1 00:00:00,320 --> 00:00:07,280 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:13,480 --> 00:00:16,600 Speaker 2: Hi, I'm Jason Kelly and I'm Alex Rodriguez. On this 3 00:00:16,680 --> 00:00:19,880 Speaker 2: episode of The Deal. Ted leonsis all right. So ted 4 00:00:19,960 --> 00:00:24,480 Speaker 2: leonsis Alex. He is the founder, Chairman, CEO of Monumental 5 00:00:24,520 --> 00:00:28,880 Speaker 2: Sports and Entertainment the Capitals of the NHL, the Mystics 6 00:00:28,920 --> 00:00:32,280 Speaker 2: of the WNBA and the Wizards of the NBA, plus 7 00:00:32,560 --> 00:00:36,400 Speaker 2: E Sports plus the Arena. This guy has built a 8 00:00:36,600 --> 00:00:39,720 Speaker 2: literal sports empire in the nation's capital. 9 00:00:39,960 --> 00:00:42,520 Speaker 1: He has, Jason, and it's what I call the most 10 00:00:42,520 --> 00:00:46,920 Speaker 1: impressive flywheel of sports with all these blue chip assets 11 00:00:47,280 --> 00:00:49,720 Speaker 1: in what he calls a super city, which was very 12 00:00:49,800 --> 00:00:52,080 Speaker 1: educational for us. And I just think he does an 13 00:00:52,080 --> 00:00:54,480 Speaker 1: incredible job. The most impressive part he's done it all 14 00:00:54,680 --> 00:00:56,880 Speaker 1: under the umbrella of Washington, d C. One of the 15 00:00:56,920 --> 00:00:58,040 Speaker 1: great cities in the world. 16 00:00:58,160 --> 00:01:01,319 Speaker 2: Yeah, and he's leaning into that act. He has made 17 00:01:01,360 --> 00:01:03,960 Speaker 2: a career. He even set it himself of looking just 18 00:01:04,080 --> 00:01:07,440 Speaker 2: around the corner and whether that is selling his small 19 00:01:07,480 --> 00:01:10,800 Speaker 2: company to AOL and then becoming the president of AOL, 20 00:01:11,240 --> 00:01:15,479 Speaker 2: being a part of the biggest and maybe worst deal 21 00:01:16,120 --> 00:01:21,000 Speaker 2: in all of corporate history, but then seeing before many did, 22 00:01:21,600 --> 00:01:25,920 Speaker 2: how to make a business out of sports and even 23 00:01:25,959 --> 00:01:28,679 Speaker 2: bringing institutional capital, and he touches all of it. 24 00:01:29,000 --> 00:01:29,080 Speaker 3: All. 25 00:01:29,160 --> 00:01:43,440 Speaker 2: Right, here's Ted Leonsis. So we like to start the 26 00:01:43,480 --> 00:01:46,760 Speaker 2: show by having our guests introduce themselves and tell us 27 00:01:46,800 --> 00:01:47,240 Speaker 2: what you do. 28 00:01:47,440 --> 00:01:51,720 Speaker 3: I'm Ted Leonsis. I'm a founder and chairman of Monumental 29 00:01:51,760 --> 00:01:56,560 Speaker 3: Sports and Entertainment, and we own the Washington Capitals, the 30 00:01:56,640 --> 00:02:01,720 Speaker 3: Washington Wizards, the Washington Mystics, Little One Arena, and the 31 00:02:01,760 --> 00:02:07,200 Speaker 3: Monumental Sports RSN Network, amongst some other sports properties. 32 00:02:07,280 --> 00:02:09,200 Speaker 2: All right, we're going to get into all of that, 33 00:02:09,320 --> 00:02:12,720 Speaker 2: but before we do, we also want to know what 34 00:02:12,800 --> 00:02:15,080 Speaker 2: would you consider your signature deal. 35 00:02:15,400 --> 00:02:19,680 Speaker 3: So far, I don't think I have one signature deal, 36 00:02:20,560 --> 00:02:26,240 Speaker 3: although I was a participant in the world's worst big deal, 37 00:02:26,880 --> 00:02:33,080 Speaker 3: so maybe yeah. Talk was AOL bought Time Warner and 38 00:02:33,160 --> 00:02:38,520 Speaker 3: it was the largest acquisition in history. AOL was the 39 00:02:38,639 --> 00:02:42,040 Speaker 3: first Internet company to go public. We were the fastest 40 00:02:42,080 --> 00:02:45,919 Speaker 3: growing company there was a decade. We were the number 41 00:02:45,960 --> 00:02:49,680 Speaker 3: one performing stock. I did the deal with Google, they 42 00:02:49,919 --> 00:02:54,160 Speaker 3: were a part of us. We invested in Amazon, we 43 00:02:54,560 --> 00:02:59,440 Speaker 3: were it, and we bought Time Warner. The cultures couldn't 44 00:02:59,440 --> 00:03:05,440 Speaker 3: have been more different. The dot com bomb happened. Basically, 45 00:03:05,680 --> 00:03:11,720 Speaker 3: it destroyed value, it destroyed web one. Oh so I 46 00:03:11,720 --> 00:03:15,400 Speaker 3: guess the signature deal that I would be involved with 47 00:03:15,560 --> 00:03:20,720 Speaker 3: would be the Aol Time Warner merger. I think I've 48 00:03:20,760 --> 00:03:29,160 Speaker 3: done dozens of smart deals to build relationships, build platforms 49 00:03:29,280 --> 00:03:33,000 Speaker 3: and the like. And you know, I've always been not 50 00:03:33,120 --> 00:03:35,880 Speaker 3: about the transaction but the relationship. 51 00:03:36,400 --> 00:03:38,880 Speaker 1: So what Ted, What did you learn from that deal? 52 00:03:39,000 --> 00:03:40,480 Speaker 1: What were some of the lessons you took away. 53 00:03:40,960 --> 00:03:43,720 Speaker 3: It's better to be about Main Street than Wall Street. 54 00:03:44,200 --> 00:03:50,520 Speaker 3: That deal was driven by investment banks. You know, the 55 00:03:50,560 --> 00:03:55,320 Speaker 3: CFOs of the offices we went from. Remember in fact, 56 00:03:55,320 --> 00:03:57,840 Speaker 3: I have the sign in my office. I stole it 57 00:03:58,000 --> 00:04:01,920 Speaker 3: off of the walls when I retired. You're going to 58 00:04:02,000 --> 00:04:07,520 Speaker 3: build the medium that is more valuable, more important, more 59 00:04:07,640 --> 00:04:13,440 Speaker 3: secure than the medium before US television and radio. And 60 00:04:13,520 --> 00:04:17,440 Speaker 3: we announced the merger and our corporate mission became generate 61 00:04:17,480 --> 00:04:21,120 Speaker 3: eleven billion dollars of EBITA. I don't have an employee, 62 00:04:21,600 --> 00:04:24,640 Speaker 3: I don't have an associate a partner who gets up 63 00:04:24,640 --> 00:04:27,640 Speaker 3: in the morning and says, I'm going to go generate 64 00:04:27,680 --> 00:04:31,960 Speaker 3: EBITA today. I need that cash flow. And so if 65 00:04:32,000 --> 00:04:35,960 Speaker 3: you stay true to a mission and you make great products, 66 00:04:36,680 --> 00:04:42,520 Speaker 3: and you have an authentic relationship with your partners, with 67 00:04:42,680 --> 00:04:48,279 Speaker 3: your board, with your with your community. The success comes. 68 00:04:48,600 --> 00:04:53,440 Speaker 3: You can't measure and build from ebita out from cash 69 00:04:53,480 --> 00:04:58,000 Speaker 3: flow out. And you know, I've seen that happen. You know, 70 00:04:58,160 --> 00:05:04,440 Speaker 3: Time Warner Then was bought by eighteen T. They spun 71 00:05:04,520 --> 00:05:09,320 Speaker 3: it out pretty fast. Time Warner Then was bought by 72 00:05:09,960 --> 00:05:15,039 Speaker 3: Discovery David Zaslov. And it's a hard business to run. 73 00:05:15,400 --> 00:05:19,040 Speaker 3: And all we think about on some of these companies 74 00:05:19,160 --> 00:05:22,440 Speaker 3: is their cash flow is there even as their earnings 75 00:05:22,480 --> 00:05:25,599 Speaker 3: per share? You kind of lose your way. So I'm 76 00:05:25,640 --> 00:05:27,880 Speaker 3: now at a stage of my life where i have 77 00:05:28,120 --> 00:05:32,599 Speaker 3: just focused on is the product great? Is the service great? 78 00:05:33,000 --> 00:05:37,120 Speaker 3: Do they love what we do? Everything will flow from that. 79 00:05:37,880 --> 00:05:40,520 Speaker 2: And so what's the moment where you decide, you know, 80 00:05:40,560 --> 00:05:42,320 Speaker 2: what I want to be in sports? 81 00:05:42,640 --> 00:05:46,720 Speaker 3: Well, I grew up in Brooklyn, New York. My dad 82 00:05:46,960 --> 00:05:52,000 Speaker 3: was a Greek immigrant, and he of course became a waiter. 83 00:05:52,320 --> 00:05:55,760 Speaker 3: And I'm an only kid, and my mom had to 84 00:05:55,839 --> 00:06:01,240 Speaker 3: work and she was a secretary piary secretary, which was 85 00:06:01,400 --> 00:06:04,680 Speaker 3: temp firm. And I'd go to school and I'd get 86 00:06:04,680 --> 00:06:08,000 Speaker 3: out at three o'clock and they would get home about 87 00:06:08,080 --> 00:06:10,400 Speaker 3: six thirty, So there was at three and a half 88 00:06:10,440 --> 00:06:13,120 Speaker 3: hours and you had a study and you had to 89 00:06:13,120 --> 00:06:17,599 Speaker 3: play sports, and if you didn't, you got in trouble. 90 00:06:18,640 --> 00:06:24,560 Speaker 3: And so I played Little League baseball, I played club basketball, 91 00:06:24,960 --> 00:06:29,000 Speaker 3: I played touch football. And my mom worked as a 92 00:06:29,080 --> 00:06:33,720 Speaker 3: temp at the Tops Baseball card Company in Brookland. Right 93 00:06:33,720 --> 00:06:37,159 Speaker 3: we're the Nets practice now. And then she got a 94 00:06:37,279 --> 00:06:42,920 Speaker 3: job working for Jonathan Bush at G. H. Walker and Company, 95 00:06:43,040 --> 00:06:45,880 Speaker 3: and they owned the Mets. They were part owners and 96 00:06:45,920 --> 00:06:49,400 Speaker 3: the Mets, and we couldn't afford going to Yankees games 97 00:06:49,640 --> 00:06:54,080 Speaker 3: or New York Giant Football games, and he would give 98 00:06:54,160 --> 00:06:58,800 Speaker 3: my mother tickets, and so I grew up going to 99 00:06:58,839 --> 00:07:04,479 Speaker 3: Mets games, and then my dad. My biggest Christmas gift 100 00:07:04,600 --> 00:07:07,680 Speaker 3: was season tickets to the New York Jets. Seven dollars 101 00:07:07,720 --> 00:07:11,880 Speaker 3: a ticket, wow, ninety nine dollars for full season. Wow. 102 00:07:12,040 --> 00:07:16,680 Speaker 3: And it was sixty eight, nineteen sixty nine. Jets won 103 00:07:16,720 --> 00:07:20,160 Speaker 3: the Super Bowl, Mets won the World Series, and I 104 00:07:20,240 --> 00:07:25,440 Speaker 3: lived in this very interesting neighborhood by the Sunset Park, 105 00:07:26,280 --> 00:07:32,680 Speaker 3: and the teams brought the community together. I mean when 106 00:07:32,720 --> 00:07:35,680 Speaker 3: the Jets won the Super Bowl, everyone came out of 107 00:07:35,720 --> 00:07:40,640 Speaker 3: their apartments and beeping the horns and hugging and crying. 108 00:07:41,040 --> 00:07:44,400 Speaker 3: And it's the only day I remember my mom and 109 00:07:44,480 --> 00:07:47,960 Speaker 3: dad allowing me not to go to school because they 110 00:07:48,000 --> 00:07:49,800 Speaker 3: had to work. You had to go to school so 111 00:07:50,200 --> 00:07:52,680 Speaker 3: they could go to work. And we went to the parade, 112 00:07:53,640 --> 00:07:57,600 Speaker 3: And when we won the Stanley Cup, I told all 113 00:07:57,680 --> 00:08:01,920 Speaker 3: our play the Washington One. We had a huge parade 114 00:08:02,040 --> 00:08:04,880 Speaker 3: and half a million people on the mall, and I 115 00:08:04,920 --> 00:08:09,120 Speaker 3: told all our players, you make eye contact with every kid, 116 00:08:09,720 --> 00:08:13,920 Speaker 3: because that was me, you know, I was like you, 117 00:08:14,120 --> 00:08:18,800 Speaker 3: Matt Snell, and it was so vivid. So when the 118 00:08:18,840 --> 00:08:24,200 Speaker 3: opportunity came and I had the means to buy the team, 119 00:08:24,440 --> 00:08:28,160 Speaker 3: I you know, that's what compelled me. So sports had 120 00:08:28,160 --> 00:08:31,240 Speaker 3: always been an important part of my life, you know, 121 00:08:31,320 --> 00:08:34,960 Speaker 3: I had built a business career, and then you could 122 00:08:35,040 --> 00:08:40,080 Speaker 3: just see the crescendo. If you will, love sports is 123 00:08:40,120 --> 00:08:46,480 Speaker 3: about sports to the fans. Sports is about unity and 124 00:08:46,600 --> 00:08:49,720 Speaker 3: holding a mirror up to the people that you serve 125 00:08:50,320 --> 00:08:54,560 Speaker 3: in the community. That's like politicians are always around sports, 126 00:08:54,760 --> 00:08:58,240 Speaker 3: but it's becoming a really big business and it was 127 00:08:58,640 --> 00:09:04,400 Speaker 3: way undervalued until the last decade, I would say, And 128 00:09:04,679 --> 00:09:07,120 Speaker 3: so you know, I'm at that point in my life 129 00:09:07,160 --> 00:09:11,120 Speaker 3: and career where I can integrate all of those experiences 130 00:09:11,200 --> 00:09:14,600 Speaker 3: and try to build something that you know, can build 131 00:09:15,480 --> 00:09:18,040 Speaker 3: a great legacy for the fans. I mean when you 132 00:09:18,080 --> 00:09:22,360 Speaker 3: win a championship, as you know, the fans, the mothers, 133 00:09:22,400 --> 00:09:26,040 Speaker 3: the fathers, the sons, the daughters, the best friends, it's 134 00:09:26,080 --> 00:09:29,880 Speaker 3: their reference point. I was there when, yeah, you win 135 00:09:29,960 --> 00:09:34,960 Speaker 3: a championship. It's a mortal yeah, and the fans share 136 00:09:35,200 --> 00:09:40,120 Speaker 3: in that. I've taken companies public. I've launched products that 137 00:09:40,160 --> 00:09:43,840 Speaker 3: are billions of dollars. No one cares, okay, but my 138 00:09:44,000 --> 00:09:47,400 Speaker 3: name's on the Stanley Cup. I have you know a 139 00:09:47,520 --> 00:09:51,000 Speaker 3: ring in the NHL. You get the World Series ring? 140 00:09:50,720 --> 00:09:52,679 Speaker 2: You so tortality. 141 00:09:52,880 --> 00:09:56,199 Speaker 3: Yeah, and it's that's that's the thrill of the business 142 00:09:56,400 --> 00:09:56,800 Speaker 3: to you. 143 00:09:56,760 --> 00:09:59,480 Speaker 1: Talk about integration. But before there, I've I've had the 144 00:09:59,520 --> 00:10:01,719 Speaker 1: great four to sit in a seat as one of 145 00:10:01,720 --> 00:10:04,120 Speaker 1: the governors in the NBA and watch what a foresh 146 00:10:04,120 --> 00:10:05,719 Speaker 1: you are in that room. What a great leader. I 147 00:10:05,760 --> 00:10:07,400 Speaker 1: grew up in Miami and there was a gentleman by 148 00:10:07,440 --> 00:10:09,720 Speaker 1: the name of wayn Heinzinger, Yeah, who was way ahead 149 00:10:09,760 --> 00:10:12,200 Speaker 1: of the curve and a pioneer. Healed the Panthers, the 150 00:10:12,280 --> 00:10:15,400 Speaker 1: Dolphins and the Marlins. Won a championship with the Marlins. 151 00:10:15,480 --> 00:10:17,800 Speaker 1: But one thing is buying one team. But you're creating 152 00:10:17,800 --> 00:10:20,360 Speaker 1: this incredible flywheel that I think all of us look 153 00:10:20,400 --> 00:10:22,280 Speaker 1: at you as kind of the north star and our 154 00:10:22,360 --> 00:10:25,520 Speaker 1: mentor that we want to follow. What makes you go 155 00:10:25,600 --> 00:10:28,160 Speaker 1: from one team to the integration of the whole flywheel 156 00:10:28,160 --> 00:10:29,080 Speaker 1: that you've created. 157 00:10:29,400 --> 00:10:33,040 Speaker 3: Well, it's interesting you mentioned Wayne Heisinger. I started my 158 00:10:33,240 --> 00:10:38,280 Speaker 3: first company in Florida. IBM was introducing the PC and 159 00:10:38,360 --> 00:10:42,240 Speaker 3: they moved to boker Ratone, Florida, and I met Wayne, 160 00:10:42,559 --> 00:10:48,360 Speaker 3: and Wayne started a sanitation company. That's where he made 161 00:10:48,360 --> 00:10:52,760 Speaker 3: his money. And then he bought the Miami Dolphins and 162 00:10:52,800 --> 00:10:56,440 Speaker 3: the Marlins, right, and the Panthers, and then Blockbuster and 163 00:10:56,480 --> 00:11:00,080 Speaker 3: then yeah, and so someone sets up a meeting It 164 00:11:00,120 --> 00:11:03,520 Speaker 3: was probably twenty eight to twenty nine years old with them, 165 00:11:03,559 --> 00:11:05,679 Speaker 3: and he said, what business do you think I'm in? 166 00:11:05,960 --> 00:11:09,480 Speaker 3: And I said, you're in those sports business and the 167 00:11:09,520 --> 00:11:13,840 Speaker 3: movie rental business. And he said, nope, come here, and 168 00:11:13,880 --> 00:11:17,319 Speaker 3: he walks me to the window, puts his armorund me, 169 00:11:17,400 --> 00:11:21,160 Speaker 3: and he says, look down that alley and there was 170 00:11:21,280 --> 00:11:27,439 Speaker 3: a dumpster in the alley, and he said, I sold 171 00:11:27,840 --> 00:11:33,520 Speaker 3: the landlord in that apartment building, that dumpster thirty years 172 00:11:33,520 --> 00:11:39,960 Speaker 3: ago we rented. I'm in the rental business. I've been 173 00:11:40,360 --> 00:11:44,280 Speaker 3: billing him twenty eight dollars a month for thirty years 174 00:11:44,640 --> 00:11:48,760 Speaker 3: for that piece of metal, Blockbuster. I'm in the rental business. 175 00:11:49,400 --> 00:11:54,560 Speaker 3: I take a movie and I pay for it once 176 00:11:54,920 --> 00:11:59,240 Speaker 3: and then I rented out to viewers. And he said, 177 00:11:59,480 --> 00:12:02,440 Speaker 3: in a way, that's the business I'm in. With sports, 178 00:12:03,200 --> 00:12:07,720 Speaker 3: I'm about renting seats. I paid for the stadium and 179 00:12:07,720 --> 00:12:13,959 Speaker 3: I rent seats. And he was a thematic investor, and 180 00:12:14,000 --> 00:12:17,080 Speaker 3: I said, I think that's going to work everywhere. I 181 00:12:17,120 --> 00:12:19,840 Speaker 3: don't know how that's going to work in sports because 182 00:12:20,640 --> 00:12:23,960 Speaker 3: as a fan, you don't say I'm renting my seat today. 183 00:12:24,120 --> 00:12:28,000 Speaker 3: It's like I'm those seats. They get passed down generation 184 00:12:28,160 --> 00:12:31,560 Speaker 3: this generation to me, ye need in sports. I think 185 00:12:31,640 --> 00:12:36,760 Speaker 3: you can have a thesis in any business, but sports, 186 00:12:37,559 --> 00:12:41,040 Speaker 3: that's only half the thesis. There's the business side, but 187 00:12:41,200 --> 00:12:43,920 Speaker 3: the product. Do you have to have passion? And I 188 00:12:43,960 --> 00:12:46,680 Speaker 3: didn't really sense Dwayne had passion about. 189 00:12:46,800 --> 00:12:49,320 Speaker 2: Sports, but you did clearly. 190 00:12:49,520 --> 00:12:53,319 Speaker 3: Yeah. Alex asked an interesting question about do you want 191 00:12:53,360 --> 00:12:55,199 Speaker 3: to own a sports team or do you want to 192 00:12:55,240 --> 00:12:58,280 Speaker 3: win championships and do you want to own a sports 193 00:12:58,320 --> 00:13:00,520 Speaker 3: team or do you want to build a platque form 194 00:13:01,320 --> 00:13:05,240 Speaker 3: that moves up the value chain in terms of business model. 195 00:13:05,559 --> 00:13:09,520 Speaker 3: And when I first came into pro sports, I bought 196 00:13:09,559 --> 00:13:13,000 Speaker 3: one hundred percent of a hockey team and then forty 197 00:13:13,080 --> 00:13:19,319 Speaker 3: four percent of the building and an NBA team, And 198 00:13:19,400 --> 00:13:23,000 Speaker 3: we didn't have a media property. We were not a principal. 199 00:13:23,000 --> 00:13:28,360 Speaker 3: We were licensing for resale our IP and at America Online, 200 00:13:28,400 --> 00:13:32,479 Speaker 3: I was president of America Online. I learned about reoccurring 201 00:13:32,520 --> 00:13:38,720 Speaker 3: revenues and software is service businesses and having a platform, 202 00:13:39,480 --> 00:13:47,080 Speaker 3: and with the platform you can move eyeballs and fingertips 203 00:13:47,280 --> 00:13:53,200 Speaker 3: around by doing cross promotion. And so I started to 204 00:13:53,840 --> 00:13:58,920 Speaker 3: explain to people that we want to be aligned in 205 00:13:59,000 --> 00:14:06,040 Speaker 3: a big market, super city and be the largest, most 206 00:14:06,200 --> 00:14:11,839 Speaker 3: valuable sports enterprise. But no one buys a ticket for 207 00:14:12,000 --> 00:14:17,280 Speaker 3: monumental sports and entertainment. We hold almost three hundred events 208 00:14:17,320 --> 00:14:21,440 Speaker 3: a year in our building, but they come to see 209 00:14:21,640 --> 00:14:26,120 Speaker 3: Lady Gaga and you too, and Alex Ovechkin and the 210 00:14:26,240 --> 00:14:28,000 Speaker 3: Washington Capitals. 211 00:14:27,440 --> 00:14:29,480 Speaker 2: And sometimes even the Georgetown Hoyas. 212 00:14:29,560 --> 00:14:33,200 Speaker 3: Sadly Georgetown plays in our building. And we can talk 213 00:14:33,280 --> 00:14:39,520 Speaker 3: about the law of unintended consequences because the Supreme Court 214 00:14:39,720 --> 00:14:45,920 Speaker 3: change the collegiate sporting world forever in a majority vote, 215 00:14:46,360 --> 00:14:52,520 Speaker 3: and everyone celebrated but didn't consider the law of unintended consequences. Well, 216 00:14:52,600 --> 00:14:57,920 Speaker 3: everything's changed. How do we look at now college and universities. 217 00:14:57,920 --> 00:15:01,080 Speaker 3: They have agents, the players agents. 218 00:15:00,840 --> 00:15:03,240 Speaker 2: And are being paid for their name, image and likeness. 219 00:15:03,280 --> 00:15:04,640 Speaker 2: Everything is Georgetown. 220 00:15:04,720 --> 00:15:08,600 Speaker 3: We won a Big East tournament, and four of the 221 00:15:08,680 --> 00:15:13,760 Speaker 3: five starters transferred that offseason. They got better offers from 222 00:15:14,280 --> 00:15:18,920 Speaker 3: other colleges. In fact, one of the young men transferred back. 223 00:15:20,120 --> 00:15:24,120 Speaker 3: I mean it's I mean, having unlimited free agency in 224 00:15:24,160 --> 00:15:28,680 Speaker 3: your college years probably wasn't what people were thinking. But 225 00:15:28,760 --> 00:15:32,920 Speaker 3: a Supreme Court justice probably didn't know the ins and 226 00:15:32,960 --> 00:15:38,080 Speaker 3: outs of basketball and NCAA. He was looking at it 227 00:15:38,120 --> 00:15:41,360 Speaker 3: through you know, his lens, his or her lens. 228 00:15:54,600 --> 00:15:56,400 Speaker 2: I do want to ask you, Ted, before we get 229 00:15:56,440 --> 00:16:00,320 Speaker 2: too far from it. This whole notion of you know, 230 00:16:00,520 --> 00:16:04,520 Speaker 2: Washington is your home. It also is an incredible sports city. 231 00:16:04,560 --> 00:16:07,960 Speaker 2: I mean, is that just you were lucky to be there? Like? 232 00:16:08,040 --> 00:16:10,240 Speaker 2: Why is DC the place you just that? Because you 233 00:16:10,320 --> 00:16:12,960 Speaker 2: had the means to go just about anywhere to do it? 234 00:16:13,040 --> 00:16:15,200 Speaker 2: But why did Washington ultimately make sense? 235 00:16:15,240 --> 00:16:15,440 Speaker 4: For you. 236 00:16:15,880 --> 00:16:22,000 Speaker 3: So there's a theory about our country's important, or are 237 00:16:22,360 --> 00:16:28,120 Speaker 3: economic regions important. So there's this theory that there's going 238 00:16:28,200 --> 00:16:33,480 Speaker 3: to be ten super cities, and a supercity is defined 239 00:16:33,560 --> 00:16:39,440 Speaker 3: by some unique ingredients. That you have a minimum of 240 00:16:39,720 --> 00:16:46,920 Speaker 3: five research oriented universities. University is incredibly important Georgetown, You 241 00:16:47,000 --> 00:16:51,120 Speaker 3: and I or a lums seventeen eighty nine. It represents 242 00:16:51,680 --> 00:16:58,440 Speaker 3: longevity in the community. It graduates IP it's students. It 243 00:16:58,520 --> 00:17:04,439 Speaker 3: attracts students, young people from all over the world, and 244 00:17:04,480 --> 00:17:09,080 Speaker 3: then they stay in your city. They become additive. We're 245 00:17:09,119 --> 00:17:13,640 Speaker 3: blessed in DC. We've got Johns Hopkins. We've got University 246 00:17:13,680 --> 00:17:16,679 Speaker 3: of Maryland. We've got University of Virginia. We have that 247 00:17:16,960 --> 00:17:23,760 Speaker 3: ingredient that you have a minimum of three major international airports. 248 00:17:24,119 --> 00:17:29,399 Speaker 3: We've got Baltimore, We've got National We've got dulles that 249 00:17:29,760 --> 00:17:34,119 Speaker 3: you've got green space. We've got the National Mall in DC, 250 00:17:34,480 --> 00:17:38,440 Speaker 3: we have the most iconic green space in the country. 251 00:17:38,760 --> 00:17:42,520 Speaker 3: That you have iconic real estate, We've got the monuments, 252 00:17:42,600 --> 00:17:49,679 Speaker 3: We've got memorials. You also need a defining business community. 253 00:17:50,040 --> 00:17:54,320 Speaker 3: We have the federal government. Were the largest customer, largest 254 00:17:54,359 --> 00:17:59,920 Speaker 3: spender on the planet. So I've always been an evangelist, 255 00:18:00,280 --> 00:18:06,439 Speaker 3: an advocate for Washington d C. But d C is 256 00:18:06,440 --> 00:18:10,760 Speaker 3: in a state we don't exist. If we do it right, 257 00:18:11,840 --> 00:18:17,760 Speaker 3: will be a supercity. And the final ingredient of supersitis 258 00:18:18,240 --> 00:18:21,199 Speaker 3: is winning sports teams. You close your eyes and you 259 00:18:21,240 --> 00:18:24,280 Speaker 3: think of New York. You go, oh, the Yankees, Oh, 260 00:18:24,359 --> 00:18:24,880 Speaker 3: the Knicks. 261 00:18:24,920 --> 00:18:27,120 Speaker 2: Well, he does, but. 262 00:18:28,080 --> 00:18:31,280 Speaker 3: It's in the fabric. It's why it's a great city. 263 00:18:31,680 --> 00:18:33,840 Speaker 3: Oh it has great sports teams. Oh, and it has 264 00:18:33,960 --> 00:18:38,280 Speaker 3: great iconic real estate. Oh it has Columbia University. It's 265 00:18:38,320 --> 00:18:39,520 Speaker 3: got right. 266 00:18:39,840 --> 00:18:42,200 Speaker 2: But Ted I mean on that note, I mean it's 267 00:18:42,280 --> 00:18:45,720 Speaker 2: it's interesting to think about the sports component of it, though, 268 00:18:45,800 --> 00:18:49,600 Speaker 2: because when you start sort of building this platform of 269 00:18:49,680 --> 00:18:54,880 Speaker 2: monumental to Alex's point, that's not obvious. It's not obvious 270 00:18:54,920 --> 00:18:58,280 Speaker 2: that sports is going to be anything beyond you know, 271 00:18:58,320 --> 00:19:01,520 Speaker 2: you wake up thinking of the Yankee. People weren't thinking 272 00:19:01,520 --> 00:19:03,400 Speaker 2: about it as a big business. 273 00:19:03,760 --> 00:19:06,280 Speaker 3: You were people who weren't thinking of the Internet as 274 00:19:06,320 --> 00:19:07,040 Speaker 3: a good business. 275 00:19:07,600 --> 00:19:10,400 Speaker 2: And so what did you see in sports that convinced 276 00:19:10,440 --> 00:19:12,040 Speaker 2: you that this was a good investment. 277 00:19:12,480 --> 00:19:19,560 Speaker 3: Great and deep and passionate and durable fan interest families 278 00:19:19,840 --> 00:19:24,679 Speaker 3: pass on fandom generation, the generation. You don't see that 279 00:19:24,960 --> 00:19:29,240 Speaker 3: in any other consumer product. It's not like, oh, my 280 00:19:29,400 --> 00:19:33,040 Speaker 3: father drove an osmobile, I'm going to drive an osmobile 281 00:19:33,480 --> 00:19:36,680 Speaker 3: right right. In fact, they ran a campaign this is 282 00:19:36,800 --> 00:19:40,000 Speaker 3: not your father's Osmobile. I said, Oh, the end is 283 00:19:40,080 --> 00:19:45,480 Speaker 3: near for that company. I saw in the tech business, 284 00:19:46,080 --> 00:19:50,040 Speaker 3: the subscription business. What was AOL? Why were we so 285 00:19:50,440 --> 00:19:56,840 Speaker 3: highly valued? We got people to pay us nineteen ninety 286 00:19:56,960 --> 00:20:03,120 Speaker 3: nine a month, and we became aim a must have product. 287 00:20:03,400 --> 00:20:06,919 Speaker 3: People wanted their mail, people wanted their instant messaging, and 288 00:20:06,960 --> 00:20:11,280 Speaker 3: we spent billions of dollars to renew customers. We renew 289 00:20:11,960 --> 00:20:16,520 Speaker 3: in the NHL and the NBA a bad year, eighty 290 00:20:16,560 --> 00:20:19,479 Speaker 3: to eighty five percent of our season ticket hold. Well, 291 00:20:19,800 --> 00:20:23,040 Speaker 3: when you have a great team, you have a waiting list. 292 00:20:23,440 --> 00:20:27,359 Speaker 3: You sell out and then you develop a waiting list 293 00:20:27,400 --> 00:20:30,800 Speaker 3: of people who want to come and fill the stands. 294 00:20:31,040 --> 00:20:34,080 Speaker 3: And because you have that kind of demand, then you 295 00:20:34,119 --> 00:20:38,280 Speaker 3: can raise your prices. Once you have a big, big audience, 296 00:20:38,800 --> 00:20:43,160 Speaker 3: then you can start to monetize the secondary revenue streams. 297 00:20:43,440 --> 00:20:47,280 Speaker 3: You can sell advertising, you can do sponsorships, you can 298 00:20:47,400 --> 00:20:54,520 Speaker 3: sell suites to corporations who really are saying they're an 299 00:20:54,600 --> 00:20:58,240 Speaker 3: owner of the team. They're buying the suite for ten years, 300 00:20:58,520 --> 00:21:03,280 Speaker 3: and now they're giving seats as gifts right to their 301 00:21:03,320 --> 00:21:07,640 Speaker 3: customers and their partners. And you want the best software 302 00:21:07,640 --> 00:21:12,560 Speaker 3: companies in the world, Oracle Salesforce dot Com. They say, 303 00:21:12,560 --> 00:21:17,199 Speaker 3: this is how many big customers we have. They have 304 00:21:17,359 --> 00:21:21,600 Speaker 3: the best balance sheets, and we're able to build into 305 00:21:21,680 --> 00:21:28,639 Speaker 3: the contract annual increases three percent, four percent, five percent 306 00:21:28,720 --> 00:21:33,320 Speaker 3: per year. So I looked when I bought into the leagues, 307 00:21:33,400 --> 00:21:38,199 Speaker 3: I said, holy macl we are the world's biggest best 308 00:21:38,560 --> 00:21:48,400 Speaker 3: SaaS companies software as a service. And who are partners? Disney, ESPN, Comcasts, 309 00:21:48,600 --> 00:21:51,439 Speaker 3: Capital One Arena has the naming rights, They're one of 310 00:21:51,480 --> 00:21:54,600 Speaker 3: the biggest banks in the world. You just you go 311 00:21:54,760 --> 00:21:59,000 Speaker 3: down and you see there's not a lot of variability 312 00:22:00,080 --> 00:22:02,639 Speaker 3: in the business. It's repeatable and you know who the 313 00:22:02,680 --> 00:22:06,160 Speaker 3: customers are and how the growth gets built in. So 314 00:22:06,520 --> 00:22:11,040 Speaker 3: I've just become a spokes person, if you will, for 315 00:22:11,119 --> 00:22:15,840 Speaker 3: the category. And I thought, one day, private equity, one day, 316 00:22:16,040 --> 00:22:20,080 Speaker 3: smart money is going to come into this business because 317 00:22:21,119 --> 00:22:25,359 Speaker 3: to date it's mostly been family run businesses. You bought 318 00:22:25,359 --> 00:22:29,879 Speaker 3: a sports team for five million dollars, you know, fifty 319 00:22:29,960 --> 00:22:30,680 Speaker 3: years ago. 320 00:22:30,640 --> 00:22:32,280 Speaker 2: Alex Is like, did you say five million? 321 00:22:33,880 --> 00:22:37,639 Speaker 3: The Washington Capitals weren't expansion team. I think it was 322 00:22:37,760 --> 00:22:39,119 Speaker 3: five million dollars fo. 323 00:22:40,400 --> 00:22:42,520 Speaker 1: So, speaking of that, Ted, I was reading that you 324 00:22:42,600 --> 00:22:45,280 Speaker 1: might be interested in the Nationals. So I was hoping, like, 325 00:22:45,320 --> 00:22:47,840 Speaker 1: if there's an opening as a bopend coach or first 326 00:22:47,840 --> 00:22:51,960 Speaker 1: base coach'll be available for you. But why the Nationals? 327 00:22:51,960 --> 00:22:56,120 Speaker 3: So first, I'm a season ticket holder for the Nationals, 328 00:22:56,160 --> 00:22:59,760 Speaker 3: and I played baseball growing up. I played third base, Alexy, Okay, 329 00:23:00,000 --> 00:23:03,240 Speaker 3: I couldn't do shortstop, but third base I could hand 330 00:23:03,240 --> 00:23:08,640 Speaker 3: on coordination. And the owners of the Nationals, the Learner family, 331 00:23:08,760 --> 00:23:16,040 Speaker 3: they're spectacular family, real estate people. Their bedrock in the community, 332 00:23:16,160 --> 00:23:20,720 Speaker 3: and they're small investors in monumental sports. And we're friends. 333 00:23:21,200 --> 00:23:24,880 Speaker 3: And the stakes have gotten higher and higher in sports, 334 00:23:25,800 --> 00:23:29,440 Speaker 3: and in baseball. They have to compete with the Yankees, 335 00:23:29,520 --> 00:23:31,359 Speaker 3: you have to compete with the Mets, you have to 336 00:23:31,400 --> 00:23:36,120 Speaker 3: compete with the Dodgers, and these big, big markets, bigger 337 00:23:36,160 --> 00:23:41,240 Speaker 3: markets right now, they have the resources to go get players. 338 00:23:41,800 --> 00:23:48,280 Speaker 3: That's why the cbas for leagues dry value right The 339 00:23:48,400 --> 00:23:52,080 Speaker 3: NHL has a hard cap. We had a lockout. We 340 00:23:52,160 --> 00:23:55,399 Speaker 3: came back with a hard cap system. It means every 341 00:23:55,640 --> 00:23:59,760 Speaker 3: team in the NHL thinks it can win the Stanley 342 00:23:59,760 --> 00:24:01,760 Speaker 3: Cup when the new season starts. 343 00:24:01,640 --> 00:24:04,520 Speaker 2: Because they're all spending the same amount of money. 344 00:24:04,320 --> 00:24:08,800 Speaker 3: Play and the playoffs. Everyone thinks the playoffs are attainable. 345 00:24:08,840 --> 00:24:13,200 Speaker 3: And once again the playoffs, anything can happen. And that's 346 00:24:13,240 --> 00:24:18,800 Speaker 3: why attendance is fantastic in the NHL. The game's never 347 00:24:18,880 --> 00:24:24,720 Speaker 3: been in better shape. CBA was very instrumental in that. 348 00:24:25,560 --> 00:24:30,359 Speaker 3: Basketball has a great CBA as well. Teams can make 349 00:24:30,440 --> 00:24:34,720 Speaker 3: the decision to spend more than the cap, but they 350 00:24:34,800 --> 00:24:39,600 Speaker 3: get penalized for that, and those dollars go into a 351 00:24:39,680 --> 00:24:43,440 Speaker 3: pot and they go to the smaller market teams, which 352 00:24:43,560 --> 00:24:48,359 Speaker 3: make the smaller market teams feel when it's time we 353 00:24:48,400 --> 00:24:51,040 Speaker 3: will compete. We'll go into the tax if we think 354 00:24:51,080 --> 00:24:54,840 Speaker 3: that's the right thing. But it gives you rules of 355 00:24:54,880 --> 00:25:00,399 Speaker 3: the road. In baseball it has CBA, but you've got 356 00:25:01,000 --> 00:25:04,879 Speaker 3: teams that spend three hundred million dollars in teams that 357 00:25:05,000 --> 00:25:09,119 Speaker 3: spend thirty million dollars. Well, if you're a fan in 358 00:25:09,119 --> 00:25:14,000 Speaker 3: one of those markets, it's tough to go with enthusiasm 359 00:25:14,080 --> 00:25:17,760 Speaker 3: because you go it's very unlikely, right, and you know 360 00:25:17,800 --> 00:25:20,280 Speaker 3: the Marlins. We're talking about Wayne Heiinger. They won the 361 00:25:20,359 --> 00:25:24,480 Speaker 3: championship one year and then he dismantled the team. He 362 00:25:24,600 --> 00:25:29,560 Speaker 3: was losing money. Ye most teams that win a championship 363 00:25:29,760 --> 00:25:34,280 Speaker 3: and pay attacks, they lose money in their championship winning year. Right. 364 00:25:34,920 --> 00:25:37,199 Speaker 3: So with the Nationals, I look and I go, well, 365 00:25:37,240 --> 00:25:42,000 Speaker 3: we have a platform. We just bought our network. Everyone's 366 00:25:42,040 --> 00:25:47,040 Speaker 3: going to streaming. Streaming is about subscriptions. If you want 367 00:25:47,040 --> 00:25:50,840 Speaker 3: to have a subscription, like at AOL back in the heyday, 368 00:25:51,480 --> 00:25:55,480 Speaker 3: you didn't have mail available for nine months out of 369 00:25:55,520 --> 00:25:59,639 Speaker 3: the year, you have to have a year round subscription. 370 00:26:00,320 --> 00:26:04,879 Speaker 3: So I have felt that from a business standpoint, having 371 00:26:04,880 --> 00:26:11,040 Speaker 3: a platform and having winter and summer programming is going 372 00:26:11,119 --> 00:26:18,760 Speaker 3: to be critical to build value for the network because 373 00:26:18,800 --> 00:26:21,560 Speaker 3: you won't get the churn. Right, Oh, you lost in 374 00:26:21,600 --> 00:26:24,879 Speaker 3: the first round of the playoffs in April, I'm going 375 00:26:24,920 --> 00:26:28,080 Speaker 3: to cancel my subscription and I'll sign back up when 376 00:26:28,119 --> 00:26:32,680 Speaker 3: the new season starts. If you're in the playoffs and 377 00:26:32,840 --> 00:26:36,400 Speaker 3: baseball is started, you're going to have a real good, 378 00:26:36,440 --> 00:26:41,600 Speaker 3: strong subscription base. So from a business standpoint, it's very compelling. 379 00:26:41,880 --> 00:26:47,680 Speaker 3: And then to be able to sell advertising indoors outdoors 380 00:26:47,840 --> 00:26:52,160 Speaker 3: on television cross promote. But the real reason you want 381 00:26:52,200 --> 00:26:54,800 Speaker 3: to do it is you want to win championships. And 382 00:26:54,840 --> 00:26:58,760 Speaker 3: I think in this new world where there's all this 383 00:26:59,080 --> 00:27:01,840 Speaker 3: money coming in, the sports teams and sports teams are 384 00:27:01,840 --> 00:27:07,400 Speaker 3: being valued incredibly high. A football team in Washington, DC 385 00:27:08,280 --> 00:27:13,280 Speaker 3: just sold for six billion dollars to the smartest, wealthiest 386 00:27:13,320 --> 00:27:18,320 Speaker 3: people who had to syndicate they couldn't afford it themselves. 387 00:27:18,440 --> 00:27:20,880 Speaker 2: Were you shocked by that price, No, I. 388 00:27:20,840 --> 00:27:26,280 Speaker 3: Think it's undervalued. Steve Bomber, who I respect very much 389 00:27:26,320 --> 00:27:29,199 Speaker 3: and I consider a friend and with like the same age, 390 00:27:29,280 --> 00:27:32,159 Speaker 3: and we competed, you know for decades. 391 00:27:31,840 --> 00:27:34,240 Speaker 2: Bears rivals back in the day, Yeah, and now rivals 392 00:27:34,280 --> 00:27:34,880 Speaker 2: in a different way. 393 00:27:35,000 --> 00:27:40,120 Speaker 3: Miss He certainly kicked my ass twenty places. But he 394 00:27:40,200 --> 00:27:45,280 Speaker 3: paid two billion dollars for the Clippers, and everyone was 395 00:27:45,400 --> 00:27:49,840 Speaker 3: shocked and laughed at him. Yeah, And he's a smart guy. 396 00:27:50,400 --> 00:27:54,679 Speaker 3: And he bought hundreds, if not thousands of companies for 397 00:27:54,800 --> 00:28:00,440 Speaker 3: Microsoft that were SaaS businesses that you pay ten times 398 00:28:01,040 --> 00:28:05,920 Speaker 3: revenues for a software company when you acquire it. So's 399 00:28:05,960 --> 00:28:08,840 Speaker 3: say a basketball team was doing two hundred million dollars 400 00:28:09,320 --> 00:28:12,040 Speaker 3: and you had a new media deal on the horizon, 401 00:28:12,760 --> 00:28:19,160 Speaker 3: and you had naming rights partners, and so Steve knew 402 00:28:19,320 --> 00:28:23,720 Speaker 3: he wasn't overpaying for it. Thank God for Steve Bomber. 403 00:28:24,480 --> 00:28:28,720 Speaker 3: It was very helpful because Mark Cuban entered the league 404 00:28:28,800 --> 00:28:31,200 Speaker 3: the same time that I did, and we were tech 405 00:28:31,400 --> 00:28:36,280 Speaker 3: people and we would be advocating it, but Steve actually 406 00:28:36,960 --> 00:28:40,520 Speaker 3: did it. And now, yes, someone well, what's an NBA 407 00:28:40,640 --> 00:28:42,920 Speaker 3: team worth? Oh, it's ten times revenue? Right, what's a 408 00:28:43,040 --> 00:28:46,440 Speaker 3: hockey team worth? Oh? Seven, eight, nine times revenues? I 409 00:28:46,480 --> 00:28:49,760 Speaker 3: think the Brooklyn Nets, it was reported they traded it 410 00:28:49,920 --> 00:28:56,280 Speaker 3: fourteen times revenue. They brought in partners, and it's not overvalued. 411 00:28:56,600 --> 00:29:03,160 Speaker 3: But this belief that the tree these automatically will continue 412 00:29:03,240 --> 00:29:08,760 Speaker 3: to grow to heaven is dangerous. Right, We're in the 413 00:29:08,800 --> 00:29:13,640 Speaker 3: red line right now of danger because if Josh Harris 414 00:29:13,680 --> 00:29:18,640 Speaker 3: and Mitrails and Eric Schmidt, all these people have to 415 00:29:18,680 --> 00:29:23,640 Speaker 3: come together to reach to buy a football team, does 416 00:29:23,720 --> 00:29:28,600 Speaker 3: that mean in five years, ten years the investors are 417 00:29:28,600 --> 00:29:33,120 Speaker 3: going to get five times their money on six billion? 418 00:29:33,800 --> 00:29:37,080 Speaker 3: How you're going to get thirty billion? That's why private equity. 419 00:29:37,920 --> 00:29:43,040 Speaker 3: I brought the first sovereign wealth fund into sports, the Guitaris, right, yeah, 420 00:29:43,080 --> 00:29:47,400 Speaker 3: And it was simple. Their belief was my belief. We 421 00:29:47,440 --> 00:29:52,800 Speaker 3: want to put our money into a safe, durable, almost 422 00:29:52,920 --> 00:29:57,880 Speaker 3: family like business in a big, important market. So where 423 00:29:57,880 --> 00:30:01,680 Speaker 3: do they invest in New York and London, in Washington, DC, 424 00:30:02,480 --> 00:30:05,000 Speaker 3: safe harbor for their money. 425 00:30:05,480 --> 00:30:07,520 Speaker 2: How did that deal come together? Tell us about that. 426 00:30:08,040 --> 00:30:15,120 Speaker 3: I was introduced to them through my investment Revolution and 427 00:30:15,280 --> 00:30:18,320 Speaker 3: then your venture firm, my venture firm with Steve case 428 00:30:18,720 --> 00:30:21,400 Speaker 3: so I knew of them, and then they were doing 429 00:30:21,440 --> 00:30:26,600 Speaker 3: the World Cup and private equity companies were reaching out 430 00:30:26,720 --> 00:30:29,840 Speaker 3: to us. Was where an attractive company. We do a 431 00:30:29,880 --> 00:30:33,600 Speaker 3: lot of revenues and a big market reaching monumental, but 432 00:30:34,840 --> 00:30:41,960 Speaker 3: private equity isn't investing their money. They get LPs limited partners, 433 00:30:42,440 --> 00:30:47,200 Speaker 3: limited partners and they've got five to seven year horizons. 434 00:30:47,280 --> 00:30:52,160 Speaker 3: Usually my horizon is the rest of my life and 435 00:30:52,240 --> 00:30:57,920 Speaker 3: then my beyond and a sovereign wealth fund. That's what 436 00:30:57,960 --> 00:31:00,640 Speaker 3: they're attracted to. Oh, we want to be in a 437 00:31:00,920 --> 00:31:06,760 Speaker 3: safe city with a lead investor who has a lot 438 00:31:06,800 --> 00:31:11,560 Speaker 3: of skin in the game and isn't going to do 439 00:31:11,800 --> 00:31:17,640 Speaker 3: crazy things and is strategic and smart and will support you. 440 00:31:18,480 --> 00:31:21,240 Speaker 3: And oh, you want to buy the baseball team. If 441 00:31:21,280 --> 00:31:23,360 Speaker 3: I think if we had said, oh, I want to 442 00:31:23,360 --> 00:31:26,880 Speaker 3: buy any baseball team. I want to buy a soccer 443 00:31:27,000 --> 00:31:33,760 Speaker 3: team in South America. Well, that's that's off. Strategy of 444 00:31:34,040 --> 00:31:40,520 Speaker 3: strategy is build the world's most valuable regional sports and 445 00:31:40,680 --> 00:31:43,800 Speaker 3: entertainment company on the planet. Get it to a ten 446 00:31:43,880 --> 00:31:49,680 Speaker 3: billion dollar market cap maybe one day. This is a 447 00:31:49,680 --> 00:31:53,280 Speaker 3: asset class, and companies are going to have to start 448 00:31:53,280 --> 00:31:57,640 Speaker 3: going public once private equity came in. They want out 449 00:31:57,880 --> 00:31:58,640 Speaker 3: at some point. 450 00:31:58,760 --> 00:31:59,600 Speaker 2: It's inevitable. 451 00:31:59,680 --> 00:32:03,960 Speaker 3: It's inevitable. So you know, my I don't have very 452 00:32:04,000 --> 00:32:07,800 Speaker 3: many gifts, but I have been good at peering around 453 00:32:08,000 --> 00:32:12,120 Speaker 3: the corner a little bit and seeing what's out there. 454 00:32:12,840 --> 00:32:16,040 Speaker 3: And so yeah, we were maybe the first to really 455 00:32:16,240 --> 00:32:21,760 Speaker 3: advocate this is software a service. Like business analysts, media 456 00:32:21,840 --> 00:32:25,200 Speaker 3: people who covered the business of sport will get it. 457 00:32:25,280 --> 00:32:29,640 Speaker 3: Bloomberg will, We'll get it. You're in the subscription Bloomberg's 458 00:32:29,640 --> 00:32:34,400 Speaker 3: in the subscription business business model and they subscribe. And 459 00:32:34,680 --> 00:32:39,600 Speaker 3: I bet you Mike Bloomberg has subscribers from day one. 460 00:32:39,840 --> 00:32:44,320 Speaker 3: Who took his first terminal and you know, cant like 461 00:32:44,400 --> 00:32:45,280 Speaker 3: Wayne izinga. 462 00:32:46,000 --> 00:32:48,200 Speaker 1: So it said obviously in the news has been private 463 00:32:48,200 --> 00:32:51,160 Speaker 1: equity entering the world of the NFL, but only at 464 00:32:51,160 --> 00:32:53,720 Speaker 1: a ten percent clip which they're doing their last, but 465 00:32:53,720 --> 00:32:56,560 Speaker 1: they're also being very conservative. What are your thoughts about 466 00:32:56,560 --> 00:32:59,120 Speaker 1: the NFL and private equity and that kind of merger. 467 00:32:59,400 --> 00:33:01,840 Speaker 3: I can't speak of the NFL. I don't own a team, 468 00:33:01,840 --> 00:33:05,400 Speaker 3: but it's pretty clear that there's not a lot of 469 00:33:05,760 --> 00:33:10,040 Speaker 3: people left that can buy six eight. I saw the 470 00:33:10,080 --> 00:33:12,160 Speaker 3: Cowboys are valued at ten billion. 471 00:33:11,840 --> 00:33:14,880 Speaker 2: Dollars, right, yeah, and then that's probably on the low end. 472 00:33:15,480 --> 00:33:19,760 Speaker 3: So it unlocks another pool. But the NFL is conservative 473 00:33:19,840 --> 00:33:24,080 Speaker 3: and they're very wise. They've built, you know, the the 474 00:33:24,120 --> 00:33:27,360 Speaker 3: city on the hill if you will, for all sports. 475 00:33:27,680 --> 00:33:32,960 Speaker 3: And my bed is over time they'll change. You have 476 00:33:33,120 --> 00:33:37,640 Speaker 3: to be able to adapt to whatever the new reality is. 477 00:33:37,880 --> 00:33:40,600 Speaker 3: And just because they did ten percent, I don't think 478 00:33:40,640 --> 00:33:44,640 Speaker 3: that'll be a forever number. Maybe well, but it probably 479 00:33:44,800 --> 00:33:50,360 Speaker 3: has some leeway. The NBA, we were pioneers. We're like 480 00:33:50,480 --> 00:33:52,240 Speaker 3: a venture backed in the company. 481 00:33:52,480 --> 00:33:53,640 Speaker 2: The NBA is a league. 482 00:33:53,760 --> 00:33:57,720 Speaker 3: Yeah, I'd say we've been in the growth stock the tree, 483 00:33:57,800 --> 00:34:00,600 Speaker 3: growth to heaven. Everyone says, oh, it's going right at 484 00:34:00,600 --> 00:34:05,920 Speaker 3: the NBA. The media deals are great, well, the local 485 00:34:06,000 --> 00:34:09,960 Speaker 3: media deals are great. Right. We're really struggling, right, and 486 00:34:10,239 --> 00:34:15,480 Speaker 3: it's hard work. It's no different serving on a committee 487 00:34:15,680 --> 00:34:17,880 Speaker 3: of the leagues as it is a serving on a 488 00:34:17,920 --> 00:34:21,480 Speaker 3: committee of a big public company. I'm on the board 489 00:34:21,719 --> 00:34:24,800 Speaker 3: of American Express right down the street from here, so 490 00:34:25,000 --> 00:34:31,279 Speaker 3: regulated business and the governance of the company. In the 491 00:34:31,360 --> 00:34:34,399 Speaker 3: board's role and what we do in the committees is 492 00:34:34,719 --> 00:34:38,960 Speaker 3: it plays a vital role. So we're all concerned and 493 00:34:39,080 --> 00:34:43,440 Speaker 3: working really really hard to figure out it's not our 494 00:34:43,600 --> 00:34:49,560 Speaker 3: product that isn't of interests. Locally, our ratings are up 495 00:34:50,360 --> 00:34:54,879 Speaker 3: while viewership of television is way down, so that means 496 00:34:55,000 --> 00:35:01,080 Speaker 3: we are taking the interest from other networks, other shows, 497 00:35:01,160 --> 00:35:06,800 Speaker 3: other pieces of content. But it's a very tough pivot. 498 00:35:07,040 --> 00:35:13,800 Speaker 3: As young people remember, cable was the last big exponential 499 00:35:14,239 --> 00:35:19,000 Speaker 3: boost for sports teams, right, So the media industry is 500 00:35:19,760 --> 00:35:23,560 Speaker 3: changing radically. I'm chairman of the Media committee at the 501 00:35:23,680 --> 00:35:29,240 Speaker 3: NBA and the NHL, and you have to stay on trend. 502 00:35:29,360 --> 00:35:33,040 Speaker 3: You have to understand what's going on. You can't blame people, 503 00:35:33,080 --> 00:35:37,640 Speaker 3: you can't blame consumers. A kid goes to college, kid 504 00:35:37,640 --> 00:35:41,759 Speaker 3: grows up at home and he's watching over the air 505 00:35:41,840 --> 00:35:46,239 Speaker 3: television or cable, and then he goes to college and 506 00:35:46,280 --> 00:35:50,480 Speaker 3: there's no cable. Everything is wireless. So when he or 507 00:35:50,520 --> 00:35:54,160 Speaker 3: she graduates from college. I'm not going you're not calling 508 00:35:54,160 --> 00:35:58,960 Speaker 3: the cable company, right, You're getting your iPhone and you're 509 00:35:59,160 --> 00:36:03,440 Speaker 3: rolling your own now all of a sudden, and so 510 00:36:03,440 --> 00:36:07,960 Speaker 3: so you've gotta you've gotta watch all those trends, and 511 00:36:08,000 --> 00:36:11,080 Speaker 3: then you have to figure out who do I partner with, 512 00:36:11,440 --> 00:36:18,200 Speaker 3: who can mutually value what we have. And you know 513 00:36:18,360 --> 00:36:23,600 Speaker 3: the thing about pro sports, I mean, here's a superstar 514 00:36:24,239 --> 00:36:29,200 Speaker 3: player with charisma who's now in chapter two of his 515 00:36:29,360 --> 00:36:33,440 Speaker 3: career and people will watch him on air, but his 516 00:36:34,520 --> 00:36:38,520 Speaker 3: star was so bright he brought people to watch the 517 00:36:38,560 --> 00:36:46,920 Speaker 3: games in the stadium and on television. You know, Michael 518 00:36:47,000 --> 00:36:52,040 Speaker 3: Jordan was my partner form and you could just see 519 00:36:52,120 --> 00:36:54,440 Speaker 3: in the interactions. You know. I was once in a 520 00:36:54,520 --> 00:36:58,800 Speaker 3: hotel lobby with Michael Jordan and we had to walk 521 00:36:59,040 --> 00:37:04,919 Speaker 3: through the whole and people said Michael Jordan's and I said, 522 00:37:04,960 --> 00:37:09,920 Speaker 3: I could have been naked on fire with an axe 523 00:37:10,200 --> 00:37:15,719 Speaker 3: in my head to see that naked guy with the 524 00:37:16,840 --> 00:37:22,400 Speaker 3: I don't see right. So sports brings that together and 525 00:37:22,480 --> 00:37:28,920 Speaker 3: a winning team with stars, the engagement level is like 526 00:37:29,120 --> 00:37:33,960 Speaker 3: no other business. And that's what advertisers want, That's what 527 00:37:34,000 --> 00:37:37,200 Speaker 3: sponsors want, that's what mayors want. That's what governors want. 528 00:37:37,239 --> 00:37:40,840 Speaker 3: They they want that that shine. So it's such a 529 00:37:41,040 --> 00:37:45,279 Speaker 3: unique business and we still have a lot of upside, 530 00:37:45,800 --> 00:37:50,960 Speaker 3: if you will, because I think streaming is in killing sports. 531 00:37:51,000 --> 00:37:55,280 Speaker 3: I think streaming is going to be ultimately a big 532 00:37:55,360 --> 00:38:00,839 Speaker 3: positive right for teams. It's amazing to me, again being 533 00:38:00,960 --> 00:38:06,840 Speaker 3: a tech executive. I guess in my background, the data 534 00:38:07,760 --> 00:38:12,480 Speaker 3: is all we lived on at AOL. Google one is 535 00:38:12,560 --> 00:38:16,719 Speaker 3: built the second or third most valuable company on the 536 00:38:16,760 --> 00:38:20,760 Speaker 3: planet because they have the data, they know where you're going. 537 00:38:21,520 --> 00:38:26,200 Speaker 3: When we just bought our RSN, I asked the people 538 00:38:26,239 --> 00:38:30,759 Speaker 3: that Comcast NBC, a very important media company, who are 539 00:38:30,800 --> 00:38:37,480 Speaker 3: the customers? Men, go, really, that's how we can do better? 540 00:38:37,560 --> 00:38:44,000 Speaker 3: How old? Well eighteen fifty? You don't know who your 541 00:38:44,080 --> 00:38:48,960 Speaker 3: customers are? Why? Because the cable company gets the customer 542 00:38:49,239 --> 00:38:54,520 Speaker 3: and then they buy the programming from the RSN and 543 00:38:54,600 --> 00:38:59,440 Speaker 3: the RSNS and people don't realize in all the changes, 544 00:39:00,440 --> 00:39:06,480 Speaker 3: they were enjoined by Congress that the cable company couldn't 545 00:39:06,520 --> 00:39:10,200 Speaker 3: share the names because of privacy. So when I bought 546 00:39:10,239 --> 00:39:15,040 Speaker 3: our Regional Sports network, I didn't know who one customer, 547 00:39:15,200 --> 00:39:19,760 Speaker 3: one viewer was. No RSN does Wow, isn't that crazy. Wow, 548 00:39:19,840 --> 00:39:24,640 Speaker 3: that's incredible. If you go direct to consumer, you're streaming 549 00:39:24,719 --> 00:39:30,279 Speaker 3: on OTT, you're like the cable company. You get the 550 00:39:30,360 --> 00:39:33,279 Speaker 3: relationship with those people. And then the other thing that 551 00:39:33,600 --> 00:39:37,840 Speaker 3: blows my mind and being counterintuitive, I think that's where 552 00:39:37,840 --> 00:39:43,000 Speaker 3: fortunes get made. I'd hear from cable companies. I just 553 00:39:43,040 --> 00:39:47,160 Speaker 3: saw on analysis. Can you believe it's seven hundred dollars 554 00:39:47,239 --> 00:39:50,400 Speaker 3: if you wanted to watch every NFL game and you 555 00:39:50,520 --> 00:39:55,160 Speaker 3: had to subscribe, and you and I go, we charge 556 00:39:56,280 --> 00:40:01,080 Speaker 3: twenty five hundred dollars a game for one ticket in 557 00:40:01,120 --> 00:40:05,440 Speaker 3: the dream seats at the Wizards, and fans will arrive 558 00:40:06,040 --> 00:40:10,560 Speaker 3: late and leave early, right and go get something needed 559 00:40:10,600 --> 00:40:14,439 Speaker 3: halftime and you see the empty seats. I go, it's 560 00:40:14,560 --> 00:40:19,359 Speaker 3: twenty five hundred dollars a seat. What could be more important? 561 00:40:19,920 --> 00:40:23,239 Speaker 3: And they're having a beer and you know, being with 562 00:40:23,320 --> 00:40:27,160 Speaker 3: some friends, and so I go, we have to change 563 00:40:27,239 --> 00:40:33,080 Speaker 3: that as a mindset. Now that cable was offering you 564 00:40:34,360 --> 00:40:39,040 Speaker 3: all the video, all the audio, all the data for 565 00:40:39,160 --> 00:40:42,319 Speaker 3: one thousand dollars a year, and people didn't think it 566 00:40:42,400 --> 00:40:45,799 Speaker 3: was worth it. But they'd pay a thousand dollars for 567 00:40:46,040 --> 00:40:51,239 Speaker 3: one ticket for Minnesota Timberwolves camping so I think a 568 00:40:51,320 --> 00:40:54,880 Speaker 3: part of our next upside is going to be will 569 00:40:54,920 --> 00:40:59,439 Speaker 3: be the bundler. The sports teams will be the buntings themselves. Yeah, 570 00:40:59,840 --> 00:41:04,880 Speaker 3: and we're selling a seat and you'll get a jersey, 571 00:41:05,280 --> 00:41:09,760 Speaker 3: you'll play golf with the team, and you'll get Uber 572 00:41:09,920 --> 00:41:15,719 Speaker 3: Eats credits, and you'll get discounts for publication. And we 573 00:41:15,880 --> 00:41:20,520 Speaker 3: have to be the bundler and a part of the bundle, 574 00:41:21,000 --> 00:41:26,160 Speaker 3: just like Prime. Think about what Amazon did. I'm sending 575 00:41:26,200 --> 00:41:29,799 Speaker 3: you stuff that you bought, and I'm going to give 576 00:41:29,880 --> 00:41:33,640 Speaker 3: you free delivery, but you're going to pay me a 577 00:41:33,680 --> 00:41:37,120 Speaker 3: monthly subscription. And now I'm going to start to put 578 00:41:37,200 --> 00:41:42,160 Speaker 3: things into the bundle. And now Prime Video is the biggest. 579 00:41:42,239 --> 00:41:47,200 Speaker 3: I think they have ninety million subscribe unbelievable. So subscriptions, 580 00:41:47,400 --> 00:41:52,200 Speaker 3: building passionate audiences and having those reoccurring revenues, I think 581 00:41:52,280 --> 00:41:53,880 Speaker 3: is what our business about. 582 00:42:00,120 --> 00:42:02,200 Speaker 2: All Right, we're gonna do a quick, rapid fire. I'm 583 00:42:02,320 --> 00:42:06,560 Speaker 2: with you, and so the like one to two word 584 00:42:06,600 --> 00:42:08,759 Speaker 2: answers for all of this. All right, what's one word 585 00:42:08,840 --> 00:42:10,400 Speaker 2: to describe your deal making style? 586 00:42:10,880 --> 00:42:13,280 Speaker 3: I use niceness as a competitive weapon. 587 00:42:14,120 --> 00:42:16,600 Speaker 1: What's more important gut or data? 588 00:42:17,600 --> 00:42:22,160 Speaker 3: I don't think either works alone. But if I had 589 00:42:22,200 --> 00:42:25,920 Speaker 3: to pick one at where I am in my life 590 00:42:25,920 --> 00:42:28,040 Speaker 3: and career, I'd say, gut, I've seen it all. 591 00:42:28,320 --> 00:42:30,200 Speaker 2: Who's your dream deal making partner? 592 00:42:31,120 --> 00:42:35,879 Speaker 3: Peter Goober? Peter Goober, we were competing for a deal. 593 00:42:36,000 --> 00:42:38,520 Speaker 3: We didn't know about it, and at the last second 594 00:42:38,920 --> 00:42:43,960 Speaker 3: we told each other and he said, oh, we're friends. 595 00:42:44,520 --> 00:42:48,120 Speaker 3: Let's do the deal together. And I'll never forget this. 596 00:42:48,200 --> 00:42:53,520 Speaker 3: He said. We'll laugh together, we'll cry together, but we'll 597 00:42:53,560 --> 00:42:58,120 Speaker 3: have a great journey as friends. And he's the greatest. 598 00:42:58,680 --> 00:43:00,239 Speaker 1: This is this is a second try at this question. 599 00:43:00,360 --> 00:43:02,120 Speaker 1: But what is the greatest deal you've ever made. 600 00:43:02,520 --> 00:43:06,000 Speaker 3: In terms of money? 601 00:43:06,680 --> 00:43:07,040 Speaker 1: Sure? 602 00:43:07,719 --> 00:43:12,480 Speaker 3: Well, I sold my company, my little startup, to America Online, 603 00:43:12,680 --> 00:43:15,759 Speaker 3: and I got ten percent of AOL and what was 604 00:43:15,840 --> 00:43:19,400 Speaker 3: called the polling of interest, if you can believe it, 605 00:43:19,440 --> 00:43:24,800 Speaker 3: AOL was four hundred million dollars. I got forty million 606 00:43:24,840 --> 00:43:31,160 Speaker 3: dollars of stock, and nine years later the company when 607 00:43:31,160 --> 00:43:33,319 Speaker 3: we bought Time War, it was worth one hundred and 608 00:43:33,480 --> 00:43:38,040 Speaker 3: seventy billion dollars, which back then that was real money. Wow, 609 00:43:38,160 --> 00:43:40,839 Speaker 3: if there were no trillion dollar market capital, it. 610 00:43:40,760 --> 00:43:41,560 Speaker 2: Feels like real money. 611 00:43:41,560 --> 00:43:41,799 Speaker 3: Away. 612 00:43:42,440 --> 00:43:44,719 Speaker 2: What's the best piece of advice? You've ever received on 613 00:43:44,760 --> 00:43:45,960 Speaker 2: deal making or business. 614 00:43:46,239 --> 00:43:48,600 Speaker 3: Don't get too high with the highs and too low 615 00:43:48,680 --> 00:43:49,200 Speaker 3: with the lows. 616 00:43:49,520 --> 00:43:51,239 Speaker 1: What's your hype song when you go into a big 617 00:43:51,280 --> 00:43:52,680 Speaker 1: negotiation or a meeting? 618 00:43:53,440 --> 00:43:57,759 Speaker 3: My hype song. People laugh at this, but I used to. 619 00:43:58,520 --> 00:44:01,080 Speaker 3: I used to be a punk and I go to 620 00:44:02,560 --> 00:44:08,920 Speaker 3: CBGB's and Talking Heads were my favorite band, and so 621 00:44:09,360 --> 00:44:12,080 Speaker 3: probably once in a lifetime by the talking Heads. 622 00:44:12,080 --> 00:44:14,080 Speaker 2: I love it. You can only watch one sport for 623 00:44:14,080 --> 00:44:15,400 Speaker 2: the rest of your life, which one is it? This 624 00:44:15,440 --> 00:44:16,239 Speaker 2: is a good one for you. 625 00:44:16,760 --> 00:44:19,920 Speaker 3: I'm going to surprise people, but hockey is the most 626 00:44:20,040 --> 00:44:25,520 Speaker 3: honest game. You can't you can't hide in hockey. You 627 00:44:25,520 --> 00:44:30,680 Speaker 3: don't skates, and you have to go one hundred percent 628 00:44:31,680 --> 00:44:35,800 Speaker 3: full out. You can't run out of bounds, you can't 629 00:44:36,280 --> 00:44:39,720 Speaker 3: hold your knees doing a file shot. It's It's an honest, 630 00:44:39,840 --> 00:44:44,080 Speaker 3: honest sport. And I've really come to enjoy the live experience, 631 00:44:44,280 --> 00:44:44,400 Speaker 3: you know. 632 00:44:44,520 --> 00:44:48,680 Speaker 1: Congrats to our mutual friend and champion Vinie Viola. 633 00:44:49,360 --> 00:44:53,799 Speaker 3: Jenny's the best, the greatest, and he deserves his Stanley Cup, 634 00:44:53,880 --> 00:44:54,880 Speaker 3: his immortality. 635 00:44:55,160 --> 00:44:57,359 Speaker 1: What team do you want to win a championship more 636 00:44:57,400 --> 00:44:58,040 Speaker 1: than any other? 637 00:44:59,040 --> 00:45:01,000 Speaker 3: I have real c I already have thought of what 638 00:45:01,040 --> 00:45:03,400 Speaker 3: I have to accomplish in the next twenty five years, 639 00:45:03,560 --> 00:45:09,760 Speaker 3: or you'll be scarred. I've won championships everywhere, taking companies public, 640 00:45:10,040 --> 00:45:13,279 Speaker 3: but I haven't broken the code in the NBA, and 641 00:45:13,400 --> 00:45:16,000 Speaker 3: so I have to make the Wizards. And you know 642 00:45:16,400 --> 00:45:20,240 Speaker 3: from last year how hard it is to get from 643 00:45:21,000 --> 00:45:24,160 Speaker 3: round to round to round, and the furthest I've gotten 644 00:45:24,200 --> 00:45:28,200 Speaker 3: in the playoffs is Game seven lost to Celtics and 645 00:45:28,320 --> 00:45:31,400 Speaker 3: semi finals of the East, and you think, oh, I 646 00:45:31,400 --> 00:45:34,240 Speaker 3: got a young team. It's just got to keep going 647 00:45:34,320 --> 00:45:40,160 Speaker 3: from there. And then injuries and bad trades and all 648 00:45:40,200 --> 00:45:44,000 Speaker 3: of a sudden you're rebuilding and careers are short, and 649 00:45:44,560 --> 00:45:47,400 Speaker 3: you know, you learn, and I want to build it 650 00:45:47,480 --> 00:45:49,560 Speaker 3: the right way. But we have to win a championship 651 00:45:49,880 --> 00:45:51,280 Speaker 3: for the fans, for the Wizards. 652 00:45:51,400 --> 00:45:53,800 Speaker 2: All right, Well, this has been really fun. Ted leonsis 653 00:45:53,840 --> 00:45:54,480 Speaker 2: thank you so much. 654 00:45:54,480 --> 00:45:55,400 Speaker 3: Thank you, Thanks guys. 655 00:46:02,760 --> 00:46:06,600 Speaker 4: The Deal is a production from Bloomberg Podcasts and Bloomberg Originals. 656 00:46:07,000 --> 00:46:10,040 Speaker 4: The Deal is hosted by Alex Rodriguez and Jason Kelly. 657 00:46:10,560 --> 00:46:14,920 Speaker 4: Our producers are Ana Maazarakis, Stacey Wong, Lizzie Phillip and 658 00:46:15,040 --> 00:46:19,640 Speaker 4: Victory Veyees. Original music and engineering by Blake Maples. Our 659 00:46:19,680 --> 00:46:21,040 Speaker 4: managing editor is David E. 660 00:46:21,239 --> 00:46:21,680 Speaker 1: Ravella. 661 00:46:22,440 --> 00:46:27,640 Speaker 4: Our executive producers are Jason Kelly, Brendan Francis, Neonham, Jordan Opplinger, 662 00:46:27,920 --> 00:46:34,240 Speaker 4: Trey Shallowhorn, Kyle Kramer, Andrew Barden, Kelly Laferrier and Ashley Hoenig. 663 00:46:35,000 --> 00:46:39,239 Speaker 4: Sage Bauman is our head of podcasts. Additional support from 664 00:46:39,320 --> 00:46:43,920 Speaker 4: Rachel Scaramazino and Elena Los Angeles. Joshua Devaux is our 665 00:46:43,960 --> 00:46:48,480 Speaker 4: director of photography. Rubob Shakir is our creative director. Art 666 00:46:48,480 --> 00:46:53,040 Speaker 4: direction is from Jacqueline Kessler. Casting by Julia Manns. Our 667 00:46:53,080 --> 00:46:57,960 Speaker 4: associate producer is Natasha Abelard, Camera operation by Ryan Cavtero, 668 00:46:58,320 --> 00:47:02,960 Speaker 4: Jesse Ridner and Sumahussin. Our gaffer is Alex Brown, and 669 00:47:03,040 --> 00:47:07,840 Speaker 4: our grip is Max Garstak. Our production assistant is Gabriella Dematase. 670 00:47:08,320 --> 00:47:11,759 Speaker 4: Alex Diaconus is our video editor. Listen to the Deal 671 00:47:11,800 --> 00:47:15,640 Speaker 4: on Apple Podcasts, Spotify, or wherever you get your podcasts. 672 00:47:16,000 --> 00:47:18,600 Speaker 4: You can also tune into The Video Companion on Bloomberg 673 00:47:18,640 --> 00:47:21,880 Speaker 4: Originals and on Bloomberg TV. Thanks for listening.