WHEN: Today, Tuesday, July 25
WHERE: CNBC x Boardroom Game Plan Summit
Following are excerpts from the unofficial transcript of the interview with Kroenke Sports & Entertainment CEO and Los Angeles Rams Owner Stanley Kroenke that took place today, Tuesday, July 25th, live during the CNBC x Boardroom Game Plan Summit in Los Angeles.
Video can be found on CNBC.com
Mandatory credit: CNBC x Boardroom Game Plan Summit
STANLEY KROENKE ON COMMANDERS OWNERSHIP
I go to Washington a couple times a year for some event and the first thing out of anybody’s mouth is what are you going to do with Washington in the NFL, so it was it was obvious problem. And so yeah, having new ownership especially Josh and David, all these I mean, these people know what they’re doing smart guys. It’ll be it’ll be it’ll be fantastic really are going to be great owners.
STANLEY KROENKE ON VALUATIONS
I mean, these valuations – and there are multiples. I mean, scarcity value is a big pone. Warren Buffett, immediately, I mean they asked him a few years ago what he thought about pro sports he goes, as long as we keep creating people with wealth in our societies around the world, he said these things will grow in value because of scarcity. So that’s one factor. So generally, they’re valued also as a multiple of revenues. And and then you kind of look at at some other things which are what what exactly can you do with, you know, the future kinds of streams, revenue streams, what are the opportunities? And you know, we’ve got lots of lots of different things that are starting to come in so that that create opportunities.
STANLEY KROENKE ON OWNERSHIP RULE CHANGES
I’ve said for 20 years, and I had my own probably, I was looked at as having my own reasons for having an opinion, but I told them for over 20 years that they were going to have to relax some of the rules like when you talk about the NFL, it’s a, it’s a league rules. We have lots and lots of rules – and a lot of people agree with me, but they wouldn’t do anything about the rules. You know, one of them was cross ownership, which, which caused all kinds of different things for me. But I was probably perceived as having a reason but I told them I said the value, the way these values are increasing. When I got involved in 1993, the expansion franchises for the NFL were 100 and 30 million. A 30% requirement for ownership was – so that’s 39 million. That’s when I got involved.
STANLEY KROENKE ON OWNERSHIP CHANGES
Scott Wapner: Are you suggesting that the NFL for one needs to evolve in terms of who they’re going to allow to invest in teams?
Stanley Kroenke: Yeah absolutely. We will be looking at there’s a lot of smart people looking at that. And so I mean, I think definitely have to evolve and it’ll be interesting. The structures that that will come into being, I think.
STANLEY KROENKE ON NFL SALARIES
I think the salary structure does evolve. I mean, I think it absolutely does evolve. Having said that, the players do get their share. You know, I would, I would tell you from our side, and you know, we build stadiums so that, that they – think about the revenue that a place like SoFi produces relative to something else. You mentioned, the huge amount of investment it took there. That produces a lot of revenue, which the players share in , and that allows them to make more. Now how you allocate it between running backs and, you know, quarterbacks and stud linemen and linebackers, you know, I mean, think about Aaron. Aaron Donald. What a great player. He should get paid, right. And so how do you allocate all that and sort of kind of comes down to market forces, I think how people evaluate it.
STANLEY KROENKE ON STREAMING
I think what really is interesting, you want to talk about values and how they might increase is we all have this streaming platform that we talk about forever. You guys talk about a lot. And you should, I mean, but again, as Warren Buffett said, it’s not a good business, right now. I mean, it doesn’t make any money. Everybody went from a legacy business that made a lot of money, you know, cable, that kind of thing. And it’s still there don’t get me wrong. But now you have streaming which nobody’s doing any – very good at it. I mean, they’re, maybe they’re increasing subscribers or whatever, but they’re not making any money. They’re losing a lot of money. And so how does it become a good business? Well, it could become a good business if it was consolidated. That’s one way. And so if you had fewer players and you had more pricing power, you guys did a thing the other day. One of your guys that talked about the average streaming bundle used to cost $70 now it costs $219 or $210 or something like that. And, and this was just two or three, four years. So obviously, the prices are going up, but I think what they’re talking about with a bundle is how many things you think you have to buy to get you to get the coverage that maybe you enjoyed with a few things historically. So I don’t know what will happen there.
STANLEY KROENKE ON INTERNATIONAL EXPANSION
The NBA probably has done done the best job so far, and I feel like I told Roger Goodell our commissioner in the NFL, I feel much better about the NFL’s ability to do some of that now than I did when, when I first got involved. I just felt like American football was such a core thing here in the U.S. that people around the world they just didn’t didn’t watch it. They didn’t understand it. But I think that’s changing some our European games – our games in London, our games in Germany last year – they’re very popular, sold out very quickly so we’ll see.