The Sporting Class: How the NBA's Masters of the Universe Box Each Other Out

Summary

Podcast Summary: Pablo Torre Finds Out

Episode: "The Sporting Class: How the NBA's Masters of the Universe Box Each Other Out"

Date: April 3, 2025
Host: Pablo Torre
Guests: John Skipper (former ESPN President), David Samson (former MLB executive)

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Episode Overview

This episode explores "The Sporting Class," focusing on the hidden world of NBA franchise ownership—how deals are structured, power broker egos operate behind the scenes, and the ongoing clashes among the league's wealthiest and most influential stakeholders. Through the lens of recent major transactions (Minnesota Timberwolves, Boston Celtics) and the curious governance quirks of owners like James Dolan of the Knicks, Pablo and his guests demystify both the business and the soap opera elements that define NBA power politics.

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Key Discussion Points & Insights

1. Setting the Table: Sports Ownership as Soap Opera

• The episode opens with a humorous, meandering conversation about retro medicines and April Fool's pranks in sports coverage, highlighting the real personalities of the guests ([00:38]-[06:30]).
• Pablo notes the need for hosts to fact-check and "herd cats" when big personalities clash:

  “I am glad to be reminded occasionally why I am needed in the host chair for this show. Not merely to fact check David Sampson, but also to bring us together under the guise of a sports business show...” – Pablo ([06:54])

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2. Timberwolves Saga: Anatomy of a Messy Takeover

• Background: Glenn Taylor sells the Timberwolves for $1.5B to Alex Rodriguez and Mark Lore after a protracted, controversial, step-by-step acquisition process ([07:30]-[13:07]).
• Legal Wrangling: The deal was complicated by arbitration, disputes about deadlines, and NBA luxury tax implications.

  “Glenn Taylor had to do the math... Is it possible that I could wrest control back into my iron grip or am I better not risking... a load of money that the T Wolves would have to pay?” – Pablo ([12:31])

• Procedural Note: The NBA’s final approval (other owners’ vote) is still required to finalize the sale.
• David clarifies the technical process:

  “You cannot finish a transaction prior to approval by the other owners... Now what Alex and Mark are doing is their vote hunting.” ([08:12])

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3. Governors, Control, and Step Transactions: NBA & Celtics Focus

• Governance Terms: "Governor" = official, league-recognized voting control person. Partnership deals often separate who "owns" from who "controls" ([09:13]-[11:11]).
• Boston Celtics Deal: Wick Grosbeck (current governor) sells to William “Bill” Chisholm via a rising valuation, multi-year, step-based buyout (starting at $6.1B, rising to $7.3B) ([14:07]-[16:18]).

  “The Celtics valuation continues to increase. Therefore, helping Wick and his family realize value over years, but also helping the NBA get a number that is really an outstanding number tomorrow, they get to have that on the books.” – David ([15:11])

• Ego & Privilege: Discussion on why outgoing owners love to draw out handovers—ego, glory, and “holding the trophy” trump simple profit.

  “Who gets to literally hold the trophy?... Who gets Gollum’s ring before everybody else?... Measuring among people who cannot necessarily buy the thing they want the most.” – Pablo ([16:28])

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4. Private Equity Invades the NBA: Rules, Risks & Red Tape

• Rule Limits: NBA allows private equity funds to own up to 20% of a team, but never more than the lead owner’s (control person’s) stake ([19:40]-[21:02]).
• 6th Street and the Celtics: Private equity (6th Street Partners) is slated to invest $1B into the Celtics deal, raising concerns about whether rules will soon need to change for these ballooning valuations ([20:57]-[22:07]).

  “The problem is these rules are going to get broken soon as these numbers keep going higher.” – David ([21:42])

• What Private Equity Wants:
  • John: "They’re not immune from the sexiness that owning a team brings." ([28:33])
  • David: “Private equity, I don’t think views it that way, actually... I don’t think that it all of a sudden means they’ll be despondent beyond repair if the Celtics go, you know, 15 and 55.” ([46:02]–[46:25])
• Future Projections:

  “What year would you assume we’ll see a team be sold for $10 billion?” – John ([22:26])

  • Yankees, Cowboys, Knicks, and Dodgers cited as prime candidates.

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5. Knicks & James Dolan: The Outsider Governor

• Dolan's Approach: Jim Dolan (Knicks' owner) reportedly skips Owners’ Meetings, sending a legal proxy who routinely votes against league positions ([33:42]-[36:17]).

  “That owner’s representative... has been instructed to... vote against all of the stuff that everybody else wants to do.” – Pablo ([34:13])

  • Referred to as “an annoyance,” “the dissenter,” and compared to George Steinbrenner’s old tactics: “They’d have to announce it as 29 to 1. Or when Bud got really angry, he would just have the Yankees abstain... but it means nothing.” – David ([34:44])
• Core Grievances:
  • Dolan dislikes league revenue sharing (seeing it as “welfare” for small-market teams).
  • Opposes NBA’s moves to nationalize media deals (as opposed to lucrative local TV deals via MSG Networks).
  • Recently resigned from finance and media committees.

  “When he says you guys are overspending in the Central League office, it comes from that place... revenue sharing... is offensive to the very essence of who James Dolan seems to be.” – Pablo ([39:41])

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6. Clash of Titans: Petty Politics, Egos, and the Future

• Meetings = Soap Operas: Owners angle for seats, avoid rivals, check team performance on devices, and bring unnecessary tension over personal egos ([44:59]-[45:54]).

  “One of the great things is... there’s assigned seats everywhere. They will not put two owners next to each other who are playing because owners meetings happen during the season...” – David ([45:03])

• What Private Equity “Wishes” For:

  “If they're only given one wish, they will wish for the valuation to go up. They're given two wishes: the valuation to go up and that they win a championship.” – John ([46:38])

• Reality Check: Ultimately, control is "about who holds the trophy first," but financial considerations always loom large.

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Notable Quotes & Memorable Moments

• On the Value of Ownership:

  “It is staggering that this is the product that does so far only go up.” – Pablo ([26:30])

• On Dolan’s Isolation:

  “He sends an emissary in his place... instructed to... vote against all the stuff that everybody else wants to do.” – Pablo ([34:13])

• On Egos in the NBA Boardroom:

  “Measuring among people who cannot necessarily buy the thing they want the most.” – Pablo ([16:28])

• On the Old Garden:

  “The only thing we could see across was all the pot smoke into the empty blue seats.” – David ([42:06]) “Now it should have been called the blue smoky seats.” – John ([43:12])

• On Private Equity’s Ultimate Loyalties:

  “Players are expiring assets.” – David ([47:18]) “Well, romantic, that’s just the human species, right? We’re all expiring assets.” – John ([47:21])

• Closing Riff:

  “It’s Pablo Torre and the Expiring Assets, coming to your club now.” – John ([47:38])

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Timestamps for Key Segments

• Intro & Banter: [00:38]–[06:30]
• Timberwolves Ownership Saga: [07:30]–[13:07]
• NBA Governance & Control: [09:13]–[11:11]
• Boston Celtics Step Transaction Explained: [14:07]–[17:29]
• Private Equity’s Push (NBA Rules & Realities): [19:40]–[22:07], [24:41]–[28:39]
• Knicks & Dolan’s Dissent: [33:42]–[41:00]
• Owner Meetings as Petty Soap Opera: [44:59]–[45:54]
• Private Equity & Future of Ownership: [46:02]–[47:18]
• Philosophical Closing & Show Title Gag: [47:18]–[47:54]

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Summary Takeaways

Pablo and his guests offer an insider’s look at how NBA team ownership operates less like cool-headed business and more like a high-stakes, ego-driven country club. The rising role of private equity and step transactions is changing both the economics and the culture, threatening to further detach owners from “trophy-holding” glory in favor of pure profit and, potentially, increased volatility. Yet for all the complexity, the show's tone—irreverent, sharp, and rich with personal history—reminds listeners that sports business is as much about “who gets to hold the ring” as it is about the bottom line.

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For full context, listen to the episode for a whirlwind tour through the business, politics, and pettiness ruling the modern NBA.

Transcript

[A]

Welcome to Pablo Torre finds out I am Pablo Torre. Today's episode is brought to you by DraftKings. DraftKings. The Crown is yours. And today we're gonna find out what this sound is.

[B]

It's Pablo Torre and the Expiring assets coming to your club now, right after this ad.

[A]

You're listening to Giraffe Kings Network.

[B]

How you feel, David?

[C]

I feel okay, John. Thank you.

[A]

That's it? Just a flat.

[C]

So I'm happy to be. I'm happy. I'm not. Antibiotics. I just live in a petri dish.

[A]

David Sampson has a cold, John. As Gay Talis once wrote.

[B]

Yes.

[A]

And all must bend to his. To his will.

[C]

Though it's not the coldest.

[B]

Guys, I believe Frank Sinatra was quite grumpy about it. And our friend David is not grumpy.

[A]

Oh, there's a smile. There is a smile.

[C]

No, I'm not grumpy. I have a. I have a golf ball in my throat. I'm not grumpy. And I don't like being swabbed. I don't know if you've ever been swabbed. It is extremely unpleasant, uncomfortable, and requires a pre listerine situation. I just don't see it.

[B]

So you mean swabbed on your throat?

[C]

On your tonsil?

[B]

Oh, yeah. When I was a kid, we would go to Dr. Jacob Leonard, and Dr. Jacob Leonard could cure your sore throat immediately. I do not think it's legal anymore. He would put what was called paregoric, which is an opiate, on a swab and swab your throat. And you'd be like, damn, did he take. I'm well, I'm well.

[A]

Did your country doctor take this out of a suitcase that he carried around?

[B]

I do not know. I believe paregoric was legal at the time. And in fact, it was not unusual.

[A]

Okay, I've found paraguaric.

[B]

It was legal at one point. And I used to. You'd get it is. My mom would get it. Put it on my thumb when I was a little tiny baby, so I'd go to sleep.

[A]

So paregoric, for those not familiar, as I am unfamiliar, a mixture of opium powder and ethanol.

[B]

You put that on your throat, man, you feel great.

[C]

Dr. Jacob Leonard Sackler, family practitioner.

[A]

I, I, my, my, my Google first hit on paregoric legal question mark brings me to the North Carolina General Assembly's website. And here we, here we learned together that paregoric may be dispensed at retail as permitted or administrative regulation without a prescription, only by a registered pharmacist. And no other person, agency or employee may dispense paregoric usp, even if under the direct supervision of a pharmacist. So, you know, feels like.

[C]

Explains almost everything.

[A]

Feels like an active investigation. Continues.

[B]

Well, this is a long time ago.

[A]

Yeah, yeah, yeah, yeah.

[B]

I haven't sucked my thumb since the 50s.

[C]

I sucked my thumb last night, actually, in the fetal position.

[A]

Relatedly, paregoric is used to relieve diarrhea.

[B]

There you go. You get your. Get your throat swabbed. It feels great. And get rid of your diarrhea. So I'm surprised to find that the topic of torpedo bats is not on the agenda today.

[A]

Oh, David, I can only imagine the torpedo bat sized lump in his throat upon learning what he'd not get to discuss with us.

[C]

Well, I'm totally fine. There's plenty of other outlets at Meadowlark Media, thanks to the great company you all have. There's plenty of places. We did it on Dan's show. Did it on. Nothing personal. I wouldn't expect to discuss torpedoes with you two, but I'd be more than happy to. I did get caught this morning, I should say. And I was trying to do many things at once while driving. It's a terrible idea, but there was a segment where it was said by two very reputable journalists for a worldwide leader of sports network. And the segment was the torpedo bats have been banned by mlb. And so I felt I needed to pull over knowing I had a time issue with this show because if that's true, that is immediate news, like breaking news immediately, and it turns out not to be true.

[A]

Yeah, what David is referring to there, which I just realized now, is that he was probably scanning his timeline, came across the pti, April Fool's, a block in which they declared that the torpedo bats were banned. A thing they do on April Fools.

[C]

Pablo. I pulled over driving back from swab doctor because I thought that I would have to get prepared to do an immediate show because they are absolutely worthy. They're not going to spread misinformation. These are your guys, Tony and Michael. And. And as I was preparing the show in my head and getting ready to call Coca, I called my. My friend at the commissioner's office and I said, hey, I'm about to go live on this.

[A]

You can't. I.

[B]

By the way, you, you, you. If there's anybody on April 1st you should be careful of on the worldwide leader, it would be Tony and Mike.

[A]

They've only been doing it for 20 years. But you know, John, the more that David Sampson being Alive is a prerequisite for many of the things I want to accomplish in my life. The more I worry that I've hitched my wagon in any way to a guy who pulled his car over because he couldn't distinguish between April Fool's joke in reality.

[C]

So you're happy you hit your wagon? Because I'm not going to. I'm not going to text and drive and I'm not going to. I want to focus.

[A]

I would just like my wagon to not have to take pit stops because the wagon is driven by a total fool.

[C]

Thank you. That's great.

[A]

Hope you're feeling better.

[B]

Get some paragoric on that throat. I'm telling you, you'll feel great.

[C]

Happy April Fool's Day, gentlemen.

[A]

I am glad to be reminded occasionally why I am needed in in the host chair for this show. Not merely to fact check David Sampson, but also to bring us together under the guise of a sports business show that has actual imminent matters of sports business to discuss in the NBA. John, a lot is happening right now when it comes to Country Club. That is these 30 governors, a term we will unpack here today on the show. But I want to start with something that David and I have been talking about in our respective shows. The Minnesota Timberwolves. That ownership saga has drawn to a close. Finally, officially, Glenn Taylor, the longtime owner of the Timberwolves, the governor, excuse me, of the Timberwolves, a guy who has owned that team for three decades, one of the longest tenured owners in the league, has finally surrendered the team after a protracted legal battle which I covered on Pablo Torre, finds out to a degree that is arguably manic. But I will summarize it merely to say $1.5 billion, guys, is what Alex Rodriguez and Mark Lori paid for the t Wolves in 2021 in a step transaction that went haywire. Too long to summarize here, but that is the price for a team now valued at what? David, what's the last back of the envelope estimate?

[C]

Well, I would say two and a half to three, but I would also tell you it's not over. Mark and a rod have to get approved by by basketball. That's so you cannot finish a transaction prior to approval by the other owners. So there'll be a vote and I know that Adam Silver would like to get this vote done as quickly as possible. So you can do it in a regularly scheduled quarterly owners meeting or. Or by unanimous consent, you can add an owner's meeting and then with further consent, you can even do it by phone and they'll try to get that approval done. And now what Alex and Mark are doing is their vote hunting. And I do not think they will have an issue at all getting unanimous approval.

[A]

Right. A fair procedural clarification. And I. I also want to start saying Mark and Alex to flip flop the proper nouns because Mark Laurie was. Will be the governor. John, the guy who goes to the meetings. And the guy who goes to the meetings is very different, it turns out, behind the scenes from the guy who doesn't go to the meetings.

[B]

Yeah, I'm trying to figure out. Explain to me, David, what it means to be. Is this a nomenclature that you use in all the leagues is that you are a governor?

[C]

Well, that's. If there's a board of governors, baseball doesn't have that. They've control people. And so there's one control person. But I would say that Alex Rodriguez will be at every owner's meeting. It's not set with just one person. Like John Henry and Tom Werner own the Red Sox, but John Henry's the control person. But both go to meetings. But what Rob Manford does and. And you can call Adam Silver and see if he does this. Rob will do one per club meetings where you only meet with the control people, no substitutions allowed. So that one only Mark would be able to go to and not Alex. If Adam is extremely strict on that issue.

[B]

But is the. The governor is the voting member. So if there are league issues, is that the sole prerogative? And the sole thing that a governor gets to do is he basically is the voter for that club.

[C]

Well, you actually can bind that club when it comes to league matters. And then if you really want to go into detail, we can talk about partnership agreements where the agreement between Alex and Mark most assuredly discusses what rights the governor has. When the governor has to go back to Alex and talk about what Mark would vote for to bind the Minnesota Timberwolves. That's part of a partnership agreement where they discuss and figure out their own governance. But in terms of the NBA, when votes are taken, or MLB or the NFL, it's one person voting one time per club for every vote for to approve a cba, to approve a broadcast deal, to approve a rule change, you name it. When the vote happens, one person per club gets to make that vote.

[A]

Now, it is worth reiterating though, that Glenn Taylor is a bit of a legendary and infamous figure in the NBA. And a lot of my reporting into this did establish that the guy, when it came to trying to pry away his Team held it with a grip that can only be described as, yeah, ironclad. I mean the guy bought the team, the t wolves for $88 million in 1994. John $88 million. Then again 2021 agreed to this three part sale with these tranches which were then delivered but then disputed whether they came in on time. And this was a big crux of what had to go eventually after a dispute that was made public on my show in large part had to go to arbitration and arbitration happened. And there's a whole backstory there that I cannot wait to fully report. But all you got to know for now is that February there's arbitration in Minneapolis. It is a three judge panel. Two judges rule in favor of Mark and Alex. The one votes in favor of Glenn. And so now we're at this point where I am told reliably that one factor that determined whether Glenn Taylor was going to appeal or not appeal that arbitration ruling was the fact that the NBA's tax bill, the luxury tax bill that you got to pay as an owner of the team for your roster is due at the end of June. And so Glenn Taylor had to do the math. If I do a hail Mary here to appeal, is it possible that I could wrest control back into my iron grip or am I better not risking what is it seems according to last check A? And again, I can't define second apron right now because I frankly don't understand the fine details, the finer points of it, but a load of money that the T Wolves would have to pay. Glenn Taylor's like Mark and Alex. Guess what, Congratulations also you get that.

[C]

Now he didn't appeal because he had no chance and he might as well take the money to lawyers to do the appeal and burn it or give it to charity or put it into his printing company. But to appeal an arbitration decision, you're going to lose.

[A]

But the NBA right now we are going to zoom out here, David, if that's okay with you, because it's not just the Timberwolves, the Boston Celtics. Can you guys update me on what the hell is happening with the other, by the way, step transaction, which is to say payments in phases, right? The NBA, John had said, or at least the belief was the NBA would never do a step transaction because of how disastrous the T Wolves sale has been. This is now years just being resolved or almost resolved now. But the Celtics not coincidentally have also orchestrated something that's like this, but not exactly like this. And you have a team led by again a governor who's like, I don't want to leave just yet.

[B]

Which is amusing being a governor. That much fun that you'd want to sell your club over three years as opposed to right away. I mean, is the step transaction intended to do what? I mean, why have a step transaction?

[C]

It's intended to keep the person in charge in charge. So if you win a title, you get handed the trophy by the commissioner. So that is what the control person gets to do. And Wick, as the owner of the Celtics, he wasn't ready to leave while his family wanted to sell. He said, I still want to run this thing and I like the glory of having the second best team in the conference. Let's see if we can defend our championship. So he didn't want to really go anywhere. And Mr. Chisholm said, that's fine by me. I'm happy to let you run the team for three years and then I'm guaranteed to take it after that.

[B]

And the step transaction here is fairly significant. Right. The first payment is proportionally based on a valuation of 6.1 and the third is based upon a valuation of 7.3. Do I have that right?

[C]

So that's what's being reported. And the interesting part is that's the biggest difference between the T Wolves deal and the Celtics deal. The T Wolves had the same valuation each step of the way, whereas the Celtics valuation continues to increase. Therefore, helping Wick and his family realize value over years, but also helping the NBA get a number that is really an outstanding number tomorrow, they get to have that on the books.

[B]

Today that's a fairly significant increase on the valuation of a team over two years, about a 20% suggesting that the team will be worth 20% more than the. Is 6:1 the most ever if it happens? I realize there's some, some obstacles right now, but if it happened, is 6.1 the most ever paid for a team?

[A]

The most in any sport, actually.

[C]

Right. Yeah, 6.1.

[B]

And internationally, more than a soccer team.

[A]

We'll check that.

[C]

Certainly the case the most by a hair. The commanders were in the lead. And it's not a coincidence, quite obviously. The commanders, I believe Pablo, were 6.05.

[A]

Yep.

[C]

And so the Celtics initial deal was 6.1. Like oh, we examined the numbers and we did a stress test and we have 6.1. Give me a break.

[A]

So, but this is why I love sports business. Right. So just to recap here briefly. So William Chisholm is the new owner of the team. The would be governor of the team. The governor, as David said, It is about, like, who is first? Who is the guy who gets to literally hold the trophy? Like, who gets to hold the thing? Who gets Gollum's ring before everybody else? I mean, this is what we're talking about. Always measuring egos, always measuring among people who cannot necessarily buy the thing they want the most.

[B]

You got to give credit to the guy who gets to. Let's just assume it's a third, a third, a third. I don't know that it is, but if it's a third, a third, a third, I like being the guy who gets to hold $2 billion of somebody else's money. And I still get to hold the trophy the next year. In fact, the year after that, I could hold four and a half billion dollars of somebody else's money and still get the trophy. Does he get. How about year three? Does he get to hold the trophy the third year?

[C]

I promise you that they will close the transaction at the end of a season, not in the middle of it, in order to see whether or not the Celtics do well. But don't think that Chisholm won't be involved in a step transaction. And we saw it with the Timberwolves and Mark and Alex and their involvement. Chisholm is not sitting there, you know, on. Pablo Torre finds out, trying to figure out what's going on inside the Celtics organization. He will be a very involved part of the governance of the team. Contracts, extensions, TV deals, tax payments, all of those things. It's not like he just hands him $4 billion, 2 billion, 4. And doesn't have any say whatsoever. That's not the case.

[B]

It's. It's good to hear that $4 billion still has value in the marketplace and will allow you to understand what trades your team may be making. What's the threshold? If I was a partial owner?

[A]

You're allowed to smell the trophy. You can't touch it.

[B]

You can just get a bit. He gets to touch it.

[C]

I bet he's so great that you asked that, because in these transactions, and I have them behind me here, and they're this thick, so I'm holding my hands like eight inches apart, if memory serves. And these transactions keep moving specific details about what a current seller can do during the period both prior to approval, during the step, how it works, and you have to choose a number, and it's sort of like a CEO of a company. Hey, you can do $1 million deal and don't bother me, but if it's going to be a $10 million deal, you have to Go to the board. So there's certain transactions prices that you have to go to Chisholm and I'm sure that exists in this deal. So for example, it could be you can not add anyone to the roster without speaking to Chisholm or it may have been negotiated. You can't sign anyone to more than a two year deal without going to Chisholm. It goes on and on and on.

[B]

Isn't Chisholm like a character on Yellowstone? William Chisholm? That just sounds like the next cowboy to walk into the attack room.

[A]

If the characters in Yellowstone loved private equity, I think there might be something there. Okay, so, but part of this story though is by the way, so just again to connect all of the dots here, T. Wolves sold for 1.5. Celtics now 6.1 and rising. Right, so we are, we are in rarefied and increasingly dizzying air when it comes to just the speed at which these transactions are happening, which brings private equity to the table. And we've been talking about this on the show forever now, it feels like. But, but David, I just want to read out the NBA standard for how much private equity you can bring in. I'm just going to read this off of the old Google Doc here. A private equity fund can have the lesser of 20% or below the percentage held by the control owner who must hold a 15% minimum stake. So a max of 20%, but you still have to be below the percentage owned by the majority owner who has the control. Who is the governor? Not always the same thing, but just to clarify, the guy in charge. And this has been a snag, it turns out, in this Celtics step transaction.

[C]

So this is a major issue that all the leagues have as these prices go and continue to rise at the level that they're getting to. Part of the Celtics transaction involves another private equity firm called 6th Street Partners. And they've circled the billion dollars. That means that they're willing to put in a billion dollars into the Celtics deal because when a team is worth 7.3, you're not spending 7.3, you're spending 7.3 minus the debt that is associated with that team. So just pretend they've got half a billion dollars in debt. That means a buyer has to come up with approximately. Just call it $6.8 billion. So you go out and you put a group together, a syndicate, and if you go to a private equity firm and they agree to put a billion dollars in, the NBA rule says that the control person, the governor, William Chisholm, has to put in a billion dollars, at least of his own money into the deal. That's the rule. The problem is these rules are going to get broken soon as these numbers keep going higher. So Adam Silver is going to have to figure out what exceptions he's going to be willing to make.

[B]

The ultimately, though, the relative to sports business, what this continues to mean is that the valuation of clubs is going up, up and up. And just for fun, what year would you assume we'll see a team be sold for $10 billion?

[C]

Well, it depends what team. I would tell you that if the Yankees or the Cowboys decided to sell now, or if there were a death in the family or something that caused a sale or a divorce like happened with the Dodgers. I think it just depends on which team because you're conveniently forgetting that the Mavericks just sold for a value of only 1.75, I believe. And that was a pretty recent transaction. So the Celtics are truly in rarefied air, not just in number, obviously, but also as an asset. Pablo I may have the number wrong, but I think I'm close.

[A]

So Cubans sold 72.3% of the Mavericks to the Adelson family for 3.5 in December 2023. If you're to break that down into its component parts, I don't know what the Mavericks alone would be. I assume there's other stuff in there Coco will help me figure out, because buildings and land, of course, are always in these deals. They get sort of like flattened into a basic purchase price. But you were under. You were under is what I think it's safe to say.

[C]

Well, it's the same as the Dolphins, though. When we, when we assigned a number to the Dolphins, Steve Ross got private equity investment. But it wasn't just the Dolphins. They got, I was going to say Landshark. They got Hard Rock Stadium. They also got the Grand Prix, the Miami Open and other things that Steve Ross owns. So what they do is they can pin a value to the team if they'd like. And that may have been the case in the Mavericks transaction.

[A]

All of which is to say that when it comes to how to get those prices up, John, Private equity, they're thirsting to get those prices up. And so what David's referring to in terms of what Commissioner Adam Silver could do in the reporting of this, I'm reading that there is an option to seek a waiver potentially from the league office. And the implication there is that team owners would be unwilling to reject a deal that's this high again, a new high, beating the commander's deal by 0.05 billion. They would not want to avoid the chance to reset the market like that. And so what's. Why are we so worried about private equity? And so my question now is, why are we so worried about private equity? Guys, what's. What's what. What are the concerns here from your, from your points of view?

[C]

I have no worry, except that private equity generally requires a rate of return on their investment. And as these numbers get higher and higher, it's hard for me to imagine what the return will be. But I'm always surprised because franchises keep going up in value, most of them, some of them, the Celtics, in theory, if they're worth 7.3 in three years, will they be worth 10 in six years? I don't think I'd argue against that, John, but at some point you, I think, reach the point of no return, at which point the private equity firms don't get the return they want and then they stop investing at those valuations. But I don't know that that is happening anytime soon.

[B]

Doesn't feel like it is. I agree with you that of course, it depends what team, but I would assume if the Yankees were sold, you would be close in a step transaction to $10 billion at some point. Yes, I would think the same thing's true of the Knicks at some point and the Dodgers and the Cowboys. So I don't actually see for the major franchises in the major leagues in this country, I don't see. Has there been anybody sold for less money than anybody paid in the last 30 or 40 years? Has anybody lost money on the team?

[A]

That is a really good question.

[B]

I don't think so.

[C]

Two different questions, though. Have they lost money or have they sold for more Back in the day where you didn't get the huge increases, let's say you bought a team for 10 million and sold it for 90 and held it for 10 years. In theory, you could have had 80 million in operating losses. We'd have to go back and actually find that out. But if so, it's very, very few where you don't get a good investment return on owning a sports team.

[A]

Yeah, I'm not going to suggest that a sports team has the same growth curve as like a meme coin, but it is staggering that, like, this is the product that does so far only go up. And so we tempt fate, I guess, at every turn. I mean, one of the things about private equity, by the way, just to be the cynic here, is that it is one thing when the rich guy who buys the team really, really, really wants to hold the trophy. He wants the trophy, that's one thing. But when you have the money manager whose goal is not the trophy, but to maximize profit, shareholder return, that's where I'm like, that is what I believe the NBA's rule is meant to guard against that conflict between profit and again, the team actually winning.

[C]

I think you have to add though that index funds only go up too if you have a long investment horizon. And one of the things that media and business reporters get wrong is that somehow the irr, the internal rate of return on a sports team always surpasses the market. But over a course of 20 years, there was a big misunderstanding with the Marlins transaction. It was better than the indexed funds, but not by the number that was, was surmised and was extrapolated by so many critics of the deal. So I just would point out that you don't have to own a sports team to get a multiplier on your money. You can simply invest in an index fund. I'm not giving investment advice. I'm merely saying that there are other ways to get a healthy rate of return.

[B]

I would suspect that. I would suspect. I agree with David that there is going to be a place where mutual.

[A]

Fund Samson, David Smp Sampson over here.

[C]

Yeah.

[B]

I would suggest to you that there, I bet is a correlation between the funds that invest that have sports fans in them.

[A]

Interesting.

[B]

I don't think they're immune from the sexiness that owning a team brings. Right.

[C]

I agree with you, John. Of course there's a lot of ego involved. It's not sexy to buy an index fund and check the paper every day to see where it is, when you can go watch a game, sit in the first row and get tons of adulation and public scrutiny, if not a whipping. So I totally understand the difference. I'm merely pointing out the investment side of it.

[B]

Yeah. No, and I think there will be at some point.

[A]

And Dave's David's John Skipper impression, which is what you've been hearing over and over again as he plays himself like a squeeze toy.

[B]

We, we should do the over under on when the first six street fund executive will be in the front row of a Celtics game.

[A]

Yeah.

[B]

I predict it will be the opener next year.

[C]

I will point out that limited sports teams have the ability to buy season tickets. They do not get season tickets.

[A]

And again, always parsing what is actually the innermost circle. What do you get for being a governor of a team that might be worth $10 billion.

[B]

You mean you don't. If you, if you bought. If you put a billion dollars in, you can't get a couple of season tickets? Is that like a rule of the league is you can't give away season tickets?

[C]

No, it's the rule of a, Of a. Of a governance document. Pablo, I would love you to do this with your vast res. Find out if six street gets free season tickets at the Boston Garden. And I, I will eat crow if you insist. I do, but I, I believe I will be right.

[B]

I don't really care. I'm just interested in. Wow. That. Why that would matter. Why that would matter. What are you protecting by not saying, Oh, I, I used to suggest that I had the. The most expensive season tickets in the world because when ESPN bought rights, we often call up and get some free tickets. Never a free season ticket. Just want to be clear. Never a free season ticket.

[C]

John, the way it worked when you were at ESPN is we get a call from MLB saying John Skipper would like three tickets and he will only be in the owner's suite.

[B]

I never said that, so it couldn't be me.

[C]

John, where were you during the World Series in 03? Were you sitting like in the dug. Were you sitting in the outfield?

[A]

We're back to Frost Nixon.

[B]

No, no, I just admit that you.

[C]

Wouldn'T sit at the Schnooks.

[B]

I suspect that the magnanimous owners and management of the Florida Marlins would extend me the invitation to come up and say hello to the owner, which I would just enjoy doing. But I actually prefer to watch the game from somewhere other than a suite. Almost anytime I would rather sit in the stands.

[C]

You can deny people would call and say, john Skipper's coming to a game. You must do the following. It was parking. It was dealing with when you were being dropped off by a driver. We knew when you were in the building, we had like people would. It'd be an alert like Skippers here.

[B]

Think how much easier it would be. Now you could just put a GPS on me and track me at all times.

[A]

I want to do a bit of cleanup on Isle Samson. So it is now the TD Garden, not the Boston Garden anymore. It is also true that we have proof, as always.

[B]

Are we required to use the titles of the Garden?

[A]

I mean, I've never called staples crypto.com, so I don't really care. I'm just trying to be the fact checker on this program. Yeah, and the second fact is that of course we can verify that John Skipper does prefer to sit out among the cold, you might even say, because we know that from Trump's inauguration, we have this photograph that we always refer to, zoomed in to prove that John is not with, not with the most powerful people. He's right in the back plotting an insurrection. Yeah, foreign. I want to pivot, by the way, to the hypothetical team that would be worth $10 billion and the hypothetical governor who may not feel like he's getting his money's worth by being the control person of that franchise, by getting to the New York Knicks. So this story I want to talk about with you guys, because it is a bit of a case study that explains so much of the stuff we've been talking about with the Timberwolves and the Celtics. And it begins this story most recently cited by the Athletic, but something that I've been monitoring for a long time, which is that Jim Dolan, owner of the Knicks, goes to these governor's meetings, the meetings of the most powerful people, these billionaires in the.

[B]

I assume he's the governor of the New York Knicks.

[A]

Well, what's been happening, I am told, is that James Dolan no longer goes to these meetings. He is, of course, the control person, but he sends an emissary in his place who works for MSG and for him in a legal capacity. And that owner, well, and that owner's representative, David, has been instructed to, it seems, vote against all of the stuff that everybody else wants to do. Like there's, there's just reporting by me and now the Athletic indicating that James Dolan, what is the term for how he is functioning at these meetings? I want to say he's, he's an obstacle. But what is the actual better term, in your guys's view?

[C]

An annoyance.

[B]

He's the dissenter. He is at the center, habitually dissents.

[C]

I guess, is the dissenter is someone who does it with thought. And to me, what, what Dolan does is what Steinbrenner, George Steinbrenner was famous for this. John and Pablo, he would not go to owner's meetings. He only went to when Bud Selig would get his extensions and the vote for his extensions. He would show up, vote, and that's it. No other meetings would he ever go to. And the Yankees were famous back in Georgia's day for voting no on everything. We do a motion on the floor that we're going to approve something so ridiculous that it, that there's no way there's a dissent. Like we're going to, we're going to approve the fact that Thursday comes after Wednesday or that we're going to do an owner's meeting in Milwaukee, let's say, and there'd be a vote and Yankees either no or they'd abstain. So we'd have to announce it as 29 to 1. Or when Bud got really angry, he would just have the Yankees abstain and it would be 29 to 0 with one abstention. But it means nothing. It's such a joke because there's no difference in baseball or basketball between 23 to 7 and 30 to 0. They. They have the same exact impact on your business. Now, if it's 22 to 8 and Jimmy Dolin can find seven other clubs to vote with him in order to change how the NBA central office spends its money or to change how RSNs are treated, if you can get eight teams, you can actually make a difference. But Dolan can't get anyone to work with him.

[B]

I would argue that he still is a dissenter. You said that the requirement for that was is that he puts thought into it. He is voting his own interest. It may not be aligned with the league's interest, but he has a what has traditionally been a very lucrative regional sports network. It is one that is likely to survive significantly longer than most other regional sports networks. And he is simply, in this case, I'm not discussing any vote because I'm not familiar with all the votes at the NBA. But at this case, he simply is at odds of with what the rest of the league has decided is good for it. Right. And that is the Today, the NFL is a national league. Everything is national. Right. And that has been good for the NFL. The NBA has clearly decided they want to be a national league. And I, I believe, sit on this program before that. They are the league after the NFL most suited to have everything become national. So that's where they're headed. But that means they have to take games that have previously been regional games, local games, and make them national. And in most cases, those regional sports networks have disappeared. They're no longer significant drivers of revenue. And Adam appropriately knows that he can make his league a national league. And they're going to move to at some point, every game being national. And that will of course hurt some franchises, but it helps most of the franchises and I think likely at least 22. So I think it unlikely that he's going to move from being a dissenter to being a minority voting bloc that gets to change what they're doing.

[C]

But I do understand, remember, John, I'm sorry I was going to say, don't forget that when they met with Wall street analysts, you say that MSG network would last forever and survive all this. They are threatening to bankrupt MSG because the economics have changed so much. The network because it's actually pulling down the stock price. And analysts are requiring an explanation as to what they're going to do here. And that James Dolan is using in his fight with the NBA. But he fights with them about other stuff, too. He wants to understand how many people work in the NBA front office next to Adam saying that I don't Want to pay 1/30 of your assistance to the traveling secretary.

[A]

Well, just that context, though, what John is gesturing at, which you're now bringing full circle here, is the idea that James Dolan, as a large market team, sees that there is in his mind a welfare state for all the small market teams funded by the Knicks. And so when he says that you guys are overspending in the Central League office, it comes from that place, it seems. And also, just to now cite a larger gripe here, David, revenue sharing, the principle of actually distributing your revenue in this way is offensive to the very essence of who James Dolan seems to be.

[C]

This has been going on, think about it. In college, Jon talked about this on a previous show. You had two schools in the ACC who were trying to get a bigger piece of what used to be an equal pie. This has been going on in baseball with revenue sharing and the teams like the Dodgers and Yankees not wanting to share as much revenue to teams that then beat them in games. And remember, the Knicks have not won a title ever under Dolan. They haven't won a title in 53, 52 years since the 7,273 season.

[B]

Well, they haven't lost yet this year, so just 51 so far. If they lose this year, man, maybe. I know they've had a tough time beating the very best teams in the league, but they're still going to make a playoff run.

[A]

It's been a long time since 73. Yes.

[C]

So at the end of the day, what Dolan is holding on to is a vestige of a business that is, that is passed. And I think MSG Networks will eventually go bankrupt and get locked in as part of the national product because Adam Silver has the power and there's more than 22 teams with the power who recognizes going national is the smart way to go for everybody. And it's not going to really hurt his franchise value. As a matter of fact, it'll help his franchise Value. He'll just have to write off some serious, serious expenses for MSG networks.

[B]

That sounds accurate. Because if we were back to the. What team will eventually command $10 billion? The Knicks, I think, would be a candidate.

[A]

Yes, absolutely. Absolutely.

[B]

I realize the Celtics win more titles, but the differential and economic value in New York and Boston is pretty dramatic. So if there were seven, three the Knicks are worth, you know, they're going to go for $10 billion at some point.

[A]

I mean, the Knicks. Part of the legend of the Garden, right, is that the Knicks could beat absolute dog bleep. You're welcome, Coco, for saying bleep. Absolute dog bleep. But they sell out. It's, it's, it is the thing you go to in New York. It is unique in that way because New York is unique. But what Dolan is fighting to now phrase it in a way, David, of course. Look, David Sampson, by the way, as New Yorker, but also a small market Miami guy. Even though Miami is also its own tortured psychology of like, ah, we're a small market, but also Miami. Yeah, we want money from the bigger team.

[C]

So wait, that's not what I'm doing, Pablo. What I'm telling you is that I'm a Nick fan above everything in my life. And when I went to the Garden when I was younger, like through high school, the only thing we could see across was all the pot smoke into the empty blue seats. And some people will remember this, the Garden was not always sold out the way it is now. And I think that it's silly for Dolan to think that it will always be that way. They're certainly in a stretch where it's working now from a revenue standpoint, no doubt. But I wouldn't assume that it's perpetually going to be that.

[B]

I assume it will perpetually be that. At this point, though, I was the beneficiary of the three dollar blue seats. I moved to New York in 1978. And you're right, David, I could go. I could come into the Garden not having purchased a ticket before, pay three smackaroos and go sit in the blue seats. And by the way, I. The whole time I didn't have. And you didn't have to buy marijuana to do it because you could just sit down.

[A]

Now.

[B]

Now, it should have been called the blue smoky seats.

[A]

Now I'm jealous. Now I'm jealous.

[C]

We're not exaggerating, Pablo. You couldn't see across.

[A]

That's unfathomable. Unfathomable to me.

[C]

But you can still back Me up, he thinks, full of hyperbole.

[A]

But. But the point being that you walk into James Dolan's garden now and you're greeted by artificial intelligence surveillance systems that are banning people at the door because allegedly they made a T shirt mocking James Dolan once or because they worked for a law firm at a certain point that had litigation with some entity that James Dolan owned. And then you get into the garden and of course you are watched by the all seeing eye, which is to say not 420 friendly. But I merely want to point out at this point in the show, which is winding to a close the next several minutes, shockingly, the league is trying to centralize its media ecosystem is how this has been reported. And James Dolan is fighting that to the point where he is, yes, sending an emissary to vote against the league at large and also has personally resigned from its finance and media committees as of the summer of 2023. And so I bring all of this up to say that when I imagine these meetings, the board of governors meetings, they're hilarious. Like, this is so funny to imagine all of these titans of industry, these masters of the universe again trying to box each other out because they don't actually have the same interests.

[C]

They put the P and petty. One of the great things is at.

[B]

I thought that was.

[C]

There's, there's. Thank you. There's dinners and it's always, it's assigned seats both at meetings and there's assigned seats everywhere. And they're very careful. They will not put two owners next to each other who are playing because owners meetings happen during the season and there, there are games happening the night of owner's meetings. And you never sit near the team you're playing during an owner's meeting because they don't want to have that sort of level of angst that happens. And all these owners have all these gadgets that they're following games. It used to be like little beepers. Used to be the BlackBerry with the dashes on bases. You may not remember that now, of course you can watch the game on the MLB app, but all the owners sit around and they're all watching their game and following it, pretending that they're not competitive, but they're so competitive.

[B]

Well, you'd kind of hope that if you spent $7 billion for a team that you really would root for them.

[C]

So private equity, I don't think views it that way, actually. Do you think that 6th street is looking at the record of the Celtics or looking at what the rate of return will be for the Celtics investment.

[B]

I think they'll be looking at both. I have the feeling that the Celtics partisanship at 6th street will be pretty significant.

[C]

The same way they will only eat Special K if they invest in Kellogg's. That obviously I agree with. But I, I don't think that it all of a sudden means that they'll be despondent beyond repair. If the Celtics go, you know, 15 and 55 well.

[B]

Well, if they're only given one wish, they will wish for the valuation to go up. They're given two wishes. They would wish for the valuation to go up and that they win a championship.

[C]

Right.

[A]

You hold the trophy first. I'm not going to resign Jalen Brown. Like that's. I mean, by the way, the brass tax of this in Minnesota, in Boston and all of the. With the Knicks, when rubber meets the road and you have a decision to make, that's an edge case between winning and your revenue and that margin, do you take the chance on the player or on the. The graph on your bottom line? And that's where we're beginning to only taste what private equity's conflict of that interest is going to be.

[C]

Players are expiring assets.

[B]

Well, romantic. That's just the human species, right? We're all expiring assets.

[A]

I hesitate.

[C]

I now have.

[B]

Is that true? Literally?

[C]

We are literally true.

[A]

We should rename the show to that three Firing Assets. It's.

[B]

It's Pablo Torre and the Expiring assets coming to your club now.

[A]

On that note, this episode of the Sporting Class has officially expired. John Skipper David Sampson. Feel better and thank you.

[C]

Yeah.

[A]

God, David. Discovering an impression is a dangerous thing to have happen on this show.

[B]

I have to say, if he was. Were you doing an impression of me?

[C]

Yeah.

[A]

This has been Pablo Torre Finds Out a Meadowlark Media production and I'll talk to you next time.

[C]

Sam.