Squawk Box Turns 30! Mario Gabelli & Ted Leonsis 9/9/25

0:00Bring in show music, please. This is Squawk Pod from CNBC, and I'm producer Cameron Costa. On today's episode, happy 30th to the Squawk Box team. Here for the celebration, sports and entertainment entrepreneur Ted Leonsis. 30 years. We've been through a lot together. Yes, we have. I'm really proud of you guys. In the time we've been on air, he's combined the Mystics, the Capitals, the Wizards, Capital One Arena, and more into monumental sports and entertainment. And he's still building. I just wanted us to start to act like a pre-IPO company. If the time ever came exactly right for us, it was a Goldilocks moment, yeah, we could consider going public.

0:45Famed stock investor Mario Gabelli, also celebrating three decades of squawking. It's like 65 years for the three of you together. Where he's looking for capital. We'll probably be more of a buyer of the pieces. Those big conversations, plus OpenAI exploring an exit from the Golden State, and Rupert Murdoch's succession fight finally resolved. He just got married. He's not dying. It's Tuesday, September 9th, and Squawk Pod begins right now. Stand Becky by in 3, 2, 1, cue it please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square.

1:29I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. Welcome back. Thank you. I see you, sir. Good to have everybody together here today. This was like succession, but it's finally, it looks like there's some answers. Media titan Rupert Murdoch's real-life succession drama coming to an end. Murdoch's family reaching a deal that will allow eldest son Lachlan to control the Murdoch media empire. I don't know if that's a big surprise, including Fox News, Wall Street Journal. following Rupert Murdoch's death, which I'm not convinced will ever happen. Reports say Murdoch's children, James, Elizabeth and Prudence, dear Prudence, will each receive about one point one billion dollars in the deal.

2:09The drama began when Rupert and Lachlan Murdoch tried to change a trust that would have given Rupert's four oldest children equal say and control the business after Rupert Murdoch's death. He just got married. He's not dying. I don't want to get remarried, but if I, if some, you know, God forbid, but if you're like romancing, 93?

2:3490-something. I think he's 94. 94. Yeah. Honeymooning. Good for him. Able to go through security. Maybe not to get on there. He may not have to do that. But able to fly around the country, traveling, everything else. It's, God bless him. Even Shatner could have a competition. According to an announcement, James, Elizabeth, and Prudence are going to sell their personal holdings in Fox and News Corp over a period of six months. A new family trust will go into effect, benefiting Lachlan and his younger siblings, Grace and Chloe Murdoch, who are Rupert Murdoch's children from his marriage to Wendy Dang Murdoch.

3:14And I remember Jeremy Strong. I don't know who he was supposed to be in succession. I don't know which Murdoch child he's supposed to be, but I can just tell you. We talked about the Springsteen movie and you were asking me about it. He does play Springsteen long-term. He's brilliant. He always is, I think. He takes his roles. But that's what I thought about that. I haven't told you anything about Telluride. That was well-received. the Bruce Springsteen film. Yeah, the Bruce Springsteen film. It's a very small part, it's a six-month period in his life where he was very depressed, considered ending it all and everything.

3:55It's not a typical biopic. And the guy from The Bear, there's two guys, there are two Jeremys in it, I think. The guy from The Bear plays Springsteen and he's brilliant, learned to play guitar, learned to sing, does all that stuff. You know the guy in The Bear, what's his name? You don't know the guy in the bureau? I know who you're talking about. Jeremy. There are two Jeremys. Meantime, advisors to President Trump reportedly putting together a report laying out criticisms of the Bureau of Labor Statistics just weeks after the president fired the BLS commissioner in the wake of weaker-than-expected July jobs numbers.

4:30The Wall Street Journal reporting that this look will be at historical job revisions from the BLS following that July jobs report. President Trump focusing his anger on large downward revisions to prior months' employment gains, although revisions from the statistics agency are a common practice. Now, a White House official telling the journal that the forthcoming report won't be used as a cudgel to force BLS employees out of their jobs, but that is one of the concerns that's been put out there. OpenAI is reportedly considering moving out of California if the state complicates its bid to turn into a for-profit company.

5:08The Wall Street Journal says that OpenAI was caught off guard by the intense reaction to its restructuring plan when it was announced last year. The company is eyeing the ability to raise funds in the future and a possible stock exchange listing as it tries to make that transition to a for-profit entity from one that is currently controlled by a non-profit. But that non-profit status is drawing scrutiny from regulators in the state who are obligated to protect their state's charities. An OpenAI spokesperson told the journal that the business has no plans to relocate from California. Cheese will be next.

5:45Coming up on Squawk Pod, businessman Ted Leonsis on his many team franchises and all the opportunity in sports. We get higher ratings than CNN and MSNBC combined during primetime.

6:06This is Squawk Pod celebrating Squawk Box, going strong since 1995. And here's a guy who's been here the whole time, Mr. Joe Kernan. We're marking the 30th anniversary of Squawk Box this week.

6:23Welcome to the new Squawk Box here on CNBC. I'm Becky Quick, along with Joe Kernan and Carl Quintanilla. And looking back on some of the memorable and market-moving moments, the biggest song was a song I still don't know. Gangsta Paradise? Coolio? Huh? I don't know. You know movies? Do you know me? Toy Story. Toy Story, Sense and Sensibility. Usual Suspects. I think Alanis Moore said, I think you ought to know, was 19. I mean, it was a long time ago. Much more to come. We have lots of memorable moments, I guess, but they all fall by the wayside, don't they, when it comes to family. I can't believe that.

7:06I mean, I can't believe that kid. But Blake, remember Ted David holding Blake? I think she peed on him. But she was literally three months old, I think. I don't know what we have. Yeah, all of our kids have been here over time. Yes, they have. But they were. A lot of the moments I remember are funny moments. They're three months and they're now 25 years old. So it's like been really like our life. It's been sort of, you can't really separate work from life.

7:38Tonight, the Washington Mystics are going to face off against the New York Liberty at the Barclays Center. Our next guest is the owner of the Mystic and has been calling the WNBA a growth stock. That's what he told us the last time he was here. Joining us right now to talk about sports investing, the renovation of Capital One Arena, and much more is Ted Leonsis. He is the founder, the chairman, managing partner, and CEO of Monumental Sports and Entertainment. And Ted, it's great to see you here. Also a longtime friend of Squawk Box. So thank you for celebrating this anniversary with us. 30 years.

8:10We've been through a lot together. We have. I'm really proud of you guys. Thank you. Well, let's talk about the WNBA. Last time you were here, you talked about how this is a growth stock. You said you're not interested in the NBA or in the NFL because you think there's a better play, a better investing play when you look at all these other sports that you've pulled together. Well, the NFL is the most important sports league in terms of engagement here in North America. But as we look at sports, it's all about digital and globalization. And basketball really is a growth stock. the NHL, I own the Washington Capitals, very, very global.

8:49And as we continue to make this pivot to be more of an international exporter of our information, we have to digitize everything. And you're seeing companies like ours. I just saw that Citi had a great buy rating on MSG. We're platform companies. We really look like we're tech giants and we're trying to get our businesses to be the venues. We're redoing our building right now with a billion dollar renovation. And we're also trying to take all of our IP and digitize it and stream it on a global basis. You bring up MSG, and there are a lot of people who've been wondering if you're going to go public.

9:33You guys have a new announcement out today about Steve Miller, who's going to be coming in as your new CFO in October. Well, we're trending towards a billion dollars in revenue. And we've brought in money from sovereign wealth funds. We've brought in money from private equity. We have some of the most sophisticated investors around. And the leagues are becoming very, very demanding in the means of how you bring in capital. So we announced today a new CFO, Steve Miller. Steve comes from Warby Parker. He's a longtime CFO there, has a lot of experience in consumer and retail marketing. also the ability to finance banking, private equity, venture capital.

10:17We've raised billions and billions of dollars already. And these have become really, really big, important companies. I look right now, I'd say we would have a private valuation of seven, eight,$10 billion. As private equity comes more and more into these companies, You're going to see a demand for exits. The public markets really today have not looked at sports as an asset class. MSG, Liberty Media really are the only public companies. So I just wanted us to start to act like a pre-IPO company with all of the discipline, all of the respect to process. process and if the time ever came exactly right for us it was a goldilocks moment yeah we could consider going public what would make it a goldilocks moment what what would make it right i think appreciation that it's not a sports team that it's more a platform play that we look like oracle or a salesforce.com i think the the community needs to be educated in what the business is.

11:25I also think, to be honest, that while we have lots of predictable growth, 70 to 80 % of our revenues are predictable. They're signed over long-term contracts, and they have built-in escalators, but we're not very profitable as companies. And so, you know, we can look at, neither though are software companies and SaaS businesses when they go public. We're having to spend a lot of money in R &D right now. On R &D on what? On getting the digital platform? Yeah, we're building. Everyone thinks we're doing a rehab of the building. It's really a physical AI. The Capital One Arena. Yeah, exactly. In Washington.

12:06Next 25 years of how we can sense and respond to 3 million consumers that come into our building. Like, what does that mean in just a real description of things? What's going to look different once this is up and running? We're redefining what the currency is. And this is all about the consumer being able to personalize. So I think what Steve Ballmer has been doing in his new building, that upon entry or even as you're coming into the building, we know you're coming. And once you get in, all of the messaging, all of the signs, all of the services should be personalized to you. So an advertising play.

12:45Well, it's not so much advertising. It's more of what kind of services? Is it your birthday? Did you gift your tickets to somebody? How can we make them feel more welcome? Are they gaming? Are they placing bets? I think we were the first company to build a sports book within our building. We own our network, and it streams all of that business, all of our content. And so these have become, I see monumental sports. Obviously, we have to have great teams. I mean, customers are interested in how the Washington Capitals, the Mystics, the Wizards are going to do. Team Liquid, we're the largest investor in an e-sports, best e-sports team in North America.

13:32The fandom and the engagement around the competition is really key. And that's what fans will tell you. But they're also being charged a lot of money because, you know, just the services have increased. So the building, as I said, we're going to spend a billion dollars partnering with our city. We'll probably do a half a billion. City will do a half a billion. These are big, big investments. They have to have an outcome, which is positive. And that will be an uplift in the overall experience. By owning the network, we can now start to look at, yes, we have 20 ,000 people that come to the game, but our ratings, and I say this demonstantly, we get higher ratings than CNN and MSNBC combined during prime time.

14:22Can I ask you a question about the capital costs of buildings? It used to be that stadiums, for years, for decades, people thought they were an albatross. The teams would say to the states and the cities they needed help to actually do this, that they couldn't make the math work. They'd say we're going to build something, and then they were going to try to create an environment around it, and it was going to be a big thing. And for decades, this was sort of like a failing idea. And something has happened in the last decade and a half. I don't know if it's definitely in the last five or 10 years where it's completely shifted, where live events and maybe it's a post pandemic.

14:59I don't know what where people want to be together, that these stadiums are working. It's a totally different situation. And I'm curious what you think changed. Well, I think just the whole nature of sports and its importance, not only as a convener in the building. We hosted the inaugural at our arena. Our mayor, Mayor Bowser, we're the new front door for downtown D.C. We take the social responsibility of reintroducing tourists, reintroducing people from Virginia and Maryland to come back into Washington, D.C. We're the largest taxpayer. We employ more than 4 ,000 people. These are real serious enterprises.

15:41And by bringing 3 million people into the city, you know, they eat at the restaurants, they dine. But what has changed? Now it's getting safer. Yes, it's much safer. But, you know, I think the federal government and the local governments have seen that these are really the iconic brands. Universities, sports teams, public space. these are really really defining of major metro areas washington dc most important city in the world we have to have the best building we have to have the best teams we export that uniting concept of what sports really is though a public-private partnership in terms of building these because you almost left washington dc yeah but i wasn't i was going three and a half miles away and i'm thrilled that sometimes the first right answer isn't the best right answer.

16:33And being in Washington, I came here in 1973. I went to Georgetown University. It's great. Georgetown men's basketball plays in our building. We can host NCAA tournaments, hockey and basketball. We can host ACC tournaments. But it's about having events as many nights as possible. Oh, yeah. And just as it's on national television, as it's on local television, It's building the brand for Washington, D.C., and that's incalculable, the amount of attention that we bring. Joe was making a joke about it, but does it feel safer? Are you happy about what's going on? No, it was not a joke. I don't know if it was a joke or not.

17:12No, it wasn't a joke. It was nudging him because he probably... We've been making a lot of progress in Washington, D.C. Really? All major cities have been challenged, and I'm looking out here at 42nd Street. Yeah. But the mayor did a really, really good job. Our new police chief was doing a good job. I kind of see this as a way to really prepare the city, not only for what we're having to do, but next year is the 250th birthday. And there's going to be major celebrations. We host 30, 35 million tourists. We have to position Washington, D.C. as the world's cleanest, world's most powerful, world's safest community.

17:53community. And I think working in tandem between the city and the federal government is the right thing to do. Ted, thank you for joining us this morning. Happy birthday. Happy birthday. Thank you. Up next on Squawk Pod, another huge guest from our many years on air, Mario Gabelli. You had gray hair in 1990. I was seven foot tall and had red hair when I started. The markets do it to you.

18:27Welcome back to Squawk Pod. Squawk Box is celebrating 30 years on the air with 30 years of the biggest names in business, like Warren Buffett. LeBron James of the Cleveland Cavaliers writes in and he asks, if you were ever to buy a professional sports franchise, what would it be? If I lived in a big city that had a top team, I'd want to buy it there. I can imagine Warren playing power forward, Joe, can't you? Maybe some elbows in the paint. There you go. Sharp elbows, Warren. Will you put on one of those Will Ferrell wigs, Warren? Semi-pro wigs? I don't know if you've seen that.

19:10Now let's bring it back to the present, where our anchors Joe Kernan, Becky Quick, and Andrew Ross Sorkin are joined by another Squawk legend. Our next guest has been a longtime friend of the show, also a media expert who's been with us through Thick and Thin. So it is fitting that he is here to help us celebrate our 30 years on air. Talk about the markets as well. Billionaire and value investor Mario Gabelli. He's the chairman and CEO of Gamco Investors. And Mario, truly, you are somebody who predates me on this show. You've been here as a longtime guest host, and we are very glad to have you with us today.

19:47I've been very privileged to be on the show for that long. I add up your years. It's like 65 years for the three of you together. I thought you were joking when you said that until I actually did the math. It is what it is. When was your first appearance? You were on with Haynes, right? Yeah, way back when. Back in the day. About the same time you started, 1995. But you were at FNN for a while. That was 1990 when I got back. I was at FNN prior to that. Nobody counts. It is what it is. I don't want to count. Just think about the fact that I've lived through eight recessions. It F &N when I was 11.

20:22Never doubt about that part. Mary, let's talk about where the markets are at this point. We'll talk broadly, and I know that you're more of a bottoms-up guy, but just broadly speaking, how difficult is it to find bargains as a value investor right now? No, because what's happened is that there's a divergence to large-cap stocks. So when we look at small, they're beautiful. and to the degree that we see financial engineering at work, that helps in terms of transactions and takeovers. Today, for example, you had a bunch of deals announced already. And so from that point of view, M &A, financial engineering, spin-offs, and looking at pieces.

21:00For example, we had a company called Telephone and DataSys. It was languishing at$10 or$12. They decided to monetize an asset called U.S. Seller, now called Adage. And basically, you can see the amount of money. The stock has gone substantially. Take Sats, Charlie Ergen's company. The stock was languishing at 26.78. Today, it's probably 84 bid. So there's always something going on. Because of the sale of the... And then you take a company like Zimve that does body parts. And basically, they spun off a company called Zimve in the dental market. And you're buying it at 10.12. And it's now 19 as takeover.

21:42And then you had a simple company, Kellogg. They split up into two parts. Kellanova is being taken over. And the company, Kellogg itself, the cereal company, is being taken over. So there's always some type of dynamic that's taking place. Okay, let me talk about financial engineering that is not being looked at kindly by majority shareholder. And that would be Warren Buffett and Berkshire Hathaway with what's happening with Kraft Heinz right now. The company came and is announcing the spinoff that they're going to do. And Buffett made the very unusual move of being an investor who, he's always a passive investor, but he made the unusual move of saying he's disappointed in this move and he doesn't think it'll work.

22:23Do you? Well, from his point of view, he's already liquefying. He's spinning off public companies. He's got a significant amount of cash. And so what is he going to do with that? What is he waiting for? Is he waiting for another cycle or is he just looking for the bargains? and work in progress. Do you have any views on Kraft Heinz, on whether you would be a buyer? Oh, Kraft Heinz? Oh, yeah, we think the stock is around 26.7, and basically the split-up pieces can be worth as high as in the mid-30s. You like the financial engineering. We don't like or dislike. We're just observing it. We own it.

23:03We didn't buy any recently. We're thinking about doing that with having an internal challenge and debate WITH OUR TEAMMATES. SO WE 'LL PROBABLY BE MORE OF A BUYER OF THE PIECES. LET ME TALK TO YOU ABOUT MONUMENTAL SPORTS AND ENTERTAINMENT. WE JUST HAD TED LEONSIS HERE ON SET WITH US. I LISTENED TO IT. OKAY. I WANTED TO GET YOUR TAKEAWAY ON THIS BECAUSE THEY ARE MAKING MOVES THAT WILL SET THEM UP EVENTUALLY FOR AN IPO, POTENTIALLY, IF THE CONDITIONS ARE RIGHT. WHAT DO YOU THINK ABOUT THE THESIS HE LAID OUT? WELL, FROM THE POINT OF VIEW OF VISIBILITY AND ADVERTISING, THEY ARE ABSOLUTELY CENTER-ROW.

23:38NFL. You can own a piece of it. For example, even the New York Giants are selling a piece of it. So from that point of view, what we like is the following. Madison Square Garden Sports. Okay, MSGS has got 24 million shares, 5.5 million owned by the Dolans. At$200, that's$4.8 billion. Are they going to move the center? What are they going to do? Are they going to take the theater and reallocate it. But think about Dolan. Jimmy Dolan spun off a bunch of companies, MSG Networks, MSG, oh, the sphere. Right. The Wizard of Oz is propelling the stock. You know. People thought the sphere was going to be a mess.

24:23I'm not saying which one is Scarecrow and Tin Man, but, uh-huh. So those are the kinds of things that we look at. Obviously, you know, you guys were kind enough to sign this, okay, baseball. But the answer is not complicated. Betting has also been proliferating since the Professional and Average of Sports Professional Act was passed by the Supreme Court. And that opened up a new genre. So those are the dynamics. The next part is focusing on soccer. But wait a second. What about Ted Leonsis' group? You were saying front and center is MSG. What do you think of Ted Leonsis and the play that he's making, which is, look, we like sports.

25:03We like being the arena. It looks like they're kind of following what MSG is doing. Are you a fan of a potential company like that that would come on market? Yeah, I'm not opposed to it. I haven't read the details. Well, they're not even going public. You know, like Bally's out and they're building a theater, a park for the team that's moving there to Las Vegas. Just think of the transformation of Las Vegas as an example. Football, hockey, baseball. So those dynamics occur. And with gambling getting wrapped into it, does that make it more attractive? Well, it's an element. Okay, I always worry about the gambling part of the business.

25:44But, you know, Nevada and Las Vegas have the culture and have the regulations in place for an extended period of time. So I'm less concerned about that market than some other dynamics. And regional sports betting and iGaming and so on, they're taking control of a lot of that. So the part of the strip, the northern part, is having challenges. So those are what we think about. And, for example, you have individuals that are taking on Pepsi Cola. Then you have that same entity buying a billion dollars worth of genuine parts. Genuine parts is 140 million shares and it's selling at 139. It's got a nice dividend,$8 of earnings this year, which are lackluster.