00:00 Speaker A

NFL team valuations. As you know, of course, they have surged, Steve, right? Uh, the Seahawks, they’re up for sale, right? What do you think explains that surge? You know, would you just talk it talking about scarcity, Steve? Is it media rights? And would you see these, Steve, as, yeah, these teams, are they trophy assets or no? You would say these are fundamentally very attractive investments.

00:23 Steve

A lot in that question. Let’s just go back and recognize that in the turn of the century, live sports, live entertainment became the lifeblood of, uh, corporate, you know, commercial, you know, they that when it comes to, uh, uh, what they what was going to sell was live entertainment. And the NFL was the was the leader. So last year, 80 of the top 100 TV shows rated in the country were NFL football games and the other 15 were college football games. I mean, football runs the world.

01:14 Steve

Uh, and so in that way, equity values have for the last 20 years gone up, uh, about a half a billion dollars a year in equity value every year, consistently, because of demand. And so, um, and then you want to say people that are now, the NFL’s now allowed, uh, minority stakes to come in from private equity, very limited number of elite private equity firms get to come in and and unlock some of that equity value that’s been so hard to to uh, to get at for generational families that have owned for, um, you know, NFL teams for many, many years. So you’ve got all kinds of things working to try to figure out what how to value and all the values are exponential at this point. And then you say, your question really is about, okay, if you’re investing today, what do you think about value valuation? And it’s just hard to think about AI is just going to push more humans for human, you know, interaction for for live entertainment. It’s just going to

02:22 Steve

I I I laughed at the valuations for a while and now I don’t laugh anymore. And it’s like, jeez, I mean, I don’t, does it go north from here? And it feels like, why not? And and as the NFL tries to get more global, the market starts to stream, that TAM gets bigger, like, I I don’t know. I don’t want to underwrite, I’m glad I’m not in the middle of the middle of the minority stakes business. But uh, there’s there’s a lot in there and it is it is a trophy. You look, you are a, uh, you know, you’re royalty. You’re American royalty if you own an NFL franchise. That’s just a fact.

02:59 Speaker A

Do you think, Steve, you could assess the value of an NFL team? I don’t want, I don’t want to say better, but would you approach is just sort of maybe differently than a traditional institutional investor?

03:19 Steve

Well, of course, I think that the product on the field is the look, I’m a I’m an ex-player. Like, I thought that was the game, right? And so, but the way that the NFL structured, which is genius, right, is that they they share all revenues equally. And so in a way, it is anti-competitive in that way. We know that the NFL environment is super competitive, but from an equity owner’s position, um, there’s the incentive to be excellent on the field is not pure. Like the most, what is the most fungible job in America, coach or quarterback in the NFL? What is the least fungible job in the NFL is the owner, equity owner. So it’s like there’s this disconnect in that way. And so how how I would underwrite the team, certainly, I would say, look, at the better teams on the field should be more worth more, but as it comes to pure underwriting, financial engineering, uh, it doesn’t matter as much, which is a little bit of a flaw in the system. Um, and oddly, like the New York Jets are I think the fourth highest value team in the NFL. And you say to yourself, wait, I’m a Jets fan, that does not compute. But yet, from an equity perspective, it does.

04:40 Speaker A

If a firm like yours, Steve, listen, I got to ask since you are an investor now, if a firm like yours, Steve, could own a minority stake in an NFL team, would that fit your firm’s model?

04:53 Steve

No, it doesn’t fit our model. Uh, and that’s, that’s probably okay. We’d have to raise another fund for specifically for that, which I’ve thought about because I, I would love to help generational ownership find, uh, you know, kind of better ways to to do business. And I think private equity can within the construct bring some expertise that’s necessary. So I’d love to do that and help, but I don’t have a fund to go do it right now. And valuations would be, for a player it’d be hard. I have to be honest with you. It’s like, would I pay $12 billion valuation for a 49er stake? Like, I would love to have that stake, but I just how would I underwrite that? And then part of it would be like, yeah, because it’s going to be worth 24 in another 20 years. So it’s a fascinating question that I I love chopping it up with you on national TV, but I’m I’m not, I’m not this set to be that guy right now.