Speaker 1: Bloomberg Audio Studios, podcasts, radio.
Speaker 2: News as turn to this one. The NFL ushering in
Speaker 2: a new era, voting to allow private equity firms to
Speaker 2: buy stakes of up to ten percent in its franchises.
Speaker 2: The move is expected to attract billions in fresh capital,
Speaker 2: boosting the valuations of teams that had already been surging
Speaker 2: to new highs. Joining us now the co owner of
Speaker 2: the Boston Celtics and Atalanta Football Club, a good friend
Speaker 2: of ours in this program, Steve Paluka. Steve, welcome back
Speaker 2: to the program, Sir. I want to talk about what
Speaker 2: exists now in world sports and what until this moment
Speaker 2: hasn't existed for the NFL. Steve, can you walk us
Speaker 2: through the opportunity here for private equity and the difference
Speaker 2: between just the traditional view of taking a controlling stake
Speaker 2: in a company and the operating business and starting to
Speaker 2: influence the decisions that it makes. What all we boud
Speaker 2: to see take place in the NFL.
Speaker 3: Well, it's a great question, John. The people are confused
Speaker 3: a little bit.
Speaker 4: In that the private equity model applied to the NFL
Speaker 4: applied to the NBA is very different. It is more
Speaker 4: I would call it an investment fund policy rather than
Speaker 4: private equity policy. Classic private equity firms go in and
Speaker 4: buy companies and then try to grow them and grow
Speaker 4: the revenues and earnings and globalize them. That's not the
Speaker 4: case with sports investments. Sports investments will be done by
Speaker 4: specialized funds like Arcto's Dial Party in existence today, and
Speaker 4: they take limited partnership stakes and they're limited to ten
Speaker 4: percent in the CENTFL deal, I think thirty percent in
Speaker 4: aggregate in the NBA deal, And those would be passive
Speaker 4: stakes really made to open up the market for folks
Speaker 4: that want to invest in sports properties, and they've created
Speaker 4: an asset class. So it's a little bit of a
Speaker 4: misnomer to say it's private equity buying in it's a
Speaker 4: passive limited partnership position so that more people can have
Speaker 4: access enough capital into the booming sports business.
Speaker 2: By improving that equidity for some of these companies, states
Speaker 2: does necessarily increase the valuation. How do you think about that?
Speaker 4: It doesn't necessarily increase the evaluation, but given the values.
Speaker 4: For example, the average NBA team probably twenty years ago
Speaker 4: sold for plus or miles three hundred million. Now it's
Speaker 4: three and a half billion or so the amount of
Speaker 4: capital involved to buy an NBA team was large, so
Speaker 4: it would be helpful in terms of having filling that
Speaker 4: capital gap which used to be filled by wealthy individuals,
Speaker 4: but those numbers are huge at this.
Speaker 1: Point, Steve, what do you think about unlocking value in
Speaker 1: some of these names in terms of where these companies are,
Speaker 1: where these sports teams can be seen. And I'm wondering
Speaker 1: as some of the cable news versus streaming channel kind
Speaker 1: of arrangements are negotiated, do you think that a greater
Speaker 1: degree of pe and involvement or just outside investment involvement
Speaker 1: is going to expedite that shift just simply to the
Speaker 1: higher bidder, not necessarily to some of the classic cable channels.
Speaker 4: I think the leagues really do a great job of
Speaker 4: Adam Silver and we don't have had a great experience
Speaker 4: in the media. And the NBA contract is up to
Speaker 4: like two point six times for the last time. The
Speaker 4: NFL contract also up dramatically. What really is the upside
Speaker 4: is sports have become globalized. Now. When we purchased the
Speaker 4: Celtics in two thousand and two, there was no streaming,
Speaker 4: There was no capability for kind of massive live global distribution,
Speaker 4: and that's changed with streaming, and now we used to
Speaker 4: count fans in the tens of thousands, you can count
Speaker 4: fans and one hundreds of billions and even billions for
Speaker 4: many of the big soccer clubs, the global sports like
Speaker 4: basketball and football. So I think what we're seeing is
Speaker 4: a long term trend of globalization of sports. And it's
Speaker 4: one of the few programs that aggregate eyeballs and that's
Speaker 4: very valuable to the new media players and the old
Speaker 4: media players, and that's why you're seeing such increases in
Speaker 4: the rights.
Speaker 1: I like the uan global well. I know that you
Speaker 1: go global and you have gun global in particular in Italy,
Speaker 1: and I know that John is very jealous and talks
Speaker 1: about it all the time, and I think that we
Speaker 1: all really want your life. I do think, Stee, if
Speaker 1: there's this question of whether you like international sports, European
Speaker 1: soccer still as really the mainstay. I see John kind
Speaker 1: of sighing with this frustration as I call it soccer
Speaker 1: rather than football. But I'm just wondering whether you want
Speaker 1: to stay with that kind of theme or whether you
Speaker 1: want to head back and invest more in the US
Speaker 1: after the Celtics investment, as well as others.
Speaker 3: Well, I think everything is situational.
Speaker 4: Investing is all about the price you pay and the
Speaker 4: trajectory you think the business can go on. And so
Speaker 4: at Wanta, we thought that was a fantastic franchise. We
Speaker 4: have a great partner, the Pacassi family, and so far
Speaker 4: that's worked out. There's a lot of luck involved, but
Speaker 4: we'll be very lucky to win the European Championship. So
Speaker 4: it's really a situational you meet to look at clubs.
Speaker 4: We look at clubs all over the world in football,
Speaker 4: other sports, and it's all about where you see the
Speaker 4: projective going and with the appreciate being to get there.
Speaker 2: Is Well, Steve, let's talk about the trajectory and we
Speaker 2: can compare and contrast global sports with what's happened in
Speaker 2: the NFL. I was looking at the Nielsen ratings ranking
Speaker 2: the one hundred most watched programs in twenty twenty three.
Speaker 2: Ninety three percent of them ninety three percent of them
Speaker 2: NFL games, which Steve is absolutely phenomenally. I have just
Speaker 2: dominated the highest rating TV shows in this country now
Speaker 2: for the last couple of years. Can you say the
Speaker 2: same thing about global sports when we talk about European football, Steve,
Speaker 2: have we hit a plateau when it comes to the
Speaker 2: valuation of TV rights? Do you see any way of
Speaker 2: unlock in more value.
Speaker 4: I think for Joe, we talked five years ago and
Speaker 4: ten years ago we thought we've reached plateaus, but we
Speaker 4: haven't reached plateaus. And again, the reach is growing because
Speaker 4: of streaming and multiple channel capabilities, and they've gotten more
Speaker 4: sophisticated about how to buy the packages up. So I
Speaker 4: don't think we've seen seen a plateau because it's so
Speaker 4: valuable to read these audiences. And the NFL has done
Speaker 4: a fantastic job. They have a league that has parody,
Speaker 4: they have games that are important every week. The NBA
Speaker 4: has done a fantastic job with growing viewership and growing
Speaker 4: access to the game, And so I don't think we've
Speaker 4: I don't think we've seen the end of that yet.
Speaker 4: Because the global the worldwide Internet companies, the facebooks and
Speaker 4: the Amazons and the old media, they need this programming.
Speaker 3: And they need those eyeballs. And as you pointed out,
Speaker 3: that's incredible.
Speaker 4: In the USA, ninety three out of one hundred programs
Speaker 4: were sports related NFL related.
Speaker 2: Can you say the same thing about European football.
Speaker 3: I think European football is continuing.
Speaker 4: They continue to change the format of the Champions League,
Speaker 4: UEFA Syria, make the broadcast schedules better. So I think
Speaker 4: right now we're a little bit of a lull meteorites
Speaker 4: in European football, basically because the streaming wars just ended
Speaker 4: or didn't end, or it really ended six months ago,
Speaker 4: a year ago, when people realize that there's too many
Speaker 4: streaming channels, too many options, and so everybody's cut back
Speaker 4: on programming. So's we've had these cycles. There's a kind
Speaker 4: of a momentary wall where there's bundling and unbundling, and
Speaker 4: right now things are less robust. But I think it
Speaker 4: will come back when there's mergers and acquisitions and you
Speaker 4: come back to four or five global players who were
Speaker 4: competing for these forced properties.
Speaker 2: Well, let's finish on acquisitions and your interest your name
Speaker 2: was associated with Chelsea Football Club a few years back, Steve,
Speaker 2: I just wonder whether you still have that interest in
Speaker 2: acquiring another club in European football.
Speaker 4: We were looking at different clubs in European football and
Speaker 4: we think it's it's continued to grow. It's a great opportunity.
Speaker 4: There's lots of things you can do to improve the
Speaker 4: product and stand the reach, as I said, and so yeah,
Speaker 4: you think it's very interesting here, Steve.
Speaker 2: Could you share with US cities, places, countries just a
Speaker 2: better idea of the clubs you have looked at?
Speaker 3: Yeah, I think there are right now.
Speaker 4: Meteorites are down in France and so there's some interesting
Speaker 4: clubs in France that need capital and to grow and
Speaker 4: come back and fresh market it will come back. There
Speaker 4: are some ission opportunities to play, as you've seen in.
Speaker 3: The UK, to move teams from the one division to another.
Speaker 3: So I think France, UK and even some things that same.
Speaker 2: Are you in any active conversations right now, Steve? I
Speaker 2: imagine if you while you can't reveal the details of them,
Speaker 2: but are you in any right now?
Speaker 4: Yeah, we're talking to several clubs right now and you
Speaker 4: don't know if they think.
Speaker 3: Come to fruition. But we can't talk about who those are.
Speaker 4: But but there's there's several clubs that we're talking to
Speaker 4: as we speak.
Speaker 2: What's this space, Stave, It's going to see as always
Speaker 2: when that news comes. Looking forward to catching up with you,
Speaker 2: Steve Paliuca that the Boston Celtics co owner on some
Speaker 2: of the shifting rules, stay side with the UNFL and
Speaker 2: the opportunities elsewhere.
Speaker 1: I just want to see a day in his life.
Speaker 1: I want to say, Vizic is that how many games
Speaker 1: does he go to? Is it every night? You know what?
Speaker 1: He cheers for them all? Would he ever buy two
Speaker 1: teams in the same sport? And what would that be
Speaker 1: if they ever went against each other?
Speaker 2: Football? Apparently?
Speaker 1: People exactly how does that work? I mean do you
Speaker 1: basically root for both of them?
Speaker 2: Do you just avoid?
Speaker 1: Do not have a favorite child?
Speaker 2: Lots of questions, amazing, just amicing. Nuff love stay