Everybody who's watching right now who's looking for, you know, so many people are trying to chase the next crypto or the next startup or the AI startup, there's so much opportunity in wealth creation in early startup sports. The problem is it's incredibly high risk, high reward. For every six leagues you write a 50 to $500,000 check, it's one that's going to have a prayer and that's a lot of money lost.
But if you refine your skills, I mean, I watched alternative sports for years before I decided to get involved. This is the time because they don't need ESPN or Fox to say, "You're ready. We're going to put you on TV to be discovered." They can be discovered on social, YouTube, and streaming. And that has changed everything.
Welcome to another episode of NASDAQ's The Winning Formula. I am your host Joel Khani and today we have an extremely famous and extremely special guest as well: chairman of VaynerX, CEO of Vayner Sports, VaynerMedia, creator of VeeFriends as well, sports investor, representative of many athletes across the spectrum in the sporting world, needs no introduction, Mr. Gary Vee. Thank you so much for joining us.
Absolutely. So, this is The Winning Formula. I know there's a kind of plethora of things that we'd want to dive into when it comes specifically to the sporting realm. You've spoken about this alternative sports, the sports asset class.
Yes. If you think about 20 years ago, the idea of a sports asset class wasn't even a term.
Yes. How would you, I'd say, define what has led to the emergence of sports valuations, not just in the big four, across the spectrum — pickleball, wiffle ball, three-on-three, Big3 — what has led to this explosion in popularity? But then also, do you see the trajectory even continuing from now?
I think the distribution landscape changes. You know, as someone who is very active in the space and who was a poor student but always good at history, I've spent a lot of time, even in my youth, because I've always had this obsession with buying the New York Jets, around the history of sports business. And you look back and you think about the NFL going to television and that famous Colts-Giants game transcending what the NFL was, or you think back to when ESPN came along and created room for other things, or pay-per-view, or how UFC worked, or, you know, Super Bowl One not selling out, and the NBA Finals game two on tape delay and CBS airing, you know, golf. You look at social media, you look at streaming, you look at 4 billion channels now instead of 13, instead of 36, instead of 100. I think the reason you're seeing the explosion in the alternative side is pickleball, wiffle ball, darts, softball, volleyball, three-on-three leagues — they can be seen now, whether that is on television or on a phone through a streaming or a social device. That's a game changer because being seen is being given an opportunity, right?
Yeah. I think the value of the big four comes from, you know, I think you've got a generation of extremely wealthy people who've been affected by the 60s and 70s and 80s of sport, right? So I think the highly wealthy in the 20s, 30s, 40s and 50s, when they got to those crazy numbers, when, you know, the J.P. Morgans or the Rockefellers or the Vanderbilts — sports and culture, they weren't affected by it as much. As a kid, it was more property or antiques or jewels, you know, it was different, like what status was today. I think owning a sports team is like king-making, and there's so few of them — supply and demand. And, you know, I can speak for myself: I'm 50 years old. I've literally wanted to own a sports team since I was 11. I don't think 11-year-olds a generation before me were thinking about that. Maybe playing for one.
So I think it's just the evolution of popular culture, what is considered cool, what is, you know, everyone's got their own things, you know, of why they want one. But I think sports are more popular than ever before. And then I think on the alternative part, you have a lot of people, you know, back to being here, there's just a lot of crossover of entrepreneurship in sports. You know, I think a lot of us grow up and want to be athletes, and then when you realize you don't have that talent, entrepreneurship is the next best game. And so for us entrepreneurs, as we — my gen, the kids underneath me — as we try to get to the levels of wealth that puts us in contention for those, I've said often to my brother AJ a decade ago, I'm like, I wonder if I invest in a sports league that ends up giving me the economics to help me buy the Jets. And so I viewed pickleball, three-on-three, Big3, Unrivaled, you know, SailGP, all these leagues I'm in as similar to the way I looked at Facebook and Twitter and Tumblr and Snapchat and Uber, my early investments early in my career that made me a lot of money.
Yeah. I viewed them as business opportunities, and I understood it because of my marketing and social media background that they had a chance. Because if you can make fame out of some of your athletes, and you can do that now. Joe Namath famously took a photo outside and was on the cover of Sports Illustrated and became Broadway Joe. The AFL was built on Joe Namath's fame. And I think Magic Johnson, Larry Bird and that rivalry, then Jordan, Steph Curry today, Caitlin Clark, Ronda Rousey, Conor McGregor — I think there's a lot more superhero building. I look at David Stern, Vince McMahon, Dana White. Similarly, they did superhero building. And I think, you know, for me, Anna Leigh Waters in pickleball, I felt like she could be famous, not just the best player in the world, which is why we drafted her for the, you know, the Fives. It's why I even got involved in the league, because I saw a path of her being the Broadway Joe, her being the Michael Jordan. And I think you look at sports, they get bigger when someone captures the imagination of, you know, the world. When Mike Tyson's the heavyweight champion of the world, boxing's bigger, right? And so I think those are all the elements, ingredients that answer your question.
And, you know, based on what you were saying, you start to touch on, you know, the why, the king-making, why owners and folks who are of that, you know, wealth level who do have interest in owning a team, why they want to own a team. If you could pen almost the message to Jets fans as to why I want to own the Jets, do you have a reason where you're like, "This is the main reason I want to own the Jets"?
The main reason I want to own the Jets is because I want to win a Super Bowl as a fan. Like, and I feel like, you know, I feel very confident in my ability to achieve things, and so why not take control of the wheel? I mean, it started off as — I didn't even know why I said it in third or fourth grade when I was asked what I'm going to do when I grow up. I guess at that point I understood that I liked business too, selling lemonade, trading cards. I don't even know where it came from. I genuinely don't know the genesis. At some point in my late teens, early 20s, it became an ideology around being an immigrant that couldn't afford to buy a jersey. So it almost became this emotional thing about my family and like kind of like fulfilling what my parents did by immigrating to America. And now it's just kind of like the curiosity of can I pull it off? Like the challenge of the entrepreneurial game. Am I able to create that insane level of wealth to put me in a position to be able to pull it off is more of a curiosity challenge of the game. The thrill of that hunt is like more important to me almost than achieving it. And then if God willing I achieve it, then it becomes complete obsession. You see it, and I know so many owners now. I'm blessed to run in the circles I'm running in business. I know enough owners now to know there's just two groups, you know, ones that are like genuinely obsessed with winning and others that view it as an asset or a lifestyle or a validation or a venture that's interesting to the family. I would be on the obsession with a fan.
That makes sense. And you think you would be very involved, front office in the draft war room, or to what extent of ownership, you know, because there's such a spectrum.
I think this is the other reason I've enjoyed doing alternative sports. I've had a crazy summer as a fan. The Knicks finally did it for me.
And for us, for all of us watching that are Knick fans. And then boom, boom, my two big kind of hot leagues, you know, Major League Wiffle and Major League Pickle, you know, first-year World Series in Wiffle and the New York Green Apples win a World Series, another ring. And then a month later in Central Park here, the New Jersey Fives, after two years in a row losing in the finals, on the third year's a charm, we finally win a title. And in both scenarios, Matt Cinamer, David Zang on the co-GMing side of the Green Apples, and Ryan Harwood on the GMing side of the Fives. I'm wildly not micromanaging. I'm passionate about building the brand. I'm passionate about, at this point, building the league. I feel that pressure as an owner. I look back at Lamar Hunt and, you know, you look back at like the people that built the NFL, Pete Rozelle, Al Davis from the AFL side, you know, Bear Bryant. Like, I want in 30, 40 years, if these leagues get to like massive scale, for my name to be talked about as one of the owners that really helped it. So, you know, we're early enough where I feel like I have to build the league, not just my own team. And, you know, this is how I've run all my businesses. I will go psycho to pick my GM, but I will let her or him cook. You know, my job is to pick the GM. Their job is to pick the head coach and the draft. You know, I feel like I'll be likable enough because of my charm and like who I am as a human where the GM and the coach might actually give me a little room. I think I'll be a very interesting owner if it happens because at that point, if let's say I'm in my 70s, that would mean I owned a sports agency that rep'd football players for 40 years. I think that would give me some — it's not like I'm an oil tycoon and, you know, no idea what a contract is. And I could speak about like, the Gunner did this. Like I really know the sport.
But even with all that, I know my biggest company, VaynerX. I know everything about that company inside out. I still don't micromanage. I micromanage the decision of who I put in place for power, but then I let them cook. And I think, you know, other than I'm just such a big fan that I'm concerned that I would undermine my GM and coach in the media once every three years out of a burst of being frustrated, other than that, I think I would be a likable owner.
Funny that you've already baked in potential frustrations even in team ownership just because of the study.
The Jets, you know, Mark Sanchez is a buddy, and I loved when he was the Jets quarterback, and we obviously had some success there. But in his rookie year, the Jets were one of my biggest clients in VaynerMedia. They're my beloved Jets, and Mark threw five picks against the Bills. And I literally tweeted, "F you, Mark Sanchez." And the Jets called me that evening or next morning, and I said to them like psycho. I was like, "When I told you when we signed this account, I'm Jets fan first and then VaynerMedia CEO second." And so even as owner, I think I will be Jets fan first, owner second. And so I have to — as my notoriety has gotten bigger, I've also been thoughtful. I don't want my voice to carry weight, undermine the organization, the players, the ownership. And so I'd like to think I'll be prepared. But when you — I mean, even this, you know, when we're taping this, we just lost to the Packers on that Sunday a couple days ago, and like up 10 and 4, yeah, up 10-10 minutes ago, like that hurt. And so like when you're a real fan, even when you're the owner, and I know several, it's hard.
It's hard.
On the subject of player — of just like player management, player engagement, you obviously founded and run Vayner Sports, right? You have a deep understanding of the modern athlete in comparison to previous generations of athletes. Obviously the amount of wealth that is now accessible at a far earlier stage of an athlete's career is greater. How have you seen the modern athlete kind of evolve in terms of their financial literacy, you know, how they view the sports that they play, everything?
It's almost like a bizarre world. We, you know, my brother AJ, Greg Gensky, Coco, they run Vayner Sports. I'm very active in recruiting, managing, creating business deals. But even before Vayner Sports, 10 years ago, for the decade prior to that, I had really become friends with a lot of athletes because my business and personal brand had gotten to a level where I could be friends with Curtis Martin or things of that nature. When I tell you — and any sports agent, and many more seasoned than me, would tell you — it's almost unrecognizable what's happened in 20 years, especially in basketball. You know, my brother reps Brandon Miller. I mean, he's in line for a $200 million-plus contract. The kid's not 25 years old. You know, one, the numbers are huge, to your point. Two, and this is a big part of my career, the entrepreneur and businessman got cool. 20 years ago, businessman wasn't cool. They were older and dorky. And a 27-year-old, 30-year-old athlete did not look up to a businessman. Now, they do. So what you're seeing even from NIL, like even when, you know, because we're with kids that are 17, 18, 19 now repping — millionaires already, millionaires, you know, taking in a million dollars, you know, where that money goes sometimes, especially at that age, could go anywhere. But I think everyone watching would be shocked because I think people cliche think these kids from rough neighborhoods don't have the financial literacy. Even kids in challenging situations where maybe it's not around them day-to-day, with their coaches, their athletes, their neighborhoods — they have so much access to content and podcasting and social media. Some of the questions that incoming freshmen to Alabama and Georgia are asking me if we rep them: "Gary, how much access will I have to private equity?" I mean, things that like I couldn't even comprehend they would ask 10 years ago. It'd be like, "How close can I get to pretty girls or maybe a rapper?" And now they want to talk to, you know, PE partners and hedge funds and fractional ownership and like, what does the blockchain mean? Like, I'm just like, what is my NIL actually worth? Can I put it into a fund so my grandkids don't pay tax? I'm like, where — like, what are you consuming? It's humbling. It's exciting. And it really does help the best firms. You know, if you look at people that rep these kids, it helps the best firms that are doing it on the up and up win more of the best players. It's not like a bag under the seat at a car anymore like it used to be. Levels the playing field. And I think the leverage — I'm writing a book right now. It's going to be called The Individual Empire. Its thesis is the human being actually has so much leverage in the new world that they will end up being the Fortune 500 companies themselves.
Themselves, the businesses they build.
What I'm doing, what MrBeast, Steven Bartlett, Cody Sanchez, you know, like these — Alex Cooper, Alix Earle, like the human becomes the moat.
To building a CPG immediate. Got it.
I think that's going to happen with the modern athlete. And I think even though I'm in the representation business, I think the creme de la creme — Victor Wembanyama, you know, Arch Manning — like I think they're going to go to building a corporation around them not being represented. And so like agents today that work at Vayner, WME, CAA, all these great firms, I think some of them are going to end up being partners with an individual athlete a little bit more like Maverick and LeBron and Rich Kleiman and Durant. I view that as the preview, even though they still — Rich Paul's done an amazing job — they're still kind of rep'd by traditional firms. I think slowly but surely that's going to evolve into a mutation because the economics and the leverage are so high, and even giving up three to five percentage points on a contract, you know, even if they're willing to do that, they're still going to want to be able to build their CPG empire, to build their collectibles empire, to build their, you know, media empire. It's going to be a tremendous half century for the modern athlete.
So you're alluding to essentially, though, a marked shift in traditional athlete representation, relationship management entirely.
I believe that we're in the pre-dawn.
And you're starting to see the, you know, previews to it. Yeah. I think you'll see more Kleiman-Durant, Maverick-LeBron at scale for the 1% of 1%. Right now, what those kids are doing is they're staying with their family, more like parents doing it, which is fine. But it's leaving so much money on the table. I believe that someone who right now thinks they're going to be eventually the CEO of Taco Bell — I'm looking at that right now, big shout out Sean, great CEO — the person right now that's at BMW and dreams to ascend to CEO, the person that's at BlackRock and Blackstone that dreams to be partner, the COO/CEO type, I think that person is going to find themselves actually being the partner of an athlete, right? And like you look at Giannis who's very entrepreneurial, like they're the CEO of Giannis and all the CPG work, all the media work, all the NIL arbitrage, and then that will bleed into contract. They won't need a Vayner Sports or a CAA. They'll just kind of do it. But they're not replacing the representation. They're the CEO of — they're the COO of — because there's a lot to do with that capital. Imagine, you know, Victor is going to make a billion playing basketball. Playing basketball, not Nike, not you, right? What do you do with that money? Now, being in the financial capital of the world in New York City, there are a ton of people right now chilling at Goldman that are like trying to figure out their careers that would have been the perfect partner, and they could have 5% equity in that corporation. They would make far more money, have much more fun, and Victor would make far more money and have much more fun.
They're already looking at deals every day anyway, right?
Correct. So I think — yeah, I think you're going to see a mutation.
That's fascinating to think about. And yeah, with those major athletes, they've become the role models for the younger athletes because they've been investing in so many different things, seed rounds, and companies that eventually, you know what I mean.
Of course. When a running back at Penn State hits campus and heard Saquon made this much on Anthropic, that's different than 20 years ago watching on MTV Cribs, you know, the culture shift is totally different. Like, and it's wonderful. And I think it's been a massive step up for the athlete having more leverage, which I think is wonderful. It was fully the reason AJ and I started Vayner Sports. We have done some incredible things for our athletes. I think about, you know, Juwan Johnson, the tight end from the Saints, what him and his wife have been able to do to build their personal brands on TikTok, the couple dynamics. Derek Morgan getting into deals early on — like it's been really fun. And now they aren't the anomalies. Every kid — look, there's still plenty of kids that are knuckleheads because they're young, but God, has it changed in a great way.
So on that, you mentioned earlier one of the formulas for an emerging league to succeed. Part of it is distribution and access and getting exposure. The other part of it is actual star creation. Yes. Right. You mentioned Dana White, Conor McGregor, Ronda Rousey, etc. The emerging leagues — what would you say from your purview is beyond just star making, the formula necessary for one of these emerging leagues to one day compete with the big four? Like beyond star making, like what are the things?
