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Y! Sports Biz: The center of the universe
Money is rapidly entering sports' orbit.
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- Y! Sports Biz: The center of the universe
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👋 Happy Friday!
In this edition:Money is flooding sports' orbit, the NFL drops a pin in Paris, CBS cranks up the Wattage, Leonsis shares a look at sports ownership, small patches are worth big bucks, and more.
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Time to show you the money...
📈 MORE MONEY ENTERS SPORTS' ORBIT
(Jonathan Castro/Yahoo Sports)
The links between the NFL and private equity grew even tighter this week, underscoring the growing gravitational pull of a sports world bringing ever-growing sums of money into its orbit.
The NFL wants in on private equity:32 Equity, the NFL's private investment arm, announced a partnership earlier this week with private equity giant General Atlantic, forming a new vehicle that will invest in and around sports.
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The vehicle will reportedly raise outside capital, in addition to managing money from the NFL itself, likely providing the league with a new revenue source in the form of management fees and carried interest.
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The new vehicle will add greater scale to 32 Equity's existing efforts, which have included investments in companies like Fanatics and On Location.
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The firm's investments leverage the NFL's platform to turbocharge growth, but unlike a traditional commercial partnership, the league can participate in the upside it creates.
And private equity wants in on the NFL:Both Apollo and Blackstone are conducting early-stage talks with the NFL to become approved team investors, per Bloomberg . They would join Arctos, Ares, Sixth Street, and a consortium that includes Carlyle and Dynasty Equity. These are the biggest brand names in private equity, all eager for a seat at the NFL table.
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Keep it in the family:The arrival of private equity hasn't precluded traditional investment interest from ultra-high-net-worth families, who are looking to sports to anchor their portfolios for generations to come.
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A Bank of America study released this week showed that 38% of family offices are invested in sports teams or sports-related opportunities, with a further 31% interested but not currently invested.
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Those family offices with Gen-Z or Millennial principals were more likely to be invested in sports.
Floor general:The role of NFL teams as both investments and investors, now common across sports , illustrates the increasing centrality of sports in the broader business ecosystem. Sports teams are not merely destinations for capital for their own compelling investment merits. They are platforms that can nurture businesses in other industries to credibility.
Sports as the sun:Sports have a unique ability to attract and retain attention, which is a rarity in an era of cultural fragmentation and a source of stability amid AI-driven flux. As a result, the orbital paths around sports are crowding with money flowing in both directions.
📍 NFL DROPS A PIN IN PARIS
Undeterred by protests across France, the NFL will add Paris to its list of international game sites on Sunday, putting another pin on an increasingly sprawling map.
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Join the club:The NFL has played in three new cities this season, with Paris joining Melbourne and Rio as league newcomers.
More to come:NFL EVP Peter O'Reilly told reporters this week that the league is weighing the addition of another international game next year, bringing the season total to 10, which is the maximum allowed under the current CBA.
Looking ahead:All signs point to an eventual 16-game international slate, which would add pins to the map, perhaps in the noticeably untouched Asian continent.
⚡ LIGHTNING ROUND
(Aaron M. Sprecher/Getty Images)
📺 CBS makes Watt permanent lead:CBS and J.J. Watt have agreed to a multi-year deal that will cement Watt's status as the Lead Game Analyst. Watt had been temporarily elevated to replace Tony Romo.
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Go deeper: Sports media writer Richard Deitsch explored which NFL broadcasting dominoes will fall next in Yahoo Sports AM .
🇪🇸 U.S. investors buy Valencia stake:Pitchwise Holdings has bought a 42% stake in Spanish soccer club Valencia at a €1.25 billion ($1.4B) valuation. The consortium includes the family offices of KKR co-founders George Roberts and Henry Kravis, as well as Broncos' owners Penner Sports Group.
⚽️ FIFA begins World Cup tender process:FIFA has begun its 30-day tender process for 2030 World Cup media rights in the U.S., though interested parties can also submit bids for 2034. The organization reportedly wants to sell the English- and Spanish-language rights together.
🏀 Record viewing in basketball:The NBA's Tip-Off doubleheader averaged 6.4 million viewers, a record for the opener , driven by 7.7 million viewers for Knicks-Sixers. Meanwhile, Game 1 of the WNBA Finals averaged 2.1 million viewers, a Game 1 record.
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See what else is trending on the Yahoo Sports Business Hub .
🎙️ THE HIGHS AND LOWS OF SPORTS OWNERSHIP
Ted Leonsis explains how the drink shelf above the urinal came from a piece of ingenious fan feedback. It's only one example of the owner's attention to finer details. (Yahoo Finance)
As owner of the Capitals, Wizards, and Mystics, Ted Leonsis sweats even the smallest details impacting the fan experience. That desire to be intimately acquainted with the nitty-gritty of operations has exposed Leonsis to genius ideas…and unsettling realities.
Catch up:Leonsis recently appeared on Yahoo Finance's " How They Run ," taking viewers behind the scenes of operating Monumental Sports and Entertainment, a business he wants to build into "the most important regional sports and entertainment company on the planet."
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Clip that:To illustrate the many responsibilities of team ownership, he recounted the high of hosting President Barack Obama at a Mystics game and its juxtaposition with his post-game responsibilities.
"I had volunteered to do every job in the company. I want to learn. So after the president left, my job was to work on the cleaning crew as a picker," Leonsis explained. "There was one area where a guy cut his toenails during the game. I was just with the president of the United States, and I'm feeling I'm all that, and now I'm picking up someone's toenail clippings."
Go deeper: Ted Leonsis wants to make D.C. the sports capital of America .
🏀 SMALL SPACE, BIG MONEY
(Sean M. Haffey/Getty Images)
NBA rules permit the patches on NBA jerseys to measure approximately 2.5 inches by 2.5 inches. That modest real estate, amounting to little more than six square inches, is among the most valuable properties in sports.
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Small patch, big dollars:The league introduced patch sponsorships in the 2017-18 season, and the revenue stream was only worth about $150 million in aggregate in those initial campaigns, averaging approximately $5 million per team. But the value has grown considerably, especially at the top. This year, one team alone will deliver revenue amounting to 10 times that average.
New money:10 of the league's 30 teams have (or will have) new patch sponsors this season. Among those deals are some of the richest.
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The Warriors' new deal with AI infrastructure company IREN is reportedly worth over $50 million annually, making it the most expensive in the league.
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The Sixers' deal with Bloom Energy ranks second in the league, per Sportico , which means it would exceed the value of the Lakers' new deal with Albert, believed to be worth over $30 million per year.
Fueled by finance:As is now common across American sports sponsorship, financial services and insurance companies represent the lion's share of patch partners. SponsorUnited estimates that financial companies spent $318 million on NBA sponsorship last season, nearly double the next-highest category.
🌎 TRIVIA TIME: TRAVEL COMPANIONS
(Steve Dykes/Getty Images)
With Paris joining the NFL's international slate, five non-U.S. cities have now hosted regular-season games for both the NFL and NBA.
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Question:Can you name the other four?
Hint:Two North America, two Europe.
Answer at the bottom.
🗳️ CAP OR NO CAP?
On Wednesday, we asked whether or not you're in favor of a salary cap in light of the small-payroll World Series.
Your response:Put a lid on it!
Vibe shift:Fans seldom align with owners in a labor battle. That will strengthen their already strong resolve.
Trivia answer:Mexico City, Toronto, London, Berlin.
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