The Hidden Business of Sport: Why NFL Teams Are Worth Billions

0:00Anthony Cheung: This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed Sponsored Jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed Sponsored Jobs. Get a$75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed Sponsored Jobs. Hello and welcome back to the Market Maker podcast and one story this week but it's a big one. We're going to go deep into the Koltzler family's acquisition of NFL Super Bowl winners the Seattle Seahawks for 9.6 billion US dollars smashing the record for an NFL franchise.

0:50Anthony Cheung: We're going to use this acquisition to revisit one of our favorite topics and that of course is the business of sport. And just on the coattails of the World Cup, what a perfect time to bring those two things together. We're going to talk about why NFL teams in particular are such attractive acquisition targets for multi-billionaires going deep into the murky world of tax codes and tax write-offs, of course. And we're also going to focus on the business model of NFL teams using the Seahawks as a great case study to understand revenue drivers and also growth engines. And as per usual, there'll be a little quiz, I'm sure, from Stephen, not just to me, but to you also listening, which I'm going to need all the help I can.

1:33Anthony Cheung: So Stephen, how's it going? Different background than normal. Where are you? Yeah, different background. I'm actually in Bristol. So shout out to everyone who lives or studies in Bristol. It's a brilliant city. I'm currently in a very kind of dampened room. So hopefully no one outside can hear some of the stuff that I'm going to chat about but the first thing i wanted to talk about before we get into the uh to the kind of crux of the story just linking it to the world cup did you watch any of the games that were hosted at the seattle seahawk stadium lumen fields it's a seriously cool stadium no i mean i'm trying to think of the games i did watch i don't think i heard them say what teams were of the stadiums I wasn't even clocking where they were, I don't think, for most of the time.

2:21Anthony Cheung: But yeah, I've seen an image in your notes and it looks ginormous. Well, look, it has set two Guinness World Records for the loudest stadium, 137 decibels. And they called it in the 2011 NFL playoff game, they called it the Beastquake. it was so loud that it caused a minor earthquake or at least a tremor so you know that's the uh that's the stadium that these guys operating in it's a pretty cool stadium i just punched it in quickly to gemini what's the comparison of 137 decibels jet engine standing within 100 meters of a jet plane taking off or firecracker at close range or a small unsuppressed firearm crikey we all know that we all know the sound of that uh well i tell you what i think they also broke a record let's see if i can get this as well ah here we go taylor swift just to kind of bring different fans from different sides of the uh the spectrum uh into this episode taylor swift performed two back-to-back sold-out nights of her era's tour and the energy from the crowd registered a 2.3 magnitude earthquake dubbed the swift quake surely surely this is bad architectural stadium design i can't hear anything it's gonna disturb the game because i'm causing tremors like doesn't matter it's america baby it's america yeah louder bigger the better we all watch the world cup halftime show we all have our opinions i'll pass no judgment or comment on that so so yeah what what's the story at hand then here okay all right so the headline and this is from a couple of weeks ago maybe just a week ago but it's a really interesting one is that the Kostler family, Vinod Kostler being the guy who set up and founded a company called Sun Microsystems that we might get into a bit and then became a bit of a legendary venture capital investor, investing in the likes of OpenAI and Anthropic and things like that.

4:42So Vinod Kostler and the Kostler Consortium has won a auction because the Seattle Seahawks were put up for auction, has won the auction for the Seattle Seahawks valuing the NFL franchised based in Seattle, USA at$9.6 billion, which is by some way the highest amount ever paid for an NFL team. I think the next highest was the Washington Commanders back in 2023 that were sold for just over six billion dollars and the Seattle Seahawks really interestingly it's been owned by Paul Allen so Paul Allen Microsoft co-founder who sadly passed away in 2018 and it's subsequently been run by the estate of Paul Allen and Paul Allen's sister Jodie Allen as well but Paul Paul Allen bought the Seattle Seahawks in 1997 for$194 million, sold it 2026,$9.6 billion.

5:54That's a 50x return in around 30 years, about a 14 % compound annual growth rate in terms of return. So not a bad little investment from Paul Allen, the co-founder of Microsoft.

6:09Anthony Cheung: I don't know why, but when you were saying Paul Allen, the first thing I quickly double-checked, I was like, what's the link again between Patrick Bateman and Paul Allen for American Psycho? I was like, yeah, that's the guy he brings back to the apartment and then just clobbers him with the axe. But yeah, sorry, my mind drifted there when you said Paul Allen. Not the same one. Well, look, the other Allen, and this is just a bit of a side note, there's going to be quite a few segues here because it's such an interesting story i got carried away um so the advisors the mna advisors on this deal for the coastler family uh boutique mna advisory called allen and company founded in 1932 it does technology media telecoms lots of sports stuff i think it did google's ipo activision's merger with vivendi i think the new york mets hired allen allen and co to sell a majority or a minority stake in the team.

7:06But anyway, so it was found in 1932 and it is run by the third generation of Allens. So Herbert Herb Allen III runs Allen & Company. So, you know, who said that the US doesn't have any history?

7:22Anthony Cheung: So how would you get into work at one of these firms? Would you typically, you would envisage work at one of the mainstream banks and then get inner sector coverage and then go over like how does it work yeah i think when it gets to this kind of boutique level obviously it really helps if your surname's alan but if you're not part of the clan it it strikes me as much more of a country club type hiring situation where you've probably got to know someone and you've got to develop that relationship and you might be as you as you rightly said, a Goldman Sachs or a JP Morgan, and you're made of the right stuff, maybe is the right way to say it.

8:06And you're asked with a little tap on the shoulder over a putt on the 18th green. Would you like to come and join us and be part of the Allen and Company family almost 100 years old? So yeah, I think it's probably got a bit of an old school mentality.

8:22Anthony Cheung: The auction process you mentioned, is that always the case with these major sports? franchises? Is that just the status quo of how this sort of thing works? No, I don't think it is. I think this was a relatively unique situation because it was known by everyone that Jodie Allen, Paul Allen's sister, wanted to sell the Seattle Seahawks to release money for her philanthropic endeavors and it was tabled that this is going to go out to auction to a number of credible bidders quite a long time ago obviously in a lot of mna transactions the the entreaties are from the buyers it's not necessarily put up the sale it's all right you know we found a really good match and we're going to try and make this work so i can imagine in a lot of other nfl or nba there might be preferred bidders there might be backdoor conversations it might not be this kind of maybe more transparent auction process that kind of everyone knew about in in the industry so next steps how what happens now then after this process has happened yeah absolutely so the kosler family vinod kosler being obviously the person with all the money but i think the family's involved i think uh vinod's wife is involved in son's going to be quite involved uh they obviously are the preferred bidder and that's great by the way vinod kosler already own a three percent stake in the 49ers the san francisco 49ers they're going to have to sell that because there are rules saying look you can't double dip you can't own more than you know percentage in more than one NFL franchise according to NFL rules potential the potential ownership group must have 30 % of the purchase price up front i.e Costa's going to have to dip into his pocket and find the best part of three billion upfront, you know, no debt, no kind of forward financing, no earn outs, no, et cetera, et cetera.

10:42Right. And that from an auction process that stops people like me and you coming in and tabling a bid saying, you know, we'll get the Qataris and we'll get the X and Ys on board and we'll figure it all out. So that's almost kind of, it's a billionaire barrier, right? Unless you're playing with the big boys you're probably not going to own an NFL franchise so they've got to come up with 30 % which is definitely possible for a family like the Coastlers it's also it's also likely that the Coastlers are going to be engaging other what we would call limited partners silent investors that are going to provide that are going to stump up a percentage of that 9.6 billion For example, the Washington Commanders, which was sold, as I mentioned, in 2023, had up to 20 limited partners.

11:34So smaller investors that come alongside. And obviously, you know, they want to get some of the financial upside, but they also want a box at Lumen Fields, right? You know, there's some credibility or there's some kind of a little bit of gold dust that's sprinkled on that engagement. And if you remember, for anyone that's been listening to this podcast for a couple of years, we spoke about this in 2024. We spoke about the fact that private equity, who had always been shut out from ownership of NFL franchises for maybe obvious reasons, the door was ajar and was made ajar in 2024 when it was agreed by the 32 franchisees.

12:19franchises, franchisees, that private equity could own up to 10 % as a silent partner of a particular NFL franchise. So it's not unlikely that an Aries or a Sixth Street or an Arctos could get involved and provide up to 10 % of that capital as a silent partner. Now, the only other wrinkle here is that all 32 NFL teams are going to be called for a special one-off meeting on the 26th of August, so less than a month away, most likely to vote on whether they're going to allow the acquisition to happen. And it needs a 75 % approval to go forward with the transaction. So again, just think about the volume of private jets that are going to be landing on that runway on the 26th of August.

13:15Their egos popping out of the plane, getting into this boardroom. You've got the owners of the Dallas Cowboys, the Washington Combinders, the Giants, all in this room going,

13:28Anthony Cheung: all right do we think this coastal bloke's up to it what what's the obvious arguments then to stop them from passing this so there are two arguments and i don't think either of them stand much mustard with regards to coastler one is do they have the money are they credible are they do they have the money and then some have they put together a good financing package with appropriate limited partners that are going to get involved? I think maximum debt is only allowed to be 1.5 billion. So you can't use a lot of debt financing for this stuff. And two, have they got a reputation of being a good actor and a good custodian of something that is deemed to be more than just a business as a going concern?

14:12So if Kozler had had an absolute shocker at the 49ers, which is a minority shareholder, I don't think he did. But if Kozler had owned a previous sports team and run it into the ground and price gouged and created enmity between the uh the the fans and the and the ownership and the management that's a reason why they would say no but i don't think he has so i don't think he will i got a quiz for you sure it's a double quizzer it's a double quizzer this episode i hope you're up for it so okay yeah all right before let's see if you know any links of the following sports club to the following celebrities so i'm going to give you i'm going to give you three celebrities yeah and three sports teams and i want you to get them right link so the three celebrities drake snoop dog okay and this guy's a celebrity only in a very small area Steve Ballmer the ex-Microsoft CEO I'm sure he's delighted to be hanging with Drake Drake and Snoop Dogg in this episode and then three sports teams Swansea City oh the mighty wow again again Swansea City in very good company here Swansea City AC Milan and the LA Clippers so three names three teams match them up Steve Ballmer's LA Clippers

15:43Anthony Cheung: correct I know that because he's a he's a he's an interesting guy when he's watching a game so you see him under the basket on the owner's end and he is a special guy yes um Drake and Snoop Dogg hmm I reckon Snoop is probably going to go for the smaller Swansea, the mighty Swansea City, Drake's got a little bit more ego and he's not as eccentric as our man Snoop. So he's going to go AC Milan. Okay, so you are absolutely right. Drake, massive ego. He goes with AC Milan. And what I've just done is I've just hopped in a little image of Snoop Dogg at Swansea City, swansea.com, the stadium of Swansea City, rocking the white of a Swansea City jersey and what he did when he announced his ownership his minority ownership can't remember I think he got involved with a couple of other players as well a couple of other people as well Luka Modric got involved in this Swansea City thing as well um the the Croatian football player but anyway so he goes to Swansea City Stadium and he says all right everyone get to the stadium 15 minutes early and all of the supporters had um white towels with snoop dog's face on them and he encouraged he did a kind of champions walk where all 18 000 people in the stadium were swinging their towel around uh and snoop dog was just absolutely loving it so you know what living a dream man such a legend uh but look so i think we've got a pretty good sense here of what's been happening and who they are and so forth.

17:29Anthony Cheung: Let's get into then the economics of the NFL. You said to me, I think it was prior to the call, that there's 19 games. I mean, I don't follow American football that closely. But I know in the NBA, if you're going to go through to the finals and wing the whole thing, you're talking like 100 plus. Premiership football is going to be, what, in the high 30s? This is half that. Yeah, you're totally right. The economics of the NFL is absolutely bonkers. And it's really, really hard to get your head around it if you're not based in the US. And it's this weird, almost

18:10socialist setup, which you would just never expect for a US sports franchise. So firstly, the annual revenue for TV and broadcasting is streets above any other league, right? So it's over$10 billion a year, signed up until 2033, I think it is. The next highest is the NBA, which is$6.9 billion a year. So$10 billion a year. And that is shared along with other broadcasting rights that is shared equally across the 32 teams, right? So they all get about$450 million a year guaranteed revenue. So think about this with your investor or acquire a hat on, right? This is unlike the Premier League. And I always revert to the Premier League when thinking about the business of sport.

19:10This is unlike the Premier League because crucially, you can get relegated. That is the biggest drag on the valuation of Premier League clubs, right? The fact that you can lose access to those revenue streams from broadcasting rights if you have a really shocking season, and we saw that with Tottenham almost last season, got very, very close to really, really being in significant financial trouble.

19:41Anthony Cheung: I saw Leicester got mentioned because they're currently on the chopping block. Is it Thai? They're investor. And then they won the title in 2016. And now they've been relegated three times. And they've just serving a penalty for fudging the books. So they got a six point penalty for the next season. And that's why football clubs are just not quite as attractive as an asset. We'll go on and talk about some other reasons why the NFL franchises are very attractive for billionaires. But the simple economics, there's a guaranteed revenue share of$450 million per NFL franchise. You cannot get regulated.

20:20They're relegated. So$450 million guaranteed, 32 teams. But what is so interesting is it's$10 billion of licensing broadcast revenue per year. But as we're discussing offline, these guys only play 17 games a year if they don't get through to the playoffs and 20 games a year if they win it. So the Seattle Seahawks won the Super Bowl in this year, 25-26, and they played 20 games.

20:55Anthony Cheung: This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed Sponsored Jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed Sponsored Jobs. Get a$75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed Sponsored Jobs. So there is something really instructive and something really interesting about this scarcity factor. If you compare it to multi-league baseball, I think they have like 180 games a year or something.

21:41And you think, wow, that's got to count for something in terms of viewers. but it's this scarcity the excitement that is across america whenever there is a a sunday or monday or whatever it might be that is showing an nfl match and all the games are big games i think i looked i looked up a stat according to sports media watch all of the 56 most watched sporting events in 2023 in the u.s were nfl games nothing else made it into the top 56 that's crazy i mean from an nba perspective how many games are there a year in the nba

22:20Anthony Cheung: yeah i mean it i'm sure what it is today but it used to be 82 but i remember well what tends to happen now in a modern game compared to 20 years ago is that the quality of the play is so bad during the regular season then all of a sudden they decide to start playing in the playoffs because there's a material, tangible outcome to winning and losing. And what that's meant is no one's got any interest at all in the regular season, like zero viewership, because why do you want to watch a game which is not competitive at all? You just don't, there's no appetite for that. It's the opposite of what you've described, where every NFL game is like Arsenal against Spurs or these sorts of big head-to-head clashes.

23:07Anthony Cheung: I can see the draw of that. Yeah, absolutely. And this is why, if you remember, there was that ill-fated move in Europe to create the European Super League, which was the kind of spin-off Champions League, where there'd be 24 teams or whatever the number was, including six teams from the UK or from England. and they were all guaranteed to be there and every match was going to be a big match. It wasn't going to be, you know, Man United playing Burnley or something like that. No disrespect to Burnley. But yeah, so every game is a big game. There is value, as we know, in scarcity. And because there are only 32 franchises, there's not going to be any dilution, right?

23:51So it's got this kind of luxury. It's got this huge protective moat around. it from a business perspective. It's got this scarcity factor, almost like a luxury brand. And it's got to the stage that I think 10 of the 15 most valuable sports teams in the world are NFL teams, which is bizarre because we don't really watch, you know, lots of countries don't really watch the NFL. It's really, really staggering. Yeah.

24:21Anthony Cheung: If you asked me about that question, I think about the World Cup, for example, which we've obviously just had it's such a global game where you know you could go pretty much in any content in the world and probably if you got that yellow brazil jersey out people will know whereas um whereas if you got the seattle seahawks i can't even tell you what color they were

24:50it's it's it's bizarre isn't it actually i'm going to give you my second quiz of the day that that's prompted me okay so well what's the color of the jersey yeah exactly according to forbes december 2025 top 50 sports teams in the world order the following from most to least valuable the new york knicks right ferrari f1 team not ferrari the entire company oh okay hang about there there's a little clock qualifier there just the f1 yeah no no it's not it's not it's Yeah, just the F1 team. Not the brand. Okay. Just the F1 team. The Dallas Cowboys and Real Madrid. So Knicks, Ferrari, Cowboys, Real Madrid.

25:37Most to least valuable.

25:40Anthony Cheung: Okay, so a couple of things, a couple of considerations here. Your Ferrari detail puts them at the bottom of the pile. I don't think the F1 team necessarily makes. They'll probably make quite a bit of money now though because I've seen the Lego sets. My daughters are pushing me for every five minutes these days. They look very cool. So I'm going to put them at the bottom. The Knicks just won the NBA, so they've probably gone up in value. And they're an institution as far as the NBA, an American cultural icon for a major city. However, you just said all the biggest sports teams are NFL. So Dallas Cowboys number one.

26:22uh who is your fourth one sorry real madrid i'm gonna put real madrid i'm gonna go dallas nicks real madrid ferrari tell you what and you're good at this you're really good at this you know your sports valuation absolutely spot on so okay the dallas dallas cowboys number one And number one, the most expensive sports team in the world, most valuable sports team in the world, with an estimated value of$13 billion in December 2025, according to Forbes. The New York Knicks were sixth, second place for you, Ant. So sixth most valuable sports franchise, almost$10 billion. Third place, Real Madrid, who notched up, I think they were the most valuable football team, but only the 20th most valuable sports team.

27:20So all the ones above are American, NBA, NFL, which is absolutely bonkers. And then you're right, Ferrari, still worth$6.5 billion, the F1 team, but that places it in 26th, the most valuable F1 team, just ahead of Mercedes. I wonder what the line items are for merchandise sales then and ticket revenue on the actual games, because in football and other sports, there's way more games.

27:50Anthony Cheung: So even though the stadiums are smaller, I'm assuming you get more revenue and then merchandise. Is these American football teams just pure ad revenue and TV licensing and things like that? What proportion of revenue does that make up? Yeah, it's a really, really interesting question. So I'll give you two answers. So one, you're kind of right. So I'm just looking at a bunch of pie charts that show the revenue split across different sports. And the NFL, 62 % of the average NFL team's revenue is what they call national revenue, which is this equal split of broadcasting and other rights. So that is much higher than any other, the baseball or the NBA or whatever it might be.

28:4219 % is seating and suites and corporate hospitality only 10 % is team sponsorships this would be very different for football by the way in terms of sponsorships versus other bits 7 % is concessions as you mentioned and then a tiny little slither for local media but what's really interesting from a business perspective and again going back to the deal rationale for Coesler and the Seattle Seahawks is you've got the Seattle Seahawks, which are subject to this revenue share thing, this revenue share piece, which is beneficial to the entire 32 clubs. But also you have a massive stadium. They don't own the stadium, by the way, but they license and run the stadium.

29:30So the stadium is owned by the Washington State Public Stadium Authority. And this is pretty standard for all NFL teams, I believe. But it is managed by First and Goal Inc., which is a wholly owned part of the Seattle Seahawks. So any revenue generated by First and Goal Inc. for things like Taylor Swift concerts, for things like Ed Sheeran gigs, for things like soccer matches, football matches, they collect revenue and they don't have to share any of it with the rest of the NFL, right? So that is just all revenue going up to the Seattle Seahawks. So again, in this era, no pun intended, where the likes of Taylor Swift are selling out massive show after massive show after massive show, having a 75 ,000 capacity stadium that you can milk without having to disperse or distribute any of that to the other 31 NFL teams is a pretty nice little side bit of business for Coastler and the Seattle Seahawks.

30:38Anthony Cheung: I know I always enjoy it when you kind of peel the onion a little bit and look at the pie chart within the pie chart. Can you explain to me then when you're running a concert like what's the collection of fees like the composition of what goes into that top line revenue number when it comes to say things that people might not necessarily think about because i'm sure there's more than just you know luxury suites and seating yeah i think you have to think about it a little bit like uh your trip to to disney world where you know your trip to disney world the flat fee is what you pay to get entrance right and then there is a whole world of top-ups and queue jumps and premiums and vips and hospitalities and all of this stuff and your kids are begging you to get you first on that ride and you're running out of money very quickly.

31:34So this is where quite a lot of the revenue comes from for one of these types of mega concerts. So you've got to pay a facilities rental fee to the Washington State Public Stadium. You also have to pay a cut of ticket sales to the likes of Live Nation or whoever the promoter fee is. The rest of the ticket sales goes to First and Goal, which is owned by Seattle Seahawks. And then this is where you get all the money. You get concessions, you get a cut of merchandise, you get to charge for parking, VIP premier access, on-site logistics. You get, and this is the biggest slice of the pie within the pie, the luxury suites and premium seating especially in the u.s market where there is an element of status there and there are a lot of luxury and premier and premium seating areas within a big stadium that's where if you're flogging it flogging a taylor swift gig that's where you're going to make the majority of your money so expect to see more mega gigs i just found out i was reading up about just how popular kind of big mega stadium shows are relative to smaller you know smaller gigs and festivals and things like that and i just found out that harry styles is doing 12 nights back to back at wembley stadium this summer he's already done that hasn't he he's already done that right he's already done i think so million tickets that's crazy he's getting paid yeah shout out harry what stuff

33:12Anthony Cheung: absolutely and we mentioned it at the top of the show though one of the i guess uh less explicit reasons why you might want to own one of these franchises is from a tax perspective um so you know our dear old friend the accountant who's our lifesaver when we're a billionaire what's the play here from a tax break perspective yeah this is so so interesting and again tax tends to be very boring unless you are a tax person that could take advantage of it or if you're rich enough to be able to employ a tax advisor. And buying a sports team is basically a tax break. And I'll explain why. So there is, under US law, there is a thing called Section 197, amortization of intangible assets.

34:07And I'm sure that many listeners would have read up on this. So, you know, maybe not. So the amortization of intangible assets says that buyers, acquirers of a company like of a sports team like Seattle Seahawks can write off approximately 90 % or more of the purchase price as intangible assets and can be amortized over a 15 year period. So let's just kind of break this down a little bit. Intangible assets, those are non-tangible assets like brand, like players, the contracts that you sign with players and all of that stuff and membership to the fact that you're getting this guaranteed revenue stream, etc.

34:58Now, these intangible assets are the vast majority, if not almost the entirety of the asset base of any of these sports companies, right? remember I said they don't own the stadiums they just own the franchise so 90 % or more of 9.6 billion for Seattle Seahawks can be written off can be used can be amortized over a 15-year period which means that let's say 9.6 billion purchase price let's say the intangibles under section 197 is about$8.6 billion. That is an annual tax deduction spread over 15 years of$570 million. So what does this mean? This means that even if Seattle Seahawks makes a profit, a net income of let's say$300 million, you can say, haha, no, but there was$570 million of amortization.

36:02So we didn't make a$300 million profit, which would get taxed. We made a$270 million loss. Now that's all well and good. But the next thing that is the real killer and the real reason why the likes of Coastal gets into this kind of stuff is that that for a sports team, that gets passed through to the owner. So that tax loss that Seattle Seahawks are going to make every year because of this amortization of intangibles thing, that tax loss goes up to the Kostler family. So for all of the profits that are being generated by Vinod Kostler in his various interests as a owner of a VC firm, that can get netted off against the intangible amortization derived losses that Seattle Seahawks incurs, meaning that they barely have to pay any tax.

37:03They barely have to pay any tax. And this is just so interesting and so kind of head scratching.

37:10Anthony Cheung: It's a tale as old as time. You know, the rich get richer. It's just having a look at some of his investments to give you an idea in his VC life. OpenAI, DoorDash, Stripe. I mean, these are some heavyweight names that he's involved in. I was looking at what their approximate Costler family is net worth. Just short$14 billion, that last check. It's crazy. And again, as you rightly said, it's a tale as old as time. I think the first instance of this was back in 1946. So people have been wise to this for a very long period of time. And by the way, last year, lawmakers considered denting the tax advantages.

37:56So the original House version, House of Representatives version of the One Big Beautiful Bill Act, would have cut the deduction of intangible assets from 100 % to 50%. But it got dropped when this bill moved to the Senate. I wonder why. Maybe a little bit of lobbying. So this is why these extremely wealthy people, yes, there is very, very strong business rationale for owning these sports franchises. You know, as we've discussed, massive, massive moats, guaranteed revenue streams, a load of cachet, valuations going up and to the right. but this concept of having these tax losses that you can apply to all of the other stuff that's going on in your life means that you really really are being very very crafty with the way that you're dealing with taxes and by the way you know i'm sure that these guys would love to pay more tax if they could it's just that they're you know they're finding the wrinkles in the system right yeah don't hate the player hate the game um one thing that i guess the community has given us

39:08Anthony Cheung: feedback on is what they quite like as something we used to do before which is kind of closing thoughts and just kind of bringing all of this discussion into a final kind of set of main key takeaways so how would you surmise that in that construct yeah i think it's really it's really important and again this is this is for any for anything that involves a two-sided negotiation you have to think about the incentives of both sides and the incentives might be obvious at first glance and then maybe slightly more tactical or strategic at second or third or fourth glance. So this is a brilliant representation, especially if you are about to have an investment bank interview or something like that, to be able to say, yeah, I get the fact that NFL teams, you've got this demand, you've got the scarcity piece, you've got the guaranteed revenue, you've got the lack of relegation.

40:13I get that. That's the kind of first degree analysis. but to be able to go dive into the incentives of the buyer and the seller and to go all right who's this coastler bloke what what other things does he stand to benefit from yes we can talk about the fact that more there are more stadium concerts going on and they get to take a big slice of that revenue that's really good analysis but then this tax piece it shows that a you're really really diving into this and thinking about the angles which is really important but B, you're getting your head around some pretty fundamental accounting and corporate finance stuff here, right?

40:54To understand the quirk of intangibles amortization, which by the way, you know, unlike a tangible asset, which piece of machinery, you have 10 year useful life by the end of the 10 years, it's knackered and you throw it away. It's not like at the end of the 15 years of Seattle Seahawks, it's knackered and you throw it away. These intangibles don't really decrease in value, yet you're managing to take this amortization hit that is going to benefit you from a tax perspective. So if you can get into that level of analysis when in an interview, or even when in a kind of coffee chat, someone goes, hey, just tell me about a deal that you're interested in, you're going to stand out way above other people.

41:39Anthony Cheung: Maybe in closing, can I just ask, It's the beginning of the end of the whole entire model that we've been talking about, the rationale. And I say that because private equity has now been invited to this party. And when I think about private equity, I think about once they're in, they want to grow and maximize revenue and value. But isn't that somewhat counterintuitive to what you've been saying about the scarcity factor? So how do you square that circle? Yeah, it's an interesting one. And the reason why in 2024 private equity was let in or the circumstances by which it was let in, it was very, very, the door was left ajar, was opened, but only in a very, very specific set of contexts.

42:26And I think, again, you know, looking at it from both sides. So the NFL, more money is better, quite frankly. And if you can get some private equity money on the table for these acquisitions, it's going to bump up acquisition values. So that's good for the NFL and good for the franchisees. But also from a private equity perspective, we've discussed this in previous episodes, private equity sitting on a couple of trillion dollars of dry powder of money that is there ready to be invested, but has not yet found a home. And quite frankly, if I have the ability as a private equity firm to allocate a little bit of money to a silent 10 % ownership of an asset that tends to go up in value, that's almost a no-brainer.

43:20I'm not allowed to get the typical private equity playbook out and go, all right, I'm going to carve this company up. I'm going to spin this thing out. I'm going to slash costs because it's not allowed to have any operational involvement. So again, it's another case of looking at it from both sides. What has one party got? What does the other party want? How are we going to structure something that works?

43:41Anthony Cheung: all right cool well look we'll wrap it up there if anyone has any questions at all we had some really great interactions actually from the last episode uh about itv and sky tons of great comments and i saw steven you were batting them away answering them all uh welcoming people's analysis so please do share your your thoughts we do see them all and we'd love to interact with you but Stephen as always thank you.

44:08Anthony Cheung: Brussels clean up nicely at Sweetgreen. Maple glazed, roasted and edges perfectly caramelized. Sweetgreen's fall harvest is back on the menu and the season's most overlooked little green vegetable is dressed to be devoured. You know what to do. Order on the Sweetgreen app. Yeah thanks Ant.