Tuesday, January 6, 2015

Cauldron So Rich

There is a nice piece on Hollywood producer and new MLS investor Peter Guber over at Sports Business Journal today that got my mind going on LAFC and their ownership.

For those of us over the age of 35 or so will no doubt recognize the name. If not, you were shaped in some way by the movies he served as executive producer on. Films like The Deep, Midnight Express, Flashdance, Clue, The Color Purple, Rain Man, Batman, Tango & Cash and one of my personal favorites Sleepy Hollow (the Tim Burton version in 1999) were just a few touchstones in many lives.

In more recent years Peter Guber has jumped into sports entertainment, media, ownership, investment, etc… at all levels and all types. He started off with the Dayton Dragons about a decade ago (selling it recently, which I think turned into his investment in MLS) and has gone all the way to being Co-Executive Chairman of the Golden State Warriors and minority owner of the LA Dodgers.

The reason I’m bringing him up here is because he’s one of the couple dozen investors of soon to be LAFC. In fact many of the same people involved with the Warriors and Dodgers are coming along with him. While there are many, make no mistake, Guber is THE guy.

In the long SBJ piece it covers lots of things (not hard with a guy like Guber), probably least of which is his part in LAFC but he does have some words that provide insight on why he’s jumping in to pro US soccer:

“I wanted to bring in not just financial capital but intellectual and experiential capital and relationship capital,” Guber said. “I think those three elements are what makes the cauldron so rich. You have people that have run teams. Done ticketing in teams. Managed teams. Been athletes themselves. Been involved in venues. Run big attraction companies. Soccer players. Women. All different ethnicities. A mixture of people that kind of mirrors Los Angeles. And every one of them bringing something to the mix.”

Certainly a Utopian approach (soccer in the US seems to attract this), but it’s one he can afford to do. Not only because of his money and stature (and age, 72) but also because the way pro sports in the US are set up where it is more on the entertainment side of the spectrum then the actual competition on the field. His risk is minimal as far as his investment in MLS but he does stand to come away from it better off a decade or so from now – same as he did with the Dayton Dragons.

No question that sports is going through a boom right now. TV rights deals are virtually doubling and sponsors are falling over themselves to be part of it. At the center of it all is Los Angeles. Guber and his group spent north of two billion on the Dodgers and Steve Ballmer just picked up the LA Clippers for about the same price. Not to be forgotten is Stan Kroenke looking to move the St. Louis Rams back to LA on 300 acres he just bought.

Pro sports ownership comes in many shapes and sizes but cobbling a large group of a twenty some investors / operators is something I’m not too familiar with. Will it work? Competitively, on the pitch, Probably not. But this is L.A. Even things that don’t work can still be profitable. Or at the very least get a return for a couple people. I mean, go watch Tango & Cash (okay, I like it).

Where this type of investment leaves MLS though, is not anywhere much better than they were. LA is a huge market but nothing about the new team says it will be any different than a team in any other MLS city. Getting their own home will be impossible and building a good team will be even harder. What I do like about the approach Guber and co. have is the idea behind it. Getting many people involved to put a new soccer team together. I believe it can happen all over the USA were the USSF to open up and link the soccer pyramid. It might not be a person of Guber's stature but it may just be the next Guber, the one making and producing wonderful films now like he was back in the 80s and 90s, or maybe the next great automaker, or online innovator, inventor, writer, artist, fashion designer... or even a group of supporters and fans that truly connect the community to the soccer team. The want is here. Just needs to be allowed to happen.

2 comments:

Vidda Grubin said...

Larry,
really good read!

I think LAFC could end up on Kronke's land?

Larry W Johnson II said...

Thanks Vidda! I think they may to sweeten the deal for the Rams (or Raiders) moving down. Another NFL / MLS deal not really ideal for me. I'd rather them play at a university facility.