Sports investing has arrived, and advisors and investors should give it serious consideration as an asset class, says Oliver "Ollie" Weisberg, who invested in the Brooklyn Nets basketball team alongside its majority owner, the billionaire co-founder of Alibaba, Joe Tsai. "We are looking at all sports assets, all the time," says Weisberg, the CEO of Hong Kong-based Blue Pool Capital. In addition to the Nets, the pair have also invested in the Miami Dolphins football team and WNBA team the New York Liberty.
A multistrategy investment firm, Blue Pool manages assets for Tsai, Weisberg, and a group of wealthy families and institutional investors. In addition to its sports stakes, the firm has invested in TikTok parent ByteDance, GetYourGuide, and Fortnite developer Epic Games. In an interview with Barron's Advisor, Weisberg, who also serves as vice chairman of Brooklyn Sports & Entertainment, explains how he wound up working in China, the unifying theme behind the investments Blue Pool makes, and what sparked his and Tsai's interest in sports investing.
Tell us about your journey. How did you end up doing what you are doing now? I grew up in Palo Alto. My dad is a professor at Stanford. My mom was a social worker at Stanford. She actually sent me to Kenya when I was in high school to do some public work projects, and I thought it was fascinating. When I got to Harvard College, I took Swahili and got really interested in international development economics. There was a sign on the bulletin board at the Harvard Institute of International Development to live in China for the summer, do some teaching, do some work. That summer really captivated me so I went back to Harvard College, took intensive Chinese, and ended up writing my undergraduate thesis comparing Russian to Chinese privatization, which was a very popular topic at the time. I decided at that point that I was going to work in China. I went back to New York for a couple of years to work in finance with the intention to come right back, which I did. So I've been living and working in Greater China since 1998.
When I worked for Goldman Sachs, it was the right place at the right time. I was the junior person on the original Alibaba Series A investment. I literally negotiated the term sheet with Joe. It was quite unusual for someone at my age to be on the board of a company. Obviously, it was Goldman Sachs' Alibaba board seat. I left Goldman, worked for Ken Griffin for a decade. It was not a complete accident that I ended up reuniting with Joe to build what is Blue Pool Capital today. Even though I left the board, Joe and I stayed in touch. We are in our 11th year at Blue Pool Capital.
Aside from Joe's family office, what type of investments are you making? I think the theme across the investments is primarily consumer and later-stage tech, obviously with the exception of Blue Owl, which is a credit business. Blue Owl was a huge home run for us. We were the first investor in Doug Ostrover and Mark Lipschultz's business, and exited the investment a couple of years ago.
If you look at GetYourGuide, which is one of the leading global online marketplaces for travel, that's a business that we invested in right after Covid, and it's going be one of the most transformational businesses in travel. This gives you the flavor of the type of stuff we focus on.
Poolside is what I call our multistrategy fund, so it kind of has everything inside. It has our hedge fund of funds business. It has our private-equity funds business. It has our real estate business and our direct private equity business. Harborside and Riverside are the vehicles that allow outside investors to participate in our hedge fund business and our private-equity business.
What drew you and Joe to sports? We wanted to invest in sports because we think it's a phenomenal financial investment. We believe that live sports is extremely unique. Live sports bring people together. We believed that we would ride along with the growth of media rights, which primarily, five, 10, 15 years ago were in cable. But as you know, we've had a shift to OTT (over-the-top distribution) on your phone through streaming, and so we believed that would grow. That was a long-term bet on that trend. Then you layer in the concept of buying an asset where there is fixed supply. There were only 30 [NBA] teams.
We believed that Brooklyn is a massively growing part of New York City. The team went from Jersey to Brooklyn back in 2012. We were very focused on how we could participate long term in owning control of a team. It's not that often that control deals are on the table. We actually bought the team from Mikhail Prokhorov in two tranches. It allowed us to wade in as a minority shareholder at 49% and then ultimately take control. We felt that we could bring our expertise and history of building businesses to turn the team around, both on the court and off the court businesswise.
Besides the Nets, Brooklyn Sports & Entertainment includes the Liberty. So what kind of interest do you see from fans and investors in women's sports now? And is that an area where you would expect to make more investments? I would caveat that all of the investing we do is what I would call opportunistic. Are we secularly interested in sports? Yes. Are we secularly interested in women's sports? Yes. I believe the biggest shift in women's sports in the last couple of years is that parents typically would take everyone to watch a men's game. And now there's a defined secular shift of parents taking their daughters to women's games. You have more fans, more viewership, more revenue, more tickets, and so that is a fundamental shift I've noticed over the last five years. There's just more people going to games, both men and women. We're looking at all sports, men and women. I think what we have learned is we have confidence in our ability to invest and execute because we've done it already.
Do you think sports is an asset class that financial advisors should be considering more broadly for investors? Sports funds have been raised, so that is brand new. There's a few different factors. No. 1, the NBA and NFL have now approved the concept of a fund buying into a team, which is a new thing. It's been done over the last four or five years. That was not allowed before.
No. 2, there have been owners that have taken teams-and we'd like to think we're part of this group-that have made the product better, made the experience better: the food, the wine, the venues, the club space. That drives higher revenue, more money, therefore more value. I would think of this as a circular reference. Obviously, more funds get attracted, more funds get raised, and team values go up. So, the answer to your question is, unabashedly, yes. It is an asset class that has arrived.
Private-equity funds are only allowed to buy minority stakes, not controlling stakes. These private-equity funds, maybe they're not quite retail, but they're much more distributed than they were. It's not just sovereign money. Those funds are already getting money from individuals through the typical channels. Avenue Capital, Arctos, RedBird, Sixth Street-those are names you'll see. Now there's a way for general partners and groups to get together to buy teams. We call them making syndicate bids.
With the sale of the Los Angeles Lakers, the valuations for NBA teams look like they're pretty strong. Are you looking at any other opportunities? Is there a way to structure these assets any differently where you capitalize on the valuation? We view the Brooklyn Nets as a family asset, and so we capitalize in making it worth more, right? But we're not capitalizing by looking to sell it.
We're looking at all sorts of leagues, men's and women's, across the ecosystem. I think there's a real spectrum. There's the gold standard of the NBA, NFL, and then you've got the more emerging leagues.
SailGP is a new [catamaran-racing] league that Larry Ellison started. It's really exciting. The way he did it was he started the league first. He built the technology, and now he's selling the countries, U.S., Germany. That's an example of an emerging league that we took the risk to invest in. Because we feel confident that Larry has put the pieces of the puzzle together, but it's still way more risky than investing in the NFL, and we sized it appropriately as a small investment for us. So, I'm looking at new leagues. We're looking at Formula One. We have quite a lot of activity in lacrosse. I get decks on new teams and leagues every day.
Soccer is an area we'll look at. It's about understanding the league, and then understanding which team, like we did with the Brooklyn Nets.
We're really happy with Miami, and Miami's really interesting because it owns four assets. It owns The Miami Dolphins, the Hard Rock Stadium, the Formula One race, and the Miami Open. We took a view that the economic development of Miami would also propel ticket sales across all those assets. We took the view that we wanted to get engaged in the NFL. We struck when we had the right opportunity. That was a very fast deal because there were a lot of people interested. I understand what it means to be a minority owner. Joe and I sold a piece [of Brooklyn Sports & Entertainment] to the Kochs a couple of years back. I understood what I could and couldn't ask for from [Dolphin's owner] Steve Ross. And I think that was a competitive advantage in how it helped build a relationship very quickly, and for him to agree to bring me and Joe in.
The "Knicks in 5" NBA championship win this year resonates through New York City. Is the hype around your city rival something that could be positive for your team? And what are you doing about it? I would tell you that this fires us up. We want to compete. It's great for New York. I'm originally a New Yorker. We're all New Yorkers, but it is getting us fired up to compete.
One of the things that's beautiful about the NBA is off the court, we're business partners. On the court, we compete. A lot of the media rights are shared by the owners. So, when the Knicks won, I'm happy and thrilled for my partner, Jim Dolan, but it's just going to make us that much more fired up to compete.
New York is a giant place. Is there spillover in the audience, and what are you doing about building the fan base? Strategically, we're looking at bringing over the marginal 40- or 50-year-old that doesn't have a team. And then we're looking through our community work, through our Brooklyn basketball community organization, which includes basketball camps, to long term build a fan base. This is a poignant nuance. Building a franchise takes decades. Joe and I are prepared to take the time to do that. When we view ourselves as stewards of the Brooklyn Nets, that's the mentality you have to have. You may know, during, Covid, the early days, we paid all our hourly workers before anybody else did. We're a community asset.
Thank you, Oliver.
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