Michele Kang

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0:33Michelle Kang came to the United States to get her education. She's a native of South Korea. After she got her education in the United States, she stayed here and became very actively involved in the business world, built a successful company, sold it, and now she's very involved in women's sports, and particularly women's soccer. I sat down with her to talk about why she's so interested in revolutionizing women's sports and women's soccer. So let me ask you about how you came to become a leading women's soccer team owner, having had no experience as a soccer team player and not having spent a lot of time in athletics before you got into this.

1:10Well, I was a good athlete, but not soccer. I have to say it was by accident, coincidence. I really did not even know there was a professional women's soccer league in the United States, let alone there was a professional team in D.C. and it was 2019 when the U.S. women's national team won the World Cup. There was sort of a celebration party at the Capitol and I was invited and I got to learn about it. And since then, I was sort of convinced that I should join initially as just a minority investor and be a mentor to a lot of young, incredible women. And when I started, I never had an intention that I was going to go run multi-teams around the globe.

1:50Now, many women's sports teams have sprouted up in recent years, but are they profitable? Not yet. And you think they will be, presumably? Absolutely. But I mean, I'd say to be fair, if you look at a lot of men's teams, if you actually take their media deals, there aren't that many companies that are profitable from just game day operations. So we as an emerging league, our media deal is not as big as some of this more mature league. So we're getting there because we're building teams. were building attendance. But even game day operations were on our way, at least break even in a couple of years.

2:26So in an average women's soccer team game, let's say in Washington, how many fans will show up? So we play at a stadium called Audi Stadium. The sellout is 19 ,215. Last two games, which were quarterfinal and semifinal of the playoffs, we sold out and then exceeded the sellout because we had standing room only. How many women are on the team? 25 or 26, yeah. They come largely from America? It used to be because in the U.S. especially, we had a draft system. So the typical path would be you play high school, local academy or clubs, and then you go to college and scholarships, hopefully. And then you get drafted from the college system.

3:09But now it's booming everywhere. Clearly in Europe, it's pretty significant. So there are a lot more player movements. So we now have pretty significant international players, but every team is limited to seven international players. So I know from owning a sports team that only one team takes a lot of energy and time. Tell me about it. So you decided after you bought the Washington Spirits to buy some other soccer teams. So you bought stakes in a team in England. Is that right? Yes. Yes. I bought a team called London City Linus, and that is the only one of the two teams in the entire potentially Great Britain that are independent.

3:51Ninety nine percent of the teams in Europe are part of the men's team. But this is one of the only two teams that that was independent. So now you have two soccer teams, one in England and one in the United States. I would think for most people that might be enough. But you decided to buy a team in France as well? Yes. Olympique Ligue 1 Feminine is actually the best women's team in the history of women's football. In terms of how many trophies the team has won, they are the eight-times champions of the European Pan-European League. And I can't even count how many times they won the French Domestic League, the most successful team.

4:32Okay, so now you have this team, the French team, the English team, you have the American team, and then you now have minority stakes in male soccer teams as well? Yes. And which ones do you have? So Crystal Palace in England and Olympic Leon Amens team as well. Okay, so now you have five soccer teams. But it's a passive, that one is passive investment. You have three that you control. Correct. And actively manage. Actively manage. as if that wasn't enough, you want to get into the sportswear and shoe part of soccer as well? There are reasons why women's football or women's sports have been somewhat behind than men's sports.

5:09There are a lot of key elements that would make any sport successful or not present. So, for example, if you look at women's teams, team sports, their training manuals are borrowed from men's training manuals. There's no independent training manuals designed and developed for women. Well, women's body is not the same as men. There's hormone, nutrition, sleep, they all work differently. And women are seven, eight times more likely to get an ACL injury than men. But we train exactly the same way we train men. So there has to be investment in understanding female body, and especially with the hormone, the period, how do they impact female athlete performance?

5:5394 % of all science and medical research on athlete performance is dedicated to men. And the other 6 % is not dedicated to women. It includes women, right? So there's just absolute lack of investment. So that has to be done. Now, I am crazy and ambitious, but I can't invest if I have only one team. You talk about profitability and the size of the revenue. You cannot afford that level of investment, which is absolutely necessary. You can't do it if you own just one team. But if you have multi-teams, then you can centralize some of the resources and do it once and make it available to everyone. If you think about global scouting capabilities, each team doesn't have to build global scouting everywhere.

6:37You just go watch one game and you don't need to send five people to watch the same thing. So there are some things that you can build centrally that you can actually put the necessary level of scale investment. You can't just buy teams and invest in teams, build training center and stadiums, and you think that actually that's going to advance the women's football. For example, the cleats, the boots. So they basically take men's shoes, men's boots, and then make it a little narrower and a little shorter and pink it. Well, apparently I'm told I'm not a scientist. The weight distribution when women run is very different than men.

7:15The arches, our arches are a little different than the men. So the boots are one of the contributing factors for female injuries. So you need to invest in that. We don't get enough media attention, right? Women's sports. There is a media company that specializes that covers only women's sports. So I'm investing in those things because the entire ecosystem has to move together, not just the teams. Has anybody from Korea called up and said, we have some female soccer teams here and we'd like you to buy one? Nothing yet. Nothing yet. But your ultimate plan with respect to what you're doing in sports is to either buy more teams or to just grow the value of the teams.

7:55What is your ultimate game plan? Yes, I do. I mean, I think there's sort of a multi-step. I want to professionalize women's sports, right? I don't want people to think that somehow women's sports is a charity or a corporate DEI project. This is a legitimate entertainment product, and it is a business that is going to be profitable, break-even profitable, and enterprise values and so forth. So I want people to take women's sports seriously. So I'm on a mission to prove that women's sports is a good business, right? And that comes from professionalizing it and investing it. Our sponsor, Wells Fargo, recently spoke to Jeff T.

8:35Blau, CEO of Related Companies, about his firm's development of affordable housing across New York City, including at Hudson Yards, the Fulton and Elliott Chelsea Houses, and Willets Point. Related started in affordable housing. Today, we're one of the largest owners of affordable housing in the United States. Wells Fargo became a partner with us in working with the New York City Housing Authority, speaking to the city, to the state, to really help us make this happen. Discover how Wells Fargo is helping Related and other clients reach The Next Horizon at Bloomberg.com slash The Next Horizon. I want to get to the story of how you'd be able to afford doing this.

9:12So it's a very interesting story, but I think the best way to tell it is to tell from the beginning. So you were born where? South Korea. And you were raised in what city? Seoul. And your parents were? My father was a professor. My mom was an elementary school teacher turned politician later. My father was educated in the United States. He got his graduate degree. So he had relatively open-minded about gender issues. Korea clearly at that time was a very traditional society where girls were supposed to do certain things, study certain things. And when you graduate from college, then you get married and you have children and all that.

9:54So there's sort of a norm, the social norm. that you're supposed to follow. But my father, who had three girls, had a little different idea because he was exposed to college in Japan and graduate school in the U.S. that, you know, girls can do whatever they want to do in the future. And he instilled that idea in us. And I don't think my sisters really took up that idea, but it just had a lot of impact on me. And then you had an opportunity to go to college in the United States. And in those days, as I understand it, Korean families saved up money so their daughters could have money to get married.

10:32And so your parents were saving up money for you to get married. And then you said, I want to go to the school in the United States. And what happened? Yeah. So especially at that time, unmarried young women going to America alone was just unheard of and not acceptable, right? No parents in the right mind would send an unmarried young woman to a foreign country. So I had to negotiate. So at that time, Korea was going through a lot of political turmoil, sort of a democracy movement driven by a lot of college students and college campuses. So the colleges were shut down. So I kind of said, well, you know, I want to go study, but the schools are shut down.

11:16I can't study. And if you don't let me go, then I may participate in these demonstrations. and my career, my future could be ruined. Who knows? And I kind of used a little bit of a threat, but also a little bit of a negotiation. And I said, give me just for one year's worth of the tuition and living expenses. And after that, I'll figure it out. And when I start making money, I'll pay back every penny. And when I get married, you don't have to spend a dime. I'll figure it out and I pay everything back and some more. So they agreed to it. now. You went to the University of Chicago, but how did you happen to pick the University of Chicago as opposed to many other good universities?

11:56Well, at that time, actually, I was studying economics in Korea, which was also kind of unheard of for girls to study economics. I said, I have to go there. I have to learn economics where the real economics is taught. So that was why I picked the University of Chicago. And so was it a culture shock for you to kind of deal with all these Americans in Chicago, or it wasn't a big problem? It was really not a big problem. I mean, I just really enjoyed it being on my own. My parents were not really rich or famous, but still the environment or the circle that I grew up, I was always so-and-so's daughter, so-and-so's granddaughter, so-and-so's sister.

12:39I absolutely hated that. I wanted to go where no one knew who I was. So it was like free at last, and I just enjoyed every minute of it. When you graduated from University of Chicago, you decided to go to business school and you picked the Yale School of Management. Why did you pick that school of management, which is a very good one? Yes. At that time, Yale actually was about 10 years old. And their mission and vision was not to create another Harvard Business School, but rather a very different and unique educational institution. And that was mixed both public and private management. And the best part to me was it was a very small class, about 170 or so.

13:19At that time, if I'm not mistaken, Harvard had about 800 students. And of course, it was drawing upon the incredible faculty members of Yale University. And I just really thought that that was the best program for me. All right. So you graduated from Yale School of Management. What do you decide to do next? At that time, actually, I had a three 10-year plan for my future career. First 10 years, I was going to go into consulting, strategy consulting, because that's the fastest way to learn. every aspect of business. So I thought that strategy consulting was the fastest way. But then second half was going to be, if you want to be a leader and CEO of any organization like Fortune 500 company, it's not about whether you can build the most sophisticated Excel spreadsheet and pricing strategy, but rather how do you manage and how do you lead organizations?

14:07Especially how do you move people sideways to get them to do what you want them to do? People who work for you, people who you work for, and that you can do only in a Fortune 500 environment. I didn't really like it. So I decided to spend the next decade in a Fortune 500 company focusing on organizational kind of leadership. And then the third decade was I was going to take a shot at becoming a CEO of a Fortune 500 company. Okay, that's a fairly ambitious schedule. So the first part, you wanted to go into consulting. How many years were you at Arthur D. Little? I did probably, I don't know, four or five years, or maybe six years.

14:44And then you went to Ernst & Young? Correct. In the consulting side? Yes. Okay, so you did that for a while, and then you left Ernst & Young, and you joined Northrop Grumman, which, to the average person, is a defense company. Were you in the Washington area? Correct, correct, yes. You moved to Washington area, and were you involved in their healthcare business or their technology business? So, I joined as a strategy officer, but then I really wanted to go run something. My goal was to learn how to build an organization, how you build leadership. So I asked to give me a P &L organization. So they gave me this health business, which they thought was so bad that I couldn't screw up.

15:26Right. So she asked for it. We're going to give it to her. If she doesn't do a good job, no harm done because it's already too bad, very bad anyway. And that's how I ended up. So you're doing that in health care for Northrop Brumman. But at that time, what is your family saying back in Korea? Did they keep calling you saying, now you're going to come back? By then, they kind of gave up on me. And they probably had no idea what I was doing. And, you know, at that time, especially in Asia or, you know, even in the U.S. at that time, women go into the business world or get an advanced degree. You're either a lawyer or accountant.

16:03I was none of those, right? So they kind of gave up understanding what I was doing. But somehow I wasn't doing too badly. So they're like, OK, she's OK. So at some point you decide I'm going to be my own boss and entrepreneur. It was hard, but it was easy. At that time, President Bush, 43, declared that every American who wants to have an electronic medical record will have one by 2014. So he put his stakes in the ground and start investing in all the doctors and hospitals implementing electronic medical records. So the boom was kind of happening, the IT investment. And when you're in the middle of that, you get that bug and you can see like how the dots could be connected.

16:49Whenever you start a company, you have to get some capital to pay people and so forth. So where did your capital come from? So I certainly had offers, but, you know, I've been saying this to a lot of people as well, that I did not take any external capital. I literally bootstrapped. I think if I took external capital, if I were them, I would not have let me take the kind of risks that I took. So I knew that. So I didn't want to do that to them. The name of the company was what? Cognosante. And what does that mean? So that means that you know something about health, health care. Sante means health in French.

17:25So you were doing consulting in effect or helping companies in the healthcare world. Ultimately, it reduced the cost and improved the care and so forth. But using technology, every doctor you visit, if you want to get a second opinion, you have to go get your MRIs and x-rays all over again for various reasons because it's different hospital systems, insurance purposes and all that. But if you can have actually interoperable IT system where all this, whether it's a picture or doctor's notes, could be shared in real time or in electronic form. You don't have to take another MRI. So it's a really efficient flow, electronic flow of medical records, pictures, prescriptions and all that.

18:08So interoperability. What year did you start your company? Technically 2008, right before the market crashed. Yes. Okay, 2008. And then you sold it last year, 2024, to Accenture, I think it was. Yes. So you sold it, walked away, started a company called Koniska. Yes. Can you tell us what that does? Yeah, so that's the globally first multi-club organization that includes only women's soccer team or football teams. There are a lot of examples on the men's side, City Football Group, Red Bull, Redbird, all that. But this is the first on women's side. And as we've been talking about, I own multiple teams and I wanted to kind of create that synergy and economies of scale and scope.

18:54So it's the first in the world. And it's named after a Spartan princess who lived in B.C. 300 plus years. She was a princess, very much into horseback riding, and she wanted to compete in the Olympics. and the chariot racing was an Olympic game, but women were not allowed to compete. Instead of complaining, she found out a loophole, which was at that time chariot racing. The medals were awarded not to the racers, but to the owners of the horses. And she went out and hired a whole bunch of male chariot racers and had them compete. And she won two gold medals. So do you get as much pleasure out of what you're doing in soccer as you did in building your company?

19:41Yeah, I think it's probably a little different. But yes, I'm enjoying it. Although I have to say every weekend I have to watch just about, even though seasons are not quite the same and they're not quite aligned, but every weekend when all three teams watch, I don't think I'm going to live up my natural lifespan because every weekend I have to watch three games and just like nail biting. So you've been a bit of a leader in being an external investor. in a women's soccer team in, let's say, France and in England. Do you think other women and or men are going to start investing external investors into these kind of teams?

20:21Yeah, so when I first arrived in England and France, everyone felt very badly for me. And they thought I was going to fail miserably. How can you do this when you don't have sort of the brand equity to leverage from men's team or in communities like Lyon and so forth? But now I can tell you that some of these Premier League teams and some of the top division teams, they're not necessarily spinning off the team like what I've done in Lyon. We totally spun off the women's team from men's team. But now some of the teams are spinning up women's teams inside their mothership. And they're actually recruiting investors separately.

21:05So Chelsea is another example. They actually separated women's team and they have separate investor group. Some of the teams are now following. So when you go to the games in Washington or Paris or London, are you have fans coming up to you for photos, selfies? For those people that are not very knowledgeable about sports, why is it more exciting to watch a women's soccer game than a men's soccer game? Well, I think you could argue it's a preference, but I think women's game, I think people will tell you they're very different. One could argue there is a lot more actually technical, in my opinion, sophistication as opposed to just pure physical strength and also the environment in which you play men versus women, especially if you've been to a game in Europe.

21:55There is just clear contrast between the men's game and women's game. So right now, as you look at your professional life, it's buying sports teams, a lot of them women, and helping with equipment, other things. And do you expect to be buying media-related things or other kinds of things that are ancillary to the sports? As I said, I bought the cleats, the boots, designed specifically for female media company, covering only media company. Right now, I'm working on actually data. So all the tools for the coaches and the technical staff and all that. So using, of course, AI, but so data, which is also my background.

22:34So I'm investing in some of those type of things. But ecosystem has to go in together. So I'm investing in that as well. Now, people come to me all the time now and say, if you bought a sports team, maybe you'll buy this team or that team. And I get a lot of offers in the women's sports area. So should I invest in volleyball, softball, ice hockey? Any views on those as women's sports? My recommendation to everyone is don't wait until it looks like it's going to take off because it's too late. Right. So you need to go in. You need to have faith in something that you believe in when no one else is believing in it.

23:11And that's the time to go in, as opposed to when everyone else says this is the greatest thing since sliced bread. And would you encourage other women to get involved in women's sports as owners? Absolutely. And I think that's one of the things that I'm hoping to achieve while I'm investing that. But if you look at actually the even women's sports right now, especially in the U.S., quite a few women have come in. So any more plans, anything else you want to do with your professional career at this point? You've got sports teams. You've built a great, successful company. You're involved in philanthropy.

23:41I think I've got my hands full. And so I still this is all work in progress. Right. So I want to make sure that this is a legitimate, real business. That's not charity. That means that there's going to be significant revenue stream and the break even and all that and business discipline. So I'm in that process. Also investing in women's health and women's performance, all that. So all the different aspects. And I really I'm doing that also because there are just so many female successful people with lots of money and resources. I want them to all join. Tell me, are you ever tempted to go try to start another company like Cognosante?

24:24No. No, you're done with that. I'm done. I don't look back. I look forward. Thanks for listening. To hear more of my interviews, you can subscribe and download my podcast on Spotify, Apple, or wherever you listen.