SBJ Morning Buzzcast

SBJ Morning Buzzcast: June 26, 2023

Episode Summary

FSG gets into golf; What's next for Monumental Sports? MLB gets another hit with London series and a big acquisition in the agency world.

Episode Transcription

Abe Madkour:

The NHL and NHLPA take over Nashville this week with the NHL Awards on Monday and the NHL Draft on Wednesday and Thursday. We are also expected to see a new executive director of the NFL PA be elected this week. I believe we'll see a rush of news as the second quarter comes to a close and people get ready for the July 4th holiday.

This is your Morning Buzzcast for Monday, June 26th. Good morning. I'm Abe Madkour. Let's start with news that Fenway Sports Group is adding golf to its growing team ownership portfolio as SBJ's Josh Carpenter is reporting Fenway Sports Group will land the second franchise of TMRW Sports' TGL Golf League that will begin play in January. TGL recently announced LA Golf Club as its first team. Four more teams are expected to be confirmed before the end of the summer.

Now, the move to join TGL's ownership ranks was an easy one. FSG's principal owner, John Henry, was an early investor in TMRW, the company founded by Mike McCarley, Tiger Woods, and Rory McIlroy. And both John Henry and his partner, Tom Werner, have had an eye on working with the PGA Tour, which is a partner in TMRW Golf for a long time. They were both drawn to the idea of team golf as well as a combination of technology with live action. So Fenway Sports Group will roll out a team name and identity later this summer as well as making decisions on staffing. Still to be determined is where the team will play in the Boston area. More team announcements around TGL Golf League are expected in July. Evolution Media Capital, the financial investment arm of CAA, is handling the team sale process. But a lot of talk about Mike McCarley's TMRW Sports and TGL Golf League.

Well, Monumental Sports & Entertainment certainly is in the news. Just a day after news broke on Thursday, Friday that the Qatar Investment Authority is seeking to buy a 5% stake in the company for a reported value of $200 million, which would make it the first foreign sovereign fund to own a piece of a major US team sports franchise, the Washington Post had a deep dive into the issues surrounding all the sports teams in the DC region and reported that Monumental Sports has actually been talking to the Virginia government officials about possibly relocating the Capitals and Wizards from downtown Washington to Northern Virginia near Amazon's new headquarters according to sources.

Now the talks were described as exploratory. Monumental CEO, Ted Leonsis, has complained about the area surrounding Capital One Arena and the city's lack of investment in the facility. So the news of even talking to Virginia is a double hit of big news. And let's start with Virginia. I think Ted Leonsis is keeping his options open. He wants the city to invest millions into improvements at Capital One Arena, and that's one of the oldest buildings in the NBA. He's also not in love with the gallery place area where the arena is located. He may have hoped there would be more high-end development in the area. So he's seeing all of his options and Virginia is seen as a state that would be open, possibly open to a deal.

But the big story that I got asked a ton about over the weekend is the investment by the Qataris. I find this deal entirely consistent with the innovator of Ted Leonsis. He's prized himself in being out front and a first mover. Remember, he was one of the first to embrace legalized sports betting. He just bought a regional sports network in the Washington Mid-Atlantic market. He's been trying to buy the Washington Nationals and made an offer for that franchise. Major League Baseball does not prevent teams from receiving sovereign funding. So this $200 million that the Qatari invested, that could help Leonsis bid for the nationals. All of the money helps him in all of his pursuits and it could lead to a public offering one day, which Ted Leonsis has been open and public about.

Something we will all keep an eye on is how the Qataris impact operations of Monumental Sports & Entertainment, if they do. I'm sure they believe or feel they can add value in some capacity or become a source of new opportunities, even as a passive investor. So could the Qatari help the Wizards and Capitals build their brand internationally or create opportunities for Monumental Sports properties to align with Paris Saint-Germain or other Qatari assets? One thing to keep an eye on is what's next. Commissioners and owners will have to be upfront with their fans on the types of investment capital they're willing to accept in the future. Because for years, these teams have been known and positioned as a community trust. And owners are the stewards of this community trust and community asset.

Now, there are other US space funds that may have liked to invest in Monumental Sports, but Monumental Sports is taking this particular source of capital from a region where there have been questions about human rights. And so it's fair to say that fans may have questions down the road. But the bottom line is these teams and leagues need capital infusion from new sources like these sovereign wealth funds. And all of the leagues, except the NFL, have changed their rules to allow for institutional investment. The NBA adjusted its rules last year to allow for such foreign investment, but no fund is able to own more than 20% of a team and only one team. So a lot to unpack with this news around Monumental Sports and Entertainment.

Let's move on. Major League Baseball had another big hit with two games at London Stadium over the weekend. I watched a bit of both games and will just say they looked great on TV. And the fans? The fans were certainly into them cheering at every major play. Sunday's game saw more than 55,500. Saturday's game saw a crowd of 54,600. The attendance marked the highest number of fans for a Major League Baseball game this season. And it's only down 5,000 from the nearly 60,000 fans that attended the first London games in 2019 for Red Sox-Yankees. The turnout for the games were very encouraging signs for baseball's efforts in Europe. Tickets to Saturday's game went from around $45 for upper deck outfield seats to more than a thousand dollars for premium spots behind home play.

So baseball is smart to bring its top rivalries to London. They've already announced that next year we'll see a two-game series between the Mets and the Phillies in early June. That'll be MLB's third series played in London. So Red Sox-Yankees, Cardinals-Cubs, now Mets and Phillies next year. Meanwhile, baseball said it is also laying the groundwork for a future series in Paris.

You know, I said on Friday that dynamic young players coming into the NBA had to make the league feel really good. There's so much to like about Victor Wembanyama, the Thompson twins, and viewers seemed to care. The draft drew a record audience on Thursday night with ABC and ESPN averaging 3.74 million viewers for both rounds. That's according to our Austin Carp. That's up 23% from last year. And let's just say Victor Mania is spreading throughout San Antonio in the first 48 hours after he was selected number one. The Spurs have already seen a 3000% increase year over year in online traffic and sales. The team received roughly 4,000 new season ticket deposits with over 50% coming from the young Gen Z or millennial audience. So younger fans are feeling this Victor Mania.

The Spurs are eager for the boost as last season they ranked 25th in NBA attendance. Now, Wembanyama had a varied couple of busy days. He was greeted by thousands of fans Friday at the airport. Hundreds of team staffers met him during a Meet the Rookies in introductory news conference. He will spend a few days looking for a house in San Antonio before heading to Nike's headquarters in Portland later in the week.

Meanwhile, he had dinner at a local restaurant called Bliss on Friday night. Who did he eat with? Let's just say it was quite the company. He was in a dining room and sat together with Tim Duncan, David Robinson, Manu Ginobili, and Sean Elliot, all former Spurs. Meanwhile, in the other room were his family and advisors and Gregg Popovich and R.C. Buford and Spurs general manager Brian Wright. So quite a night at Bliss. Quite a weekend in San Antonio and there is a lot of energy around the San Antonio Spurs right now.

And finally, a big deal in the agency world as underdog Venture Team, which was co-founded by Dan Mannix is expanding. The marketing services agency, which was founded in early 2022, has been acquired by Pennsylvania-based private equity firm, NewSpring Holdings. So the name of the company will change to Underdog & Company. Mannix and his executive team will have access to new capital with an eye on acquiring other businesses that are focused on Underdog's mission of diversity.

Now, NewSpring partner, Skip Maner, has known Dan Mannix since their college days at the University of Richmond in the mid-'80s, it's NewSpring's first investment in the agency world and also in sports. Now, Dan Mannix, he's well known to the sports business community. He built the experiential and event agency, Lead Dog Marketing, from 1999 to 2016. He sold it to CSM in 2016. He said that he expects to unveil acquisitions as soon as this fall, adding new disciplines to Underdog & Company. Mannix will serve as co-founder and managing partner of the new Underdog & Company. Dave Nugent, the other co-founder of the original Underdog Venture Team, will also have a significant equity stake in the new Underdog & Company. So a big deal for Dan Mannix as his Underdog Venture Team gets acquired by NewSpring Holdings and will be repositioned as Underdog & Company.

And so that is your Morning Buzzcast for Monday, June 26th. I'm Abe Madkour. Thanks for listening to the Buzzcast. Have a great start to your week. Stay healthy, be good to each other. I'll speak to you tomorrow.