Avenue Capital's Marc Lasry talks investing in sports again
The sports world has never been as hot an investment as it is now, especially coming off of fan excitement over the men’s and women’s NCAA basketball tournament in March. Avenue Capital Group CEO Marc Lasry sits down with Yahoo Finance Executive Editor Brian Sozzi at the 2024 Milken Conference to discuss the possibilities of investing in certain sports areas, including women’s sports and even Premier League soccer.
The University of Iowa and Caitlin Clark’s appearance in the women’s NCAA championship drew 18.4 million viewers to watch the college basketball game.
“That’s more than I’ve watched a regular season game, right? I think there’s only been a couple playoffs that have had higher ratings than that for the NBA finals. More than a baseball game, more than the World Series. More, by the way, than the men’s NCAA,” the former co-owner of the NBA’s Milwaukee Bucks says. “So what that’s telling you is there’s a lot of interest in women’s sports, and I think that’s only gonna continue,”
Lasry touches on investments made into the PGA tour and other sports leagues through the Avenue Sports Fund.
Turning his attention to the US economy, Lasry says things have definitely “gotten harder for Americans” as inflation flourishes in an otherwise prosperous economic environment.
“The fact that you have a slower economy, even though it’s positive GDP, is positive. The fact that rates are high is actually mean that the cost of doing business has gone up for businesses. And you’re finding that some people had taken on too much leverage, and they’ve got to de-lever,” Lasry says on credit conditions.
Catch more of Yahoo Finance’s coverage at the 2024 Milken Institute Global Conference.
This post was written by Luke Carberry Mogan.
Video Transcript
There’s lots going on at the Milken conference at the Beverly Hills Hilton in California.Some markets talk, some fed rehe talk and of course some sports talk for more on that.We have chairman and CEO of Avenue Capital Group, Mark Lasry.Mark.Good to see you.My pleasure.Thank you for having me.We were talking before we came in.Do you miss owning the books?I mean, that was, it was, it was a lot of fun.Um loved going to the games, love the community, love the players.So yeah, it was a big part of my life for, for about 10 years.So a lot of the sports figures here, I think I saw David Beckham walking to a hall before.How do you explain your success in turning around a team and then leaving it in better hands than when you got it.Look, I think when you end up owning a team, your goal is obviously to try to win, right?As you were saying, you’ve been a knick fan for, I still can’t believe they’re winning for a whole for a long time, but the goal is about winning.And I think we were able to do that.We were able to transform a community, um help transform a city, built a new stadium, built a whole district and ended up winning a championship.And I think for the city and for me, that was a unique experience.Do you want to be an owner again?Um I wanna invest in teams again, I think um it’s expensive owning a team.It’s just a little pricey.I don’t know, I don’t have that in my back pocket.I, you mentioned investing in sports.You’ve been linked to various things.Where, where do you see yourself investing next?I think we’ll be investing in all the different leagues, whether it’s basketball, hockey, football or baseball.Um We’ll probably do something in the premier league.Um We want to get involved in women’s sports.So I, I think you’ve got this massive opportunity out there.Um, and there’s a, there’s a renewed interest in sports.So I think you’re literally in the 1st, 2nd inning of doing this stuff today.Has Kaitlin College changed how you think about investing in women’s sports?I think it has, I mean, what’s kind of, you know, surprising is if you think about it for Kate and Clark, I think, yeah, I think the ratings were like 18.4 million.Um, you know, that’s more than I’ve watched a regular season game, right.It’s, I think there’s only been a couple of playoffs that have had higher ratings than that for the NBA finals, more than a baseball game, more in the World Series, more by the way than the men’s NCAA.So, what that’s telling you is there’s a lot of interest in women’s sports and I think that’s only gonna continue.This conference is getting a little crazy.I’m sorry to forget my own name.So, Caitlin Clark.Yes, that, that, that’s correct.So, you’ve been, there’s been some talk of you investing in the PGA tour, right or wrong?Is that correct?We invested, invested in the PGA tour.We did.The talk is correct.What was the, what was the thought behind it?I, I think we had an opportunity because of liv and all the issues that the PGA has had.Um I think it’s a unique franchise.It’s where the best players in the world play.And I think over the next five years, the PGA is just gonna continue to grow and they’ll be able to work out something hopefully would live.How does, how does the average investor invest in sports?And they’re not, they can’t go out there and invest in teams per se or leagues?Is there an easy way to do it?I think you’re gonna find that there’s more and more people doing sports funds.So I think investors will be able to have that opportunity, you know, whether you’re a small investor or a large investor.Um But I think if you want it diversified.You’ve got to find people like me who are doing it otherwise you can go out and buy MS G, right?And you can own a piece of the Nick.What do you, what do you look for when you’re evaluating these investments?How do you assess making an investment in a sports team or a league maybe differently than what you’ve done for many years in credit?I think part of it is you want to make money, obviously.So you’re taking a look at what’s gonna happen with their media.What’s gonna happen with sponsorship?Is there enough engagement or demand that people want to be part of this team?Right?And you’re sort of seeing it, right?What you found with Caitlin Clark and your initial question, there’s more interest in women’s basketball today.So what does that mean?That means you’re gonna have higher media rights, you’re gonna have higher ticket pricing, higher sponsorship because more people want to be involved.So that’s what we’re looking for is in essence, businesses that are gonna make you money.Let’s get back to, I guess some of the day job markets, credit investing.What are the credit markets saying about the health of the economy?I think the economy is doing fine, right?That’s not, that’s not really the issue.I think the issue is for the average American.So for the average American, what’s happened in the last couple of years, what’s happened is interest rates have more than doubled, right.So for your home pricing that’s gone up, food and fuel have gone up, right?So basic necessities for people, for the average American, it’s more expensive.When you look at the economy, the economy is better, right?And that’s because the economy is growing, you’ve got positive GDP, but you’ve got lower unemployment.So all of that is good for the economy as a whole.But I would say for the average American, it’s gotten harder.Is it harder to find opportunities and credit given the economy is somewhat argue, has found a soft landing.Oh, I think it’s easy to find opportunities to credit.People always need capital people.There’s always problems.So from what we do, um, the fact that you have a slower economy, even though it’s positive GDP is positive, the fact that rates are high is actually mean that the cost of doing business has gone up for businesses and you’re finding that some people had taken on too much leverage.Um, and they’ve got to deleverage.I asked a policy on Mark Rowan about this on how people are so leverage to essentially three or four stocks.It’s NVIDIA Apple Amazon.What’s the risk of that?The risk is simple that those stocks don’t do.Well, it’s not look, the great thing about being concentrated is if it works, you’re really, really happy.If it doesn’t work, you’ve got issues, right.So let’s not make believe.Has NVIDIA done great.Yeah, it’s done.Phenomenal.Has Apple done great.Yes.And if your belief is they’re gonna continue, then you should be concentrated.But the problem is concentration is great when it works.And it’s horrible when it doesn’t.Do you think that type of concentration could keep working if rates are going to stay high for longer?I think it’s hard.I really do.I think what, what’s happened is when people are nervous, they invest in things that they know really well and they believe are going to be around.That’s why Apple and Via are doing well.Amazon Meta is another example, but I don’t know what happens in the next year.I do know on the credit side, you’ve got all these opportunities on the equity side.I’m not an equity player.So I just think you’re going to have a harder time before I let you go.You don’t, I imagine you don’t own a sports team.You don’t spend over 40 years of credit investing if you’re not doing a hell of a lot of things right in your life and your career.How do you explain your success and what advice can you give to fellow investors who may see who may be seeing this?I remember Mark, he owned the bucks, you know, he, he’s doing something right?Yeah.You know, it’s a great question.I don’t think people like the answer.You know, the answer is you work really hard Right.And like in today’s world, like saying that you gotta work really, really hard, you gotta be in the right place at the right time.You gotta get lucky, but luck only starts for you.Right.If you’re working really hard, like, you’ve gotta make your own luck.And I, you know, I was lucky that I started out as a lawyer and I got involved on the business side.I was good at math.But for everybody out there and you know, this in any industry, you’ve got to work exceptionally hard.You got to be lucky.So very true.Uh Well, good to see you.Pleasure, really enjoy this conference, Mark Lasry Avenue Capital Group chairman C good to see you and I will just note note this too.You’re one of the first people that came on Yahoo Finance.Way back when and we thank you for your support.Thank you.It’s great to see you again.You.