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Becker Private Equity & Business Podcast
Sports, Strategy, and the Value of Underdogs with David Pivnick of McGuireWoods LLP 8-1-26
00:15:41
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- [00:01]
A
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- [00:30]
B
This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. I'm joined today by David Pivnick. David is a brilliant lawyer. He's also a thinker on a broad range of subjects. We often get the chance to talk to David about sports versus business, even though he's literally valedictorian of his law school class and has built a brilliant practice around white collar and criminal defense litigation of sort of the highest level false claims cases and things like that. Just a really interesting, smart, smart person. David, let's talk sports today versus law, if that's okay with you.
- [01:09]
C
Always okay with me, Scott. And thanks for having me on.
- [01:12]
B
Thank you so much. And so David, let me ask you this question. What are the most interesting sports stories that you're watching currently? What's top of mind for you? Is it the LeBron moving teams? Is LeBron at the end of an era? Is it Patrick Kane who's also late in his, in his age for a hockey player coming to Chicago? What's interesting to you right now? Or is it none of the above? What, what's really, what are you following currently?
- [01:39]
C
Yeah, I mean, a couple things. So, I mean, look, the LeBron news was, was interesting to me. I, I, I will say in brief, I, I don't think it's going to work and I think they have a lot of guys who are not great on defense or not as good as people seem to think they're on defense and not enough balls to go around. So I think they've built a high profile team in Philadelphia, but I'm not convinced that it's going to work. But, but that's not what I'm focused on with the NBA. I'm much more intrigued by the Kawhi Leonard drama, both because it directly impacts the Raptors where I was, you know, very excited a few weeks ago thinking that Kawhi was, was coming home to Toronto and now, you know, the trade is stalled. I mean NBA's investigation is lingering, which I think is inexplicable. So I mean that is Sort of top of mind. Patrick Kane returning to Chicago is great and happy to discuss that. It's top of mind. And then the trade deadline in baseball is on Monday and the Blue Jays have had just a disastrously disappointing and terrible season and look to be sellers. So actively monitoring that and who might be shipped out as the deadline approaches.
- [02:46]
B
Well, let's do this. Let's get. Let's finish one subject really quickly because no one cares about Toronto sports other than yourself and your family. So give us 60 seconds on these two Toronto sports stories so we could get those out of the way and get to more interesting sports discussion. You know, Canada is not a 51st state. It's its own country. We agree with that 100%. Nor should it be a 51st state. I know it's a very highly controversial subject, though. Everybody knows Canada is a great country in its own country. So I joke about that. President Trump does. But. But ill humor. But, but give us two minutes on Toronto sports. We can get past that into real sports and into the United States, if that's okay.
- [03:30]
C
Yeah, I mean, I appreciate that. And we are talking about real sports with teams based in Toronto. And you did take a lot of gratuitous cheap shots against Toronto Sports for a guy who cheers for the Bears and the Bulls who haven't been relevant in 30 years, and the Cubs who've been relevant for one season out of the last 110. I'm not going to disparage the Blackhawks, but they've also been pretty bad for several years. So there's a lot of big talk coming from you, but I'll let that slide without more than that. So on the Kawhi thing, it's just interesting because the initial drama started in 2019 when he was a free agent leaving the Raptors to go to the Clippers. And he sort of forced his way there and apparently had made demands for marketing dollars and other ways other money to come in, millions of dollars to circumvent the salary cap, which is obviously frowned upon. He ended up in LA for a few years and apparently had a different contract negotiation where he did get a marketing agreement that was at least alleged to be improper and that the NBA is currently investigating it. So where it's interesting is, I mean, the Raptors are effectively a victim of this because they lost, you know, their best player at the time, Kawhi, coming off a champion who went to the Clippers. And, and with a contract that is alleged to have been improper or at least involves some improper inducement but now that they're looking to acquire him, this investigation is lingering and the NBA has basically said they're not going to exempt, you know, the team that's, that's employing him or Kawhi for potential punishment, which obviously makes it difficult to, for the Raptors to complete the trade. So he was sort of the centerpiece of, of this offseason strategy, and with him, I think the Raptors are a contender. Without him, I think they're a lower tier playoff team. And I think it's kind of ridiculous how long the NBA has allowed the investigation to linger and particularly that the, that the league isn't being somewhat more cognizant of the fact that, you know, the Raptors are now being harmed again by this investigation and the conduct after they were the initial victim. So that's my probably minute and a half on Kawhi on the Blue Jays. I mean, there's not much to say about this season. They can't hit. They don't have anybody who seemingly can hit except for Okamoto, our rookie from Japan. It's just kind of been disastrous. We've had a ton of injuries and a bunch of guys who are great hitters who forgot how to hit this season. So they're likely going to be selling and, you know, we've got a lot of expiring contracts that, you know, guys like Kevin Gossman, George Springer, Dalton Varsho, Shane Bieber, who have been, you know, very good at Major League baseball players for years and I think will help teams. But unfortunately, it's just sort of monitoring to see where they're going to end up and what prospects they can acquire to, to dream on for the future and hoping that they'll then go spend some money this offseason to try and run it back next year with a better outcome.
- [06:33]
B
And they do have a big budget, right? They're one of the teams that has put a big budget out there.
- [06:38]
C
Yeah, they, they spend a lot of money. They, they've been in the running for basically every major free agent the last few years. And I mean, just the guys they're, they're looking at potentially trading. You know, just those guys alone make over $70 million. And, and that's not including guys on the roster like, you know, Guerrero Jr. Makes 40 billion, cease makes 30 billion. So they spend a lot. It just hasn't worked out this year. Between injuries and underperformance, it's just kind of been a disastrous season. And so I think at this point, nine games under.500 near the end of July, it's time to. To sell and to see what we can bring in to build for the future. But it's very unfortunate for a year that I thought, you know, we had a good chance to go back to the World Series, and instead it's going to be not even making the playoffs. Pretty. Pretty big and unfortunate turn of events.
- [07:29]
B
Thank you. Let me ask you a question on the, you know, we. We mentioned LeBron, and when I think about LeBron, it makes me think about flopping to get called for fouls versus about great basketball. But is there more flopping in the NBA or the. Or the World cup soccer? Where do they flop more? I thought that was an incredible display of floppage in the World cup games. I mean, I've never seen anything like that. Is that, Is that right? Or what's the deal with that?
- [07:57]
C
It was an incredible display of. I think you summarized it perfectly. And I think, you know, to be fair to soccer players, and look, I was absolutely captivated by the World Cup. I watched way more soccer than is healthy or justifiable over the last two months and certainly watched more soccer in the last two months than I had over the prior four years. So I thoroughly enjoyed it. But the amount of flopping is staggering. And the only thing I can think of is that knowing the World cup is held every four years, some of the players are confused that it's like the Olympics and wanted to get into the diving formally, hoping there was a medal, but it was. It's worse than the NBA, I think. It is clearly a problem in the NBA as well. But the amount of flopping in soccer is stunning. And the number of times where it was just blatant and completely unwarranted, with little or absolutely no contact leading to the flop, really was staggering. Like it comes out of nowhere and just happens. And I think, you know, it's interesting when you have a game like Argentina versus Switzerland, which was a very competitive quarterfinal game and ultimately was decided based on the Swiss player just having an egregious flop, having a yellow card overturned, to getting, you know, for the other team, to getting yellow card for himself, which led to a red because he already had a yellow. And so Switzerland then had to play shorthanded and lost effectively because one of their guys had one of the more egregious flops in the tournament. So, you know, not. Not only was it painful and a little ridiculous to watch at times, although overall the quality of soccer was outstanding during the tournament, but the fact that one of the key Matchups turned on someone, you know, participating in such a ridiculous flop is. Is kind of incredible, really.
- [09:45]
B
Let me ask you this question about Major League Baseball payrolls and performance. So the Dodgers have the first or second highest payroll in the league. They've got the best record. Teams two and three, in terms of records are the Milwaukee brewers and Atlanta Braves. How does this happen that the brewers are literally spending almost $200 million less a year than the Dodgers and they're one or two games short of the Dodgers? How does that happen that one team spends literally several hundred million once he's a little more than 100 million, and the records are not that different? I mean, talk to me about that. And is in. How does that happen, really? How does a team with such a lower payroll compete so well? How do they do that?
- [10:34]
C
So, I mean, there's two things. One, just quickly on the Dodgers, they spend the most money. They are almost certainly going to win the World Series again this year. I think betting against them would be insane. And. And they are rightly the favorite. But one of the things that's interesting is, you know, a lot of their spending hasn't worked out. There are two big free agent acquisitions last year where Edwin Diaz, who was terrible at the start of the season and then hurt and has missed the rest of the last couple months. And. And he's the best closer in baseball in theory, but has been dreadful and hurt in parts this year. And Kyle Tucker was the biggest free agent sighting of the off season, and he has been absolutely atrocious this year. So part of it is the Dodgers spend a ton, and because their payroll is so high, they can still be in first place even when they have guys that have just unequivocally not worked out as intended. The brewers are sort of the opposite. I mean, I thought the brewers, and we actually commented on this, discussed this on a podcast a few months ago, that it was almost offensive that the brewers traded away, you know, Peralta, one of their best pitchers, who was only making 8 million bucks this year because they knew they weren't going to sign him after this year when he was their best pitcher. But what. What they've done is a couple things. One, they've identified quality young talent, and that talent has risen to the occasion. A guy like Jacob Bizaroski came out strong at the beginning of last year and had potential, but he's been absolutely dominant this year, and, you know, that makes a huge difference. But they've clearly also built a winning culture. The players respect the manager they play baseball the right way. They try hard at every game. They're not leaving outs on the base paths, they're giving easy at bats. And so they've allowed themselves to thrive in large part by building a well rounded team, spending their money well, having prospects come up and deliver. But a lot of it is, you know, every one of their players is performing. And in some ways, you know, last year for the Jays, they had a ton of guys who were, you know, either hadn't played well in a few years, like George Springer, or were unheralded like Ernie Clement and Addison Barger. And every one of those guys had a great year. The brewers seem to have built a culture where everybody comes in and plays their best and has consistently good seasons, sometimes seemingly beyond their. Their talent. And I think that goes to some of what we talk about in connection with, you know, management and leadership, where I think, you know, the general manager and the manager in Milwaukee deserve a great deal of credit for building a strong culture and putting their players in a, you know, in a. In a place to succeed and do things the right way. So they're certainly building different ways. I think it'll be interesting if the brewers cash in some of their chips and acquire some additional veteran help at the trade deadline to make a true run for it. They certainly can afford to do that, and frankly should. But it'll be interesting to see how it plays out.
- [13:39]
B
No 100%. And you got to, like, you almost want to cheer for these teams that are these lower payrolls and competing well. I mean, it really does make it an attractive story. And you're sort of. You can't help but want to cheer for those teams with payrolls that are 200 million, 300 million less and still competing at a great level. I mean, it does bring out that interest in the underdog, doesn't it?
- [14:03]
C
Unequivocally. I don't. I don't know how anybody could cheer for the Dodgers at this point, even including Dodgers fans. Like, it's not really fun the way they do it, and if it was my team spending double what everyone else did, I guess I'd get over it. But the underdog story and the way the brewers have built their roster is certainly much more appealing and a lot easier to cheer for.
- [14:25]
B
Right. It does remind you of how LeBron tried to assemble championship teams with guys and really an unfair way of doing it and does really harm his legacy. The Dodgers and LeBron seem to fall into that same category. Whereas, again, LeBron, also famous for flopping too.
- [14:42]
C
And LeBron's doing it again, going to Philadelphia. And I, I respect LeBron for taking a reduced contract to go do that and to try and win, not maximizing every dollar. But he's certainly not helping the narrative that he tries to make things as easy for him as as humanly possible compared to a guy like Jordan who just wanted to win no matter what.
- [15:05]
B
No 100%. I mean, Jordan was one of the great competitors of all time. Certainly in a class of top five basketball players, Jordan's right at the very top. And LeBron hopefully makes the top 10 list. David, I want to thank you as always for joining us on the Becker Private Equity the Becker Business podcast. We had a chance to talk about the Toronto teams, the Blue Jays, the Raptors, the Dodgers, LeBron, the World Cup, Patrick Kane really come back to Chicago. Didn't get much time on, but probably the most interesting part is talking about the brewers and the Braves compete so well with half the payrolls or less of the Dodgers. It really makes it interesting to cheer for that and fascinating, but I couldn't agree with you more. It's hard to cheer for the Dodgers like it used to be hard to cheer for the Yankees. They have so much resources done, it almost doesn't seem fair.
- [15:54]
C
Completely agree. But it'll be interesting and hopefully someone will pull an upset in a short playoff series and prove that it's still possible.
- [16:02]
B
Fantastic. David, thank you so much for joining us. You're the best. Appreciate it greatly. Thank you so much.
- [16:07]
C
Thanks for having me. Scott.
- [16:12]
A
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