NFL Union Had Secret VC Fund in the Works; NCAA's New Landscape

0:28This is the business of sports. 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 colleagues Damian Sassauer and Vanessa Berdomo. Coming up on the show, we do a deep dive on the NCAA with college football's new season coming up. We'll take a look at the latest following the NCAA settlement with the House, some of the latest legal headlines involving college sports, and more.

1:05Plus, we'll also take a look at how some of the Trump administration's policies could be reshaping America's soft power in the world of sports. We'll explain that. All that and more is on the way on the Bloomberg business of sports, but first, we continue to follow the turmoil in the NFL Players Association. One of the latest discoveries, the union's former leaders, were working in secret on a venture capital fund with the hopes that one day it would raise enough money to invest in an NFL franchise. Bloomberg U.S. sports business reporter Randall Williams has been following this story, and he joins us now to discuss.

1:46Randall, welcome back to the Bloomberg Business of Sports. As always, thank you for having me. Now, you wrote a great article, man. It's so much to talk about here. In your article, the former head of the National Football League Players Association, Lloyd Howell. When he left, Howell's project for the Union's secret venture fund project also left. And he had hoped it would raise enough funds to invest in an NFL team. I just don't see other NFL team owners voting for that. Yeah, neither do I. I think it was a little far-fetched, but he had, from what my sources told me, he had reason to believe that this was a way that NFL players could gain equity in teams.

2:31I mean, the NFL owners voted to ban that as part of contract negotiations. Aaron Rodgers tried it, Caleb Williams tried it, and evidently they were like, no, this isn't going to happen. And when Lloyd Howell came in at the time, he mentioned during his press conference that in his conversations with the league, well, at the time, no one had reported the firms that the league was having conversations with, which obviously goes back to his position at Carlisle. And so he had started basically bringing together a quiet group of people at the NFLPA to look into raising funds in hopes of one day buying into a team.

3:06Now, what team would allow that and what owners would approve that? But I don't think we'll ever find that out. It's interesting because I was trying to figure out who it would actually be the most beneficial for, obviously other than Lloyd Howell himself, because is it beneficial to the players? I mean, they kind of have that seat, but also at the same time, if the owner did allow it, technically that means the players or whatever the PA would be in on the best interest of the franchise. Yeah, I don't know. I don't know that the project got far enough to figure out like the intricacies of how this would work.

3:42Like what is exit exiting look like in this proposed plan? And another part of this is like if you're one of the NFL's greatest earners. So let's think like Mahomes, Allen, Jackson, Burrow, they're all going to earn probably another$300 million in their career. at a certain point they might just want to buy in themselves and not want to go as part of this union thing now obviously with lloyd being gone for a multitude of reasons i don't think that the new executive director is going to come in and be like yes venture fund that's definitely at the bottom of his to-do list well rand talk to us about david white who is the new interim i believe director i talk is is that going to be a permanent position is he going to be the permanent you know leader of the NFL Players Association?

4:27So he was interviewed alongside Lloyd when Lloyd was hired, not at the same time, but he was another candidate. And it's to be determined, I think, that luckily he's in a time of labor peace. When Lloyd was in his tenure, he was talking about the biggest contention point was whether or not they could get an 18-game season done. At first, Lloyd was in favor of it. Then at the Super Bowl, he changed gears a little bit. It's unclear how David feels about this. And the union doesn't really put their executive director in front of journalists much. Like outside of the Super Bowl interview that they have during Super Bowl week, they don't really speak that much.

5:04So I don't know how David feels about this. Now, the first thing that he has to get in order is to rally the NFL players like Lloyd's actions as executive director and also J.C. Tretter as well have divided a lot of players and there's a lot of uncertainty. And so who is going to be the person to rally the troops? And I think it has to be David White. I want to go back to Aaron Rodgers. Now, in his heyday, obviously, he was with the Green Bay Packers. But because the way the Packers' ownership is structured compared to the Jets, I'm assuming that's why he put it in the try-to anyway, the Jets contract.

5:43Yeah, that's part of it. I mean, no one can buy into the Packers. I don't even think the Packers can ever be sold. But at the time of his Jets tenure, he's thinking about like long term. And I don't know how much he would have asked for. I imagine it would have been a very small stake. We've seen people buy 0.5 percent. I believe Charles Woodson bought 0.1 percent. But you got to remember, 0.1 percent of like the Giants is going to go for millions of dollars. So it would have been very beneficial to Rodgers because, of course, NFL valuations have shown no sign of slowing down. in large part because no one is stopping watching the NFL.

6:17The Super Bowl had 127 million viewers. So Rodgers, rightfully so, was like, let me get in on this. And then the NFL owners had a quick, impromptu meeting. Everybody voted no, and that was the end of it. Well, you know, Randall, while we're talking about NFL sports teams' valuations, I can't help but point out the Chicago Bears resetting the playing field at$8.8 billion. And let's just think about some of the more recent transactions. The Niners went for 8.6, the Eagles for 8.3, and the Dolphins for 8.1. I'm talking taking on some minority investors. This, I mean, is a big, big number. I mean, even adjusting for all of those previous transactions, that's what we do here at Bloomberg Intelligence.

6:54We kind of try to smartly adjust for things in real time. I mean, I was only coming up with a$7.74 billion valuation for the Bears, and they go for 8.8. I mean, my God, this is just resetting the bar, no? It does. Because what's most interesting to me, and I'll go on record and say that the Bears are the biggest sleeping giant in the NFL by far. They have the third or fourth largest market, depending on if you want to put Houston in front of them. But they have the smallest stadium in the NFL, the oldest stadium in the NFL, and they're struggling to build a new stadium probably in Arlington Heights.

7:27And with that in mind, the 8.8 number is staggering. But, of course, you still need a stadium built. And at that point, you look at Josh Harris, for example, who has this$3.8 billion facility that he hopes to open by 2030. What does the Bears go for? When they were talking about putting this on the lakefront, the number they floated around was$4.6 billion. That was with all the infrastructure. The stadium itself would have been$3.2 billion. Now, granted, the lakefront stadium is dead and they haven't got into the specifics in Arlington Heights. But with that in mind, you add a stadium onto the valuation of 8.8 and you very quickly get to a 10 number, which is very, very high.

8:03I want to talk about the Chicago Bears and their board. They reset all that. Edward McCaskey is the son of board secretary Patrick McCaskey. He was named the seventh member of the panel. He replaced his grandmother, Virginia McCaskey, who died in February at age 102. How much of an impact will Edward McCaskey now have? Can I just for our audience here, Michael, let's just talk about who Virginia McCaskey is. She is the daughter of the founder of George House, who bought the team in 1924 for$100. Insane. Oh my. Anyone who doesn't believe in women's sports should remember that. $100 a hundred years ago.

8:45So just give them a little bit of time. $100 a hundred years ago. They didn't even have leather helmets back then. No. But it's got to have an impact. I mean. Well, I think the Bears board is one of the more private boards of all the NFL ownership groups. Like George McCaskey is not getting on a podium. He'll talk to reporters, of course, but he's not one of the more forward facing owners in the NFL. And neither are the board members. The most often people at the NFL league meetings that are speaking are Bears president and CEO Kevin Warren and occasionally Ed McCaskey. And so with that in mind, I am interested to see if Ed McCaskey has any impact on the stadium front.

9:26Now, that's been Kevin Warren's project, of course, but they have a long way to go. And I mean, maybe he comes in with a new fresh mindset. He starts talking about any way to fund this or maybe he's lobbying. I don't know. Yeah, it'll be interesting to see what they do on the stadium front. The thing that I find interesting and you pointed out those numbers earlier, Damon, about which teams have gone recently. and they're all for the minority stakes, but different than we thought, right? We thought private equity was going to come in and rechange the valuations, but these minimal 2%, 6 % deals are changing valuations.

10:00Do you think that they should have an impact like that? I think that this is an impact of private equity. There are some people who might disagree with me, but what you're seeing from my vantage point is that private equity gets approved in August 2024. you immediately have two deals approved in December. That's Dolphins and that's Bills. And then three months after that, in March, you have a Chargers deal, I think that is, March or May, one of those two league meetings. And, of course, you have all these minority stakes. Now, all of these ownership groups, if you go back to the Eagles, the Eagles considered private equity.

10:35I believe the 49ers considered it as well. And so what I think is probably happening is that it is a new investment pool for these owners to look at. And evidently, then they have these conversations with private equity firms. They have these conversations with individual investors. And then whoever is the right investor and the right fit and they have the most money, they go with. And so with the Bears in particular, this was a small stake. I'm sure that they may eventually look further into private equity, of course, because private equity is going to help with the stadium funding. But in regards to the 49ers, the 49ers had conversations.

11:09They went another way. The Eagles had conversations. They went another way. And the exact reasoning for that is unclear. But it doesn't really matter because it is what the NFL wants to see. They want to see more of these minority transactions so that if owners want to get more capital, they can. And that's what's happening. So I think it's an inadvertent impact that private equity is having. And there will be more deals to come. Sixth Street hasn't made a deal yet, and neither has Dynasty, Carlisle, and Curtis Martin. Randall, you think the Giants sell for$10 billion? I do think that stakes are passing.

11:41The reason, let me explain. I agree. If the coach family is involved and considering what they bought into BSC, which is, of course, the Nets and the Liberty, they have a lot of money. A whole lot of money. And so if you're competing against the coach family and you're putting up money, what if they say, we want the full 10 % and we'll go$1.5 billion? Well, that's a$10.5 billion valuation. And who's going to be willing to own 10 % of the team, have no, you know, hat to control and just say, I just want to be a fan and, you know, participate and help you all. There's not a lot of people who are going to be offering$1.5 billion for anything that they're not going to control.

12:18Our thanks to Bloomberg U.S. sports business reporter, Randall Williams, for joining us. Up next, we take a look at how America is wielding soft power in the world of sports and how new policies might be reshaping that influence. For Damian Sassauer and Vanessa Perdomo, I'm Michael Barr. You are listening to the Bloomberg Business of Sports from Bloomberg Radio around the world.

12:50This 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, along with Damian Sassauer and Vanessa Perdomo. The U.S. has long-wielding soft power in the world of sports, but recent changes to U.S. foreign and immigration policies could be reshaping that soft power and affecting athletes around the world. Bloomberg opinion columnist Adam Minter's latest piece discusses this, and he joins us now to tell us about it. Adam, welcome to the Bloomberg Business of Sports. Glad to be back.

13:28I want to talk about one of the articles, and you hit a point. America is undermining its soft power in sports. And part of this is because with new travel restrictions that's going on and all that's going on and people are afraid of ice and this and that, that has changed the landscape in sports. It absolutely has. You know, the Trump travel bans, as they're loosely called, are really starting to impact who can come to the U.S. and why they can come to the U.S. in terms of sports. And we're seeing this with the Little League World Series, which is happening right now. It took an exemption from the Secretary of State, Marco Rubio, to get the Latin American representatives, a team from Venezuela, Cardinales Little League, into the country.

14:23And that's fairly unprecedented. I mean, usually and historically, international athletic events in the U.S. have welcomed and have had no problem welcoming competitors from all over the world. And all of a sudden, since the beginning of June, that's no longer the case. We've seen visa denials for teams. And then we've seen, you know, unbelievable red tape having to be cut through as we have with this Venezuelan Little League team. So it's a real shift. It's interesting. And also, if you could explain a little bit of the idea of what the term soft power means in regards to this topic. Sure, sure.

15:04Well, hard power is, you know, what it kind of sounds like military means, tariffs, these kinds of things that are ways of extending U.S. power kind of with a big stick or, if we will, with a baseball bat. Soft power is a little bit different. It's cultural power. You know, it's going to China and seeing a lot of kids wearing James Harden jerseys, which you will see. They love Harden over there. You know, those kids aren't just embracing James Harden. They're kind of embracing the American values, the creativity that a guy like James Harden embodies on the court. So that's the kind of thing that is much harder to acquire and much harder to project.

15:45But the U.S. has been able to do it for decades. And one of the ways it's been able to do that is through sports. And these travel bans, as I argue in this recent piece, are starting to undermine that traditional soft power that the U.S. has wielded. Well, it's one thing when, you know, the State Department's denying these as to members of Senegal's national women's basketball team or Cuba's national women's volleyball team. We've got FIFA World Cup coming to town. We've got the Olympics coming to L.A. I mean, what about your average run-of-the-mill fan from abroad or family member who wants to watch their child participate in some of these events?

16:19Do we expect they're going to have similar problems here? Absolutely, they will. I mean, again, there are certain countries that will have no problem. If you're coming from the UK, you're probably going to be able to get in and see your child dive for the UK diving team at LA-28. But the problems come, as exactly as you point out, with the fans. The travel bans make exemptions for major athletic events, and it was the Olympics and the World Cup that everybody had in mind, but it does not make, the bans do not make exemptions for fans. And so if your country is on the list of around a dozen countries, you know, Venezuela, Cuba, some West African countries, and it's likely to expand to more countries, you may not be able to get in.

17:07And it kind of undermines, not kind of undermines, it definitely undermines one of the reasons, theoretically, why the U.S. would want to hold events like this. I mean, it's to showcase our country, to showcase our venues, to showcase our openness, ironically, and to showcase how well we can host an event. You know, these aren't just about hosting the World Cup. They're advertising our ability to host other kinds of events. And if people can't get their people into the country, they're going to look elsewhere. Well, I agree with most things that Adam Mentor is mentioning here, Michael Barr. But, I mean, let's be clear.

17:41U.K. athletes getting into the U.S., just so long as Keir Starmer, you know, prime minister of U.K., treads the line carefully with the White House. You know, we can – I don't think anything is set in stone here. Well, you know, what I realize is that, like – and you said it best, Adam. This isn't just like with baseball or basketball or something like that. This impacts – because I'm a motorhead – in the F1. I mean, you know, everything. The fans, you know, if you're from Brazil and you're rooting for your driver or this, that, whatever, or even the drivers for that matter, this impacts everything.

18:16Yeah, that's a great point, because, again, the travel bans, you know, they make a exemption for major sporting events. Well, you know, obviously in the Olympics and the World Cup, you know, what is the Miami Grand Prix? Does that qualify? You know, does the Las Vegas Grand Prix qualify? You know, is Marco Rubio going to, you know, be sitting in his office signing travel exemptions for, you know, team members from countries that are on the travel ban list? Or, you know, for that matter, is he going to be signing exemptions for people, you know, who got caught up in a dragnet at the, you know, the consulate in Rio that day because some visa officer was in a bad mood?

18:58I mean, this really turns the soft power idea and the openness of American sports on its head. And Vanessa, this does not help Las Vegas at all because they just came out with a report that said that their visitors coming to the city went way down. Yeah, I saw that as well. I mean, it's interesting after we've seen so many sporting events in Vegas, then the downtick happened, which is definitely something to pay attention to. Adam, I'm curious, because in your article, you talked about how this could affect NCAA athletes, because we've seen a huge uptick in that in the last few years. I played Division I.

19:42They got free scholarships. And no matter what sport they played in, it's a massive part of college athletics. So how is it going to affect that? Well, it's first worth noting that the number of international athletes coming to the U.S. to play in NCAA sports has ballooned over the years. In the piece, we note that in 2023-24, around 7 % of D1 athletes are international. Now, not all of those are scholarship athletes. A lot of them are. But you also have the case where you have international athletes from countries that don't have a training program, say in swimming or diving, which are very popular examples.

20:24They can't train as well, say in Singapore, as they can somewhere in the U.S. They will pay tuition to schools to take these kids and train them. That's a business opportunity for these colleges and universities, first of all. But even where you're talking about the scholarship athletes, I mean, there's a lot of uncertainty there. I mean, if you're a basketball program and you're counting on, you know, a student coming in from, you know, say, Serbia, and I'm just throwing this out there. I don't know if any T1 programs have it to play basketball. And there's visa delays. That not only gives you pause for the future about whether you're going to be recruiting these kinds of athletes because, you know, you're not going to have the student athlete there, the athlete there.

21:04But on the other side of the equation, say you're a Serbian, a very talented Serbian, you know, 18-year-old center, you may have other opportunities. They may not be as lucrative as playing in D1 basketball is these days, but at least you know you can get the visa to say go play in Spain. And so, again, it's cutting the U.S. off from international talent. So it's going to lower, theoretically, the level of competition across American college sports. And it's also going to hurt the business of college sports. I also want to talk about, and you wrote another good article, and this involves Bryce Harper, you know, first baseman for the Philadelphia Phillies, making$330 million.

21:47dollars uh he got into a let's call a uh a little tift he did um you know exchange well he was talking to major league baseball commissioner rob manfred and uh it ended up with uh harper saying oh yeah your brother blows bubble gum and then all it all broke loose well you wrote a great article that should a 330 million dollar player be the face for getting more pay fights yes i mean i i think uh you know the harper confrontation with uh with manfred is interesting because it was manfred going to the phillies uh phillies team meeting to basically just talk about what's going on in the business of baseball and he does this with every team um just updating them.

22:40And Harper, who we know just from watching him on the field, he has a bit of a temper. He sensed that Manfred was about to start talking about salary cap, which is something that the Players Union and Harper have opposed for many years. And he got up and used an expletive telling him where to go. And Manfred fired back and, you know, cooler heads prevailed and they stop talking about the salary cap. But my point in this piece is, you know, a guy like Bryce Harper has done really well without a salary cap in baseball. I mean, he's got the$330 million contract. So it's natural that he wouldn't want one.

23:20But that discussion, guys like Harper are really the exceptions in baseball. And anybody who follows baseball knows that most of the players on most rosters aren't making that kind of money. Most of them are struggling with salaries around $1 million a year. Now, I would be happy to have a salary of$1 million a year or even the MLB minimum of$760 ,000 a year, but they're locked into contracts that don't allow them to get to that level of compensation for years. And so those are the players who I argue should be talking, not Harper. Well, Adam, I mean, you couldn't be more right on this front. I mean, this number just stood out to me in your article.

23:56I just have to, for our audience here, in 2015, the median Major League Baseball player salary was$1.65 million. Today, 10 years later, it's only$1.35 million. It's gone down, down. I mean, that is just mind-numbing when you think of all, just how big the Major League MLB is and how many players there are and minor leagues and everything that goes hand-in-hand with it. I mean, it really does, I mean, it does bode in favor of a salary cap, something like what we see in the NFL and some other professional sports leagues, no? Right. And it also pushes against the narrative that I think many fans have about baseball, which is that the salaries keep spiraling upward.

24:37But that's not the case. And it's worth keeping in mind. Again, Bryce Harper, he's written that narrative. But for most of these players, they're stuck in six years of service. That is, their rookie contracts mean that they're stuck on a team unable to negotiate, really, their contracts. There's some movement. There's some contractual stuff. But they can't get their value. They're underpaid. Our thanks to Bloomberg Opinion columnist Adam Minter for joining us. For more from Bloomberg Opinion, visit Bloomberg.com slash opinion or O-P-I-N-G-O on the Bloomberg Terminal. Up next, we take a deep dive on the latest headlines in college sports.

25:27For Damian Sassauer and Vanessa Bernomo, I'm Michael Barr. This is the Bloomberg Business of Sports from Bloomberg Radio around the world.

25:40this 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 Damian Sassauer and Vanessa Burnomo the college football season is right around the corner and it comes in the middle of a lot of change in the college sports landscape. Kelly Irwin-Fagan is a partner at Church Church Hittle and Antrim, or CCHA, and chair of its sports law practice. She's also a former college athlete and previously worked in enforcement at the NCAA's national office. Kelly joins us now to weigh in on some of the latest legal headlines and regulatory changes shaping the world of college sports.