ICYMI: The Next Sports and Entertainment Empire

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1:31Podcasts, radio, news. This is Bloomberg Businessweek with Carol Masser and Tim Stenevek on Bloomberg Radio. Well, the WNBA, known as the W to fans, announced plans to expand 18 teams by 2030, adding Philadelphia, Detroit and Cleveland to the previously announced Portland and Toronto teams, which begin play next year. The expansion builds on several seasons of dramatic growth and comes at a time sports teams have been getting acquired for record-breaking and eye-popping amounts. So let's talk about sports and entertainment and hospitality. We've got Sam Zussman with us. He's CEO of Brooklyn Sports and Entertainment.

2:12It is the parent company of the NBA's Brooklyn Nets, the WNBA's New York Liberty, and their home arena at the Barclays Center. We're also joined by Randall Williams. He's a familiar voice and face to all of you. He's Bloomberg News Global Business of Sports Reporter. Both of them join us here in the Bloomberg Interactive Brokers Studio. Sam, I want to start with you. I think, you know, the brand Brooklyn is something that you are leaning into big time here with the Brooklyn Nets. Also, of course, with the New York Liberty, with the Barclays Center. But I think people outside of New York might be surprised to find that the Barclays Center, basketball is a big part of it, but it's not the biggest part of it by any means.

2:52sort of break down the share of what comes from basketball versus what comes from everything else that the Barclays Center does. Yeah. So thank you for that, Tim. So Barclays Center is a real entertainment mecca. We are open roughly 190 nights a year. We do somewhere around 75 to 80 concerts a year. Brooklyn Nets games in the 40s, Liberty games in the 20s. We are the third highest grossing arena in the world. And it's not just about the content, it's also about how we do it. Our goal at Brooklyn Sports and Entertainment is to create bold and unique experiences the Brooklyn way, meaning Brooklyn DNA.

3:48If you sort of think about what Brooklyn stands for globally, not just nationally, for creativity, for relentless hustle, for authenticity, for diversity, we represent about 150 different cultures. and so we want to make sure that when you come to an experience at Barclays Center, whether it's a concert or a game, you have a unique Brooklyn DNA-based experience that might be different from the experience you would have with the same game played at a different arena or the same concert played at a different arena. And we manifest that with food, with service, with ancillary entertainment, with how the venue is.

4:34And the fan experience, the audience experience is sort of first. And we manifest that. So, Sam, one of the things you mentioned was culture. And the reason I bring that up is because obviously New York City has a lot of it. But Madison Square Garden in particular has been open since 1968. The Barclays Center opened, I believe, in 2011 or 2012. You built culture in 15 years to become the third highest grossing stadium or arena in the world. What went into that? So the work and the vision of a lot of people that came before me. But I would say it's focus, first and foremost. But secondarily, and maybe first, is a lot of long-term thinking.

5:22So we are, I consider us and the ownership group to be long-term builders. Everything that we do is with a long-term goal. We're focused on building generational fandom. We're focused on building the experience, the service that we provide, the training that we put in, the selection of vendors, the selection of entertainment, the selection of concerts. If you look at Barclays Center, it is only, to your point, opened in 2012. It is only 13 years old. And we've already embarked on a set of arena renovations with over$150 million over four years. and we've opened several new clubs that you told me.

6:16The Crown Club is my favorite. The Crown Club is my favorite. Yeah, and look, Crown Club literally is first and unique in its experience. A chef restaurant with unparalleled wine list where people come in and they're having the time of their life. There are some people who don't even go to the games. They just go to the crown club and sit down there the entire time. I think Ramlin needs to bring me to the crown club. He's your guy, not me. He's your guy. A follow-up to the renovations. We're seeing this age of sports teams who have to renovate these stadiums, and the cost of that continues to go up.

6:59You guys obviously got out ahead of that. Why is that important to say, hey, we're going to put money into this, even though the stadium is less than 15 years old? You know, there's a world where the Psy family could have waited 20 years down the line and be like, okay, now's the time, but you're out ahead of this. Why is that? It is because we're long-term thinkers and it is because we're audience and fan focused, right? So just to give you an example, we have taken two levels of suites and we've turned them over into bull-facing clubs where the reason we did that was not the utilization the reason we did that is that we noticed that the consumption pattern and the preference of the audience has shifted people like less to run from their seats to buy something and run back and miss the game and so on there are there are folks who come in look when you look at overall how you experience a concert or a game it's an experience it's it's it's entertainment and so if you can offer somebody the opportunity to come into a club with several hundred people to be able to eat drink take that food um to your seat watch the show or watch the game go back and forth be with your friends entertain your clients.

8:27It's a very different experience than buying a ticket and sitting in a seat. And so what we've observed is this is the trend. This is what people want. We've done primary research. We spoke to people. And so we want to give that experience to people. And we have not invested, we're not doing this because things are getting old, because we want give things a facelift we're doing this because we want to satisfy the patterns of what we hear people are wanting and we believe in the notion of keeping everything fresh of being being leaders and thought and entertainment and and we're putting our we're putting our money um you know to to work i want to talk about the growth of women's basketball and the wnba randall had pointed out to Tim and I that the Liberty were ranked the second most valuable WNBA team 450 million at least by Sportico is it possible to get to one billion and and what would that look like talk about like how we've gotten here and where we're going um I think it's not just possible I think it's highly likely you think there's a race to get there um look we're in sports there's always a race right the look we don't but i would say this the race is to win another championship um to be a dynasty to give fans a great experience to um have the best players to um to take care of our players and so on that's that's what the race is not to the valuation you also don't dictate the valuation the valuation comes because you do all these things uh right but yes i do think that it will happen i think it is um you know famous last words but it feels to me like it's straight down the fairway when i look at i joined the company three years ago i have seen the average crowd go from um 2000 that's a much different time three years ago From 2 ,000 to a sellout.

10:34I have seen, you know, I won't belabor all the key performance indicators, but attendance, ticket prices, season ticket holders, sponsorships, every single metric has gone up tens of percentages a year. And when you are at the arena, it's palatable. A Liberty game is loud. It is a party. It is a fun experience. Everyone is invested. And there are some things that you could just see. You can feel. We're speaking with Sam Zussman, CEO of Brooklyn Sports and Entertainment. Also joining us, Randall Williams, Bloomberg News, global business of sports reporter. Sam, how is the consumer doing right now based on ticket sales?

11:26Are you seeing any weakness, any lack of demand in different events due to concerns that the consumer has about parting with discretionary income? I mean, there's nothing essentially more discretionary than what we're talking about here. Yeah. You know, it's interesting. We are we're in the experience economy. Right. Like when you think of people buying products and services, they do that in order to save time, in order to gain efficiency. For us, it's the opposite. For us, people are giving us their time and giving us their money in order to gain an experience. And so it's quite interesting. It's in good times that people want to do it, and it's actually in tough times that people want to do that as well.

12:10And so, look, I can't exactly measure the macro, but I can tell you in the micro, if we look at attendance in concerts, it is stronger than ever. If you look at attendance in Brooklyn Nets and New York Liberty Games, we are in the high 90 percentage. percentage. You know, when you look at discretionary purchases of merchandise or food and beverage and so on, if you look at ticket prices, if I only had those to go by, I would tell you that the economy is doing great. Sam, one of the things that both you and Emily mentioned was the growth of the WNBA. And I'm going to ask you about the CBA negotiations that are going on, and I don't know if you can answer that but the players have said they want better salaries better benefits increased retirement all of these things we haven't heard much from the league so from your vantage point what do you think is a fair deal from both sides because you know these cba negotiations go on once every decade and we only have 20 seconds yeah well i won't use that because i that is actually a topic that i um that i should refrain from it's it's an active negotiation And so I think we should let the professionals negotiate around the table.

13:29A good place to end it. Sam Zussman, CEO of Brooklyn Sports Entertainment. Randall Williams, Bloomberg News Global Business Sports Reporter. This is Businessweek.

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