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Speaker 1: Bloomberg Audio Studios, podcasts, radio news Carol Master along with

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Speaker 1: Tim Stanoveek live here on Bloomberg Businesswekdaily.

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Speaker 2: Now.

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Speaker 1: You might recall a story from the Bloomberg Team news

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Speaker 1: team earlier this month. It was about Apollo Global Management

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Speaker 1: being poised to launch a five billion dollar strategy to

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Speaker 1: invest in sports deals, marking another major asset manager targeting

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Speaker 1: the booming sector. It's about long term lending a strategic

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Speaker 1: capital to sports leagues and clubs. They've also considered owning

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Speaker 1: stakes and teams, though this wouldn't be a priority, and

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Speaker 1: may hire news staff and our next guest, Tim definitely

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Speaker 1: knows about investing in sports for his investors.

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Speaker 2: Jeff Luno, CEO of Blue Crow Sports Group, also former

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Speaker 2: Houston Astros President of Baseball Operations, along with Bloomberg News

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Speaker 2: Texas Bureau chief Julie Fine. They both join us from

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Speaker 2: our Dallas bureau for Bloomberg News. Jeff, really good to

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Speaker 2: have you with us. Julie, always good to see you.

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Speaker 2: Thank you for joining us, Jeff. Multi Club Ownership Platform

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Speaker 2: a sports investment platform backed by private equitys, high net

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Speaker 2: worth individuals, family offices. The company began back in twenty

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Speaker 2: twenty one numbers are not public, but financially, give us

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Speaker 2: an idea of where this company is, what your focus is,

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Speaker 2: and how you compete against the big folks such as Apollo.

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Speaker 3: Well, you rightly pointed out there's a lot of interest

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Speaker 3: in sports, a lot of American investors are investing in

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Speaker 3: European football, et cetera. We started as a startup four

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Speaker 3: years ago. We wanted to pick our niche. Our niche

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Speaker 3: is to find own and operate clubs in desirable locations

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Speaker 3: that have big growth opportunities. So we invested in KANCUNFC

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Speaker 3: and Mexico Group de Portibo, Leganesse in the suburbs of

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Speaker 3: Madrid and luav in the Normandy area of France. And

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Speaker 3: those are the three teams, one in first Division and

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Speaker 3: two in second division. And the key for us is

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Speaker 3: to operate those clubs well and allow them to make

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Speaker 3: money and to win games.

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Speaker 4: Jeff, you talk about the key is to operate them

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Speaker 4: well and to win money in games. But really, what's

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Speaker 4: the long term plan? Are you looking at other sports?

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Speaker 4: Do you want to stay in the in the soccer world,

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Speaker 4: what's next?

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Speaker 3: Well, we've got a lot of work to do in football.

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Speaker 3: We want Leganess to get back to first Division. We

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Speaker 3: want LUAV to establish itself in second division, and now

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Speaker 3: that promotion relegation is coming back to Mexico, we'd like

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Speaker 3: KANCUNFC to get into LEGAMX. So I think our to

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Speaker 3: do list for the next five years is pretty busy

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Speaker 3: and pretty filled, but I think over time we will

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Speaker 3: certainly look at other sports, where right now our focus

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Speaker 3: is football.

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Speaker 4: I want to talk a little bit. You were with

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Speaker 4: the Houston Astros. You were fired after a baseball scandal.

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Speaker 4: You have denied any wrongdoing, but you are going now

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Speaker 4: and asking people for money. Has there been any issue

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Speaker 4: when it comes to trust.

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Speaker 5: Now, not at all.

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Speaker 3: In fact, many of the investors in Blue Crow are

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Speaker 3: people that were either investors in the Astros or knew

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Speaker 3: me from that time. If anything, has been an advantage

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Speaker 3: because people knew of what happened with the Astros after

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Speaker 3: we got involved in getting the World Series in twenty

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Speaker 3: seventeen and reaching it in nineteen and you know, doing

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Speaker 3: making money for the club and it's investors. So we

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Speaker 3: have a very diverse group of investors, people from private equity, entrepreneurs, technologists,

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Speaker 3: et cetera.

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Speaker 5: And they're all very bullish on what we're building.

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Speaker 1: Does it ever come up though? I am curious, Jeff,

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Speaker 1: Like I know, we all have our past and histories,

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Speaker 1: and I just think, you know, sometimes when it comes

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Speaker 1: to money, people do at least be like, well, just

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Speaker 1: let me just talk to you a little bit about

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Speaker 1: this before maybe I think about investing.

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Speaker 3: Well, I think a lot of people want to know

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Speaker 3: about my time in baseball and what we did and

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Speaker 3: how it relates to football.

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Speaker 5: It's never come up as a negative.

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Speaker 3: I was telling Julia earlier that in Europe baseball is

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Speaker 3: not a very big sport, so people don't even know

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Speaker 3: who the Astros are or who Josel t is, so

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Speaker 3: they really just care about whether we're going to win

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Speaker 3: on Sunday, and you know, whether we're going to get

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Speaker 3: three points or one.

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Speaker 2: Hey.

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Speaker 1: One thing I want to ask you too, though, Jeff,

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Speaker 1: when it comes to owning a team, is it a

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Speaker 1: buy and hold strategy or because you have investors, is

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Speaker 1: it by hold, build up and then sell for a

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Speaker 1: premium so that there are returns to your investors. I'm

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Speaker 1: just curious.

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Speaker 5: That's a great question.

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Speaker 3: And the way to make money and football, as you noticed,

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Speaker 3: is you can either hold and sell for more than

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Speaker 3: you bought, but usually have to cover losses in the meantime.

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Speaker 3: But we're trying to run these clubs to win and

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Speaker 3: grow revenue and eventually be profitable so that we can

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Speaker 3: potentially return some money to our investors as we go along.

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Speaker 3: We're not looking to buy and flip. A lot of

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Speaker 3: the things that we do in our clubs require three

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Speaker 3: or four years, five years for them to start working,

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Speaker 3: and that's why for us we're talking about more long term.

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Speaker 4: Holds, talking about long term and working. We talked earlier

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Speaker 4: about technology and analytics. What role is AI playing in

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Speaker 4: all of that.

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Speaker 3: Well, the world of football has lagged baseball and basketball

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Speaker 3: and other major sports in terms of the use of

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Speaker 3: analytics and technology, but that's changing. And part of the

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Speaker 3: reason it's changing is in football, you have eleven v eleven,

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Speaker 3: So there's a ton of data, and there's a ton

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Speaker 3: of games all over the world, and it's hard to

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Speaker 3: analyze that with just a few data scientists. So AI

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Speaker 3: allows you to analyze a much much larger volume of

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Speaker 3: data and to generate insights from it. So I think

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Speaker 3: it's going to be increasingly important in our world.

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Speaker 2: Jeff We talk a lot here in the US about

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Speaker 2: ballooning sports team valuations. I mean, you're certainly familiar with this.

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Speaker 2: We just had the deal news about the New York Giants,

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Speaker 2: for example, with American football, and I'm curious if you

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Speaker 2: think the growth here in the US will start to

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Speaker 2: slow down and the real opportunity for valuations to grow

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Speaker 2: as they did here in the US in the last

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Speaker 2: two decades. That opportunity is outside of the US now.

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Speaker 3: I think that, well, first of all, I've always been

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Speaker 3: skeptical about valuations of major US sports, but I've always

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Speaker 3: been wrong.

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Speaker 5: I've been saying that things.

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Speaker 3: Are overvalued for the last thirty years, and they keep

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Speaker 3: selling for more and more down the road. So I'm

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Speaker 3: not good at predicting that. I do think that buyer

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Speaker 3: beware on European football because there is relegation and promotion

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Speaker 3: and you have to do things well in order to

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Speaker 3: increase value. And there's a lot of investors that are

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Speaker 3: losing money in this sector as well. So we're hoping

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Speaker 3: to be one of the one of the winners. But

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Speaker 3: we're being very cautious about what we invest in and

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Speaker 3: how we do it.

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Speaker 2: What makes you skeptical about US team valuations. You know,

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Speaker 2: it's it's a supply and demand question, right is it?

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Speaker 2: Is it more complicated than that?

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Speaker 3: Well, I think that generally the revenue is driven from

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Speaker 3: TV contracts for most of the sports, and I just

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Speaker 3: can't see those continuing to grow at the rate that

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Speaker 3: they've grown.

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Speaker 5: But I know it's happened.

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Speaker 3: So, like I said, I'm I'm not a good predictor

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Speaker 3: of that, but I think ultimately everybody's going to want

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Speaker 3: to consume sports on their mobile or on their you know,

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Speaker 3: their handheld, and that that changes the dynamic a little bit,

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Speaker 3: and some of these bigger contracts, you know, may not

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Speaker 3: get renewed at the increases that have happened in the past.

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Speaker 4: This is going to be a very big time for

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Speaker 4: football coming up with the World Cup. We have here

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Speaker 4: in Dallas, we have the most matches. Houston, your hometown,

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Speaker 4: has a lot of matches as well. What do you

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Speaker 4: think this attention on the sport in the United States

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Speaker 4: will do.

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Speaker 5: For it overall?

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Speaker 3: I think it's going to be great for all of

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Speaker 3: North America, Mexico, United States, and Canada. I'm very bullish

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Speaker 3: on North American football. I have been since the beginning

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Speaker 3: when we invested in Cancun. And you know, I lived

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Speaker 3: through the ninety four World Cup and everybody who's expecting

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Speaker 3: football to suddenly become one of the big four sports.

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Speaker 3: I think it has grown, but I think it's poised

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Speaker 3: to continue to grow. It's never going to beat NFL,

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Speaker 3: it's never going to beat MLB or NBA, but I

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Speaker 3: think it can continue to grow its fan base, and

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Speaker 3: I think it can continue to produce good results.

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Speaker 4: You know you are now in soccer, you came from baseball.

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Speaker 4: I want to know what your future is.

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Speaker 3: Well, like I said, we're just at the beginning. We've

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Speaker 3: been doing this for four years. We've got a lot

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Speaker 3: on our to do list. I'm going to be focused

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Speaker 3: on building Blue Crow for the foreseeable future.

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Speaker 1: Is there an investor that you would love to have

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Speaker 1: with you for the ride? Is there a team that

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Speaker 1: you would love to go after? And I know who's

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Speaker 1: going to talk, right because you don't want to kick

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Speaker 1: up the valuation, But I am just curious because and

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Speaker 1: anything you can share on your investors or who else

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Speaker 1: you'd like to have with you.

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Speaker 5: Well, we have a great cap table.

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Speaker 3: We've got some people that have in the NBA, in

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Speaker 3: the NFL and MLB, etc. I don't like to disclose

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Speaker 3: who they are because that's their business. But we're well funded.

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Speaker 3: All of our investors have offered to put more money

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Speaker 3: in if they need to. So really, at this point,

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Speaker 3: I think we have an all star cap table. We've

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Speaker 3: got a great plan and now it's just a matter

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Speaker 3: of going out and continue execute Jack twenty seconds.

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Speaker 1: Women's sports, how does that play into it? It's kind

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Speaker 1: of popular. I don't know if you've heard that really quickly.

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Speaker 3: It is, and there's a lot of money going into

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Speaker 3: women's sports. We have a female team in Spain. We're

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Speaker 3: looking at the sector very closely and trying to figure

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Speaker 3: out what our strategy is. But it's growing in the

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Speaker 3: US a lot, and it's growing in Europe quite a lot,

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Speaker 3: and I think it's going to continue to grow.

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Speaker 1: All right, Well, you're always welcome to come back and

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Speaker 1: share some more. Jeff, thank you so much. Jeff Leno,

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Speaker 1: CEO Blue Crow Sports Group, along with our Bloomberg News

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Speaker 1: Texas Bureau chief Julie Fine,