?
Speaker 1: You know, there's been a lot of reports. It's out there.
Speaker 4: The team was on the markets, it's no longer technically
Speaker 4: on the market. We view ourselves here as having a platform.
Speaker 4: You mentioned we have a couple of teams, we have
Speaker 4: have a dozen venues. We now own our network. So
Speaker 4: for us, we have this platform and if we can
Speaker 4: add like businesses to it, it's tremendous. We have tremendous
Speaker 4: operating leverage in the business. Makes a lot of sense
Speaker 4: from a media point of view. We really are focused
Speaker 4: on the region now. For us, the region runs all
Speaker 4: the way up to Philadelphia and down into maybe even
Speaker 4: North Carolina.
Speaker 1: And west from here.
Speaker 4: So adding to the platform, we're six hundred and fifty
Speaker 4: million dollars in revenue news revenues now. Ted Chamer wants
Speaker 4: to get to a billion. We'll do some of that organically,
Speaker 4: just growing what we have. Some of it will also
Speaker 4: be adding businesses to the platform. I'm not going to
Speaker 4: name names that there's something.
Speaker 3: No matter how hard you travel here make.
Speaker 1: A lot of sense.
Speaker 2: I tried to kind of weave it together and was hoping.
Speaker 3: A little bit of a slip. You wanted a little
Speaker 3: bit of a slip there from Pete.
Speaker 2: No, no, I respect. I respect Peter. Having said that,
Speaker 2: we did much of the teams. You know, you guys
Speaker 2: have esports gaming. As you said, you're a media company.
Speaker 2: Where's the growth. Where's the biggest amount of growth, you know.
Speaker 4: I think it really is on the media side. We
Speaker 4: can't really add seats here in the building. We can
Speaker 4: raise prices, but it's about getting eyeballs. We really need eyeballs,
Speaker 4: and as you all are very familiar with, with the
Speaker 4: changing media's landscape and the regional sports network cord cutting,
Speaker 4: we need to be getting to our fans however they
Speaker 4: want to consume us, whether it's again on a traditional
Speaker 4: TV with a.
Speaker 1: Copper wire coming in, or it's on their hand held
Speaker 1: or whatever.
Speaker 4: So our growth is more eyeballs, but getting to them
Speaker 4: in ways that we haven't gotten to them.
Speaker 1: In the past.
Speaker 4: One of the reasons we're in esports, particularly sports related
Speaker 4: to basketball and hockey, is that's a way of connecting
Speaker 4: with a younger fan, and we need to connect with
Speaker 4: the younger fans.
Speaker 1: So esports is that.
Speaker 4: One of the reasons we're active and it's all over
Speaker 4: the country, all over the world and sports gaming is
Speaker 4: that's the way to connect with our fans.
Speaker 1: We have fans who have an interest in doing that.
Speaker 4: We need to have a product, whether it's a channel
Speaker 4: or distribution to reach those fans, younger fans, fans who
Speaker 4: have a very specific interest, whether it's gaming. That's where
Speaker 4: our growth is going to be. It's going to be
Speaker 4: more that's where our organic growth will be is in
Speaker 4: more eyeballs.
Speaker 2: Yeah, really fascinating.
Speaker 1: Yeah, through more and more channels.
Speaker 2: I'm sorry, no, no, no, no, no, no, no, forgive
Speaker 2: me hang on for a second. We do have to
Speaker 2: do a little bit of news and we're going to
Speaker 2: actually stay in the nation's capital, but we're going to
Speaker 2: come back and continue with Peter Biche. He's chief financial
Speaker 2: officer at Monumental Sports and Entertainment. As we said, joining
Speaker 2: us from Washington, d C. And you know, a lot
Speaker 2: going on in the world. I got to say, Matt,
Speaker 2: I do love when we talk business of sports. It
Speaker 2: is a big business. I feel like when there's a
Speaker 2: story that often crosses the Bloomberg and it's sports related,
Speaker 2: you know, we're on it, and you think about in
Speaker 2: the last week or so, right in terms of the
Speaker 2: PGA Tour and live golf. I mean, this is what
Speaker 2: a lot of the terminal users we're reading and interested
Speaker 2: in because it's big money and it's big business.
Speaker 3: I love it as well, not just for the sports,
Speaker 3: but also for the betting side of the business, which
Speaker 3: is just growing unbelievably quickly in the US.
Speaker 2: We've got a great guest with us. So we want
Speaker 2: to get right back to Peter bsche He's the CFO
Speaker 2: of Monumental Sports and Entertainment. He is the star of
Speaker 2: tonight's episode of Chief Future Officer, airing at nine thirty
Speaker 2: pm Wall Street Time on Bloomberg Television.
Speaker 1: Very cool.
Speaker 3: Yeah, that's a great show.
Speaker 2: You know, Peter, I gotta be on like you know this.
Speaker 2: You've been there for I think what two decades. I mean,
Speaker 2: coming off the financial crisis, we realized how important chief
Speaker 2: financial officers are in keeping businesses growing. I think we
Speaker 2: used to be for such a long time. It's the
Speaker 2: earnings call. They pop on the earnings call, they do
Speaker 2: the numbers, and then they go away. Being a CFO
Speaker 2: is so key in terms of the strategy that's deployed
Speaker 2: at companies today. And you talk get talked earlier about
Speaker 2: you know, how you guys have really made a mark,
Speaker 2: you know, in the DC area. But does that mean
Speaker 2: that becoming even more national is not on the table
Speaker 2: or could you when you talk about growth and expansion
Speaker 2: and more eyeballs, you know, continue to think about building
Speaker 2: out your brands nationally well.
Speaker 4: Well, obviously our teams through the leagues have a national
Speaker 4: presence right, the NBA, NHL.
Speaker 2: Right, But you know what I mean, you know what
Speaker 2: I supposed nationally.
Speaker 4: I think we've got a lot of work to do
Speaker 4: here at home, a lot of opportunity in our market,
Speaker 4: and there's a lot of value from our point of view.
Speaker 4: I've used this word already on the platform. You know,
Speaker 4: can it expand perhaps, But we need to do what
Speaker 4: we need to do to get to a billion dollars
Speaker 4: and we think we can do it.
Speaker 1: And oh, by the way, Washington's a great place to
Speaker 1: do it.
Speaker 4: And there is There are obviously other strong, important cities
Speaker 4: in this country, but Washington is one of those, and
Speaker 4: so we're excited to be here.
Speaker 1: Not to knock other cities, but we think this is
Speaker 1: a great place.
Speaker 3: To you can knock other cities. Washington is an awesome
Speaker 3: sports town. I gotta say. You know, people who live
Speaker 3: down there really root for their teams. They really get
Speaker 3: into it in a way that people in other cities
Speaker 3: sidetracked by other stuff really don't.
Speaker 4: But if you only had a baseball team, well, you know,
Speaker 4: we've had some success.
Speaker 1: We won the Stanley Cup a few years ago.
Speaker 4: Our women's team won the WNBA Championship, the Nationals, who
Speaker 4: you keep mentioning, won the World Series in twenty nineteen,
Speaker 4: so it's been a few years, but we've had a
Speaker 4: lot of recent success with our professional sports team.
Speaker 3: So is the NWNBA starting to pick up? You know,
Speaker 3: there's so much talk about pay parody, and to that
Speaker 3: snarky men always say, well, if you want them to
Speaker 3: get paid the same, go see the game. You know,
Speaker 3: are people starting to fill up those seats?
Speaker 4: Yes, And I don't think it's I think it's in
Speaker 4: women's sports overall at the collegiate level, at the professional level,
Speaker 4: not just in this country. In Europe for example as well,
Speaker 4: when we seeing the growth of women's professional soccer teams,
Speaker 4: often sistering with an EPL team or a lot of
Speaker 4: legal team. So I think there's a rising tide raising
Speaker 4: all those boats. I think the WNBA was at the
Speaker 4: forefront of that twenty years ago when it first started.
Speaker 4: They've done some great things in terms of raising growth
Speaker 4: capital at the league level, which is a fairly unusual
Speaker 4: thing for professional sports leagues to do. So I think
Speaker 4: the future is very, very bright for women's sports, but
Speaker 4: also for the WNBA in particularly and particularly in Washington. Obviously,
Speaker 4: the mix of professionals here includes a lot of women
Speaker 4: in very very significant roles, so we're excited about that
Speaker 4: as well.
Speaker 2: Hey, listen, I want to ask you about something very
Speaker 2: serious if I may, because it certainly has been a
Speaker 2: hot topic here at Bloomberg, certainly in the financial community.
Speaker 2: When this story crossed, I think it was the most
Speaker 2: read on the Bloomberg and stayed that way for the day.
Speaker 2: Has to do with the PGA tour and live golf
Speaker 2: and the increasingly growing role of Saudi Arabia and their
Speaker 2: money when it comes to global sports, and I'm just
Speaker 2: curious what you what your opinion of that is.
Speaker 1: Yeah, I think is it good? Okay?
Speaker 4: There there have been sort of startup leagues that have
Speaker 4: grown in the past, whether it was the the old
Speaker 4: AFL or the the.
Speaker 1: You know, competing NBA, wh and hockey.
Speaker 4: So that's been a common theme, perhaps not as much
Speaker 4: reacently that people have tried with the XFL and others.
Speaker 1: So alternative leagues I think are always going to come up.
Speaker 4: Often they result in merging, as the AFL and NFL did,
Speaker 4: and the A b A and the NBA, and so
Speaker 4: I'm sort of not surprised that followed that path maybe
Speaker 4: a little quicker than people might have expected. As to
Speaker 4: the specific sources of funding, I'm reluctant to comment on that.
Speaker 1: I think one thing I will say is sports teams.
Speaker 4: The sports business has gotten so much bigger, teams so
Speaker 4: much more valuable that opening up new pools of capital,
Speaker 4: as the number of the leagues have done, to institutional
Speaker 4: investors and the like, is just going to be critical
Speaker 4: to grow the game. And we're international brands, particularly the NBA,
Speaker 4: so international sources of money I think are going to
Speaker 4: be required to get where we want to go.
Speaker 3: I want to ask about speaking of international William Hill,
Speaker 3: I think has spot in your arena there? What's the
Speaker 3: arrangement and how has that growth been, Because you know,
Speaker 3: I lived in London for a long time. British kids
Speaker 3: learn spread betting when they're like five years old and
Speaker 3: then they do it for the rest of their lives.
Speaker 3: Here in the US, it's starting to pick up. It's
Speaker 3: starting to really catch on as a form of entertainment.
Speaker 3: So what's your experience been.
Speaker 1: Yeah, so I got to just give a shout out.
Speaker 1: It's actually Caesar's.
Speaker 4: Now Caesar's acquired the US operations of William Hill and
Speaker 4: they're iportant partners, so I.
Speaker 1: Got to get their name out there.
Speaker 4: No, I think it's always been out there, but it's
Speaker 4: been in the dark, it's been offshore, it's been unregulated,
Speaker 4: often not good people taking advantage of good people. So
Speaker 4: having light on it, sunshine on it, I think that
Speaker 4: we think is critical. I think it's critical. So we
Speaker 4: have a partnership with Caesars. We have no interest direct
Speaker 4: or indirect and the betting that happens there. There're a
Speaker 4: tenant in the building. They rent the space where the
Speaker 4: sports book is. They buy a lot of advertising, which
Speaker 4: is why I gave Caesars the shout out. But no leagues,
Speaker 4: no teams want to have any interest in the actual bettings.
Speaker 1: Not good for.
Speaker 4: Our integrity, it's not good for the fans thinking that
Speaker 4: these games are on the up and up. But again,
Speaker 4: I think we want to acknowledge that's out there and
Speaker 4: bringing it into the light of day is a good thing.
Speaker 4: As I said earlier, though, it's also whay if our
Speaker 4: fans engage with the game, and we need to always
Speaker 4: be figuring out new ways to engage with our fans
Speaker 4: as they distracted by, you know, watching Yellowstone or whatever
Speaker 4: else they're TikTok or wherever else is let to be doing.
Speaker 1: So that's just another way of doing it. All right.
Speaker 2: One thing we didn't ask you, are you going to
Speaker 2: buy the Washington Nationals?
Speaker 1: Well, I think you did ask me that a couple
Speaker 1: of times.
Speaker 2: All right, have any easier question, might you guys go public?
Speaker 2: And just got about thirty seconds.
Speaker 4: You know, pools of capital. We need pools of capital
Speaker 4: at the right time. I think we need to be bigger, definitely,
Speaker 4: it's something we think about. Market's got to be ready.
Speaker 4: But there are advantages to having the liquidity, to having
Speaker 4: a currency for acquisition. All the reasons other companies are
Speaker 4: public would make sense for US. Liquidity, currency, that kind
Speaker 4: of thing, and someday perhaps.
Speaker 2: Well, Peter, you are and no pun intended. Truly a
Speaker 2: good sport. We really enjoyed this and we're looking forward
Speaker 2: to it be well. Have a good season seasons. Peter Bscha,
Speaker 2: Chief Financial Officer, Monumental Sports and Entertainment on Zoom from Washington,
Speaker 2: d C. He will be featured in tonight's episode of
Speaker 2: Chief Future Officer, airing at nine p thirty pm Wall
Speaker 2: Street Time on Bloomberg TV. I love talking sports.
Speaker 3: Yeah, and a very cool show, Chief Future Officer. Tune
Speaker 3: in for that.