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00:00We're here with Rashawn Williams of Harbinger Sports, a company that actually just raised its
00:05first fund about $450 million with a target of $750. But we're now learning that you have
00:10actually made your first investment and minority stake in the Las Vegas athletics. That's right.
00:17Yeah. Talk to me a little bit about what that deal actually means. Can you tell me what percent
00:21stake that Harbinger has? So first of all, I appreciate being back here. You know, we launched
00:26Harbinger here with you. And now we're back here right now to tell you for the first time that we
00:32just did our first deal in the Las Vegas A's. We're very excited about it. I mean, Vegas is Vegas.
00:37Everyone knows that. But the Las Vegas A's, one of the most storied franchises in all of Major League
00:42Baseball, for us to have the opportunity to partner with the ownership group there in a market like
00:48Vegas, where you can see what happened with the Raiders. You can see exactly what happened with
00:51the Golden Knights. I mean, us as owners and operators, I mean, we have a unique advantage.
00:56Where we understand the value creation that's getting ready to happen, moving from Oakland
01:00to Vegas. We're super excited about baseball. And the A's are our first investment.
01:04Well, give me a sense here. When we talk about the A's and the move, I guess the season,
01:09the official season starts for the A's in 2028 in Las Vegas, correct?
01:13That's when the stadium, the ballpark opens.
01:15When the ballpark opens. Excuse me. Thank you. Obviously, relocating from Oakland here.
01:18Is the sense here that this investment is the start of a broader footprint for Harbinger
01:25in Las Vegas? Or is this simply confined to what we're seeing with the Las Vegas A's?
01:30Yeah, we're looking at about half a dozen teams right now in North America that we're in diligence
01:35on to make investments. We really, really like Vegas. We like the demographics there. We do
01:41something called predictive analytics to do demand modeling to determine whether or not a marketplace
01:45has pricing power, whether or not you can actually make money there. What are your revenue projections
01:50if you were in Vegas versus Charlotte versus Nashville versus Salt Lake City? So we can do
01:55the analysis and determine whether or not a market is strong. Vegas is very strong. It's very premium.
02:0130 to 40 million visitors per year coming through. And people love sports in Vegas.
02:06Yeah. Well, give me a sense here as to what the magic is in Vegas, because when we first started
02:10to
02:10see professional sports gravitate there, there was some concern that, well, Vegas is it's a tourist town.
02:15It's transient. The type of sort of a built-in fan base that you would have in New York or
02:20Chicago,
02:21Atlanta, Green Bay isn't there. Is that false? That's not the whole picture. Sports is migrating
02:27to the sports 2.0 thesis that we talked about when I was here a while ago, where they're not
02:32just
02:32looking at themselves as a ball team. They're looking at themselves as an entertainment company.
02:37What are you doing with that ballpark when you're not having baseball games? What are you doing with the
02:41football stadium where you're not having football games? You want to rent it out. Concerts,
02:45corporate events. What's the concert and entertainment capital of the world? It's Las Vegas.
02:50So you can make a lot of extra money renting your arena out or your ballpark, just like in Atlanta
02:55with the battery, if you're in a market like Las Vegas. That's number one. Number two, what are those
02:59people looking to do during the daytime when they're not at the casino at nighttime? Something with some air
03:03condition? That's entertainment. Baseball is America's sport. It is entertainment. It's just
03:08another way for people to entertain themselves when they're in town. So with regards to the structure
03:13of Harbinger and how this investment works, is there any sort of anything you can share with me about
03:18who your anchor LPs are in this particular deal? Yeah. So we have raised money from institutions,
03:23from wealth platforms. One of our original investors was Merrill Lynch. We've also partnered with
03:29Citizens Private Bank, and we're raising money currently from foundations, endowments, and
03:34pensions. But we have some of the wealthiest clients in the world, specifically in America,
03:39through our wealth partnerships that now have the opportunity to be LPs in a fund that has
03:45ownership in franchises like the Las Vegas A's. When I look at this deal, and I look at the short
03:50amount of time since you founded Harbinger, you're going up against some big players in this space,
03:56Arctos, Aries, quite a few others that have also found a way to make room in this. Billions that
04:01they already have either invested or committed in some way or another. Are you trying to compete
04:06with them? You know, we've heard from our investors that they wanted another option. They wanted an
04:10option of people who have owned and operated franchises for the last 30 years. That's why
04:14Jonathan Mariner, one of our founding partners, was a former CFO of Major League Baseball. Mark Cuban,
04:20owner of the Dallas Mavericks. Steve Cannon, former CEO, vice chairman of Arthur Blank Sports.
04:24So having another option is helpful for the marketplace, but also they wanted people who
04:29had a unique perspective on liquidity. And we talked about how illiquid these assets are as well.
04:34And our underwriting process is from the inside out. We're not guys from outside the ecosystem.
04:39We are people who have owned and run P&Ls of these teams. So people really appreciate that.
04:44I do want to ask you about the fundraising. Your target was $750. I think the last time we spoke,
04:49you were at $450. I assume you haven't gotten to that $750 target, but you've made an investment already.
04:53Yeah, we're still raising. So is the fund capped or no?
04:56No, it's not. It's uncapped. And we're still raising. We have until next year to finish raising.
05:01I think we'll probably end up being oversubscribed. We have some indication of interest that we're
05:05closing now. In fact, we're on a roadshow right now, man. But we had to stop through and say hello
05:09to my buddy here. Do you think that this deal and the announcement of this deal might actually
05:13help get you to that $750 and maybe beyond? Yeah. You know, I think people expect us to do deals
05:18like
05:18this. And I know when we are talking to investors, we're talking about our pipeline. I hope that people
05:23see this exclusive access to story franchise, this partnership as what's to come in the future on
05:30future story franchises that we're able to partner with. And, you know, we are looked upon as strategic
05:35partners to the cap table. So if our investors value that, they'll partner with us.
05:39With regards to the structure of Harbinger, I always thought the original idea here was to do more
05:44LP to LP type of sales transactions. This is a new minority stake, right? Why take that approach?
05:53Was it that's just what was available or what? Yeah. You know, a lot of people don't know this,
05:57but there are 1,000 to 2,000 minority owners of sports teams just across the big three. It's 10
06:02to 20 per team. You have 92 leagues. Some teams, one guy owns 90 to 99% of the stake.
06:08Some teams,
06:09a guy owns 15 to 20% of the stake. So it's case by case. But we usually buy from
06:14the minority
06:14owners who haven't had liquidity and we come in as strategic partners. But oftentimes the control
06:19owner wants to have us on as a strategic partner as well. None of these guys need our money. We're
06:24all coming in and we're approaching them as strategic partners. Well, on that point, though,
06:28I mean, the A's in a way kind of didn't need it. I mean, there was definitely a funding gap
06:31there
06:32that the Fisher ownership had talked about. And that's why they were open to bringing in other
06:37investors, PE, if you will. There's been a lot of talk that as new stadiums get built and you have
06:42new transactions and sort of the old model of relying on the municipalities to help fund that,
06:47that if more of this is going to have to be shouldered by the team and its investors,
06:51does that open up opportunities for someone like you and Harbinger?
06:54Not for us. That funding gap you're referring to was closed two years ago. So they started
06:58construction on the stadium. They were fully funded on all of the commitments two years ago.
07:02We're just getting in today. So we don't usually come in to be a funding gap stop. We usually come
07:08in to be strategic partners and have alignment with owners who are fully funded, running profitable
07:14businesses. Our motto is not we're not a hard money lender. Is your focus right now going to be
07:18primarily on Major League Baseball? We're looking at all profitable North American sports. We love
07:23baseball because we think baseball teams are undervalued. We have significant expertise in
07:28baseball. And we love the structural tailwinds that we see are in place. We think we will we
07:33will thrive investing in baseball early on. But we also think diversifying it to other leagues is
07:38part of the long term strategy. Well, MLB has been relatively progressive in allowing outside
07:42investments and private equity. That's more so than the other leagues. I know the NFL and others
07:46are now catching up here. Is there a disparity there that maybe limits what you can do outside of
07:51MLB? No, they're all pretty strict. They're all very judicious on who they want as partners,
07:56rightfully so. I mean, their job is to protect the shield and the brand. And MLB was first. NBA was
08:02second. NFL was just allowed. As you know, I was personally approved by NFL as a Falcons limited
08:07partner. But they're all very strict. They have very high standards and they want people who are
08:11great partners. So when we talk about what's next, I am curious and I know you're probably not going to
08:15tell me, but I'm going to ask you anyway. There are a lot of teams. There's a lot of rumors
08:19about
08:19certain teams that either might be up for sale or major portions of them might be up for sale.
08:23New stadiums being built. My beloved Chicago Bears are unfortunately going to no longer be in
08:28Chicago as they move to Indiana. Are you looking around at specific teams right now where you might
08:33see an opportunity, an opening for you to maybe make a prudent investment? Yeah, we are. So we're
08:38in diligence with half a dozen teams right now across all of those leagues. And for us, it's about
08:43finding the right team at the right time at the right price. And sometimes it's just not the right
08:49time, right? For example, if there's a competitive auction and the price goes through the roof,
08:53we're probably not the right partners for that, right? We're private equity firm. Have you been
08:57outbid on things already? We wouldn't even enter if we thought we would be outbid. We love looking
09:02at off-market transactions where we can approach the owner and show them why bringing us on as a
09:08partner is strategic to their cap table. My final question, this just has to do with the broad
09:12lens of sports as an asset class. And something that some people would say acts as a diversifier
09:20to a lot of traditional investments as well as other alternative investments. Does it really
09:24represent that type of diversification, particularly given the longer holding periods, the somewhat
09:30narrow lens of exactly where the money actually comes from, the actual revenue comes from?
09:36Not all sports are the same. So some people would throw everything in the sports category,
09:41but you have startup leagues, that's venture risk. And then you have leagues that are unprofitable,
09:46growth stage leagues. If you're looking at the profitable North American sports leagues,
09:50they are non-correlated to equities. They're growing at a higher revenue and valuation caterer
09:54than the S&P. They're legal, local monopolies. They've been around for a hundred years. I mean,
09:59these are amazing franchises. They've been around for such a long time and they dominate sports in
10:05North America. So the profitable leagues are definitely a diversification. I think some of the
10:09earlier leagues are more of a venture play.
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