Power Players Descend on NYC for Bloomberg Summit

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2:17Ted Leonsa, Stoudard Chairman, Managing Partner, and CEO of Monumental Sports and Entertainment. Here's a little bit of what they have. Home to the Wizards, the Washington Capitals, the Washington Mystics, Capital One Arena, Eight teams, five venues, one media platform, and more. Once again, monumental sports and entertainment. Ted with us along with Gary Bedman, longtime commissioner of the NHL, former longtime general counsel for the NBA. Both join us here on set at Power Players New York. Welcome to both of you. Great to be with you. Well, we got a little bit of the panel earlier. We were able to take some of it and broadcast it to our audience across YouTube, radio, and Bloomberg Originals.

2:53You're up there with Scarlet Fu talking about the new fan experience. You've both been involved in the world of sports for a long time. A lot has changed. Streaming, sports betting, NIL, Carol, which I think is like the backdrop to everything that's happening here, the role of tech alone. What is this moment that we're living in right now? Well, I think AI is really the next big thing. With sports? Oh, yes, totally. How? Well, right now we're redoing our building, and all we're talking about is physical AI. How do we collect data? How do we, with 3 million people that come into our building, where are they coming from?

3:32How old are they? Who are they married to? How long have they had the tickets? What are they like? Where do they eat? What can we do to be anticipatory with our building? It's not just smart buildings anymore. or it's build the intelligence and the data right into that experience. You know, I just want to ask you, Ted, because you were at AOL in the early days. I mean, this is before you were in sports, you were in technology. So you understand the space. Are we in a moment now that is like when AOL brought us the World Wide Web? Well, I think the leagues, it seems like it's been a long time, but it's been a quick pivot to go from analog and bricks and mortar and linear distribution and local to be a global digital power plant, if you will, that we look at our teams.

4:26Obviously, they have high fanavidity, but it's IP. And how do we digitize everything that we're doing from the start and distribute it over our own channels? That's why we bought our RSN. Everyone was running out of the burning house. We said, let's run in. There will never be a better time to buy and reinvent the distribution model than there is right now. Gary, I want you to come in on the role of technology. I think all of us who are watching sports, I love it, whether it's tennis, whether it's golf, whether it's baseball, the statistics that come up. Hockey. Sorry, sorry. I was getting there.

5:03I was getting there. Sorry, sorry, sorry. Well, that's what I wanted to get to. How fast the puck is going or something. How much fans love that engagement? I'm going to respond to that, but I want to add on to what Ted said. Just so you know, I have four brothers, and growing up we had an ice skating pond that they dug out of the woods in the back and would play hockey. I knew I liked you and your family. You grew up with it. Sports tends to focus people at an instant, at a moment in time. The score of the game. What's the result? I don't think we're at a moment in time. I think we're on a journey, and we've been on a journey for decades, and the speed limits change on the road, road conditions change, there are curves, there are hills.

5:49But at the end of the day, it starts with the authenticity of sports and how important sports are in people's lives and how it brings people and communities together. And technology has enabled us to connect better with our fans. So AI, we're like any other consumer business. It's going to help us do business better. But also, it's going to help us make sure that our games stay true to themselves. I always tell, particularly my tech and strategy guys, we're not going to change the game to make it more tech savvy or tech favorable. What we're going to do is use technology to make the game more consumable, more connected.

6:37And so puck and player tracking at HL Edge is a function of that. We're gathering millions of data points a minute, but it's enabling us to take people inside the game. Maybe even people who don't know the game and understand it and let them say, wow, that puck traveled 14 miles with average 88 miles an hour. This player can skate as fast as 35 miles an hour, and he's already skated six miles in this game. This gets people to understand and feel more connected, and it's going to let us give them the game on their terms. Because with all the streaming platforms, you're going to be able to sit at home and decide how you want to watch the game.

7:19Not the way we've done it from a linear standpoint since I was a little kid. Right. And people my age are used to sitting on the couch and doing it. We used to get in front of my dad and be like, you know, get down, get down because you couldn't rewind. But if you're a Gen Z or a Gen A and you want to focus on a particular player and you want Dana simultaneously and you want to place a bet, you're going to be able to do all that and buy a jersey all at the same time. In addition, what fucking player tracking has enabled us to do is use the metaverse. We use animated versions of our game in real time.

7:55We were the first sports league to do that, and it works really well, and it engages young people and their parents. You know, I'm thinking about all this, and I'm thinking about the technology and thinking about the investment that's being made, and it reminds me of the way that we've seen sports turn into this premium experience now and the premiumization, this idea of it being a luxury good. And I'm wondering how you think about that, Ted, and how, you know, it's not like you go to the ball. Well, I guess ball games are still affordable. But apart from that, I mean, some tickets just end up being so expensive.

8:28How do you think about that for your customers? Many of us have run big public tech companies. And when you come into sports, you say, oh, the model is like a software company. We have nothing but blue chip clients, naming rights, suite sales, big sponsorships. media deals with the biggest companies in the world, Amazon and NBC, Comcast and Disney, ESPN. And they pay us over 10 years or longer with Escalate. So the model looks just like Salesforce.com or Oracle. Those are very valuable companies. it's why they're valued at a multiple of revenues, not a multiple of EBITDA. So that's what's happened to sports teams.

9:23It's where six times, eight times, ten times, twelve times revenues. But for those of us who came in from public companies and tech companies, I go, we don't have an R &D budget. Think about that. We didn't have a CTO. We were one of the first teams that, I mean, we made a major hire. We have software developers. There's like those software developers in these teams. That's a big part of the pivot, right? If you're going to be digitized or die, if you're going to try to get your products and services out and build brand and build audience on a global basis, it all starts with taking a pixel and digitizing it.

10:11And we're now, I've owned the team 26 years, but there's now a lot of the big markets and more innovative companies that have said, yeah, we're not just a hockey team. You've got to have the hockey team as the ethos for the competition for the fans. But as a business, these have become big businesses. We're going to be doing two years from now, a billion dollars in revenue. You were valued at about$4 billion back in 2023 with the Qatar investment. We've been valued now close to seven. It's big growth in three years. Good business. It's good business. But we're doing$750 million in revenue. But the landscape, and it relates to everything that's going on with the distribution of content, No matter what platform you're talking about, live sports is the most compelling, most valuable content.

11:04And that's what's driving the values that you're seeing. Right, because there's so much stuff out there. But you're right, people tune in, write to see something. It's reality TV. I mean, it really is. You're right. But I think one thing that people miss, too, the world's in chaos. and it's not going to get more calm, but there's something about you go to a game and you know the puck's going to drop at 7.06. You know where the game is going to be televised. You know where your seats are. The players know if you make the wrong pass, it goes over the blue line. They know what penalties are. There's referees.

11:51And while there's people boo at the referees. Wait, are you saying there's guardrails? I'm saying that there's structure, right? Yeah. I was amazed that at the World Cup, you have countries fighting each other, at war with each other. Yet they get on the pitch, and it's, I know this line is out of bounds, that this is a boundary. I think we crave that. We want a level playing field, and you want meritocracy, and you want to see how people can compete. And yet politics, geopolitics have gotten their way into sports. And I think about the NHL being kind of the most international and Canadian of all U.S.

12:30pro sports. And yet geopolitics coming from the White House, whether it was over trade and terror policies, we saw that play out, certainly. It did during the Four Nations in February when Canada was playing the U.S. in two games, including the final game. But what's great about sports, and it transcends geopolitics, because sports brings out people's passion and it brings people together. Even if they're rivals, their common interest in seeing the game and the outcome, and even within a particular country, You know, no matter how diverse a country is, on whatever basis you're figuring out what the diversity is, people come together.

13:12It brings communities together. And when you have assets, franchises like Ted has in Washington, they make a difference in people's lives. Their outreach in the community, their youth programs, using sports to teach young people life lessons. That's as important as anything else that we can do in sports. And I think monumental, what Ted does in Washington, is a great example of being outward facing in the community and making a difference. So we helped the White House have the inaugural at our arena. We called the world's most important arena. And that same week there was a study out on who is the most popular and best athlete in Washington sports history.

14:01And it's a Russian, Alex Ovechkin. He broke Wayne Gretzky's record last year, and he is beloved in Washington, D.C. Yesterday, we announced a naming rights deal with Kupang, a South Korean company, e-commerce company. We're global, right? We are exporting our IP around the world. We have these icons, these great global brands. Advertisers want to reach those fans. And so, you know, it's just ironic. Here we are in Washington, D.C. As I said, I can see the White House. And while they're churning on things, sports is the great united. And didn't that poll also say that you were the most popular owner?

14:56Let the record show Ted did not answer the question. I think you guys need a little podcast. You want to be modest. It's good to hear that. It's good to hear that sports really kind of brings people together. We do see that over and over. Gentlemen, thank you so much. Thanks for being a part of this. Ted Leonsis, founder, chairman, managing partner, and CEO of Monumental Sports and Entertainment, Gary Bettman, commissioner of the NHL. Stay with us. More from Bloomberg Businessweek Daily coming up after this. What if data didn't sit still? What if intelligence moved with us? Not buried in reports, but activated in real time.

15:32Where lives are being shaped. Where decisions are being made. It all starts with a question. Where is the potential? Cotality turns data into clarity. Intelligence into insight. Insight into action. Because when intelligence moves, we all move forward. Cotality. Intelligence beyond bounds. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day.

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17:54This is Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. College is under a lot of pressure right now. Just this afternoon, Northwestern University president Michael Schill resigned after a three-year tenure marked by controversy over protests on campus, conflict with the Trump administration over research funding, and a hazing scandal in its football program. College athletics, not immune to all this pressure either. Fair to say NIL, also known as name, image, and likeness, has completely changed college athletics. There have also been labor challenges that have come along with this.

18:28Makes it interesting on college campuses. For a view from one campus, we have Mike Herity with us, Haldeman, Family Director of Athletics and Recreation over at Dartmouth College. Also with us is Bloomberg News Higher Education Finance Reporter Janet Lauren, both here at Power Players New York. And they were both up on stage, weren't you? College athletics, going through a lot. We were just talking about the ability for college players to move around and kind of, you know, find the best deal. Tell us what it's like to be an athletic director in today's environment. And you're also, a lot of colleges and administrations, I mean, a lot of academic administrations are also catching the attention of the White House.

19:08So what's it like to do your job today? Yeah, just a few things going on. Just a few things. Just a few things. First of all, thank you for having me. I'm honored to be here. You know, at Dartmouth and in the Ivy League, We're really distinct as it relates to everything going on nationally in terms of the house settlement with revenue sharing, name, image, and likeness. We have real NIL as it was originally intended. That means a student athlete can have a sports camp using their name or be an entrepreneur and start their own business. But any kind of pay for play, that is not something that's aligned with our values and our presidents have made it clear in the Ivy League that that is not something that we're going to do.

19:46That's an Ivy League rule or a Dartmouth rule? That's an Ivy League rule. Okay. Yep, and voted on by all the presidents in the Ivy League and certainly supported by the athletic directors. But having said all that, we're still very competitive nationally. The Learfield Directors' Cup, which measures postseason success in NCAA championships, there's a Power Four. Those are the top four conferences when you measure that. We're the fifth. When there was a Power Five, we were sixth. So competing at the national level in the sports across the board has been a really, really shows that we can have the primacy of academics and also, you know, pursue excellence in athletics.

20:23And those things are not mutually exclusive. Does it make it harder to recruit though athletes? I think it actually makes it easier in today's world in that our value proposition has always been different. The Ivy League, we do not give athletic scholarships. It's always been need-based financial aid that has not changed. So that was a differentiator between scholarships and that. And now we can, we're doubling down on our distinctions. And what we're finding is as Power 4 institutions are emphasizing certain sports, primarily football, basketball, maybe one beyond that, the Olympic sports are being de-emphasized, reduction in scholarships, reduction in opportunities to compete.

20:58And we're sitting right there to benefit from that. And our coaches are telling me that we already are. So that's really exciting. So take us back to what happened last year with the men's basketball team. There was a vote of 13 to 2, I believe it was, to unionize, and then they pulled back earlier this year. What was that like being in the athletic director's chair? Yeah, there's no playbook for it. You know, when I took the job and started in July of 2022, if you would have told me that Dartmouth men's basketball was the first union in college athletics history, I would have called you crazy.

21:30But we learned a lot. Dartmouth has a long history of supporting unions, including student worker unions. We just fundamentally believe that student athletes are not employees for many reasons. one of which is the athletic endeavor itself we view as an extension of the educational core mission of Dartmouth. And so our president, Sian Bylock, a phenomenal leader, was public in saying that we would appeal that all the way up to the Supreme Court. They did withdraw their unionization effort right around New Year's Eve. And I'll note that the team went on to have the best on-court season in 25 years after that.

22:06Pretty impressive. Well, so what is the greatest challenge for you today when it comes to college sports? Yeah, for us, you know, we're always thinking about how do we best deliver on the promise that we make to the recruits who come to our institution. You know, Dartmouth's mission is to attract the widest swath of really motivated, you know, students and send them off into the world as responsible leaders. And we play a key role in that. So we have 35 varsity sports. We have over 900 varsity athletes. They're roughly 22 % of the undergraduate enrollment at Dartmouth. So I wake up every day thinking about how do we better support them to strive for their aspirations and help support their holistic development as students, as people, as athletes.

22:53And I know that sounds really lofty, but everything we do from driving revenue, philanthropy, we landed the biggest gift in Dartmouth athletics history from the Lewinstein family two years ago. So all that goes back into supporting their health, wellness, and overall development. So earlier in the conference today, we were talking with some athletic directors who are writing very big checks to their students. Could you talk a little bit about the difference in what's going on on your end where you have to approve or you have to attest to NILs that are$2 ,000? And I just want to clarify for everyone, Janet.

23:27Janet, what you're saying is the schools are actually the ones that are funding these athletes, right? They have to pony up, if you're at a Power 4 conference,$20.5 million a year to athletes. Okay. Sorry. Go ahead. We do not.

23:46But what I'll say is we have a variety of rules that ensure that the presidents have directed that there is no pay for play. So with that, yes, every deal,$2 ,000 and above, I review personally to evaluate that. And also we attest as athletic directors that we are not in any way directly or indirectly, you know, asking a donor alum to give money to somebody as a recruiting inducement or if they want to go in the transfer portal as a retention inducement. And it's really the spirit of it that we as ADs have all really committed to in our conversations because I believe our distinction is a strength in today's world.

24:25Women's sports? Yeah. What's changed? I mean, we feel like there's been such an explosion and a lot more attention. Yeah. The media rights, viewership, certainly on a professional level. But for you guys in terms of college sports? It's exciting. It's so exciting. What does that mean, though? Well, I'll tell you. I was at Notre Dame when women's basketball won a national championship, and I saw how it mobilized that community in a way that I hadn't seen before in my then 20 years in college athletics. It's amazing. Here, what I'm mostly concerned about, yes, that is all true, and also as the power for the revenue sharing happens, there will be de-emphasis on Olympic sports, which would include both men's and women's sports.

25:05So when you're focused on football, maybe men's and women's basketball, there will be de-emphasis on the swimmings, the tennises, the golfs, and so on. So that's an advantage. Because the money isn't being committed. It's not. It's not coming in for those Olympic sports announcements. I think a lot of presidents and athletic directors have been public about sharing that that's a reality, that they need to pay. An SEC school announced, for example, 85 % of their$20.5 million was going to football. The other 15 % was split amongst basketballs and maybe one other sport. So the opportunity for us in a broad-based program in the Ivy League, which we believe strongly in, is that we'll always have those opportunities for them.

25:40We're not cutting sports. We are very committed to the broad-based program, and that includes women's sports. But as a father of two daughters, 15 and 12, who are gymnasts and soccer players, it's really exciting. I just can't believe it's so different at the Ivy League versus these other schools. I know. And we still compete at a national level. Don't forget that. Yeah. We're still learning up and winning. And it's also just completely different in just a few years. I mean, this was all unheard of. Yeah. A lot of it was happening. Look, a lot of this was happening. Was it? I went to a party at a car dealership owner's house during a tournament and saw a lot of players from a basketball team there.

26:23This was all before NIL. And it was like, they're like, oh, yeah, they just hang out. You know, it was like unofficial sort of like, I don't know if they were getting a car, but they were very comfortable and they knew him very well. And like, he wasn't a part of the school. It was very interesting to see. Let's just say that. Just last question. So when you think about your career, and I know you obviously sound like you like where you're at, but would that shape you? Do you want to stay kind of being an athletic director within the Ivy League community? Because it does seem a little bit more pure.