The Business Behind Professional Sports: A Glimpse at Owning an NFL and NBA Team

Audio Description

Do you dream of owning an NFL or NBA team? Co-owner and team executive A.G. Spanos, from the LA Chargers, and Alex Bhathal, from the Sacramento Kings, discuss the economics of owning a professional sports franchise.


00:00 - 00:00

Hello, everyone.

00:00 - 00:28

Before I launch into today's episode, I want to acknowledge the disgusting truth that racism and injustice continues to be a part of this country status quo. Our hearts go out to the families and loved ones of the individuals whose lives were tragically cut short and to all our Black brothers and sisters who continue to be plagued by the systemic racism in this country. We stand with you and promise to do our part to listen, learn, and help move our nation towards true equality.

00:37 - 00:56

Hey, everyone, and welcome to The Big Stage podcast, where we talk to athletes, artists, and entertainers of all kinds about their lives. I'm your host, Adam Sansiveri, Bernstein Managing Director and Co-head of Sports and Entertainment. We have a very special show for you today.

00:56 - 01:30

Today's podcast is a roundtable discussion with two amazing individuals, individuals that have reached one of the highest and perhaps most coveted levels in business. We have an owner and executive board member of the NBA, Sacramento Kings, Alex Bhathal, as well as an owner and the president of business operations of the NFL's LA Chargers. A. G. Spanos. Joining me for the discussion is one of the top advisers in our Sports and Entertainment group at Bernstein, and friend of our guests, Jeff Kragel. Gentlemen, welcome. So let's jump right in. Jeff, and I want to start with you, because that's how we've all come to be together talking today.

01:31 - 01:38

First, how did you meet Alex and A. G.? And second, how did you find yourself advising in the worlds of sports and entertainment? Thank you, Adam.

01:38 - 02:07

So, look, Alex and I met a couple of years ago through a mutual acquaintance, as Alex actually serves on an advisory board for a company that one of my clients founded a couple of years ago. But he's also very involved in kind of the economic opportunity zone landscape through lobbying and legislation and development. A. G. I met at the Super Bowl this year as I'm friends with a few of his cousins and then, Adam, to directly answer your question about how I got started here.

02:07 - 02:35

I think it starts with the age-old adage of finding something you love and are passionate about. And if you can make a career into it, then you essentially know that everything's going to work out OK. With that, let's go ahead. Get rolling. Thank you both again for joining us. Before kind of getting into your current roles, it'd be great to get a little perspective of your history. So maybe, Alex, I'll start with you. If you could share a little bit about what you and your family did prior to becoming co-owners of the Kings.

02:35 - 02:40

Sure. Thanks, Jeff. And thanks, Adam, for having me today. I'm excited to be here.

02:41 - 03:15

I come from a family that's been in business for a few generations. Back in the 1960s, my parents started a company in the apparel industry, that actually was a swimwear beachwear company. And thankfully, that was a successful enterprise that allowed the family to get into real estate, real estate development. So we always had kind of those two verticals of our family enterprise. I worked in real estate and actually prior to getting my MBA, I had a little taste of the sports business when I worked for Leigh Steinberg and Jeff Moore and were big sports agents, actually wrote my letter of recommendation for business school.

03:15 - 03:49

So that's a story I don't tell too often. But after that, it went back into the family business, the swimwear company. I joined my sister, my parents were retiring, helped grow the company. We wound up selling it to private equity. I ran the company as CEO for, eigt years and then transitioned over, which was really my long-term goal is to oversee the family investment office, where, as you mentioned, we're really active in real estate, particularly with a focus on opportunity zones. And seven years ago, we were part of the Vivek Ranadive-led group to acquire the Sacramento Kings.

03:50 - 04:13

At what point did you know that you wanted to be an owner of a sports franchise? It's a good question. It's an interesting process of getting to where we landed. Within our family, we've always loved business and we've always loved sports. And it's something that brought the family together. And it always was a goal and a passion to get into the sports business.

04:13 - 04:43

It took some time. We looked at a lot of different opportunities, came close a couple of times, particularly with one team. We almost got the New Orleans Hornets for the time. Now they are the Pelicans. But through that process, we earned a lot of respect, I think, from the league and developed relationships. And when the Sacramento opportunity was available, then we jumped up. So, A. G., your story is a little bit different than Alex's.  You were essentially raised in an NFL family. You're a third generation kind of owner operator of the team.

04:43 - 04:51

So can you maybe just share a little bit of what that was like, kind of growing up in that environment? Yeah, sure. Absolutely.

04:51 - 05:13

As you said, I grew up in the family business, and for that we have my grandfather to thank. I could pretty much spend most of this podcast talking about him and his amazing story. But I'll plug his book, Sharing the Wealth, if anyone's Interested. But it's the story of a young son of a Greek American immigrants who really started with nothing, turn to restaurateuring and catering.

05:13 - 05:31

He lived in Northern California. So there was through his connections with the farming community, he was able to source workers for their labor and was able to amass enough money to get into real estate, which then he parlayed into a construction business, which then became one of the larger builders of apartments in the United States.

05:31 - 05:49

All this while having this, you know, somewhat quiet desire to own a professional sports team. And around the late seventies, he started to try to buy the Tampa Bay Buccaneers. He tried to buy the 49ers, and was about to buy into Donald Trump's USFL league.

05:49 - 06:08

And a good friend of his, Barron Hilton, actually talked him out of it at Bel-Air Country Club and said, Alex... as some people know, Barron was the original founder of the LA Chargers in 1960, and he said, Alex, I still own a portion of the Chargers. I'll sell you a portion of the Chargers.

06:08 - 06:37

I'll give you first right of refusal to buy the team should they ever come up for sale. It's a much better investment. Best sound...  better investment. And on the eighth hole at Bel-Air Country Club, they shook hands on the deal. So, yeah, a year later, the team came up for sale. My grandfather matched the price of, it was like 77 million dollars, I think at the time. I've been a Charger ever since, I like to say. I was still relatively young when that sale took place.

06:37 - 07:10

And I grew up in San Diego and around the team and really learned the business from the ground up during my formative years in high school. Interned with the team during the summers, was a ball boy, was... delivered the mail... like all of those jobs, and then started full-time with the team in 2001. And was there ever a time you considered maybe not following in the footsteps of the family, or was that a out of the question? This is, this is what you're doing? Yeah. My parents did a great job of just letting me pursue my dreams. And it was, you know, I grew up loving sports.

07:10 - 07:13

I played football in high school. I played football in college for a year.

07:13 - 07:46

It was always a passion of mine. And it's really just rewarding to kind of live out your dreams and meaningful to extend my grandfather's legacy through the team and our work. This is something that I've wanted to know and I'm sure listeners would want to know as well. What does it actually take to become the owner of an NFL or NBA team? Because we know it's not just about money, because plenty of wealthy individuals have tried to own teams and failed. So what does it come down to? Alex, you want to start? From our experience to get into the ownership circle of professional sports.

07:46 - 07:50

It takes time. It takes relationships and takes consistency.

07:50 - 08:21

We looked at a lot of different opportunities through the years with a goal of getting into the business of sports. And although many of those journeys were not fruitful or not the right opportunities at the time, it allowed us to develop the relationships with the decision makers and have a consistency and build a reputation within the ownership world and the league offices. And I think that is... that takes time and that bore fruit in our experience in Sacramento.

08:21 - 08:23

Great. A. G., anything you would add?

08:23 - 08:54

Oh, it's a good question. I think similarly to Alex, you're looking for someone who's going to be a good partner and really appreciate the dynamic of the NFL and how special it is, and that we understand that the part of the secret to the success is that the joint success, that another team's success is also your success, especially when you consider things like revenue sharing and the TV money involved and those things. So, yeah, if I could just underscore that. Well, it truly is a team sport, then. Yeah.

08:54 - 09:09

A. G., we're going to come back to kind of the economics question here in a minute. But maybe before we get there, we'll talk a little bit about the environment today with COVID-19 and the fact that, like all businesses, sports organizations clearly have had to pivot. Right?

09:09 - 09:41

I mean, this was a moment in time where the basketball season on Alex's end had to hit the pause button or trying to figure out a way to restart. And A. G. on the NFL side, you're trying to plan for a season, and this was the first time ever you had a virtual draft. So Alex, maybe we'll start with you on this. In terms of what pivots have you had to make and how is this entire kind of moment been for you in the organization? Well, it's been surreal and the impacts are very real to the business of sports and basketball in particular.

09:41 - 09:51

The day itself was a day that I'll never forget. It was... I was actually hosting a group up in Sacramento that day and we had some meetings over the course of the day.

09:51 - 10:23

There were a lot of rumors and stories coming out online on what was happening around the country as the impacts of COVID-19 were starting to ripple through the broader economy. And I found out that the season was canceled the same way, I guess, that Mark Cuban found out looking at ESPN and... we were at a pregame cocktail party with the group that I was staying. And that created a ton of buzz poolside actually at the hotel next to the arena.

10:23 - 10:53

We found out from the league because we were the ESPN game of the night, that we were going to proceed with the game, even though the league had suspended, and we were going to be the last game for the season. And we actually went into the arena along with 18,500 fans. And just before tip off, we received word that our game was canceled as well and the whole season was going to be suspended, including our game. That was the start of a really crazy couple of months for us, for the

10:54 - 11:05

team, for the league, and everybody in the country. And A. G., how about you on the football front? Yeah, for us, it it happened very early in our off season.

11:05 - 11:29

I suppose the timing was relatively fortunate. We didn't have to... we haven't had to deal with any loss of games or even delays of games at this point. But we obviously... our offseason looked tremendously different than what we had planned. For the Chargers, in particular, we were launching a new uniform. We had grand plans for a giant draft party. We were picking six overall. We ended up selecting a new franchise quarterback.

11:29 - 12:01

So we had to shift dramatically our planning and move our entire staff to work remotely. And I was pleasantly surprised with how quickly we're able to do so and the quality of work that we've been able to produce from everything from our launching new uniforms to the draft to the schedule release. I got to give credit to our team just for their efforts and creativity and really taking advantage of every technology that's out there and really separating our organization and the quality content we've been able to do. From a draft standpoint,

12:01 - 12:30

and I know people are really curious about the players, and how all that worked. And, you know, luckily we didn't lose the combine, that combine happened just before this all broke. A lot of that work was already pretty much complete at that point. All the tape has been reviewed and our scouts and our GM met virtually for most of the that process leading up to the draft. And our IT department deserves a great job of making sure all those connections were very secure. There was many levels of failsafes for when the draft was actually happening.

12:31 - 12:51

I will say this one tidbit. The one thing that was not ever allowed online was the actual draft board sheet. That was... there was only several copies and those were, those were hard copies that were only possessed by a few select individuals. Collector's items then at some point in time to be finite amount of hard copy draft sheets.

12:51 - 12:55

That's great. And then how about I mean, again, difficult time for all.

12:55 - 13:26

And so how have you two, your families, your organizations has been able to effectively help support communities through philanthropy and things of that nature? I'd love to hear maybe what your respective organizations have done. From our family perspective, we're really proud of the job that the Kings have done to support the local community in Sacramento. There's been a myriad of activities that I'll just highlight. There's been a $250,000 donation, cash donation to support local community groups that are in need during this crisis.

13:26 - 13:51

The organization has also donated 100,000 masks to the community. There's a litany of efforts, but that's something that with the Kings being a community asset such as it is, I know from our family perspective, we really are supportive and encouraged by the efforts that the Kings as a brand and as an organization are making to support Sacramento.

13:52 - 14:14

A. G.? Something that our organization keyed on was once that we heard that L.A. Unified School District was closing, we knew there was going to be a tremendous need among the families who rely on school lunches for meals. You know, it's an estimated 80 percent of the student body lives at or below the poverty line, some 560,000 students.

14:14 - 14:40

So, you know, we made a donation of $250,000 to the LA Food Bank, as well as donations to the Orange County and San Diego food banks as well. Additionally, then we partnered with our media partners, iHeartMedia and KCBS to do a fundraiser for... telethon for the L.A. Unified School District Scrap and Go program, which also provides over 10 million meals.

14:41 - 15:15

So that was the most imminent need that we saw coming out of COVID. Now, the other thing I will say is we also used our... we tried to think differently and we used our schedule release to thank essential workers, which I think is one of the coolest pieces that we've...of content we've ever done. And if you get anyone listening to this podcast, want to check out one of our social channels to view it. I've showed it to a couple of people and very few people, I don't think anyone's watched it with a dry eye, so... Great. Thank you for both for sharing that. Now, A. G., you alluded to it earlier, we wanted to talk a little bit about the economics.

15:15 - 15:26

I'm a numbers guy. My background is a CPA. So let's talk a little bit about the business of football and basketball and kind of how the overall economics work. Sure.

15:27 - 15:59

As I touched on earlier, I think the secret sauce of the NFL is that we share one of the largest revenue streams, which is the TV revenue equally among all 32 teams. So what that does is it ensures that every team at least has enough to spend at or near the salary cap so that you don't have a situation where, as sometimes you see in other leagues, where one player might make more than another team's entire roster. The NFL feels that that's just not really conducive to a strong league.

15:59 - 16:09

It creates a disincentive to follow every single team and show interest. So it's kind of a macro approach to the economics of the league that I think is our secret.

16:09 - 16:44

There's obviously a lot of talk about possibly starting the season without fans. I don't want to address specifically certain potential outcomes that have been discussed. You know, whether it's playing without fans, or delaying the start of the league or playing games out of certain states that might have different rules than other states. There's obviously so many contingencies and so many variables that it'd be hard to address them directly. But I will say at this point right now, we're focused on starting the season as regularly scheduled with fans, that's a priority for our organization.

16:44 - 17:18

And we're acting as if, because otherwise we wouldn't be ready. But I think you, as you touched upon earlier, fans are excited to have football back, sports back, period. I would love to see the NBA back very soon. And, you know, there's a groundswell of interest. Just you can cite the NFL draft this year was up 30 percent and viewership over the previous high. So there's tremendous demand right now. And it's also a great signal of, you know, the economy and just the United States being open again for business when sports is being played.

17:19 - 17:38

Now, clearly, because we will be one of the last things to be approved, you're now starting to see restaurants open, bars open. This thing will happen in stages, but hopefully these positive trends continue of opening and a steadying of the curve. Alex, how about you, anything to add on on that?

17:38 - 18:12

Oh, I think A. G. did a great job covering how TV contracts work and also the uncertainties that are ahead of everybody in the sports business with respect to how things reopen. The only thing I would add is related to real estate. That's a particular area of interest of mine, as you mentioned. And nowadays, sports teams are not necessarily just the franchise. Oftentimes there's economics around the arena as well and the events that go into the arenas or stadiums.

18:13 - 18:35

And oftentimes there's ancillary development or real estate that is part of the ownership groups, such as in Sacramento next to the Golden 1 Center. And then the Kings ownership group also builds a hotel, restaurant, retail space, office space. And all of that's impacted when the anchor of the development is closed.

18:36 - 18:57

So we're very eager for events and games to be able to be reopened, to restart in the long run and will include fans. I think everybody is highly motivated to see that day come as soon as possible with the caveat it must be done in a way that is safe and gives comfort to customers.

18:57 - 19:25

And, well, it goes without saying. I think that the amount of jobs that you both create, your organizations create, goes far beyond the value of the emotion that we all get by getting to watch sports on a regular basis. So it goes without saying that everyone is really keen to see both leagues come back and proceed. So I guess that leads to my next question is, without sharing anything confidential, can you give us any insights into the NBA and NFL restart plan?

19:25 - 19:51

No. A. G., anything you'd add to that? Honestly, the conversations are still going and we're all reacting as new information comes available. And we still are... more information is still coming in. And I agree with Alex. It's got to be done in a way that that fans feel safe and positive about the experience of going back.

19:51 - 20:23

So there's not much to add at this point. We're still just following this thing as it progresses. It's a much better answer. Thanks, A.G.! All right. So maybe we are getting towards the end here. The fact that we've had no live sports means that all we've been able to do is, is watch basically episode after episode of The Last Dance, or all the ESPN classics that are on there. And so I'm going to ask both of you, if you had to pick one game to kind of air on ESPN Classic, what would it be and why. I can jump in.

20:23 - 20:45

So there's been so many incredible games over the long history of the Sacramento Kings. As you guys may know, Sacramento, the Kings organization, has its roots in Roch as the Rochester Royals and actually won NBA championship in 1951. So it's one of the longest franchises in the NBA. From my perspective,

20:45 - 21:20

I'll just look at it within the context of the time in which we've been involved and the most memorable game that I can point to is the last game at the old ARCO Arena, and even though our team wasn't good that year, we played the last game against the Oklahoma City Thunder. It was a phenomenal game, went down to free throws at the end. We won by two points. And not only was it so emotional to close the arena on a positive note, but it also ended in there and began a new era when we moved downtown.

21:20 - 21:33

And the next season we're able to open the new arena. And that was representative of the team putting deep roots into the community and kind of the end of an era and the beginning of a new one. Likewise with Alex.

21:33 - 21:55

There was so many games to choose from in Chargers history from the epic in Miami to, you know, our 1963 championship game, but got to narrow down to two basically, like our AFC championship game in the 94th season, when we went into Pittsburgh and we clinched the berth through our first Super Bowl, it was just an incredible experience. It was kind of actually an ugly game.

21:55 - 22:18

It was a little sloppy, but it was just so exciting and to stun that crowd. And then more recently in the 2018 season, we went on the road to the Kansas City Chiefs on a Thursday night game, nationally televised, hostile environment. We hadn't beat the Chiefs, in I think, like, nine tries or something. It was... it had been a long time since we've beaten them.

22:18 - 22:51

And we went down by two touchdowns early in the first quarter. And that offense was revving, Patrick Mahomes was at the top of his game and we fought back, never gave up. Nobody quit. Mike Williams had an incredible game. He scored like three touchdowns and one of which was at the last seconds of the game. And then we scored a touchdown to be down by one. And our coach, instead of kicking the field, kicking the extra point, which would have just tied the game, and send it overtime, has the guts to go for two.

22:52 - 23:16

And Mike Williams catches, breaks wide open, and catches. The ball felt like it hung in the air forever. And I say, I'm sitting there waiting for him to catch it. Man, he was wide open and catches it. And then our, just our sideline erupts. The crowd is absolutely stunned. We clinch the playoffs with that win and we clinch the playoff berth with that win. And it was just, it was probably the, it was the most exciting regular season when I've ever been a part of.

23:17 - 23:21

Yeah, I remember that. And that's amazing. That's what it's all about.

23:21 - 23:55

So, guys, I want to end on a question that, since we are a financial firm, has to be a finance question. And I'm curious to know, what financial advice would you give your younger selves? I would say in thinking about the long view, investing in real estate earlier, that's been a very lucrative area for our family and understanding the impact that good real estate projects can do for communities. So I would say look at real estate opportunities. Great. A. G.?

23:56 - 24:22

Yeah, I probably would have invested in the, in Google or some of the Blue chip when they were still, you know, tens of dollars, if not hundreds of dollars. But my education, just continuing education, just make sure that you, you know, listen to a podcast like these and then continue to brush up on what's going on in the world because things... And stay current. Great advice. Great advice.

24:22 - 24:42

Well, thanks for sharing all of that with you. And I think we'll end it there. So, Alex, A. G., Jeff, thanks so much for joining us on The Big Stage. Thank you. Thank you, Jeff. Bernstein—making money meaningful for individuals, families, and foundations for over 50 years. Visit us at

Adam Sansiveri
Senior Managing Director

The information presented and opinions expressed are solely the views of the podcast host commentator and their guest speaker(s). AllianceBernstein L.P. or its affiliates makes no representations or warranties concerning the accuracy of any data. There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not guarantee future results. The views expressed here may change at any time after the date of this podcast. This podcast is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor’s personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AllianceBernstein or its affiliates.

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