Leagues banned institutional owners after corporate forced sales depressed team valuations
Doc O'Connor · Ian Charles & Doc O'Connor – Investing in Sports Teams at Arctos Sports Partners (Capital Allocators, EP.225) · Dec 6, 2021 · at 21:23
Doc O'Connor, co-founder of Arctos Sports Partners, discusses the historical reasons why professional sports leagues previously restricted institutional and corporate franchise ownership.
0:00 / 0:24exact quote · 25.0s
720p mp4 · rendered on demand · StarZero watermark
“Disney owned the Angels and the Ducks, and Fox owned the Dodgers. But what happened was those institutions by their own governance were forced to sell. And as forced sellers, the leagues perceived those values to be diminished in the marketplace. So they disallowed institutional ownership for the better part of a decade or more.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Doc O'Connor
Customer experience matters more to team economics than winning in MLB
“In baseball, in hockey, and in Major League Soccer, winning is probably more important, but even in those circumstances, winning and losing is less important, I believe, than the customer experience.”
The losing Knicks led NBA revenues until the Warriors' new arena
“The garden was at capacity, or certainly near capacity, and we sat atop the revenue food chain for the entire time until the Golden State Warriors came along and beat us in many revenue categories with their new arena”
Modern collective bargaining agreements have lowered the relative cost of player talent
“More rational collective bargaining agreements have brought the general cost of talent, which is the single cost Largest cost center for any sports enterprise down over time.”
Sports franchises are legal monopolies with call options on ancillary businesses
“These are legal monopolies that exist inside and have geographic exclusivity in most cases, except those cities where there's more than one franchise in a given league, but they're given very clear geographic parameters within which to operate, and it gives an…”
Investing in sports teams is fundamentally a content and IP play
“Ultimately, I believe this is all a content business. We are investing in the content that is generated by these teams and leagues, franchises, and all that derives from that content, including hard assets, like venues, like marks and logos, media content, etc…”
Value created for a sports league benefits all rival franchise owners
“But remember Ted, in addition to being intense competitors on the field, on the court, on the ice, whatever it is, more importantly, they're all partners. So if Arctos or any entity for that matter can bring value to the league, it's a value to all 30 or 32 te…”