Garcia And Bailey: Kurt Badenhausen

WFNZ Podcasts
Tuesday, May 22nd

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Kurt Ben Nelson who joins us on the second job just slide it up again sports business Josh reforms and we appreciate him up and on toward Howard McDyess whose top. I'm doing I don't. Dole well so so way I'll ask your question and you can answer your own headline how did the other quote unquote small market Carolina Panthers just sold for a record 2.3 billion dollars. Well our response is out. Well an anti popped wanna get out in the went up for they'll gonna that a new record. Economic Vienna double right now. There is that. It's been really matter these things just don't come up herself very often thought the last game so look the Buffalo Bill. Back in 2014 Middle East valuable franchise. In the NFL built a one point four billion dollars. The Vietnam the NFL it's so good despite all our credit we here rating there down. And question problem. I internationally happened protest. If every other sport we quick kill to have the problem that the NFL Patrick out. Team on average generate more than a hundred million dollar in operating profit. And it it big guarantee money maker because of the way the app where. Because that massive national TV deal it's it's it's good that that then the effort is to get it gigantic tax write off as well. What Edwards is tempered a second but you use and you fired off a tweet about 33 minutes ago that's fascinating to me because. This is what you tweet of the folks that don't know and byways are great follow I came by and how's it don't work but so the Carolina Panthers were the NFL's third most valuable team. In forbes' first NFL franchise valuations back in 1998 the third most valuable franchise in the league in 1998 and the traders value was. Increased sixfold and Al ranked 41 after the stadium building roads if so how how. How prepared to go from the third most valuable team in the NFL in 1998221. Most valuable and I guess and today in today's age. Yeah oil epic there really ahead of their time when they came in bill we. They'll believe it you know treat Ericsson stadium by Bank of America. I've renamed it you know what they're really ahead of their time in terms of how they built fixed we everybody you know feeling. It included environments despite eating 73000. Feet something out and people. Really the at a time in terms of generating revenue from popular chip premium seating. And they really set the model. Or what followed over the next twenty years where everybody built into it at the time. It will happen owner operated there outside of state Jerry to own. Look at a bill owner operator stadium and kind of the very people they weren't really maximizing revenue. The thirteen and if you don't threw that out of the PS bill got a new stadium. With that low what this expansion franchise. And really were a Motley app co op teams in terms of rapid oh lead pack up he'd get big huge TV deal. But and what a battle of the pecking order is really the money to generate from the eighty. So one point you know despite Charlotte between. You know the kind of happy and expelled from the market that I. Their revenue with near the pop only the cowboy been paid in were valued higher when import person that the not a DA. Probably albeit they would every almost every single even gotten new building ten and or undergone massive. Accreditation negate the state of buried there. The Packers achieve the mother in. But that's why we've been. In terms of the that epic moved down the rank in terms of and it felt value to the IE. About a going up 60. You know Kurt we talked to two different billionaires on the station and one of them said leave the stadium right where it's at the other once a move that. If you're paying 2.2 billion and you're trying to win whatever that looks like. What makes it more. Financial what makes more financial sense for an owners that build a new stadium moving the stadium or just leaving the stadium and renovated. Well pick in all it talked about it yet of a hoot hoot who would not put the bill. The stadium it's very important. What the NFL going to charge you to move are you getting yet. A cheaper rates like the creator Scott Horry got people pretty. Like the rams are doing. Their movies and movie and then Louis a lot and got. And then we're in ample. You know that that they'll open build Monsanto obviously. It did do Vienna built an eight additional they're not gonna put in a dollar. Building accuse the media. So I you know they're not go on people who don't know where you go in. There are the obvious candidate anymore. There that you don't city expert I've used per decade it. Oh hole in Los Angeles that read a movie due out there until we're though it there that no lump or rep. I think GAAP definitely want keep the team in Carolina. And they. Minneapolis shown that they really are not going to. Prove. I. Doctor Robert pops and the terms of cutting and you go. They'll it's an economic. I'd say the new building getting very very. We've beat teams like Kansas City. And Green Day to figure it accreditation. They've been able to generate. Substantially more revenue thirteen. So economically. You know that that there are a lot. And got like David pepper can certainly afford it worked eleven billion dollars but what now. He talked you know about the thing guaranteed money that you're gonna make and I agree you look at the model that the NFL uses in order to. You know maximize the amount of money because there is a capsule is ceiling to the captain there's a cap floor you know you're going to be but they're gets to be a point where there is a diminishing return. And that 2.2 billion dollars Brighton starts becoming risk vs reward at what point does this cap out there we say stadium in just can't let our teams just can't sell any higher because it's a diminishing returns for even these billionaires. Yeah a year period a good point and we we we thought about it all the time and critically you know there. A lot of guys but if more people to afford it in the 2.2 billion a day. Out tablets go up or else what I put four point oh it at that we really big check that you have to write. Because the way they and a boatload of work into that yet the living and our partners if they have a 30% equity open. On their control donor and so is that you do reach a point where it's you don't have corporate ownership. And individual that the army. And it it you do limit the number of people there can be able. The bottom. And how might be MBA. Which is they're very hot global property and whatever he could step up and you really billionaires of how in the world that would be it just it and it. They're not that famous trip when it comes to Deanna felt. So it of the from that standpoint if you're not limited entirely US market but you're much more likely by the US billionaires and a bit on that. Armed. So it does become tricky I don't think we're gonna see the value of that and there's increased six spoke. Over the next twenty years but David tapper at the very Smart guy and admitted. A lot of money and that's been in what he what undervalued. Apt. Is so but but it I think it's the stock market have been going up. An opt in opt the stock market no ways and it continued to any canary in front of the fact that and it yeah oh definite here. Indicate the pepper like if Palmer it would clipper is just that played the part. You know it dispute almost 10% of fortune temper it looked in a part in 20% year fortunate that app that it's gonna generate state. A hundred million dollar in property chair. The fact that 5% dividend on top of that he dipped more than a hundred million dollar tax break. Every year because of the way to the purchase correct allocation work where he can write off about two billion dollar of the purchase. So what I like pepper who had a lot have been com it is tremendous tax credit and he indeed after the fifteen year. That turn around and ballot so so he he's gonna be a lot of I'd be just fine and that's. While talking to Kurt bad Nelson's Forbes dot com senior editor for Forbes dot com Forbes magazine George is on the second job just like before it's ago armed. Damn like. The Supreme Court struck down the other federal ban on sports gambling trade under way for states to look to electoral legislation and board and had a lot of states doing that some already are some had legislation in the tank ready to go. And a guy like Mark Cuban for instance has made him the values of these professional sports franchises just double now that that seems a little bit extreme to me and it's very easy before we actually see what happens with this to say oh god people are going to be you know just a sprinting to stadiums and sports books and it's gonna draw more interest in more revenue disagree with what I got to wait and see what happens here but look I do think that the the values will go up I do think it's possible that David tepper signed on the dotted line just before Supreme Court ruling came down there probably saved himself a little bit of money but in your experience in the best of your knowledge into the most educated guess that you have how much more valuable to these franchises just yet. Yeah I could. Given me I'll never will occur but currently I. I I think probably a doubt it's a bit much. But happily they get up opera I mean that opened up opened up a lot of revenue opportunity art if they really have a great about it because we're not cut out. What how much is gonna go about it he's a much in a very. With the league how much the take a cutter this state gonna take our but it turned that. Bringing in new revenue bump bump spot bishop you know if they credit their plea deal at the end date pushing their integrity the other now would be ideal and often bump their you know and the app though they are really struggling with keeping do you work interest. And getting people would show up. Act stadium be it the app on the experience is so good with fear it he I think it's TB in the great about them right there. I like getting people to build a campaign but it five dollar. But park even twelve dollars that are appear 120 dollar particular. They'll. But it it you can create a situation at this stadium. Oh where oh where it really there is a gambling opportunity. That is attractive and and so that helps you with you pray eat out or turn the ticket and sponsors and sweets so. Actually act I think it creek is about I have every angle and try to. Oh but whether we whether it up 5%. Our 20% of I think is still to be seen. Under present. I'm Arab by etiquette you buy it but I think there's a wreck I'm. Controls the the the banks who controls the the gamble who controls those windows. Is it the state is that the government is it the owner. Well that I mean that he had doubles pushing congress to step in and really regulate. So you know it be eight albeit not final group but my guess is that the kind of funnel relief I mean there. I can't imagine that they gave it gave up an operation where he got 32 NFL team. Completely opt operating non their own. Doing whatever they wanted you at least the start I would think that the NFL would we keep a tight grip. On how it was gonna operate but and you hope. You've got owner in here that are gonna put the wind it'll Jerry Jones broke away broke out of the NFL. Like this program adult market back on it thought I'd Jerry don't push. Stadium partnership even though they inflicted with the league like opposite so people push but I think just start with. We're gonna see the leaks keep a tight control over what goes on with there. Stated but it but the US government in app bump into that and it is they gambling company. You know there's there's a lot of existing company. They're gonna try to grab a pilot and then every state in a lot in all may want it to the degree that it generate tax revenue. And so they're gonna want their cut as well. Isn't there a conflict of interest you know with an integrity problem you know beat for example who sets the lines. I think you know if you're if you're sitting there looking at these lines and your owned by the NFL I mean. To me that's a huge conflict of interest I'm not put any money on that. And I knew that Vienna helped the other out pop out the other poll figures is. It's comical I mean the fact that they have been the strongest terms of that Major League. The strongest one speaking out against gamble in in the sport out and corrupt the port. I mean the gambling may yet elbow route and it is for example it may yet so well I did recently at. You know what every 30% of their audience for a thirteen game. That the terrible match up about what people are treated. Gambling and fantasy sports. It is a big engine pretty so already. And in the NFL you know that they're gonna look at it we yep well. The NBA. Had a terrific prospect that outside the United States yet at all. You know he's obviously not the prospect that by the US army that it but it didn't need to really maximize. Every revenue opportunities that they can because these type of could act out their baby and yet and terms of predicting revenue. And he used to do you put the patriot. And the cowboy what they're really doing is building me. Yeah indicate that patriot patriot plate so that utilized in the stadium which only hope. Ten games a year clearly to creep in the game. But it wouldn't want to create a requirement where there are attracting fans. And and I didn't retail operation than restaurant and hotel. People combat base there and the stadium is the centerpiece. And either 365 days a year. And why owner book back to that though revenues that outside. The team and so it doesn't feel they're in under the salary cap. Our occurred that thousand Forbes Forbes dot John Forbes magazine senior editor join us on the tech job just like we appreciate your time a great insight great information we'll talk too soon aren't. I think I've now got.