Guggenheim's Todd Boehly Talks Dodgers Purchase at Milken Conference
Hockey legend Wayne Gretzky and former tennis champ Jimmy Connors discussed the business of sports entertainment Wednesday in Beverly Hills.
Guggenheim Partners president Todd Boehly told a Beverly Hills audience Wednesday that his company's winning $2.1 billion bid for the Los Angeles Dodgers was a reflection of how the consortium of new owners see the team: As an entertainment property.
"It was our job to treat it as an entertainment experience,” Boehly told the audience at the Business of Sports panel, presented at the Milken Institute Global Conference. The panel, moderated by TV sports personality Jim Gray and featuring former tennis champ Jimmy Connors and hockey icon Wayne Gretzky, covered the unprecedented amount of money paid for sports franchises, the high cost of talent, rapid inflation in major sports TV rights and the rising cost of cable TV for subscribers.
Guggenheim, a diversified financial services company based in Chicago and New York, manages more than $160 billion in assets and owns The Hollywood Reporter.
Boehly's logic also applied to Time Warner Cable's thinking in sewing up a $8 billion deal for TV rights to the Dodgers' games, only a year after it paid about $3 billion for the rights to show Los Angeles Lakers' NBA games.
“What you’re talking about is the entertainment value,” said Melinda Witmer, Time Warner Cable's executive vp and chief video and chief content officer. “That’s what matters. … We need fans who are passionate about turning on the TV and watching the game or match, and it’s all about the entertainment value and the fan.”
Boehly said the Dodgers' new owners have spent big money to land players like free-agent pitcher Zack Greinke and fixing up Dodger Stadium to enhance that entertainment experience. He said the “energy in Dodger Stadium is magnetic, and you can feel that, but you still can’t guarantee a winner, and that is also what sports in the big-bucks era is all about."
“You’re paid for two reasons as an athlete – to entertain and to win,” said Gretzky, the NHL's all-time leading scorer who also has coached and served as a general manager in the league. “There isn’t anything else.”
All that entertainment has come at a steep price for the consumer -- cable and satellite bills seem to grow every year. And while Witmer agreed that the increased costs are going to be passed on, she said growing consolidation -- in theory -- means companies such as TWC can eliminate the middleman and deal directly with the teams and sell to consumers.
“We believe over the long run we are taking costs out for the sports fan,” she said.
Joseph Ravitch, a partner in Raine Group, which advises teams and leagues and facilitates sales, said the media world is changing quickly with the growth of mobile and online, and that too is a factor in the rising value of franchises and TV rights.
However, he said it isn’t changing as quickly as some think. For instance, he doesn’t see big technology companies rushing to buy rights in part because teams want the broad exposure a broadcasting or cable deal can offer.
“The old regime is going to be around for a while,” said Ravitch. “People want to watch it on big screen.”
Ravitch added: “The deals being set up right now by Fox or Time Warner Cable are going to continue the old system for a very long time. There is a confluence of events where everybody benefits, the leagues and the teams."
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