1 00:00:00,880 --> 00:00:03,720 Speaker 1: This Sunday in Nevada, the Kansas City Chiefs will face 2 00:00:03,760 --> 00:00:06,280 Speaker 1: off against the San Francisco forty nine Ers in Super 3 00:00:06,280 --> 00:00:09,440 Speaker 1: Bowl fifty eight. Last year's Super Bowl reached more than 4 00:00:09,480 --> 00:00:13,600 Speaker 1: one hundred and fifteen million viewers, and the NFL, helped 5 00:00:13,640 --> 00:00:16,560 Speaker 1: along by the high profile romance between Taylor Swift and 6 00:00:16,600 --> 00:00:19,560 Speaker 1: the Chiefs tid end Travis Kelcey is hoping for a 7 00:00:19,600 --> 00:00:24,120 Speaker 1: new record audience, but behind the scenes, many eyes are 8 00:00:24,120 --> 00:00:27,600 Speaker 1: on the ownership model both teams represent, and that's threatened 9 00:00:27,640 --> 00:00:31,120 Speaker 1: by the league's explosive growth. The Chiefs and the forty 10 00:00:31,200 --> 00:00:34,199 Speaker 1: nine Ers have been owned by the same families for decades. 11 00:00:34,880 --> 00:00:37,720 Speaker 1: The Chiefs were founded by Lamar Hunt in nineteen sixty three, 12 00:00:38,080 --> 00:00:40,280 Speaker 1: and the York family has had control of the forty 13 00:00:40,360 --> 00:00:44,000 Speaker 1: nine Ers franchise since nineteen seventy seven. The league prides 14 00:00:44,000 --> 00:00:47,640 Speaker 1: itself on this family first image, but spiking valuations are 15 00:00:47,720 --> 00:00:54,120 Speaker 1: raising questions of succession for these families, and these questions 16 00:00:54,160 --> 00:00:57,440 Speaker 1: are getting more urgent. Nearly a quarter of the league's 17 00:00:57,480 --> 00:01:01,920 Speaker 1: thirty two teams have an owner over the age of eight. Today, 18 00:01:01,920 --> 00:01:04,360 Speaker 1: on the show how the NFL is struggling to keep 19 00:01:04,400 --> 00:01:06,720 Speaker 1: it all in the family as its franchise is sore 20 00:01:06,840 --> 00:01:10,920 Speaker 1: and value from Bloomberg News, this is big take. I'm 21 00:01:10,920 --> 00:01:20,160 Speaker 1: Sarah Holder. When it comes to ownership, the NFL is 22 00:01:20,200 --> 00:01:23,000 Speaker 1: known to have some of the strictest rules in professional sports. 23 00:01:24,319 --> 00:01:26,600 Speaker 1: There are tight limits on how owners can pass their 24 00:01:26,600 --> 00:01:29,520 Speaker 1: stakes to other family members, and each team must name 25 00:01:29,600 --> 00:01:33,800 Speaker 1: a single controlling owner. Rules like these have effectively shut 26 00:01:33,800 --> 00:01:37,080 Speaker 1: private equity and other institutional investors out of the NFL 27 00:01:37,440 --> 00:01:42,080 Speaker 1: and favored family ownership. But as original team founder's age 28 00:01:42,160 --> 00:01:45,600 Speaker 1: and newer generations take over, my colleague Grandall Williams, a 29 00:01:45,600 --> 00:01:48,360 Speaker 1: sports business reporter, says the league has started to see 30 00:01:48,360 --> 00:01:51,760 Speaker 1: some of these family run models break down. He called 31 00:01:51,760 --> 00:01:55,240 Speaker 1: in from on the ground in Nevada. 32 00:01:55,400 --> 00:01:58,600 Speaker 2: Typically, I think that the NFL wants these things to 33 00:01:58,600 --> 00:02:01,480 Speaker 2: stay in the family. But there's when you have people 34 00:02:01,480 --> 00:02:04,400 Speaker 2: are getting older and sometimes quite frankly, they're not relinquishing 35 00:02:04,400 --> 00:02:06,960 Speaker 2: the power of running a team. And if you're not 36 00:02:07,040 --> 00:02:10,760 Speaker 2: prepping your children, your grandchildren, whoever your successor is going 37 00:02:10,840 --> 00:02:13,560 Speaker 2: to be, then it creates an issue where hey, I 38 00:02:13,840 --> 00:02:16,120 Speaker 2: don't get along with my cousin or my brother or 39 00:02:16,160 --> 00:02:18,520 Speaker 2: my sister, then it creates an issue as far as 40 00:02:18,600 --> 00:02:21,359 Speaker 2: who's the principal owner for a team, and you need 41 00:02:21,400 --> 00:02:23,960 Speaker 2: one of those. You can't have a party of three 42 00:02:24,080 --> 00:02:26,920 Speaker 2: deciding because what if one person wants one thing and 43 00:02:26,960 --> 00:02:29,240 Speaker 2: two people want another, or two people want one thing 44 00:02:29,280 --> 00:02:32,080 Speaker 2: and one person wants another. It creates an issue that 45 00:02:32,840 --> 00:02:36,959 Speaker 2: complicates business for really a five six billion dollar franchises. 46 00:02:37,440 --> 00:02:40,680 Speaker 1: How have the skyrocketing valuations of these teams impacted the 47 00:02:40,720 --> 00:02:43,120 Speaker 1: way ownership is working in the league? 48 00:02:43,760 --> 00:02:46,320 Speaker 2: It is a rose and a thorn, I'll say, because 49 00:02:46,960 --> 00:02:51,639 Speaker 2: everyone's making more money, but there's implications, tax implications that happen. 50 00:02:53,120 --> 00:02:54,639 Speaker 2: And at the end of the day, like everyone does 51 00:02:54,680 --> 00:02:57,519 Speaker 2: want to want to make as much money as they can. 52 00:02:57,560 --> 00:03:02,080 Speaker 2: But when you have such a big team, when these 53 00:03:02,680 --> 00:03:05,919 Speaker 2: teams get so expensive to operate, and maybe families don't 54 00:03:05,960 --> 00:03:08,800 Speaker 2: necessarily have the means or the funds to do it, 55 00:03:08,880 --> 00:03:13,000 Speaker 2: then you need an additional source of income, which of 56 00:03:13,120 --> 00:03:15,600 Speaker 2: had sources tell me that private equity is coming in March, 57 00:03:16,200 --> 00:03:19,280 Speaker 2: and so the league formed this committee to take a 58 00:03:19,280 --> 00:03:23,440 Speaker 2: look at things. NFL didn't its owners maybe didn't necessarily 59 00:03:23,440 --> 00:03:25,400 Speaker 2: want to do it for many years, but now I 60 00:03:25,480 --> 00:03:26,840 Speaker 2: think it's becoming a necessity. 61 00:03:27,480 --> 00:03:30,240 Speaker 1: So the league has had discussions to potentially open up 62 00:03:30,240 --> 00:03:33,320 Speaker 1: ownership stakes to private equity. What will that look like 63 00:03:33,560 --> 00:03:34,600 Speaker 1: in the short term. 64 00:03:35,000 --> 00:03:39,880 Speaker 2: Well, everyone's kept very tight lips on this. It's been 65 00:03:39,920 --> 00:03:43,200 Speaker 2: talked about a lot over the last six to eight months. 66 00:03:43,320 --> 00:03:45,760 Speaker 2: It's had a lot of pushback in a way, but 67 00:03:45,800 --> 00:03:48,760 Speaker 2: I think it's going to have to happen to keep 68 00:03:48,800 --> 00:03:53,560 Speaker 2: business running smoothly. Now, whether that be minority stakes, majority stakes, 69 00:03:53,680 --> 00:03:56,800 Speaker 2: will have to see come March. I doubt that details 70 00:03:56,880 --> 00:03:59,280 Speaker 2: for that will be revealed or leaked before then. 71 00:03:59,320 --> 00:03:59,360 Speaker 3: No. 72 00:03:59,600 --> 00:04:02,520 Speaker 2: Granted, some great reporters out there, including myself or maybe 73 00:04:02,520 --> 00:04:04,640 Speaker 2: an owner says hey, I'm happy about this. But the 74 00:04:04,720 --> 00:04:07,120 Speaker 2: thing that is going to happen that I had some 75 00:04:07,160 --> 00:04:10,440 Speaker 2: sources tell me is that if SLASH, when this gets approved, 76 00:04:10,480 --> 00:04:13,960 Speaker 2: there will be more minority stake self. So whether that 77 00:04:14,040 --> 00:04:16,960 Speaker 2: be five to ten percent of teams. But here's the 78 00:04:17,000 --> 00:04:19,960 Speaker 2: thing that people I don't think they're necessarily talking about. 79 00:04:20,320 --> 00:04:23,240 Speaker 2: If you have a seven billion dollar franchise and someone 80 00:04:23,279 --> 00:04:27,080 Speaker 2: buys ten percent of that team, that's seven hundred million dollars. 81 00:04:27,680 --> 00:04:28,720 Speaker 2: That's a lot of money. 82 00:04:28,800 --> 00:04:29,160 Speaker 4: And so. 83 00:04:30,680 --> 00:04:32,400 Speaker 2: Even if it's five percent of the team, if we're 84 00:04:32,400 --> 00:04:34,839 Speaker 2: talking about seven billion dollars, that's three hundred and fifty 85 00:04:34,839 --> 00:04:37,240 Speaker 2: million or still are not a lot of people on 86 00:04:37,320 --> 00:04:40,839 Speaker 2: planet Earth that can write a nine figure check to 87 00:04:40,839 --> 00:04:43,800 Speaker 2: be like, hey, I want to own just five percent 88 00:04:43,800 --> 00:04:47,240 Speaker 2: of an NFL team, So we'll have to see. I 89 00:04:47,279 --> 00:04:50,400 Speaker 2: think that that rules and the rule, if it gets approved, 90 00:04:50,480 --> 00:04:52,960 Speaker 2: is going to be ever changing because you're going to 91 00:04:53,000 --> 00:04:55,120 Speaker 2: have private equity who are going to step in and 92 00:04:55,120 --> 00:04:56,880 Speaker 2: be like, hey, I want I want to be a 93 00:04:56,880 --> 00:04:59,360 Speaker 2: decision maker in this. I didn't just buy into this 94 00:04:59,440 --> 00:05:02,800 Speaker 2: team to give you this money and step out of 95 00:05:02,800 --> 00:05:03,080 Speaker 2: the way. 96 00:05:03,880 --> 00:05:07,720 Speaker 1: How does Roger Goodell, the league commissioner, feel about this change? 97 00:05:08,000 --> 00:05:11,440 Speaker 2: Well, interestingly enough, I asked him about this at his 98 00:05:11,560 --> 00:05:15,000 Speaker 2: press conference. As NFL team evaluations rise, in a circle 99 00:05:15,040 --> 00:05:17,520 Speaker 2: of people that can afford to purchase teams grow smaller, 100 00:05:17,880 --> 00:05:21,280 Speaker 2: wondering how that complicates the session planning for owners. And 101 00:05:21,320 --> 00:05:23,960 Speaker 2: on that note, if you have any updates on potential 102 00:05:24,040 --> 00:05:27,800 Speaker 2: rule changes to allow private equity investors to buy into teams. 103 00:05:29,160 --> 00:05:36,360 Speaker 3: Yes, listen. When franchise values increase, sometimes that makes you know, 104 00:05:36,880 --> 00:05:41,480 Speaker 3: a franchise less affordable to a certain segment of our population. 105 00:05:41,680 --> 00:05:45,040 Speaker 3: Less people may be available to do that. That's why 106 00:05:45,080 --> 00:05:48,640 Speaker 3: we are looking at our ownership policies and looking at 107 00:05:48,680 --> 00:05:51,520 Speaker 3: them in every context, and we need to be intentional 108 00:05:52,520 --> 00:05:56,440 Speaker 3: to make sure that our policies not only attract the 109 00:05:56,480 --> 00:05:58,800 Speaker 3: best ownership group, but diverse ownership. 110 00:05:59,040 --> 00:06:02,520 Speaker 2: He spoke about that. I didn't mention anything about diversity 111 00:06:02,520 --> 00:06:05,000 Speaker 2: and increasing diversity and ownership, which is I think has 112 00:06:05,000 --> 00:06:07,599 Speaker 2: to happen as well. But he didn't speak to the 113 00:06:07,640 --> 00:06:10,880 Speaker 2: private equity thing. I think that he knows as well 114 00:06:10,920 --> 00:06:13,039 Speaker 2: that private equity is going to be good for the 115 00:06:13,080 --> 00:06:16,599 Speaker 2: league in some capacity, whether that be majority stakes or 116 00:06:16,600 --> 00:06:17,360 Speaker 2: minority stakes. 117 00:06:17,440 --> 00:06:19,640 Speaker 1: I just think we'll have to see how do the 118 00:06:19,800 --> 00:06:24,320 Speaker 1: older owners themselves, or these individual franchise owners themselves feel 119 00:06:24,440 --> 00:06:27,720 Speaker 1: about the idea that more and more teams may end 120 00:06:27,800 --> 00:06:30,480 Speaker 1: up owned by groups of investors. 121 00:06:31,000 --> 00:06:34,919 Speaker 2: I think it's uncomfortable because when you're thinking about something, 122 00:06:35,080 --> 00:06:39,120 Speaker 2: I mean, these teams run fifty sixty years, These franchises 123 00:06:39,160 --> 00:06:43,120 Speaker 2: have been bought for sometimes eighteen twenty twenty five, one 124 00:06:43,200 --> 00:06:45,880 Speaker 2: hundred and twenty thousand dollars, and now they're worth six billion. 125 00:06:46,279 --> 00:06:48,560 Speaker 2: And when you're thinking about handing that off, yes, you're 126 00:06:48,600 --> 00:06:52,080 Speaker 2: going to get a big paycheck whenever you sign it 127 00:06:52,120 --> 00:06:55,600 Speaker 2: away to whomever. However, it's a pride thing when you 128 00:06:55,640 --> 00:06:58,640 Speaker 2: get to say, hey, I ran this for so many years. 129 00:06:59,120 --> 00:07:01,680 Speaker 2: And at the same time, if you look at the 130 00:07:01,720 --> 00:07:04,080 Speaker 2: trend of what's happening in sports today, everyone's getting a 131 00:07:04,080 --> 00:07:06,680 Speaker 2: new stadium, and these stadiums cost a lot of money. 132 00:07:06,720 --> 00:07:10,280 Speaker 2: I mean, so far just cost five billion. The stadium 133 00:07:10,320 --> 00:07:13,400 Speaker 2: I'll be in on Sunday, Allegiant costs two billion. Those 134 00:07:13,400 --> 00:07:18,080 Speaker 2: are the two most expensive stadiums in the NFL and 135 00:07:18,160 --> 00:07:20,760 Speaker 2: maybe probably the world. So if you have private equity 136 00:07:20,800 --> 00:07:23,880 Speaker 2: come in and potentially say we'll give you seven hundred 137 00:07:23,880 --> 00:07:26,120 Speaker 2: and fifty million or a billion dollars or however much 138 00:07:26,160 --> 00:07:28,240 Speaker 2: the price is going to be, then that helps the 139 00:07:28,240 --> 00:07:29,080 Speaker 2: stadium process. 140 00:07:29,800 --> 00:07:32,480 Speaker 1: Randall also spoke to the owner of the Kansas City Chiefs, 141 00:07:32,760 --> 00:07:33,440 Speaker 1: Clark Hunt. 142 00:07:34,880 --> 00:07:36,840 Speaker 2: When I spoke to him on Monday about this was 143 00:07:37,120 --> 00:07:39,520 Speaker 2: when you're looking at stadiums and how everybody wants one, 144 00:07:39,920 --> 00:07:43,120 Speaker 2: private equity can help in that specific issue. 145 00:07:43,320 --> 00:07:46,160 Speaker 1: After the break, Randall breaks down how money is in 146 00:07:46,280 --> 00:07:54,360 Speaker 1: everything when it comes to running an NFL franchise. We're back. 147 00:07:54,800 --> 00:07:57,559 Speaker 1: I've been speaking with my colleague Randall Williams, who's calling 148 00:07:57,560 --> 00:07:59,800 Speaker 1: in from Vegas ahead of Super Bowl fifty eight on 149 00:07:59,840 --> 00:08:03,920 Speaker 1: the changing landscape of NFL ownership. When other kinds of 150 00:08:03,920 --> 00:08:07,160 Speaker 1: investors like private equity and sovereign wealth funds have gotten 151 00:08:07,160 --> 00:08:09,920 Speaker 1: involved in other sports leagues here in the US, how 152 00:08:09,960 --> 00:08:13,720 Speaker 1: else has that played out? Besides the potential for getting 153 00:08:13,760 --> 00:08:16,960 Speaker 1: bigger and better stadiums, what has that investment meant for 154 00:08:17,040 --> 00:08:18,120 Speaker 1: other leagues well? 155 00:08:18,120 --> 00:08:20,560 Speaker 2: In terms of the product on the fields and the courts. 156 00:08:21,840 --> 00:08:24,000 Speaker 2: I wish it depends on where you're looking. I mean, 157 00:08:24,040 --> 00:08:27,520 Speaker 2: if you're looking at David Tepper for example, I mean 158 00:08:27,560 --> 00:08:30,600 Speaker 2: we see these five six coaches across two different clubs. 159 00:08:33,040 --> 00:08:35,800 Speaker 1: David Tepper is a successful hedge fund founder who bought 160 00:08:35,800 --> 00:08:38,800 Speaker 1: the Carolina Panthers in twenty eighteen for over two billion 161 00:08:38,840 --> 00:08:42,240 Speaker 1: dollars and is reportedly very hands on in running the team, 162 00:08:42,640 --> 00:08:46,959 Speaker 1: and football commentators following David Tepper's tenure have strong misgivings 163 00:08:47,040 --> 00:08:47,880 Speaker 1: about his approach. 164 00:08:48,200 --> 00:08:50,360 Speaker 4: I wish he would fire himself. And by that, I 165 00:08:50,400 --> 00:08:53,320 Speaker 4: don't mean sell the team. I mean just get out 166 00:08:53,360 --> 00:08:57,080 Speaker 4: of the way, you know, don't meddle and allow the 167 00:08:57,120 --> 00:08:59,839 Speaker 4: football people to do their job, and once you hire them, 168 00:08:59,800 --> 00:09:01,000 Speaker 4: allow them some time. 169 00:09:02,880 --> 00:09:06,160 Speaker 1: Teber also owns a Major League soccer franchise, the Charlotte FFC, 170 00:09:06,600 --> 00:09:08,480 Speaker 1: where he also fired a coach last fall. 171 00:09:09,480 --> 00:09:12,960 Speaker 2: It's taken some time. It's going to take time for 172 00:09:13,040 --> 00:09:15,120 Speaker 2: a lot of these private equity guys to figure out 173 00:09:15,120 --> 00:09:18,480 Speaker 2: that sometimes the best way to run these teams is 174 00:09:18,520 --> 00:09:19,880 Speaker 2: to buy them and get out of the way. Like 175 00:09:19,960 --> 00:09:23,880 Speaker 2: make decisions on whatever you want to be involved in, 176 00:09:24,040 --> 00:09:25,960 Speaker 2: but it's going to be difficult to be involved in 177 00:09:25,960 --> 00:09:30,000 Speaker 2: it everyday general management of a team if that's not 178 00:09:30,040 --> 00:09:32,120 Speaker 2: something you're familiar with. Now, the thing that they are 179 00:09:32,120 --> 00:09:35,520 Speaker 2: familiar with is making a lot of money. However, what's 180 00:09:35,559 --> 00:09:36,800 Speaker 2: going to make you a lot of money is the 181 00:09:36,800 --> 00:09:38,400 Speaker 2: product on the field at the end of the day. 182 00:09:38,400 --> 00:09:41,319 Speaker 2: And if you are involved and this is not a 183 00:09:41,400 --> 00:09:44,360 Speaker 2: hypothetical because this actually happens. If you are seventy years 184 00:09:44,360 --> 00:09:48,240 Speaker 2: old with a billion dollars, you've made so much money 185 00:09:48,240 --> 00:09:50,720 Speaker 2: over the years. Now you've bought a sports franchise, but 186 00:09:50,760 --> 00:09:54,520 Speaker 2: your focus over your entire life has been financed Quite frankly, 187 00:09:54,559 --> 00:09:57,040 Speaker 2: what do you know about football that makes you think 188 00:09:57,040 --> 00:09:59,760 Speaker 2: that you can decide, Hey, we want this quarterback, we 189 00:09:59,840 --> 00:10:03,320 Speaker 2: want that running back. And so it it's one thing 190 00:10:03,440 --> 00:10:07,280 Speaker 2: to be involved in the management the stadium construction, the 191 00:10:07,320 --> 00:10:10,200 Speaker 2: finances of a team. It's another thing to be involved 192 00:10:10,200 --> 00:10:14,240 Speaker 2: in the everyday decisions that a team makes. 193 00:10:15,320 --> 00:10:18,280 Speaker 1: Right ownership is about more than the business. It's about 194 00:10:18,640 --> 00:10:22,000 Speaker 1: how teams are made up. It's about what kinds of 195 00:10:22,080 --> 00:10:26,720 Speaker 1: coaches are hired. Absolutely, who are you rooting for on Sunday? 196 00:10:26,760 --> 00:10:30,800 Speaker 2: Randall rooting? I'm a journalist. I can't root for a team. 197 00:10:31,080 --> 00:10:33,160 Speaker 1: Journalistic ethics apply here too. 198 00:10:33,679 --> 00:10:36,560 Speaker 2: Listen, listen. I have I've met many Chiefs and forty 199 00:10:36,640 --> 00:10:38,600 Speaker 2: nine Ers people. I want them to continue to speak 200 00:10:38,640 --> 00:10:40,960 Speaker 2: with me. Here's what I'll say. I think that the 201 00:10:40,960 --> 00:10:45,040 Speaker 2: forty nine Ers have the best weapons on offense. The 202 00:10:45,120 --> 00:10:48,319 Speaker 2: Chiefs have a better defense and the best player. Now 203 00:10:48,320 --> 00:10:52,520 Speaker 2: they say defense wins championships, So if defense wins championships, 204 00:10:53,000 --> 00:10:57,040 Speaker 2: I would take the Chiefs. If I'll take them, you 205 00:10:57,080 --> 00:10:59,120 Speaker 2: know what, let me let me stopt the. 206 00:11:02,000 --> 00:11:02,160 Speaker 3: Well. 207 00:11:02,240 --> 00:11:04,360 Speaker 1: I'm not a sports reporter, so I can say, go 208 00:11:04,520 --> 00:11:12,040 Speaker 1: nine nurs. Thanks for listening to Big take from Bloomberg News. 209 00:11:12,200 --> 00:11:15,720 Speaker 1: I'm Sarah Holder. This episode was produced by Alex Sugera. 210 00:11:16,480 --> 00:11:19,360 Speaker 1: Our senior producers are Naomi Shaven and Jill Duddy Carley. 211 00:11:20,400 --> 00:11:24,000 Speaker 1: It was edited by Caitlin Kenney Giles Turner and Tim Annette. 212 00:11:24,760 --> 00:11:27,520 Speaker 1: It was fact checked by Tiffany Choi. It was mixed 213 00:11:27,559 --> 00:11:31,680 Speaker 1: by Alex Sugura. We get editorial direction from Elizabeth Ponso. 214 00:11:32,280 --> 00:11:35,760 Speaker 1: Nicole Beemster. Borr is our executive producer. Sage Bauman is 215 00:11:35,800 --> 00:11:39,440 Speaker 1: Bloomberg's Head of Podcasts. Special thanks to Ayra Budway for 216 00:11:39,480 --> 00:11:43,160 Speaker 1: his reporting. Thanks for tuning in. We'll be back tomorrow.