How to build a billion-dollar sports team from scratch, with Golden State Valkyries’ Jess Smith

0:00The WNBA is 31 years old, right? So it's taken a lot of ups and downs to get it here. But what you're seeing that's different is investment. When so many people are asking, why is it working? You have to have capital. You can think you're going to do great things. And if you don't have capital, you're going to miss the mark. Someone who is at the forefront of the revolution happening right now in women's professional sports. Please welcome the newest WNBA team president. Jess Smith. Jess Smith. Jess Smith. The president of the WNBA's Golden State Valkyries, Jess Smith. When you showed up on day one, what'd you do?

0:34Panicked. Like, I'm the momentum. I have to figure this out and direct us where to go in a year and a half time until we tip off. The most fun part of that equation is the generational fandom. Here in the Bay Area, I have two young girls. They're five and seven, and they will know nothing different than a Chase Center that's packed for the Warriors and packed for the Valkyries. Hey, folks. Jeff Berman here. Before we dive into today's episode, I'm talking with a very special guest, my friend, Jamie Batmer, Chief Investment Officer of Creative Planning, one of the largest independent wealth management firms in the country, a sponsor of Masters of Scale, and a truly exceptional company.

1:12Jamie, welcome to Masters of Scale. Hey, thank you so much for having me. Jimmy, when someone's evaluating who to work with to help them not just make investment decisions, but manage their family finances, what are the keys for someone figuring out who the right partner is? It's like oars in a canoe, right? And if someone's working with a CPA somewhere, an investment team somewhere, and a state attorney somewhere else, So they're not rowing against each other, but they're definitely not rowing in unison. So you can go as fast as you can possibly go. And really, that's it. So optimize all those dynamics, right?

1:51The genesis of creative planning was bringing it all under one roof, right? That's the story of creative planning. At Masters of Scale, we have conversations with a lot of founders who feel wealthy when their company's valuation takes off. In so many levels, it feels like security. But when we look at it from a step back, it's also risk, right? There are massive tax implications when, you know, you IPO or get acquired. They've been focused on that, you know, right? Just grinding every day, making their business better. People think, okay, this liquidity event is here. I'm about to have this windfall.

2:27Let's get on it. No, no, no. These are all things, like anything, you fortify the defenses years in advance. The longer runway you have, the more you put the odds in your favor. The data says you don't try and outsmart it. You try and optimally own it, right? It's through these tax dynamics, the estate dynamics. That's what we're hyper-focused on. On average, one year later, an IPO is down 31%. I mean, think about that. Think of Wall Street hung up a sign that said, this investment on average will lose a third of its value one year from now. No, like, you know, these IPOs are typically exit points, not entry points.

3:03And so the idea is getting ahead of that, you know, putting the odds in your favor, fortify all those things on the front end. There's never an end to the line. You never set it and forget it. That's the type of people you want to work with. It has to be living and breathing on your behalf. Jamie, thank you so much for joining us. And now on to the show.

3:26I've been looking forward to this conversation for a while. We have a very special guest on Masters of Scale today, Jess Smith, who runs the Golden State Valkyries, the fastest growing sports franchise in America, going from$50 million expansion fee to a billion dollar valuation in about two and a half years. Absolutely extraordinary growth in a category that's exploding as well, Jess. Welcome to Masters of Scale. Thank you. It's an honor to be here and talk about this. I'm so happy to have you here. You and I first met at Angel City, where I was a season one ticket holder. My oldest, who is not a sports fan, won't go to anything except for an Angel City game because he loves the energy of it.

4:05What did you learn at Angel City that you're now carrying forward in your new role? I mean, that whole opportunity to be a part of that organization taught me everything, you know, truly. I'd take 15 years before that happened in the sports industry and in a variety of different leagues, learning how Major League Soccer operated different than the National Hockey League and operated different than Major League Baseball. And by the time I joined Julie Ehrman and Karen Ortman and Natalie Portman at Angel City, there were five of us in our homes and on our laptops in the pandemic saying, we're going to build the most powerful women's sports team in the world.

4:35And that was really what we set out to do. We, first of all, were really curious. I think when you go into a brand new product, sports or not, you have to understand the landscape and understand who you're going to be. And we did a really good job of defining who we were going to be and what we were going to do from day one. You're building something for an audience that's been untapped. And when you can tap into them and build them an elite product that they've been waiting for, they show up and help to build that atmosphere. They have to show up and be loud and invest in the product to make it operate.

5:05That's part of the science and really what goes into the behind the scenes. When I first got to Angel City and was thinking, how are we going to fill this venue? One of the main questions I had was, well, what is the actual crossover between the men's and women's teams that are sharing venues, whether that's shared ownership or not? And what I found through a very exclusive study, which was me calling people, there was really no more than 10 % that you saw a crossover. So that was an immediate light bulb to us. You should be building for the 90 and then inviting the 10 to be a part of that, of course.

5:34And so, you know, there's a lot that goes into it. But I think knowing your audience and building that product for them is the most important. What are you looking for in terms of what the markers are of when the brand is landing? And how are you adjusting as you go to build that deep brand connection? I mean, for the Valkyries, to be honest, it landed right away. And I think some of that is you look at the power of the WNBA even as we were coming into it, right? The first expansion team since 2008, the Bay Area, which has its own energy. This is where people look to see what comes next. What we saw right away was merchandise sales.

6:09And mind you, we had no players. We launched our brand a year before. We actually launched on an opening day of the WNBA season in 2024, a year before we would take the court. And we sold merchandise in 60 days in 70 countries and all 50 states. Why did the brand land so well with people? It was its own. It was powerful. It was representative of the Bay, but of something bigger than that. And we wanted very aggressively to be like, when you saw the color, you thought of us. It's our job to build out what that means. But what is that colorway was going to be really, really important. But when we saw this Valkyries Violet, like we knew it was ours, right?

6:44It was something that could be used from a lifestyle perspective, but it was powerful. The one true category leader brand where I've worked is the NFL. And that is a big category leader. I've spent most of my career working with insurgent or challenger brands. You were in Major League Baseball. You were in the NHL. You were in the MLS. They all are, you know, kind of category leaders. When you jumped over to Angel City and then to the W, what changed for you in terms of how you had to think about what you were doing because you were at least at more of a challenger brand than you'd done before?

7:18I mean, I think if you look at my resume in the most respectful way, I was also at challenger brands within those leagues. And I think for me, in hindsight, that served me so well an experience standpoint. I had to work to educate, to be a part of making these brands mean something more than simply the top team in the top media market. And I love that. You know, very candidly for me and my personal background, I come from being the first person in my family to graduate from college. My mom had me young. And I credit that from getting access to sport early. I played basketball, you know, among softball and some other sports, but basketball was my favorite.

7:54And it taught me a lot. But as I had a chance to move into working in women's sports with the investors that wanted to make it great, I was able to take that traditional sports experience and also my lived experience and not lose sight of why we're doing it. I think when you're building a powerful brand like an Angel City, like a Golden State Valkyries, and knowing what you're going after, you can't ignore the fact that the communities you're representing are still underserved. And I think there's ways to build with mission and capital coexisting. And that's what's made those two products really powerful is they're doing both.

8:27They're unapologetic about being great, and they're not going to stop. but the why and the opportunity for engagement and visibility and actual societal impacts also exists. You're talking about a community that's underserved. How do you define that community? I mean, one, fandom, right? Being a woman sports fan has been really difficult. When we were building the Valkyries, so many people came up to me and said, please make it cool, right? I want the club experience. I want to eat sushi at a basketball game and drink champagne. Like, we've got you, right? Secondly, you can't ignore that the communities that are represented through our athletes have been underserved.

9:00You know, specifically in the WNBA, when you look across these incredible athletes and their platforms and who they represent, it's important that we have those conversations and also talk about accessibility, right? Women still don't have the same access to sport as men. That's just a fact. That's okay for us to say and okay for us to engage with and know things like 94 % of women in the C-level suite have had access to sport. So how do we change that. It's pretty simple. We're a sports team. We get a chance to work with our partners and community to provide more access to sport. And there's a lot of things like that that we get a chance to do.

9:33There's historically been this boom-bust cycle in women's sports, right? You have a Women's World Cup happen. The viewership is off the charts, to your point. And then, you know, there's a drop-off because you haven't had the sustained flywheel where brands are investing because the dollars are there. The media companies are investing more, not only in the rights, but in the promotion. When that happens, there's more money, for example, for revenue sharing for players, which can incentivize more people. I mean, there's a flywheel that happens. It looks like we are breaking or we have broken that negative cycle and we're in the positive cycle and it will sustain.

10:09Am I right? Is that the right way to think about this? Absolutely. I still think there's a lot of young leagues emerging, which are great. We've got two volleyball leagues. We've got professional baseball. So I think we also have to remember there's a lot of brand new leagues and it's going to take them some time to mature. The WNBA is 31 years old, right? So it's taken a lot of ups and downs to get it here. But what you're seeing that's different to your point and what we can't ignore is investment. When so many people are asking, why is it working? To me, three-pronged. But the first is investment.

10:39You have to have capital. You can think you're going to do great things. You can have all these great ideas. And if you don't have capital to actually build that out in the simplest of forms, like hiring staff, and good people to run your product, then you're going to miss the mark. The second are people. You know, I look back even from my own consumer mind at the pandemic. You know, that was such a shift in how we're seeing fandom and the responsibility of fandom and women's sports happen. The wobble happened. And all of a sudden people were watching and people are talking about these incredible viewership metrics and merchandise sales are going up.

11:15Well, then all of a sudden you're getting better windows and better production and more visibility and your algorithms on your phones are changing. And people really understood their power in that equation. And the third is media. You know, I think we can't ignore that media continues to be one of the most prominent ways that women's sports are put in the right places to gain consumers, right? Whether you're looking at these college basketball numbers over the last number of years, let's not forget, it wasn't even allowed to be called March Madness at one point. And now you You can go to one network and find the games and look what's happening.

11:45And then those viewers are following these athletes into the W. That's huge. Seems really simple. It's not, right? There's only so many windows on these networks. But as the product continues to prove its power, that's going to continue to increase it like never before. But it's not just basketball, right? Like women's softball ratings are unbelievable, right? There's so much potential out there for that flywheel, to your point, to continue. And it's not going anywhere. I think the most fun part of that equation to think about, though, is the generational fandom. You know, here in the Bay Area, you know, I have two young girls.

12:17They're five and seven. And they will know nothing different than a Chase Center that's packed for the Warriors and packed for the Valkyries. And that mindset of young girls and boys idolizing these athletes, just, you know, seeing Veronica Burton and Steph Curry as the same, that's really where this takes, like, real shape. You know, and so as we follow their fan journey in the next 10 plus years, it's going to be really, really cool. A former boss of mine is very fond of saying it's easier to catch a wave than create a wave. You have, in your last gig at Angel City and here at the Valkyries, it feels like you're doing both.

12:48How do you think about that? I think about it every day, all day. It's exhausting and wonderful at the same time because it matters, right? I think for us, you know, we knew even being this expansion team, you know, first expansion team since 2008, there was a weight to this. Us getting this right showcased what was possible and dictated what investment was going to come next. So we are always thinking about that. Our success matters much differently than just we want to be the best at everything that we want to do. And by the way, we do. But two, like not to overthink that it should be fun. You know, I think one of the things people miss in these conversations or miss in the everyday that I get to do is like, how do we have fun with this?

13:25You know, for instance, the mascot, because Violet does a ton for us. Number one, she's so cool. She's our bestie, as you know. Being able to bring her out into the community and have her showcased as a part of our brand in so many different spaces that otherwise we wouldn't be invited into is such an advantage. What went into framing Violet's personality and what's really working there? You know, you're in Valhalla. You definitely feel like you're in another universe, right? And so she's an added element that why wouldn't there be a Violet raven running around, you know, that we call our best friend?

13:54The raven is a big part of the Norse mythology. The ability to make her violet in color and in name, we call her Vi sometimes too, you know, is an opportunity to continue to define our brand. When you see her, you see her. She's like bright and energetic. What are the things that ravens love to do? Well, they love shiny things. They're songbirds. They love music. So her entire personality is really a tribute to, you know, the prowess of a raven as well. So, of course, she's a great dancer. You know, she can throw it down with the best of them. But those moments of, you know, defining who she is help reinforce our brand and give us another layer to, you know, that line of Norse mythology that we like to, you know, that we like to tow.

14:36You were employee one at the Valkyries? Yes. So you're doing a startup inside a legacy institution, a fairly young one relative to the leagues that we think about maybe more popularly in America. But it's still an interesting dynamic. When you showed up on day one, what would you do? panicked. No, I mean, after going through a startup with Angel City, for those that have done it, it's relatable. And you sit there and you realize when you talk about momentum, oh, that's me. Like, I'm the momentum. I have to figure this out and direct us where to go in a year and a half time until we tip off to build this team to the potential that I knew it could be built to.

15:16You are building the plane as you're flying it, as they say. And that is so true, right? So you start doing all the jobs, you know, but you're also hiring into the jobs that you need. What's been great about building at Golden State is some of the advantages that we've had are one, we are Golden State. There is a reputation that they've worked really hard to build. There are facilities that they've worked really hard to build. So within those very first weeks, we were making commitments to renovate our practice facility, build a locker room inside Chase Center, and having Golden State and the power of Golden State say yes to those things and help me with those things was definitely a game changer and one I don't take for granted or candidly take much credit for.

15:55Like they had infrastructure to help me. The most important things, you know, are getting that set and then building this brand the right way, right? You can't go to market too soon, even though you're kind of panicked about the timeline until you know who you are. And so really putting a bow on who we were going to be, the Valkyrie's name, the Valkyrie's branding, the Valkyrie's launch, how we're going to tell this story and keeping it a secret, you know, which is really hard to do. Having merchandise ready for the moment as well. and getting that right opened the permission for us to have season ticket holders start to engage with us and very candidly have brands start to engage with us.

16:27Even when I got there, I come from partnerships. It's my background. I love it. And so many brands were like, let's talk. And I had to say, not yet. Because what it meant to be a Valkyrie's partner wasn't defined yet. And so we had to really figure that out and be really confident in that before we went to market because you can only go to market once. So if you go to market too quick and you don't know what you're asking for, it ends up being more harmful than helpful. We love all of our guests equally at Masters of Scale, obviously, because they're all absolutely amazing. But occasionally, I personally have a holy balls, I can't believe I get to do this for a living.

17:04Oh my goodness moment. I had one of those recently with Jim Collins. He's the foundation of my business education because as someone who did 10 years in public service before I went to the private sector with no formal business training whatsoever, I had to teach myself. One of the things that Jim talks about on our recent episode and in his new book is what he calls Who Luck. It's the luck of people who cross paths with you and they play a huge role in your life. My guidance of folks is you've got to find ways to just increase the chances that you're just going to have a marvelous conversation or bump into somebody or to be curious about something.

17:39One of the best things about Masters of Scale Summit is it's full of Who Luck. It is an extraordinary cross-section of business people, of technologists, of investors, of academics, of authors, of artists. It just goes on and on. And so if you want to increase your who luck, if you want to potentially change the trajectory of the rest of your life, join us. Visit mastersofskill.com slash summit.

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18:44Because every Friday, we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely, from Ford's CEO to NASA's administrator to the lessons from the Devil Wears Prada. It takes about 10 seconds to find. Just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Humans will never be more intelligent than AI. There's going to be two types of companies. Those are great at AI and those that went out of business because they weren't. How do we build a future that is human-centered?

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19:58Partnerships is so much more art than science. How did you land on what that go-to-market looked like for your partnership strategy? It really went back to when we're building the Valkyries, who are we and what are we doing? And how did partnerships fit into that? So when we talk about mission and capital coexisting, one, the knowledge that, yeah, we're going to have a full arena and the media is going to be great and we're going to hire into the right role. So the social media and everything that you're looking for for metrics is going to exist. but why would you do this partnership and how are you going to reach our fans in a deeper level which exists with this with this caliber of the end is what we had to define and so where we landed was for all of our founding level partners there was going to be a impact council and so right now we have nine founding partners that sit around the table together we've got sephora jp morgan chase kaiser permanente permanente olivitamins rackets and etc and they're not just investing with us.

20:50They are having unique programs in the community that are driving outcomes. But also, we're going to start talking a little bit more about what we're going to do as a group. Because it's not done yet. It's not seen yet. I think in partnership, you have the opportunity to say honestly, that's the exciting part about being our partner, is that the trajectory of women's sports and women's sports fandom is just getting started. So how are we actually navigating this together with deep impact for your brand and your outcomes, but also learnings that we can apply directly together. There's a tension when you're building a mass brand to having your stars engaged in social activism.

21:28And there's a higher level of tension when a brand itself, whether it's the W or a club, engages in that as well. How do you think about striking that balance in a time where the country feels so divided in so many ways? Our athletes and every athlete of the WNBA are their own people and platform. You know, and I think that the communities they represent and the attention that they get is warranted, you know, because of the genuinity of how they're sharing these stories and what it means to them and what it's meant to them and those around them. I think we've had a lot of male athletes do the exact same thing, but I think because they are women, rightfully so, you know, in the communities they represent, there's a lot more attention to it.

22:10So for us, we want every athlete to be themselves and to have platforms to support that. Then as a team, right, how we're looking at it is who are we as a team and what are we representing, right? And for us, we want to make sure that we're providing safe and celebrated spaces for athletes and for our fans. And when you walk into a game at Valhalla, it's joyful. That's our job is to maintain that and to protect that. While they're two separate things, I think when you look at the convergence of the opportunity for them to come together, there are definitely moments of representation that you can't find anywhere else, right?

22:49Our Pride game was a great example of that. And none of that was forced. We are a part of the San Francisco Pride weekend. Like almost every team here, I believe every team in the Bay Area. And the Friday night, we have a game. It's a celebration. We then win, you know? Of course. In epic fashion, of course. And the celebration of that win feels deeper and more meaningful because of who's gathered there and having that moment together. Going back to my NFL experience, the league looked at it as shield, the league, club, and then player. The reality of where we are in sports right now is by and large, and the Valkyries are, and Angel said here, both exceptions to this in many ways.