You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio.
You've got the Washington Capitals, the Wizards, the Washington Mystics, You've got Team Liquid, You've got the Capital One Arena, You've got NBC Sports Washington and so much more.
Add it all up.
You get Montamen, Monumental Sports and Entertainment, a four billion dollar sports empire headed by Ted Leonsis. He's a New Yorker, he's a businessman and more. But with us right now ahead of Tonight's episode of Chief Future Officer airing at nine thirty pm Wall Street Time on Bloomberg Television is Peter bsche He's the CFO of Monumental Sports and Entertainment. He joins us on zoom from Washington, d C. Peter, it is really great to have you here on Bloomberg
Business Week. First of all, you know, talk to us about your life on a daily basis and what it's like to be a CFO of monumental sports. And I ask you on a day when we have been laser focused on something like the FED, and I'm curious about the macro We're going to get into what you guys are doing and everything under the Monumental brand. But what is it on a macro basis that you guys talk about with you and your team.
So we talk about our consumers, our customers.
We talk about what's happening in the economy, obviously, and whatever happens there in fact that impacts our customers. We're in the media business. We're in the disposable income business. People have different ways to spend their money, so we are We think about that a lot. Jobs inflation, interest rates, not so much impacting us directly, but impacting our customers.
That's something we talk a lot about.
What does disposable income look like right now? You know, I often bring up the stats of excess savings left in consumers accounts right now. We put it at about one point two trillion dollars essentially left over from stimulus. Now, a lot people strike back on Twitter. Let's say you're wrong. You know, we don't have any money, and I get that some people don't, But what do you what does what does your client base have?
Yeah, you know, we're in an interesting business. We're in the media business. If you really think about it, and so again disposable income, but we are also so much a part of the fabric of our community. People have grown up in sports, whether it's.
On the.
Youth level, the high school, collegiate, professional level, so it's really part of their life in a way that a lot of businesses or products aren't so coming out of For example COVID, where we were essentially shut down for two years, the demand back was phenomenal. We came back instantly again because I think people like sports, They like it live, they of course like it on their screens,
where the vast majority of them to consume us. The other part of our business, and you mentioned all our teams, but we're really alive entertainment business, and that we have a lot of events here at the arena and our other facilities that aren't just our teams. Tonight we have a major wrestling event. So that side of the business, that side of the live entertainment business that occupies our buildings came back very strong as well.
The concert business.
We all So what's happened certain very high profile acts our businesses, I won't say with a recession proof what impacts us more as our team performance. So if we have a downcycle on the teams. That's much more impactful than a downcycle into the economy.
Peter, we want to get more deeper into sports. But when you look at the economic outlook, does it say to you recession? Does it say now we're going to skip it out?
You know? I think that's what you all and your other guests down Bloomber get paid.
To a pine on that's not really my area.
If you want to ask who we should pick in the next draft, which is coming up, I might have a view on that.
I don't believe it. I don't believe Listen. We do spend a lot of time talking about J. Powell, but I guarantee that if J. Powell ran into you, he would want to pick your brain to figure out what's going on in the economy, because you're the kind of people he wants to talk to.
Now, I think, as I said, we've done well.
We are concerned, like many people are, with cities commercial real estate that impacts us here, particularly in a market like Washington, so we pay close attention to that. We have a lot of our corporate partners. Obviously we have people buy tickets, but we have sponsors and their businesses are impacted by what's going on in the economy. Again, the commercial real estate world concerns us a little bit.
We're downtown. We need fans comfortable coming here, their fan experience, fan safety, all those things are very important to us. I don't know whether mister Powell would focus on that, but that's what we focus on, our fan experience. We think of it as driveway to driveway, when they leave their driveway to come here, and then when they return,
we've got to make that a seamless and experience as possible. Obviously, we control what happens in the building here, but silly things like traffic and public transportation and all that that really matters to us.
Well, we're just thinking he might. I don't know, is the Grateful Dead playing at the Capitol Arena because he might come to see it because he does like the Dead.
Well, the Dead no longer exists, But what do they call themselves?
Dead and Company? I think they play the Coastal City Music Theater.
I don't know whether they're on tour or not.
We're sort of the only game in town, so if they play in Washington, they would be playing here.
They are on tour, they're playing City field on next Wednesday and Thursday.
So people play indoor buildings, particularly older acts tend to play indoor buildings like Hours they're an older act. But in the summertime, obviously the football and baseball stadiums can hold a lot more people than we can with twenty thousand dollars here, But come a rainy night or a cold November day, they'd be very happy to be inside with us. Peter.
One thing that is certainly a great economic and market indicator is when companies are willing to expand grow their business, you know, take on debt to build out their business or possibly you know, expand their franchises. And I'm just wondering along those lines. The Washington Nationals are said to be coming up for sale, reports that you guys might be interested. Are you enthusiastic maybe about doing something like that? Is that a possibility?
You know, there's been a lot of reports. It's out there.
The team was on the markets, it's no longer technically on the market. We view ourselves here as having a platform. You mentioned we have a couple of teams, we have have a dozen venues. We now own our network. So for us, we have this platform and if we can add like businesses to it, it's tremendous. We have tremendous operating leverage in the business. Makes a lot of sense from a media point of view. We really are focused
on the region now. For us, the region runs all the way up to Philadelphia and down into maybe even North Carolina.
And west from here.
So adding to the platform, we're six hundred and fifty million dollars in revenue news revenues now. Ted Chamer wants to get to a billion. We'll do some of that organically, just growing what we have. Some of it will also be adding businesses to the platform. I'm not going to name names that there's something.
No matter how hard you travel here make.
A lot of sense.
I tried to kind of weave it together and was hoping.
A little bit of a slip. You wanted a little bit of a slip there from Pete.
No, no, I respect. I respect Peter. Having said that, we did much of the teams. You know, you guys have esports gaming. As you said, you're a media company. Where's the growth. Where's the biggest amount of growth, you know.
I think it really is on the media side. We can't really add seats here in the building. We can raise prices, but it's about getting eyeballs. We really need eyeballs, and as you all are very familiar with, with the changing media's landscape and the regional sports network cord cutting, we need to be getting to our fans however they want to consume us, whether it's again on a traditional TV with a.
Copper wire coming in, or it's on their hand held or whatever.
So our growth is more eyeballs, but getting to them in ways that we haven't gotten to them.
In the past.
One of the reasons we're in esports, particularly sports related to basketball and hockey, is that's a way of connecting with a younger fan, and we need to connect with the younger fans.
So esports is that.
One of the reasons we're active and it's all over the country, all over the world and sports gaming is that's the way to connect with our fans.
We have fans who have an interest in doing that.
We need to have a product, whether it's a channel or distribution to reach those fans, younger fans, fans who have a very specific interest, whether it's gaming. That's where our growth is going to be. It's going to be more that's where our organic growth will be is in more eyeballs.
Yeah, really fascinating.
Yeah, through more and more channels.
I'm sorry, no, no, no, no, no, no, no, forgive me hang on for a second. We do have to do a little bit of news and we're going to actually stay in the nation's capital, but we're going to come back and continue with Peter Biche. He's chief financial officer at Monumental Sports and Entertainment. As we said, joining us from Washington, d C. And you know, a lot going on in the world. I got to say, Matt, I do love when we talk business of sports. It
is a big business. I feel like when there's a story that often crosses the Bloomberg and it's sports related, you know, we're on it, and you think about in the last week or so, right in terms of the PGA Tour and live golf. I mean, this is what a lot of the terminal users we're reading and interested in because it's big money and it's big business.
I love it as well, not just for the sports, but also for the betting side of the business, which is just growing unbelievably quickly in the US.
We've got a great guest with us. So we want to get right back to Peter bsche He's the CFO of Monumental Sports and Entertainment. He is the star of tonight's episode of Chief Future Officer, airing at nine thirty pm Wall Street Time on Bloomberg Television.
Very cool.
Yeah, that's a great show.
You know, Peter, I gotta be on like you know this. You've been there for I think what two decades. I mean, coming off the financial crisis, we realized how important chief financial officers are in keeping businesses growing. I think we used to be for such a long time. It's the earnings call. They pop on the earnings call, they do the numbers, and then they go away. Being a CFO is so key in terms of the strategy that's deployed
at companies today. And you talk get talked earlier about you know, how you guys have really made a mark, you know, in the DC area. But does that mean that becoming even more national is not on the table or could you when you talk about growth and expansion and more eyeballs, you know, continue to think about building out your brands nationally well.
Well, obviously our teams through the leagues have a national presence right, the NBA, NHL.
Right, But you know what I mean, you know what I supposed nationally.
I think we've got a lot of work to do here at home, a lot of opportunity in our market, and there's a lot of value from our point of view. I've used this word already on the platform. You know, can it expand perhaps, But we need to do what we need to do to get to a billion dollars and we think we can do it.
And oh, by the way, Washington's a great place to do it.
And there is There are obviously other strong, important cities in this country, but Washington is one of those, and so we're excited to be here.
Not to knock other cities, but we think this is a great place.
To you can knock other cities. Washington is an awesome sports town. I gotta say. You know, people who live down there really root for their teams. They really get into it in a way that people in other cities sidetracked by other stuff really don't.
But if you only had a baseball team, well, you know, we've had some success.
We won the Stanley Cup a few years ago.
Our women's team won the WNBA Championship, the Nationals, who you keep mentioning, won the World Series in twenty nineteen, so it's been a few years, but we've had a lot of recent success with our professional sports team.
So is the NWNBA starting to pick up? You know, there's so much talk about pay parody, and to that snarky men always say, well, if you want them to get paid the same, go see the game. You know, are people starting to fill up those seats?
Yes, And I don't think it's I think it's in women's sports overall at the collegiate level, at the professional level, not just in this country. In Europe for example as well, when we seeing the growth of women's professional soccer teams, often sistering with an EPL team or a lot of legal team. So I think there's a rising tide raising all those boats. I think the WNBA was at the forefront of that twenty years ago when it first started.
They've done some great things in terms of raising growth capital at the league level, which is a fairly unusual thing for professional sports leagues to do. So I think the future is very, very bright for women's sports, but also for the WNBA in particularly and particularly in Washington. Obviously, the mix of professionals here includes a lot of women in very very significant roles, so we're excited about that as well.
Hey, listen, I want to ask you about something very serious if I may, because it certainly has been a hot topic here at Bloomberg, certainly in the financial community. When this story crossed, I think it was the most read on the Bloomberg and stayed that way for the day. Has to do with the PGA tour and live golf and the increasingly growing role of Saudi Arabia and their money when it comes to global sports, and I'm just curious what you what your opinion of that is.
Yeah, I think is it good? Okay?
There there have been sort of startup leagues that have grown in the past, whether it was the the old AFL or the the.
You know, competing NBA, wh and hockey.
So that's been a common theme, perhaps not as much reacently that people have tried with the XFL and others.
So alternative leagues I think are always going to come up.
Often they result in merging, as the AFL and NFL did, and the A b A and the NBA, and so I'm sort of not surprised that followed that path maybe a little quicker than people might have expected. As to the specific sources of funding, I'm reluctant to comment on that.
I think one thing I will say is sports teams.
The sports business has gotten so much bigger, teams so much more valuable that opening up new pools of capital, as the number of the leagues have done, to institutional investors and the like, is just going to be critical to grow the game. And we're international brands, particularly the NBA, so international sources of money I think are going to be required to get where we want to go.
I want to ask about speaking of international William Hill, I think has spot in your arena there? What's the arrangement and how has that growth been, Because you know, I lived in London for a long time. British kids learn spread betting when they're like five years old and then they do it for the rest of their lives. Here in the US, it's starting to pick up. It's starting to really catch on as a form of entertainment. So what's your experience been.
Yeah, so I got to just give a shout out. It's actually Caesar's.
Now Caesar's acquired the US operations of William Hill and they're iportant partners, so I.
Got to get their name out there.
No, I think it's always been out there, but it's been in the dark, it's been offshore, it's been unregulated, often not good people taking advantage of good people. So having light on it, sunshine on it, I think that we think is critical. I think it's critical. So we have a partnership with Caesars. We have no interest direct or indirect and the betting that happens there. There're a tenant in the building. They rent the space where the sports book is. They buy a lot of advertising, which
is why I gave Caesars the shout out. But no leagues, no teams want to have any interest in the actual bettings.
Not good for.
Our integrity, it's not good for the fans thinking that these games are on the up and up. But again, I think we want to acknowledge that's out there and bringing it into the light of day is a good thing. As I said earlier, though, it's also whay if our fans engage with the game, and we need to always be figuring out new ways to engage with our fans as they distracted by, you know, watching Yellowstone or whatever else they're TikTok or wherever else is let to be doing.
So that's just another way of doing it. All right.
One thing we didn't ask you, are you going to buy the Washington Nationals?
Well, I think you did ask me that a couple of times.
All right, have any easier question, might you guys go public? And just got about thirty seconds.
You know, pools of capital. We need pools of capital at the right time. I think we need to be bigger, definitely, it's something we think about. Market's got to be ready. But there are advantages to having the liquidity, to having a currency for acquisition. All the reasons other companies are public would make sense for US. Liquidity, currency, that kind of thing, and someday perhaps.
Well, Peter, you are and no pun intended. Truly a good sport. We really enjoyed this and we're looking forward to it be well. Have a good season seasons. Peter Bscha, Chief Financial Officer, Monumental Sports and Entertainment on Zoom from Washington, d C. He will be featured in tonight's episode of Chief Future Officer, airing at nine p thirty pm Wall Street Time on Bloomberg TV. I love talking sports.
Yeah, and a very cool show, Chief Future Officer. Tune in for that.