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Todd Boehly explains his sports investment philosophy: ‘We’re always looking for the structural advantage’

Welcome to modern football

US-ECONOMY-MILKEN Photo by PATRICK T. FALLON/AFP via Getty Images

The four-day 2022 Milken Institute Global Conference, which “brings together individuals with the capital, power, and influence to change the world with those whose expertise and creativity are rethinking health, finance, technology, philanthropy, industry, and media”, is going on right now in Beverly Hills, CA, and one of the invited speakers is future Chelsea owner Todd Boehly.

Boehly has not said anything publicly over the past two months to specifically address his consortium’s Chelsea bid, though what he has said in years past about profiting through success on the field or pitch or court is certainly promising as far as our competitive future is concerned.

As one of the guests yesterday for a panel called “Mega-Trends Shaping Asset Management” — exciting! — Boehly talked a little bit about his sports investment philosophy (apparently “sports” is a mega-trend in big money), again touching on the main point that to get the best return on your investment, you have to ensure a) success and b) fan engagement and happiness.

And it certainly helps if you’re starting with a team already at the top.

“There’s nothing like sports to excite passion. And if you have passion, then you have people who care about things. And if you have people who care about things, you have great opportunity. And really, it’s about curating that experience, that access, that opportunity.

“[For example] we’ll have 4 million people coming out to Dodger Stadium this year. So, our goal is to give them the best possible experience. We still have the most affordable tickets in the league basically, for a stadium that’s full regularly.

“So when you look at how we think about price points, and how we think about sports, we just believe they’re not making more of them, so implicit in that is scarcity value. [And] we’ve been really focused on just the super big brands. In some sports like the NFL, they share all the media money. In baseball, you’re really a derivative of your local market.

“The Premier League’s similar. If you look at the way it works, to be one of the big brands, you have a structural advantage. And for us, we’re always looking for structural advantages.”

If that sounds nakedly capitalistic, well that’s because it is. Unless you’re owned by a mysterious Russian oligarch to be a plaything and diversion, or you’re owned by a state government with practically unlimited funding, you have to play the Wall Street game.

But the way Boehly has approached his sports investment over the past decade has been that it can be a win-win situation: a win for the fans is an automatic win for the owners, especially when, as he put it, you have the “structural advantage”. From that base you can then grow your reach, your revenue, and yes, even your rewards (on and off the pitch).

When asked about the role NFTs and “tokenization” might play in future asset management, Boehly again framed it as something that can benefit the customer (i.e. fans) and, in turn, the team, rather than the other way around.

“You’re just characterizing it as ‘tokenization’ because it’s digital. But the reality is ... if you want to buy stock in the Green Bay Packers, that to me is ‘tokenization’. You have no rights, you have no control, but you can say you have an ‘interest’ in the Packers.

“I think loyalty programs, whether it’s Vivid Seats, Dodgers, Lakers, Chelsea, we’re all thinking about how do we have direct customer relationships that we can then build upon. And if a form of that comes in a ‘tokenization’, then so be it, but what we really care about is direct access to our fanbase.

“And if we have direct access to our fanbase, [then] we can start thinking about [having] lots of tiers of different fans that want different products. So we’re starting to think a lot about what is that we want to really give our ‘super fans’ and how do we develop fans.”

-Todd Boehly; source: 2022 Milken Institute Global Conference

As for what he means by “develop fans”, Boehly gives the example of the Chelsea-sponsored camp in Greece where people can pay to stay at a resort and have their kids coached by (former, current) Chelsea players — you might remember Eden Hazard, of all players, popping up there one summer a few years ago! Again, nakedly capitalistic and commercial, but also to the benefit of the fans, the club, and the money-men.

Welcome to modern football! (Or perhaps not so modern seeing as how football at the highest level was always a profit game.)