I am pleased to welcome my first guest today, Marc Lasry, co-founder, CEO, and chairman of Avenue Capital Group. With three decades of tenure as a fund manager, Avenue now has nearly $13 billion in assets under management. Marc, welcome. It's great to have you here today.
It's great to see you again. Thank you.
Thanks so much for coming in, and I'm so glad you're here to talk about all things sports. And there's a lot happening in the world of sports. Of course, we had the recent news last fall about the NFL and being able to take in the private equity minority stakes. There's also rumors about investing in college sports. There's, you know, golf, esports, you name it. There's a lot for us to talk about. And what I love about this opportunity is that you have personal experience investing in sports, and now at Avenue Capital, you're focusing part of the strategy on thinking about where the opportunities are in the sports ecosystem. So with that, let's jump in. And, you know, my first question is about that personal investment that you made. And you were the co-owner of the Milwaukee Bucks from 2014. You sold it in 2023. What was that experience like?
It was a great experience. I loved it. I thought it was pretty unique. You got to go in the locker room, you got to talk to the players. It was just fun. But more important, you got to learn about the business of sports. You know, the one thing you want to do is you want to get the best players, but to get the best players you have to have, you know, money. And so for us, we ended up focusing on that, and I learned quite a bit. Right, so it was fun, and it was also a profitable enterprise as well.
And there's been quite a bit of growth in terms of value of the team when you bought it versus when you sold it. How do you think about value creation when you own a sports team? How do you drive that?
When you bought the team, the team was last in the league and everything, and then it moved up. Obviously, we won the championship. That was great. I remember when we won. You get to hold up the trophy, right? And that's kind of fun. Very cool experience. Very cool, right? It's on national TV, everybody's watching. And before I go out, my son looks at me and goes, 'Whatever you do, don't drop it.' Yes, good advice. So I go, I get the trophy. It's kind of heavy, so I'm lifting it with two hands like this. You know, it's great. And then five minutes later, Giannis grabs the trophy and he's like, with one hand, goes like this, 'Don't drop it.' It was a cool experience, and it was a lot of fun.
You know, obviously it's a great experience, and also as an owner you have to think about valuations and growing those valuations. So what have you learned about, you know, what's the magic, what's the secret sauce to grow the valuation of a franchise?
So teams only make money three ways. It's going to be ticket sales, it's going to be sponsorship, and it's going to be media. The one that really grows is media. If you look at the last NBA deal, you're getting about, you know, I'd say sort of $2.7 billion per year, and now you're going to get somewhere around $7 billion. That's a huge step up. That's where the real focus should be. And I think for us, when we're trying to invest in teams or in leagues, anything we try to invest in, we look at where the media could be, because that's going to be where you're going to make the most money.
Well, let's talk about valuations of media rights. As you mentioned, there's been a huge step up, especially in the NBA, but it's been there for other places as well. So if I'm an investor that's new to sports, you know, what is my entry point today? Is it quite as attractive as it was five years ago? Am I going to look back on this time and say, 'Oh no, I shouldn't have been investing in these high valuations'?
I think ultimately in sports, your teams are going to grow around sort of 10 to 15% a year, right? So if you're investing in the NFL, if you're investing in the NBA, baseball, or hockey, you're going to make about 10 to 15% a year. If you look at sort of all those teams over sort of a 20-year period, the average has been 11.8%. So, and that's NFL, NBA, Major League Baseball, and hockey.
I mentioned at Avenue Capital you do focus on identifying sports opportunities as well. After selling the team in 2023, you know, why the pivot? Why did you decide to pursue investing in sports at your business?
Well, I love sports, right? And that's a good reason. It's a good reason. And I think I understand it. And owning a team, you get to meet everybody, but more important, you understand sort of the business of sports. So for us, plus we've invested in a bull riding team. Why did we invest in bull riding? Because we think their next media deal is going to be multiples of what the current one. We invested in SailGP. So here's a sailing league. Here's a great question for you. We have 350 million Americans in this country, all right? Do you know how many watch hockey? Half a million. Half a million. Half a million. That's it. Baseball, 1 million. Basketball, 1.5 million. Right? So when you think about it, you got 30... Sounds like a niche sport. It does. No, but they're getting paid so much, but the amount of people are watching. So where it ends up is really on the playoffs. In the playoffs, I'll have 10 or 15 million people watching. So bull riding has a million, two viewers. That's more than baseball. That's shocking. It is. But the one that really will shock you, SailGP had a race, they had a million viewers. So when you start looking at it, what we're trying to do is find those viewers, and you actually automatically see the ratings, so you know how many people are watching. So we're investing in those. We want to invest in women's sports. Why? Because that's the fastest growing. When I was a kid, if I went to a game, I went with my brother. He never took my sister. Today, the idea, you know, you have a daughter, with the idea of bringing her to a game, like, do you say no? I would never bring her because she's... Of course I would. Of course I would bring her. Of course you would. But that's what it is. That has changed. And because of that, people are more interested in women's sports. I think women's sports is huge. I think there's a huge opportunity there. Whether it's women's soccer, whether it's women's volleyball, WNBA. But what you're seeing, and you're seeing the spike in ratings for everybody, and what that means is that more and more people are watching, right? And we're trying to find the areas where more people watch, and that's happening a lot in women's sports. So that's a big focus of what we're doing.
Right. How niche is women's sports right now, or is it, and how much scaling do you think will happen?
Oh, it's huge scaling. Here's a great statistic. Caitlin Clark, in her final game of women's basketball in the championship game, you had close to 20 million viewers. That's more than I've ever watched the NHL playoffs, Major League Baseball playoffs, the World Series, and only one NBA game has come close to that. That was LeBron and Steph. So when you look at it, there's this huge interest. And on the media side for women's sports, their first deal was a million and a half, their next deal was 60 million a year. And why? Because there's more people watching, more young girls, more young men. Go to a Liberty game in New York. You go there, you're going to see half of the people are men, right? So why is that? Because I think people just want to see the best in the world can be, and those are the best athletes.
