The Business of Owning a Sports Team (ft. Orioles Owner David Rubenstein)

**SPEAKER_1** (0:00)
This episode is brought to you by Charles Schwab. Timing the market, fighting inflation, managing risk? Financial decisions can be tricky. Investing isn't just math, it's psychology. Your neurons are playing favorites and the market doesn't care. Financial Decoder, an original podcast from Charles Schwab, can help.
Join host Mark Reapy as he breaks down practical strategies to help overcome the mental traps that may affect your investing decisions.
Listen at schwab.com/financialdecoder.

**Ann Berry** (0:34)
For Friday, August 28th, it's Brew Markets Daily, and I'm Ann Berry.
Sports teams, increasingly viewed as financial assets with private equity firms in hot pursuit, but with a special place in American culture that makes buying and owning a sports team a highly scrutinized endeavor. So what does owning a sports team actually involve? Why have valuations soared in recent years? Can they be run like regular businesses? How do arenas and stadiums play a part in making money? And do startup leagues, the likes of Pickleball have seen, have any shot at being the next NFL? Well, to break it all down, we welcome David Rubenstein, owner of major league baseball team, the Baltimore Orioles and founder of leading private equity firm, the Carlyle Group. In just a few weeks, David releases his new book called Inside the Owner's Box, Conversations on Power and Leadership in Sports, which describes his own journey to acquiring the Orioles and details his interviews with 14 sports team owners, from the Houston Astros to the Washington Commanders to the New England Patriots and the Brooklyn Nets.
Well, I read a pre-release copy of the book and had great fun sitting down with David for its key insights into what is now a $500 billion plus industry. We also explored how civic engagement matters enormously in sports team ownership, and also beyond, as we dive into David's national support of what he terms patriotic philanthropy. It's a conversation you won't want to miss, and it's coming up in just a moment.
But first, this episode is brought to you by Charles Schwab. Timing the market, fighting inflation, balancing risk. No one says financial decisions are easy. In fact, it's the exact opposite. Financial decisions can be really tricky, and it's often your own thinking that can lead you astray.
Financial Decoder, an original podcast from Charles Schwab, can help.

**SPEAKER_1** (2:24)
Join host Mark Reapy, head of the Schwab Center for Financial Research, as he offers modern strategies to help combat the, wait, what in your head?
Mental traps like overconfidence, loss aversion, and recency bias may cloud your investing decisions. When you understand these patterns, you can take steps to make better informed financial decisions. Listen at schwab.com/financialdecoder, or wherever you get your podcasts, that schwab.com/financialdecoder.

**Ann Berry** (2:50)
And now my conversation with David Rubenstein, co-founder of the Carlyle Group, principal owner of the Baltimore Orioles, and author of the new book, Inside the Owner's Box.
I've got so many questions for you, but I want to start with the slightly more soulless aspect, potentially, of owning a sports team. You've made your money and your reputation as a legendary financial investor. Are sports teams financial assets?

**David Rubenstein** (3:17)
Today, they are viewed that way.
Fifty years ago, the richest people in the United States, the most successful financial people in Wall Street, did not have an interest in buying sports teams. When George Steinbrenner bought the New York Yankees in 1972, he was not well known by anybody, and he only put in $250,000 of his own money because that's pretty much all he could have put in. The purchase price was $8.8 million, so he had to round it up from others. The richest people in the country in those days didn't say, I want to buy a sports team.
In fact, if you go back in the 1920s, 30s, 40s, 50s, the richest people in the United States were not sports team owners. You might have some real estate developers or other people who were modestly wealthy, but not fabulously wealthy. Today, people like Jeff Bezos are buying sports teams, and it's just a different phenomenon, and there's reasons for it, but it's much different than it used to be.

**Ann Berry** (4:05)
So come on, you're a financial... These things, most part, they don't cash flow. They've shown that they appreciate.
There is some liquidity, but not as much as you might think. So with your traditional private equity hat on, which is where you've made your fabulous wealth, you wouldn't look at it this way, would you?

**David Rubenstein** (4:21)
No, in the private equity world, when you buy a company, or when you have a publicly traded company, you want to show quarterly earnings are always going up. In the sports world, since you don't tend to report your earnings, generally they're privately owned companies or teams, you don't worry about quarterly earnings going up. You generally just worry about doing a good job on the field, and eventually you think that when you sell, you'll probably get a better price than when you paid for it. But the prices that people are now commanding for these sports teams are so staggering. So as the LA. Lakers just sold for $12.5 billion, the Boston Celtics for $6.1 billion, the Seattle Seahawks for $9.6 billion.