Dealmakers In Sports: A Good Time To Be In The Game
By Abe Madkour and Ross Nethery
At a Dealmakers in Sports conference, you’d expect a lot of talk about investments, equity, return and capital. And there was plenty of that this week at SBJ’s one-day conference at the JW Marriott Essex House in New York. But there was also a consistent theme echoed among the team owners on the speaker roster: Wes Edens, Larry Lucchino, and Zygi and Mark Wilf. What we heard from them was that for teams to be successful, they must be part of the fabric of their community and serve the fans. It was interesting to hear much of the discussion – even from the next gen of owners, Eric Eisner and Zach Leonsis – focus on going back to listening and serving fans, and being positive stewards of the community. Lucchino said owners must love the sports that they own to be truly effective in serving the community. “They’ve got to care about the sport,” he said, and “understand the importance of the game to the city, to the fan base, to themselves.”
CASUAL EFFECTIVENESS: Edens is clearly a whip-smart, forward-thinking executive. The co-owner of the Milwaukee Bucks and Fortress Investment Group has a quiet, unassuming style, speaking softly but effectively. During a one-on-one interview with Inner Circle Sports’ Rob Tillis, Edens talked about growing up on a ranch in Helena, Mont., his affinity for skiing, going to college in Oregon and then starting in the financial world with Lehman Brothers. While many financial executives have a reputation for being tough and almost ruthless, Edens comes across as mellow, super-smart and humble. Maybe it’s the Montana upbringing. Sports clearly is a different world for Edens, as he admitted, “It’s the chattiest business in the world. There are no secrets in this business.” He said he sees great potential for the NBA both in Africa and in reaping the benefits of sports betting. Despite coming across as a chill person, Edens stressed his competitive nature and said he won’t be happy until he’s lifting the Larry O’Brien trophy for a Bucks NBA championship.
COMMON REFRAIN: The NBA’s Mark Tatum, during a panel discussion with other deputy commissioners, echoed Edens’ bullish outlook on the NBA’s international growth potential. Tatum several times mentioned the possibility of placing a G League team in Mexico City, the league’s continued interest in growing the game in Africa and how NBA China is now valued at more than $4 billion.
THE ‘LL’ SHOW: Few speakers have been as forthright and entertaining as longtime baseball executive Lucchino, who talked about his plans to relocate the Pawtucket Red Sox to Worcester, the memories from bringing iconic ballparks to Baltimore and San Diego, and the process of renovating Fenway Park. Lucchino brought a bag of swag and some signed baseballs that he handed out to people who asked questions, at one point walking from the stage into the audience to answer questions and distribute gifts.
He was also involved in one of the more humorous moments of the day. SBJ moderator Abe Madkour, who once interned for the Baltimore Orioles when Lucchino ran the team, asked about public money going into the new Triple A ballpark Lucchino is building in Worcester, Mass. Envision this conversation with both men trying not to break into laughter.
Madkour: “The state is giving you how much toward that $90 million?”
Lucchino, after leaning over to punch Madkour on the arm: “They’re not giving us anything, Abe.”
Madkour: “Don’t hit me, Larry.”
Lucchino: “They’re investing with us.”
Madkour: “Investing. Sorry.”
Lucchino: “They’re investing with us in a downtown redevelopment process.”
Madkour: “Of course.”
By the way, read the commencement address Lucchino gave to BU’s Class of 2008. Worth your time.
POWER LUNCH: Bruin Sports Capital’s George Pyne told a story of his last day at NASCAR. “I went to lunch with Bill France and Jim France – two billionaires,” he said. “Where do they take me for lunch after working for them for 11 years? They took me to Steak ’n Shake. At Steak ’n Shake, I asked Bill and Jim, ‘Could you give me some advice?’ In the way only Bill France could say it, he said, ‘You’ve got to learn when to squeeze and when not to squeeze. It was great advice.’” Madkour, who was conducting the interview, asked, “So, George, do you know now when to squeeze and when not to?” Pyne: “I’d like to. I’m not perfect at it.”
POLITICAL FATIGUE?: Are the NFL’s TV ratings rising because people are exhausted by political turmoil and turning to sports? That’s at least part of the reason, theorized Vikings owner Zygi Wilf during an appearance on stage with his brother, Mark. After two years when the presidential election and player protests caused some to reject the NFL, “People are getting tired of the politics now and they are turning on the TV and watching sports,” Wilf said. “There is nothing better to distract than sport.” After his comment, there was a soft round of approving applause in the ballroom.
MAKING A DIFFERENCE: Teall Capital’s Ben Sutton founded the private equity firm in ’17 with the goal of serving as “subject matter experts” to help grow businesses in the college space. He pointed to Tailgate Guys’ explosive growth since Teall Capital got involved as a major success story. The company, which organizes fans’ tailgates, had six partners when Teall Capital made an undisclosed investment for 25% of the organization in early ’17. It now has more than 40 event spaces across the country. “They are drinking from a firehose now,” Sutton said.
WINNING FORMULA: Former NBA player Baron Davis, current professional lacrosse player Paul Rabil and Mastry Inc. Founder & Managing Partner Rudy Cline-Thomas discussed the growing trend of athletes becoming entrepreneurs in one of the most buzzed-about sessions of the day. Davis said that because most of the athletes who become investors do so without a degree in business or finance, they rely on what made them successful on the court or field. “In our sports, we’re taught to be innovative, we’re taught to outwork the opponent, to practice,” Davis said. “All these things are disciplines in business.” But this definitely isn’t the right path for everyone. “It sounds sexy, but not all athletes care,” Cline-Thomas said. “For a lot of them, they make so much money playing the game that they play and earning the money that they do, it’s enough for them.” Rabil also touched on his heavily anticipated plans for the Pro Lacrosse League.
SEEN AND HEARD: Sutton hosted about 20 people the night before the conference at Aretsky’s Patroon on 46th Street. Guests included members of Teall’s staff and Sutton’s investment team, as well as Turner’s David Levy, The Montag Group’s Sandy Montag, Big East’s Vince Nicastro, and SBJ’s Madkour and John Ourand. … By the way, do you know what “TEALL” stands for? “Touch ’em All.” …. Inner Circle Sports’ Steve Horowitz dined with English Football League’s Shaun Harvey and Donald Dell at Avra on 60th Street the night before the event … Tatum has been a road warrior and was in Senegal, Africa, on Monday visiting an NBA Academy and came right back to speak on a morning panel.
QUOTES OF THE DAY:
“Mark, you’re seemingly doing one a month.” — Proskauer’s Joe Leccese, tongue-in-cheek to MLS’s Mark Abbott when discussing franchise expansion.
“I don’t know who is going to answer that.” — Abbott, with a laugh, when asked about the division of work and roles between deputy commissioners and their bosses, the league commissioners.
“Did I say no or did I say hell no!” — Sutton, when asked whether college athletes should be paid.
“He is not afraid to put me in my place from time to time.” — Monumental Sports’ Zach Leonsis, on working daily with his dad, Ted.
“I should probably say my dad.” — Zach Leonsis, when asked what sports executive he admires the most.
“Make money. That’s what’s most important.” — Shamrock Capital’s Alan Resnikoff, on his investment strategies.
SOCIAL ANIMALS: Thanks to everyone who contributed to the social conversation around the conference. The hashtag #sbjdealmakers had 58 mentions on Twitter and more than 600,000 impressions. Among the tweets that caught our eye:
@Blake_Lawrence: Always enjoy the top-down conversations on the state of sports and the future of the industry. Major topics today include sports betting, OTT solutions, fan engagement.
@LTWPhilly: "Everyone always wants to talk about the Globetrotters" - Love this clip from #SBJDealmakers Conference today - proud to have worked for @Globies brand during both the Shamrock (and) Herschend Family Entertainment years. (Here’s the clip she was referring to: Alan Resnikoff on investing in the Globetrotters.)
@23_Capital: Great to hear Shaun Harvey here at #sbjdealmakers talking about increasing ownership trends in EFL teams - expecting more US investors to pile in to the lower leagues!
@sjcarmike: Great to listen to friend and longtime boss Bill Daly at the @sbjsbd #sbjdealmakers today in NYC. Much respect.
@Blake_Lawrence: Always enjoy the top-down conversations on the state of sports and the future of the industry. Major topics today include sports betting, OTT solutions, fan engagement.
@vibhormvic91: Deputy commissioners of the @NBA, @NHL and @MLS in one panel at the #sbjdealmakers. How much better does it get? Thank you, @sbjsbd
LET’S GO TO THE VIDEO: We partnered with Grabyo this week to provide video content from the conference that we posted on our social media channels and in Sports Business Daily. You can check out all of the videos by visiting our SBJ YouTube page. Grabyo provides technology that allows us to quickly clip small segments from a panel or presentation and easily post those videos to a variety of channels. You can find out more about Grabyo by clicking here.
Here are the top three videos we posted from the conference:
— “Successful companies are built off of people, not Excel spreadsheets.” @PremierLacrosse's @PaulRabil on how to evaluate potential investment opportunities.
— "Did I say no or did I say hell no?” @BenSuttonISP on
whether or not college athletes should be paid.
— Zygi and Mark Wilf discuss their vision when purchasing the @Vikings.
NEXT UP: We’ll close out our 2018 conference slate next week with a return to New York for the Intercollegiate Athletics Forum. We’re looking at a big crowd for a top lineup of conference commissioners, ADs and other industry execs. We hope to see you there!
