Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Hey, what's up. You're in Minnesota.
Speaker 3: I am in Minnesota. Where are you?
Speaker 2: I'm in New York.
Speaker 4: I'm in my cozy little studio here in you know,
Speaker 4: the Bloomberg Empire's headquarters. It's a nice little spot. So
Speaker 4: coming up, we're going to catch up with Jesse Jacobs.
Speaker 4: This is the guy you know better than I do.
Speaker 4: I know him by reputation. I'm psyched to talk to
Speaker 4: him because he's invested in a whole bunch of different things,
Speaker 4: but especially recently in youth sports, which I want to
Speaker 4: talk to you about. But before we do that, all right,
Speaker 4: a couple headlines caught my attention. One over the last
Speaker 4: couple of weeks is our buddy Jerry Cardinal. He was
Speaker 4: a guest on the show. He's creating this new company
Speaker 4: that's basically going to invest in college sports.
Speaker 2: What do you make of this?
Speaker 5: Well, this reminds me, Jason, of the time before social media,
Speaker 5: right before Facebook, before Instagram. The world is about to
Speaker 5: change and is in a very fluid spot right now.
Speaker 5: That's why it's difficult to speak about this, and that's
Speaker 5: why it's so interesting. But I think Jerry Cardinal has
Speaker 5: proven over the last two and a half three decades
Speaker 5: that he's always one step ahead of the curve, and
Speaker 5: in many ways, what he's doing today I think is
Speaker 5: a preview of what we may see in four or
Speaker 5: five years, which is is Duke basketball owned by Blackstone,
Speaker 5: Is Michigan Football owned by KKR? I think is going
Speaker 5: there faster than people think.
Speaker 2: Yeah, So it's funny.
Speaker 4: I dug into this a little bit just because I
Speaker 4: always want to understand as you do, what Jerry's doing.
Speaker 4: So as I understand it, He's created this company. It's
Speaker 4: a partnership that is basically going to loan money to
Speaker 4: college athletic departments. We're talking like fifty million to two
Speaker 4: hundred million dollars, and essentially they're learning the money to
Speaker 4: build out these organizations to take advantage of all these
Speaker 4: new name, image and likeness opportunities, other media related and
Speaker 4: commercially related opportunities, and of course the upside for them
Speaker 4: is a cut of future earnings.
Speaker 2: I started thinking.
Speaker 4: About, like, well, why would they do this, and it's
Speaker 4: exactly for the reasons that you described. The other thing
Speaker 4: that struck me, and this came up in our conversation
Speaker 4: with Jerry, they did legends, they did on location. These
Speaker 4: are live experience businesses. At the end of the day,
Speaker 4: college athletics are live experiences business.
Speaker 2: So when I.
Speaker 4: Started to look at it from that perspective, it makes
Speaker 4: a ton of sense because these games and I'm thinking
Speaker 4: about you going to visit your daughter at the big
Speaker 4: House at University of Michigan. I mean, think about all
Speaker 4: the money flowing around a University of Michigan football game.
Speaker 3: Yeah.
Speaker 5: And also, don't forget the S network for Jerry Carnell,
Speaker 5: who you started that with, Yes, you know two thousand
Speaker 5: and one four George Steinberunner's partnership of Cannas Saxo when
Speaker 5: he was just thirty three years old. Look, I think
Speaker 5: this world of college is so interesting and we should
Speaker 5: all keep an eye on it because it's one of
Speaker 5: the most ever changing.
Speaker 3: Business models that there is.
Speaker 5: I mean, you've gone from take Michigan football, you mentioned it.
Speaker 5: It went from a very simple model of big revenue,
Speaker 5: low expenses. You take care of the head coach, you
Speaker 5: take care of your coaches, and after that you have
Speaker 5: the regular administration. Right today, you have bigger revenues and
Speaker 5: growing tremendously because of the TV contracts, and now you
Speaker 5: have to run a.
Speaker 3: Mini semi protein.
Speaker 5: Now you have to care players, You need to institutionalize,
Speaker 5: you need to bring more a business people, M and
Speaker 5: A people, and this is something that universities are not
Speaker 5: quite equipped today. So I like what Jerry's doing because
Speaker 5: through Debt with a Kiss on top, when you say
Speaker 5: you get a little bit of the upside, I call
Speaker 5: it the side door. But I think the debt side
Speaker 5: is the most coacher side and the easiest side to
Speaker 5: approve because you keep the institutions in control.
Speaker 4: Okay, I'm going to say it. This is one of
Speaker 4: my favorite phrases. It's ever been undered on our show,
Speaker 4: Debt with a Kiss on Top. I mean, that's fantastic.
Speaker 4: I don't feel like I'm going to use that like
Speaker 4: later today. All Right, we got to talk about U
Speaker 4: sports because it's going to be a big part of
Speaker 4: our conversation with Jesse Jacobs. I've been dying to ask
Speaker 4: you this because you came up through youth sports in
Speaker 4: a very meaningful way. I know you have a couple
Speaker 4: deafews who played baseball coming up. I've been a parent
Speaker 4: of a kid who went through the club system for lacrosse,
Speaker 4: and now I was playing in college. When I say
Speaker 4: youth sports to you, what do you think about? Well,
Speaker 4: I think about the craziness of parents.
Speaker 5: And of course I'm in South Florida, Jason, where every
Speaker 5: kid thinks he's going to be the next Rothfaeld Palmero
Speaker 5: or Derek Jeter or a Rod or whatever. It's a
Speaker 5: business that is very, very sticky. The reason why is, look,
Speaker 5: every time you look up, there's a new three hundred
Speaker 5: million dollar contract, two hundred and fifty million dollar contract
Speaker 5: being signed, and is irrational. For this reason, parents will
Speaker 5: do what they can't afford to send their kids to
Speaker 5: travel to pay for a five hundred dollar bat. I mean,
Speaker 5: my mother's a perfect example. We couldn't afford barely to
Speaker 5: eat steak, but she put all her money together to
Speaker 5: send me to summer camp or to buy me a bat.
Speaker 3: So I think as a growing business.
Speaker 5: And I love with Josh and Blitz are doing Josh
Speaker 5: Harris and Blitzer are doing David Blitzer and now with Jesse.
Speaker 3: I think it has a huge, huge upside.
Speaker 4: Yeah, I mean I think about this all the time,
Speaker 4: in part because I grew up as a kid, I
Speaker 4: played a little bit of travel baseball, a little bit
Speaker 4: of travel soccer.
Speaker 2: Fast forward to being a parent.
Speaker 4: These are empires that are being built to really meet
Speaker 4: the demand, which is seemingly insatiable. One of the things
Speaker 4: I really wanted to talk to Jesse about is this
Speaker 4: idea of you have to think about the economics on
Speaker 4: the part of the individuals, because, as you said, parents
Speaker 4: are willing to spend almost anything, but there are a
Speaker 4: lot of parents and a lot of families, as we know,
Speaker 4: who just simply can't afford it. And you really don't
Speaker 4: at least, I don't want a system where the only
Speaker 4: people who can ultimately play professionally or even at the
Speaker 4: college level are those who can afford, you know, tens
Speaker 4: of thousands of dollars a year to play club baseball,
Speaker 4: or to go to the showcases or go to the tournaments.
Speaker 4: I mean, it's a mitigating that has to be addressed.
Speaker 4: I'm interested to see what Unrival is doing about this.
Speaker 4: And yet the capitalist in me looks at this and says,
Speaker 4: it's a highly fractured market, as we've agreed, and I'm
Speaker 4: one of those parents willing to spend a lot of
Speaker 4: money to help their kids live out a dream. And
Speaker 4: so there's a hell of a lot of money to
Speaker 4: be made. So you can see the investment case easily.
Speaker 5: Yes, the investment case. You can talk about it in spades.
Speaker 5: But I'll share one story with you, Jason. I know
Speaker 5: a family in South Florida. There is about fifteen years ago,
Speaker 5: the mother sold her car. She now takes the bus
Speaker 5: to work. She mortgaged her house three times. And this
Speaker 5: is all to give her son an opportunity to go
Speaker 5: to college and be the next professional star. And you
Speaker 5: have to watch that a little bit. We have to
Speaker 5: take care of families like that.
Speaker 3: Now.
Speaker 5: Of course, you and I we can afford to send
Speaker 5: our kids, you know, to camp and they can do
Speaker 5: all of that.
Speaker 3: But I know my mother couldn't do that. So I
Speaker 3: was a scholarship kid.
Speaker 5: Yeah, so obviously the business is great, but from a
Speaker 5: scholarship point of view, what are you doing for those
Speaker 5: families that cannot afford? And also you want to protect
Speaker 5: them from themselves that in order to chase this dream,
Speaker 5: they're not going to file bankruptcy.
Speaker 4: Yeah, I mean, and the reality is, and you know
Speaker 4: this well from your own experience and also through family
Speaker 4: and things like that. The actual number of scholarships for baseball, lacrosse, football,
Speaker 4: basketball are very very small. I mean, the top of
Speaker 4: the funnel is massive. The bottom of that funnel in
Speaker 4: terms of the money that's actually given to people in
Speaker 4: order to get a full fledged education, especially a full.
Speaker 2: Ride, those are tiny. I mean.
Speaker 4: And then of course, like to make it in the
Speaker 4: professional it's like a fraction of a fraction of a fraction.
Speaker 2: Anyway, I'm probably rolling on this more than I should, but.
Speaker 3: No, Jason, and listen, I'm very passionate about this too.
Speaker 5: And the deal is that you know, if you look
Speaker 5: at the data, and the data is very open and
Speaker 5: very transparent, probably one out of very thousand make it.
Speaker 3: So you have to go in with eyes wide open.
Speaker 5: And I rather than say it is not an investment,
Speaker 5: I rather than say I want to give my son
Speaker 5: or my daughter are the best opportunity to advance their
Speaker 5: career as far as possible. Now that's a little bit
Speaker 5: more accurate, but the blind spot to think this is
Speaker 5: an investment for the future, chances are that is not
Speaker 5: going to pay off.
Speaker 3: So as long as they know that, that's important.
Speaker 4: Looking forward to our conversation coming up with Jesse Jacobs.
Speaker 2: Welcome back to the Deal.
Speaker 4: I'm Jason Kelly here with my co host Alex Rodriguez.
Speaker 4: So this week we're talking to Jesse Jacobs. He co
Speaker 4: founded a firm called TCG, the Churnin Group. It's an
Speaker 4: investment firm that builds consumer and media businesses and some
Speaker 4: of the deals you have definitely heard of Barstool, the
Speaker 4: Professional Lacrosse League, and one recent one unrivaled Sports, a
Speaker 4: deal they just went into with Josh Harris and David Blitzer. Jesse,
Speaker 4: really good to have you with.
Speaker 1: Us, Jason, Alex thrilled to be here. Thanks for having me,
Speaker 1: big fan of its show.
Speaker 4: All right, so Jesse, make all our guests do this.
Speaker 4: So introduce yourself because we always want to hear like
Speaker 4: how people sort of present themselves to the world.
Speaker 1: Actually have two jobs. So one job, I'm a founding
Speaker 1: partner of the Churning Group. Churning Group is a growth equity,
Speaker 1: private equity firm that invests in sports, media, content, consumer
Speaker 1: two partners. We run about three billion dollars of capital
Speaker 1: run our third fund. Majority or most of what we
Speaker 1: do is in sports, not one hundred percent. I'm happy
Speaker 1: to go through that. We've been doing that for about
Speaker 1: fourteen years completely separately. I'm a principal and main owner
Speaker 1: of a film and TV production company called North Road.
Speaker 1: We're one of the largest producers of movies, TV shows,
Speaker 1: reality shows, and we do probably more sports docs sports
Speaker 1: content than any production company and studio out there. Based
Speaker 1: in Los Angeles, currently in New York and huge sports fan.
Speaker 1: So that's me, big sadly a big Met fan.
Speaker 3: But we're doing all right this yere.
Speaker 4: So, yeah, you're a good company of like sad Met fans.
Speaker 4: I feel like that's a badge of honor at this
Speaker 4: point now. So Jesse, you know, one of the things
Speaker 4: that jumps out to me, just to play a little
Speaker 4: bit of this is your Life, is you're an English major,
Speaker 4: which I love. I was an English major as well,
Speaker 4: so like, how do you find your way into the
Speaker 4: sort of media business world.
Speaker 1: Yeah. So when I found out that I could actually
Speaker 1: go to college and read books and graduate, I was.
Speaker 1: I signed up for that. At University of Pennsylvania, I
Speaker 1: was an English and communications major, loved sports, just wanted
Speaker 1: to be in the sports industry. And when I was
Speaker 1: in college between my freshmen and sophomore year, Fox Sports
Speaker 1: got the rights to televise the NFL from a from CBS,
Speaker 1: and in between my freshman sophomore year, I flew out
Speaker 1: to LA got a job as an intern. It's like
Speaker 1: the third person in that office. And saw them build
Speaker 1: that over the summer, and when I went back to Philadelphia,
Speaker 1: they were like, hey, by the way, when we filmed
Speaker 1: games in Philadelphia and New York and Washington, we need
Speaker 1: people to sit and truck and keep track of you
Speaker 1: know how many times Emmitt Smith has run to the
Speaker 1: left in the center and the right. So John Madden
Speaker 1: can say that, or we need to when they start.
Speaker 1: When they picked up baseball, we need somebody in the
Speaker 1: truck to basically say, all right, Alex Rodriguez went from
Speaker 1: first to third after the guy back of them, you know,
Speaker 1: hit a single. And so I did that for four
Speaker 1: years and realized the more successful you get in sports
Speaker 1: TV production, if you're really successful, you work in Thanksgiving football,
Speaker 1: you're working Christmas basketball, you work in New Year's college football,
Speaker 1: you know. And I saw the lives very successful. It's
Speaker 1: just not I didn't want to be every weekend on
Speaker 1: the road, every holiday on the road, and then ended
Speaker 1: up going to business school, ended up at Goldman Sachs
Speaker 1: doing investing, investment banking, all in sports and media, and
Speaker 1: then left to start these two firms with Peter about
Speaker 1: fourteen years ago. And Peter had been the CEO and
Speaker 1: chairman Peter Churnman of Fox and News Corp. For many years.
Speaker 5: Yeah, Jesse's interesting you mentioned about once you found out
Speaker 5: about reading books and then you were excited about college.
Speaker 5: When I found out you had to read books, I
Speaker 5: passed the college, I went to the pro.
Speaker 3: So that explains it. Okay, I'm talking with two.
Speaker 5: Really smart people here, but you know of your impressive resume.
Speaker 5: You know, we've become buddies over the years, and I
Speaker 5: was selling Jason before you jumped on that you're one
Speaker 5: of the most talented people that I've ever come across.
Speaker 5: And it's not just because your high IQ, but your
Speaker 5: equ is also very strong. But I've always read just
Speaker 5: someone who has a great nose for great talent and
Speaker 5: deal flow. Where did you learn that from and what
Speaker 5: attributes do you think you know is the biggest payoff.
Speaker 3: For you there?
Speaker 1: Thank you for saying that. I mean to me, it's
Speaker 1: all intuition and psychology, you know, we're going through this
Speaker 1: right now. With there's a company, a's a person who
Speaker 1: runs it very successful. They own one hundred percent of it.
Speaker 1: And you can look at the numbers and you look
Speaker 1: in the business plan, you know, and at the end
Speaker 1: of the day, that's going to get you so far.
Speaker 1: But ultimately, can you work with that person do they
Speaker 1: have what it takes to win when you're alone with
Speaker 1: them and ask them questions about psychologically, how does this
Speaker 1: process feel to you? Are you excited about it, you're
Speaker 1: nervous about it? Are you selling me in this process?
Speaker 1: Or are you completely transparent and open about And I
Speaker 1: think you just learn those reps just through human intuition
Speaker 1: and also communication. Ultimately, ninety five percent of everybody's job,
Speaker 1: maybe not athletes. I don't know. Is storytelling, which is sure,
Speaker 1: it's when we're sitting down and saying and you know this,
Speaker 1: Alex very well from all the successful businesses you've been in.
Speaker 1: But if you get someone to invest with you, you
Speaker 1: are showing them numbers, but you are telling them a story. Right,
Speaker 1: If you are trying to convince somebody to take your
Speaker 1: money to invest in them, you are telling them a story.
Speaker 1: Our entire job is storytelling.
Speaker 4: So take us back to twenty ten, because you know
Speaker 4: you mentioned Peter Turnant like unbelievable career works for Ruper Murdoch.
Speaker 4: You guys sort of strike out on your own, you know,
Speaker 4: three of you to sort of do this, and there
Speaker 4: are some interesting choices you make, one of which is
Speaker 4: you're going to create this holding company that kind of
Speaker 4: takes away some of the traditional, candidly like barriers and
Speaker 4: obstacles that you would face as an investor. So talk
Speaker 4: to us about some of those key decision because it
Speaker 4: feels like it leads you towards maybe different investments then
Speaker 4: you would have otherwise pursued.
Speaker 1: Yeah, I think there were two things that we thought about.
Speaker 1: One was structuring ourselves as a holding company not a fund,
Speaker 1: which may seem like a technical point. I think as
Speaker 1: a fund, you raise money from a lot of different investors,
Speaker 1: you have to invest it over a specific period of time,
Speaker 1: and you have to exit over a specific period of time.
Speaker 1: We wanted way more flexibility. Most funds are investing between
Speaker 1: ten and twenty companies in one fund. If we just
Speaker 1: wanted to do four investments, if we wanted to hold
Speaker 1: on to something longer, if we didn't want to have
Speaker 1: to exit something if we wanted to put forty percent
Speaker 1: of our capital into one business. Those were things we
Speaker 1: felt were important. The second thing is we said to ourselves,
Speaker 1: you've got the big private equity firms Blackstone, kkar Apollo, Carlisle, Goldman,
Speaker 1: Sachs's investment business. We're never going to compete with them
Speaker 1: on capital never. Then you have the early stage investors Benchmarin, Sequoia, Excel.
Speaker 1: We're probably never going to compete with them in terms
Speaker 1: of being great venture cat they're exceptionally what they do.
Speaker 1: There is this lane, and I think we've done a
Speaker 1: decent job of carving that lane out where you have
Speaker 1: a mid sized company. They're too small for Blackstone, they
Speaker 1: require way too much work and way too much involvement
Speaker 1: for a traditional venture capital firm, and they need somebody
Speaker 1: who operationally can help them. You know, we get asked
Speaker 1: all the time, who are competitors. I just don't know
Speaker 1: anybody else who's going to walk into Dave Portnoy and say,
Speaker 1: all right, Dave, like we'll buy fifty one percent of
Speaker 1: your business and do a lot of the work to
Speaker 1: serve you. In terms of hiring a CEO, hiring a
Speaker 1: management team, moving to the whole office to New York,
Speaker 1: supporting your vision, et cetera. And that's what we've done repeatedly.
Speaker 1: And it's just a lane that no one else seems,
Speaker 1: very few others seem to play in.
Speaker 4: I mean, the other thing, key decision, it feels like
Speaker 4: you make. We all have a lot of friends in
Speaker 4: the private equity world that like they sort of say
Speaker 4: they're going to do It's like, no, no, no, we're investing
Speaker 4: in people, We're gonna do this. But like at the
Speaker 4: end of the day, because of all those things that
Speaker 4: you said, because like the fund has a life, you know,
Speaker 4: they've got a lot of investors to answer to, they've
Speaker 4: got a certain structure. They may want to do that
Speaker 4: even but they're not really able to do You think
Speaker 4: that's a fair comparison.
Speaker 1: Yes, with Dave we Hada deal, we're never get involved
Speaker 1: in this creative. With Reese Witherspoon, we built Hella Sunshine
Speaker 1: with and for her. Ultimately she sold that to Blackstone,
Speaker 1: never going to get involved in the creative. We're the
Speaker 1: only outset investor in Peyton Manning's business, never going to
Speaker 1: get involved in the creative. Were the only outsid investor
Speaker 1: in Questlove's business. Never get involved, and it's just we're dead.
Speaker 1: The minute we say you know what, I actually think
Speaker 1: you shouldn't have said that. You know, individual abarc it's over.
Speaker 2: So how do you pick those people?
Speaker 1: Well, I think that there are three things. One is,
Speaker 1: it has to be a person who has a passionate audience.
Speaker 1: The first time we saw the Google analytics for Dave Portnoye,
Speaker 1: we fell for chair. You know, when we looked at
Speaker 1: Reese Witherspoon's instagram, we fell off the chair. That's one
Speaker 1: piece of it. The second piece of it is it's
Speaker 1: to be that person's idea. So it was b Reese's idea,
Speaker 1: it was Peyton's idea, it's Dave's idea. It's not their agent,
Speaker 1: their manager, the representatives saying, hmm, there's a big opportunity
Speaker 1: in tequila. I think you represent that lifestyle. Why don't
Speaker 1: you do it? Tequila brand's got to be that person's idea.
Speaker 1: And the third thing, and this might be the biggest,
Speaker 1: that person has to show up. The first time somebody
Speaker 1: called us about Reese said hey, b Reese has this idea,
Speaker 1: and we said, okay, Like I've seen this before, you know,
Speaker 1: is she into it? Seven am? Breakfast the next day
Speaker 1: Porten I did one hundred percent the negotiations. Peyton Manning,
Speaker 1: you know, shows up is their texts, email, is on
Speaker 1: Instagram late at night. They're all looking for what influencers
Speaker 1: are out there. They have to show up themselves. And
Speaker 1: I think those three things have been the recipe for
Speaker 1: what works.
Speaker 4: You know, Jesse, when you talk about sort of the
Speaker 4: competitive landscape, but I'd sort of think back to even
Speaker 4: you describing how you start your careers sitting in trucks
Speaker 4: and counting stats and things like that, and it takes
Speaker 4: me to the present day in the media world, and
Speaker 4: specifically the sports media world. You know, we're looking at
Speaker 4: an NBA right steal that's being negotiated. We've seen all
Speaker 4: these records, you know, being broken over and over again.
Speaker 4: We were talking Alex and I earlier about what's going
Speaker 4: on in the college sports landscape. As you think about
Speaker 4: the sports media landscape at this point, how do you
Speaker 4: characterize it at this point and what should we be
Speaker 4: looking for sort of around the corner.
Speaker 1: If you're a league or a team, the thing you
Speaker 1: want always want is however many bidding packages you have
Speaker 1: to sell. You want one at least one more buyer. Yeah,
Speaker 1: and the NBA has that right now, you know. And
Speaker 1: I think the challenge and the concern with some of
Speaker 1: these leagues that have sold so many different packages so
Speaker 1: many different places, is some of those buyers may go
Speaker 1: away soon. So will CBS still be there where there'll
Speaker 1: still be for broadcast owts. I don't know. That's an
Speaker 1: interesting thing, and I think it was brilliant for some
Speaker 1: of these leagues to put in these long term deals
Speaker 1: so they have that guaranteed money for a period of time.
Speaker 1: The second thing is I think the college landscape is
Speaker 1: most ripe for disruption. I mean, it is complete chaos
Speaker 1: right now, complete and we're deep into it in a
Speaker 1: variety of different ways.
Speaker 3: The schools are.
Speaker 1: Paying for players, the conferences are playing for players, the
Speaker 1: sponsors are paying for players, the alum are paying for players.
Speaker 1: All of a sudden, you go from one year to
Speaker 1: this school, then you go to that school the next year.
Speaker 1: It's chaos and that has got to change. So I
Speaker 1: think the biggest opportunity in sports media, I believe, just
Speaker 1: given the appeal of college football and how disruptive that
Speaker 1: the whole space is in college.
Speaker 3: So Jesse.
Speaker 5: You know, in twenty fifteen, the last two or three
Speaker 5: years of my career, I joined Fox and Eric Shanks
Speaker 5: brought me in and John nt The one regret that
Speaker 5: I said, I said, boy, I wish I would have
Speaker 5: done this rookie year to really understand the landscape of media,
Speaker 5: that they're not my enemies, that they're a bridge to
Speaker 5: the consumer. And in New York I kind of played
Speaker 5: everything very tight. Going back to your career, you started
Speaker 5: Fox and CBS. How do you think working with people
Speaker 5: like Shanks, John Madden, how has that shaped and helped
Speaker 5: your career over the last few decades.
Speaker 1: Yeah, I think Fox in particular, there was something fascinating
Speaker 1: about them, where look, the CBS, ABC and NBC had
Speaker 1: football for however many years, right, and they said, you
Speaker 1: know what, actually I don't know where the first down
Speaker 1: line is. It's a little bit hard to see. Why
Speaker 1: don't we put a yellow line? Can we actually put
Speaker 1: the microphones closer to the field that make them louder?
Speaker 3: Can we?
Speaker 1: Actually? They were, by the way, the first one to
Speaker 1: do the Fox box in baseball, which is like where's
Speaker 1: the runner going right?
Speaker 3: And that was David Hill, right, David Hill totally.
Speaker 1: David Hill had Jerry Glanville, I remember, you know, they
Speaker 1: just were like, we're gonna turn it more into entertainment, right,
Speaker 1: and they changed directly. TV changed, you know, in many
Speaker 1: ways when they get out of market. Games and technology
Speaker 1: has always changed the viewing experience. I do think the
Speaker 1: one thing I would say about the NBA, I think
Speaker 1: oddly baseball has done a decent job. That's recently with
Speaker 1: miking the players. I think if you look at some
Speaker 1: of the broadcasts, the quality has better. I think the
Speaker 1: NBA has a long way to go on changing how
Speaker 1: it looks and feels when you watch a game, it
Speaker 1: doesn't look nearly as different as to ten or twenty
Speaker 1: years ago. That's a sport in particular, where I think
Speaker 1: that they could increase the production value. They've done a
Speaker 1: decent job with putting the microphones in the huddle. I
Speaker 1: think that helps look. People are looking for something new
Speaker 1: and fresh and loud and energetic. They're looking for technology
Speaker 1: to be integrated. They're looking for personalities, and I think
Speaker 1: Fox what it taught me at least was you know
Speaker 1: that that stuff matters, and we'll get an audience.
Speaker 4: Okay, so let's talk a little youth sports if we can.
Speaker 4: It's something Alex and I talk about all the time.
Speaker 4: He obviously came up through the system as it was
Speaker 4: as a amateur and then professional athlete. I actually am
Speaker 4: heart of a college athlete, so I experienced the whole
Speaker 4: club world. And we know Josh Harris and David Blitzer
Speaker 4: really well what they've done with Unrivaled and getting together
Speaker 4: with Cal Ripkin and his brother Billy Ripkin to form
Speaker 4: this company. You guys come into Unrivaled as a big investor.
Speaker 4: Tell us about how that came about and how you
Speaker 4: go about assessing something like that.
Speaker 1: Yeah, we've had two themes. We're very theme driven in
Speaker 1: how we go about investing. And by that, I mean
Speaker 1: we say, you know, eight years ago we said sports gambling.
Speaker 1: Seven years ago we said podcasts. A couple of years
Speaker 1: ago we said, there are two main themes that we're
Speaker 1: interested in. One is you sports. The other happened to
Speaker 1: be sort of European soccer, and that led to an
Speaker 1: investment as well. And here's what we do. We assign
Speaker 1: a team, multiple different people, and that team's job is
Speaker 1: to go out there and fund every youth sports company
Speaker 1: in the United States of America, within every sport, within
Speaker 1: every part of the value chain, and then over time
Speaker 1: you start to winnow down you're like, you know, I
Speaker 1: think this part of the value chain is interesting. This
Speaker 1: part isn't interesting, Like we concluded. You look at baseball
Speaker 1: as an example, the little league level really hard to
Speaker 1: enter into. It's nonprofit, it's mom and pop really hard
Speaker 1: to enter into. You know, you look at don't should
Speaker 1: we get into the business of making bats and balls?
Speaker 1: Really hard to get into that business. You look at
Speaker 1: premium experiences and you're like, I have sadly a stratification
Speaker 1: of wealth in the world that creates a class of
Speaker 1: people who have increasing amounts of discretionary income who also
Speaker 1: want whatever that they could do to enable their child's
Speaker 1: progression academically, athletically, etc. And are looking for premium experiences. Look,
Speaker 1: Josh and David are the two best or two other
Speaker 1: best you know, investors and people out there to partner with.
Speaker 1: And they had one asset which was incredible, which is
Speaker 1: within baseball. Two assets within baseball, Cooperstown All Star Village
Speaker 1: taking place right now by the way, you know, thousands
Speaker 1: of kids over the summer having a great experience. And
Speaker 1: they had these cow Ripken weekend tournaments. Yeah, by the way,
Speaker 1: not in New York and Baltimore, in LA and Philly,
Speaker 1: in Pigeon Forge, in Aberdeen, you know, all around the
Speaker 1: and people go and they get to like play baseball
Speaker 1: in a field that looks like Fenway or Wrigley. Unbelievable experiences.
Speaker 1: We known them, they believe, I think, I mean, you
Speaker 1: should ask them that there was value that we could
Speaker 1: provide on the media content management side of it. And
Speaker 1: we came in and bought a third of it. We're
Speaker 1: all equal partners. It's a great business in and of itself,
Speaker 1: and I think there's a huge opportunity to grow the
Speaker 1: baseball business. But beyond that, take football. We just bought
Speaker 1: seven football fields right next to Canton, Ohio. There is
Speaker 1: no equivalent of the Cooperstown All Star Village experience for football,
Speaker 1: you know, and the plan is on those seven football fields.
Speaker 1: Why can't over the summer, whether it's flag football or
Speaker 1: seven on seven for girls and boys, have a similar
Speaker 1: type of experience. There should be a similar type of
Speaker 1: experience in all sports. And kids aren't going to stop
Speaker 1: playing sports. Parents are not going to stop spending money
Speaker 1: to enhance and enable their kids. And I think it's
Speaker 1: just the single most exciting opportunity in sports today for
Speaker 1: us is the use sports.
Speaker 5: So Jesse, when I think about my real estate business,
Speaker 5: I've been doing it for over twenty years.
Speaker 3: We do two things.
Speaker 5: We buy, we fix, we refine, or we buy we
Speaker 5: fix it sell. So naturally for you guys, you know
Speaker 5: you're in the business of RIRI and return capital to
Speaker 5: your LPs. When you think about the next steps, two questions.
Speaker 5: One do you ever see a world where you can
Speaker 5: get the leagues to partner with you as they can
Speaker 5: control the next generation of great athletes? And two, what
Speaker 5: is a possible exit if it is not the league's
Speaker 5: is it going public?
Speaker 3: Is it a blackstone? How do you look at that?
Speaker 1: Yeah, so one hundred percent on the leagues. I mean,
Speaker 1: you know, the NFL currently has a flag football program.
Speaker 1: You know, the NBA does a lot in use sports.
Speaker 1: The basketball youth ecosystem is interesting because it's got very complicated,
Speaker 1: it's effectively professional. You know, minor leagues with AAU. The
Speaker 1: leagues being part of this would be great. Every league
Speaker 1: being part of each of these things would be phenomenal.
Speaker 1: So that's your answer that we haven't done a deal
Speaker 1: today that has gotten as much positive where the inbounds
Speaker 1: afterward from investors, strategics, individuals, people, leagues has been as
Speaker 1: positives in terms of people being interested in co investing.
Speaker 1: So I think whoever ends up buying it, I think
Speaker 1: that the way we have to think about is let's
Speaker 1: build a great business and the rest will take care
Speaker 1: of itself.
Speaker 3: You know.
Speaker 1: I think if you start thinking of trying to engineer
Speaker 1: the exit multiple years in events, you'll end up screwing up.
Speaker 1: Just build a great business, and great businesses end up
Speaker 1: working out and Jesse.
Speaker 4: One of the things that Alex and I have talked
Speaker 4: a lot about was this notion of, yes, you have
Speaker 4: this strata that we're fortunate to be a part of
Speaker 4: that can afford you know a lot of these club
Speaker 4: teams and travel teams.
Speaker 2: And all that different things. How do you create.
Speaker 4: These businesses and grew these businesses so that you can
Speaker 4: widen the access and widen the aperture so that you know,
Speaker 4: more people can take part of this. I take your
Speaker 4: point about like local fundraisers and things like that, but like,
Speaker 4: is there a mechanism by which these can be a
Speaker 4: little more accessible as these sports get bigger and bigger.
Speaker 1: One. I mean, I actually a different way to answer
Speaker 1: that question. I've thought about, like what should be done
Speaker 1: to fix baseball? Yeah, you know what I would do
Speaker 1: to I mean there's a lot I have a lot
Speaker 1: of use on how to fix baseball.
Speaker 3: Tell us tell us.
Speaker 1: One is, each team should commit thirty million bucks. I
Speaker 1: don't know, thirty five million bucks, which, by the way,
Speaker 1: you do the math on that and you quickly get
Speaker 1: to a billion dollars capital. Right, it doesn't have to
Speaker 1: be all front to build the most state of the
Speaker 1: art baseball fields in inner cities across the country. Put
Speaker 1: coaches there, put you know, ex players there. But you
Speaker 1: know what I also you should do there, have after
Speaker 1: school programs, so you know, moms and dads and single
Speaker 1: moms who are working who can't pick up their kids,
Speaker 1: send them to that place, do their homework, and get
Speaker 1: them food. Like you want to get a younger generation
Speaker 1: that's more diverse in America back into baseball, have their
Speaker 1: mom say, you know what you're doing after school today?
Speaker 1: You're going there and you're playing for three hours and
Speaker 1: you're going to those types.
Speaker 3: Of things.
Speaker 1: All right.
Speaker 4: So we literally could talk to you all day, but
Speaker 4: we want to be conscious of your time. We do
Speaker 4: like to do a little rapid fire with all of
Speaker 4: our guests, Jesse. So all we say is keep it tight.
Speaker 4: What's the best piece of advice you've received on deal
Speaker 4: making or business?
Speaker 3: Be honest, what's the best deal you've ever worked on?
Speaker 1: Barstool?
Speaker 4: What's the deal you wish you'd been a part of.
Speaker 1: How long do we have? God, that's a good question.
Speaker 1: I think any of those NBA teams that were bought
Speaker 1: when Blitz bought the Sixers and that sort of wave,
Speaker 1: that wave which just I remember, by the way, as
Speaker 1: I coled me, we were selling the we we're in
Speaker 1: an arbitrator on a deal where the Atlanta Hawks owners
Speaker 1: were Yeah. I mean that was like they couldn't give
Speaker 1: the franchise away. I'll tell you the other deal. In
Speaker 1: twenty thirteen, we came this close to buying Hulu for
Speaker 1: a billion three wow, which, yeah, that one would have
Speaker 1: been good.
Speaker 5: So, Jesse, what's your walk up or hype song before
Speaker 5: a big meeting or a big negotiation?
Speaker 3: Oh?
Speaker 1: God, you know, the honest to god truth is, I
Speaker 1: don't have one, but it probably would be white noise. Okay,
Speaker 1: it would just be white noise, just to block it
Speaker 1: all out, just to block it all out.
Speaker 3: Yeah, all right.
Speaker 4: So what's one mistake that everyone should avoid in negotiations?
Speaker 1: And I learned this the hard way many times. But
Speaker 1: when you're in a negotiation and somebody proposes something to
Speaker 1: you and you know there's a list of things that
Speaker 1: they're going to go through, just wait until you hear
Speaker 1: everything on because if you respond to that one thing,
Speaker 1: you may be prepared to give that thing up. But
Speaker 1: wait until you see what the full thing is, so
Speaker 1: you can go back and the thing you were prepared
Speaker 1: to give up when you've done it in totality, seems
Speaker 1: like more of a concession than it does.
Speaker 3: In the moment.
Speaker 4: Oh that's good. That's really good. That's really good, Alex.
Speaker 4: Anything else for our friend.
Speaker 5: Well, I just want to give Jesse a compliment because
Speaker 5: I said what I meant both before he jumped on
Speaker 5: and when he was on. I think Jesse's a type
Speaker 5: of investor that is not all or nothing. I do
Speaker 5: think that he thinks about the other side. He thinks
Speaker 5: about the long term partnership, and he also is willing
Speaker 5: to leave a little bit on the table, and I
Speaker 5: can't say that for every investor. And Jesse, as far
Speaker 5: as white noise, try playing in New York for fifteen years,
Speaker 5: you get planning.
Speaker 4: Yeah, all right, Jesse, thank you so much, Thank you, Jesse.
Speaker 4: It's really fun saying.
Speaker 1: All right, all right, take care of cheers.
Speaker 4: The Deal is hosted by Alex Rodriguez and me Jason Kelly.
Speaker 4: This episode was made by Victor eveyas Stacey Wong, Annamasarakus,
Speaker 4: and Lizzie Phillip Arth. The music was made by Blake Maples,
Speaker 4: Brendan Francis. Neonham is our executive producer. Sage Fauman is
Speaker 4: the head of Bloomberg Podcasts. Additional support from Kelly Lafarier,
Speaker 4: Ashley Honig, Rachel Scaramzzino, and Elena Los Angeles. If you
Speaker 4: have a minute, subscribe, rate and review our show. It'll
Speaker 4: help other listeners find us.
Speaker 2: Thanks so much for listening. See you next time.