LA Rams President Kevin Demoff on Building NFL Footprint Overseas

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2:13We have a super team running this league and this league is here and it's here to stay. 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. I'm Randall Williams. Vanessa Pernambu-Magleone is off this week. Coming up today, we get ready for the NFL season. This year, it starts on a Wednesday. You go, why not? A lot of firsts for the 2026 NFL season, including their first ever game in Australia. Last week, Vanessa and I sat down with the president of the LA Rams, Kevin Demoff, right before the team headed to Melbourne.

2:50We also spoke with the head of the Women's Tennis Association about the U.S. Open. That's coming up, but first, let's run through some headlines that happen in the world of sports. And oh my God, one huge one involving the Clippers, Steve Ballmer, and NBA just came down on a hammer with these guys. It is an absolute sledgehammer to the Los Angeles Clippers. And Steve Ballmer, who's being fined 30 or, you know, the franchise is being fined$30 million. Five first round picks are being taken away and the multiple staffers are suspended as well. It's one of the harshest punishments, if not the harshest punishment the NBA has ever given out that did not involve an owner selling a team.

3:35Now, if you haven't heard the story, what happened is that Ballmer, he is suspended for a year after the NBA found that the team had circumvented salary cap rules by facilitating sponsorship agreements between outside companies and star player Kawhi Leonard, who, by the way, has been fined$700 ,000, but he has not been suspended. He has not been suspended. And the seven hundred thousand dollar fine is nothing in comparison to what the Clippers are being hit with. I'll also note that it's important that this it's important to say that this entire investigation began because of Pablo Torre and his podcast.

4:14The Pablo Torre finds out where he he revealed that that Kawhi Leonard had side deals and the Clippers were attempting to cap circumvention. And of course, the Clippers, they've sent a letter to Adam Silver, and they're going to fight this. And it's going to be a very, very difficult fight. Yeah. And I tell you something else. If this sticks, the thing that really is going to hurt about the Clippers losing five first round draft picks, that is huge. Because how can you rebuild the team? Well, in all reality, it's really 10 first round draft picks that Kawhi Leonard cost them. And the way that that math works is that if you remember a long, long time ago in a far, far galaxy away, Kawhi Leonard wanted to play with Paul George.

4:59So the Clippers traded for Paul George from the Oklahoma City Thunder. Who did they trade? Two-time, now two-time MVP Shea Gildas-Alexander and Danilo Gallinari along with five first-round picks. Now you consider the penalty of five first-round picks. That's now 10 picks that Kawhi Leonard has cost them on top of legal fees, on top of this$30 million fine. And I'll also note that this dispute that the Clippers are going to try to do cannot be done through the collective bargaining agreement. This is not going to go to an arbitrator because of the fact that the NBPA, the NBA's union, and the league agreed on this punishment for Kawhi Leonard.

5:43So it's already settled between the league and its partner. Anything that now happens will in all likelihood see Steve Ballmer either sue the NBA, sue Adam Silver, sue Wachtell, or all three. It could happen. And by the way, Leonard was supposed to go in a trade to Toronto. But now that's been all put on hold. I think it's still going to go through. Based on his statement, I expect that trade to go through. And it's really in the Clippers' best interest for the trade to go through because they're getting two first-round picks back to them. They will, of course, use that to draft somebody in all likelihood unless they trade those away, which would not be a good decision because they don't have any picks for years to come starting, I believe, in 2029.

6:24So I think Kawhi Leonard will still be a Toronto Raptor. By the way, I want to put out what NBA Commissioner Adam Silver said. It's a strong statement. I am deeply disappointed by the fragrant violations of our rules and by the Clippers institutional and leadership failures that led to this misconduct. And Silver went on to say the severity of the penalties reflects the seriousness of the violations. That is a very strong statement, especially coming from Adam Silver. Adam Silver is often thought of as a softy player. The conversation around him is said like, oh, Adam Silver is never going to do anything.

7:02He took a sledgehammer to the NBA's richest owner by at least$100 billion. It is a huge punishment. And it goes to show that Adam Silver is not afraid to give out punishment when he feels like it's due. And so I think that this is a message to, of course, all NBA teams and NBA owners that if you are found violating the cap, that there will be a huge, huge punishment. To put an exclamation point on this, remember, Ballmer purchased the Clippers in August of 2014 for$2 billion back then. That was a record price for an NBA team. And the sale came after former owner Donald Sterling made racist remarks that were recorded and published by TMZ.

7:49The last thing I'll say is that I've been asked a couple times, do I expect Steve Ballmer to sell the Clippers? I don't think that's likely unless he's just ready to get out of the basketball business. And I don't think that that's likely either. The two occasions where the NBA has seen owners sell teams after some sort of scandal involved racism. The first one, as you mentioned, was with Donald Sterling and then allegations into Robert Sarver and workplace misconduct, you know, some years ago. And then Robert Sarver, after that investigation, put the team up for sale. He denied all allegations that the NBA investigated, but sold the team to Matt Ishbia.

8:26Speaking of basketball, ex-NBA star Russell Westbrook, he has joined Project B. That is a startup trying to create a global basketball league. Russell Westbrook is, I'd say, an under-the-radar NBA business person. He has a lot of different businesses out there. Project B is going to be one of them. I believe it was last January Bloomberg reported that Project B was being they were trying to raise up to five billion dollars for this. They are now targeting a January 2027 launch date. They have several WNBA players who are scheduled to play in this less NBA players. It remains to be seen what the men's side of the business is going to look like.

9:08But Russell Westbrook absolutely adds some legitimacy to this operation. It remains to be seen if how this league operates, where they're going to travel. But one thing is for certain, Russell Westbrook told me in a Zoom call that he's going to approach this with the same intensity that he played basketball with. And so I would not want to be in those board meetings. Yeah, he is going to help strategize across basketball business for Project B. And there are some people, by the way, some names, you know, connected with Project B. That includes NFL star back in the day, Steve Young, pro tennis player, Sloan Stevens, and David Crane, chief executive officer of GV, formerly known as Google Ventures.

9:54Yep. They are all backers. And so, look, the basketball business more broadly is becoming increasingly crowded. We have the NBA Euro League happening. We have Unrivaled. We have Project B. And so it seems like there is more appetite for basketball globally. But I wonder how many of these leagues are going to survive in the next 10 to 15 years. Yeah, and by the way, old friend of the show, Ice, he's connected to. Oh, you're right. Ice Cube. Ice Cube. He's with Big 3. Big 3 is another one. And Big 3, I would say, is a strong survivor in this. People thought that the Big 3 was going to die, and then they recently went public.

10:34The league is still owned and operated by Ice Cube, and it's doing well. So, lots of basketball. Oh, man. I wanted to see how this was going to do globally. So last thing is that, of course, the L.A. Angels fans are rejoicing that the Moreno family has sold to Cronky Sports and Entertainment. This deal came as a sort of shock to me, considering that the Moreno family had put the team on the market and they pulled the team from the market. And now Stan Cronky is the new owner. It came to a shock for a lot of the players, too, heading to Angels Stadium because when Artie Moreno sold his big shares in it, they didn't know that until they walked onto the field.

11:16Which generally happens a lot. But I do think that the reasons that Angels fans are rejoicing is that Stan Kroenke is, I would say, the most prolific sports investor in the world. He also owns the LA Rams. He owns the Denver Nuggets. He owns Arsenal. He owns the Colorado Mammoth. He owns a lot of sports teams and he's won a lot of championships recently. And he invests heavily. He owns and operates the most expensive stadium in the world. And so what this means for LA Angels fans is that you have somebody who's not afraid to spend money. And in baseball, money is a big topic in conversation right now because of the collective bargaining agreement.

11:53And don't forget, he also has Major League Soccer's Colorado Rapids. I mean, this man is all over the place. Exactly. Exactly. And I think the one thing that remains to be seen is, will there be a name change? I believe the NFL has a rule that you cannot own two sports franchises in which your NFL team is located. Now, of course, the Angels at one point in time were the Los Angeles Angels of Anaheim, which is a very long name. I do wonder if, you know, if Kroenke will go to the NFL's league meetings and ask maybe for a waiver or if the league changes its rule. or if the Los Angeles Angels will just become the Anaheim Angels.

12:31Now, Moreno's been criticized. Never mind the record. Sure. They're well below 500. But he's been criticized because when he put the infrastructure of the team together, he has been criticized because he hired a series of baseball operators and the bosses who had little or no experience in the top job. Yeah, I think that's part of it. But I think the real outrage comes from the fact that he had both Shohei Ohtani and Mike Trout and nothing to show for it. And now Shohei Ohtani is a world champion. Mike Trout, of course, still plays for the team. But when we look back on this era of baseball, it's going to be remarkable to be able to say that two all-time talents played for a team together and the team walked away with nothing.

13:19And by the way, Shohei Ohtani was not traded. There was a world where the Angels could have been like, listen, we don't have the cap space. We can't afford this guy. So let's trade him to the Dodgers, a team that can. And they just didn't do that. You mentioned Mike Trout. Here's a quote from him. As soon as I got the word, I looked him up. And what a track record, Trout said of Kroenke. Which he's right. Wherever he buys, they win. So that's a good sign, no doubt. He'll invest in the team, in the players. That's all you can ask. Cronky Sports and Entertainment is already off to a good start. But, of course, the looming lockout is approaching day by day.

14:02And who knows if we'll have a baseball season. But based on everyone I talk to, it doesn't seem likely. Please, guys, don't call off the season. I remember what happened in the mid-90s. I was there, and it was awful. If you're hearing Michael Barr, he's pleading. Anyways, coming up, we get ready for everyone's favorite time of the year, the start of the NFL season. That is straight ahead on the Bloomberg Business of Sports. For Randall Williams, I'm Michael Barr. You are listening to the Bloomberg Business of Sports, Bloomberg Radio around the world.

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16:24This 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. I'm Miranda Williams. Vanessa Perdomo-Magleone is off this week, but before she headed out, Randall, you guys sat down with the president of the Los Angeles Rams, Kevin Demoff, right before the team headed to Melbourne. That's right, Michael. We talked to Kevin about the team's strategy to build its footprint overseas in their aspirations for the 2026-2027 season. The Rams will take on the San Francisco 49ers in the NFL's first game September 11th at the Melbourne Cricket Ground.

17:07Let's take a listen, Randall and Vanessa's conversation with Kevin Demoff, president of the Los Angeles Rams and president of Team and Media Operations for Kroenke Sports and Entertainment. So I know that the Rams have been doing a lot in the Australian market. You guys have had the global rights there since 2022. So tell us what you've been doing to lay the groundwork for the Rams to have a presence in Australia that will all culminate in this game in Melbourne on September 11th. Look, I think for us, it started with we were really excited about Australia's market because English speaking, they play contact sports.

17:42They've had kickers, punters, rugby players come over to the NFL. So of all the markets in the global program, even though it is the farthest distance wise, it seemed the most compatible with true NFL growth and where we could go. And so in 2022, when the NFL started the program, we really leaned into how do we go build our brand in Australia? through watch parties, through taking players down there multiple times in the spring so they could go get a sense of what Australia is like, truly engaging that market in a way to develop Rams fandom and NFL fandom, you know, both truly from a Rams perspective.

18:19And then I think, you know, over the last few years, partner with the NFL as it comes to flag football and thinking ahead to Brisbane 2032. And so one of the things that, you know, you and I attend these league meetings. You're in the meetings while I'm covering them. But one of the things that I hear teams talk about a lot is investment into the international markets program and these international markets. And they're trying to figure out how they can make money. The Rams are making seven figures on partnerships in Australia this year alone. Tell me the ways in which you've been able to generate profit and thinking about the creativity of the business internationally?

18:56Well, I look at international a little bit differently than, you know, P &L. I think international is the one place that I would consider true R &D in the NFL portfolio. And, you know, most companies, Fortune 500, when they look at the world, they'd say, where are we going to invest our research and development funds? And for us, it's international. And we've been fortunate. You know, we were very excited when the NFL came to us two years ago with the idea of playing a game in Australia, and they said they were thinking about announcing it. We were adamant that we would be announced as the home team when they announced at the Super Bowl in New Orleans.

19:27That would give us a two-year runway, really in market, to sell partnerships around the game and use the drumbeat and the excitement of this first ever NFL game in Melbourne to help cement those partnerships and get people engaged and activated. And I think any NFL team will tell you that our international success from a partnership standpoint and a revenue standpoint always comes around the ability to sell around games, such as in Germany or the UK, Spain, France, Mexico, Brazil, et cetera. And so we've really used that runway over time. What I would be curious to see for us is whether there is a tail off of this game that we can continue to raise our partnership levels throughout Australia after the game and once the NFL starts playing there overall.

20:11And I think that's the R &D component. If you look at the 2022 to 2025 phase, that's really where we've been investing in Australia, hopefully 2026 and beyond is when we can reap some level of return. Now, it's my understanding that the Rams, the players and the coaching staff are flying in, I believe the morning of or the day before and then flying out right after the game. That's correct, right? That is correct. We will be leaving Los Angeles on Tuesday, arriving in Melbourne on Thursday and playing on Friday. Very similar schedule to what we did last year in London. We flew from the East Coast to the UK, landed Saturday afternoon, played Sunday afternoon, won that game in convincing fashion over the Jaguars.

20:51So don't, you know, if it's not broken, don't fix it. Yeah, you guys are normally in and out of these markets very, very quickly. What is the strategy behind that? Because we saw some teams have some extended stays in Europe, but you all are one that has adopted that strategy. Talk to me a little bit about why you all move the way that you move when you're traveling internationally. I actually think it's just a continuation of our normal domestic travel. Whenever we play on the East Coast, we still arrive in the city the night before the game around 6 p.m., 7 p.m. So, you know, Sean McVay, you know, our head coach, Reggie Scott, their belief is players function their best when they have the most time at home in their own beds, in their own routine.

21:30So everything we do as an organization from a travel standpoint is designed to limit travel time that we spend, you know, in other cities. So to me, this is just a continuation of that theme. Even though it's a little bit further this time? It's a little bit further of a trip. But, you know, look, there's no – I think the one thing that always excites us about these trips is there's no data on what is best. You know, we did have some good fortune, and this is where you get, you know, benefits from, you know, being part of a global system of Cronky Sports Entertainment. I was with the Nuggets when we traveled to Abu Dhabi for a preseason game a couple years ago, which was a 14-and-a-half-hour flight from Denver.

22:08We've studied and talked with Arsenal, who's flown to places like Kazakhstan, which are nine-hour flights, and really try to use the sports science to figure out what's best for the Rams in this environment. There is no right and wrong answer. Obviously, there are different approaches that are going to happen with us and the 49ers taking different approaches. And whoever wins the game, someone may say that approach worked. Someone may say the approach didn't. I don't think until you've played a number of games, people are going to be able to say what's best and what's not. Yeah, that's really interesting.

22:34I know we're talking a lot about the start of this season, but I do want to look ahead. We are speaking with Kevin Demhoff, president of the Los Angeles Rams and president of team and media operations for Cronky Sports and Entertainment. So I do want to look ahead a little bit, a little far into the season, into the Super Bowl. You guys are hosting the Super Bowl this year. And, you know, it's pretty quickly after the last one you guys just hosted just about five years ago that it'll be just five years then. Tell me what the Super Bowl is at SoFi and how you guys are planning to build on when you host in 2022.

23:09Look, it's really exciting to get the opportunity to host again after five years. I think it's one of the quickest turnarounds the NFL's had, especially for a new stadium that's come on board. You know, a lot of learning from the 2021 Super Bowl, you know, great outcomes. So I hope the outcome is the exact same as the 2021 Super Bowl with the Rams hosting the Lombardi Trophy. But, you know, look, that was the first major international event post-COVID. And there were things that went great and there were things that you wished you had more time and more planning. So, you know, knock on wood, hopefully there's no global pandemic between now and February.

23:44I'm really excited to see the city come to life. We saw so much benefit to our community from the World Cup and the eight matches that we hosted. And, you know, the number of articles that talked about SoFi Stadium being the shining star of the World Cup and building off of that experience in SoFi Stadium, building off of the hosting experience and the travel experience to Los Angeles. I think our community is really excited to bring the Super Bowl back in full fashion. I think it is amazing that this is Disney's first ever ESPN Super Bowl and Disney's first Super Bowl in nearly 20 years, headquartered here in Southern California, a great partner we can work with to bring this game to life.

24:22And this, to me, represents what the NFL should be. You know, the merger of entertainment and sport in Los Angeles is exactly why Stan Kroenke built SoFi Stadium in Hollywood Park. And I think it's going to shine on the biggest stage once again this year on Valentine's Day. And hopefully the Lombardi Trophy will be our Valentine. That's sweet. That's a sweet intention. I'm glad, though, that you brought up the World Cup there, because obviously that just wrapped up this summer. And the World Cup obviously moves very differently than the Super Bowl and NFL games and all of that because you essentially got kicked out of your own stadium for a couple of games there.

24:58But tell me what it was like hosting. I mean, you said that it was the jewel of the World Cup that people had said. But how does it differ from hosting a Super Bowl? How does the World Cup differ from hosting a Super Bowl? Well, I think the first thing you notice with the World Cup is, you know, there's just a different passion when it comes to nationalities and fan bases in the world of global soccer. And, you know, watching 30 ,000 Bosnians come into our stadium and cheer against Switzerland at noon on a Thursday, we were fortunate to host Spain in the, you know, round of 16 in the quarterfinals on their march to the finals.

25:32And, you know, most of what we had, the two, you know, opening round U.S. matches, including their first game against Paraguay and watching them, you know, score a goal two minutes into the tournament and watching the stadium go crazy. But, you know, the nationality and the fervor that brought people together. But I thought what it did for SoFi Stadium is bring a whole level of attention and interest from different groups of people that had never really paid attention before. And, you know, we're so fortunate owning Arsenal, owning the Colorado Rapids, being involved in global soccer. And, you know, Arsenal had an amazing run winning the EPL this year, advancing the Champions League in Budapest, you know, with an unfortunate outcome on penalty kicks.