Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: Let's move on to our top story this hour, because
Speaker 2: private equity is making a big splash in pro sports
Speaker 2: with two major deals in basketball and baseball this week.
Speaker 2: The Boston Celtics today reaching agreement to be a sold
Speaker 2: to a consortium for six point one billion dollars, making
Speaker 2: it the largest sports takeover deal ever, while two days earlier,
Speaker 2: the San Francisco Giants announced they sold a ten percent
Speaker 2: steak to Six Street Partners. We're so pleased now to
Speaker 2: bring in one of the savviest investors in sports, and
Speaker 2: he is Mark Lasry. Mark bought a twenty five percent
Speaker 2: steak in the Milwaukee Books in twenty fourteen. He sold
Speaker 2: it nine years later in twenty twenty three. Mark is
Speaker 2: chairman and CEO of Avenue Capitol, which has its own
Speaker 2: sports fund.
Speaker 1: Great to see you, my pleasure, Thank you for having me.
Speaker 2: So let's talk about that six point one billion dollar
Speaker 2: price tag for the Celtics. The Washington commanders of fetch
Speaker 2: what six point oh five billions, So.
Speaker 3: This is the biggest deal.
Speaker 2: The Celtics might be raining inions on the court, but
Speaker 2: they don't own their own court at TD gardens. So
Speaker 2: I'm curious what you make of this price tag.
Speaker 4: Look, I think it's a great price for the league,
Speaker 4: and you had four people who wanted to buy it,
Speaker 4: so it was a competitive process. The fact that they
Speaker 4: got six point one billion, it's it's great for the holders,
Speaker 4: for the folks who own the Celtics today.
Speaker 1: But I think it's it's a high price. But it
Speaker 1: seems that's where teams are selling for today.
Speaker 2: Back in the day, you had said that you paid
Speaker 2: too much for the Bucks, and at least at the
Speaker 2: time you thought you did. I guess when it comes
Speaker 2: to wondering whether they paid too much for the Celtics
Speaker 2: this time around, because of real estate was not part
Speaker 2: of that component, I got wonder, you know, how much
Speaker 2: more should it have been if there was real estate involved.
Speaker 4: It probably would have been more because you would have
Speaker 4: made more on the team because of owning the owning
Speaker 4: TD or the garden. Yeah, and you know the question is, well,
Speaker 4: they try to build their own arena, and they may
Speaker 4: do that, but at the end of the day, like
Speaker 4: when we bought the Bucks, we had paid the most
Speaker 4: for any NBA team, and that was about five hundred
Speaker 4: and fifty million today.
Speaker 3: That's funny now, I know.
Speaker 1: I no, it does. It sounds funny.
Speaker 4: And when I sold, I thought that was a great
Speaker 4: price around you know, three and a half. So look,
Speaker 4: I knew at the time that when we sold, prices
Speaker 4: would probably go up. I think because of the new
Speaker 4: media deal that got done, price have gone up a
Speaker 4: lot more. I thought Adam Silver had done a phenomenal
Speaker 4: job in getting that new media deal, and I think
Speaker 4: that's what's spurring these new prices.
Speaker 5: All Right, we just have us some breaking news for
Speaker 5: us here is Nike just gonna give out the earnings Here.
Speaker 5: Nike third quarter earnings comes in and fifty four cents
Speaker 5: a share, well below estimates, about seventy seven cents of share.
Speaker 5: Revenue a little better than estimated, though, coming in eleven
Speaker 5: point is two seven billion dollars. We were looking for
Speaker 5: about eleven billion estimates, so definitely better. China though not
Speaker 5: great that ebit coming in at four hundred and twenty
Speaker 5: one million dollars in inventory still a little high at
Speaker 5: seven point five billion looking at that stock though pretty
Speaker 5: much flat. So digesting that reaction mark, does this make
Speaker 5: you want to get back into pro mba?
Speaker 3: Yeah?
Speaker 1: You know, look I think.
Speaker 4: I think there's a lot of growth that's still going
Speaker 4: to happen. I think part of it is going to be,
Speaker 4: hopefully when they end up having an expansion team. We've
Speaker 4: been looking at Vegas, so we'll end up seeing what happens.
Speaker 5: What do you think that, like the froth is done
Speaker 5: at some point. I'm just trying to understand how you
Speaker 5: can suck more value out of something that doesn't have
Speaker 5: the real estate yet.
Speaker 3: Like, how do you how do you get more value
Speaker 3: from them?
Speaker 1: Well, I think the way you'll get more value.
Speaker 4: Look, you only make money in sports three ways, so
Speaker 4: it's ticket sales, sponsorship, and media. So if the Celtics
Speaker 4: win again, they'll be able to ticket prices anywhere between
Speaker 4: ten to twenty percent. If you have a team that's
Speaker 4: the worst in the league, that team is still raising
Speaker 4: prices five ten percent. Nobody stops giving up on their team.
Speaker 4: It's actually one of the great little secrets about pro sports.
Speaker 4: Every year, you know, the whole mantra in sports is next.
Speaker 1: Year is our year, right, and everybody believes that.
Speaker 4: So I think you're always going to see that teams
Speaker 4: are going to keep on growing at sort of anywhere
Speaker 4: between you know ten percent, fifteen percent.
Speaker 1: I think if you own the real estate, you'll.
Speaker 4: End up growing faster because you can end up having concerts,
Speaker 4: you can do everything within your own arena, and so
Speaker 4: I wouldn't be surprised if ultimately the Celtics end up
Speaker 4: building their own arena.
Speaker 2: When it comes to the Vegas franchise that you're considering
Speaker 2: that you're weighing, have you thought about where that franchise
Speaker 2: would play.
Speaker 4: Yeah, we've been looking at a bunch of areas in Vegas.
Speaker 4: I don't want to talk about it, becau if I do,
Speaker 4: then those guys will raise the price.
Speaker 3: Of where it usually works.
Speaker 1: Yeah, that's yours. It works.
Speaker 4: But I think for everybody who does something in Vegas,
Speaker 4: it'll be at the T Mobile Arena at least for
Speaker 4: the next few years, until people are able to figure
Speaker 4: out where they want to move the team to.
Speaker 2: All the sports franchises are looking overseas to expand their
Speaker 2: brand and their market. The LA Dodgers would show Hayes
Speaker 2: a perfect example. Right, They've got this built in Asian
Speaker 2: fan base. What's the single best way of doing that?
Speaker 2: For teams that maybe aren't obvious candidates for international fans, Well,
Speaker 2: I think first.
Speaker 1: If you win, people love that, right.
Speaker 4: So for us, we had Yannis, and because we had Yannis,
Speaker 4: you wanted to play games in Greece. We never did,
Speaker 4: but we ended up playing in Europe. We ended up
Speaker 4: playing in Paris, we played in London. So part of
Speaker 4: when you have international players wherever they are, you want
Speaker 4: to try to end up playing there because it just
Speaker 4: feeds that popularity. So I think for every team, what
Speaker 4: you want to do is you want to grow outside
Speaker 4: your market. You want to grow in the US, and
Speaker 4: then you want to grow internationally, and a lot of
Speaker 4: that is the media, and that's sort of what everybody
Speaker 4: is seeing that all these teams are becoming global in
Speaker 4: scope as opposed to what they were, which was national
Speaker 4: in scope.
Speaker 1: Or even regional or even regional. I agree with that.
Speaker 3: What are you most excited about right now?
Speaker 1: For US?
Speaker 3: Yeah, I think our.
Speaker 1: Sports fund is very exciting.
Speaker 4: We've invested in a number of new leagues that are
Speaker 4: doing exceptionally well.
Speaker 1: We ended up investing in the Orioles, and you know,
Speaker 1: we're very excited about that.
Speaker 4: But in a number of the investments we've made, we've
Speaker 4: already seen prices that have gone up already about fifty
Speaker 4: percent plus. So what you find in new leagues and
Speaker 4: new teams is if.
Speaker 1: You're right, it's going to grow exponentially. Right.
Speaker 4: So the whole key in the nice thing about that
Speaker 4: is you see the ratings the next day, so I
Speaker 4: can tell you if it's grown. Like we've invested in
Speaker 4: PBR and Professional bull Riding, that league is growing thirty
Speaker 4: percent plus a year.
Speaker 3: We have professional bull Riding.
Speaker 1: Yes, do you want to get on a ball? You'll
Speaker 1: let up if you could say eight seconds?
Speaker 3: This sounds awesome. Do you have to go? I don't
Speaker 3: want to go to rodeo for that's.
Speaker 1: No, No, you could do it. We are here in
Speaker 1: New York.
Speaker 4: We owned the New York Mavericks, so you can come
Speaker 4: anytime you want to go.
Speaker 1: Okay, yeah, well.
Speaker 5: So would you own little bits and then it grows exponentially?
Speaker 5: What area would you not touch right now?
Speaker 3: In sports?
Speaker 4: I don't want to touch leagues or teams where we
Speaker 4: think you've got flat growth. Okay, right, So when you're
Speaker 4: doing a new league or new team like TGL.
Speaker 1: We ended up doing that. The golf league that Tiger.
Speaker 4: And Rory started, a lot of that was how many
Speaker 4: people are going to watch it, and what you've seen
Speaker 4: is they've had great growth over the course of the year.
Speaker 4: Just had the semifinals and finals are going to be
Speaker 4: this Tuesday. It's actually been going great and you've had
Speaker 4: more people tuning in than you thought. Originally, we thought
Speaker 4: it'd be two fifty to five hundred and it's been
Speaker 4: about seven to fifty to one million. So that's letting
Speaker 4: you know that people love it and people want to
Speaker 4: be a part of it.
Speaker 2: When it comes to TGL, it's a new simulator golf League.
Speaker 2: It feels like the ticket sales might be capped right
Speaker 2: because it's in this arena, So then you have to
Speaker 2: really rely on those other two legs of the soul
Speaker 2: that you were talking about, media and sponsorship is to
Speaker 2: really really grow that business. How is that looking right now?
Speaker 2: I mean, this is the first season, so you've just
Speaker 2: gotten started.
Speaker 4: We've gone started. What's happening is you've had more people
Speaker 4: watching it. It has more people watching it, you end
Speaker 4: up having more sponsors who want to be a part
Speaker 4: of that. So it's actually gone far better than we thought.
Speaker 4: And you know the only problem with it, I would
Speaker 4: tell you is we lost our match a couple of
Speaker 4: days ago. Yeah, I thought it would have been nice.
Speaker 3: To would make it to the playoffs.
Speaker 1: So we did.
Speaker 4: We did, but Stevie Cohenes in the playoffs, Arthur Blanks
Speaker 4: in the playoffs.
Speaker 1: So we'll see who ends up winning.
Speaker 4: That'll be a pretty nice championship for either one of them.
Speaker 5: I'm just really into the fact that you can watch
Speaker 5: it in two hours, like that's huge.
Speaker 1: But that was the whole key to it.
Speaker 3: That's a game changer.
Speaker 4: No, it is, and that's exactly it, because the problem
Speaker 4: I think that TV or media had with golf was
Speaker 4: it was three or four or five hours. It was long,
Speaker 4: it was fever So now that it's two hours, you've
Speaker 4: got a lot more people watching, and they love it
Speaker 4: and they love the interaction.
Speaker 1: Between the players.
Speaker 2: You've also invested in women's sports, and I know that
Speaker 2: you're looking at that very carefully. Where are we in
Speaker 2: the trajectory of the valuation of those teams?
Speaker 3: Are we in like the second inning? The sixth inning?
Speaker 1: I think you're in the first inning first, I really do.
Speaker 4: If you think about it, five years ago, you could
Speaker 4: have bought a women's soccer team for a million dollars.
Speaker 4: Today they're trading around one hundred, one hundred and fifty million.
Speaker 4: We've ended up starting to buy women's soccer teams in Europe,
Speaker 4: and part of the reason for that is we think
Speaker 4: right now they're under value, but we've invested in unrivaled.
Speaker 4: You want to invest in women's sports, and the reason
Speaker 4: you do so here's.
Speaker 1: A nice little tidbit of information.
Speaker 4: When Kaitlyn Clark played in the women's final in college,
Speaker 4: you had close to nineteen million people who watch that.
Speaker 4: By the way, that is more that I've ever watched
Speaker 4: a Stanley Cup finals game, more that I've watched the
Speaker 4: World Series game, right, And it's pretty much almost as
Speaker 4: much as washing NBA finals.
Speaker 3: So that that's great.
Speaker 4: The fact that you ended up having a woman's NCAA
Speaker 4: basketball game and you had all those people come, what
Speaker 4: is telling you is there really is a change that's happening.
Speaker 1: And that change is very simple.
Speaker 4: When I was a kid, if I went to a
Speaker 4: baseball game or a football game, my.
Speaker 1: Dad didn't bring my sisters. It was him and I.
Speaker 4: Today, the idea that you would not bring your daughters
Speaker 4: is inconceivable to someone. And so because of that, your
Speaker 4: daughters are going to games they're playing, so it's actually
Speaker 4: been great.
Speaker 5: Oh sorry the Stanley Cup that was her final scarlet.
Speaker 5: But anyway, this is where I'm going to pair sports
Speaker 5: with the macro environment. A lot of uncertainty. CEOs are
Speaker 5: on the pause button all the way. How does that
Speaker 5: and all the uncertainty in DC affects sports, Like, how
Speaker 5: do you view through that lens?
Speaker 1: I think it's the one thing that people it's immune.
Speaker 4: I would never tell you something's immune, but I would
Speaker 4: tell you for the short term, I think it is.
Speaker 4: But part of that is because people want to be
Speaker 4: part of something. They love sports, they love going so
Speaker 4: I think you're always going to have that look. During COVID,
Speaker 4: it was actually kind of interesting. During COVID, people wouldn't
Speaker 4: come into the office, but they would.
Speaker 1: Go to a stadium, they'd go to an arena.
Speaker 4: They'd go to you know, it was outside, so you
Speaker 4: still had thirty forty fifty thousand people showing up. What
Speaker 4: that tells you is people want to be part of that,
Speaker 4: and they're always going.
Speaker 1: To want to be part of their sports team.
Speaker 2: Do you find better value in sports assets right now
Speaker 2: than in the conventional markets of public markets or private assets?
Speaker 3: You know, debt anything else.
Speaker 4: I think depending on where you're investing in sports, So
Speaker 4: I think in our core business we're able to make
Speaker 4: about ten to fifteen percent a year because really what
Speaker 4: we're doing.
Speaker 1: Is lending money.
Speaker 4: I think in sports, especially in sort of emerging leagues,
Speaker 4: you can make multiples of that.
Speaker 1: You can make sort of ten twenty times for money.
Speaker 4: And I think in sort of the Big Four, over
Speaker 4: twenty years, the ir of that's been about eleven percent.
Speaker 4: So if I think over the course next ten years,
Speaker 4: I'm still going to make ten to fifteen in sort
Speaker 4: of the Big Four, I would.
Speaker 5: Do that interesting broadering out because for broader viewers, what
Speaker 5: do you like in the non sports market right now?
Speaker 1: Well, really what we love.
Speaker 5: Is lending, yeah, and the recent we love lending and
Speaker 5: a lot of other people right now.
Speaker 1: Yeah.
Speaker 4: But the reason for that is you're not taking the
Speaker 4: equity risk, right, and if you can make in today's environment,
Speaker 4: if you can make ten to fifteen percent, people want that, right.
Speaker 1: It's very safe, you're not.
Speaker 4: Taking as much risk, and when people are nervous, what
Speaker 4: they want to do is take less risk. So for us,
Speaker 4: we're able to lend and sort of generate those returns,
Speaker 4: So that's really positive.
Speaker 2: What do you need to see for people to be
Speaker 2: on you to be more willing to take on risk?
Speaker 3: Then at this point, I think what.
Speaker 4: You want to see is you want to see positive
Speaker 4: GDP growth. You want to sort of see an excess
Speaker 4: of two percent. Part of it is really what's going
Speaker 4: to happen to interest rates?
Speaker 3: Yeah?
Speaker 1: Right.
Speaker 4: The lower rates are, the more people are going to
Speaker 4: take risk because there's just more capital. The higher rates are,
Speaker 4: the more people are just waiting. And that's sort of
Speaker 4: what you're seeing today.
Speaker 5: I love you just as we wrap up, get your
Speaker 5: perspective on the uncertainty that we're seeing in the markets
Speaker 5: and the economy today versus any other time.
Speaker 3: Like you've lived through a lot of cycles. How does
Speaker 3: this compare? Oh I don't think this is that big
Speaker 3: of adeo.
Speaker 1: No, I really do.
Speaker 4: You've had real recessions. You've had real issues in my career.
Speaker 4: I think what you're looking at today is little bit
Speaker 4: of what you said. People are nervous, So people are waiting.
Speaker 4: The real question is how long do they wait? Do
Speaker 4: they wait three months, six months, a year, two years.
Speaker 4: If you're waiting a long time, then you've got a
Speaker 4: real recession. If it's three to six months, then what
Speaker 4: you've got is sort of GDP that's flat up one percent.
Speaker 4: I would be more nervous if six months from now
Speaker 4: I'm back, and in essence people are still nervous, right right,
Speaker 4: that's what you've got to look at.
Speaker 1: So that's what I would try.
Speaker 2: To do, and of course it all depends on what
Speaker 2: this guy on the screen says and does to get
Speaker 2: us to that.
Speaker 3: Six months suck and we're obviously going back now in
Speaker 3: six months. So thank you for a three Thank you,
Speaker 3: Thank you so much, a pledgure spending time with you.
Speaker 2: Mark Lasri is chairman and CEO of Avenue Capital