Ice Cube on BIG3's New Season; Buss Family Sells Lakers at $10 Billion Valuation

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0:57I'm Carol Masser. And I'm Tim Stanovic. Subscribe today wherever you get your podcasts.

1:28important buildings for businesses, for fans. COVID was one of the best things that ever happened to golf. The NFL is a bulletproof business. Racing's unique because there is absolutely no reason why we can't compete with the guys. Come on, is pro pickleball real? Are people really going to tune into this? If you're playing money ball with a huge bag of money, you're going to be really, really good. Bloomberg Business of Sports from Bloomberg Radio. This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr along with my colleague Damian Sassauer.

2:00And we'll hear from Vanessa Perdomo later on in the show. Coming up, we hear from Ice Cube. His Big Three basketball league just started its season and has a full slate of games this weekend. We'll talk to him about how his league is growing and becoming real competition for the NBA. You know, after the NBA finals, they're really waiting for the NFL to start. So there's a lot of fans out there just waiting to be entertained, and we think we got it with the big three. We'll also hear from Fabian Allegra. He's chief brand officer for Paris St. Germain Football Club as the FIFA Club World Cup rolls on.

2:40All that is on the way on the Bloomberg Business of Sports. But first, big, big, big, big, big, big news this week. The Los Angeles Lakers will have a new owner, the Buss family, who've owned the Lakers since 1979 when patriarch Jerry Buss bought the team. It was a struggling franchise for$67.5 million. Now, the team is being sold at a record$10 billion valuation to Guggenheim Partner CEO Mark Walter. That's on top of being the lead owner of the L.A. Dodgers. Here to break down what we know for sure about another record-breaking franchise deal is Bloomberg Global Sports business reporter Ira Budwe.

3:20Ira welcome to the Bloomberg business of sports thanks for having me on man oh man I tell you what news just breaks left and right I'm surprised I mean yes okay in case you didn't hear it by the way uh billionaire yes he's loaded Mark Walter uh he bought actually I should add this the controlling stake in the team that is coming up from the Buss family. And I understand that Jeannie Buss is still going to operate the team. Yeah, she will for a number of years, I think was the quote in the original ESPN report, remain as the governor and then eventually transition out of that role, which means she's keeping at least 15 % of the team for now.

4:09And And we've seen deals like this lately in the NBA where the governor wants to stick around a little bit longer but is ready to sell majority stake in the team. So it's an interesting one. But, yeah, I mean, this is an end of an era. The Buss family, longest tenured ownership in the NBA, and bought this team in 1979 for a lot less than what Walter is paying. I saw the crawl, we're talking about this, come across the TV. And at the time, we had company at the time. And I thought I saw it wrong. I'm like, no, that can't be. It's your turn, John. You go roll the dice. That's basically what happened.

4:52But, yeah, I mean, this is amazing. And my goodness, the valuations keep going up. This is for a record$10 billion. Right. And this is on the heels of that Celtics deal at$6.1 billion, which was then the record. And they're falling fast. I mean, 10 is a lot more than$6.1. And it's not been that long. So I think it's pretty surprising. I mean, the Lakers are on a very short list of premier, premier franchises, not just in a premier elite, in a top sports league, but also one of the top teams, one of the top global brands. and they just did a lot about them that makes them attractive. But also I think Walter just has a record of being willing to go big and he's already in the market, right?

5:38They set a record for a franchise when that group bought the Dodgers in 2012 for$2.1 billion and that seems to have worked out pretty well for them so far. And now with this, there's some interesting possibilities what they can do in market sort of combining the Lakers and Dodgers potentially as a media property and so on. And so, you know, I think they know what they're doing. But I also think like these numbers are beyond maybe what you could look at the balance sheet and justify. So it's interesting. Yeah. I mean, this is one of those stories where, well, how high can the pot run? I mean, we're going to keep going and going.

6:15I mean, what's going to happen? Yeah, and I think partly what we're seeing is a split now between sports properties that are like A +, like the Lakers, and maybe if you're a small market baseball team, we maybe have hit the peak and we've hit the roof, right? I think you're seeing in that market, the Twins, the Rays, other teams, like having a little trouble fetching the price that they originally wanted. So I think on the one hand, you could say bubble bursting. On the other hand, you can look at these numbers and say we can go on forever into the stratosphere at this rate. It's very interesting.

6:53And Walter, in that group, they have, like we said, Dodgers. They already had a piece of the Lakers. Now they're becoming majority owners. They have stakes in Chelsea in the Premier League. They have Formula One, Professional Women's Hockey League, Sparks. They are building a very big platform, or as they call them now, of sporting properties. And I think that's another thing that we're seeing is when you can combine these things, maybe they're worth more than a standalone property. Our thanks to Bloomberg Global sports business reporter Ira Budwe for joining us. From record-setting sports franchise deals to the golf course, Arcus Golf recently made a few deals of their own, acquiring three Atlanta-area golf courses.

7:36Here to talk to us about the deals and the growth of golf is Blake Walker. He's chairman, CEO, and founder of Arcus Golf. Blake, welcome to the Bloomberg Business of Sports. Michael, thank you. I'm a big fan of the show. Happy to be here. You've been too kind to us. Arcus Golf reaches$2 billion value. You bought three Atlanta courses, but you guys have a lot of history about Arcus Golf. Can you take us through it, sir? Sure. You know, I began my career back in the early 90s, really looking, making investments in leisure and sports and really began to develop a niche in hospitality, specifically golf resorts.

8:17And, you know, Arcus was something I was sitting in as a chief investment officer of a large platform. and we were about to go public. And I looked at the market. This would have been like 2012, 2013. And there was about$3.5 billion for the debt, distressed debt coming due, sort of post-Leibman. And I thought, wow, this would be a phenomenal opportunity to build a platform within golf. Because one of the things I've thought about was that golf was really dependent upon aging baby boomers. And I thought, what's going to happen when they age out? Golf's got to get younger. It's got to get more diverse.

8:52and it's got to get decidedly more female. So went home, told my wife I had this idea and that I wanted to quit my day job and, you know, at this rate, all my equity there and not take a salary for a couple of years. And thankfully or surprisingly, she said yes. So that was when sort of the odyssey began with Arcus in 2014. And as you mentioned, you know, we most recently acquired three private clubs in Atlanta. A couple of weeks before, we acquired the Woodlands in Houston. And that was on the heels of Champion Street, where we host co-host the Augusta National Women's Amateur and Greyhawk and Scottsdale and a variety of others.

9:28So, Blake, I wonder if you could just tell our audience a little bit about the business model you employ at Arcus in terms of, you know, buying these courses, you know, upgrading them, renovating them. I mean, I'm looking at some pictures here of Fox Meadow and Weymouth Country Club and some of the renovations and the transformations of these two clubs. It's just astounding. Take us through that. You know, I mean, it's it's interesting. We've done this a while and we have a preconceived idea from an investment perspective and reinvestment specifically. But we do a series of focus groups with, you know, with members prior to, you know, finally investing.

10:00And, you know, it's really a family centric thesis. And it's really built upon our four pillars, you know, which are, you know, health and wellness, experiential dining, lifetime sports and arts entertainment. And we really use that as a day part strategy, much like you would in media, for every member of the family, by member, by day. So that CapEx is very intentional, and it's really a lot of lifestyle amenities in addition to golf. Man, if I told my wife that I wasn't going to have a salary for a couple of years, man, she would tell me to go get that greeting job at Walmart that I've always dreamed about.

10:40You have a very understanding wife and made your dream come true, sir. Well, you know, Michael, there were days I thought I might have that greater job. So I absolutely understand what you're talking about. It could have clearly been a very public failure, but I've been I'm a lucky guy. I've got an incredibly supportive spouse and I've got a great team, quite frankly. I mean, really, the journey here has been a lot of people want to talk about our inorganic growth, but our organic growth has been special. And it's really been the direct result of the talented people we have on this team. So Blake, take us through.

11:16I mean, the company's been around for nearly 11 years. I mean, it commands a$2 billion valuation. I mean, who are your partners? You know, I've seen some of these, I've seen iFit, you know, you've done some things there, you know, some AI coach, I believe that you guys are testing out. I mean, talk to us about, you know, who the logical partners are that can not only help your company, but help it grow? Well, it really goes back to that four pillars thesis. I mean, it, you know, I think as you look at our growth on a go forward basis, I mean, we're partnering with people that are best in class from a course design perspective.

11:46I'm jumping on a plane here in about an hour to work on a project. We've got the three or four, we have an in-house construction team. We work with the best designers on the planet from a health and wellness perspective. We're beta testing with a couple of leaders in the health and wellness space and a couple of hub markets currently. we're we're in the process of the final design stages of a social house we're going to build in in Scottsdale that will be a have a green grass location so again you know think about younger you know female more diverse audience and what those wants needs desires are in terms of on a daily basis right I mean it's where they're gonna it's where they're gonna dine it's where they're gonna work out it's where they're gonna socially they're they're going to spend time in the social house.

12:31It's really, it's very similar to if you were bottling it in the media business. Well, you also have a very diverse portfolio, right? This isn't just private clubs we're talking about. There's public courses, there's municipal courses. Take us through your portfolio. I mean, take us through those different business models and how you view them. I mean, are they individually looked at separately as a part of, you know, just building better diversification into your portfolio, for example? I mean, talk to us about, you know, the narrative for investing across all three verticals? You know, again, very intentional.

13:00And to grow the game, you know, as you look at those aging baby boomers and who the next wave of consumers is going to be within golf, it had to make it more approachable and more affordable. So for us, it was key that about 50 % of our portfolio be daily fee. And so that 50 % is driven by our subscription offering. So if you look at markets like Scottsdale, where we're building the social house, we've got over 10 ,000 subscribers in that market. And we also have several private clubs everywhere from entry level to$100 ,000 initiation fees. And really, we're trying to create an ecosystem where the consumer can be vertically integrated as they grow in their career.

13:39But again, the mental model is that four pillars thesis. Really, the only difference is that breadth and scope of what we offer at a daily fee versus a private. Our thanks to Blake Walker for joining us. He's chairman, CEO, and founder of Arcus Golf. Up next, we turn to soccer and the FIFA Club World Cup with chief brand strategist of Paris Saint-Germain football club, Fabian Allegri. For Damian Sassauer, I'm Michael Barr. You're listening to the Bloomberg Business of Sports from Bloomberg Radio around the world. This is Scarlett Fu. And I'm Paul Sweeney, inviting you to join us for the Bloomberg Intelligence Podcast.

14:16Every day, we harness the power of Bloomberg Intelligence to bring you deep dives into the companies that are moving markets from publicly traded companies like Apple to those that are privately owned but known by everyone on Earth like OpenAI. Now, I helped to build Bloomberg Intelligence to what it is today, Scarlett. And now our analysts are the best in the world, covering more than 2 ,000 global companies. That is your legacy, Paul. And we speak to those in-house experts every day. They are Bloomberg's go-to authorities on sectors, companies and legal processes. And we do it all live each weekday, then bring you the best conversations in our daily podcast.

14:49So be sure to search for Bloomberg Intelligence on YouTube, Apple, Spotify, or anywhere else you listen. Listen in the afternoons on your way home from work to catch up on the market news you miss during the business day. That is the Bloomberg Intelligence Podcast. I'm Scarlett Fu. And I'm Paul Sweeney. Subscribe today wherever you get your podcasts. This is Bloomberg Business of Sports from Bloomberg Radio. This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr. With the FIFA Club World Cup underway, Vanessa Perdomo got a chance to sit down with one of the folks behind the scenes at one of the teams participating.

15:28Fabian Allegra is chief brand officer at Paris Saint-Germain Football Club. Let's take a listen to their conversation, part of an ongoing series focusing on the business of soccer. Well, this first edition of the Club World Cup is super exciting for Paris Saint-Germain. Maybe as you know, we already get a strong and a growing U.S. footprint with our 80 official fans club, the three stores that we have in New York, Miami and Las Vegas, the academies as well, and our U.S. dedicated e-commerce platform. So for us, it's a way not to, we're not visiting in a way, we're moving in. And the concept that we have for PSG House in Los Angeles will be a unique and immersive hub on Melrose Avenue, blending football, fashion, art, and lifestyle experiences.

16:34I mean, the DNA of the club. Yeah, I love that. I love that. I love the way you put it there. You're not visiting, you're moving in and expanding, right? Your footprint that you already have here. And you guys are in Group B along with one of the only MLS teams competing here and going to be competing with them in their home stadium, on their home pitch. Tell me how, you know, is that exciting or does that pose another challenge? Or does that just give you more of a footprint to grow in the U.S. playing against a U.S. team? Well, the way the Club World Cup is organized is really interesting because that will allow us to get in different cities.

17:21I mean, obviously for the group stage, we will be in L.A., but also in Seattle. And for us, that's also a way to go and meet our community and fans and once again, try to expand our footprint in the different key cities. So tell me a little bit more about the L.A. house that you were saying. I mean, you have the stores already here in, like you said, L.A., New York. So tell me how this is going to be. Not in L.A. Not in L.A. Okay. So how is this going to be different? The concept of it was really to bring the best of what we are. And you know a little bit about the positioning of Paris Saint-Germain, which is so unique in the football world.

18:09We were maybe the first club to move into this, what we define culture, and create the bridge for the young generation of fans around sport, music, art, fashion. And the concept is really to bring the best of what we are doing to highlight maybe some new and high-level collaboration that we're going to launch, especially in Los Angeles. Yeah, the concept is really to create a space where the community, the local heroes, all the meetings that we can organize from a business perspective, but also to connect with our local fans, you know, is like a welcome there to the PSG house for two weeks. And you said it there that art, culture, music, these are the things that you intersect.

19:10And obviously every team that's coming over from internationally is going to want to connect with U.S. fans, but how you're doing that differently and capturing the U.S. audience, is that exactly what you're leaning into? The culture of it is different for you guys, do you think? I think that the main difference between us and the other, and with a lot of respect, we've been so in advance on this one because that was a part of the project in 2011 when the chairman took over the club to make this a successful brand on the pitch, but also asking to build this global and lifestyle brand. And at the time, in 2011, the club were not open to this aspect of creating the bridge.

20:03So I'm not saying that what the other club are doing is nothing, but we always try to be the first. And I think that the consistency and the credibility that we get since 2011 is unique. So yeah, that's maybe without any kind of arrogance, you know, that we always think differently and the positioning of the club being like the club of the new generation is like super important and drives all the kind of initiatives that we're doing. Yeah, I love that, the club of the new generation. And the interesting thing here too, and one of the things that we're really diving in on is unlocking this market in the U.S.

20:59in a way that hasn't really been done before in soccer, really even here. So do you think the importance of being here and doing all these things to unlock the U.S. fan base is because you think it's the next generation of fans or the next way to unlock a new business for you guys? Yes, of course it is. And we already know that maybe soccer, what we call football, but soccer ranks fifth in popularity in the US behind American football, basketball, baseball and MMA. MMA, sorry. So we have a lot of works to do to increase the popularity of the sport. And we believe that when it comes to this young, new generation of fans, whatever sport we're talking about, is really to go into their ecosystem in a way and create this bridge, you know, because they are not only fans of basketball.

22:06They are fans of basketball, of football, of music, of fashion. So we need to really to reinforce this strength of the club, which is once again unique for me. And how big do you think this is in terms of from a business perspective, if you do break out and get this new market really signed on to soccer, to PSG, how big can it be for you guys from a business perspective, from a growth perspective? it's hard to give you some numbers but the fact that we will be in town for two weeks and that's just once again the beginning we started like earlier maybe on a small scale but the fact that we will show during these two weeks and not only in LA we will be a part of the Fanatic festival in New York.

23:11We're going to make some really big announcements when it comes to cross collaboration with American brand and Paris Saint-Germain. So hard to give you numbers, but what I really want to say is like the U.S. market is a key market for the next couple of years for Paris Saint-Germain. And, you know, you obviously talked about the LA house and having that in LA for two weeks. But across the US, you said 18 fan clubs, I think you said? Are you planning on working with them specifically while you guys are here? Yes, of course. And we're going to do the same thing with the seven academies that we have all around the US.

24:02We're going to organize some viewing parties for the game because, of course, So not all of them can fly to L.A., but at least we'll have different kind of events dedicated to the fact that Paris Saint-Germain is in the U.S. And after, you know, the Club World Cup is over, how do you plan on keeping the footprint here and keeping the excitement about the club?

24:33That will be like on different sides. I think that we have a strong, when it comes to the community, give back to the community. We have a big plan, you know, just not to be there and go back to Paris and forget about the community who needs some help. So we have a big project around this part. and then it will be more around the connection that we'll have locally not only on men's football but also women's football you know that we have a women's team as well we have some American players so it's more working to use to create this relationship and network so then And yeah, that's that will go along the all the announcements we're going to do over the 10 days.

25:30Yeah, I'm really glad that you brought up the women's side there, you know, because just because this is the the men's club World Cup and next year we're hosting the men's World Cup doesn't mean that it also can't benefit, you know, the women's side. So you are so one of your plans is to then introduce your women's team over here. Or are you planning on having them come play or anything like that? Or how do you envision that? That's what we're trying to achieve. But the calendar of the women's competition is also complicated, you know, and we cannot have the full team because they are all in their own national team.

26:11but we already get some contact with some other women's team and we will go from there just to highlight the fact that maybe 1 plus 1 equals 3 even if we are not competing in the same area we can together join our strength and highlight this women's football as well that's psg's chief brand officer fabian allegre speaking with our own vanessa perdomo it's part of an ongoing series where vanessa speaks to some of the key decision makers and players in the world of soccer as we get closer to the fifa world cup coming to the u.s up next we turn to basketball and talk with none other than ice cube about the new big three season you know these guys have played for championships.

27:08So, you know, it's pretty cool to see them still with the hunger and the fire. And it's what people want to see. You know, people want to see real passion on the court, not, you know, guys, you know, worrying about, you know, managing minutes and all this kind of like crazy stuff that's happening in the NBA. I'm Michael Barr. You're listening to the Bloomberg Business of Sports, from Bloomberg Radio around the world.

27:49I'm Barry Ritholtz, inviting you to join me for the Masters in Business podcast. Every week, we bring you fascinating conversations with the people who shape markets, investing, and business. CEOs, fund managers, billionaires, Nobel laureates, traders, analysts, economists, everybody that affects what's going on in the market, whether you own stocks, bonds, real estate, commodities, crypto, you really need to hear these conversations. Sometimes it's behaviorists like Dick Thaler or Bob Schiller. Sometimes it's fund managers like Peter Lynch, Bill Miller, Ray Dalio. Sometimes it's authors, Michael Lewis, author of The Big Short and Moneyball.

28:34Regardless of the conversation, these are the folks that move markets each week. That's the Masters in Business podcast with me, Barry Ritholtz. Listen on Apple, Spotify, or wherever you get your podcasts. This is Bloomberg Business of Sports from Bloomberg Radio. Thanks for joining us on the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr along with my colleague Damian Sassauer and Vanessa Perdomo. Joining us now is none other than Ice Cube. He's a movie star, a hip-hop legend, and he's CEO and co-founder of The Big Three, and its new season is just getting underway.