The Sporting Class: Cooperstown Prom Kings, WNBA Protests & What Owners Want

Transcript

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Speaker 10 Coach, the energy out there felt different. What changed for the team today?

Speaker 11 It was the new Game Day Scratchers from the California Lottery.

Speaker 2 Play is everything.

Speaker 11 Those games sent the team's energy through the roof.

Speaker 13 Are you saying it was the off-field play that made the difference on the field?

Speaker 11 Hey, a little play makes your day, and today it made the game. That's all for now.

Speaker 2 Coach, one more question.

Speaker 14 Play the new Los Angeles Chargers, San Francisco 49ers, and Los Angeles Rams Scratchers from the California Lottery.

Speaker 16 A little play can make your day.

Speaker 17 Please play responsibly. Must be 18 years or older to purchase, play, or claim.

Speaker 2 I'm Pablo Torre, and this episode of Pablo Torre Finds Out is brought to you by Remy Martin 1738, Accord Royale. Exceptionally smooth cognac for all your game day festivities.

Speaker 18 Please drink responsibly because today we're going to find out what this sound is.

Speaker 12 Your whole career, your whole wealth is based on capitalism and the way you made money for yourself and other people.

Speaker 12 And now you sit here and say, you know, losing $11 million a year, big whoop, your asset went up by more.

Speaker 2 Right after this ad.

Speaker 2 People are wondering where we've been. It's been a while.
Hello, John. Hello, David.

Speaker 2 Hi, Pablo. Really? That's the timing we're going to have today?

Speaker 12 Same sweater.

Speaker 2 How many Mississippi's was that before you say hello? Yeah, hold on. You're making fun of my sweater?

Speaker 2 I'm not sure. Can we visually describe the scene here right now? Am I going crazy?

Speaker 12 Well, John's in an old Navy striped shirt that I assume he wore in elementary school.

Speaker 2 And it fit me.

Speaker 2 It's the best I can come up with. John looks European.
He looks like he should be pedaling a bicycle with a baguette in the basket. And a beret.
David looks like what I see when I'm on mushrooms.

Speaker 2 Wow. That's a bad trip.

Speaker 2 I think it's a great trip.

Speaker 2 It's a good coat.

Speaker 2 But a bad trip.

Speaker 12 It's a bad trip.

Speaker 2 Just suggesting that when I take mushrooms, I'm not looking to have visions of my friends. Well,

Speaker 2 if you look deeper into this, you might see childhood.

Speaker 12 So this is a blazer that I have not worn yet.

Speaker 2 How do you describe the pattern for people just listening to us? It's Paisley.

Speaker 2 It's pastel Paisley.

Speaker 12 It's a pastel Paisley.

Speaker 2 Psychedelic pastel Paisley.

Speaker 12 Well, those are all words that you could use to describe it. It's just, this is an important show.
Since we've last been here, you're a top 100 podcast of all time.

Speaker 2 Of all time. All time.
And this is John doesn't even know. I would assume.
John was literally somewhere else. I would assume with a bullet.

Speaker 2 John has been traveling the earth, and I have not seen him since the last show we did. And yes, I feel happy.
I know. He looks refreshed.

Speaker 12 You have no

Speaker 12 anything. You have no bags under your eyes.
I just think we should get down to business because we have two months' worth of stuff to talk about, and we only have one episode. I know.

Speaker 12 And I just feel it's important to get John when we can get him.

Speaker 2 I do want to point out that that jacket, I think,

Speaker 2 is a

Speaker 2 habitashery version of predeterminism.

Speaker 12 I resent and do not resemble anything that says and means haberdashery.

Speaker 2 I don't

Speaker 2 know.

Speaker 12 It's actually the model who wears this on the Robert Graham website is extremely good looking.

Speaker 2 I was simply pointing out that before you attribute any

Speaker 2 motives for wearing this particular jacket, you have told me multiple times that it is complete happenstance.

Speaker 12 This is new, though.

Speaker 12 So when you buy a new jacket,

Speaker 12 no, I get to put it anywhere I want. So I put it in the news.
Wow.

Speaker 2 See, I didn't know that either. Well, so you're God.
You're predetermining when it's coming up.

Speaker 12 When it's a new blazer, it's not in the rotation. Therefore, it gets put into, and I get to place it.

Speaker 12 It's sort of like the choice you make when you play a game, like when do you drop like the third ball or like in a pinball? When do you do it when you have multiple pinballs?

Speaker 12 And I wanted to do it because Pablo's show is one of the best podcasts of all time.

Speaker 2 What top 100? I hear.

Speaker 12 I heard that too.

Speaker 2 Yeah, so thank you. So, you put that in the queue to correlate with this day?

Speaker 12 With this recording, yes, I did. Yes, I did.

Speaker 12 And we're back live during a flex alert.

Speaker 11 Dialed in on the thermostat.

Speaker 19 Oh, we're pre-cooling before 4 p.m., folks.

Speaker 20 And that's the end of the third. Time to set it back to 78 from 4 to 9 p.m.

Speaker 2 Clutch move by the home team.

Speaker 20 What's the game plan from here on out?

Speaker 19 Laundry? Not today. Dishwasher?

Speaker 20 Sidelined.

Speaker 19 What a performance by Team California.

Speaker 2 The power truly is ours.

Speaker 20 During a flex alert, pre-cool, power down, and let's beat the heat together.

Speaker 3 The market's uncertain, revenues tight, and hiring on hold.

Speaker 9 No bulky overhead, no rigid long-term contracts, just the right expert right when you need them.

Speaker 3 Work smarter and faster with Upwork.

Speaker 11 It was the new game day scratchers from the California Lottery.

Speaker 17 Please play responsibly. Must be 18 years or older to purchase, play, or claim.

Speaker 2 Guys, you guys fist bump each other.

Speaker 2 I want to acknowledge that when it comes to all-time greatness, I'm not the only person with an update on the immortality front. Because David, John, while you were somewhere

Speaker 2 gallivanting in a foreign land, and I was in the minds podcasting, David was in Cooperstown

Speaker 2 and

Speaker 2 someone else noticed.

Speaker 21 And to the Miami Marlins, I appreciate David Sampson and Mike Hill for coming today.

Speaker 21 Honestly,

Speaker 21 when you guys called to offer me a contract for 2015,

Speaker 21 I have never heard of your team.

Speaker 2 Fantastic. Oh, my God.

Speaker 2 I was going to ask whether the Marlins had won a World Series. We had.
So he had never heard of a team that had won the World Series.

Speaker 12 He had also at the time

Speaker 12 had been 8 for 41 against us. Just throwing that.
I mean, just in case there was any questions.

Speaker 2 Were you holding a counter rally for one of the most decorated and no doubt Hall of Famers in the history of sports?

Speaker 12 I love Ichiro. And here's what I was warned.
I did not know what he was going to say, nor did I know he was going to actually say my name.

Speaker 12 What I did know from Ichiro is, hey, I can't wait for you to tell me whether you like my speech.

Speaker 12 And that was the only clue I had. I thought of calling you to see if you could find a copy.
Oh, yeah.

Speaker 12 Because getting the copy prior, you would have known it's all English, except for one Japanese sentence said to Hideo Nomo, but the rest was all in English.

Speaker 12 And maybe you would have found out what the joke was going to be because there were many jokes because he's a funny guy. After the ceremony, we're taking photos and I look at you.

Speaker 2 You're a special guest of Ichiro. We should spell this out.
Yes. For all of the insulting, like with us on the sporting class, we actually invite you to do this with us.

Speaker 12 I don't, yes, thank you. I don't just show up.
This is not exactly convenient to just show up, Pablo.

Speaker 12 Although maybe in the future, you'll make it even less convenient than this, but I don't know how that's possible. So, yes, I was a guest of Ichiro, and I was there with Mike Hill.

Speaker 12 And he and I were instrumental in extending his career because he played three years with the Marlins, John, after his career may have been done. And we ended up striking a great relationship.

Speaker 12 And after the ceremony, after this, which became the hit of the viral immediately. Immediately, Ichiro looked at me and I looked at him.
And I did one of these.

Speaker 12 I don't know what to do because I do a lot of bowing. There's a lot of talking with your eyes to Ichiro.
And I just looked and I went, and I gave a little wink.

Speaker 2 You're talking with your eyes?

Speaker 2 This is like...

Speaker 12 Haven't you ever done that?

Speaker 2 What does Newt say in Bull Durham?

Speaker 2 He's doing the lizard thing with his eyes.

Speaker 12 I just think it's important to communicate however you need to communicate. And I wanted him to know because he didn't want me to hear it before, but wanted to make sure that I was good.

Speaker 12 It was lovely. And I was very good.
Good. My name was called out in a Hall of Fame acceptance speech by the greatest player maybe ever.

Speaker 2 Him with a strong,

Speaker 2 strong hairline. Ichiro? Ichiro.
What a hairline. By the way, he's ageless.
He is a style icon. He's not ageless.
He's gray. It's strong gray.
But distinguished.

Speaker 2 Distinguished. That's true.

Speaker 12 He could still play. I told him that this weekend.
That if I were still running a team, he'd be one of 26.

Speaker 12 He prepares as much as anyone else.

Speaker 2 I feel like that is both a great compliment to Ichiro and a great insult to your general managing abilities.

Speaker 2 He won a World Series.

Speaker 12 It was a great weekend. Being surrounded by greatness, which I sometimes feel like in this room I am as well, but I like being surrounded by greatness.

Speaker 12 And when you see Sandy Kolfax, when you see Juan Marshall or Tony Perez, Carlton Fisk.

Speaker 2 Did you wink at Carlton Fisk?

Speaker 12 You don't really talk to Carlton Fisk.

Speaker 2 You don't talk to him with your eyes.

Speaker 12 There's certain rules with Carlton Fisk.

Speaker 2 Because he had that mask on the whole time, so you really couldn't communicate with your eyes.

Speaker 12 The way you can talk to Wade Boggs, easy. Easy.
Very easy to talk to you. You just have to bring a beer.
You bring a beer to him. 470.
You can.

Speaker 12 He was.

Speaker 2 who was the mvp of hall of fame weekend

Speaker 2 how do you not say each row but in terms of appearance the prom king of all stuff having sandy having sandy kolfax there 89 years old and uh he's you know and also the specter of of ryan sandberg passing away very soon after he ended up dying the next day and was it well known was it known that he was very ill yes The idea that this is, and I was, when you told me that you were going, I was very, as a fan of baseball, jealous because it feels like a fantasy camp kind of experience.

Speaker 2 But then you also realize that it's like the thing that all of the Hall of Famers actually genuinely want to go to. It's kind of part of the point of being in the Hall of Fame.

Speaker 2 It makes me laugh even more at the idea that there you are just winking at people.

Speaker 12 Well, each row, the others I spoke to, and I got to introduce, I got to have a father moment that I don't know if it works. What does that mean?

Speaker 12 That I brought my son who grew up around baseball, but then I was introducing him to Hall of Famers who we had not had the chance to meet, who weren't playing necessarily when he was, when I was in baseball, and he brought a friend.

Speaker 12 The friend was very impressed. My son seemed less so, which may have been more a function of my fathering in general versus that specific weekend, though I don't know the answer.

Speaker 12 And I can't ask him.

Speaker 2 Yeah. Yeah.
I just let it go.

Speaker 12 But it was a special weekend. And I would only tell you that if you have an opportunity to go to Cooperstown and to witness the Hall of Fame in Cooperstown, to me, shows the history of our sport.

Speaker 12 And I've been to other Hall of Fames. It's just a better Hall of Fame.

Speaker 2 You're saying if you have a chance to get shouted out personally by Ichiro Suzuki on Hall of Right Weekend, you should take it.

Speaker 12 If you can.

Speaker 2 As always, very relatable advice from the sporting class.

Speaker 2 It's third down.

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Speaker 21 We're here.

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Speaker 5 No bulky overhead.

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Speaker 9 Just the right expert right when you need them. Work smarter and faster with Upwork.

Speaker 11 It was the new game day scratches from the California Lottery.

Speaker 17 Please play responsibly, must be 18 years or older to purchase play or claim.

Speaker 2 What we do here is something that I've genuinely been looking forward to, by the way, in a predetermined fashion, even, because there is a topic that I think of you guys specifically about as I'm watching another topic course through the internet discourse.

Speaker 2 And this was about another special event in the summer sports calendar. It was WNBA All-Star Weekend.
And the story there, John, was essentially player protest,

Speaker 2 player complaints about bleep you pay me. me.
I mean, that was not literally what the shirts said, but it was basically what the shirts said. A lot of players saying amid CBA,

Speaker 2 essentially pre-negotiation, that we need more money. It's finally time.

Speaker 12 Has there ever been a negotiation where one side doesn't say we need more money? I think that's the baseline of a negotiation.

Speaker 2 Well, actually, it's both sides saying they need more money.

Speaker 12 It's true. I want to give you less so I can keep more.

Speaker 12 Yeah, the players were out of hand during that all-star.

Speaker 2 But the fans were also chanting, pay them throughout the arena. And that's, by the way, also a bit different, right?

Speaker 2 And so this is a story we have talked about fairly glancingly in the past, but I want to set up who we have here to talk about it because John Skipper was the president of ESPN when they were negotiating the media rights deals for the WNBA, which is sort of like Russian nested.

Speaker 2 doll, Russian nesting dolled inside of the NBA rights deal, as we've established before.

Speaker 2 John now is a part owner in Unrivaled, which is a key player in the whole question of leverage that the players have against the WNBA. And David has always been a skeptic of all things labor.

Speaker 2 That's incorrect.

Speaker 2 As management.

Speaker 12 Yeah, I'm not skeptical. I'm just aware of what it is that both sides are trying to accomplish and the ways in which they do it.

Speaker 2 So, John, this argument. This seeming consensus among the players with the fans noticing, oh, wait a minute, hold on.

Speaker 2 So the league's highest paid player is on a three-year deal worth about $700,000 total. I mean, this is part of why Unrivaled was formed.
I want to disclose that again.

Speaker 2 This is not immaterial to the debates.

Speaker 2 So, how do you begin to think about this out loud?

Speaker 2 Well, I think it's understandable and comprehensible why the W NBA players are anxious to get paid more money. What they do, only

Speaker 2 300 people in the world can do, right? They play at the highest level. They look across the arena, across town, and see their male counterparts, parts,

Speaker 2 making

Speaker 2 $60 million a year, an individual player, contracts, $400 or $500 million. They then use

Speaker 2 faulty reasoning

Speaker 2 to look at their attendance, to look at their

Speaker 2 number of fans, social followers, and go, well, we're a substantial

Speaker 2 minority fraction of what the NBA is, so the salary should correlate to that. And it has almost nothing to do with the ratings.
That is the most specious logic going on.

Speaker 2 Oh, our games get, I make it up, a million viewers, the NBA games get two and a half. Well, there's two and a half to one, right?

Speaker 2 The answer is no, that's wrong.

Speaker 2 It doesn't work that way. What matters, these are businesses, right? They are, in the WNBA's case, it's an aggregated team business,

Speaker 2 but they have revenues. They can only pay the players salaries from those revenues.
In many cases, they don't.

Speaker 12 They've taken losses, John.

Speaker 2 They haven't even paid them from the salary.

Speaker 2 Well, I was going to make the distinction between gross revenues and net revenue because many of these teams still lose money, even paying only $70,000 for a rookie, only $700,000 for the best player in the league for three years.

Speaker 2 So I get it emotionally, psychologically. I even get it logically.
It's just the delta between what the WNBA

Speaker 2 owners

Speaker 2 including the league, and what the players think the next CBA is going to uncover is huge. Everybody does the math of, oh, you used to have $60 million immediate rights.

Speaker 2 Now you have 200 and somewhere between 200 and 250. Oh, salary is going to go up four times, right?

Speaker 2 And they don't even, I would assume that most of the players would not consider a $2.8 million over three years or a $210,000

Speaker 2 rookie maximum as where they would like to be.

Speaker 12 Even higher.

Speaker 12 And by the way, the shirt said, Pay us what you owe us, is my recollection.

Speaker 12 And that always made me smile because that is a term of art when someone says you owe me money. That's got to be the basis of an agreement where someone has not done their side of the bargain.

Speaker 12 Because there is no way in the history of labor and management where there is a systematic way at a bargaining table where you say, by the way, you owe me this.

Speaker 12 So give me this in this agreement because you owe me from last agreement. That is not in the history of how it goes.

Speaker 12 I would love to have gone to ESPN during negotiation and say, John, you owe us because you underpaid the last deal. So please do better than you need to for this one to make it right.

Speaker 12 It's literally ridiculous. That's only the first part of their position.

Speaker 2 I did hear that about $683.

Speaker 12 How'd that go? Did you give in?

Speaker 2 No, I ignored it.

Speaker 12 Right. So.

Speaker 2 But, okay, hold on.

Speaker 2 I want to parse the saber rattling, the shirt rattling, right?

Speaker 2 Which is trying to frame the debate in a way that, of course, the fans who are chanting pay them might be able to jump on alongside them with.

Speaker 2 And I want to get to just the question of how the math actually works, right? So what is clear to me is that, of course, you're not looking for a dollar-for-dollar equivalency with the NBA.

Speaker 2 That would be insane.

Speaker 12 But I believe. It's not insane.
The tennis players, they have the same prize money in tournaments. They fought for equality.

Speaker 12 So the thought is, why aren't we fighting for equality in women's basketball and men's basketball? They do it in tennis. So it's not insane.
It's just, it's not realistic.

Speaker 2 So So I suppose that I am here to put my thumb on the messaging scale. I would say do not argue for that.
That's very unrealistic, borderline insane. But instead,

Speaker 2 as a matter of percentage, like let's talk about just percentage, right? Not raw total dollars, but just what would be fair for the players to request as a matter of a percentage of the pot.

Speaker 2 So where does that bring us when, you know, again,

Speaker 2 the landscape of women's basketball is now quite different, right?

Speaker 2 Before, WNBA players in the offseason, if they needed to make more money, they go to Russia or Turkey or wherever, overseas, wherever John was hanging out in the last couple of weeks.

Speaker 2 Now, scouting in Russia. Now they go to Miami.
They go to Unrivaled.

Speaker 2 And here's just some of the basic math on that is John Unrivaled was paying page backers, you know, $350,000,000, $400,000 for a single season, a season that's way shorter, eight to 10 weeks, right?

Speaker 2 Chewing ice. John's chewing ice.
This is a negotiating technique. What do you think? This is

Speaker 2 ASMR ice chewing. Do you not like the ice chewing? We're in the middle of a show.
Sorry, I was trying to step back. And Matt Coca kept saying, get closer.

Speaker 2 I am an ice chewer. If I have the ice in a glass, we're doing a show.

Speaker 2 The financial. I just think of this as a conversation among friends.
I don't mind the ice. I do want to get back, though, from the ice crunching to the financial crunching.

Speaker 2 What does this do, right? So, okay, the players can say, we're going to go to Unrivaled. We're going to go to this operation in Miami.
I played 10 weeks.

Speaker 2 I get more than I would make in a year for a fraction of the time. So now there's a plausible threat, right?

Speaker 2 And Athletes Unlimited is out there too, but they pay way less for a shorter, even shorter season than Unrivaled. So anyway, I'm saying, like, They go to the bargaining table in real life.

Speaker 2 And what's the actual debate here? Do you think? Well, first of all, I do, as you, I appreciate your pointing out the conflict I have.

Speaker 2 The

Speaker 2 salaries we pay them make sense within our business model. The greatest differential is we don't have arenas.
We don't have big office

Speaker 2 running the league. We don't have but 40 some players.
We're not paying for 15 players. We're paying for six for six teams.
So

Speaker 2 the WNBA collective bargaining agreement has to follow the same rules we followed, which is they have to look at their business and figure out what is

Speaker 2 a reasonable amount of that money to pay your players. If I were there, I would be thinking about trying to tie it to a salary cap to league revenues.
Then you can say, we're all in this together.

Speaker 2 A percentage of league revenues. Yeah.
And I believe the percentage of revenues that the NBA players get is 51.

Speaker 12 Call it anywhere between 48 and 51. But here's the problem.
And we cover this on sporting class. What exactly is the revenue for the WNBA?

Speaker 12 Because the argument that the owners are going to make, and they're going to make it correctly, is that that TV revenue that you're trying to count all in as just for you, that was a gift.

Speaker 12 And you you and I can disagree about this, but it was a double-edged sword when it was announced what the WNBA deal was going to be.

Speaker 2 The Russian nesting doll of WNBA living inside of the NBA.

Speaker 12 There was no separate WNBA broadcasting deal. It was part of the NBA broadcasting deal.
We talked about it on the show.

Speaker 12 The reason they pinned a higher number to it is that you wanted everyone to seem like, oh, the WNBA is healthy. Everything's looking good.
There's momentum.

Speaker 12 The downside of overestimating what the deal was, which you disagree was overestimated, but I don't. The downside's this, that the players now think, wait a minute, where's all this money going?

Speaker 12 And the answer is, John touched on it, there's tremendous overhead for the WNBA. There is no profitability.

Speaker 12 And on top of that, any profitability that comes, the owners want to use it to pay down debt that was accrued to support the league for the decades when it was at a loss position.

Speaker 12 So you don't want to take the money that you get in and give it to your employees. You want to take it and give it back to the banks in order to to lower your debt and try to make your money back.

Speaker 2 Well, hopefully you don't want to give it to the banks. You may have to.
You got to give the banks back. You should keep in mind

Speaker 2 that the nesting doll

Speaker 2 occurred in an environment. Do you know when David Levy and I negotiated the NBA deal in 2000, I don't know, 13, give or take for 2015 through 24, you know how many bidders for the WNBA there were?

Speaker 12 Hold on. Let me count.
Let me see if I have any fingers and toes. I'm going to go with zero.

Speaker 2 No, there's one. You? Yeah.
Okay. So.
No, no, I would have paid the money and more if I had to bid for it separately.

Speaker 2 So I do not believe, I think the nesting egg thing has been good.

Speaker 12 Would you have taken it if you didn't get the NBA?

Speaker 12 Yeah.

Speaker 2 Sure, I would. We were in the business of having a lot of sports and a lot of hours.
We had the women's college basketball tournament when we did not have the men's college basketball tournament.

Speaker 2 So yeah, we would have taken it and we would have paid

Speaker 2 at least as much as we paid within the NBA. And while the NBA, NBC has it within their NBA deal,

Speaker 2 there are other deals made that are outside and only small women's component. I do know that several people have suggested that Adam and I suppressed the price.
It's wrong.

Speaker 2 They would have, in the free market, they would have, they had no bidders. That is how much the league has grown and gotten there.
I do think that the

Speaker 2 NBA establishment, because remember, the league owns a piece of all of teams. So they're, oddly enough, could be considered to have a bit of a conflict in this.
Yes.

Speaker 2 And by the way, they own buildings, they own teams. These are all the entanglements that are really hard to isolate.

Speaker 2 Even if it means that they don't solve all of their making money problems, they should solve their equality problem by saying, you're going to make the same

Speaker 2 over a certain amount of years. You're going to get the same

Speaker 2 disbursement of revenues the men get. That's how we can be equal.
By percentage. But

Speaker 12 how do you say what the revenues are? In the NBA, it may be far easier.

Speaker 2 It may be far easier.

Speaker 2 But we should explain this, though.

Speaker 2 I don't have a business solution.

Speaker 2 Get a fing math genius.

Speaker 2 An auditor would work. Hold on, let's draw up that LinkedIn posting.
We need a fucking

Speaker 12 math genius to help the WNBA. I just think that the reason why you're in for a labor stoppage is the expectations of the players, not unlike in baseball.

Speaker 12 It's just unrealistic in terms of what they're in for.

Speaker 2 It is the expectations of the players with the short-sightedness

Speaker 2 of the establishment, which is going to try now to make all the owners solvent, get them making money. The money owners.

Speaker 2 Forget the horror. People are paying lots of money for the valuations.
And that's how the WNBA owners are eventually going to make money.

Speaker 2 So they're sitting there complaining about, I lost $11 million last year. Boohoo.
There's not any poor guys who own teams, first of all.

Speaker 2 And they are already getting $400, $500, $600 million valuations. So they can lose $11 million a year the way Mark Cuban did for a long time and still be in a

Speaker 2 revenue-producing business. And that is buying your team, holding it and selling it for a huge multiple.

Speaker 12 It's really amazing that you were ever in the corporate world. Because if you went to

Speaker 2 the world, I really won't listen to the show. He's the most socialist capitalist in sports business.

Speaker 12 If you went to Bob Iger and said, listen, I understand that my division is getting crushed and we're going to need a distribution here from your division, but don't you worry.

Speaker 12 We're buying stuff that if you sell it, you're going to get all your money back. How would what would Bob Iger say to you?

Speaker 2 Well, the Walt Disney company is not analogous as a business to a sports league at all. I don't agree.
Damn, there was some spice on that. No, no, it

Speaker 2 sounds if you own at this point in the world, if you buy a sports team,

Speaker 12 you're so anti-rich people.

Speaker 2 To live on the money you make from that team,

Speaker 12 you dress like a schlepp on purpose so people can think you're some sort of plebeian. It really makes me.

Speaker 12 The reason I'm tired of it, Pablo, is that people may get the impression that John has the best interests of the man in mind because he's so anti-son.

Speaker 12 Exactly. And so my issue is that your whole career, your whole wealth is based on capitalism and the way you made made money for yourself and other people.

Speaker 12 And now you sit here and say, you know, losing $11 million a year, big whoop, your asset went up by more.

Speaker 2 Yeah, I don't have any concern for the billionaires who own teams and are losing pocket change on a WNBA team.

Speaker 12 It's fun to count other people's money. I've never met a billionaire who looked at his losses as pocket change.
I've just

Speaker 2 and I find it astonishingly. Have you ever met one?

Speaker 12 No, and I find it astonishingly obnoxious until you were a billionaire and then you wouldn't find it obnoxious it is obnoxious okay

Speaker 12 I can't argue with you why do you know why casinos make more money on poor people because the richer you are the less you gamble

Speaker 2 I don't gamble at all

Speaker 2 exactly

Speaker 2 no I just I don't have any it's it's the same as as

Speaker 2 when rich owners want the government to subsidize their stadiums so this is this is this is the point I had to debate all this about

Speaker 2 I know this is where we're debating literally the fundamental tenets of sports business, which is to say it's always the unholy

Speaker 2 amalgamation of

Speaker 2 rank capitalism and also socialism when convenient.

Speaker 2 This is the whole point of how you protect yourself as a very rich, wealthy person with lots of power in a club that you need to buy into. That's how this goes.

Speaker 2 And so, of course, these tensions exist.

Speaker 2 Anytime you have a business, you have to understand the nature by which you're going to make money. And there are different different ways.
You're not buying a sports team at this point

Speaker 2 to make money on the earnings every year. Mark Cuban famously said, I'd rather lose money and win than make money and lose.

Speaker 2 I introduce you now to the Miami Marlins.

Speaker 12 That is not. No, we ended up losing money way more years than we made and we didn't win, which is the worst plan ever.

Speaker 2 And did it change the owner's lifestyle?

Speaker 2 Yeah, what did you sell that team for, David?

Speaker 12 So the answer is it did not change his lifestyle.

Speaker 2 And did you make all of that money back from the sale?

Speaker 12 You bet your sweet Bippy.

Speaker 2 So who used to feel bad for them?

Speaker 12 You don't understand. I'm not asking for the violin playing.

Speaker 12 I'm asking you to not pander to the people thinking that you are them. That's all I've ever asked of this show is for you actually to acknowledge that you're not.

Speaker 12 Where have you been for the last six weeks?

Speaker 2 So I have to be heinous in order to keep. That's the worst.
Keep.

Speaker 12 Let's talk about the WMA because I'm losing my mind.

Speaker 2 Keep loyalty back to me. I kind of like this, actually.
Keep loyalty in that class.

Speaker 2 I didn't grow up in that class. Well, that will make you angry.
No.

Speaker 12 I did not. No, but you spent a whole time talking about how you grew up.
You know, the way I grew up, an SAT tutor, that was for the rich people.

Speaker 2 Okay.

Speaker 2 I did.

Speaker 2 I am a jabson. I am guessing.

Speaker 2 I am guessing you had a tutor.

Speaker 2 I did not have a tutor, and you may think that's posturing, but I did not.

Speaker 12 Because you couldn't afford it. Right.

Speaker 2 I know. And I continue to hold those values that.

Speaker 12 Your kids didn't have tutors? No.

Speaker 2 Nice. Because the SET doesn't matter.
Oh, sorry. It does.

Speaker 2 It doesn't.

Speaker 12 And he has an answer for everything in order to keep the lie alive. I love this.

Speaker 12 I know you better than the audience does in this instance, and you continually trying to trick them with with your positions.

Speaker 12 Today, it's bothering me because, A, you're conflicted, and we can talk about Unrivaled and the conflict that exists with the labor negotiations, and that there are people from Unrivaled who are negotiating with the WNBA's players, and what a great position that is, and the nightmare that could be if Adam Silver wakes up one day and says, you know what, I don't really want Unrivaled to be around, and what would happen then, which isn't going to be an interesting part of the negotiations.

Speaker 2 Oh, boy, that is the

Speaker 2 the fifth amendment gesture we're seeing now on youtube is to cover the mic while he chews ice oh excuse me excuse me a very different a very different amendment

Speaker 2 Look, I want to get to that, though, because something that Gabby Williams, who is a WNBA All-Star, was saying at All-Star Weekend was the WNBA wants to box out Unrivaled and Athletes Unlimited and these competitors, and they still don't want to pay us what we deserve, right?

Speaker 2 And so two things are happening that I want to sort of merge in terms of the argument here. One is,

Speaker 2 what does team valuation mean when it comes to what you pay the players who arguably are responsible for a lot of the value that is increasing in those valuations? That's one argument we're having.

Speaker 2 The second argument is, if you're the WNBA,

Speaker 2 what do you think of the fact that Unrivaled is around and trying to, you know, basically take advantage of the fact that all these players feel like they're vastly underpaid and objectively have a pretty strong argument?

Speaker 2 So

Speaker 2 what does that mean objectively? They had a pretty strong argument.

Speaker 2 I think that if you were to show anybody

Speaker 2 what a WNBA player makes,

Speaker 2 forget that. If you were to ask them, what do you think a WNBA player makes? They would all imagine a number that is over the reality.
So what?

Speaker 2 I mean, you say objectively, now you're back to the, because ratings are up, because there's a lot of to do.

Speaker 2 In this case, I have a fundamental agreement with my friend David, which it has to be in the context of the business.

Speaker 2 It's not, you don't deserve, like I would say, given my politics, teachers deserve to make more money. Do they?

Speaker 2 Yeah. Are they going to make more money? No.

Speaker 2 So I don't know what this concept of deserve means.

Speaker 2 You deserve what you can negotiate, right?

Speaker 12 And that's all you get.

Speaker 2 I'm simply saying that the owners and the league should have the foresight to understand that they're all got a payback coming. When this works, these teams will be worth a billion dollars.

Speaker 2 So I may have a dismissive manner, but it does not come from my dismissing anybody. It comes from wishing that those people could have more foresight beyond the, oh, I'm losing money right now.

Speaker 2 Did it change your life?

Speaker 2 Jeff Bezos, does sucking up to Donald Trump change his life if the Amazon stock goes down because of the Washington Post? It does not.

Speaker 12 That is so mischaracterized. His responsibility is to keep the stock going up, not just for him, but for all the institutional investors, for all the individual investors.

Speaker 12 That is what they're investing their money. His job is to increase the stock price.
Of course it benefits him, but it's a public company. You're benefiting his company.

Speaker 2 He may be a public company, but even as a public company,

Speaker 2 you should have the foresight and the responsibility to go, there are things that are more important than my next quarterly earnings report.

Speaker 2 The First Amendment should be one of those.

Speaker 12 Should Disney not have done layoffs? No, it's not. Were you against Disney layoffs, which there was a quashing impact on stock price? The company was losing money, therefore they did layoffs.

Speaker 2 No, I was not against layoffs. I am against the Walt Disney company doing a settlement.

Speaker 2 on a frivolous lawsuit by this president in order to curry favor because they think that'll be good for the stock.

Speaker 2 I don't think that's good for the country. And you're supposed to have something, some things that rise above your ability to have money you can't spend.

Speaker 2 Well, this is kind of where we can take our Thanksgiving dinner argument back to the rundown of the show, right?

Speaker 2 The question that all of these teams are facing, that these unions are facing, is what leverage do we have? Is it an emotional, moral appeal, which it feels like certainly

Speaker 2 underpayment to many,

Speaker 2 or is this the cold, hard math in which, by the way, you risk a further rift?

Speaker 12 Why does the WNBA want Unrivaled to go away? And if you spoke to Adam, forget the fact that they're friends, forget the fact that John's involved. Why do you want your competition to go away?

Speaker 12 Because competition, when it's good, can have a negative impact on your ability to do business in the way you've been doing it and to have the margins that you've been having.

Speaker 12 If Unrivaled or when Unrivaled becomes a true competitor to the WNBA, true, there's a different cost structure. True, they're not unionized.
There's A to Z differences.

Speaker 12 However, if you're the WNBA or really the NBA, you don't really want unrivaled around because it has a deleterious impact on your business and on the way your business is perceived.

Speaker 2 Yeah, I would argue that's wrong. It actually has increased the visibility.
Look what it's done for Nafisa. It's increased the visibility of the players.
It's made more people women's basketball fans.

Speaker 2 We don't play during the same season.

Speaker 2 We're not competitors of them. These two leagues can coexist forever, and it's fine.
I don't see any problem with that.

Speaker 2 The problem here is a lack of vision on both sides to say, let's actually use this moment of momentum to build something and let's build it together. You're not going to get your magic overnight

Speaker 2 10x salary, but you're not going to get to abrogate your responsibility to pay these amazing athletes by pretending that you bought the team to live on.

Speaker 2 And if you look at the math, they should all be building team valuations because that's where everybody gets paid. You think anybody who owns an NFL team, there's a couple of, there's a few

Speaker 2 owners who still are sort of hanging around, but for most of them, it's a trophy that they bought after making a lot of money doing something else.

Speaker 2 And they enjoy it so much more than whatever else it was that they were doing making money

Speaker 2 that it's worth it to them.

Speaker 2 Nobody does. I go to all these conferences where they try to do valuations for sports teams and based upon X Times earnings.
And it's just bullshit. It's not how anybody makes money.

Speaker 2 You have an example here, though he will not admit it, which is a woe-begotten franchise down in Florida.

Speaker 2 I've never heard of that. A true true true true true tradition that always

Speaker 2 struggled, despite great management, it struggled in that market

Speaker 2 with that sport to make money.

Speaker 2 And if the collective bargaining agreement cannot be so that the most difficult franchises in the league can solve their financial problems, it's got to be a vision of how do we make this a billions of dollars franchise.

Speaker 2 And if they don't have that in mind, they're going to set themselves back. And the league is trying to protect

Speaker 2 these semi-owners and they want it both ways. Everybody would like to be the NFL.
The teams make money and the valuations go up. That's the only sport, I think, where that's pretty much the occasion.

Speaker 2 Lots of English Premier League. teams lose money um and they don't care because they want to win they care tremendously.

Speaker 12 Earlier this week on Nothing Personal, Pablo, I did a segment on Steph Curry, who did an interview and talked about that he wants a piece of the pie.

Speaker 12 He wants equity because the valuations have gone up during his career.

Speaker 12 And I wanted to respond to him, which is that how come you all have a collective bargain agreement where your salaries are tied to revenue, not valuation?

Speaker 12 If you're so interested in valuation as a concept, then why didn't you bargain that? Why didn't you negotiate it?

Speaker 2 I haven't thought about this before.

Speaker 12 And the reason nobody does is because it's total poppycock.

Speaker 12 You would never have an agreement where, in the history of business, forget sports, where, oh, there's an enterprise valuation that could be based on myriad factors, including irrationality and ego, and we're going to tie cost of labor to that.

Speaker 12 It's crazy to me. But John's arguing WNBA teams are now worth $600 million, maybe a billion dollars.
Have the foreskin to pay them. Foresight.

Speaker 2 Well, edit that out, please. No, we're keeping that.

Speaker 2 That feels like a beyond Freudian slip.

Speaker 12 Foreskin. Look, the.
I was just talking about a brisk before it started, which is why that was in my head.

Speaker 2 When he said horror, I was like, horror?

Speaker 2 By the way,

Speaker 2 it's a good question to ask Steph Curry. The answer to his question is he's not willing to forego his earnings.
He wants to get paid today, and that's his right.

Speaker 2 But if I was the league, I'd say, fine, if any players would like to

Speaker 2 take half of their money

Speaker 2 or give up half of their salary and take a piece, we, the league, will have a, we'll take 10%, I'm making it up, I know it's not feasible, we'll take 10% of all sales, profits, and we'll distribute those to the players who decided they want to be in that business.

Speaker 2 They don't want

Speaker 2 any incentive to be in them, nor need to be in that business. They don't need to be in that business.
And by the way, I wouldn't do that if I was one of them.

Speaker 2 I'd take the money, invest it in something else, but why would I wait for it to happen?

Speaker 2 But to ignore the fact that that's there and just pretend they have to operate like businesses, like all other businesses, they have a specific

Speaker 2 part of their economic reality, which is unlike almost anything else other than art. and a few other sort of esoteric things.
By the way, art, they don't tie out of the labor to art.

Speaker 2 You don't go to a painter and say, we'd like you to take 50% all the it's just a different business to pretend that that shouldn't enter into a smart discussion you're having with the players which is they should say they're not going to because i know how they work they'll say and they already did this clearly and pissed the players off they went and said well you need to understand how hard it is for the owners they've invested they're still not making money they should say all that but they should say guys we have to take a long-term view of this you're not going to get what you want right now.

Speaker 2 We're not either. We're going to give you more money than the math would conjure.
Yeah, the math genius might suggest. Yeah, exactly.
Got to cut that out.

Speaker 12 There's three swears in this show. What are we doing?

Speaker 2 I assume we're not bleeping poppycock. That feels

Speaker 2 at least half okay. I'm assuming we're not bleeping ice.

Speaker 2 But that is

Speaker 2 so much. An important thing.
Like, are we going to Trump thing again? No, where that was.

Speaker 2 If you had a secret poll and ask all the owners why they bought a team, there would only be two answers. Trophy, and I'm going to sell it someday and make a whole bunch of money.

Speaker 2 You think people buy a team?

Speaker 2 I want David's thoughts on that. And go into an analysis of

Speaker 2 nobody buys a team who can't afford not to make money on it.

Speaker 12 It's just not accurate. It's really not.
So especially now with the valuations that you're seeing. So let's just talk about the Washington Commanders.

Speaker 12 When you have a base that you're now in at $6 billion

Speaker 12 and you have private equity money in and you've got other people who are interested in ROI, you cannot run it irresponsibly on an annual basis. You just don't have the capacity.

Speaker 12 You don't have the debt capacity and you certainly don't want to pump in cash. Josh Harris is not calling his investors and saying, hey, we need 20 million from you because of losses this year.

Speaker 2 He's just not doing that.

Speaker 2 I don't believe I've suggested they should be run irresponsibly.

Speaker 12 Therefore, they should be run responsibly, which equals profitably. Not necessarily.
I view those as synonymous when it comes to a business.

Speaker 12 It is irresponsible to be operating at a loss.

Speaker 2 We have to be clear, though, right? Beyond sports teams, there are many businesses, certainly in Silicon Valley, that are being run at a loss because there is some vision for long-term

Speaker 2 mass capital.

Speaker 12 You say at a loss, they've got sources and uses of funds. They've raised money with an understanding that for the first three years, you need a runway for R ⁇ D.
You're going to lose lose money.

Speaker 12 And then either we're going to write off the investment, the company goes away, or we're going to find the cure to cancer and we're all going to be rich. It's all part of the original plan.

Speaker 12 No one, have you done a business plan, Pablo, where you say, hey, we have no path to profitability? I mean, other than

Speaker 2 the crazy

Speaker 2 one we're sitting at.

Speaker 2 I would like to compare myself to Open AI, by the way, which is absolutely, explosively growing revenue while also struggling on the balance sheets. So I must point out.
David is so proud of himself.

Speaker 2 David has given me like a pitch down the middle. I know.
All right.

Speaker 2 He said,

Speaker 2 he said, you discover the cure for cancer and get rich.

Speaker 2 So

Speaker 2 that is a capitalist who thinks that the motive

Speaker 2 is to get rich.

Speaker 12 Wait, what's the other reason again?

Speaker 2 I can't remember. Save lives.

Speaker 12 I forgot about that one. Thank you.
Thank you. Like, I've never had anyone in my family dying of cancer.

Speaker 2 I didn't say that.

Speaker 2 Again,

Speaker 2 it's like a Freudian pitch. It's like a Freudian.

Speaker 12 Hit the pitch and move on, John. That's the key to great entertainment.
Just hit it and then move on instead of talking about hitting it.

Speaker 2 I would like to brush both of you off the plate.

Speaker 2 That's the difference between sports media and sports.

Speaker 2 We talk about the pitch. That's true.

Speaker 2 The question of valuations. God, there's so much happening right now.
And I'm trying to keep all the threads in order. You got this.

Speaker 2 Do I?

Speaker 2 The question of whether team valuations are just bullshit, right?

Speaker 2 So you're describing, like art, to John's analogy, you're describing a very precious thing that everybody deeply cares about, in which the full monetary upside can only be realized at a point of sale, right?

Speaker 2 And that could be driven by all sorts of things. Who sold right before you? Is some other external thing happening? Is there a asteroid? Many things can impact.

Speaker 12 Estate planning.

Speaker 2 Estate planning.

Speaker 12 Right. Kids arguing.

Speaker 2 It's not as much as a math genius might say, this is the formula. There are many variables that cannot be controlled is the reality of the sports valuation business.

Speaker 2 So when it comes to trying to price it out at a CBA negotiation, is it the question of agreeing on a math genius, a f ⁇ ing math genius? What are we doing here?

Speaker 12 It never comes up, John. It just never comes up.

Speaker 2 It never comes up.

Speaker 12 In a bargaining, in a bargaining table.

Speaker 2 Of course it does not because the one side is worried about getting paid now and the other side is trying to hoodwink the guys on the other side of the table that, oh my gosh, we're having a tough time.

Speaker 12 Both sides have the audited statements, John.

Speaker 2 I don't know what world you're talking about.

Speaker 12 The players union has the audited statements of the teams. It's right there.

Speaker 2 I'm suggesting that the core economics of a sports team are no longer about annual earnings in a report. They are about the valuation of teams.

Speaker 12 Is unrivaled about annual earnings and profitability?

Speaker 12 Or is part of your business plan saying profitability when we sell unrivaled, whether we sell it privately, whether we take it public, that's when we'll get paid?

Speaker 2 Like lots of startups, we are not investing money to take profits out of the profits. We are taking money, we are putting investments in

Speaker 2 in the hope of a financial transaction that we'll benefit from.

Speaker 12 So you have no path to annual profitability.

Speaker 2 We broke even this year and we'll make money next year, but nobody would have put the money in to take a division of the dividends

Speaker 2 and we are planning for a financial transaction.

Speaker 12 I understand the word salad and I think it's great. I'm asking a separate question.

Speaker 12 Are you telling me that you would have been able to raise money for Unrivaled with pro forma financial statements that showed annual operating losses?

Speaker 2 Yes.

Speaker 12 And for a extended period of time.

Speaker 2 We have actually done better than that.

Speaker 12 For an extended period of time. It wasn't part of the initial,

Speaker 2 we had a short business plan, not a long business plan. People bought into the vision.

Speaker 12 People bought into the vision. It's an amazing thing what he's not saying, which is that when you raise money, you have a cap table and you have a certain amount of money that you bring in.

Speaker 12 And then that money, there's sources and uses. The sources of the money is investors.
The uses of the money is: we're going to use it to fund operations.

Speaker 12 We're going to use it for a capital investment by renting or building a stadium space or a studio. We're going to have this much in equity we're giving away.
It's all got to be part of a financial

Speaker 2 players. So,

Speaker 2 you believe Bob Iger and Willow Bay

Speaker 2 bought a women's soccer team at a valuation of a billion dollars based on a ROI of running that club and passing that along to their

Speaker 12 I actually believe Willow Bay responded to that and said that they bought it because it was in short commuting distance from her house

Speaker 2 that doesn't sound like a hard financial

Speaker 2 hard financial calculation it's my point and there

Speaker 2 is that a joke I don't even know and there

Speaker 2 and there I believe you are dealing with enlightened owners who understand

Speaker 2 they're one doing good two they can afford it and three they're going to sell it for profit someday Okay. And that's all they care about.

Speaker 2 Are we going to frost nix in each other anymore or are we back to hanging out? There's nothing but love. How much you sell Marlins for?

Speaker 12 They were sold at an enterprise valuation of $1.2 billion.

Speaker 2 Nice.

Speaker 2 Based upon revenues, past revenues?

Speaker 2 So based on nothing to do with the brilliant job you did running the team?

Speaker 2 Yeah, no, it did have something to do with you won on Boral Series.

Speaker 12 It had nothing to do with it. No, it had to do with

Speaker 12 supply and demand. Yes, exactly.
Which is why I wouldn't pay a banker to sell the team because anybody could have done what I did. I take no credit for selling the team.

Speaker 12 One, two, you've noticed publicly, I've never taken credit for it. I laugh about it, but I don't say that I'm a genius banker.
I say that we had an item that other people wanted.

Speaker 12 And when you have more than one buyer for something, the price tends to go up.

Speaker 2 Which brings us back to the difference between WNBA negotiations before and the ones that are about to happen. And they are happening.

Speaker 2 Well, excuse me, the ones that are actively happening privately and publicly.

Speaker 2 But I suppose, near the end here, much like the business plan that John described, we are not here for a long time, but we are here for a good time.

Speaker 2 And so thank you both for none of us made any money.

Speaker 2 Not with that attitude.

Speaker 2 Pablo Torre Torre Finds Out is produced by Walter Aberoma, Maxwell Carney, Ryan Cortez, Sam Dawig, Juan Galindo, Patrick Kim, Neely Lohman, Rob McRae, Matt Sullivan, Claire Taylor, and Chris Tumanello.

Speaker 2 Our studio engineering by RG Systems, sound design by NGW Post, theme song, as always, by John Bravo, and we will talk to you next time.

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