You want a hat with that “howdy, ma’am” dip

Summary

Marketplace Morning Report: "You Want a Hat with That 'Howdy, Ma’am' Dip"
Release Date: March 19, 2025

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1. Private Equity Takes the Field in Major League Sports

David Brancaccio opens the episode by highlighting a significant shift in Major League Sports ownership. He states, "The San Francisco Giants are selling a 10% stake to a private equity firm," marking a trend where institutional investors are increasingly acquiring portions of sports teams (00:17). This move reflects a broader acceptance across all ten major U.S. sports leagues, allowing private equity firms to invest in beloved franchises, thus merging passion with profit.

2. Expert Insights on the Intersection of Sports and Private Equity

Henry Epp delves deeper into this phenomenon, explaining that traditionally, U.S. sports teams were owned by affluent individuals or families. However, as team valuations soar, owners are now opting to "sell off part of their stake in a team as a way for existing owners to capitalize on the rising valuations of their clubs" (00:40).

Tim Koba from High Point University adds, "Essentially, they're buying into people's passions" (01:07). He emphasizes that private equity firms recognize the immense revenue opportunities stemming from the unwavering loyalty of sports fans. Stefan Chymensky of the University of Michigan concurs, stating, "What they're trying to do is trying ways to extract more of the financial value of that happiness from the fans" (01:23).

3. Revenue Expansion through Fan Engagement

Private equity's involvement goes beyond mere ownership stakes. Henry Epp discusses strategies such as raising ticket prices and leveraging digital platforms to "find new ways to reach and charge fans through digital channels" (01:31). These approaches aim to maximize profitability by tapping into the deep-seated enthusiasm fans have for their teams.

4. Broader Economic Landscape and Market Updates

Before transitioning to another segment, David Brancaccio provides a snapshot of the current economic climate:

• Market Movements: S&P futures are up by 3.10%, while the 10-year interest rate slightly decreases to 4.29%.
• Federal Reserve: An upcoming briefing on interest rates, growth versus recession, and job statistics.
• Policy Changes: The Trump administration is considering revamping the boards of Fannie Mae and Freddie Mac, institutions pivotal in the U.S. mortgage market and under government control since the 2008 financial crisis.

These updates set the stage for understanding the broader financial environment influencing both sports investments and everyday economic activities.

5. Business Strategies Amidst Digital Transformation: Insights from the Texas Rodeo

Transitioning from high finance to grassroots commerce, David Brancaccio introduces an on-the-ground business segment from a Texas rodeo. He explores "tricks of the retail trade from the pros at the vast livestock show and rodeo," illustrating how traditional businesses adapt in an increasingly digital economy (03:11).

6. Navigating Retail Sales in a Live Rodeo Environment

Marketplace Reporter provides a vivid account of the NRT Center in Houston, where vendors like Joe Young are innovating their sales approaches. Joe offers specialized services such as realigning customers' hats, a unique selling point that differentiates his booth from competitors. He quips, "You want to have a little bit of dip in the front? It's kind of that howdy ma’am dip" (03:59), showcasing his personable sales technique.

Ginger Joe, another vendor, emphasizes the importance of "just in time inventory" to maintain her unique, handcrafted hats. She explains, "If I didn't go home and make hats in the morning and the night, we wouldn't have any more left" (05:57), highlighting the artisanal and exclusive nature of her products.

Shanna Saunders of Our Stuff showcases high-end, made-in-America leather furniture, blending craftsmanship with premium pricing. Her statement, "People don't realize this booth right here costs $28,000 to rent this space right here" (06:39), underscores the significant investment required to participate in such events and the corresponding expectations for sales performance.

7. The Value of Quality and Customer Investment

Visitors to the rodeo demonstrate a preference for quality and longevity over disposable merchandise. Families recount purchasing hats years earlier, considering them "an investment that holds up" (07:03). This sentiment is echoed in the durability and craftsmanship of the goods sold, contrasting sharply with the low-quality offerings commonly found in theme parks.

8. Looking Ahead: Pricing Strategies and Market Dynamics

David Brancaccio hints at upcoming discussions on how livestock markets set prices through auctions and teases a humorous segment on social media presence with, "You can decide if I look like a poser in that Stetson by checking out our videos on Instagram, TikTok and YouTube" (07:30).

Conclusion and Additional Resources

The episode concludes with promotional segments for Marketplace's expanded content offerings, including the Marketplace Newsletter and the Financially Inclined podcast, which delves into personal finance topics such as negotiating job offers and managing student loans.

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Notable Quotes:

• David Brancaccio [00:17]: "The San Francisco Giants are selling a 10% stake to a private equity firm."
• Tim Koba [01:07]: "Essentially, they're buying into people's passions."
• Stefan Chymensky [01:23]: "What they're trying to do is trying ways to extract more of the financial value of that happiness from the fans."
• Joe Young [03:59]: "You want to have a little bit of dip in the front? It's kind of that howdy ma’am dip."
• Ginger Joe [05:57]: "If I didn't go home and make hats in the morning and the night, we wouldn't have any more left."
• Shanna Saunders [06:39]: "People don't realize this booth right here costs $28,000 to rent this space right here."

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This episode of the Marketplace Morning Report offers a comprehensive look at the evolving dynamics of sports team ownership through private equity investments and provides insightful glimpses into traditional retail strategies thriving in live event settings like rodeos. Whether you're interested in high-stakes financial maneuvers or grassroots business tactics, this episode delivers valuable perspectives to kickstart your day.

Transcript

[MultiCare Representative]

For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn [e-mail].

[David Brancaccio]

Who'S on first? Maybe private equity I'm David Brancaccio. The San Francisco Giants are selling a 10% stake to a private equity firm. It's now all 10 major sport leagues in the US that allow those institutional firms to buy pieces of teams. Marketplace's Henry Epp has more on how watching pro games now is also like watching private equity in action.

[Henry Epp]

Historically, major sports teams in the US have each been owned by one really rich person or family, and the only way for them to cash in on their investment has been to sell the whole team. But as the value of sports teams has risen, Tim Koba at High Point University says owners have realized that selling off part of their stake in a team is a way for existing owners to capitalize on the rising valuations of their clubs. And right now, private equity firms are willing buyers.

[Tim Koba]

Essentially, they're buying into people's passions.

[Henry Epp]

Stefan Chymensky is at the University of Michigan. Because fans are so passionate about their teams, they're willing to sink a lot of money into watching and supporting them. And private equity, Sheminsky says, sees a revenue opportunity.

[Tim Koba]

What they're trying to do is trying ways to extract more of the financial value of that happiness from the fans.

[Henry Epp]

By raising ticket prices, he says. We're finding new ways to reach and charge fans through digital channels. I'm Henry Epp for Marketplace.

[David Brancaccio]

The private Equity Co. Buying 10% of the Giants is 6th street, which has far flung investments, but its sports has previously bought into the San Antonio spurs and it became the first institutional firm to be majority owner of a team. Women's soccer's Bay FC numbers S&P futures are up 3.10percent now the 10 year interest rate is at 4.29%, slightly lower than this time yesterday with the Federal Reserve briefing on interest rates, growth versus recession and jobs coming about seven hours from now. We're also covering the Trump administration revamping the boards of the two firms that back about half the mortgages in America, Fannie Mae and Freddie Mac. These have been under government control since the great financial crisis, but that could eventually change. Marketplace Morning Report podcast We'll have that later on.

[Marketplace Newsletter Host]

If you want to be savvy about the economy, the Marketplace newsletter is just what you need. Every Friday you'll get explainers and analysis that make sense of everything from the moving markets to grocery prices. No jargo, no hype, just smart takes delivered to your inbox. Sign up [e-mail] subscribe.

[David Brancaccio]

The boss sent me to the rodeo in search of business stories. It's part of our ongoing series on what we can learn from humans doing commerce face to face in such an otherwise digital economy. Today, tricks of the retail trade from the pros at the vast livestock show and rodeo going on now in Texas.

[Marketplace Reporter]

Here at the NRT center in Houston, live bovines and sure manure. A T shirt for sale depicts five cows with the words Smells of money. The retail selling floor next to the livestock judging pasture is heavy gauge cattle handling hardware, 900 degree home pizza ovens and western hats of felt from pelt. Joe Young is selling hats and realigning the ones customers bring by.

[Joe Young]

You want to have a little bit of dip in the front? It's kind of that howdy ma'am dip. If it's flat it can pick it up and just blow it right off the top of your head.

[Marketplace Reporter]

I came to Joe's booth called Heads or Tails out of Haskell, Texas, equipped with my own wool Stetson, which never did come with an owner's manual.

[Joe Young]

If you just were to throw it in the back seat, it's not going to stay shaped very well. So if you set it on your dash or in your passenger seat upside down, that would be the best way of keeping it so so it holds its shape.

[Marketplace Reporter]

I don't know his sales, but a rival vendor lets on that 300 hats a day fly off the shelves over there with not even a sales pitch here. The shaping is what they call in retail a loss leader.

[Joe Young]

It gets busy. All eight of these steamers will just be blowing steam all day on a weekend. Especially pretty Marlboro man looking right there.

[Marketplace Reporter]

Yeah, no one has ever mistaken me for the Marlboro Man.

[David Brancaccio]

They might have mistaken you for the marble rang.

[Joe Young]

We give it a shot.

[Marketplace Reporter]

Now the key hat trick of the trade, the x factor. A 10x hat is plenty serviceable, but 100x should be better armor against the elements.

[Joe Young]

So like a 10x would probably be around about a 10% beaver and 100x hat would be pure beaver.

[Marketplace Reporter]

A thousand x western hat costs thousands and might have Ming or chinchilla in the mix with diamond accents less for trail riding and more for picking up vocalist of the year at the CMA Awards. I am more of a 10x man.

[Joe Young]

Still a good quality hat. It's a $400 hat. They hold their shape well. I just Wouldn't go out in a.

[David Brancaccio]

Torrential rainstorm for a hat that's more.

[Marketplace Reporter]

I don't know, vegan. There's Ginger Joe's booth, family jewels of Texas. She's got hats woven mainly of palm, all customized, none identical.

[Ginger Joe]

Turquoise and spiny, oyster and coral. We put sterling silver conchos on them.

[Marketplace Reporter]

Ginger Joe's trick of the trade is about the efficiency of what business geeks call just in time inventory.

[Ginger Joe]

I mean, if I didn't go home and make hats in the morning and the night, we wouldn't have any more left.

[Marketplace Reporter]

Back to cowhide. At a business called Our Stuff, Shanna Saunders, proprietor. She's selling easy chairs and sofas made in Levelland, Texas.

[Shanna Saunders]

That one's a leather made out of Tiffany blue with a cowhide on the side. It's kind of got that old San Francisco gunslinger day kind of look.

[Marketplace Reporter]

Rodeo priced at $3,500, which seems a steal for real leather America made. But do people actually buy big ticket here versus just stopping at one of the few places to sit down on the selling floor? Shanna answers this way.

[Shanna Saunders]

People don't realize this booth right here costs $28,000 to rent this space right here.

[Marketplace Reporter]

She's smiling, which says to me her revenue by week two here is well past her break even.

[Shanna Saunders]

People come in and they'll go home and measure. Sometimes the sale comes afterwards, but some people are drunk and put their credit card out.

[Marketplace Reporter]

I guess you can get beer right over yonder.

[Shanna Saunders]

I mean, the alcohol does help.

[Marketplace Reporter]

What I'm seeing is not the typical theme park style throwaway dreck. Several families I meet here tell me they had bought their spiffy headgear at the rodeo years earlier, suggesting the merch is an investment that holds up. This young fellow, Daniel Clark is here with his mom.

[Ginger Joe]

It has red feathers, two on the sides of the hat, and it kind of looks like a taco, but a bit smaller. Yeah, it didn't fall apart because it's good quality.

[David Brancaccio]

Later this week here what lambs and goats tell us about setting prices through an auction. And you can decide if I look like a poser in that Stetson by checking out our videos on Instagram, TikTok and YouTube. Our handle is MarketplaceAPM. I'm David Brancaccia with the Marketplace Morning Report from APM, American Public Media.

[Janelie Espinal]

Consumer confidence had its sharpest monthly decline since 2021, which means we're all in our feels about money. And while uncertainty is the only constant these days, it's also a great reason to get serious about understanding personal finance. I'm Janelie Espinal, host of Financially Inclined, a podcast from Marketplace that makes learning about money simple. Learn about practical skills like negotiating job offers, dealing with money and friendship and love, entrepreneurship and student loans. Get serious about your money and build a life you've always dreamed of. Listen to Financially Inclined wherever you get your podcasts.