Can Women's Sports be BIGGER Business than Men's? With Kara Nortman (Angel City FC Founder)

Oh, wow. This is not 20% of my time. This is what I'm dreaming about. This is what I'm talking about. This is what I wanted to do. And then, you know, Natalie Portman arrived in my life. And I pulled her into the pay equity fight. Every deal, every transaction I do, it's the handshake that's important. And we get aligned and I write an email or I forget what he does, but we get aligned on key terms. If they violate the spirit of that, we're not meant to work together. And I sort of say to everyone, just like it doesn't need to be a job, but find your joy, you know, and sometimes it could surprise you and if you let it surprise you, it will. And then also let it go away. If you're forcing it, it won't happen, but you can just let it simmer. So find a hobby, find good people who will lift you up, and let the butterfly effects take you from there.

Great to be here.

In Europe. In Europe in general and Germany was where we wanted to start.

Yeah, that's an interesting question. I'm going to describe it differently maybe than I used to. I think we all kind of are always building new careers within our careers, even if we stay in the same job because we're never the same person, right? I think we all go on these seven-year almost biblical cycles. But in a lot of ways, what I'm doing has always been very similar, right? I've been sort of an operator and an investor. And I think what I love to do most is start things and work as an operational investor. And sometimes that means you're more on the operating side and sometimes that means you're more on the investing side. But I guess you could say I spent the first 25 years of my career in tech and media. And so I think we tend to think about that as one type of career and sports is another. But if you think about it all as global IP and community building and innovation, you could put it in the same bucket. But yeah, I had to learn a new industry and I definitely had all the impostor syndrome stuff when I started doing that about a decade ago.

Absolutely. I'm going to answer the question. One thing I want to say up front is everything that I've been involved in starting, I've been a co-founder and the co-part is important as well. I love building with other people both at Monarch, at Angel City, at some nonprofit things, and there's no way any of these things would have played out without doing it as part of a team. Angel City, what it was unexpected is what I would say. If you'd asked me a decade ago if we would be doing this podcast talking about women's football, I couldn't have imagined it. So, it happened as authentically and organically as I think anything maybe will in my life or could. One of the reasons we named the firm Monarch is all the butterfly effects and the chaos theory that leads to these unexpected things in life. Angel City started in 2015 for me. I was at a women's World Cup finals in Vancouver, Canada with my three daughters, my husband, my parents, and we went to have a fun weekend. And candidly, I think it was the first time I had had fun. That's not true. I have fun. But I had this moment at that game where it was just such a beautiful weekend. And the game felt different to me than some of the men's sports games I had been to, and I've always been a huge sports fan growing up. It was a big part of my family. But it was just, the US won 5-2, so that was lovely. You guys have an incredibly winning culture for the German women's national team. But what really stood out to me was we walked around and everyone was introducing themselves to each other and painting faces. I wanted more of that. So anyway, after the US won, I had all these new heroes: Abby Wambach, Crystal Dunn, Tobin. Is Alex Morgan there? Yeah, probably. Oh, of course, Alex. I actually have this incredible picture with Alex and two of my three daughters as a fan in the stands. It's the only picture I got with a player and she came up and we were signing the autograph. We didn't know each other at all. She was just being nice, you know, as they are. But I was with her at dinner a couple weeks ago at the NWSL finals and she brought up the picture and we just had so much fun and I'm now friends with her and her wonderful husband. But anyway, I'll speed it up because I could tell this story forever. I left that game just wanting my middle daughter, who is a football player, and she really wanted one of the defenders' jerseys, a woman named Megan Klingenberg. And I went to many, many stores in Vancouver determined to find this jersey. And not only could I not find a jersey with a name on the back of anyone, even Alex or the strikers. That was what year? It was 2015. By the way, it's still hard to find jerseys with names on backs in stores. It's gotten much better, but it's still something and candidly something we at Monarch are working on trying to solve with teams and directly. But it wasn't. So, I ended up finding one jersey, no name on the back. I came back to LA. I eventually found a Carli Lloyd jersey from a friend who worked at one of the big agencies and then I ordered a Klingenberg jersey on eBay or something. So anyway, in my mind, I came back and then I tried to find content for this league I didn't know existed, the NWSL. And it was unwatchable. It was like being streamed by a 12-year-old's phone from out of space and players were this big. I talk about little Tobin Heath. She was literally this. But what that kicked off for me was just a curiosity and maybe a mild irritation around how could you have at the time 300 million people watch that event and that kind of experience? And then there was nothing to do with that demand and that enthusiasm afterwards. And everyone I spoke to in the sports industry, I started calling people trying to understand it said, 'Cara, you're the only one who wants to watch women play football more than every four years.' And I went on Instagram and I thought, 'No, there are other people who follow these players.' And if you follow Ashlyn Harris and Ali Long, it was like reality television. It was incredible content. So anyway, that was the beginning of the journey for me. I talked about it all the time. The analogy I made is like it's like having a Gatorade commercial or Nike commercial where you have for 90 minutes the best experience ever and then there's none of those products in store but you say nobody wants the product. You just don't know, right? Because it's so hard to find. So anyway, one thing led to another. Eventually I was asked to be an adviser to the US women's national team players union. And I'd gotten to know a number of the players who were starting businesses and it was a way I could be helpful with my background. And I was one of a group of 15 women who had started a nonprofit called All Raise to drive gender and racial equity in venture. And all of those things kind of came together where I got involved with the national team right when they were launching their pay equity work to get paid the way the men's team got paid and they were doing early name and likeness work to generate more revenue. So I thought I was starting by just helping the players in the union. It didn't occur to me that I would start a team, but starting the team, building the friendship with Natalie all came out of that work. And if you want me to go there I can tell you the story. It's fun. But I'll pause.

Yeah, I mean for me, I've always been the kind of person who will follow my energy and I have to stay very focused on the thing that I'm committed to doing from a work, paying the bills, etc. standpoint. But the way I've looked at it, and there have been times in my life where I can do this and times where I don't, where I spend 80% of my time on my job and my kids, but 20% of the time is around things that just light me up and that I care about and that I want to see exist in the world. And I've always had nonprofit work heavily around gender equity. I mean, I was one of the, I started out at Morgan Stanley in the late 90s in their private equity group and then at Battery Ventures and kind of went from there. But I was always one of the only women at that time. And so I got very involved in mentoring then and even when I had nothing to offer other than I was a venture capitalist. I was a very young venture capitalist who would just show up and say I'm here to help. So what I would say is that I think it's having a hobby. It's having an interest and I think sometimes if we think something needs to pay you it becomes a job and a lot of delight and community and aliveness comes from doing things that just bring you joy whether that's taking a run or trying to get women's football players paid in a thoughtful sustainable way. So yeah, for me, my journey and getting involved in sports really started as something that was just a couple hours a week. I would talk about this at the end or beginning of meetings. 'Hey, like why do you think you can't find the content for women's football?' or 'Why is there not a successful league?' And it was small talk and then it became like, wow, I'm thinking about this all the time. I'm reading about it. I started to proactively reach out to people. My friends in venture capital, one of my friends at Sequoia, and one of my friends who runs a big impact fund here, Rethink Impact, they made the introductions to the players who were starting businesses and to the National Team Players Union. And really they said a friend of mine who I think highly of is really passionate about what you do and she's happy to help for free. And so for me that's how it started, but it did take many years and it marinated and I didn't need it to go anywhere and at some point I realized, oh wow, this is not 20% of my time. This is what I'm dreaming about. This is what I'm talking about. This is what I wanted to do. And then, you know, Natalie Portman arrived in my life and I pulled her into the pay equity fight. We literally met, I was at an event together with women gathering from different parts of the industries trying to figure out how to drive more representation. And on stage, I said, 'Go make a new friend while you're here. Give them your number, someone you're curious about, and if they're strange, you can block them, but try to have a meal with them first.' And she came up to me and gave me her number, and we had a meal, and we talked about everything under the sun. And in the last 10 minutes we talked about the work I was doing with the players union and she said how can I help and we built a friendship. And so that's the whole butterfly effect thing. And then of course at some point we decided to start a team, but it was years in the making and it wasn't even a twinkle in my eye. And when she came up with the idea initially I said really, I think you have to be much older, much more, and with more dollar zeros. And she said no, I hear it's possible and don't you know how to do this, right? Raise capital, build a team, etc. And that's when I started the journey to go find Julie. We started raising capital, my co-founder Julie Uhrman who became the CEO of the team. But it was very much, and so what I would say is just start talking about it and figuring out the way you can plug in personally. And sometimes that's time and sometimes that's dollars. Sometimes it's just being in the community and buying tickets and showing up and bringing more people and running a supporters group or just being a part of it. But I think the goal is more like how can I bring joy into my life. I mean unless you have a lot of capital in which case we can help you. But you have to have the right values. I think values alignment has always been first and foremost for me and for us and you don't always get that right. But I think now we really try to get that right both at Angel City and Monarch. So if the values alignment isn't there, it doesn't matter the market, the team, you know, like we won't do it because we think long run it won't drive the kind of returns that are possible because this is very mission-oriented, it is very authentic, and you can feel the difference. You can feel the difference with an FC Victoria versus others.

Yeah. Well, so I'll start qualitative and then I'll get into numbers. I think you know, magic when you feel it, right? And we're in this industry where you can show up in a stadium, no matter how jaded or how long you've been in the business, and go back to feeling like a 12-year-old kid, and you can feel that, right? But then you have to make the math work. This is the way we move the ball forward, put it in the net, whatever we want to say. Is by showing there's also a financial case and it's also the way we enable the right people to run these teams and we balance all the components. So community, player welfare, sustainability from a profit and loss standpoint is a key part of that in the long run. So at Angel City, I would say we went through a lot of iteration to boil down the key thesis. I think my key thesis became, I'll just say this maybe to give you guys some stats to start. We went out to raise capital for Angel City, the three of us, me, Julie, and Natalie. And we didn't know who was going to give us capital. We didn't know if we were going to raise a half a million dollars or $20 million. We knew it wasn't going to take a half a million. And we started by looking for somebody who was going to do all of it and be there to put 20 or 30 million in at the beginning. And what we found was that no one was interested in doing that. We got close with a couple people who I really respected, out of private equity, cared about impact, but ultimately everyone was afraid of some macro risks and there wasn't a team level example yet of a P&L that worked. So, the thesis that I eventually got to with Julie and Natalie was that if you could get a certain number of people to show up for 12 games a year, right, which is all we have, in a city of 15 million people, you could make a case for how you break even. And I think the number we came up with in LA where costs are high and opening our stadium is expensive was 10,000 a game. So the thesis was, hey, we need to put 10,000 people in seats 12 times a year in a city of 15 million. So we have to create something that is showtime, don't miss, community oriented, more than what's on the pitch. And then from there everything else plays out. And we said we want to be worth as much as Real Madrid someday. We said our dream to show that you can start that way. You can build sustainably to a P&L that breaks even and we have ambition and here's how we're going to get there. And so we ended up raising less than a million dollars a few weeks before COVID, which is crazy. If we hadn't done that, I don't know that we'd be in business if it was after COVID because people didn't think people would go to stadiums. And then we ended up turning it into a structure because nobody wanted to fund all of it where it was in the US a more traditional corporation structure where we as the founders owned it a third, a third, a third and we put that less than a million dollars in at a $6 million valuation. So, pretty low, though some people may still think it's high. And in that first year out, which took three years to get there because of COVID and a bunch of other things, we went from zero to $30 million in revenue and we had more season ticket holders than one of our professional basketball teams here and one of our professional hockey teams. And most importantly, we really put a model in place that also gave back to the community in a way that we were very proud of. So the last thing I'll say, you asked about the numbers. We paid $2 million for the Angel City franchise. That has kind of marched up pretty consistently since. I think we bought the franchise in 2020. Then Kansas City came in and paid $5 million for a franchise. Then Washington came in and paid $30. Then Boston and San Francisco came in and paid $53. And we just had the most recent one go in Atlanta to an incredible ownership group who leads the men's team there. And they paid $165. And so, the franchise values have obviously changed meaningfully. The league has changed meaningfully. The quality of owners have changed meaningfully. And a lot of it did come from seeing a commercial model that other owners and league officials thought could work.

No, the stadium was 22,000. That first year we sold out a few games. We were much higher than that. We probably were much higher on costs as well, but I think we, you know, we did. I look back at the original data, we underestimated our revenue meaningfully. I think we were more than four times our initial forecast from a revenue standpoint. I guess what I would say is like every team is different and it is hard to build these out and so I don't want to pretend like this was easy. There were a lot of incredibly hard things. I mean this became like a fourth child or even a first child at times. There were so many ups and downs in those first few years and navigating those things. And I think your point is a really valid one. I mean we'll get to Victoria and Berlin in a second. Every market is different dynamics. There's certain things you can't change. Do people consider it a major global market? Do people want to visit that market? Are sponsors and brands and partners interested in it? But I mean, we were told by everyone that this is explicitly not going to work because it's LA. You have essentially 11 professional sports teams. If you count your two college teams, everyone in LA is fickle. The weather's too good. You have the beach, the mountains, the music, Hollywood. And then red ocean. Yeah. So people switch back to saying, 'Oh, it only works because it's LA.' So I think the key is, and it's a key thing that we look at at Monarch, is we look at there's sort of like 80% of what we do across women's sports that's probably replicable and then every market's different and the 20% that's different is going to define it. And looking at how we're going to build, are we going to think about cost in a thoughtful way? We went about it in a big swing kind of way at Angel City. There are more conservative and slower ways to go about it. Like we had to prove a model on the revenue side because it hadn't happened yet. Now there are a lot of pro P&Ls across women's football in the US primarily. I think Europe honestly is still playing out. I don't know that you actually have, I mean I think that's a huge part of we think about like the market, we really try to get to know it. Who are we working with there? Are they authentic? Is it a market that's important in Europe? Is it important to football? How do you work with the EVs and the supporters group in a way that is really long term? Because you're going to always have, sometimes it's three steps forward and four steps back, but hopefully it's usually three steps forward and one step back. And so only to say, we do really now know it's possible and try to figure out where we go fast, where we go slow, and how we partner in a thoughtful way for the long term. Because, you know, Rome or Berlin, we're not built overnight. And we need to be thoughtful about how we do these things, especially when you're working with teams that have been around or groups that have been around since the 1800s, which is kind of incredible.

Yeah. I'll talk about what I can talk about. There are many more rules now than when we started. So the early days are all public because there were less rules. You can quote some Harvard Business case numbers. Yes. And so we do have that Harvard Business School case which is great. But we have league and new partners at Angel City in the last year and so I try to be thoughtful about honoring all the disclosure. I am very thoughtful about honoring the disclosure. But I'd say there were multiple rounds. I mean it's very similar to Victoria, right? There were multiple rounds. We raised a million dollars, then we raised $5 million, then I think we raised $14 million. And we brought in lots of different kinds of investors. We had a venture fund called Initialized that wrote the biggest check in our first round. And we brought in a wonderful family office who was really mission aligned in LA and they did a ton of work with us. We had a couple incredible board members who came out of sports in the industry who were invaluable to us. David Nathanson, Brian Weinstein, who really helped us with stadium dynamics and media dynamics. And so we surrounded ourselves, most of our capital came from people who were new to sports ownership and more like a venture capital profile. I mean we brought in all of our friends, right? Julie likes to talk about how our very first commitment was a verbal commitment from Eva Longoria. And it was at a point in time when, do you guys know Eva Longoria over in Germany? She's very famous because she advocates living in Europe heavily over here. Yeah, she's very, I think she has a very international life. She's an incredibly authentic person who moves between cultures and we were actually at a low point when we pitched her. We just gotten many nos and I was very down and Natalie said, 'Hey, pitch my friend Eva.' And Julie did it alone and she came back and she said, 'Eva gets it.' She said, 'I get it. You guys are a platform the way I am a platform and I believe in I do work in TV and movies, etc., but also there's so much I care about beyond that and how do we bring those things together?' So, we started bringing in Natalie's actor friends who had much bigger Instagram followings than my friends, but also on my side, I brought in people who were like Sarah Harden who ran Hello Sunshine or Heidi Patel who runs a very large gender lens impact venture fund here. Or Leila Sturdy who runs Google's growth equity investing arm and has done some of the biggest tech investments, UiPath, CrowdStrike. So we brought our communities together but we raised a million, five, etc. When we raised that million and we didn't have a license to operate yet. So those people were taking a lot of risk, right? And so we'll be forever grateful to those people who took risk.

Yeah. And I should say I missed some key people like many members of the US women's national team who are our heroes became a part of it. Right. Just like we have Ari at FC Victoria who's incredible. That founding group of six, Reena, Ari, just incredible group. But we had Julie Foudy and Abby Wambach and Mia Hamm and Lori Lindsey, I mean it's just incredible. But so yeah, it was a huge positive. We built community everywhere in the cap table. It's sort of like ask our investors how many games they've been to and go to and who they hang out with and who they see. You could see Lily Singh who's like a YouTube star out there on the field just when she is not filming she is at every game so passionate and like my 12-year-old knows her and then like Glen Powell when he shows up whose sister sings the national anthem, I mean he's not an investor but it's a big deal, you know, my daughter. But then similarly you have people that you would not have ever known or heard of and it's, we say sometimes it's become like a country club and it is like the first time women and men have found this community that is really like a part of their love of gathering. So yeah, a lot of advantages and then honestly there were hard parts to it, right? We didn't have a consistent funding source in the early days and so we would go out to market to get someone to price and lead rounds and that's part of venture, right? We raise venture. And again, our first check from Initialized was really meaningful and they were good to us but it also is like you go out and you prove yourself by going and getting marks and getting other people to come in and eventually we had to figure out we realized we couldn't keep doing that and we needed someone who really wanted to be sort of in it for the long term and kind of fund losses without going out to market and that's when we brought in Bob Iger and Willow Bay. But the community part of it is everything at Angel City. In all parts of it, the way we built the supporters groups, the way we built the cap table, the way we built the management team. We don't talk about the management team as often on these podcasts but everyone knows about me, Julie, and Natalie. But there are names that should come up, like Carrie Flehchouser who's running Gotham right now or Jess Smith who's running the Valkyries or Steph who runs PR for us and Billie Jean King and people like that. And there's just an incredible, Katherine Dilla who ran community for us. There's just an incredible group of people who were essentially like the founding management team who lived and breathed this and it was their entire life.

Yeah. And I'd say just, I mean I'll answer for Angel City, but zooming up, I left my job in venture to start Monarch with my partner Jasmine Robinson with the thesis across everything we do and we're now in three teams in the US and we're proud of all of them. Boston Legacy, San Diego Wave, and Angel City. And Victoria is the first one in Europe. But I would say for all of them it's sort of like we look at community and we look at representation. I mean we are an impact fund. Who is running this team? Who is funding this team? And do they represent the community that they're serving? And are these people who, we show up and we try to work in any environment we can. And very often now we're working in other sports or other countries we're working with wonderful owners of men's teams. But how do you construct an approach from governance and from empowerment to have an independent spirit around how you build community? It's core to the Monarch thesis. So yeah, I mean if you go to Angel City or Boston Legacy which is something we've worked on very deeply over the last few years was our first investment at Monarch. They are an expansion franchise which is something you don't have in Europe. But they will have their franchise opener in March. I think it's March 13th or 14th. We'll all be there and for that it's like okay how are we going to activate the community for all of these moments and it really starts with the players and the fans and that's where it starts. And I think many people, I sometimes say in women's sports people show up with joy and greed now. Greed's not a great word, I should find a better one. But it's, I don't think I show up with joy and then how do we prove a model that's sustainable? But if greed, capitalism, pure capitalism gets people to pay attention, great. And then it's like, do you know what your mission is? And why are you doing this? And who are you bringing in? And are you empowering them? And going through that journey of self-awareness, I think is really important because I think so many places you just end up with the capitalism part. And if you don't, these are community assets. These are, one of the other reasons we call it Monarch is when you go to Europe you visit coliseums and cathedrals and palaces and these are our great cultural institutions. And so we are trying to build that in a way that is like the yin and the yang, the black, brown and white, the gay and the queer, men and women, but where you really are building this for community and you try to figure out how to make the math go hand in hand with the heart. But I think the heart and the authenticity drives the math. So anyway, only to say it's the core of everything.

Yeah, then depending upon who you talk to we may describe it differently. Sure. Talk about manifesting and heart and you know, if you get Jasmine or Christine, they may discuss it a bit differently.