Speaker 1: Bloomberg Audio Studios, podcasts, radio news. The Bloomberg invest Conferences
Speaker 1: underway in New York. Earlier, Bloomberg's Jason Kelly spoke with
Speaker 1: Mark Attanasio, the chairman and principal owner of the Milwaukee
Speaker 1: Brewers baseball club, and Tom Warner, chairman and co founder
Speaker 1: of Fenway Sports Group. Here's some of their conversation.
Speaker 2: We're talking about golf. We're to talk about sports.
Speaker 3: I'm so delighted to have both of you here because
Speaker 3: you were at the white hot center of something we
Speaker 3: all care deeply about, which is the world of sports.
Speaker 3: I want to start with golf. You guys are both
Speaker 3: part of the Strategic Sports Group, which made a big
Speaker 3: investment in the PGA, and I want to put up
Speaker 3: a couple slides that Tom you were nice enough to
Speaker 3: share with me that talk about the growth of the
Speaker 3: game and the opportunity that presents itself in golf.
Speaker 2: If we can get those, it's somewhere. Okay, it's really big.
Speaker 2: There we go there, So there's us.
Speaker 3: I mean, these are staggering numbers, and I think maybe
Speaker 3: I certainly when I had looked at them when you
Speaker 3: send them to me, I was surprised at how big
Speaker 3: these numbers are.
Speaker 2: Can we go to the next one because it gives
Speaker 2: them Okay, please?
Speaker 4: The first slide is about the popularity of golf in
Speaker 4: the United States. Part of what made us all excited
Speaker 4: about it is that this is really a global sport.
Speaker 4: So you know, when you think about the one hundred
Speaker 4: and two billions spent in golf that's in the United States.
Speaker 5: And of course there's a bigger number worldwide.
Speaker 3: Yeah, so let's look at the global numbers because it
Speaker 3: does feel like that's at the core of this business case.
Speaker 2: So that if we go to the next slide about
Speaker 2: the global.
Speaker 3: I mean that is a staggerer almost four hundred million people.
Speaker 3: So Mark, I want to start with you, why do
Speaker 3: this deal? I mean, obviously the numbers pencil out, but golf,
Speaker 3: if you look at it, if anyone falls the headlines,
Speaker 3: not exactly, it's not not a mess when it comes
Speaker 3: to a business.
Speaker 2: Is that part of the attraction?
Speaker 5: Well, it starts with the macro and the brand. Yeah.
Speaker 6: And I was sitting I'm on a committee with John,
Speaker 6: actually a couple of committees with John and Tom at
Speaker 6: Major League Baseball John Henry and they were talking about
Speaker 6: the opportunity here, but I didn't realize that what they
Speaker 6: were working on. They just talked about some of the
Speaker 6: challenges that were being faced and I said to John, well,
Speaker 6: to me, given that brand, the more challenges, the more opportunity. Right,
Speaker 6: thirty three years of investing at Crescent, that's what we found.
Speaker 6: You know, the easy investments don't really create a lot
Speaker 6: of opportunity that more difficult ones do. So Tom and
Speaker 6: John called me a few days later and said, were
Speaker 6: you really serious on how you looked at that? And
Speaker 6: would you invest in the PGA and course? And I
Speaker 6: still didn't know what they were working on, and then
Speaker 6: they let me under the tent and it's it's extremely exciting.
Speaker 2: And so Tom, what was it for you?
Speaker 3: I mean you you know your Fenway Sports Group, obviously
Speaker 3: the Red Sox, Liverpool, Pittsburgh Penguins, Nessen, the Sports Network
Speaker 3: and more.
Speaker 2: What was it about golf that jumped out to you?
Speaker 5: Well?
Speaker 4: As most of you know, the structure of golf a
Speaker 4: couple of years ago is that it was a nonprofit
Speaker 4: and the players were independent contractors. And so this now
Speaker 4: is a league that the players are now owners, they
Speaker 4: have equity in the league, and uh, this SSG and
Speaker 4: Fenway Sports Group are really investing in the commercial growth
Speaker 4: of the game, and of course it all starts with,
Speaker 4: you know, what can create a better fan experience. And
Speaker 4: you know, we are grateful that we were selected because
Speaker 4: it was a very competitive situation to invest in the
Speaker 4: new structure. But you know, we think that and Mark
Speaker 4: is part of this group, that the operational experience that
Speaker 4: we have in sports can benefit the players and be
Speaker 4: a resource.
Speaker 3: And so so take us inside this proverbial ten a
Speaker 3: little bit, like what do you need to do, Like
Speaker 3: what's the low hanging fruit here? And what are the
Speaker 3: things you're seeing that can be relatively easily fixed or
Speaker 3: changed to improve those elements.
Speaker 4: Well, one thing that Jay Monahan, who we think is
Speaker 4: a very strong leader, is doing is we are commencing
Speaker 4: a very extensive research study that it's called Fan Forward.
Speaker 4: But Rob Manfred did the same thing in i think
Speaker 4: twenty nineteen where we did a about what was good
Speaker 4: about baseball how to make the experience better, and you
Speaker 4: know a lot of positive changes have come from that.
Speaker 4: But but you know, we're going to be listening to
Speaker 4: our fans and you know, just one one idea that
Speaker 4: we've been talking about is when you think about the
Speaker 4: experience of going to an event on the tour, that
Speaker 4: we are trying to event tize it and make it
Speaker 4: really more must see. And somebody at the PGA was
Speaker 4: looking at Louisville. You know, they have an event every
Speaker 4: year that is really just two minutes long in its
Speaker 4: actual composition of the Kentucky Derby, but around it they
Speaker 4: have a week long festival. So one of the things
Speaker 4: that we're talking about is how to create experiences at
Speaker 4: PGA tour events that will make them more attractive.
Speaker 3: And so Mark as you look at this you're a
Speaker 3: global investor. Obviously, one of the elements that is clearly
Speaker 3: at play here is live.
Speaker 2: What needs to happen.
Speaker 6: Well, if you look at the golfers, whether they're at
Speaker 6: Live or PGA, these are some of the best athletes
Speaker 6: in the world, and across all sports, you want to
Speaker 6: see the best athletes competing against each other. That's why,
Speaker 6: for example, you have so much interest in the Olympics,
Speaker 6: and so we you know, we've hoped to be a
Speaker 6: bridge or a catalyst to try to bring the golfers
Speaker 6: back together so they could compete more than just a
Speaker 6: handful of times each year.
Speaker 2: What's your level of confidence at this moment that that'll happen.
Speaker 6: Well, look, we're all optimistic, right we know, so we
Speaker 6: know how difficult it is and what the hurdles are,
Speaker 6: including some regulatory ones. Yeah, but it really should happen,
Speaker 6: and so I think it will.
Speaker 3: And so Tom when you think about you know, one
Speaker 3: of the things that is very compelling about sort of
Speaker 3: the data underneath this is this notion of sort of
Speaker 3: off course. You know, many of us in this room,
Speaker 3: for better worse, go out and hack it around the
Speaker 3: you know, nine or eighteen holes. But increasingly more people,
Speaker 3: especially younger people, are experiencing golf in different ways. How
Speaker 3: do you, through the PGA monetize, I mean, how do
Speaker 3: you take advantage of that movement towards the top golf
Speaker 3: and the sims and whatnot.
Speaker 4: Well, the first thing is to acknowledge that one factoid
Speaker 4: I think it was up there is that more people
Speaker 4: were playing off course golf in twenty twenty three than encore.
Speaker 5: So they're both growing.
Speaker 4: But off course golf things like top golf, is very attractive.
Speaker 4: So you know, it is all about the popularity of
Speaker 4: the game. One of the great things about golf as
Speaker 4: opposed to the NFL, for example, which you know has
Speaker 4: its own great attributes.
Speaker 5: Is that people are playing it.
Speaker 4: And so when they're watching watching golf, they are participants
Speaker 4: in the sports. So you know, whether they you know,
Speaker 4: play golf at their country club or they're playing mini golf,
Speaker 4: you know, with their local local hangout, it's all good
Speaker 4: for the game.
Speaker 6: And that's you know, five year olds can play. Or
Speaker 6: Hall of Fame announcer Bob Yucker turned ninety, he still
Speaker 6: plays golf pretty well, actually right, that's.
Speaker 3: And what about the you know, both of you, I
Speaker 3: mean Tom, obviously your your experience and success in in
Speaker 3: the in the media world is very well known. You
Speaker 3: have created, you know, many beloved shows, are still creating
Speaker 3: beloved shows on on multiple platforms.
Speaker 2: What's the media side of the of golf?
Speaker 3: And then I want to talk about some other sports,
Speaker 3: but like, what's what's the media play here for you?
Speaker 4: Well, I think we focused too much on Nielsen ratings,
Speaker 4: even though they're obviously very important. But the platforms that
Speaker 4: golf is on, the social media, you know, people are
Speaker 4: it's growing exponentially on social media, and it's all it's
Speaker 4: all about how to communicate the game to the consumer
Speaker 4: in a variety of ways.
Speaker 3: And so what's the what's the non obvious mark lest
Speaker 3: golf question for now? What what's the non obvious thing
Speaker 3: that could help golf in your mind? Like, what's the
Speaker 3: surprise as you got into it and said, this is
Speaker 3: a nonprofit you know they're doing this, they're doing that.
Speaker 3: Like what was the thing where you're like, oh, well,
Speaker 3: just do this or you know that it surprises me
Speaker 3: that this is going on here.
Speaker 6: Well, I think the best athletes in the world want
Speaker 6: to compete against each other.
Speaker 5: Yeah, and and so.
Speaker 6: Underlying, however, we got to where we are now, you
Speaker 6: would you would think they'd want to be able to
Speaker 6: go head to head. And I'm hoping that that undercurrent
Speaker 6: will will prevail.
Speaker 2: So let's talk a little baseball if we can.
Speaker 3: And both of you were, you know, owners of Major
Speaker 3: League Baseball teams, and when you think about this, we were
Speaker 3: talking a little bit about this backstage. You know, Tom,
Speaker 3: this was a sport baseball. You know, I grew up
Speaker 3: watching it. I'm sure many people in the in this
Speaker 3: audience did. And folks you know watching this, and yet
Speaker 3: it seemed to be running into a little bit of
Speaker 3: trouble over the last couple of years. Competition committee, you know,
Speaker 3: gets together and and make some real changes. It feels
Speaker 3: like it's made a difference. Tell us what it looks
Speaker 3: like from from your perspective when you actually get down
Speaker 3: to the numbers.
Speaker 4: Well, we know, we know it's made a difference because
Speaker 4: the fans have have told us that that one of
Speaker 4: the most important changes in Mark and I are very
Speaker 4: supportive of of all these these changes, is that the
Speaker 4: game was too long. We all knew that it was
Speaker 4: over three hours in length for a night and nine
Speaker 4: inning game. And the pitch clock really has transformed a game.
Speaker 4: Now the game averages about two hours and thirty five
Speaker 4: minutes per game, and so people were not leaving in
Speaker 4: the six or seventh inning. But that's just part of
Speaker 4: an initiative to make changes. You know, the NFL makes
Speaker 4: changes every year and nobody notices it, and every change
Speaker 4: in baseball is scrutinized.
Speaker 5: But along with the.
Speaker 4: Pitch clock, we've made some other changes. We now have
Speaker 4: rules about defensive alignment, which allow more balls.
Speaker 5: To be in play.
Speaker 4: The size of each base is larger, which encourages stealing,
Speaker 4: and so there were rules that have already been implemented.
Speaker 4: And last year, you know, again, another factoid is over
Speaker 4: seventy million people came to Major League baseball games, which
Speaker 4: dwarfs the combined attendance of the NFL, the NBA, and
Speaker 4: the NHL. So we could do probably a better job
Speaker 4: touting that, but to people are going to baseball games,
Speaker 4: you know the minor leagues.
Speaker 6: The most watched sport live in the country is Major
Speaker 6: League baseball. The second most watch sport is minor league baseball.
Speaker 6: So you know, the game and and I think a
Speaker 6: lot of the demographics don't get picked up. You have
Speaker 6: increasing interest on from you know, Latin American community for example,
Speaker 6: and it's not clear that all of that younger demographic
Speaker 6: interest is picked up in the numbers. So look, there's
Speaker 6: nothing more riveting than the ninth inning of a baseball game,
Speaker 6: right And and you know, to Tom's point on on the.
Speaker 5: Some of the changes the pace of game, the action.
Speaker 6: So two years ago, you'd have the shortstop and short
Speaker 6: right field almost like a softball player, and the ball
Speaker 6: would go right to them. Now you've got second basement
Speaker 6: diving and making plays. There's a lot more action and
Speaker 6: and a lot more you know, for the fans to
Speaker 6: engage with.
Speaker 5: You know.
Speaker 3: One of the underlying themes of of your investments, and
Speaker 3: the golf thing fits into this too, is this sort.
Speaker 2: Of global view.
Speaker 3: You know, Mark, you more recently have have gotten into
Speaker 3: the world of football soccer, Tom, you've been there, you know,
Speaker 3: via Liverpool. What is it you take from that experience
Speaker 3: and you apply back to you know, some of your
Speaker 3: US side investments. Tom, I'll start with you, like, what
Speaker 3: have you picked up from Liverpool? You're like, okay, we
Speaker 3: need to do that either from a management perspective or
Speaker 3: an organizational perspective.
Speaker 4: Well, the Premier League, and Mark is involved in English
Speaker 4: football too, is a very popular sport globally. You know.
Speaker 4: Sometimes we have that narrow focus of the United States,
Speaker 4: but we are very pleased to be in the Premier League.
Speaker 4: And many more people watch in Manchester United a Liverpool
Speaker 4: match than the super Bowl.
Speaker 5: So we're aware of that.
Speaker 4: And and part of what we bring to all of
Speaker 4: our investments is relationships with sponsors because they fuel our growth.
Speaker 4: Part of our operational expertise is the relationships we have
Speaker 4: in Liverpool, for example, with ups Google. This week we
Speaker 4: announced a new partnership with Japan Airlines, so you know,
Speaker 4: we are we are excited to be in the Premier League.
Speaker 3: So Mark you looking at and saying, I'm sorry, did
Speaker 3: you say relegation?
Speaker 2: Like what ocean relegation?
Speaker 6: What?
Speaker 3: Well?
Speaker 5: What?
Speaker 6: What created the opportunity for us was relegation. North City
Speaker 6: Canaries were relegated from the Premier League to the Championship League.
Speaker 6: And that that's what created. Out of adversity comes opportunity.
Speaker 5: And what I've.
Speaker 6: Taken from it is the you know, this is this team,
Speaker 6: This club has been in existence over one hundred years.
Speaker 5: They have the.
Speaker 6: Oldest fight song in English football. And what struck me
Speaker 6: sort of I really knew very little about football or
Speaker 6: soccer as somewhat the ted lasso of owners was that
Speaker 6: the fans were close supporters, and the way you engage
Speaker 6: with your supporters is meaningful in such a way that
Speaker 6: almost when you're born in Norfolk County in the east
Speaker 6: of the UK, you start wearing yellow and green. So
Speaker 6: we've looked how to take that sort of feeling and
Speaker 6: bring it to Milwaukee, where we have a natural, you know,
Speaker 6: fan base that grew up with the Milwaukee Brewers.
Speaker 5: And we've learned a lot of lessons from that.
Speaker 3: And so as you look across you just have a
Speaker 3: couple of minutes left. But so as you look across
Speaker 3: the sports opportunity landscape, you do this golf deal, it's
Speaker 3: you know, three billion dollars. The amount of money that
Speaker 3: is pouring into sports is breathtaking. And I sat on
Speaker 3: the stage earlier with Josh Harrison talked about that do
Speaker 3: you worry about sort of the cost and the valuation
Speaker 3: is getting so high? Tom, Like, what do you what
Speaker 3: do you look at You guys have been doing this
Speaker 3: for a long time.
Speaker 5: Now, Well, I look at it differently.
Speaker 4: I think that in Mark would agree that as an
Speaker 4: asset class, investing in sports has shown to has been
Speaker 4: demonstrated to be very attractive to investors, and more and
Speaker 4: more people are investing in sports as an asset. You know,
Speaker 4: part of our we are in partnership with Redbird Capital,
Speaker 4: We're in partnership with Arctos that has a fund that
Speaker 4: invests in multiple teams in major sports.
Speaker 5: So the fact is that.
Speaker 4: Sports as a part of life is immensely important, and
Speaker 4: it's one of the things that brings people together. And
Speaker 4: obviously there's revenue implications for that, and the live.
Speaker 5: Event business is booming.
Speaker 4: So I'm very optimistic about the future of sports and
Speaker 4: the future of teams in a world in which they
Speaker 4: there's obviously scarcity value.
Speaker 3: So mark anything that you're like, no, I'm not gonna
Speaker 3: I'm I'm good for now when it comes to sports
Speaker 3: or something that you want to get into that you.
Speaker 6: Haven't yet well to the point on some of this
Speaker 6: twenty plus years ago, when I bought the Brewers, I
Speaker 6: knew my In fact, my wife came into the study
Speaker 6: one day. My wife, Devian, said, you're not going to
Speaker 6: lose all our money, are you? And so I had
Speaker 6: The Bank of America did a study back twenty years
Speaker 6: ago that showed it was a non correlated asset class
Speaker 6: that didn't you know, would be somewhat recession resistant, which
Speaker 6: sort of is we found in COVID that you know,
Speaker 6: yeh might be different for what's a live event business,
Speaker 6: but I yeah, So look, we're looking at everything from
Speaker 6: women's volleyball to professional sailing and and and other leagues
Speaker 6: to invest in. But you know, I think at some
Speaker 6: point there'll be differentiation. There's some sport that don't make
Speaker 6: sense to me. What's probably the greatest opportunities, not just clear.
Speaker 6: What the land will be is college sports, yeah, and
Speaker 6: enormous revenue opportunities, and that they're not organized yet, they're
Speaker 6: getting organized to take advantage of it. So we've made
Speaker 6: a toe hold investment in a company that's involved with
Speaker 6: the Big twelve and we'll see.
Speaker 3: So Tom will sort of wrap where we started with,
Speaker 3: you know, with golf, this big opportunity.
Speaker 2: What does success look like for you? You know, as you.
Speaker 3: Sort of embarched on this, you put together this pretty
Speaker 3: incredible roster of investors a year from now, two years
Speaker 3: from now, Like what a success looking feel like?
Speaker 4: Well, we're patient, but success is the fact that the
Speaker 4: best players will be playing in events in a schedule
Speaker 4: that works for the players and the audience.
Speaker 6: Mark agreat FSG has a real sense of agency here,
Speaker 6: and you know, I think that's going to prove out.
Speaker 1: Mark Attanasio, the chairman and principal owner of the Milwaukee
Speaker 1: Brewers Baseball Club, and Tom Werner, chairman and co founder
Speaker 1: of Fenway Sports Group, speaking with Bloomberg's Jason Kelly at
Speaker 1: the Bloomberg invest Conference