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Speaker 1: This is the business of sports where in the situation

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Speaker 1: that we haven't dealt with in modern times, pandemic here

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Speaker 1: has really accelerated the investments that we've been advocating for

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Speaker 1: for years. From a MACROS standpoint, I think our sport

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Speaker 1: industry is really forced to look at the business a

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Speaker 1: little bit differently. In depth conversations with the leaders in

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Speaker 1: the sports industry. Who wants to be the sacrificial lambs

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Speaker 1: that shows up at the first big major sporting event

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Speaker 1: were part of something much bigger than the sport right

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Speaker 1: now and the health and day of our stakeholders, the

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Speaker 1: works much important every moment. I think we're all from

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Speaker 1: the business respective thinking about the impact that the virus

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Speaker 1: is having on across the country against Bloomberg Business of

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Speaker 1: Sports from Bloomberg Radio. Hello, I'm Jason Kelly, and up

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Speaker 1: Mike Lynch and I'm Michael Black. We're here Monday's, Wednesdays

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Speaker 1: and Thursday's exploring the big money issues in the world

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Speaker 1: of sports. Talking to some of the biggest players in

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Speaker 1: the industry today. Delighted to be talking with the chairman

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Speaker 1: of the boarder directors for Envy Gaming and co owner

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Speaker 1: the Texas Rangers, can her, She joins us from Dallas.

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Speaker 1: Can really good to connect with you. How are you

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Speaker 1: in Texas? Oh we're doing okay here. Um, we wish

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Speaker 1: the stars had done a little bit better. It's beautiful

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Speaker 1: here in Dallas. Yeah, absolutely, So talk to us to

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Speaker 1: start about the world of e sports you're deeply involved

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Speaker 1: in and the gaming. Of course, we have seen E

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Speaker 1: sports just take off in a massive way over the

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Speaker 1: past few years. Some of it may be fueled by

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Speaker 1: the pandemic, but I do wonder sort of what you've

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Speaker 1: seen and what you saw the opportunity was when you

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Speaker 1: got involved here. Sure, I mean I think the sports,

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Speaker 1: the growth and the sports this year due to the

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Speaker 1: pandemic was really just a continuation of this massive growth

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Speaker 1: rate that's been happening globally around around E sports in

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Speaker 1: general had nothing to do with the pandemic. I mean,

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Speaker 1: we've continued. Um, the fact that we didn't have to

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Speaker 1: dis continue our seasons and things, I think that obviously helps.

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Speaker 1: But um, you know, I noticed E sports just in

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Speaker 1: the world of sports, and it kind of appeared on

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Speaker 1: my radar a half dozen years ago, um, just through

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Speaker 1: my um small ownership in the Texas Rangers. I follow

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Speaker 1: the business of sports and I I kind of noticed

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Speaker 1: an article here and there on the sports and I

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Speaker 1: kind of I said, what the hell is that? And

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Speaker 1: you know, I'm not a gamer. But but the more

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Speaker 1: I the more I looked into it, UM, you know,

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Speaker 1: it was what was stunning to me was the size

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Speaker 1: of the audiences, the diversity of the audiences, and the

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Speaker 1: global nature of the audience. And and I said, this thing,

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Speaker 1: this trend line is is unbelievable. And I said, I

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Speaker 1: don't you know, so as I looked at the demographics

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Speaker 1: of who's playing these these things and who's watching them

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Speaker 1: and and taking a part in in in competitive gaming, UM,

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Speaker 1: I said, you know, these are you know, twenty something

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Speaker 1: year old UM audiences and players. And I said, you know,

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Speaker 1: in fifteen years, these people are not going to bring

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Speaker 1: in their eighteen year old sons and daughters to a

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Speaker 1: baseball game. And so anyway, the more I looked into it,

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Speaker 1: it was just it was stunning to me the growth

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Speaker 1: rates and both in terms of audiences and in revenue

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Speaker 1: and and in following so UM and the connections UM

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Speaker 1: when you looked at the consumer data UM in the

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Speaker 1: marketing world, I mean they're these people are really connected

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Speaker 1: to their teams and to their to the to the

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Speaker 1: personalities and the influencers. So UM, it struck my interests.

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Speaker 1: And then I quickly said, as an investor, UM, who

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Speaker 1: understands the space, I need to I need to put

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Speaker 1: some chips on the table. Uh. And that's what I

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Speaker 1: did to him. Look tew years ago. Here's a sentence

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Speaker 1: I never thought would come out of my lips. I

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Speaker 1: have to explain. I have my youngest son is fifteen

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Speaker 1: years old. He is on the high school E sports team.

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Speaker 1: And I never thought I would say this, but I said, hey,

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Speaker 1: you made the team great, Now go in there and

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Speaker 1: play video games and practice. I never thought I would say,

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Speaker 1: but it came out of my lips. And it brings

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Speaker 1: me to the point is that this is big in

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Speaker 1: high schoolers. That you have high school teams like this?

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Speaker 1: Can you can you take? It's more about where you

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Speaker 1: see that part expanding in the sports. Well, it's it's real, um,

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Speaker 1: and and it's first, let me just say it's not

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Speaker 1: just high school UM, but there's over twenty colleges universities

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Speaker 1: that now have official E sports programs and officially sports teams. Um.

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Speaker 1: You can get a degree in the sports marketing from

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Speaker 1: Ohio State. I mean, this is a this isn't a

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Speaker 1: flash in the pan. It isn't a small little business. Um.

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Speaker 1: It just wasn't on the radar for you and me.

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Speaker 1: But you know what what's really been fascinating about this

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Speaker 1: is that these this this industry grew organically. Um. Nobody,

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Speaker 1: nobody topped down said we have a ball here and

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Speaker 1: we're gonna go create e sports. You know, we're going

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Speaker 1: to create something out of this ball, this leather ball

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Speaker 1: that we have. And these were these were game developers

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Speaker 1: who are in the entertainment business, and there were you know,

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Speaker 1: hundreds of millions of globally who are playing and getting better.

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Speaker 1: And then, you know, human nature being what it is,

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Speaker 1: when you're playing and getting better, you want to be

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Speaker 1: the best. And then because you want to be the best,

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Speaker 1: you gotta prove it. And so you gotta prove it,

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Speaker 1: you gotta have some competitions, and so people came, people

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Speaker 1: sprung up to create events and create tournaments, and then

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Speaker 1: the next thing, you know, there were leagues and and

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Speaker 1: so this whole thing happened organically. UM. And so it's

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Speaker 1: very very durable. So I don't I think that it

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Speaker 1: isn't going away? And so you know when when um,

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Speaker 1: what what it's tapped into is the same the same

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Speaker 1: um outlet that the robotics teams might have in in

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Speaker 1: high schools and um, and so not everybody can play football,

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Speaker 1: baseball or basketball or soccer. And here's it, here's an

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Speaker 1: activity that is highly skill oriented. Um. My first blush was,

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Speaker 1: you know the same as yours, Like it's really just

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Speaker 1: video games. But watching the elite players play, um, it

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Speaker 1: is every bit uh equivalent to say Nascar, where you know,

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Speaker 1: if you want Nascar, you say, you know, how hard

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Speaker 1: can that be? But you get behind the wheel and

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Speaker 1: you're driving two hundred miles an hour or six inches

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Speaker 1: away from somebody and your head's on a swivel. The

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Speaker 1: amount of concentration, the amount of reflex um, the amount

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Speaker 1: of conditioning and mental conditioning you need to be to

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Speaker 1: participate in NASCAR, to be an elite driver is something

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Speaker 1: special and so there's nothing different about the sports. And

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Speaker 1: you know, the more I've gotten to know it, Yeah,

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Speaker 1: this is Mike Lynch up in Boston. What kind of

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Speaker 1: impact do you expect post Malone to have as a

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Speaker 1: as an addition to Team Envy, well, I think you know,

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Speaker 1: Team Envy is one of the top global e sports

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Speaker 1: complexes and brands in the world. UM. And the uh,

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Speaker 1: you know, the ability for us to play multiple games, um,

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Speaker 1: to have multiple personalities, to have multiple players across different

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Speaker 1: games under the same Nvy umbrella, you know, is huge. UM.

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Speaker 1: Bringing a post malone into the fold was actually a natural. Um.

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Speaker 1: He likes call of duty. UM. And he from the

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Speaker 1: Dallas for Worth area, right in our territory. And so

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Speaker 1: uh our our chief gaming officer and co founder, Micro Fell,

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Speaker 1: who is the founder of Envy Gaming, who is who

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Speaker 1: is one of the top influencers in all of the sports. Um.

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Speaker 1: You know, these guys know each other and uh, and

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Speaker 1: so one thing led to another and and we're happy

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Speaker 1: to welcome him as part of the ownership group and

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Speaker 1: and you know, and and it's just an example of

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Speaker 1: sort of people who are bridging multiple industries. I mean,

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Speaker 1: the sports isn't just video gaming. I mean these are

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Speaker 1: at the level that Team Envy is playing. You know,

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Speaker 1: these are global media and entertainment and lifestyle brands. And

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Speaker 1: and the biggest, the most the biggest analogy I can

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Speaker 1: draw is to um is to the Premier Soccer League.

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Speaker 1: I mean, there are people who cheer for Arsenal and

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Speaker 1: they couldn't find the Arsenal stadium on a map or

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Speaker 1: Man you and they probably don't even know what Man

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Speaker 1: stands for. And yet there's these are brands that have

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Speaker 1: followings all over the world, and you know, they have

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Speaker 1: Emirates on their jerseys. Say, don't you know they don't

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Speaker 1: even have the name of their team on their jersey,

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Speaker 1: they have the they have just sponsors and and this

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Speaker 1: is these these brands have global followings and and it's

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Speaker 1: really it's really fascinating to watch. So can play this

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Speaker 1: out for us, because you know, one of the things

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Speaker 1: that that you really describe well was this notion that

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Speaker 1: it's been a sort of bottoms up creation and not

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Speaker 1: a top down as we've seen with more traditional sports. So,

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Speaker 1: if someone in our audience is thinking about this from

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Speaker 1: a business or an investor perspective, where's the opportunity here,

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Speaker 1: Because obviously you got in on a relative basis pretty early.

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Speaker 1: Where do you see the growth because the whole ecosystem

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Speaker 1: is growing here, and I wonder how you see this

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Speaker 1: developing as a very successful, savvy long term investor who

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Speaker 1: has seen other businesses, not the least of which the

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Speaker 1: energy business grow over decades. Well, unlike the energy business,

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Speaker 1: which is commodity. UM. Here these are brands, Brands have identities. UM.

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Speaker 1: There's no difference in these emerging E sports teams and

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Speaker 1: brands then there is in any other professional sport um

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Speaker 1: around their business model of attracting fans and connections and

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Speaker 1: sponsors and and ticket revenue and all the rest. But

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Speaker 1: the sports is UM is global. UM. E sports is

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Speaker 1: a is kind of a universal language. I mean, not

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Speaker 1: everybody knows the rules of baseball. If you if you

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Speaker 1: follow cricket, you don't know baseball. And if you follow

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Speaker 1: a baseball you don't know cricket, and and you but

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Speaker 1: but E sports, you know you can these are these

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Speaker 1: are um you can play the same game, you know,

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Speaker 1: with a Korean and somebody from China and some of

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Speaker 1: the United States are playing the same game. And and

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Speaker 1: it's universal language because it's just it's just the avatars

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Speaker 1: that that are playing. And so the the the ability

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Speaker 1: to transcend and connect with audiences is really really special. UM.

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Speaker 1: And you know what, I what I look at it

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Speaker 1: and say, it's just it's only starting because what as

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Speaker 1: a as a business, because you're talking about um several

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Speaker 1: hundred million people that play these things that are enthusiasts

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Speaker 1: globally UM seventy of them are between the age of

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Speaker 1: eighteen and fifty about fifty some odd percent or between

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Speaker 1: eighteen and thirty four, which is a really tough demographic

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Speaker 1: to reach. UM. These people haven't identified with their brand yet,

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Speaker 1: they don't know what truck they're going to drive, they

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Speaker 1: don't necessarily know what car they're gonna drive, and they're

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Speaker 1: in that station of life where they're building and and

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Speaker 1: so the ability to capture this attention and the eyeballs

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Speaker 1: here UM in a way that has a really deep

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Speaker 1: connection because these people are connected to these games because

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Speaker 1: they play them UM. And that's that's just a fascinating

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Speaker 1: business formula. And so I think the growth is you know,

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Speaker 1: we're talking compound growth rates UM in viewership and twenty

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Speaker 1: some odd percent compound growth rates in revenues going to

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Speaker 1: e sports. And I think, as you mentioned about high school,

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Speaker 1: people were gonna play in high school, then they're going

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Speaker 1: to play in college and and and the truth of

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Speaker 1: the matter is they were already playing it just wasn't organized.

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Speaker 1: They were in their dorm rooms playing on their Xbox.

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Speaker 1: It just wasn't a team yet. And so these colleges

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Speaker 1: have woken up and say, if I can, if I

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Speaker 1: can create a kind of a gaming center and a

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Speaker 1: gaming team. Uh at my university, all I'm doing is

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Speaker 1: getting the kids out of the dorms where they were playing,

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Speaker 1: into these centers and doing something and doing it an

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Speaker 1: organized fashion. So um, and it's a better recruitment tool

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Speaker 1: to get students to come to your place. So it's

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Speaker 1: been a it's it's it's a pretty sticky business proposition,

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Speaker 1: and the growth rates are impressive. So I I you know,

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Speaker 1: I think that it votes really well for the long term, um,

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Speaker 1: because it's you know, it's hitting the age group that

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Speaker 1: needs to be that needs to be spoken to. I

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Speaker 1: got into a quick story to bring me to the question,

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Speaker 1: and I want to go back to what you were saying,

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Speaker 1: is like watching nask Ard and I want I want

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Speaker 1: to talk more about an audience part of it. My

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Speaker 1: my youngest son and my my next youngest son. They're

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Speaker 1: playing Fortnite, and I'm enjoying watching them playing Fortnite. And

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Speaker 1: here I am with a beer, and I'm that stupid

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Speaker 1: fan in the stands that's sitting right there in the den.

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Speaker 1: And all of a sudden, my son gets killed in Fortnite,

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Speaker 1: and and here I am yelling, damn boy, didn't you

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Speaker 1: see him? He was right by the shed, he was

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Speaker 1: right there. And he said, all right, then you grab

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Speaker 1: a controller and let's see how well do you do well?

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Speaker 1: If you played Fortnite. They are a hundred people in

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Speaker 1: a game. I was nine. The only one I wasn't

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Speaker 1: a hundred was because one guy died because it didn't

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Speaker 1: open to shoot. So I bring up the point I

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Speaker 1: want to put the players aside. Why we could see

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Speaker 1: more of a channel of just E sports and not

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Speaker 1: just streaming. I mean, I think you could put this

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Speaker 1: on on television. I think people would watch this. Oh yeah, no,

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Speaker 1: it's it's during the regular season. UM TBS had Friday

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Speaker 1: night uh esports live contests, you know, on on Friday

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Speaker 1: night primetime television. So this is you know, we've had

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Speaker 1: events on major networks. UM the there's no doubt that

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Speaker 1: this is moving from the side to the mainstream. And

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Speaker 1: during the pandemic, there were we had we had network

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Speaker 1: coverage because there was so little UM Live Sports on

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Speaker 1: UM and you know you mentioned NASCAR. NASCAR even had

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Speaker 1: simulated the you know, they had the drivers playing the

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Speaker 1: simulation games and for competition and and so the the

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Speaker 1: this is this sort of convergence of the virtual world

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Speaker 1: with the physical world and people. You know, my son's

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Speaker 1: age and your son's ages. There's not that is a

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Speaker 1: meld that's happening. And so they view they don't view

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Speaker 1: the virtual world as some sort of this thing off

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Speaker 1: to the side. It is part of their lives. They

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Speaker 1: are connected on their devices and and there's very little

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Speaker 1: distinction between who's in the room with them and who's

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Speaker 1: what what the conversation they're having via text or WhatsApp

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Speaker 1: or Facebook or whatever, and and so or TikTok you

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Speaker 1: know her Instagram. I mean, these are ways that people

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Speaker 1: can connect with each other when they don't have to

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Speaker 1: physically be in the room and you know watching you know,

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Speaker 1: when when I sit down and talk to somebody, I

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Speaker 1: put my phone away. When our kids do it, the

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Speaker 1: phone is there and their their counterparts phones are there,

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Speaker 1: and they're talking to not only the people in the room,

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Speaker 1: but they're conversing and sharing stories and ideas and whatever

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Speaker 1: with the people who they're having these simultaneous virtual conversations with.

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Speaker 1: And so that that's what this E sports phenomenon is capturing.

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Speaker 1: And and so it's a high skills game, it's high energy,

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Speaker 1: and the people are learning the the the watchers it is.

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Speaker 1: It is an engrossing experience. I mean, I've caught myself

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Speaker 1: getting engrossed into it and I and I can barely

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Speaker 1: follow the games they're going so fast. But I mean

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Speaker 1: that to me, is it Once you get into it,

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Speaker 1: it's no different than watching people play two basketball teams play.

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Speaker 1: I can no sooner duncle ball or play the game

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Speaker 1: that I'm watching, but I can enjoy watching those people

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Speaker 1: in the high skill level and the drama of the game.

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Speaker 1: And so that's you know, that's that's the phenomenon of

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Speaker 1: E sports, and it's going at a pace and and

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Speaker 1: it's in a medium that a lot of people, you know,

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Speaker 1: are having their brains wired for ken. I think all

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Speaker 1: you need to know about this is that David Price,

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Speaker 1: so who once pitched for the Boston Red Sox, went

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Speaker 1: on the disabled list because he was playing too much Fortnite.

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Speaker 1: That actually a true story. That is a true story.

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Speaker 1: Talk about convergence. There you go, and it's every It's everywhere.

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Speaker 1: That's the kind of thing is I tell my friends

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Speaker 1: as soon as as soon as you talk about it

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Speaker 1: and their eyes are open to it, that all of

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Speaker 1: a sudden they notice everywhere. And a serious note, there

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Speaker 1: was a there was a World Series advertisement that talk

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Speaker 1: O Bell ran and during the World Series, and it

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Speaker 1: was a guy who was playing UM had his controller

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Speaker 1: on his couch and he put his controller down to eat,

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Speaker 1: you know, some some Taco Bell stuff, and his the

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Speaker 1: character on his screen, his avatar said, Hey, dude, come on,

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Speaker 1: I'm getting killed in here. But so I'm watching the

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Speaker 1: World Series, which was the ultimate traditionalist physical sport, and

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Speaker 1: the advertiser was using an e sport to connect with

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Speaker 1: the audience at the World Series, which just that says

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Speaker 1: everything you need to know about your world's collided right there, Ken.

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Speaker 1: Unfortunately we weren't in that world. Yeah, so, Ken, I

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Speaker 1: have to ask you, So you gave me an opening,

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Speaker 1: give us an opening to talk about baseball and traditional sports.

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Speaker 1: It has been a topsy turvy season, to say the least,

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Speaker 1: and you and your team, the Texas Rangers, have a

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Speaker 1: very special ace in what the postseason, this very unusual

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Speaker 1: postseason is going to be. Tell us what it has

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Speaker 1: been like from a traditional sports perspective as a minority

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Speaker 1: owner of the Texas Rangers. Yeah, I mean, you know,

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Speaker 1: I'm the percentage that I owned the team. I'm kind

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Speaker 1: of along for the ride. But it's been, um, you know,

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Speaker 1: it's been bitter sweet. We we we hustled to get

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Speaker 1: a stadium built. Um that is really state of the art, domed,

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Speaker 1: really special. It's got a ton of cool features. Um,

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Speaker 1: it should be an exciting place to watch baseball. And

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Speaker 1: so we hustled like crazy to get that thing built.

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Speaker 1: And we got it built on time and on budget,

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Speaker 1: and and then then we're ready for opening day in March,

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Speaker 1: and then the season obviously got delayed. So um, so

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Speaker 1: either watching the season unfold or the short season from

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Speaker 1: an empty ballpark, it's just, you know, it's a shame. Now,

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Speaker 1: the good news is the ballpark doesn't go anywhere, and

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Speaker 1: so they'll be when we do re enter, it'll be

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Speaker 1: it'll be as novel then as it is now. Having

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Speaker 1: the World Series there, um is a real validation that

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Speaker 1: it's and I think the world will see what kind

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Speaker 1: of a quality park it is, and you know that's

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Speaker 1: it's it's great for the metroplex. Um, it's you know,

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Speaker 1: I wish that the teams could play in their own home.

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Speaker 1: There's nothing more special, you know, It's there're very few

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Speaker 1: you know, basketball is one, and the baseball's and other.

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Speaker 1: Football isn't where they crown the world champion, you know,

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Speaker 1: potentially at their home. And that's ah, you know, that's

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Speaker 1: a special that's a special thing. Um. And you know,

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Speaker 1: watching the Tampa get the Cup when their fans aren't there,

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Speaker 1: it's just you know, it's just you feel like your tourists. Um.

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Speaker 1: So that the DFW area will roll out the red

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Speaker 1: carpet for the teams. Um, it'll be a great place

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Speaker 1: to play. It'll be a wonderful stadium and and so

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Speaker 1: it should be an exciting venue. And and I'm proud

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Speaker 1: to show it off. So you know, but should you know,

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Speaker 1: I hope, I hope that we're back to playing in

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Speaker 1: our homes next year. Though absolutely well, Ken Hirsch, I

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Speaker 1: have to say, and I think guys speak on half

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Speaker 1: all of us. I've never heard a better explanation for

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Speaker 1: e sports and the business of the sports than you

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Speaker 1: gave us, So I really really appreciated. I feel like

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Speaker 1: it's something that's been hanging out there, um and we've

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Speaker 1: been watching it obviously with a with a close eye,

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Speaker 1: but you know, hearing from someone who's a successful investor

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Speaker 1: in all aspects of life, uh, sort of dig into

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Speaker 1: it and help us understand it was was really great.

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Speaker 1: So thank you so much for your time. Happy to

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Speaker 1: do it, and everybody keep your eyes and ears open

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Speaker 1: because Team Envy and E Sports is going to be

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Speaker 1: on the radar, all right. We really appreciate you. Can

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Speaker 1: catch our podcast right here every Monday, Wednesday and Thursday.

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Speaker 1: I'm Jason Kelly. Find me on Twitter though I'm not

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Speaker 1: a gamer at Jason Kelly News and I'm Michael in

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Speaker 1: Still Stunned. You can major in each sports at Ohio State.

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Speaker 1: You can follow me at Lynch w CVB and I'm

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Speaker 1: Michael barn A fifteen year olds. You I know you're

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Speaker 1: not you can follow me a big bar of sports.

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Speaker 1: You're listening to Bloomberg Business of Sports from Bloomberg Radio

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Speaker 1: around the world. Ye