Alibaba Joe Tsai's family office eyes more sports investing
Blue Pool Capital, the Hong Kong-based family office of Alibaba co-founder and chairman Joe Tsai, sees sports investing as one of the most exciting sectors for its new investments.
This is driven by increasing interest in live sports events and the related growth in media rights, according to Chief Executive Officer Oliver Weisberg.
“One of the things that we're most excited about is actually sports investing,” Weisberg said during the recent Milken Institute Global Investors’ Symposium in Hong Kong.
“When I think about my marginal dollar today, sports is at the top of the list,” he said. “Sports has become an actual asset class now.”
"We believe between the interest in live sports, and the increasing growth in media rights, that's something that we're super excited about," he said.
"It's not just NFL (National Football League), NBA (National Basketball Association), NHL (National Hockey League). It's women's soccer, women's basketball [as well]."
Weisberg added that the family office is also very active in the real estate market in Japan, without elaborating.
Alibaba’s Tsai was born in Taiwan and educated in the US. He has had a passion for sports since his high school days in New Jersey, where he played lacrosse and American football.
Tsai was among early Asian investors in international sports franchises.
In 2019, he took full ownership of the American professional basketball team the Brooklyn Nets and its home arena, Barclays Center in New York, from Russian politician Mikhail Prokhorov. The deal was estimated at $3.5 billion.
It is by far the most iconic assets in Tsai’s investment footprint.
Through the sports investment vehicle J Tsai Sports, Tsai also has stakes in the New York Liberty, part of the Women’s NBA, as well as the San Diego Seals of the National Lacrosse League, and holds investments in the Premier Lacrosse League. Tsai also owns stakes in Los Angeles FC of Major League Soccer and several sports media and technology companies based in North America and in Asia.
Weisberg is also the CEO of J Tsai Sports. He joined Blue Pool from Citadel in 2015 when the family office was founded. The hedge fund veteran led efforts to acquire the Brooklyn Nets and Barclays Center.
Weisberg led Goldman Sachs’ original investment in Alibaba, when it was a fledgling Chinese e-commerce and technology company, during his time with the bank in the early 2000s.
ASIA INTEREST
Blue Pool manages much of Tsai’s $8.4 billion fortune. The family office also reportedly looks after some of Alibaba founder Jack Ma’s $30 billion in assets.
Its portfolios span hedge funds, real estate, and private equity with a focus on technology, media and telecoms, as well as services and the consumer sector.
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Sports investing, an emerging sector that the family office is focusing on, is not an area of ample deals in Asia. The market is much more active in the West, noted a senior executive of a leading global alternative investments firm.
The Asia story is more about Asian investors involved in sports teams and relevant investments in the US or Europe, although there hasn’t become a major trend, he noted.
This is partly because such investments require very strong relationships and exclusive access to deals, which are not widely available in the market. But there is certainly interest, he said.
Echoing such views, Gideon Kong, managing partner and co-head of Hong Kong at multi-family office AlTi Tiedemann Global, also cites the naturally limited supply of sports teams, and the fact that it can be difficult to get owners to sell. Many have a passion for the teams they own and are not necessarily looking to make money.
At this stage, certain wealthy families are interested in owning sports teams because others have them, Kong said. This is also because values have been going up, he added.
ADDITIONAL VALUE
Kong agreed that sports investing is increasingly becoming an asset class, as more investors, including private equity managers, start acquiring stakes in teams.
There are different ways to create value from such investments beyond ticket sales. This includes media rights and sports paraphernalia, he noted. Media rights, in particular, have become an important revenue source for owners.
Another AlTi managing partner and co-head of Hong Kong, Joshua Green, believes live events are the only programming worth money to advertisers ever since the advent of content streaming in the late 2000s.
Such spectacles include sports events, concerts, and awards ceremonies such as the Oscars.
“The market was undervaluing the media assets for major sports teams,” Green told AsianInvestor.
Successful acquisitions sometimes require renegotiating the media rights to unlock additional value from sports franchises. The Guggenheim Baseball Management's ownership of American professional baseball team the Los Angeles Dodgers in 2012 is one example, he said.
In some cases, team owners were also able to re-purpose the real estate in and around sports stadiums, which are often located in prime locations, Green added.
While independently operated, Guggenheim Baseball Management falls under the Guggenheim family's extensive business holdings through its parent company Guggenheim Partners.
This article has been updated with more comments from Oliver Weisberg in para 5 and 6; and details of the ownership of the LA Dodgers.