PGA of America CEO Derek Sprague Talks Golf & Ryder Cup

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1:28years for the NFL and college football. Our demographic reach has continued to expand. This is going to be really unlocking the streaming platform for sports fans. Sports valuations are rising. We'll see when they peak. You don't have to be the best in your sport to make a whole ton of money. 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. My colleagues Damian Sassauer and Vanessa Perdomo will join later on in the show. Coming up today, we hear from PGA of America CEO Derek Sprague on golf's growing popularity and to unpack the Ryder Cup's intensity, global reach, and behind-the-scenes strategy in one of golf's most iconic competitions.

2:18Well, I think with all the programs that the PGA of America does, helps with the retention in the game, helps with the growth of the game. Since the pandemic, when we haven't used the word social distancing in a long time, but where you could get families together playing the game together, and we've seen this multi-generational growth, getting the parents and grandparents, getting the younger generation into the game. So we've seen that explosion. We have more golfers today than we've ever had in the game. Close to 28 million people in this country are playing the game. 550 million rounds of golf were played last year.

2:50Derek Sprague recently joined us here at World Headquarters from Bloomberg Power Players New York. The annual event brings together influential voices from the business of sports to identify the next wave of disruption that could hit this multi-trillion dollar global industry. We'll hear the PGA of America CEO's conversation with Bloomberg Texas Bureau Chief Julie Fine. That and more is on the way on the Bloomberg business of sports. But first, football, football. The college football season is just getting underway. And live on stage at Power Players Bloomberg's Christine Cook spoke with Ryan McCormick.

3:29He's senior director of Factor and QQQ equity product strategy at Invesco for a conversation on the new possibilities for college athletics. Let's take a listen to a portion of that conversation. Just to kind of set the stage, can you, as a quick reminder, tell everybody what the QQQ is? Yeah, no, I'm happy to. So Invesco QQQ is an ETF. It's an exchange-traded fund. It happens to be the fifth largest ETF in the world, and it tracks the NASDAQ 100 index, which is made up of the 100 largest companies listed on the NASDAQ exchange, X Financials. So pretty much a number of different companies that you probably use every day, multiple times a day, very well-known companies.

4:16But it was launched 26 years ago, back in March of 1999, sort of like in the early stages of ETFs in the U.S. And so in that 26 years, I mean, at the time, it was a pretty novel technology, a pretty novel advancement in the world of asset management. And to see staying power of 26 years, it really has blossomed into this very widely known, very widely utilized ETF and a strategy that has brought the ability for investors to add growth into their portfolio in a very easy and efficient manner. You say 99, I immediately think about Y2K and it's good that you made it past all of that and all this longevity.

5:02Well, part of the growth is an investment in collegiate sports. Can you talk a little bit about your partnership with the NCAA and why that's important in your partnership portfolio? Yeah, for sure. I mean, you know, I think in general the question would probably be like, well, what is this guy doing at a sports conference, right? And I think, you know, we're the official ETF of the NCAA. We've had that partnership now for a couple of years. alongside that we're kind of the official financial literacy partner of the NCAA. We developed a program, How Not to Suck at Money. Originally, it was geared towards like the college athlete, but I mean, it's for anybody, right?

5:43It's for a college age student, it's for a high school age student, it's for a 30, a 40 year old. Like it really just emphasizes the basics of where do I start with investing right or um how do i tackle credit card debt it's like very approachable questions to try to to to develop some level of education and you know with that that came in conjunction with our sponsorship of the ncaa so i joked before in our lunch um you know if you watch the ncaa basketball tournament if you're watching march madness i mean i challenge you to go 90 seconds without seeing an Invesco QQQ commercial. But it's a great opportunity for us to elevate our brand with a whole new set of potential investors, a whole new set of eyeballs, and just a very high-profile sponsorship that we're quite proud of.

6:31When you think about financial literacy in that way and the commitment that you all have had, and like you said, it's a variety of age groups. Are there any trends that you see on programs that you all have invested more in there or need states that have shown up that maybe you've had to pivot to address? Yeah, you know, so we partner with a number of different schools, and I've been on the road, and I've presented with, you know, alumni networks at, you know, pretty major universities, right? They'll tap a former athlete to come and talk about the importance of financial literacy, or maybe a specific kind of financial question that they've been asked.

7:07I would say it's, the most encouraging thing is, like, the appetite for education. like these these are packed rooms with college athletes with stuff a lot better to do than listen to me but like they are all there showing up and asking very real questions about you know where do i start what do i do in this scenario and i think alongside like some of those alums right like they're drawn to those alumni they've been in their shoes they've been in that room they've seen most of them a fair amount of success and just the engagement is is is pretty spectacular but i would say the one thing that i would really highlight is just like it's the appetite these are this this generation of kids they they want to learn they want to capitalize on nil and i think the fact that there's so much education that is out there not only through our financial literacy program but i mean a number of them it's affording these kids these athletes these students access to this information and they're really taking to it.

8:10Let's shift a little bit and talk about innovation. So earlier this afternoon, you sponsored a breakout session, Innovation and Investing in College Sports. Talk about what role innovation plays in powering a fund like Invesco QQQ and shaping kind of the future for college athletics. Yeah, I think for Invesco QQQ, like we say that if you invest in QQQ, you're investing in innovation. And I think there's a few different layers to peel back on that onion. Like number one, the fact that this strategy was launched way back in 99, like as I said earlier, that in and of itself, that was a pretty innovative product.

8:52The ETF ecosystem was pretty innovative at that time. But we kind of look a little bit further because the companies that are in Invesco QQQ, like generally they seem to be able to stay ahead of the curve when it comes to changing consumer preferences, changing consumer trends. I mean, in this case, like wholesaling or looking different or the ability to stay nimble where these companies look way different today than they did three years ago, five years ago, 10 years ago. And throughout that, they've been able to generate very real fundamental growth, right? They've been able to grow sales they've been able to grow earnings and that has you know fueled a halfway decent amount of of performance so that in and of itself is pretty innovative and then you and then you look at sort of the crossover between sports and and some of these names these technologically oriented names it's no secret i mean any of the programming i mean everybody was talking about how technology somehow shapes sports that could be the way that we consume as fans the way we watch the game that what we have at our fingertips when we're watching the game the options that we have certainly big data analytics right if you look at preparedness right film study recovery I mean they lean they need data in an effort to get any sort of edge on a competitor and then you kind of take it a step further and you look at some of the companies Well, a lot of these companies that are in this fund are these social media companies.

10:25And if you look at NIL and where you can monetize your name, your image, and likeness, I think immediately you get the gravitation over to kind of the world of social media. An easy way to kind of get your foot in the door when it comes to NIL and promoting your own brand. So I think the intersection has only gotten kind of more entwined when you look at some of the names within the fund or technology in general and sports. It's revolutionizing the way that we consume, the way that athletes play, and the way that the game has evolved and grown over the past 20 years. And I feel like we're advancing at a pace that's much faster than at any point now and 20 years ago.

11:08Well, the other thing, you know, back to school for all of us with kids in New York today and the beginning of fall, which I refuse to say it's fall yet because I think we have at least 20 days more. or maybe 18 but college football is officially full swing right so let's do some lightning round on college football questions okay we ready all right everybody uh favorite college football rivalry uh i mean i love notre dame sc um but i will never say anything other than army navy oh very nice uh tickets to the game or home fan cave i don't know if i'm in the minority on this but tickets to the game i feel like i'm gonna show of hands um who's who's a fan cave at home and live no no yes wow okay live see my friends are all like no i'm just gonna sit in the basement and kind of relax and i got my big screen or whatever but no i gotta be there i love the idea of live i think especially you talk about innovation talk about technology you're hearing more and more people want the kind of experience of the game which is very exciting okay early season favorite to win the cfp my heart always says notre dame but i mean we get a we're sensing a trend we get it yeah i gotta i gotta stick with my heart i mean you get we got a free look last week i mean tough miami team on the road but i mean ohio state also probably um i think i probably know what the answer to this one bucket list stadium and or game day atmosphere yeah i know i know where i'm going i mean an lsu tiger right here i know i've i some people were trying to sway my we have any other tiger fans i'm i went to lsu anybody am i alone here okay i'm alone i was best stadium they were trying to sway me before penn state whiteout i had a couple of folks trying to lob in hey you know throw this on but again i i gotta just stay with what i really want and that would be lsv lsu death valley night game yes um mount rushmore of college football players the four best players ever and i'm going to do best players not heisman's not okay yeah cam newton herschel walker bo jackson vince young yes i like that that's ryan mccormick Senior Director of Factor and QQQ Equity Product Strategy at Invesco.

13:38Speaking with Bloomberg's Christine Cook from Bloomberg Power Players New York on investing in college athletics. Up next, we go through some of the latest headlines in sports, including a big Saudi sports conference that didn't happen. I'm Michael Barr. You're listening to the Bloomberg Business of Sports from Bloomberg Radio around the world.

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14:29They 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. So 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 missed 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.

14:57this 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 we haven't even gotten to the FIFA World Cup hitting the U.S. in 2026 and plans are already getting started for the World Cup in 2034 a part of that planning was supposed to be the World Stadiums and Arenas Development Summit in downtown Riyadh. It was scheduled for earlier this month, but it was postponed. Damian Sassauer and Vanessa Perdomo caught up with Bloomberg U.S. sports business reporter Randall Williams to talk about the big Saudi sports convention that did not happen and some of the other headlines in the world of sports.

15:42Let's take a listen to their conversation. Well, it sounds like this conference they were having is for an anticipation right of the World Cup, right? They're supposed to have the World Cup, I think. I forgot which year it's coming. 2034. 2034. Thank you, Vanessa. And they have to build a lot of infrastructure to handle what is going to be a huge, huge audience. And am I to believe that they're falling a bit behind the eight ball here? I mean, what did you learn? I think World Cup preparations are hard anywhere outside of the U.S. The U.S. is naturally built for it because there's a lot of stadiums and things like that.

16:08But when you take this to other countries, I don't think it means that they can't do it. It just means that it requires a lot more money, a lot more commitment, a lot more labor. And there are some countries that are better fit for it, and there are others who aren't. I think the Saudis can do it. It just needs a lot of work. Yeah, I mean, let's be real. The Saudi World Cup is going to be similar to what we saw in Qatar in 2022. Agreed. It's going to be absolutely outstanding. And they're probably going to want to break that record, don't you think, for the most expensive World Cup ever? This one is probably the most sustainable, the one that we'll see next year.

16:38But, I mean, you talk about brand new stadiums, brand new training facilities, probably hotel accommodations. It's a lot of money that's going to be spent there. No one's talking about it right now because everyone's so excited for next year. And then we have the 2030 World Cup after that. But, yeah, 2034, which I'm glad that that is a long time from now because, I mean, you start talking about things. And we were talking about the World Cup years ago, and now it's basically tomorrow. So good ways away, but a lot of money to be spent between now and then. I think one of the, I wouldn't say issues, but one of the difficulties with sporting events in Saudi is just getting out there.

17:15And from the boxing, from the UFC perspective, they've held events there. But a lot of times, like, it's a haul to get out there. And if you're only there for a couple of days, it better be some damn good business that you're doing. Otherwise, I mean, a lot of these sports companies, investors, business people are like, ah, I don't know if I want to spend, however, I'll just say 16 hours on a flight. So I think there's things like that going on. But at the end of the day, money is money. And if the Saudis are paying as they are in a lot of sports, named golf and tennis and everything else, then this World Cup will come along just fine.

17:49All right, Randall, as we talk about things that are going to be expensive and being built, you recently wrote about the Chicago Stadium for the Bears and Denver. They are now getting new stadiums. Tell us about that. Yes, so the Bears made their move official. They're moving from downtown Chicago to Arlington Heights. There's some things that they have to work out there, but that is the site of their stadium they purchased. I want to say it's 300 acres. I think it's 326 acres in Chicago some years ago. That was potentially for a building down there. Now it's official, so they'll be moving there.

18:20In Denver, they already have the land set up. This is another Walmart family that's going to be building. Another Walmart family. Another Walmart family, right? Yes, a retractable roof. I think both of these stadiums will be super expensive. Yeah, they have to. I see Vanessa's eyes watering because this is the end of Soldier Field, right? I mean, 100 years and like in a windy city and all that stuff goes away overnight because, as you rightly point out, they're going to have a roof on that puppy one way or the other. Yeah, I think a good portion of NFL teams are looking at stadiums and looking at them as multipurpose facilities now.

18:54Both the Bears and the Broncos mentioned Super Bowls. And one of the jokes that I have in this newsletter is that it would be cold as Helheim in both of those cities in February. But the reality is that in the NFL, if they move to 18 games or 17 games, either or, you host eight or nine home games a year. And so that's nine dates out of a 365-day calendar. And if you have an open-air stadium, then you can't host a lot of events during the wintertime. And so with the Bears, the Broncos, the Chiefs, the Browns, and so many other organizations, this isn't just specific to the Broncos and the Bears.

19:29But they're looking at, OK, like, how can I make the most out of this money if we're going to be putting billions of dollars into it? And so a roof is the way that you can do that. It is the way to do that. But at the same time, it makes me nervous that you say Super Bowl. Right. Because the last frigid one was in Minnesota. You were at that one, right? I was not at that one. OK. But I understand what you're saying. Yeah. I mean, I don't want us to be rolling up to a, you know, Chicago Super Bowl in a couple of years. Yeah, I'll be honest. I think that the Chicago Super Bowl, I believe Kevin Warren, Bears president and CEO Kevin Warren, wrote in his letter a 2031 date.

20:05I think that's a little bit ambitious. I do think that when stadiums get built, that the NFL does make an effort to show off these new facilities. And the way that they do that normally is you get a draft or you get another event there in your local municipalities first before you get a Super Bowl. So will the Broncos and the Bears eventually get a Super Bowl should their stadiums be built? I think so. How imminent is that? I would say 10 years out. I mean, you still have Nashville that has to be built. I think Jacksonville is getting a new stadium. Both of those will come first. And that's not even including, we still have SoFi and Allegiant.

20:39I think the Sports Business Journal reported a couple days ago that 2029 is looking like Vegas. Once the Titan Stadium opens up in Nashville, I think that's a new Nissan Stadium there, they're going to be bidding for a new stadium. And so at that point, you get to 2030, and now we're looking at 2031, and neither one of these stadiums have even started construction yet. But 2031 is ambitious. But it's better for business, do you think, for the NFL's business of the Super Bowl week to host in warm cities? I think so. Absolutely. I mean, if you're talking about what is a destination, one of the reasons that Las Vegas and Los Angeles and so many of these others, Arizona, Jacksonville, Miami, all of these are destination cities because people want to go down in the middle of February and be warm.

21:22If you're going to Chicago, yes, that vibe is completely different. Minnesota and so many other places. Damian? Here's the interesting thing, and you pointed out so clearly in your article, is these huge$5 billion,$4 billion new stadiums are being funded privately. And I think that is just fascinating. That means that there is an ROI for the debt and the equity investors out there for building these multipurpose facilities. And so it's funny because there's been all this backlash against municipal taxes and taxing locals to fund this. But I mean, how did the public sector mess this up? These were real investment opportunities that they're shooing away.

21:57We don't want to fund this. But obviously to a private investor, to real institutional capital, there's got to be something here now. You have an interesting perspective there because I think that a lot of politicians would disagree with you there. I think that there are a lot of politicians who don't. And granted, let me say this. I think the culture of sports depends on where you go. If you go down, if you look at Charlotte, Charlotte made a stadium and made a deal with David Tepper very quickly. Jacksonville made a deal. In D.C., Josh Harris made a deal. But some of these cultures aren't, and some of these politicians in some of these cities don't have a lot of money.

22:33And Chicago is one of those cities. Chicago is one of them, yeah, for sure. Now, what both of them are saying is that they will be privately funded, but they won't be paying any new taxes. Now, Chicago has a lot to work out there. In Denver, I think things are a little bit more simple because, again, you have the Walmart family. Now, will Greg Penner come out and pay another$5 billion similar to what the Cronkies did in L.A.? I don't think so. But, hey, I don't know. Maybe he wants to build a state-of-the-art facility that will be$4.5 billion. I doubt it, but you never know. In Chicago, I think that it's a completely different issue because this isn't a Walmart family.

23:09And while they do have Greg Ryan as a part owner of the team, we don't know if Greg Ryan is going to be offering up any money for this. and the McCaskies are an older family. They aren't the biggest capital family in the NFL in terms of the cash that they have to spend on this. So Chicago has some work to do, but at least they've chosen a site. It just feels like with everything that's happening in the NFL and really just in sports in general with new facilities and team valuations, that everything is chasing a record number. So you don't think that these owners will want some sort of record when they're building these new stadiums?

23:45No. No, no. And the reason for that, I mean, if you look at if you stadiums are the most expensive things for these owners to build by far, it's not even close. And the reality is not there's not a lot of people who just have a lot of money to spend on these things. That's why private equity was brought in. That's why you see more transactions happening, because there are some owners who are looking for liquidity. Philadelphia is next. They've floated that around with their season ticket holders. And so I do think that there are owners who are willing to pay, but they see this as a public-private partnership.

24:17And sometimes their politicians and the people that live in the cities that their teams are in, they don't see it that way. And Kansas City is a perfect example. How many Super Bowls have they been to in a row? How many Super Bowls have they won in the last six years? Three and I think five overall. And yet they couldn't reach a deal. Maybe that was because of the Royals and maybe they'll be able to reach a deal in Kansas or in Missouri. We'll see. and I do think that they will get a deal done. But when you win three Super Bowls, I don't think that the common fan would expect like, oh yeah, the Kansas Cityans, they did not vote for a new stadium there.

24:49That's kind of crazy. Randall, we only have a few minutes left with you and I can't let you leave without asking you about your favorite sport and that sport being women's basketball. And Unrivaled just raised a new round of funding which gave it a$340 million valuation. Now Unrivaled is the women's three-on-three professional league. Brianna Stewart, I mean, Talk to us a little bit about what's going on there. Yeah, they raised money. They're going to be adding teams. They're going to be touring as well. And I mean, the business that they built in less than a year, really, has been remarkable.

25:18The ways that they have in many ways been able to empower WNBA players who are now playing for both of these leagues has been remarkable. Are those players feeling that, do you think, new valuation, the players who got that initial stake in the league last year? I don't know if the players got a payout out of this. I do think that Unrivaled has been strategic on offering equity to specific players so that they can attract more players. Now, who are the two elephants in the room that they're hoping to land? Obviously, it's Caitlin Clark and I would say Asia Wilson. Now, neither have committed to play yet, but they're doing just fine without them.

25:56So if Caitlin Clark comes and plays in this, it's going to supercharge the league even more. They could be at a billion dollars in a couple of years from now, considering that they've already hit$340 million in less than a year. One of the things about Unrivaled was that it really impaired the players, like you said, and it was kind of putting pressure on the CBA. Now with this valuation, everything you know about the CBA, do you think it still has anything to do with any sort of pressure still at all, seeing this$400 million? In some aspect, the CBA negotiations are independent between the league and the union, of course, but it definitely has informed the union as far as what value and what sort of business the players have been able to raise themselves.

26:39I mean, you have to remember that this is founded by Nafisa Collier and Brianna Stewart, two WNBA players who were able to do a lot of this business alongside the infrastructure and the support that they have. And so if two W players can do this and the league, the WNBA, is supported by billionaires. And you have to imagine, like, the W players are then going back to the negotiating table and be like, OK, this is what we're hearing. And the W owners and their, I imagine, their collective bargaining committee are saying, this is what we think is a fair deal. This is what we don't think is a fair deal.

27:07And we're going to find out on Halloween, which, again, is the most poetic date for CBA negotiations to potentially end, if they're going to be able to come to terms with a deal. It's interesting because one of the reasons why I feel like, obviously, there could be a lockout for all of the reasons that we know. but less detrimental because they have this league to play in, actually, where they're making$100 ,000. In some aspect. I mean, the player population is a little smaller, but I do think that there are more opportunities here than there were a couple years ago. And that's a huge factor in things.