At the Nasdaq headquarters in Times Square on Monday, Sportico held its annual Invest in Sports New York event, bringing together big names across sports business. The event included new Orioles owner David Rubenstein, two-time Super Bowl winner Eli Manning, NHL commissioner Gary Bettman, The Kraft Group president Jonathan Kraft, Washington Spirit owner Michele Kang and many more.
The owners, executives and big names from the world of athletics expounded on several issues and trends related to money and sports—from the growing opportunities in women’s sports and youth sports to the introduction of private equity and sovereign wealth funds. They also stressed the importance of diversity in the owner’s suite and put a spotlight on emerging markets for talent and fandom.
Michele Kang on building Kynisca and DC as a sports town
Kang elaborated on her decision to build Kynisca as the first multi-team organization for women’s sports. She also spoke about how her Washington Spirit have broken through in D.C.’s crowded sports marketplace, countering the narrative that the nation’s capital is “a bad sports town.”
On encouraging further investment into women’s sports, Kang cited her company’s recent investment into IDA Sports, a women’s footwear company, and said “women’s sports can’t just take off because you’re buying teams, there are a lot of other things in the ecosystem that need to come along.”
PFL as first movers on sovereign wealth funds
Donn Davis (Professional Fighters League) and Danny Townsend (SURJ Sports Investment) talked about how their organizations came together in a time when few sports executives were going to the Middle East. The mixed martial arts upstart has celebrated its first-mover status, sort of speak, as more established sports organizations are having conversations with sovereign funds from Qatar, the UAE and Saudi Arabia. If leaders still have reservations about seeking those funds out of fears of geopolitical tensions, Davis said, “I have zero questions about the negative buzz. … In the last 18 months since all the noise in the marketplace, it’s all about how do I get a global industrial-strength investor.”
Eli Manning on his post-playing career and athlete investments in the NIL era
The two-time Super Bowl champion has built quite the post-playing career since retiring from the NFL, between his growing media commitments and building a portfolio with Brand Velocity Group. In a conversation with Lloyd Howell, the executive director of the NFL Players Association, Manning discussed the transitions he had to make through every stage of his athletic career and the at-home mentorship provided by both his father Archie and big brother Peyton.
The Giants legend said that one thing he’s appreciated over the years is that athletes aren’t always going for the “home run” investments but are more mindful of the best fits for their resources. “Nowadays, I don’t know if it’s social media, but athletes are talking about it more, and they’re starting their own companies,” Manning said. “They’re invested in sports teams. They’re more involved. They’re sitting in the calls, and they have a great team, and so they can make a great impact on some of these investments.”
Manning also gave his perspective on NIL, which has given young athletes more business insights at earlier stages in their career than their predecessors.
Howell, who came into the players’ union from the private equity industry, asked Manning about his own entry into PE, which began with “being a fly on the wall” in conversations with Brand Velocity. Manning flipped the script to ask Howell about the potential of the NFL moving toward a long-desired 18-game season. He also asked the union leader about the entry of private equity into the NFL, to which Howell replied that it’s been long overdue but it’s too early to assess exactly how the players themselves can participate.
West Africa, the Middle East and other emerging markets for sports investment
Investors are always looking for “the next,” whether it’s a team, a league or a geography where talent can be developed. In a panel discussion featuring veteran sports executives with international experience, each felt that investors will look to nations in Africa and the Middle East as fertile ground for the future of sports.
Cheick Sanankoua, the founder of Omega Sports Holding, pointed out that over the next 20 years, one-third of global youth will come from Africa, making the continent a hotbed for sporting talent. Alex Saratsis, the co-managing director for Octagon Basketball, agreed, saying that several nations there could produce “the next Giannis (Antetokounmpo), the next Joel Embiid.”
In speaking about the massive disparity in sports investment between the U.S. and Africa, Kojo Annan, the founder of A10, put a spotlight on the Summer Olympics, when he said that Stanford University had as many medalists (39) as the entire continent of Africa despite a population of 1.5 billion people. “Obviously, as much as we love Stanford, you can’t believe it has better supporting potential than the whole continent of 1.5 billion people, but I think it shows you what the opportunity is if we got a little bit of Stanford type of investment into Africa.”
The new kid on MLB’s block: David Rubenstein
In a humorous one-on-one conversation with Proskauer’s Jon Oram, David Rubenstein talked about the ongoing learning curve he’s on in the first year as the control person and owner of the Baltimore Orioles. Despite decades in law, government and private equity, the founder of the Carlyle Group said that investing in sports was as much a “feel-good” proposition as it was good business.
Rubenstein’s ownership group includes several limited partners, including Orioles legend Cal Ripken Jr. (also in attendance at Invest) and Grant Hill, whose father Calvin grew up in Maryland. Rubenstein is bullish on limited partnerships in the sports world, joking that “there are worst developments in the Western world than letting limited partners buy sports franchises.” He suspects that 10 or 20 years from now, most major league franchises will go public.
“Everyone watches women’s sports”
On the heels of Sportico’s RISE: Women’s Sports conference in October, three investors believe that capital needs to move in other arenas outside of the teams and leagues themselves.
Angel City FC co-founder Alexis Ohanian said the next big opportunity in the women’s sports space lies in brands, especially for those that have been unable to advertise in the crowded ad market.
Entrepreneur and one-time WNBA champion Fran Harris said that the full picture of women’s sports has not been fully realized until platforms invest in greater storytelling of female athletes. Ohanian believes that a women’s sports team will be worth $1 billion in the next few years. (At RISE, New York Liberty co-owner Clara Wu Tsai said she expects her team to be the first one that reaches that valuation.)
A Hall of Famer, a tech guru and a wealthy sports owner go to a Little League game
Cal Ripken Jr., David Blitzer and Sameer Ahuja are investing into youth sports in ways few others ever have before.
Where Ripken (and his brother Billy) saw his involvement in youth baseball as giving back to the game at the grassroots level, Blitzer saw a fragmented world in need of professionalization. Ahuja, who manages GameChanger for Dick’s Sporting Goods, talked about navigating the challenges of the coronavirus pandemic, helping the platform emerge to be one that streams more sports content than any company in the world.
With Yankees fans still smarting from the World Series, moderator Jamie Horowitz threaded the needle between Aaron Judge’s struggles and the foundational skills developed in youth sports. By the way, Ripken would love to play in an era when someone like Juan Soto could sign a $600 million deal.
The value of bringing color into the owner’s suite
The owners’ club, especially in the U.S., is overwhelmingly filled with well-resourced white men and their families. Yet in this new era of the sports industry, that club is slowly diversifying. Olympic gold medalist Dominique Dawes (Atlanta Falcons, Washington Spirit), Damian Mills (Charlotte Hornets, NC Courage, Carolina FC) and André Swanston (MLS Next’s Connecticut franchise) had different paths to team ownership, but all shared the desire to bring more individuals “who looked like them” into the executive suite.
Dawes, as one of only six black women with ownership stakes in the NFL, spoke about embracing the Atlanta community as well as believing that the owners’ suite should reflect the communities that they are a part of.
Gary Bettman on skyrocketing NHL team valuations and more
The longest serving commissioner in sports history, Bettman had a wide-ranging one-on-one conversation with Rob Tillis, the CEO of Inner Circle Sports. Bettman, the NHL commissioner since 1993, touted the success of recent expansion efforts, including Stanley Cup wins by the Vegas Golden Knights and both Florida franchises in recent years. He also touted the rising franchise valuations, which were released last week with a hockey assist from Kevin Weekes.
In an unexpected start to the conversation, Bettman recapped the infamous John Spanos fraudulent ownership bid for the New York Islanders, which compelled the NHL to revamp its vetting process of potential team owners.
Bettman also threw some cold water on the fever dreams of international expansion, recognizing already existing leagues outside of North America. “For us to be putting franchises on the continent, I think that’s maybe a bridge too far because there are professional leagues in Germany and Finland and Sweden, and I don’t think that they’d be thrilled if we started putting our own franchises there, putting aside the logistical issues of travel when you’re playing 82 games a season.”
Private equity’s smooth glidepath into the NFL
As the NFL’s decision to allow institutional investment created a long-awaited entry for private equity, Marc Lasry of Avenue Capital Group and Lyle Ayes of Verance Capital brought a wealth of experience to the conversation about what the funds can do for sports leagues across the globe.
Both agreed that the NFL, with liquidity across all 32 franchises, can provide the best entry point for major PE firms, with Ayes discussing his role in advising the league on guidelines for the firms.
Lasry, the former majority owner of the Milwaukee Bucks, discussed one of the pitfalls of NBA ownership: fans’ demand for owners to spend themselves into fleeting contention can over time make it less profitable to own a team.
Jonathan Kraft on MLS’ trajectory and limited partnerships in the NFL
From his stewardship of the NFL’s New England Patriots and MLS’ Revolution to his work on crucial committees for the NFL, Jonathan Kraft is one of the more active executives in American sports. Kraft also sits on the board of TKO, and he discussed how his fandom of the former WWWF (the precursor to the WWE) in his youth led to conversations with Endeavor about joining the board of TKO, which merged the wrestling promotion with the UFC.
Kraft also talked about soccer’s trajectory in the U.S., from the growing pains of MLS through the Revolution to the growth in the league’s infrastructure through soccer-specific stadiums and Apple’s landmark streaming deal. The son of Robert Kraft, the Patriots’ majority owner, Jonathan explained how limited partnerships in the NFL are primed for private equity at an institutional level and with family offices.
Sportico’s event was sponsored by Nasdaq, which is hosting the conference, Inner Circle Sports LLC, Proskauer, Arctos, Omega Sports Holding, GameChanger by Dick’s Sporting Goods, XO and Next League.
