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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. The Bloomberg invest Conferences

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Speaker 1: underway in New York. Earlier, Bloomberg's Jason Kelly spoke with

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Speaker 1: Mark Attanasio, the chairman and principal owner of the Milwaukee

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Speaker 1: Brewers baseball club, and Tom Warner, chairman and co founder

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Speaker 1: of Fenway Sports Group. Here's some of their conversation.

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Speaker 2: We're talking about golf. We're to talk about sports.

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Speaker 3: I'm so delighted to have both of you here because

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Speaker 3: you were at the white hot center of something we

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Speaker 3: all care deeply about, which is the world of sports.

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Speaker 3: I want to start with golf. You guys are both

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Speaker 3: part of the Strategic Sports Group, which made a big

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Speaker 3: investment in the PGA, and I want to put up

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Speaker 3: a couple slides that Tom you were nice enough to

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Speaker 3: share with me that talk about the growth of the

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Speaker 3: game and the opportunity that presents itself in golf.

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Speaker 2: If we can get those, it's somewhere. Okay, it's really big.

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Speaker 2: There we go there, So there's us.

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Speaker 3: I mean, these are staggering numbers, and I think maybe

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Speaker 3: I certainly when I had looked at them when you

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Speaker 3: send them to me, I was surprised at how big

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Speaker 3: these numbers are.

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Speaker 2: Can we go to the next one because it gives

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Speaker 2: them Okay, please?

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Speaker 4: The first slide is about the popularity of golf in

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Speaker 4: the United States. Part of what made us all excited

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Speaker 4: about it is that this is really a global sport.

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Speaker 4: So you know, when you think about the one hundred

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Speaker 4: and two billions spent in golf that's in the United States.

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Speaker 5: And of course there's a bigger number worldwide.

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Speaker 3: Yeah, so let's look at the global numbers because it

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Speaker 3: does feel like that's at the core of this business case.

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Speaker 2: So that if we go to the next slide about

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Speaker 2: the global.

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Speaker 3: I mean that is a staggerer almost four hundred million people.

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Speaker 3: So Mark, I want to start with you, why do

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Speaker 3: this deal? I mean, obviously the numbers pencil out, but golf,

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Speaker 3: if you look at it, if anyone falls the headlines,

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Speaker 3: not exactly, it's not not a mess when it comes

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Speaker 3: to a business.

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Speaker 2: Is that part of the attraction?

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Speaker 5: Well, it starts with the macro and the brand. Yeah.

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Speaker 6: And I was sitting I'm on a committee with John,

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Speaker 6: actually a couple of committees with John and Tom at

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Speaker 6: Major League Baseball John Henry and they were talking about

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Speaker 6: the opportunity here, but I didn't realize that what they

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Speaker 6: were working on. They just talked about some of the

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Speaker 6: challenges that were being faced and I said to John, well,

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Speaker 6: to me, given that brand, the more challenges, the more opportunity. Right,

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Speaker 6: thirty three years of investing at Crescent, that's what we found.

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Speaker 6: You know, the easy investments don't really create a lot

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Speaker 6: of opportunity that more difficult ones do. So Tom and

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Speaker 6: John called me a few days later and said, were

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Speaker 6: you really serious on how you looked at that? And

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Speaker 6: would you invest in the PGA and course? And I

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Speaker 6: still didn't know what they were working on, and then

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Speaker 6: they let me under the tent and it's it's extremely exciting.

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Speaker 2: And so Tom, what was it for you?

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Speaker 3: I mean you you know your Fenway Sports Group, obviously

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Speaker 3: the Red Sox, Liverpool, Pittsburgh Penguins, Nessen, the Sports Network

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Speaker 3: and more.

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Speaker 2: What was it about golf that jumped out to you?

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Speaker 5: Well?

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Speaker 4: As most of you know, the structure of golf a

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Speaker 4: couple of years ago is that it was a nonprofit

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Speaker 4: and the players were independent contractors. And so this now

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Speaker 4: is a league that the players are now owners, they

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Speaker 4: have equity in the league, and uh, this SSG and

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Speaker 4: Fenway Sports Group are really investing in the commercial growth

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Speaker 4: of the game, and of course it all starts with,

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Speaker 4: you know, what can create a better fan experience. And

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Speaker 4: you know, we are grateful that we were selected because

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Speaker 4: it was a very competitive situation to invest in the

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Speaker 4: new structure. But you know, we think that and Mark

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Speaker 4: is part of this group, that the operational experience that

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Speaker 4: we have in sports can benefit the players and be

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Speaker 4: a resource.

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Speaker 3: And so so take us inside this proverbial ten a

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Speaker 3: little bit, like what do you need to do, Like

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Speaker 3: what's the low hanging fruit here? And what are the

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Speaker 3: things you're seeing that can be relatively easily fixed or

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Speaker 3: changed to improve those elements.

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Speaker 4: Well, one thing that Jay Monahan, who we think is

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Speaker 4: a very strong leader, is doing is we are commencing

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Speaker 4: a very extensive research study that it's called Fan Forward.

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Speaker 4: But Rob Manfred did the same thing in i think

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Speaker 4: twenty nineteen where we did a about what was good

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Speaker 4: about baseball how to make the experience better, and you

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Speaker 4: know a lot of positive changes have come from that.

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Speaker 4: But but you know, we're going to be listening to

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Speaker 4: our fans and you know, just one one idea that

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Speaker 4: we've been talking about is when you think about the

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Speaker 4: experience of going to an event on the tour, that

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Speaker 4: we are trying to event tize it and make it

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Speaker 4: really more must see. And somebody at the PGA was

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Speaker 4: looking at Louisville. You know, they have an event every

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Speaker 4: year that is really just two minutes long in its

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Speaker 4: actual composition of the Kentucky Derby, but around it they

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Speaker 4: have a week long festival. So one of the things

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Speaker 4: that we're talking about is how to create experiences at

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Speaker 4: PGA tour events that will make them more attractive.

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Speaker 3: And so Mark as you look at this you're a

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Speaker 3: global investor. Obviously, one of the elements that is clearly

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Speaker 3: at play here is live.

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Speaker 2: What needs to happen.

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Speaker 6: Well, if you look at the golfers, whether they're at

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Speaker 6: Live or PGA, these are some of the best athletes

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Speaker 6: in the world, and across all sports, you want to

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Speaker 6: see the best athletes competing against each other. That's why,

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Speaker 6: for example, you have so much interest in the Olympics,

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Speaker 6: and so we you know, we've hoped to be a

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Speaker 6: bridge or a catalyst to try to bring the golfers

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Speaker 6: back together so they could compete more than just a

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Speaker 6: handful of times each year.

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Speaker 2: What's your level of confidence at this moment that that'll happen.

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Speaker 6: Well, look, we're all optimistic, right we know, so we

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Speaker 6: know how difficult it is and what the hurdles are,

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Speaker 6: including some regulatory ones. Yeah, but it really should happen,

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Speaker 6: and so I think it will.

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Speaker 3: And so Tom when you think about you know, one

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Speaker 3: of the things that is very compelling about sort of

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Speaker 3: the data underneath this is this notion of sort of

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Speaker 3: off course. You know, many of us in this room,

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Speaker 3: for better worse, go out and hack it around the

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Speaker 3: you know, nine or eighteen holes. But increasingly more people,

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Speaker 3: especially younger people, are experiencing golf in different ways. How

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Speaker 3: do you, through the PGA monetize, I mean, how do

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Speaker 3: you take advantage of that movement towards the top golf

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Speaker 3: and the sims and whatnot.

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Speaker 4: Well, the first thing is to acknowledge that one factoid

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Speaker 4: I think it was up there is that more people

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Speaker 4: were playing off course golf in twenty twenty three than encore.

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Speaker 5: So they're both growing.

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Speaker 4: But off course golf things like top golf, is very attractive.

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Speaker 4: So you know, it is all about the popularity of

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Speaker 4: the game. One of the great things about golf as

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Speaker 4: opposed to the NFL, for example, which you know has

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Speaker 4: its own great attributes.

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Speaker 5: Is that people are playing it.

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Speaker 4: And so when they're watching watching golf, they are participants

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Speaker 4: in the sports. So you know, whether they you know,

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Speaker 4: play golf at their country club or they're playing mini golf,

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Speaker 4: you know, with their local local hangout, it's all good

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Speaker 4: for the game.

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Speaker 6: And that's you know, five year olds can play. Or

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Speaker 6: Hall of Fame announcer Bob Yucker turned ninety, he still

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Speaker 6: plays golf pretty well, actually right, that's.

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Speaker 3: And what about the you know, both of you, I

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Speaker 3: mean Tom, obviously your your experience and success in in

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Speaker 3: the in the media world is very well known. You

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Speaker 3: have created, you know, many beloved shows, are still creating

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Speaker 3: beloved shows on on multiple platforms.

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Speaker 2: What's the media side of the of golf?

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Speaker 3: And then I want to talk about some other sports,

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Speaker 3: but like, what's what's the media play here for you?

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Speaker 4: Well, I think we focused too much on Nielsen ratings,

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Speaker 4: even though they're obviously very important. But the platforms that

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Speaker 4: golf is on, the social media, you know, people are

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Speaker 4: it's growing exponentially on social media, and it's all it's

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Speaker 4: all about how to communicate the game to the consumer

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Speaker 4: in a variety of ways.

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Speaker 3: And so what's the what's the non obvious mark lest

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Speaker 3: golf question for now? What what's the non obvious thing

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Speaker 3: that could help golf in your mind? Like, what's the

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Speaker 3: surprise as you got into it and said, this is

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Speaker 3: a nonprofit you know they're doing this, they're doing that.

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Speaker 3: Like what was the thing where you're like, oh, well,

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Speaker 3: just do this or you know that it surprises me

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Speaker 3: that this is going on here.

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Speaker 6: Well, I think the best athletes in the world want

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Speaker 6: to compete against each other.

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Speaker 5: Yeah, and and so.

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Speaker 6: Underlying, however, we got to where we are now, you

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Speaker 6: would you would think they'd want to be able to

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Speaker 6: go head to head. And I'm hoping that that undercurrent

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Speaker 6: will will prevail.

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Speaker 2: So let's talk a little baseball if we can.

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Speaker 3: And both of you were, you know, owners of Major

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Speaker 3: League Baseball teams, and when you think about this, we were

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Speaker 3: talking a little bit about this backstage. You know, Tom,

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Speaker 3: this was a sport baseball. You know, I grew up

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Speaker 3: watching it. I'm sure many people in the in this

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Speaker 3: audience did. And folks you know watching this, and yet

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Speaker 3: it seemed to be running into a little bit of

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Speaker 3: trouble over the last couple of years. Competition committee, you know,

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Speaker 3: gets together and and make some real changes. It feels

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Speaker 3: like it's made a difference. Tell us what it looks

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Speaker 3: like from from your perspective when you actually get down

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Speaker 3: to the numbers.

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Speaker 4: Well, we know, we know it's made a difference because

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Speaker 4: the fans have have told us that that one of

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Speaker 4: the most important changes in Mark and I are very

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Speaker 4: supportive of of all these these changes, is that the

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Speaker 4: game was too long. We all knew that it was

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Speaker 4: over three hours in length for a night and nine

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Speaker 4: inning game. And the pitch clock really has transformed a game.

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Speaker 4: Now the game averages about two hours and thirty five

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Speaker 4: minutes per game, and so people were not leaving in

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Speaker 4: the six or seventh inning. But that's just part of

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Speaker 4: an initiative to make changes. You know, the NFL makes

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Speaker 4: changes every year and nobody notices it, and every change

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Speaker 4: in baseball is scrutinized.

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Speaker 5: But along with the.

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Speaker 4: Pitch clock, we've made some other changes. We now have

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Speaker 4: rules about defensive alignment, which allow more balls.

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Speaker 5: To be in play.

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Speaker 4: The size of each base is larger, which encourages stealing,

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Speaker 4: and so there were rules that have already been implemented.

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Speaker 4: And last year, you know, again, another factoid is over

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Speaker 4: seventy million people came to Major League baseball games, which

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Speaker 4: dwarfs the combined attendance of the NFL, the NBA, and

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Speaker 4: the NHL. So we could do probably a better job

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Speaker 4: touting that, but to people are going to baseball games,

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Speaker 4: you know the minor leagues.

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Speaker 6: The most watched sport live in the country is Major

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Speaker 6: League baseball. The second most watch sport is minor league baseball.

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Speaker 6: So you know, the game and and I think a

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Speaker 6: lot of the demographics don't get picked up. You have

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Speaker 6: increasing interest on from you know, Latin American community for example,

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Speaker 6: and it's not clear that all of that younger demographic

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Speaker 6: interest is picked up in the numbers. So look, there's

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Speaker 6: nothing more riveting than the ninth inning of a baseball game,

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Speaker 6: right And and you know, to Tom's point on on the.

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Speaker 5: Some of the changes the pace of game, the action.

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Speaker 6: So two years ago, you'd have the shortstop and short

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Speaker 6: right field almost like a softball player, and the ball

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Speaker 6: would go right to them. Now you've got second basement

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Speaker 6: diving and making plays. There's a lot more action and

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Speaker 6: and a lot more you know, for the fans to

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Speaker 6: engage with.

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Speaker 5: You know.

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Speaker 3: One of the underlying themes of of your investments, and

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Speaker 3: the golf thing fits into this too, is this sort.

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Speaker 2: Of global view.

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Speaker 3: You know, Mark, you more recently have have gotten into

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Speaker 3: the world of football soccer, Tom, you've been there, you know,

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Speaker 3: via Liverpool. What is it you take from that experience

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Speaker 3: and you apply back to you know, some of your

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Speaker 3: US side investments. Tom, I'll start with you, like, what

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Speaker 3: have you picked up from Liverpool? You're like, okay, we

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Speaker 3: need to do that either from a management perspective or

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Speaker 3: an organizational perspective.

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Speaker 4: Well, the Premier League, and Mark is involved in English

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Speaker 4: football too, is a very popular sport globally. You know.

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Speaker 4: Sometimes we have that narrow focus of the United States,

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Speaker 4: but we are very pleased to be in the Premier League.

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Speaker 4: And many more people watch in Manchester United a Liverpool

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Speaker 4: match than the super Bowl.

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Speaker 5: So we're aware of that.

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Speaker 4: And and part of what we bring to all of

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Speaker 4: our investments is relationships with sponsors because they fuel our growth.

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Speaker 4: Part of our operational expertise is the relationships we have

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Speaker 4: in Liverpool, for example, with ups Google. This week we

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Speaker 4: announced a new partnership with Japan Airlines, so you know,

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Speaker 4: we are we are excited to be in the Premier League.

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Speaker 3: So Mark you looking at and saying, I'm sorry, did

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Speaker 3: you say relegation?

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Speaker 2: Like what ocean relegation?

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Speaker 6: What?

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Speaker 3: Well?

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Speaker 5: What?

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Speaker 6: What created the opportunity for us was relegation. North City

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Speaker 6: Canaries were relegated from the Premier League to the Championship League.

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Speaker 6: And that that's what created. Out of adversity comes opportunity.

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Speaker 5: And what I've.

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Speaker 6: Taken from it is the you know, this is this team,

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Speaker 6: This club has been in existence over one hundred years.

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Speaker 5: They have the.

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Speaker 6: Oldest fight song in English football. And what struck me

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Speaker 6: sort of I really knew very little about football or

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Speaker 6: soccer as somewhat the ted lasso of owners was that

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Speaker 6: the fans were close supporters, and the way you engage

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Speaker 6: with your supporters is meaningful in such a way that

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Speaker 6: almost when you're born in Norfolk County in the east

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Speaker 6: of the UK, you start wearing yellow and green. So

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Speaker 6: we've looked how to take that sort of feeling and

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Speaker 6: bring it to Milwaukee, where we have a natural, you know,

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Speaker 6: fan base that grew up with the Milwaukee Brewers.

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Speaker 5: And we've learned a lot of lessons from that.

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Speaker 3: And so as you look across you just have a

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Speaker 3: couple of minutes left. But so as you look across

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Speaker 3: the sports opportunity landscape, you do this golf deal, it's

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Speaker 3: you know, three billion dollars. The amount of money that

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Speaker 3: is pouring into sports is breathtaking. And I sat on

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Speaker 3: the stage earlier with Josh Harrison talked about that do

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Speaker 3: you worry about sort of the cost and the valuation

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Speaker 3: is getting so high? Tom, Like, what do you what

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Speaker 3: do you look at You guys have been doing this

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Speaker 3: for a long time.

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Speaker 5: Now, Well, I look at it differently.

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Speaker 4: I think that in Mark would agree that as an

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Speaker 4: asset class, investing in sports has shown to has been

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Speaker 4: demonstrated to be very attractive to investors, and more and

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Speaker 4: more people are investing in sports as an asset. You know,

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Speaker 4: part of our we are in partnership with Redbird Capital,

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Speaker 4: We're in partnership with Arctos that has a fund that

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Speaker 4: invests in multiple teams in major sports.

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Speaker 5: So the fact is that.

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Speaker 4: Sports as a part of life is immensely important, and

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Speaker 4: it's one of the things that brings people together. And

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Speaker 4: obviously there's revenue implications for that, and the live.

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Speaker 5: Event business is booming.

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Speaker 4: So I'm very optimistic about the future of sports and

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Speaker 4: the future of teams in a world in which they

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Speaker 4: there's obviously scarcity value.

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Speaker 3: So mark anything that you're like, no, I'm not gonna

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Speaker 3: I'm I'm good for now when it comes to sports

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Speaker 3: or something that you want to get into that you.

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Speaker 6: Haven't yet well to the point on some of this

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Speaker 6: twenty plus years ago, when I bought the Brewers, I

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Speaker 6: knew my In fact, my wife came into the study

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Speaker 6: one day. My wife, Devian, said, you're not going to

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Speaker 6: lose all our money, are you? And so I had

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Speaker 6: The Bank of America did a study back twenty years

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Speaker 6: ago that showed it was a non correlated asset class

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Speaker 6: that didn't you know, would be somewhat recession resistant, which

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Speaker 6: sort of is we found in COVID that you know,

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Speaker 6: yeh might be different for what's a live event business,

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Speaker 6: but I yeah, So look, we're looking at everything from

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Speaker 6: women's volleyball to professional sailing and and and other leagues

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Speaker 6: to invest in. But you know, I think at some

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Speaker 6: point there'll be differentiation. There's some sport that don't make

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Speaker 6: sense to me. What's probably the greatest opportunities, not just clear.

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Speaker 6: What the land will be is college sports, yeah, and

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Speaker 6: enormous revenue opportunities, and that they're not organized yet, they're

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Speaker 6: getting organized to take advantage of it. So we've made

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Speaker 6: a toe hold investment in a company that's involved with

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Speaker 6: the Big twelve and we'll see.

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Speaker 3: So Tom will sort of wrap where we started with,

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Speaker 3: you know, with golf, this big opportunity.

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Speaker 2: What does success look like for you? You know, as you.

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Speaker 3: Sort of embarched on this, you put together this pretty

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Speaker 3: incredible roster of investors a year from now, two years

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Speaker 3: from now, Like what a success looking feel like?

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Speaker 4: Well, we're patient, but success is the fact that the

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Speaker 4: best players will be playing in events in a schedule

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Speaker 4: that works for the players and the audience.

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Speaker 6: Mark agreat FSG has a real sense of agency here,

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Speaker 6: and you know, I think that's going to prove out.

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Speaker 1: Mark Attanasio, the chairman and principal owner of the Milwaukee

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Speaker 1: Brewers Baseball Club, and Tom Werner, chairman and co founder

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Speaker 1: of Fenway Sports Group, speaking with Bloomberg's Jason Kelly at

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Speaker 1: the Bloomberg invest Conference