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News as turn to this one. The NFL ushering in a new era, voting to allow private equity firms to buy stakes of up to ten percent in its franchises. The move is expected to attract billions in fresh capital, boosting the valuations of teams that had already been surging to new highs. Joining us now the co owner of the Boston Celtics and Atalanta Football Club, a good friend of ours in this program, Steve Paluka. Steve, welcome back
to the program, Sir. I want to talk about what exists now in world sports and what until this moment hasn't existed for the NFL. Steve, can you walk us through the opportunity here for private equity and the difference between just the traditional view of taking a controlling stake in a company and the operating business and starting to influence the decisions that it makes. What all we boud to see take place in the NFL.
Well, it's a great question, John. The people are confused a little bit.
In that the private equity model applied to the NFL applied to the NBA is very different. It is more I would call it an investment fund policy rather than private equity policy. Classic private equity firms go in and buy companies and then try to grow them and grow the revenues and earnings and globalize them. That's not the
case with sports investments. Sports investments will be done by specialized funds like Arcto's Dial Party in existence today, and they take limited partnership stakes and they're limited to ten percent in the CENTFL deal, I think thirty percent in aggregate in the NBA deal, And those would be passive stakes really made to open up the market for folks that want to invest in sports properties, and they've created
an asset class. So it's a little bit of a misnomer to say it's private equity buying in it's a passive limited partnership position so that more people can have access enough capital into the booming sports business.
By improving that equidity for some of these companies, states does necessarily increase the valuation. How do you think about that?
It doesn't necessarily increase the evaluation, but given the values. For example, the average NBA team probably twenty years ago sold for plus or miles three hundred million. Now it's three and a half billion or so the amount of capital involved to buy an NBA team was large, so it would be helpful in terms of having filling that capital gap which used to be filled by wealthy individuals, but those numbers are huge at this.
Point, Steve, what do you think about unlocking value in some of these names in terms of where these companies are, where these sports teams can be seen. And I'm wondering as some of the cable news versus streaming channel kind of arrangements are negotiated, do you think that a greater degree of pe and involvement or just outside investment involvement is going to expedite that shift just simply to the higher bidder, not necessarily to some of the classic cable channels.
I think the leagues really do a great job of Adam Silver and we don't have had a great experience in the media. And the NBA contract is up to like two point six times for the last time. The NFL contract also up dramatically. What really is the upside
is sports have become globalized. Now. When we purchased the Celtics in two thousand and two, there was no streaming, There was no capability for kind of massive live global distribution, and that's changed with streaming, and now we used to count fans in the tens of thousands, you can count fans and one hundreds of billions and even billions for many of the big soccer clubs, the global sports like basketball and football. So I think what we're seeing is
a long term trend of globalization of sports. And it's one of the few programs that aggregate eyeballs and that's very valuable to the new media players and the old media players, and that's why you're seeing such increases in the rights.
I like the uan global well. I know that you go global and you have gun global in particular in Italy, and I know that John is very jealous and talks about it all the time, and I think that we all really want your life. I do think, Stee, if there's this question of whether you like international sports, European soccer still as really the mainstay. I see John kind of sighing with this frustration as I call it soccer
rather than football. But I'm just wondering whether you want to stay with that kind of theme or whether you want to head back and invest more in the US after the Celtics investment, as well as others.
Well, I think everything is situational.
Investing is all about the price you pay and the trajectory you think the business can go on. And so at Wanta, we thought that was a fantastic franchise. We have a great partner, the Pacassi family, and so far that's worked out. There's a lot of luck involved, but we'll be very lucky to win the European Championship. So it's really a situational you meet to look at clubs.
We look at clubs all over the world in football, other sports, and it's all about where you see the projective going and with the appreciate being to get there.
Is Well, Steve, let's talk about the trajectory and we can compare and contrast global sports with what's happened in the NFL. I was looking at the Nielsen ratings ranking the one hundred most watched programs in twenty twenty three. Ninety three percent of them ninety three percent of them NFL games, which Steve is absolutely phenomenally. I have just dominated the highest rating TV shows in this country now
for the last couple of years. Can you say the same thing about global sports when we talk about European football, Steve, have we hit a plateau when it comes to the valuation of TV rights? Do you see any way of unlock in more value.
I think for Joe, we talked five years ago and ten years ago we thought we've reached plateaus, but we haven't reached plateaus. And again, the reach is growing because of streaming and multiple channel capabilities, and they've gotten more sophisticated about how to buy the packages up. So I don't think we've seen seen a plateau because it's so valuable to read these audiences. And the NFL has done a fantastic job. They have a league that has parody,
they have games that are important every week. The NBA has done a fantastic job with growing viewership and growing access to the game, And so I don't think we've I don't think we've seen the end of that yet. Because the global the worldwide Internet companies, the facebooks and the Amazons and the old media, they need this programming.
And they need those eyeballs. And as you pointed out, that's incredible.
In the USA, ninety three out of one hundred programs were sports related NFL related.
Can you say the same thing about European football.
I think European football is continuing.
They continue to change the format of the Champions League, UEFA Syria, make the broadcast schedules better. So I think right now we're a little bit of a lull meteorites in European football, basically because the streaming wars just ended or didn't end, or it really ended six months ago, a year ago, when people realize that there's too many streaming channels, too many options, and so everybody's cut back
on programming. So's we've had these cycles. There's a kind of a momentary wall where there's bundling and unbundling, and right now things are less robust. But I think it will come back when there's mergers and acquisitions and you come back to four or five global players who were competing for these forced properties.
Well, let's finish on acquisitions and your interest your name was associated with Chelsea Football Club a few years back, Steve, I just wonder whether you still have that interest in acquiring another club in European football.
We were looking at different clubs in European football and we think it's it's continued to grow. It's a great opportunity. There's lots of things you can do to improve the product and stand the reach, as I said, and so yeah, you think it's very interesting here, Steve.
Could you share with US cities, places, countries just a better idea of the clubs you have looked at?
Yeah, I think there are right now.
Meteorites are down in France and so there's some interesting clubs in France that need capital and to grow and come back and fresh market it will come back. There are some ission opportunities to play, as you've seen in.
The UK, to move teams from the one division to another. So I think France, UK and even some things that same.
Are you in any active conversations right now, Steve? I imagine if you while you can't reveal the details of them, but are you in any right now?
Yeah, we're talking to several clubs right now and you don't know if they think.
Come to fruition. But we can't talk about who those are.
But but there's there's several clubs that we're talking to as we speak.
What's this space, Stave, It's going to see as always when that news comes. Looking forward to catching up with you, Steve Paliuca that the Boston Celtics co owner on some of the shifting rules, stay side with the UNFL and the opportunities elsewhere.
I just want to see a day in his life. I want to say, Vizic is that how many games does he go to? Is it every night? You know what? He cheers for them all? Would he ever buy two teams in the same sport? And what would that be if they ever went against each other?
Football? Apparently?
People exactly how does that work? I mean do you basically root for both of them?
Do you just avoid?
Do not have a favorite child?
Lots of questions, amazing, just amicing. Nuff love stay