Assertion Supported
Charles: Post-election optimism drove non-market rallies in public alt manager stocks
“There's this animal spirit around the election results, the new administration, deregulation, and you can see that animal spirit in the price change of publicly traded adults, managers, strategic advisory firms. Their share prices have moved in non-market ways…”
Insight
Charles: Fundraising pressures and product proliferation drive PE manager consolidation
“Manager consolidation and M&A is a theme that has been emerging and dominant for the last couple of years. But it is an emergent trend from several themes that are happening under the surface within this asset class around fundraising, product proliferation, i…”
Insight
Charles: Higher Skill in Competitive Fields Increases the Role of Luck
“The higher the skill level in a competitive game, the more luck determines the outcome.”
Assertion Partly supported
Charles: US public equities top 90th percentile, PE entry multiples hit record highs
“You're in the 90th percentile plus in every valuation metric that matters for US public equities, and entry multiples in private equity have never been this high, and holding multiples have rarely been this high.”
Insight
Ian Charles: Institution spin-outs achieve smoother generational transitions than founder-led firms
“If your firm started as a spin out from a big financial institution, which is actually quite common in Europe, it's less common in the US, but in a spin out, there's less of a founder mentality. There's a stewardship, a shepherding mentality. If the firm start…”
Insight
Charles: LinkedIn network dominance predicts VC performance better than quartile tracking
“We, a long time ago, supported some really cool academic research on using network dominance to predict venture fund performance. It was actually better than core tiles. You could actually measure how important and how connected someone was mathematically Thro…”
Assertion Contradicted
Charles: 80% of Recent Sports Team Buyers Come from Tech or Private Markets
“If you look at the people who have purchased control of North American sports teams over the last decade, 80% of them come from tech or private markets.”
Opinion
Sports team minority stakes blend infrastructure, real estate, and growth equity
“It had a lack of correlation. It's really hard to find. It had attributes that looked a little bit like a blend of core infrastructure, core real estate, but also growth equity.”
Insight
Sports ownership is a closed garden resistant to Wall Street mindsets
“This wasn't going to work unless our founding team included well-known senior members of this community. Cause it really is a community. It's a closed walled garden. They're really not into the wall street private equity mentality.”
Opinion
Major North American sports leagues are standalone $25B to $150B businesses
“These leagues by themselves should be valued anywhere between 25 and one hundred and fifty billion dollars by themselves.”
Assertion Not checkable as stated
Ninety-five percent of major professional sports teams generate positive operating income
“And 95% of these businesses have positive operating income.”
Prediction Open · timeframe Oct 2071
Major League Baseball will continue to hold a World Series in 2071
“I do know 50 years from now, there will be a world series in October.”
Assertion Supported
Sports leagues ban institutional funds from using leverage or holding governance control
“You're not allowed to use leverage. You're not allowed to use the assets as collateral in a back levering package. You're not allowed to have formal governance control.”
Prediction Not checkable as stated
Real estate development surrounding sports venues is a $50 billion opportunity
“Then you've got all of the real estate around the venue. It's a massive 20 to fifty billion dollar opportunity over the next five to 10 years.”
Assertion Supported
Tech and finance executives comprise 60% of new sports team owners
“So if you look at control ownership transactions over the last decade,
I think something like 60, 65% of the new control owners in North American pro sports have either come from the technology sector or finance.”
Assertion Supported
The average Big Four sports franchise is valued around $2 billion
“I think the average evaluation for one of the teams in Major League Baseball, National Basketball Association, NFL, NHL, I think it's about two billion dollars, 2.2 billion dollars, something like that.”
Insight
Forced selling impairs long-term asset returns by establishing depressed transaction comps
“Forced selling is one of the ways you impair long-term returns. If you go through a phase of forced selling, you get bad prints and it suppresses price appreciation until you can get inertia back in a positive direction.”
Assertion Supported
League-level revenue accounts for 40% to 80% of sports team economics
“Depending on the league, 40 to 80% of the economics for each team are generated at the league level.”
Disclosure
Arctos is contractually prohibited from accessing player or coaching information
“Anything that touches players, drafts, free agency, farm system, anything that has to do with players, coaches, we can't be involved. We can't have any information. We can't have any dialogue. We actually are prohibited from receiving any information on those …”
Assertion Contradicted
Some sports leagues mandate institutional funds have 10 years of remaining term
“So some of the leagues require that a fund have at least 10 years left in its term to be considered for approval.”
Assertion Supported
Some leagues require funds to dedicate $500M to $700M for ownership
“Some of the leagues Require that you have at least 500 or seven hundred million of capital dedicated to their league.”
Assertion Supported
Major sports leagues recently locked in media rights for 12 years
“For us, a big part of that risk has been taken out of the system for the next seven to 12 years because Major League Baseball, the National Hockey League, and the NFL, and a couple of the European soccer leagues have all repriced their national and internation…”
