The Sporting Class: Private Equity, Salary Caps and Whether Players Should Want a Piece

0:00Welcome to Pablo Torre finds out. I am Pablo Torre and today we're gonna find out what this sound is. We're not doing a political debate where you have to spin bulls**t that we all know is bulls**t. We can be honest about this situation, David. Right after this. With a Discover Cash Back Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5% cash back at different categories each quarter on up to $1,500 in purchases. That's 5% cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See Discover.com slash 5 for details. Just two wheels, two pedals and you. At Bikes Online, we share your passion for everything cycling. Whatever bike you're looking for from mountains to road, either pedal powered or electric, we've got what you want ready for super fast delivery. Quality gear at prices you won't find in your average bike shop. All bikes are pro-built and tuned before shipping to get you riding quickly.

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2:02I do actually like you. That's why I'm still here. I appreciate that. I sincerely apologies. We're now taping. Start to show. We're rolling. We're rolling. We're rolling. Start to show. See, technical issues happen. It's the communication that's about it. We agree. I am somebody who would love technical issues more if I can make it into content. And unfortunately that is impossible because no one's going to know what we just did. Alright, on I started watching me day for 10 like we're happy. I hope we don't start with that. If you have ever woken up tired and sore, this one is for you. Because there are a few things that set you up for success like a good night's sleep. And the best way to ensure a good night's sleep is with a mattress fit to your own personal habits. If you have ever woken up tired and sore, this one is for you. Because there are a few things that set you up for success like a good night's sleep. And the best way to ensure a good night's sleep is with a mattress fit to your own personal habits.

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4:03For 30% off your Helix mattress. Helixleap.com slash ptfo. The reason I'm doing this episode of the sporting class with David Samson and Dominique Foxworth is because this question that started almost as this joke that got dismissed by everybody around could Kauai Leonard get a piece of the team he signed with when he was a free agent in 2019. He asked the Lakers for it. They laughed at him. And eventually the NBA investigated it because Uncle Dennis Robertson said, I want a piece of the team and everybody said players cannot get pieces of teams. But then over time, we've seen lots of players repeatedly go back to that question. Jalen Brown asking the question to Bloomberg in January, 2026, when can players ever get a piece of a team? I think players should be able to invest alongside in ownership groups and business opportunities. Like I don't understand why that's ever been a thing. But it's like your athlete and they make it seem like they can control how much wealth or growth that you could actually accumulate.

5:06I think that's wrong. I also think that just like any other major corporation, like if you work for Apple or if you work for Nike or if you work for anywhere, like if you're CEO or if you're someone that's been on the board for a large amount of time, you get equity in the company at some point. Like you are a part of it. And I think athletes should be looked at in the same way. Like you play for the Celtics for 20 years. Like you should get a piece of equity in because you helped accumulate the growth. Apparently Dominique, I mean NFL, you may recall Caleb Williams, right? And his dad, they wanted a piece of the team that was going to draft him. That was a big part of their request. And so, Dominique Foxworth, for people who don't know, former president of the NFL PA, the player president, and then an executive, the COO of the NBA, was this a real desire when you were running unions?

6:06Of course, it's a real desire to have some sort of equity. And I think you could make a lot of players and people will make comparisons to Fortune 500 companies or any company. Startups, you often get compensation packages. That includes some equity in the business that you, where you work. And that makes sense. I understand that I'm sure the players would feel the same way. The challenge, I think here is that they frame it as an opportunity to get equity. But it's really an opportunity to invest, which then gets complicated and problematic, especially when you are collectively bargaining the compensation packages between the two. It's a tangled web. And I'm not even sure it's a smart investment for someone like, I'm not some sort of investment guru, but the first vocation is important. I'd be weird to have all your salary come from one place and then also have all your investment be tied to the same things that impact your salary. It's very common though, Dominique, that's how Wall Street, that's how finance works, where you get stock.

7:06I don't disagree with that. I guess the point I'm making is there's a difference between being awarded it as a part of your compensation package. And what the NBA players have negotiated for is the opportunity to invest in private equity funds that then invest in the NBA. That's entirely different than being compensated by it. And it would be tantamount to someone getting paid a bunch of money to work somewhere and then taking a big portion of money and using that to then invest in the place that you're working. It's slightly different. So this is where you may have lost to be Dominique because I thought the rules were that players could invest in a private equity fund as long as the equity funds investment in teams was not a control piece. As of 2023 in the NBA, the CBA allows for this arrangement, which I want to clarify, which is NBA players association can buy a share of NBA teams through an approved private equity firm, which is separate and an evolution Dominique from what the original, I think, demand was,

8:11which is I individually Caleb Williams, Kauai Leonard, Jalen Brown, I want a piece of the franchise. Right. I'm just saying that that's not a win in negotiations. It's not an actual win in negotiations the way that is being framed. Being awarded a portion of the equity of a franchise as a tie to like your compensation package is different from being allowed to give them your money. So you can invest alongside them. It's entirely different. David, have players that you've heard from in the past made that request give us a piece of the Marlins, which you were the team president of? When we're talking salaries with them, they're always interested in ways to make more money in a non-salary cap league. We don't have the salary cap circumvention issues. There's luxury tax issues that I never had to deal with because I was never close to it. But when players ask for that, my answer was league rules state that you cannot be a minority owner of a team.

9:12So if you want a piece of a team, then you have to stop playing. And it turns out that that was never a trade that any player wanted to make because they realized that they'd make more money playing for the team than by giving us money to pay other players. But if you're asking whether I think players should be able to own parts of a team that they play on, I have no objection to that because it would be a arms length transaction where the owners would have a valuation that a player would have to agree to as any limited partner investor has to agree to and limited partners in general under agreements to not have power and who gets traded, who gets signed. They literally are just limited partners mostly for tax reasons and cocktail party reasons. So if that is something that players would bargain, my position has always been I would give that because I think that I would get a lot of other things that would be way more meaningful to me in a CBA negotiation when it comes to the dead service rule when it comes to luxury tax threshold when it comes to a salary cap when it comes to pension, which is a huge issue that Dominique can speak about.

10:25That is mind numbing, but is a critically important financial issue, but if I were to get wins on those just in return for allowing a player to write a check to be a partner and a team, that's a trade I would make. I mean, you should make that trade without even getting wins like if you get wins on top of it, it's a double win like I do not view this as an successful option for the players like players can find things to invest in that are just as attract just as attractive and as lucrative as investing in teams that they play for and then you compound it by the one of the challenges when I was at the basketball union was the basketball players. There's such a big gap between who they are in the league and who they are in this world and the guys that are at the top of the NBA. Sometimes they feel like their interests align more with ownership, so it makes it really difficult to have negotiations when you're trying to represent an entire body, but there's a group and not a not an insignificant size group, but certainly disproportionately powerful size group that see some of these things and are like yeah, I would give you.

11:36And I like actually this over here that's good for them that's actually better for me and now you can make it even more overt where it's like yeah my franchise value that I now own a stake in through this private equity company that franchise value is directly tied to the amount of salary I have to pay out. You know what helps push the salary down and push up my franchise value if we negotiate a deal that limits the amount of money that players can actually make and so it's a short term loss maybe I lose a little bit now for a long term game because the franchise value goes through the roof so I don't love it I don't love it as an option it doesn't feel like a win. David this is really funny to me because when I'm fighting out is something I did not expect which is that both of you kind of agree which is that this is something in which the players are seeking the win quote unquote of getting to pay the owner's money for a share of your team and the question then is why does it feel like a win to them and Dominique is explaining that at the highest levels a superstar might think I need to be able to get what owners have but David your view on why players want that is what.

12:46I think there's some confusion here and me and you'll help me here when jalen brown talks about a equity stake in the Boston Celtics I do not believe he was saying what is the value of the team and I want one percent and I will put one percent in what I think jalen brown is confused about is does he want to be granted shares in a team or does he want to pay market value or have the right to pay market value for shares in the team. I was under the impression he wanted as part of his comp the ability under the cap to be awarded shares in the team I did not think that he was crying out to buy at market value shares in the team so there's two conversations happening there's one thing that can actually be done and was negotiated in the cba and then there's another thing that it seems like I believe jalen brown employers like him would like and so being granted shares as a part of your company.

13:46I'm all for that that's fine that's consistent with with what people do in many businesses that you are pointing out the other thing is the thing that they actually have the ability to do which I don't think benefits them at all is that they have the ability to give their money to a private equity firm who will then invest in these teams at what the fair market value is to me that's not a benefit these leagues are looking to increase franchise. And we keep finding that it's harder and harder for them to find a pools of money big enough to buy their team they be delighted if some of their money that they paid you in salary went back to supporting private equity firms that will then increase their franchise value and then you compound that by it also benefits the owners by if the players are actively involved in their investment they know that they have the ability to negotiate.

14:46On the other side against the biggest cost the biggest cost so the biggest cost is the labor it's the players so if there is a player or there are players who recognize that their franchise value will go through the roof if they're able to limit the amount of money that the players can make but they might make a little a few million less this year. But their franchise value will triple then they are incentivized in these negotiations to be like I don't know I don't really care that much about that that money's fine whatever they offer is fine you want to cap it yeah less cap it because I'll be a NBA player for 15 years I'll be an owner of an NBA team for 60 would you guys seem to agree on in the end is that the granting of equity to superstar players is a less interest to both the union and. The teams which you both are representing respectively Dominique and no no no no no no you can reframe it the way that you want like I don't think that it's a less interest to the union I think it's super unlikely to be agreed upon on the team like I think the union and the players will be happy to accept equity as part of common spot you think that it's very obvious that David would fight and his and owners would fight so hard that it's not realistically worth bringing to the table above other issues correct because here's the

16:11question think about this if you're granted equity in the Celtics and then you get traded to the sixers so the way it happens when you trade a player now is that players removed from your organization and you then are added to the roster of the next organization but if you have shares of JP Morgan because you work to JP Morgan and then you leave JP Morgan you keep your shares of stock and JP Morgan that have vested so you get those shares that are part of your net worth and then you move on to your next company. Sports to me is very different because when you want to share of JP Morgan stock you are not in any way involved in anything once you leave if jalen brown owned a share of the Celtics and is now an active player of the sixers I as a team operator would have an issue with that because he would have access as a limited partner depending on the agreement he could have access to things about the Celtics that there would be a concern that we're going to be able to do that.

17:11So if you're going to be able to do that with then be shared with the sixers there's just all sorts of conflicts that exist and there's ways to deal with it in the Wall Street world fewer ways to deal with it in the sports world. Well those seem like small hurdles that could be addressed like those things we could invent ways to deal with it whether it's worth our time to discuss because I think we both agree that it's a probably a pretty unrealistic possibility but it's not hard to figure out what I think. But I think to your point the question really is though is Wall Street all that different from sports when it comes to how these businesses should be behaving. Yes. So let me try another way. There are pension plans non-uniform pension plan in baseball and the uniform pension plan. The non-uniform pension plan gets no attention. It's a nupt for short but that's the pension plan I'm in and you vest over time when you're in the league for 10 years. There's it gets capped whatever the case may be when you get granted shares of a public company which are stock options that are given to employees when you have an employee owned company.

18:18What you're doing is not giving operational control of that company. You're not giving board seats of that company to your employees. You are giving them potential sharing of upside and worth. Players already get that. It is not the case on Wall Street or at your local rental car company that when the stock price goes up if you do not own shares of stock your salary does not go up in lockstep with the revenue of the rental car company in sports because of the union and the CBA in a capital league and even in baseball frankly as revenue goes up salaries are going up in lockstep and our view was always that is a big deal. Big enough concession where it is like players have a vested interest in the health of the underlying team but they obviously don't. But I disagree. I mean it's they obviously do. Look at what Jalen Brown will make more money in one year than while Frazier made in his career.

19:22So and there's a crappy players on the end of the bench in the NBA because of the salary cap I call the concax the concax or players who are so overpaid because teams have to your friend a john concax yes listen if you don't get the reference. Google it and just let's move on seven foot tall white guy who was a scrub is what you're saying so disrespectful and he got a huge contract totally overpaid and in a salary cap league there's a floor. And NBA because of that floor you've got end of bench players right now making millions of dollars more than they were previously because the salary cap has gone up so much and that's been a huge benefit to a large part of that union Dominique in my opinion right I get it and the salary cap is tied to basketball related revenue basketball related revenue is something that can be. That can be and has been manipulated in the past and the growth of the franchise values is absurd to the degree that it's not connected at all to the growth in the salaries of the players because players don't deserve a share of ego premium that's never that's just not something employees don't get that either if there is a value in a company can stop for one second when you start getting into deserved.

20:46While we also are talking about something that is negotiated based on like power and leverage is like are you saying they don't deserve it just like it's like in the same way that you would say that I as a football player don't deserve baseball money or you're saying they don't deserve it because they're not connected to it which is where we disagree is they are connected to the ego premium that other own. That's what I'm saying is that you're saying they're not going to be a premium that other owners that future owners are paying they're paying in order to own these teams because these teams are cool because I'm trying other way if you Dominique at when Disney does well do you believe that it is your position when at ESPN that your annual bonus should go up in lockstep with Disney share price or with their operating results do you go to that level and say look at all the money that the company is making I want to be. I'm not paying more do you ever do that no because I'm not nearly as valuable to Disney as you know who does do that like a great filmmaker when they come back they're like you know what I'm not I just made you a billion dollars in the last film I'm going to negotiate for some level of ownership some more control like they are in an uncapped system and allows them to negotiate for everything that they want the players are not.

22:14I'm not really interested in what David has said about ego premium because it speaks to like why these teams are worth in the Lakers case 12 and a half billion dollars and all these records are being set over and over and over we're talking the same week where the angels. The God am angels for four billion dollars because Stan Kronke has connected he's really collected all of the infinity stones he is a team in every pro sports league now and the question is why why are these things going up and therefore how can players. How can labor share in any of the boom that's happening. So I want to call the dots here when the MVP and 2023 negotiates for the thing that Dominique is saying isn't really a win as much as they framed it right which is you have the right to buy through private equity a share of these booming valuations ostensibly because they're booming Dominique it should be a win but you're saying it's not because all you're doing is paying your boss the right to basically ride along without any of the

23:14control is that a picture getting it on the other side though when you're a player. I'm saying that once you pay me my salary as a basketball player I can choose to do whatever I want with that salary. There are plenty of investment opportunities that are as attractive or even more attractive that then the NBA and also it be wise for you to separate your investment as far as diversification is concerned to separate your investment. I'm portfolio from where your salary is coming from just in case something goes wrong all I'm saying is that is not a win if you're looking at investment in the coldest way possible as far as like rate of return is concerned you can find other places that would have the same risk in the same rate of return or a higher risk in a higher rate of return or lower risk in lower rate of return you can find all of these things without being able to get it. It's not really anything new or different it's the opportunity to to investor money in a probably more risky situation by product of the fact that you are already getting salary from there.

24:32If I forget that it's an MBA team at all, just take it out of my mind and I'm investing based on the prospects that this will be successful. I can find some other business with the same like potential. This is not a benefit. This is a benefit for the teams. Well, I think you have to mention to people that when players have the right to invest in a private equity fund, that fund is not solely investing in a sports team. That fund has a diversified portfolio. You are investing in that fund to get your ROI that's based on all of the funds underlying investments of which a team happens to be one of them. Really, that rule was put into place simply to open up a alternate. It's really called an alternative investment. You look at stocks, equities, bonds, fixed income, and then you've got alternative investments. And private equity is an alternative investment. And what the players were saying is, we're making so much money, which is their right and I'm proud of them for doing it

25:32because it's so hard to do. We want to be able to invest in all three asset categories. And they previously had not been allowed to invest in that third asset category if that category had an investment in a team. All the MBA did is say, hey, if they happen to invest in a team, you're still eligible to put your hard earned money into that investment portfolio. One thing we've all experienced is our bodies aging and slowing down. And even though I've been trying to stay active and make sure that I'm moving every day, I've definitely noticed I don't bounce back the way I used to. Recovery takes longer, my energy isn't always there. And it's easy to start wondering if what I'm doing is actually making myself healthier. You can clean up your diet, take supplement, and then you can do that. And I'm going to be able to invest in a team that's going to invest in a team that's going to invest or change your workouts, but unless you're actually measuring what's going on, you're kind of just guessing about what works and what doesn't.

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28:33That's bill.com slash proven. With a Discover Cashback card, it's payback time when you earn cashback on everyday purchases. Activate and earn 5% cashback at different categories each quarter on up to $1,500 in purchases. That's 5% cashback at different places each quarter, like grocery stores on gas and at restaurants. It pays to discover terms apply. See Discover.com slash five for details. With just to clarify, because it's Caleb Williams, it's Jalen Brown, it's Aaron Rogers, by the way, Aaron Rogers, when he was a free agent, he apparently, according to Proof of Bull Talk, in 2023, he was a free agent. Yep, apparently, according to Proof of Bull Talk, in 2023, asked the Jets, hey, I'm not even interested in salary, give me equity. The reason to spell it all out, the reason is because one dollar of salary is less valuable than the percentage point equivalent of equity in a team because of the way

29:34that all of these teams are booming in value. It's actually, you have to understand the number of people who could say that, are only people who have enough money where they don't need cash now. If you do not need cash, it is always better to get paid in stock. Always. The people who end up getting taken advantage of the employees who get taken advantage of are those who need money to live or money to buy their home or money to pay their, whatever, you know, debt they have, because they will take money, and then they don't want to share in the upside because you have to give something up to share in that upside. And what you give up is current day dollars. So whatever Roger was asking for, it makes sense, give me the equivalent of $10 million in the team as its value today. You don't have to give me 10 million in cash because I don't need it to live. And then I think the team will go up in value so my 10 million will become more as though I had taken your 10 million cash

30:35and invested it in some other way that had the same rate of return as a professional sports team. That's all, it's just math. Even if it was the jets, all of that is still true. All boats rise with the tide. Well, only in these American leagues that exist as legal cartels and part of the reason why the tide continues to rise is because the players do not have the freedom to negotiate for larger salaries that would maybe make some of the boats not rise. It's not right. They do. It is 100% right. They do have the right to bargain it. They just don't have the stomach or the career longevity to get it. It's like saying that you could dunk if you just really focused on it. Like no, I can only dunk if you lower the basket. Literally you have all the muscles that need that you need to get dunked ever. Dunk or if you got me a letter. Given that David Samson is currently sitting in a giant baseball glove, I think he has a point.

31:37So fine, you could hit 350 in major league baseball if only you would concentrate. There's nothing about you that means that you can't do it. Other than realistic circumstances is you do not have that ability. Like it's the same thing when you throw that out there. Like I know that's a talking point that that owners and the management class use, but we all know, like we all know it's not real. It's not real. You're simply asking for sympathy because there are certain things in collective bargaining that you know you can't get. There's certain things that I know on our side we can't get either. I'm not asking for sympathy. I just feel like we should have, I feel like we should just have an honest conversation. Like if we're talking about what people deserve and what they need and what they should be able to negotiate for, like we have to be honest about the parameters that exist. I've never been in a negotiation without parameters. Maybe I'm the only one. Every time I negotiate anything, there are parameters that each side has.

32:38There are different objectives that each side has. There's different points of view. There's different investment horizons and strategies. It's always that way in a negotiation and you come to an agreement or you don't. And with players, the reason why more times than not, you come to an agreement that favors ownership is the same reason why airplane pilots and teachers and flight attendants and other unionized workers constantly say we get the low and the short end of the stick with every bargaining that we do with management. It's not just in sports. I get that, but sports is unique in that when you named all those places, no disrespect to any of them, they are not as unique or as valuable as individuals as some of these players. I love this argument. I love this argument. It's not an argument, it's a fact. We're players. We are so unique that we couldn't, you couldn't live without us. Teachers screw them. We have 25 people ready to take your place.

33:40So we're not going to give you anything. That's not how it works. This is not, we're not doing a political debate where you have to spin bulls**t that we all know is bulls**t. We can be honest about this situation, David. Everyone in the world who's tried to play basketball, they're only 300 of them at any given time that are good enough to be there. Like this is a true thing. It's not the same thing. For like, and whether we want to be, we can pretend that we value teachers as much as we do athletes, but we don't. Like it's the revenue in you, someone who like defaults to capitalism all, oh, quite often as a defense for this, recognize that these players are generating an amount of revenue that teachers and auto workers and other people aren't. That's why they get paid so much. Agreed. I agree, but they have a restriction that the other people don't. That's all I'm saying. And like, these athletes are closer to entertainers than anything else. And those entertainers who also exist in unions also exist in an uncapped system.

34:41That's all I'm saying. We don't have to argue it. I'm just stating a fact. And you are making these kind of disingenuous arguments in order to undercut the things that me and Pablo and you and all of us actually know are true. I would just say just because I disagree with something doesn't make it disingenuous. I've said the thing that we all know to be true and whether we want to admit it or not us as a society. So like, you can all look at me and say, you're evil mean person who believed this. I don't believe it. I look at the TV. I look at the bank accounts. I look at the behaviors of all of us. We all value the entertainer more than we do the service worker. Should we? Probably not, but we do. And they also provide, create, generate more value. I've always make the argument that there is a free market system. And I'm going to say it's not free because it's so constrained by labor and by CBAs. But in a system where no one would pay to watch a teacher teacher, a lawyer, be a lawyer, people pay to watch athletes, be athletes.

35:42And they pay to watch entertainers sing or act. And that's why they get paid more. But what you're missing is that there are a whole level of entertainers who do entertain, but don't get paid nearly. The difference in pay between the top and bottom in movies is the same as in teachers and lawyers where it's different is in a cap-led like basketball where the minimum salary is a life-changing amount for anybody. There are more people in SAG after Dominique and you know this, who have to have three jobs because they don't make enough to live. I believe that you are accustomed to having too many conversations with stupid people. It's because we both know that there are a bunch of people in this world who play basketball or baseball or football at various levels. Those people don't get compensated. Like the structure is almost identical to that of entertainers.

36:47The difference is there is no cap on the top of the entertainers, which is fine. I'm just confused why we're having an argument on something that's a fact. You and I don't have to debate whether a cap should exist or shouldn't exist. A separate episode, by the way, about the salary cap and baseball and everywhere else. Whether you should be able to get equity in a team or not, we don't have to debate those things because they're facts. Like you trying to create this argument as if you're going to trick me into believing that these are somehow different. Like that's confusing to me. I would never try to trick you, Dominique, so now no, you're way too smart for that. But I was merely trying to point out that the sympathy, when Jalen Brown, I guess it goes back to Jalen Brown. He gets in front of a microphone and he proffers an argument that is totally self-serving, quite obviously. And it applies to maybe out of all the players in the NBA, are there 30 of them? Maybe one, 32, one, 13? You're probably fewer. Yeah.

37:48And what he's trying to do is appeal to the senses of the every man who says, wow, that's not fair. You're right, Jalen Brown. And I'm merely giving you the other side, which is, I don't believe that he should be arguing that to a public who, in general, will watch that and then try to elicit sympathy for that. That's all. Right. I agree that he's not going to elicit sympathy. I'm not sure that he's trying to elicit sympathy, but I think that's an irrelevant conversation. Like you and I both know what we're talking about. We don't have to talk about how other people are going to interpret it. And that's where it gets hard for me when you start saying that they like exist in a free market as if the draft doesn't exist, as if there aren't limitations on rookie pay. Like even in the uncapped sport of baseball, there are limitations on the amount that you can earn. Thank God. There are limitations on which you can earn. So let's not pretend like they aren't. Those limitations don't exist in other fields and they shouldn't. That's all. If the players union cared, then that it would be a bigger issue at bargaining. Well, so let's, this is, but, but, no, it's not.

38:50No, no, no, no, no, no, no. But this is, this is why this, this, the, the difference. It's all feels like a political argument. And it all feels like appeals to sympathy is because in real life, when these things are being bargained at the table and the threat of, well, we're not going to work, we're not going to play the games and the audience has to say to themselves, wait a minute, is that real? Are we going to lose our favorite thing and will the teams that own these assets going to say then we got to give the players what they want? All of that is happening in the public realm. Simultaneous to the private. And so that's why this all feels perpetually like it is about sympathy. With the Discover Cash Back Card, it's payback time when you earn cashback on everyday purchases. Activate and earn 5% cashback at different categories each quarter on up to $1,500 in purchases. That's 5% cashback at different places each quarter,

39:50like grocery stores, on gas and at restaurants. It pays to discover. Terms apply. See Discover.com slash 5 for details. So in this last part of the show, when you're at a vending machine and the only difference is there's a sticker on it that has the NBA logo. I can't think of a better metaphor than what NBA Europe is than that. We're talking about this other thing that players, the NBA is now saying we want to share in the revenues of because we here in America don't get it, but in NBA Europe, you're putting a sticker on a vending machine and guess what? That sticker is actually our faces. You don't admit it, but that's us. So we should get a share of that. So just think about two things. One, if the fee they're saying is up to a billion dollars in some of the markets and that fee is going to be paid, it is worth bargaining and I assume it has been bargained,

40:55whether or not those fees that go to the NBA are in any way part of the revenue calculation that is shared with players. But there is a person who will invest a billion dollars to have an NBA Europe team in Paris, let's pretend. I can assure you that revenue that comes from that NBA team operating in Europe, broadcast deals, ticket sales, sponsorship sales, that's not going to be shared with the NBA until they get to recoup their investment, that they get a return on their investment, that they are cash flow positive because NBA Europe, it's ready come out that maybe three years until we're breaking even as though they're celebrating that. Like with the WNBA, just because of the existence of Caitlin Clark doesn't make the league profitable overnight because to be profitable, you have to look at the history of the asset. You have to recoup your losses. So we are so far from NBA Europe actually impacting in a way

41:55that people are thinking in terms of NBA domestic revenue calculations. Yeah, that's fine and that could be true. I don't know the insides like these leagues and teams have not always been honest about their projections. I don't know where that's true of false. I don't think that we're wrong. We're wronged at Dominique. You know that. You have the audit right. It's so funny to me when the baseball union, I don't know about your union so I don't want to say. The baseball union, they have access to our financials. It's like a joke when they come out and say that team's not losing money. I know that they're printing money. They've got our numbers. Sorry. I can't speak to like how much access the baseball teams have. Having someone audit it is not the same as having the ability to see like in your financials there are categories and in those categories there are things. We don't get the ability to see everything in the category and what is actually represent. So like that there's no in an audit in the same which I know you've read.

42:58There are notes. Hold on hold on hold on hold on hold on hold on. I think if I if I if I if I if I if I if I if I if I if I have learned anything from how it is that financial organizations and the people who run them. Keep track of where the money is going. I think there are quite a bit of things you can do to make it so that your auditor is just like. That's all I'm saying. Don't�pune the auditing community. Pablo. No, no, no, forget it. That that especially because our argument was when an auditor left aspiration it was a big deal. There was something afoot. Okay, hold on. I am always in favor of auditing the auditors. I just fear that we digress Dominique. So please proceed. Yeah, I guess I was just saying that in order to set up this point is the performance of the franchise doesn't matter for the argument that I think the players are making. The argument that the players are making is that you're essentially using a value that we help to create to launch a new endeavor. So like either that that value should buy us a piece of

44:05that endeavor or you should pay us for the value that we created. Like that's what they're saying is like up into this point we thought that all of the excitement and interest and drama that we in athleticism and sacrifice that we were using was being used in order to sell this product here and make money that was considered basketball related revenue. You're now looking to launch something else that's you hope will make you billions of more dollars on the backs of the things that we help to create. We deserve some compensation for that. That seems fair. I'm only smiling because I'm picturing a franchisee of a McDonald's when a new franchise opens that the franchisee would call it McDonald's and say, hey, Ray Croc, it's because of my cooking of quarter pounders and how well my franchise doesn't demoin. I want a piece of your fee for opening a franchise in Albuquerque. It makes me laugh. You're not you're not you're not good at analogy.

45:07What you're saying right now is to pay money back to the franchise. Like you're a franchisee opening a new franchise in Europe and the players are saying the reason why this why you want to open this new franchise in Europe is because this American one is so awesome. Why is this one awesome? Me like that that seems like a reasonable leap to make is like, hey, only reason you can do that is because what we did here I deserve some of that. That's very different from McDonald's being huge and amazing in one little franchise in demoin saying, hey guys, you know why you're so popular now across the world is because we're killing it here in Iowa. I don't want to keep doing analogies with you, but I can I have 10 more, but let me give you one last one. If you're good, if you create value in something because you're an orthopedic surgeon and you're part of a hospital and that hospital does research and ends up being a worldwide leader in curing cancer. Do you think the orthopedic surgeon because he was so helpful to his hospital by being the best orthopedic surgeon

46:08that he would definitionally get a piece of the we just cured cancer credit or financial pie? No, but if he was integral to them discovering that there is no cap on what he can negotiate in his next deal. The next time he negotiates, there's nothing that says you cannot make any more money. He can go to all the different hospitals and say, I'm the cancer cure guy because to you, you pay me all you do and you accuse me of the same. So it's good. You just go back to the cap. Everything to you goes back to the cap, which is fine. I mean, I don't know where else if we're talking about money, I can give you 10 economic arguments. Let's give you one economic argument why the cap league, why are franchise valuations in the NBA and NFL so much higher than that of baseball in your opinion? Well, I mean, because there are better sports. Not not not only because they are better in more popular sports, but I do think that the existence of the cap probably being able to lock in cost structure for a period of time. So you're locking in percentage of

47:15revenues. Yes. And why franchise valuations are higher is because of the cap among other reasons. And so in baseball, when they want a cap, if they get a cap, which I think they will, they will be able to show players that total player comp will be higher under a cap than it was without a cap. And your whole argument is in an uncapped system, everybody will make more money. And we have just not found that to be the case. It's not my whole argument. And you know what I guess is I guess that if you believe that to be true, you would not be looking. So you want me to believe that these monsters of capitalism are looking for a system where they end up paying more money, right? That's how that's again, King of analysis. I'm telling you with the cap on a floor, no matter where they agree to the cap on the floor, there will be more teams that have to spend more money to get to the floor than teams who have to spend less money because they're over the cap.

48:19So I'm looking at total player comp, not just one team's player comp. I just want to make sure that we got this clear. And I don't even want to refute it. I just want to be clear that you are trying to convince me that the owners of professional sports teams are looking to create a system where they pay more salary to players. They're looking for certainty. Right. So that's the difference. Cost certainty is different than cost cut in. It's certainty. It's why players sign pre-arbitration deals. They want to take the uncertainty away. But it's more. All right. The math is what it's clear currently sits would be more. That's not a talking point. But that's just a math. Okay. Okay. Okay. Okay. But in the long term, oh, in the long term, we got your ass, man.

49:20That's all. That's all. That's all. The clock weren't ticking. I wouldn't have delivered that to you, but it was just too important to get it out. I love you, Jess. Yeah. The truth is always important to get out. We don't like you. I do love Pablo. Not today, though. I think if you play it out, if you play it out long enough, you both come back to liking me. We don't have that kind of time. There's a love cap for me. There's a cap on the amount of people I'm willing to love. And you, yeah, I can't pay the luxury tax for you. David Sapson, Dominique Foxworth, my affection for you, of course, as always, is constrained by nothing, but the time we have together and we're out of it. So thanks for doing it. Publicory Finds Out is produced by Walter Ave Roma, Maxwell Carney, Ryan Cortez, Juan Galindo, Patrick Kim, Nilly Lomon, Rob Cray, Matt Sullivan, Claire Taylor, and Chris Tuminello.

50:25Studio engineering by RG Systems, sound designed by Andrew Bersich, Digital Strategy by Bailey Carlin and Andrew Northern, theme song, as always, by John Bravo. And we'll talk to you next time. With a Discover Cash Back Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5% cash back at different categories each quarter on up to $1,500 in purchases. That's 5% cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See Discover.com slash 5 for details. At Verbo, we understand that even the best of plans sometimes need a little support. So we plan for the plot twists. Every booking is automatically backed by our Verbo care guarantee, giving you confidence from the very start. Whenever you need help, it's ready.

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