You're reading the Business of Sports newsletter.
You're reading the Business of Sports newsletter.
You're reading the Business of Sports newsletter.
Subscribe below.
Subscribe below.
Subscribe below.
Plus Signed UpPlus Sign UpPlus Sign UpBy continuing, I agree to the Privacy Policy and Terms of Service.
This week we tell you what went on at the NFL owners meeting ("when the ducks quack, feed 'em"), talk to the woman behind a budding sports empire and look at this weekend's Boat Race.
Also, Bloomberg House Miami will open its doors for the first time April 29-30 during Formula 1 Miami Grand Prix week. Request to attend here. We'll be there!
And if you missed it, check out how far Mark Walter's fledgling women's hockey league has come and the strategies finance executives, such as Goldman Sachs' CEO, use to fill out their March Madness brackets.
As always, send us any feedback, tips or ideas here. If you aren't yet signed up to receive this newsletter, you can do so here.
Raising Flags in Arizona
What's up folks, it's Randall. I've returned from the NFL owners meetings in Arizona. Let me round up all the news from the family reunion, from flag football to what's next for private equity.
Flag Football
The biggest business story was the league officially partnering with TMRW Sports to create a men's and women's pro flag football league.
When the NFL began the process to find an operating partner a year ago it said it wasn't looking for capital, and yet it found dozens of investors including Ariel Investments, Bessemer Ventures, Blue Pool Capital, Arctos Partners, Silver Lake and Sixth Street.
Former players and athletes who also invested included Tom Brady, Peyton Manning, Larry Fitzgerald, Billie Jean King, Serena Williams and Alex Morgan. Terms of the deal weren't disclosed, but I have to imagine that this investment is well over $100 million. The exact structure of the league hasn't been determined, however a model where teams tour has been floated.
Cash Money
This is the general vibe of the NFL these days, even when they say they're not interested in cash, bags of it turn up at the door. The same with teams. The league approved three transactions. One that saw Lin Bin buy a 1% stake of the Miami Dolphins at a $12.5 billion valuation and another allowed Silver Lake Co-CEO Egon Durban to gain a path to control of the Las Vegas Raiders. Owners were updated on the sale of the Seattle Seahawks, but the process is still in its early days. The hope is that there will be a new owner in Seattle before the new season begins.
There were no conversations to increase the 10% limit private equity can buy in clubs to 15% or 20%. Chiefs owner Clark Hunt said the league will review the policy once a year and expects that to happen after the sale of the Seahawks.
"I think we'll learn a lot about our private equity policies through that sales process, and I have no doubt that private equity would probably be part of the equation for whoever ends up buying the Seahawks," Hunt told me.
So far the policy has seen four private equity transactions and a litany of other limited partners buying stakes in NFL clubs. With so many investments happening, the owners haven't yet considered creating a policy for sovereign wealth, and I wouldn't expect that to change for a long time. In fact, Hunt said he expects the league to approve another private equity firm or two over the next couple of years. It's also important to note that the league hasn't seen any exits yet and institutional investors are required to hold stakes for at least six years.
Prediction Markets
The league sent letters to prediction markets operators asking them to stop offering trades on easily manipulatable things like celebrity appearances and broadcaster verbiage. While other sports leagues and organizations, like the NHL, MLB and most recently FIFA, have partnered with prediction market operators, the NFL has been steadfast in keeping them at an arm's length. At some point, that could change, but we're not there yet.
Media Hype
Much has been made about the league's attempt to renegotiate its media deals, with Paramount/CBS first at the table. Based on what I've gathered, those conversations will continue, but I don't think it's a foregone conclusion that there will be deals done by the time the season starts. Everyone wants more money, but right now the stakes are relatively low. Super Bowl 60 at one point was 12-0 through three quarters, and yet it was the second-most-watched Super Bowl.
There's also the opportunity to add an 18th game and create an international package to sell to a streamer. The league can't do that without negotiating with its union, the NFLPA, which has been unstable since last summer. The union just hired its third executive director (JC Tretter) in less has a year. With Tretter just getting into office, there haven’t been any formal conversations about a new collective bargaining agreement.
With all that being said, owners aren't going to stop talking about the 18th game, Jerry Jones said: "It's great for the players and increases the viability of the financial aspect, more gate and more money for the players as well." Jones had no concerns about there being too much NFL football on TV either.
"When the ducks quack, feed 'em,"
Jones said. “We have that demand for our games because of the hard work and great players that we have.”
Rooney Rule
Away from business, NFL commissioner Roger Goodell said the league would not get rid of its DEI policy known as the Rooney Rule. The rule says teams must interview at least two people from diverse backgrounds before hiring someone. Florida Attorney General pressured the league to do away with it, claiming the rule has "blatant race and sex discrimination."
Goodell responded saying: "We are well aware of the laws and where the laws are changing and evolving. We think the Rooney Rule is consistent with those, and we certainly will engage with the Florida AG or anybody else as we have in the past to talk about our policies."
The policy has good intentions but by and large it hasn't been successful. The league had 10 head coaching openings this offseason and only one was filled with someone from a diverse background, bringing the league's total to five in the 32-team league, after reaching a record nine two years ago.
That's all for now, but I'll have exciting news to share soon. Have a good weekend.
ICYMI
- Charlotte received the green light on Wednesday to sell $650 million of debt to help pay for upgrades to the home of the National Football League's Carolina Panthers.
- Milwaukee Bucks star Giannis Antetokounmpo is taking an equity stake in IM8, the health company co-founded by Prenetics and former footballer David Beckham.
- Rugby is a great sport but maybe a bad investment. Former All Blacks captain David Kirk, who took over as chairman of New Zealand Rugby last year, says the team must win almost 80% of their games to boost the brand worldwide and drive commercial outcomes.
- Los Angeles Host Committee President Kathryn Schloessman said the city will have additional security if Iran comes for its scheduled matches for the upcoming World Cup.
Building a Women's Sports Empire in Portland
Hi it's Vanessa. The WNBA has had a rough offseason, with the owners and players in a contentious labor fight that threatened the season.
Now imagine trying to get an expansion team off the ground in that environment. That's what the Portland Fire and the Toronto Tempo faced as they tried to build a brand and excitement without any players to advertise because the expansion draft was delayed during the labor unrest.
But they'll be getting some help now. The owners and players reached a new collective bargaining agreement last month, and the expansion draft will finally be held on Friday. I recently spoke with Fire co-owner Lisa Bhathal Merage for the Bloomberg Business of Sports podcast about building a franchise -- and really a budding sports empire since she also has co-ownership in the Portland Thorns of the National Women's Soccer League.
First thing is first, did you breathe a sigh of relief when you first heard there was a deal in place for a new CBA?
We've been waiting, and we've been having contingency plan after contingency plan. Actually, on Monday [March 16], we went through looking at our wishlist of players because we have everything else lined up. We have season tickets. We have marketing plans. We're auditioning the dance team. Everything else is completely rolling. We just need players.
How did you navigate building a brand and getting fans without any players?
I think it’s kind of just like you said. The fans are there. They love the team. They’re crazy about sports in Portland. And maybe that part of it is that Nike’s in our backyard with the corporate headquarters. And then also Adidas North America headquarters and some of the other sports brands.
Sports is a way of life in Portland. That’s really why we call Portland the global epicenter of women’s sports. It’s been proven. It’s been since, I think, the early 1970s when Portland was the first city to host an LPGA tournament. That started this appreciation and love for women’s sports. And it’s just grown and grown and grown.
Apart from the uncertainty of the CBA, how would you compare building a team from scratch with the Fire to coming into ownership with an already established brand like the Portland Thorns?
In a way, it’s a little bit easier to build from scratch because we can say: these are the colors we want to have; this is our logo; this is how we want to set our game experience tone; this is how we want our fan experience tone—and we can create that from scratch.
And sure, they’ll maybe sometimes we hit a bump or make a mistake, and we can course correct. Withthe Thorns, we came in and we have a very passionate fanbase. We have our supporters group calledthe Riveters,and they’re known throughout,frankly,the world asthe most passionate women’s soccer fan supporters group that there is.We have to make sure that we keep them happy,too.So,we talk to them regularly.We build those relationships.And we have to kind of walk a little bit slower with some of the things that we may want to do with the fan experience.
Boat Race Blues
This weekend is the Boat Race, that famous British tradition where teams from Oxford and Cambridge University try not to get E. coli while rowing 4.2 miles of Thames River.
The event has been going since 1829, yet this year is the first time the race won't be on the BBC in any format since the 1920s. It's on Channel 4 instead, while radio coverage is on Times Radio.
That's a big deal in the UK and unsurprisingly, the BBC got attacked for giving up the rights. In 2025, the race got an overall peak audience of 2.8 million viewers. This was lauded as the most-watched sporting event on TV that weekend.
I guess that is good. The final round of the 2025 Masters on Sky Sports - Rory McIlroy's epic Grand Slam -- reached a peak audience of 1.85 million viewers in the UK, making it the most-watched day in Sky Sports history.
But a decade ago, the women's race got 4.8 million and the men's race 6.2 million. It also costs quite a bit to put on TV, with cameras up and down the Thames. Also, they're not even the best university rowing teams, so it's hardly a cup final.
The BBC gets abuse no matter what it does. When it won back the TV rights in 2009, it was accused of being elitist. But if the average number of viewers is going down, and the cumulative number of Oxbridge graduates is ever increasing, maybe the BBC is on to something.
Whatever happens, it will be interesting to know if the new BBC director Matt Brittin will bother watching it, given he rowed for Cambridge three times in the Boat Race. Governing body British Rowing couldn't resist putting out its own press release when he got the job.