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- [00:00]
A
While holiday shopping is almost always fun, credit can be confusing. That's when you get MyFico. Download the MyFico app now and shop with confidence, knowing that you can stay on top of your credit 24. 7. Get your FICO score straight from the people that created it, plus free credit monitoring and a free credit report every month. No credit card required. FICO scores are used by 90% of lenders, so trust the MyFico app to keep you in the know. Visit myfico.com free or download the MyFico app today. This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. We tried today to bring you one to two business and market insight episodes, plus an interview with a brilliant business leader. This week we're joined by one of our regular guests who's literally one of the smartest people I ever get to visit with. But we're talking today to David Pivnick. In today's a little bit different episode, rather than talking business or leadership, we'll be talking sports with David Pivnick because David is both brilliant and an avid sports fan. David, I'm going to tee up in a second. I'll give you a couple of the sports stories and I'm watching, but I'll first start with you. We're going to talk sports today and that's the title day sports with David Pivnick. David, what are the, what are the big sports stories that you're watching currently? What's top of mind for you?
- [01:24]
B
Yeah, Scott, thanks for having me on and always a pleasure to discuss anything, but particularly sports. So a few things that are sort of catching my attention right now. One of them, which I recognize is probably more interesting to me than maybe the average elicitor is I'm following the Major League Baseball off season pretty closely. The Blue Jays in particular, they, they've been very active and have spent a bunch of money, but looking to see where the biggest names in free agency go. Kyle Tucker, formerly of the Cubs, and Boba Shet, a blue for life up until now, being most notable. And I'm holding up hope, holding out hope the Jays managed to sign them both, or at least one of the two, and also that the Dodgers don't end up getting one or both. But following the major league off season, seeing where the money's flowing and how those things are playing out has been very interesting. Certainly as we approach, you know, the Christmas break, the football season is in full screen, you know, and I've been interested in how the Bears are doing. I think The Bears are going to beat the packers in round two. And I think the Bears could actually win the division or at least make a good spirited run down the stretch, particularly now that the packers don't have Micah Parsons. So very excited about that and view that as a promising development and certainly paying attention. And then I'm very focused on on the NBA right now, both because the Oklahoma City Thunder utterly dominating and it's been really fun. I know a lot of people don't like them. I'm fairly indifferent. But I like and respect dominance. And they've just done such a phenomenal job building a strong organization top to bottom from a management, coaching and player development standpoint. So watching their dominance is pretty interesting. And then seeing how the trade market's going to shake out, particularly as the honest, you know, something I've been monitoring as well.
- [03:12]
A
Great. Let's pick up on those three stories and in a little bit I'll add a fork about Philip Rivers. But let's start with a couple of these and I'll tie together Toronto and Oklahoma City. These are two teams that aren't thought of as necessarily the biggest budget markets. And somehow or another Toronto's got the fourth or fifth largest payroll in the country and continues to really double down on trying to win it all. They got very close this year. Then Oklahoma City, which is nobody's metropolis, even the people from Tulsa tend to look down at Oklahoma City has become a real city and somehow or another incredibly dominant in basketball with just and I'd love to get your thoughts on how these two teams, these two cities, have done this because people thought the days of second market cities or smaller market cities being competitive were over just with the amount of money spent on payrolls and everything else. Talk a little bit about Toronto and how they've grown to spend so much. I think they're up to 250 million a year or so and probably going higher. And the same thing with Oklahoma City Thunder. How have they managed to do this?
- [04:22]
B
Yeah, so totally different approaches and different stories. The Jays and first of all, and I sorry, before I get to this, I do have to start with it's Metropolis. Scott, I don't know what a metropolis is. Maybe that's how they pronounce in Oklahoma City. Perhaps that's what you're talking, but it's metropolis for the rest of us. But as to the Jays, they, they were already above 250 last year. 250 million. This year they're going to cruise past 300 million. And the short answer is they've got the second deepest pocketed owner in all of baseball. So Steve Cohen of the Mets is the richest owner. Ted Rogers and Rogers Corp. In Toronto, you know, they are an empire. And so the Jays have virtually unlimited funds if they're willing to spend. And the biggest challenge the Jays have had the last couple off seasons is they couldn't get players to take their money. You know, they made a huge offer for Juan Soto last year. They made a huge offer to Shohei Ohtani two years ago and it just didn't work. I think they were the runner up both times. This year we've already got the best pitcher on the market, Dylan Cease. We got a guy, Cody Ponce from Korea, who I think is going to be excellent. He wanted to be a Blue Jay, which I think is great to hear. They just signed a reliever last week, Tyler Rogers, and we're paying these guys, we're paying fair market. They're not necessarily coming at a discount. But I think people really saw the camaraderie in the Jays clubhouse. And I think it matters to these players who are going to go live in a city for at least half the year and potentially three years of their lives. Basically every player and their family from last year's Jays team, hey, Moden said that they love the team, they love the wives, they love the family, they love the city of Toronto. And I think it's really helped with recruiting. You know, when people are happy, A, the team plays better, but B, it's a lot easier to sell people on. Hey, come join a good clubhouse in a great city that's sort of thriving. We'll still pay you top dollar. We're not looking to scrimp and save. So the Jays are throwing around the financial club they have.
- [06:27]
A
And let me ask you a question. Does the team then run at a loss because the owner's so rich that they could do that or do they still map? Does that still. Do the numbers still work or just it still. It doesn't matter because it's an advanced hobby for Rogers. Yeah, how does that work? Can they still make money at those payrolls or is just you, you, you. You do grow the net worth of the franchise, but not necessarily make money year to year when you go those big on numbers.
- [06:53]
B
I think in Toronto there's money to be made with a winning team. So ticket sales go up dramatically when the team is winning. I know that that sounds like a no brainer comment, but it's just true. And you know, the Maple Leafs, you know, struggle regularly at least when it gets to the playoffs. But that building is generally sold out. And even when their sellout streak broke, you know they're selling 95% of the seats in the building or more. So they don't have that financial pressure. The Jays, if they're not winning, if they're not playing competitive baseball, they can sell 50% of the building. With the team hot the way it was last year, they were selling dramatically more than that. The ticket prices have gone up a lot in the last years. The stadium is the company, the team put a lot of money, hundreds of millions of dollars into the stadium. It's a much better place to watch a game right now than it was a decade ago. The atmosphere is terrific. But. So, I mean, look, they probably made in the ballpark somewhere between 50 and $100 million on the playoff run last year. I couldn't tell you exactly where within that range, but my guess is on the higher side of that range. So they've got a lot of the money that they generated on the playoffs last year. They're obviously hoping to make another long playoff push this year, which would kick in tens of millions of dollars. And they're raising ticket prices and expecting to sell more seats for every game. So I, you know, got it, got it. But they think they can make money.
- [08:18]
A
So it does, it does. Map out. That's, that's absolutely fascinating. It's, it's amazing what they have done. And it's amazing to me that the Cubs, I think, are still not a top 10 payroll team, even though they've been quite competitive. If you go play Toronto, are you also paying higher taxes because you're in Toronto, because you're in Canada, or is that map out as well?
- [08:38]
B
I mean, I think it certainly has tax consequences relative to some of the other cities that are options. So I think that ultimately, you know, relative to non tax, state, without tax, state taxes, et cetera, I think there's probably some tax consequences. I think there's also some benefits, though, that the players are getting paid in American dollars and paying to live in Canadian dollars while they're up there. So I think there are some benefits to that may neutralize that. I think there's also marketing opportunities that might exist in Toronto and across Canada, frankly, for players that might not otherwise be as marketable in an American city. So I think that's advantageous. I mean, a guy, it's a different sport, but a guy like Scotty Barnes is the face of numerous products in Canada as the best Toronto Raptor and as a favorite athlete in my household, certainly. But I don't think Scotty Barnes has the same brand name recognition in the state that he'd be able to cash in as well as he has in Toronto. So I think, you know, the taxes are a definite impact and a factor. But I think there are other things that help neutralize that.
- [09:48]
A
Thank you. And talk to us about how the Oklahoma City Thunder, which has been competitive for some time now, how have they managed to make that happen? When again I do it as a comparison there Chicago Bulls are so bad. How is the OK City? How have they made that work? Where in contrast our Chicago Bulls, which were Chicago located in Chicago are just sort of very middling at best. How does Oklahoma, how do they do that? How does that happen?
- [10:15]
B
Yeah, I mean the first thing we, we talk on a lot of these calls about having a long term vision and a plan and working towards a goal and sticking to it and the funder have really done those things. They've got incredible leadership, they've got a great coach, they've got incredible general manager, they've got owners who are willing to invest in the franchise. But they built slowly, steadily and patiently. They got some luck along the way certainly in terms of where they've ended up in the draft, how some of their picks have played out, but they've made consistently intelligent decision after decision after decision and some of it, you know, they got lucky like Kawhi Leonard in his hubris frankly when he, you know, pushed his way, didn't want to stay in Toronto coming off the title, which love the guy for bringing the Raptors a title. But I think he made a mistake leaving. But it wasn't just that he left the side elsewhere. He told the Clippers, I'm going to sign with you but you got to go get Paul George. And and the Clippers ended up trading Shea Gildrus Alexander, the reigning MVP of the league. And I think it was six first round picks to get Paul George from Oklahoma City. So the Thunder gave up a depreciating asset on his back legs of his career and they brought in one of the best scorers in the NBA. He was only going into his second year at that point. They've obviously helped to develop and then they got, you know, a half dozen first round picks that have looked pretty good and then they maximize those, those draft assets by making smart trades but also by getting good picks later in the first draft like Jalen Williams is their second best player and they picked him, you know, in the back half of the lottery. So they really just had a good plan. They built slowly and steadily, built incrementally. They haven't gone out and signed huge free agents and they've made moves that make their team better. And then even when they've made mistakes, like I think Alex Caruso is a great player, but I think objectively trading Josh Giddey, who's great in Chicago, to bring in Alex Caruso in a one for one deal was it a great deal. But the Thunder were able to recognize they needed what Caruso brings. Leadership, defense, some of those skills that Josh Giddey doesn't specialize in. Maybe he will be a great leader later, but he wasn't on that team and it helped them win a title next year. And for the Bulls, I think getting giddy for Caruso was an unbelievably great move as well. But the Thunder have just built consistently and put a great team in place. They've avoided making the huge multi pick trades for a superstar in the other direction. They haven't brought in a Kevin Durant. They've been rumored to be wanting Giannis for years. They've resisted that and they've built a team that might set the all time wins record this year while winning back to back titles. And they've got another three picks in the first round this coming year. I mean they're, they're a juggernaut that's got a long road ahead of them to continue juggernauting, if that's a word.
- [13:11]
A
That's literally amazing. Talk a little bit about the multiplayer trades. The most famous of all time is I think the Herschel Walker trade where somebody traded a slew of draft picks for him and then he ended up being sorted towards the end of his career. And the other team reloaded. Micah Parsons. Micah Parsons was thought of as a brilliant maneuver by the packers and this shows a little bit of the fragility of sports. And Mike has been a force this year and then his knee, you know, had an ACL tear this weekend and that always puts a guy's career in question. How do you sort of judge these multiplayer? Like obviously the Thunder has done fantastic with this multiple draft choices. It's unbelievable how much they recruit benefits from it. The Blackhawks are finally seeing the benefit of their long term strategy of accumulating lots of draft picks. How do you view some of these multiplayer trades for draft picks and how good the Micah Parsons trade looked for the packers just a week ago? How do you think about those things?
- [14:10]
B
Yeah, I mean look, health, health Always matters. And it's hard to evaluate a trade or criticize too much based on health. The packers were trying to win a title this year and made a sort of all in tight move to get Parsons. And I think with him they were a real contender. I think without him they're probably not. I think the Cowboys took a lot of grief for not trying to compete this year and they're not going to make the playoffs without Micah. But you know, as a Cowboy fan, I can tell you Micah wasn't going to make the Cowboys season dramatically differently and go different. And going into next year with Kenny Clark, Quinn Williams, some $20 million in extra cap space and an extra first round pick, I think the Cowboys will be better for it next year. To me, it just comes back to what is the team you're trying to build? Are you one piece away from a championship? I think making those kind of all in moves makes sense if you assess the situation correctly and know that you can get the job done. So in sports, that's winning a championship. When the Raptors traded for Kawhi, they knew he didn't really want to be in Toronto. They knew there was going to be a strong chance that he would leave and he did. But they also recognized they could give up three significant pieces, including DeMar DeRozan, who was the best, second best player on the team at the time, and make a legitimate run for a title, which. Which they did and then they won the title. So that was an educated, smart, all in aggressive move that worked, I think when you misfire like the Clippers building around Georgia and not much else. Okay, good.
- [15:45]
A
100%, yes. No, no, no. 100%. Talk for a second about. I think the feel good story of sports this past week is Philip Rivers, 44 years old, had been out of football for several years. The Colts bring him in to start. He plays fine. Not great, but fine. Talk about that for a second. That's an amazing story, isn't it?
- [16:09]
B
I mean, yes, yes and no. I think it's amazing that he was able to get out there, play somewhat competently. I'm not sure. I mean at the NFL level, certainly he did a lot better than I would have done at quarterback. But relative to an NFL quarterback, I think somewhat competent is a fair assessment. I think that it, it says a lot about his abilities that he's able to come in as, you know, a guy who retired a couple of years ago, father of, I think 10 kids, grandfather, etc. And still play at a high enough level to contribute at all in the NFL. So I think all of that is kind of cool. I also think there's something to be said for, you know, he's got a full life, he's got a lot going on and on some level I think it's interesting that he felt compelled to come back, whether it's for the money or the opportunity or otherwise, when I think he's got a lot on his plate. But God bless, is that not for me to judge. And I think it's a sad state of affairs for the Colts that they're trying to be competitive this year. They made their own all in move at the trade deadline. They traded a couple first round picks and a receiver that they like at annoy Mitchell to bring in Sauce Gardner from the jets, shore up their defense to try and win a title this year. And the second they do that, Daniel Jones goes down and is out for the season and into next year probably. And that's super unfortunate because Daniel Jones to me was one of the most best feel good stories of the season this year. A guy who really struggled early in his career had been declared a bust and then emerged this year to become a superstar. So to have that yanked away, the fact that the Colts didn't have a good backup or even a competent backup in house, the fact that they allowed the relationship with Anthony Richardson, a guy they picked in the top five picks of the draft, I think three years ago, like in the very recent past, that relationship was so strained that they couldn't count on him at this point because of how they've handled it. And he's hurt as well. But I think there were a lot of things that went wrong to have Philip Rivers be the solution. And I think the Colts have absolutely no chance of going anywhere this year with Philip Rivers at the helm. So I wish him the best of luck. I know that you heard the news and immediately thought it might not be too late for you to get on the ATP Tour. I wish you the best of luck with that as well. But as a general statement, I don't think these things are going to work out for you or Philip Rivers quite as you might hope.
- [18:33]
A
No, but it was. I just give him so much credit. He's been out of the game for four or five years, you know. Right. The backup quarterbacks in Indianapolis were so offended by this that they were iteratively upset about the fact that they went out and brought in the guy who's been out for four or five years. The beauty of this is one of the reporters asked Philip Rivers at a press conference, you know, what's your playing weight right now? And Philip Rivers, who's four years out of the league and out of shape said I don't know, do you know what your weight is? You know, it's just like, it was just, it's just literally great. Great TV and Philip Rivers saying I was never that mobile to begin with. I stay in the pocket, take my hits. And it was just like, it was just like, you know, he is one of the, he's up there in the all time passing records and yards and all those kinds of things. Obviously it almost does seem like comedic like the bad news beer to bring in a guy's four years out. It wasn't like Phil Rivers is Tom Brady and he's been out for a long time and he was great but he wasn't like Tom Brady. But it is, it is sure fun and interesting to watch. I mean the other feel good story in sports, which is another weird story, is the Golden State warriors have a guy playing, last name is Spencer. You'll know the details better than I do. But this is a guy who didn't play college basketball. So after his college across career was the best college lacrosse player of all time and now is getting real minutes in the NBA after not really being recruited, not really playing college basketball. He played I think one year after he was done with this report career, but just a crazy athlete who's transferred to basketball and putting up seven and a half points a game and more.
- [20:13]
B
Yeah. And I think first of all I agree completely. Pat Spencer is a great story. My boys are, my sons are loving watching him play and seeing the highlights, especially as he talks trash to other players. And I think the biggest takeaway I glean from a story like Pat Spencer's is pro athletes are just not actually just like us. Like these guys are just on a whole different level and their skill sets as athletes and physical specimens is just something that, you know, it's hard to even comprehend. I look at a guy like the Bucks had a player for years. I forget who he plays for now. But Pat Connington was on the team through last year and I mean that's a guy threw a 96 mile an hour fastball as a collegiate baseball player and then is one of the best three point shooters and one of the best dunkers in the NBA. I mean these guys are just on a whole different level. But I'm thrilled that you wanted to say something about Pat Spencer because you started down the road of feel good stories and The Golden State Warriors. And I thought you were going to say something about Draymond Green or Jimmy Butler and couldn't wrap my head around how either of those guys could be associated with a feel good story.
- [21:20]
A
No, that's exactly right. But, but it really goes to point there's this great, you know, study and people talk about, you know, if, if, if you or I had put in and you have great hand eye coordination so maybe it would work out better for you. Had put in 10, 12 hours a day our entire life at a certain activity, a certain sport, I would at least still be very marginal at best and certainly not making the pros in anything. Whereas here's a guy who never really played serious advanced basketball but just as a crazy athletic specimen and crazily coordinated and is able to transfer his athleticism to the Pros. He's now 29 or 30 years old. He's, I don't think he's starting but he's getting serious time. He's not quite a rookie but he did play in the G league, the developmental league last year and is now actually playing in a contributor at a real level. And it just goes to show exactly what you said about certain people are different level athletes. I think I may or may not be able to take Pat Spencer in a math test. I don't know actually. But I better play to my advantages because if I put in 20 hours a day at basketball and slept four hours I would still not be going anyplace. So it is what it is.
- [22:31]
B
Yeah, I completely agree. If I devoted all my time to being great at any one sport and it probably would have been been tennis, I would have been a marginal country club tennis player and I would have been it while making myself less successful in every other facet of my life. So I agree. I think you and I have invested our time and energy in different pursuits in an intelligent way and I think we can take a pat on the back for recognizing our own limitations 100%.
- [22:58]
A
Again we're with David Pivnick today. David Pivnick on sports. What a pleasure to visit with you David. Thank you so much for joining us. We'll visit with you again shortly and we'll make this a regular segment. What a pleasure.
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B
Appreciate it.
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A
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B
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A
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