Back in February Alec Scheiner of RedBird Capital joined the Are You Not Entertained? podcast. They cover a wide-range of topics including SPACs, Fenway, Toulouse, multi-club strategy, XFL, Wasserman, NFL media, and sport being the ultimate people business.
You learn a lot about the business philosophy of one of the top people at RedBird Capital and a big influencer in the new XFL.
Scheiner talks about how viewing sports interest and success just by TV ratings is an antiquated view. The real monetizing of sports is coming soon and it is not just Nielsen ratings.
“people engaged with sports very differently than they used to. And yet we’re still tracking the way they engage, for the most part with an old style of doing that.(TV Ratings)… people engage with sports more now than they ever did. And we’re not quite capturing it by just saying how many people are watching TV. And so I do think in the next five years and probably sooner…. We’re just going to start measuring true engagement and then be able to monetize off of that true engagement as opposed to using what’s become a really unsophisticated tool to do it.
This view on the monetization of sports could be a big factor in why RedBird Capital wanted to partner with Dany Garcia and Dwayne ‘The Rock’ Johnson in purchasing the XFL.
“what we tried to do all the time, which is partner with the best people we can and then drive value from there.”
Dany and The Rock know how to work the engagement and social game with great success and Scheiner had said, RedBird partners with people who can make them better. Who better than this duo.
One thing about sports that make it a good venture for companies is that no matter how bad the team might be, fans will stick with it. It’s what makes sports teams so valuable as opposed to a restaurant or department store. Unlike a store, if you don’t like the offering, you never go back but in pro sports that’s not the case.
“I think the biggest sports brands in the world or the smallest ones have one consistent attribute. And it’s what I tell people about sports all the time. Unlike any other business, you don’t really lose your customer…. Cleveland Browns fans are not going to go to the Pittsburgh Steelers if their Cleveland Browns are bad.”
Scheiner later talks about the pandemic and how it opened the door for places like RedBird Capital to acquire an interest in other sports franchises and brands. This view tends to lean into the idea of why there is an interest by RedBird in the CFL and why now.
“in a weird way, the pandemic opened up the ability for private equity funds to invest in sports. I think it was and always been a somewhat closed ecosystem, especially when you talk about the people who actually own their own brands. It was hard to break in and to have that conversation. And I think that’s changed over the last year because of the disruption in sports.”
Later Scheiner discusses RedBird Capitals’ purchase of the XFL and why they did it.
“There is more than enough demand for football.. the interesting thing about the last iteration of the XFL was how many people watched it. You can’t argue with that. A ton of people watched it.
More people watched the XFL on TV than a lot of sports that have been around a long time. And I think that’s just because people love football at its highest level… there’s more demand for this product and then you partner with people like Dany Garcia and Dwayne Johnson, who in and of themselves have so much popularity that it rivals big brands and sports. Then you take Jerry’s kind of sports business building acumen. And I think we have a fighting chance. But it’s not it’s not easy.
“our perspective is you’ve got demand. And then if you have the right operators, you can have success.”
RedBird Capital joined with The Rock and Dany Garcia to purchase the assets of the bankrupt Alpha Entertainment LLC (XFL) back in August of 2020.
Scheiner served as President of the Cleveland Browns and Senior Vice President of the Dallas Cowboys. He joined RedBird Capital in 2016.
You can listen to the full episode here.
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