Business of Soccer: Napoli Potentially Becoming Next $2 Billion Sports City

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1:20Podcasts, radio, news. This is the business of soccer. The appetite for soccer in this country is here to stay. The Global World Cup of 26 will bring just that, the globe, to the United States. Every four years, you know, there's this moment where the world wakes up to the incredible athletes that we have on the U.S. women's national team. There are more soccer games available to watch on television in the U.S. than any other country in the world. On soccer, or as I would call it, living in the UK, football is the biggest sport in the world. There's a gap in the market around women's soccer, and we're here to fill that gap.

1:55Bloomberg Business of Soccer from Bloomberg Radio. This is a special edition of the Bloomberg Business of Sports, the business of soccer. I'm Vanessa Perdomo-Maglione, and I'm diving in behind the scenes of the beautiful game as we get ready for the 2026 FIFA World Cup in just a few days. Now we're looking at all aspects of the business of soccer, not just the World Cup. We are looking at the global football market and the money behind the most popular sport in the world. Today we are joined in the studio by Matt Rosetta. He's the founder and managing partner of Underdog Global Partners, a private equity firm whose sports entities include Campo Basso FC and Napoli basketball.

2:32Welcome to the Bloomberg Business of Soccer, Matt. We're excited to have you in the studio today. And to kick off this conversation, just introduce us to Underdog and what your mission is there. Well, Vanessa, first off, thanks for having me. It's a pleasure to be here. In fact, it's crazy that the World Cup is just a week away. We were just talking about this before the episode. Absolutely nuts. It's like five years, six years just flashed before our eyes and it's here. So it's great to be here. My name is Matt Rosetta, as you mentioned, founder and managing partner of Underdog Global Partners.

3:00So we're focused, we're a private equity firm, as you mentioned, focused on the business of investing and operating undervalued sports assets. We have three subsidiaries. One houses our sports franchises. So we right now own four professional sports franchises, soccer and basketball teams all over the world. Our second is real estate. So we do a lot of infrastructure projects related to arenas, academies, sports-related real estate developments. And then we have an advisory subsidiary, which focuses on putting deals together for other private equity partners and high net worth and family offices in our network.

3:35We're also looking to jump into the sports journey, which now has become sports has become, as you know, better than anybody, a true asset class. And we're really proud to be part of it. I didn't expect to find myself at this stage in my career in the business of sports. My journey, I think, is a little unique. You know, as an operator, I started in marketing and media. I don't know if you want to get into that. Yeah, get into that. I mean, it's obviously very interesting how you get to the point where you then start investing into sports. Seems like you said it is as an asset class. So my background is actually on the media and marketing side, which being here in Bloomberg gives me a lot of a lot of motivation and brings brings you back to my old days.

4:10I used to spend a lot of time here when I had my agency. I started a media and marketing agency called North Six Agency in late 2009. It was actually named North Sixth Agency after North Sixth Avenue, which was the street where my grandparents, Italian immigrants, immigrated to here in Mount Vernon, New York, just north of the Bronx. And we just built, you know, we built a great business, put my head down, built the business from my basement, worked my butt off. And over the span of about a decade or so, we turned it into one of the top 50 independently held media and marketing firms, privately held media and marketing firms in the U.S.

4:42And I exited the business and wanted to just start doing something new. I couldn't retire. In fact, my family, my wife, my kids, there's no way they would let me retire. So I wanted to just dedicate my life to things I was more passionate about. It was a dream of mine to buy the soccer team where my grandparents immigrated from and kind of build this Cinderella story and build them back to a top club in Italy. It was 2019, 2020. So this was just when Ryan Reynolds was getting involved with Wrexham. And I was like, you know what? I think we could do a very similar thing out in Italy with this club called Campobasso.

5:17And that's how I got started in this. We wound up joining hands with some great partners behind me. Mark Consuelos, Kelly Ripa joined our project, Dan Doyle, Angelo Pasto. I mean, these are all guys who have really backed me for quite a long time now. And we just turned Campobasso into the Cinderella story. We took it from a fifth-tier amateur team. We won two championships, two promotions. Just this past season, we finished fourth in Sedia Chi. We were only a few wins away from a promotion to SETI-B, which for that fan base would be the first time in 40 some odd years they would be in the second tier.

5:49And that's how I got started in sports ownership. And then just like anything else, you build a network and you learn. And I started to study more of the business side. So my passion turned into more of an enterprising business entrepreneurial mindset. And we wound up acquiring other assets. And then we rolled all of these assets into what today is Underdog Global Partners. And for me, it's been an incredible journey. I mean, to wake up and get out of bed every day and love what I do and work in my passion comes with a lot of obviously it comes with the same pressures and stresses that anything else does.

6:19And I'm still learning in many ways, but I have great, great partners around us. And I tell my kids all the time, if you get out of school and you can spend you can spend every day of your life working in your passion, you've you've certainly done something right. And that's that's how I feel. Yeah, absolutely. I mean, like being able to especially, like you said, work in and by the team that your grandparents were from, about that and trying to build up club teams from a certain, like from the level five to level three to hopefully to Syria A at the time. Tell us about the business of building smaller club teams into hoping to grow them to the top level.

6:53Well, what I found quickly, Vanessa, was that a lot of the clubs in Italy, in Europe, not just in Italy, but in Europe, regardless of the level, they weren't commercialized properly. So on one hand, And the beauty of the clubs and the asset is that they're so rooted in their community and the culture. The culture is so incredible over there. It's visceral. It's passion. And you can't put a price on that. But on the commercial side, there was a lot of what I viewed as low-hanging fruit that just wasn't being optimized or prioritized properly. So, for example, building media rights, putting the games on streaming TV, merchandising.

7:30In our case, sponsorships. The Campobasso project for me was very interesting because there's about 300 ,000 people who live in that region in Italy, but there's 1.2 million immigrants from that region of Italy who live in the United States and Canada. So our vision and my vision for that project was really to export Campobasso into North America and use that as a way to engage fans and sponsors and really create a platform that represented the underdog, hence Underdog Global Partners, obviously. I thought it was just a really great platform that represented the underdog values and the underdog journey that my life represented.

8:07And I have so much – I have a debt of gratitude, obviously, to my grandparents and my parents who came here and sacrificed so much for me and for my family members. And I felt like this club in a small way could really represent those values. And just on the commercial side, none of those things, I think that storytelling and that there's a lot of media that goes behind that, that just wasn't being leveraged properly. So that was the first thing we concentrated on was just how do we tell this story in a way that engages fans that are not just soccer fans, but really can relate to this underdog journey and this immigrant journey that really brought me to the investment in the first place.

8:45And can you explain a little bit about the different tiers, the tier system? Obviously, I think when people think of, you know, promotion and things like that, obviously, we talk about Rex and like you had mentioned, and people kind of understand how promotion works. But what is the differences in the business at that, at those different points at those different tiers? So it's funny, Vanessa, because obviously, I'm an entrepreneur. So I'm sort of an eternal optimist. I'm, you know, you talk about risk tolerance, you know, I'm definitely on more of the more of the aggressive side of risk tolerance.

9:14So I always look at promotion relegation as a blessing because you can, in our case, like in Campobasso, you can go rescue a team or buy an asset that is extremely undervalued. It needs a lot of work, you know, because don't get me wrong, it takes a lot of work to get these clubs promoted and it's sports. So at the end of the day, there's no guarantees, but the upside, the upside is there. If you, you know, if you accomplish what you set out to accomplish and you bring the team up in tiers, you know, you buy an asset for, you X and two or three years later, that asset is worth 15 X. And it's incredible.

9:44But the flip side to that is the relegation side where I've seen just as many. In fact, I've seen many more stories of foreign investors, American investors go into these European clubs who maybe were in over their head. They didn't have the right network. They didn't understand the local, you know, cultural nuances. They didn't speak the language. They didn't know soccer, whatever, for one reason or another. And they wound up taking a team from the first or second tier. And then all of a sudden they pick their eyes up there, you know, they're open their eyes and two or three years later, guess what?

10:12They're in the fourth tier, the fifth tier, 90 % of their, the value of their investment was wiped out. So, you know, there's two sides to that coin. And I think just like anything else, I think you need really good operating teams. I think you need a very, I think you need a very deep respect and understanding of the local cultures and the local traditions. because sometimes when these American or foreign groups go into Europe, sometimes they don't prioritize the history of the clubs. And like in my case, you know, Italian is not my first language, but I have been fortunate. I speak it fluently and I've done probably, I don't know, 100, 150 press conferences now over the past five or six years in Italy.

10:47And every one of them has been in Italian, even though, you know, I struggle relative to I speak English. But, you know, little things like that, I think, are important to show the connection to the community and that you're there to respect them. You know, you're there to be of service to them and the community and the fans. And we were talking about this earlier. These are clubs that have been passed down from generation to generation to generation. And, you know, if you go in there and sort of elbow your way into these community based clubs with an overly commercial mindset, it can be a recipe for disaster.

11:17Yeah, absolutely. So, I mean, obviously you have that emotional connection to Campo Basso, but when you're looking at other assets, when you looked into acquiring the Napoli basketball team and other assets you're looking to, how do you look at those assets? What are you looking at when you're looking at them? What's interesting? How do you measure those risks so you don't end up, like you said, having 90 % of your investment wiped out? No doubt. Well, so when you talk about the Napoli basketball projects, that's our latest project that we're going into our second year of ownership. It's been successful beyond my wildest imagination for many reasons.

11:56I mean, we're a year into the investment and the team hasn't been in the playoffs for 20 years. We were one game away from making the playoffs this year. We're in the process of building a state-of-the-art arena, which will be one of the most prominent arenas in all of European sports. We're talking to the NBA about becoming an expansion franchise for NBA Europe. We're doing the same with EuroLeague. So for me, just as somebody who was looking at this investment beginning two, two and a half years ago, it's been an incredible journey. But the thing that interested me in that particular one was when you look at football, Vanessa, it's the primary sport in Europe, no doubt about it, right?

12:30So you can take a team like a Wrexham, in my opinion, or a team like a Campobasso, which are secondary markets or tertiary markets, depending on how you look at it. and you can build them into very viable assets because you're talking about the primary sport in the continent, right? In the case of basketball, basketball is growing faster than any sport in Europe. You have the NBA investing in Europe. You have EuroLeague putting a lot of resources into building their commercial platform. Now with the NCAA, there's becoming a player trading economy with these European clubs and these European players that never existed before.

13:06but nevertheless it still is it's a secondary sport still today so my thesis and our thesis at ugp when we looked at the monopoly basketball deal was let's go into a primary city in europe with a secondary sport whereas in soccer we were looking at it as a secondary city but a primary sport and that was really the thesis and then you looked at the multiples at the time basketball multiples were trading at you know anywhere from one to one and a half x revenue whereas soccer multiples or, you know, six to 10 X revenue, depending on, you know, what type of club you're looking at. So I felt like we could pick up an amazing asset on the backdrop of being, you know, being the fastest growing sport in Europe in a primary city that was exploding with tourism.

13:50And, you know, the America's Cup was just, just announced that it shows Naples as its host city and the Formula One is being rumored to be going there and the Amalfi Coast is in its backyard. So I was really looking at Naples as an incredible brand that could be exported internationally and could become a basketball platform for really, you know, there's 20 million Italian immigrants, and most of them identify with Naples being from southern Italy. So that's how we looked at that project. And I think the thesis was, we could pick this up at a discount. And even, you know, 12, 18 months since the acquisition, you look at the average multiple of a European basketball team, it's like four to five x revenue.

14:24So even just that alone, it's about, you know, four times what we paid for it. But the thesis was, if we're going to do a secondary sport, we're doing a primary city. If we're going to do a primary sport in the case of Campobasso, a secondary city could work out. And then obviously, we get into this Napoli soccer deal, which has been all over the headlines. We're no longer in, now we're in primary sport and primary city, which is a whole different thesis. Right. Exactly what I wanted to ask you about, Matt, as we're talking about, you know, Napoli and the city there. So James Horncastle by The Athletic had done this report recently that underdog was looking into investing into Napoli soccer, the Syria A team in the market.

15:02What can you say about your looking into the team? I would be lying if I said this was our vision at UGP and my vision from day one. But quickly after we bought the Napoli basketball asset, it became apparent to me that there was a much larger play to create something much, much bigger than even I and my partners at UGP, I think, ever envisioned. And that was to bring together basketball and soccer and other sports, by the way, for that matter, and create this multi-sport platform, powerhouse platform in Naples. And I think I can give you all the data points on why I think Naples is, in my mind, one of the most unique and valuable cities and brands in the world.

15:46And we were looking at this and saying, all right, we've got this basketball team. We have an arena being built. The number one club in this city is the soccer team. It's been here for celebrating its 100th year anniversary this upcoming season. Obviously, Maradona played there. It's a one-team city, which I think was very interesting. You go to a lot of European cities. London has like 20 teams. Madrid has several teams, Atletico and Real obviously being the primary tenants in that city. Milan has Inter and AC Milan. Roma has Lazio and Roma. Napoli just had one team. It was just Napoli. So I like the idea, and we like the idea at UGP of merging all of those assets together.

16:27And if you looked at, from a business side of things, if you look at soccer franchises in the world, three of the top four are multi-sport platforms. Real Madrid, number one. I think Man U is number two. And then three and four were Barcelona and Bayern. So we were just looking at all of that and saying, imagine if we had this multi-sport platform. We already have the basketball team. We have an arena behind it. We get the soccer team. And then obviously we would talk about investing significantly in the stadium and infrastructure and all that stuff behind it. And we felt like overnight, you know, we would be looking at one of the top 10 to 15 most valuable soccer brands, because even though basketball is, you know, primary soccer brand in the world.

17:06And then you look at it five, seven, 10 years out as you commercialize that brand. Naples has a massive, massive international community. In fact, Naples, believe it or not, is only the fifth most populous city of Neapolitans in the world. Think about that. Oh, interesting. And there's four million people in Naples. It's not like a tiny city. But if you look at San Paolo, Buenos Aires, I think Toronto. I'm not sure about Toronto. But Naples is actually the fifth most popular. There's four cities across the world that have more Neapolitans in those cities than in Naples. And Naples has four million people living there.

17:40So just to give you an idea of sort of what type of international potential we felt that brand had. And then I got to work. And then we spent six months getting to know who have so much respect for the De Laurentiis family. Aurelio De Laurentiis bought the club 20-some-odd years ago out of bankruptcy and now has built it into one of the top 30 most valuable soccer brands in the world. a perennial Champions League contender. And I went in there, you know, talking to him without any selfish interest at the time. I said, just, you know, if there's an opportunity for us to partner together, we have the basketball team, you have the soccer team.

18:14And then the conversations obviously evolved and materialized and turned into something more serious. And obviously can't talk too much about it, but we'll see where it goes. I think that's the interesting thing is, you know, that in the report, it had said the team was not for sale, technically. So you went into those conversations with the hope that you could do something together? Or did the conversations just evolve into, we would love to potentially buy this club? Well, I think the thing that we always came back to in our conversations, which I completely respected being, you know, remember Vanessa, like, you know, I was an entrepreneur who invested in sports because I was passionate about it.

18:52And then as a consequence of that, it's turned into an enterprise with my with UGP and the private equity firm that we're building. But I'm not, you know, I'm not some hedge fund manager who's scrutinizing spreadsheets and looking at numbers and saying, you know, the five to seven year exit is like, you know, I'm looking at this, I went into this, first and foremost, obviously, now we have a financial discipline and an enterprise behind us. But I went into this because I was passionate about it. And it was about my legacy. And going back to the conversations with the De Laurentiis family for Napoli, it was our conversations began about legacy.

19:26The numbers were always something if we get to that stage, we'll figure that part out. But you know, when you take a club, and I've seen it in Campo Basso, I've seen it now in Napoli basketball, you know, you pour your heart and soul as an operator and a president into these clubs, it's 25 hours a day, it's eight days a week, it's 366, it's literally you're working more than you believed you ever could work. And so I understand that the importance is legacy. And that was really the crux of most of our initial conversations was, we'll work the numbers out, but how do we figure out potentially a legacy for you?

20:01Taking this club in 2004 from bankruptcy, building it to where it is now, he can't just sell it to some fund who's going to say, look, five years from now, this thing's going to be worth X and we're going to flip it. He said it all along. He told me, he said, Matt, I have a responsibility to the 100 million Neapolitans across the world, most of whom are Napoli supporters and Napoli fans. If this club ever gets handed off, it needs to be handed off to the right person. So for me, I felt a great, deep responsibility and sense of responsibility to show that I'm motivated and I can take this club into the future and I can do everything that honors the tradition and the legacy that he's built.

20:43But also I can add maybe a layer of innovation and international appeal to the club that maybe it hasn't focused on for one reason or another. And again, at the end of the day, revenue means more investment in the club. More investment in the club means a more competitive product. So we're not talking about distributions and we're not talking about dividends. We're talking about increasing our revenue base, which will put us in a position to invest in the club, which then makes the club more competitive and gives back to the community, which is what they're all about. Mm-hmm. And when you're looking at, you know, if the deal does go through, what are those things that you're looking at that you want to, you know, maybe get into right away that you feel like maybe, like you were saying, were a little bit underlooked?

21:29They're undervalued right now or they just need a little bit more investment for the club? Well, the first Vanessa would be infrastructure. The Maradona Stadium was built in the late 1950s, early 1960s, I think. It's never really undergone any sort of considerable upgrades. They're talking about Italy competing for the 2032, I believe it is, European Cup. And stadiums are a problem in Italy all over the place. So Naples, obviously, it's the third largest city in Italy. Naples needs to be a host city. So the first thing we would do is, and we've already been discussing this, we've had pretty advanced conversations with the city of Naples, who's been incredible to us and the mayor.

22:08we would invest in infrastructure to really bring that stadium to become one of the modern day gems and jewels of European football. The club, for one reason or another, hasn't really invested in ancillary infrastructure, so youth academies, community centers, things of that nature. And you look at most of the football talent in Italy, it comes from southern Italy, comes from Naples, comes from Rome South, Rome and Rome South. But most of the talent there at the ages of 12, even before 12, ages of 10 to 18, they all leave to go to the north. So I think that's something we would look to change.

22:42We would really look to invest in. A lot of that begins with infrastructure just because they don't have the necessary fields and academies and infrastructure required to nurture that type of talent at a young age. So those are things we do. And then obviously the international appeal, Naples is an international brand. Naples, the Amalfi Coast, and Naples, all of these, Naples has now become, I believe, it's the youngest city in all of Italy by demographic. It's the number two fastest growing tourist destination, I believe in all of Europe, certainly in Italy, but I think it might be even in all of Europe.

23:14You have tons of capital and investment pouring into Naples. And look at our Campobasso. I love Campobasso. It's my baby. But Campobasso, the entire population of Campobasso is about 50 ,000. So just one area of Naples is like five, six times the size of the entire city of Campobasso. So when you think about just the opportunities around that, they're incredible. And if we would have done this 30, 40 years ago, obviously Naples, it was a different Naples back then. Naples now is, in my opinion, is one of the most beautiful and advanced and sophisticated and elegant cities in the world. And we're proud to represent it.