Avenue Capital's Marc Lasry speaks again about investing in sports

The sports world has never been a hotter investment than it is right now, especially with fan excitement over the men's and women's NCAA basketball tournament in March. Avenue Capital Group CEO Marc Lasry sits down with Yahoo Finance Editor-in-Chief Brian Sozzi at the 2024 Milken Conference to discuss the possibilities of investing in specific sports sectors, including women's sports and even Premier League soccer.

The University of Iowa and Caitlin Clark's appearance in the women's NCAA championship drew 18.4 million viewers to watch the college basketball game.

“That’s more than I watched a regular-season game, right? I think there have only been a few playoffs that had higher ratings than the NBA Finals. More than a baseball game, more than the World Series. More, “By the way, than the men’s NCAA,” says the former co-owner of the NBA’s Milwaukee Bucks. “So that tells you there’s a lot of interest in women’s sports and I think it’s only going to continue.”

Lasry discusses the investments made in the PGA Tour and other sports leagues through the Avenue Sports Fund.

Turning his attention to the U.S. economy, Lasry says things have definitely become “more difficult” for Americans as inflation flourishes in an otherwise prosperous economic environment.

“The fact that there is a slower economy even though GDP is positive is positive. The fact that interest rates are high actually means that the cost of doing business for companies has increased. And you find that some people have accepted that.” “You're using too much leverage and you have to reduce it,” Lasry says of the loan terms.

Learn more about Yahoo Finance's coverage of the 2024 Milken Institute Global Conference.

This post was written by Luke Carberry Mogan.

Video transcript

There's a lot going on at the Milken conference at the Beverly Hills Hilton in California. Talk about some markets, some about the Federal Reserve and of course sports to learn more about it. We have Avenue Capital Group Chairman and CEO Mark Lasry.Mark. Nice to see you. It's my pleasure. Thank you for having me. We talked before we came in. Do you miss owning the books? Play, love the community, love the players. So yeah, it was a big part of my life for about 10 years. Many of the athletes here, I think I've seen David Beckham walk into an arena before. How do you explain your success in turning a team around and then putting it in better hands than you had. I think when you end up owning a team, obviously your goal is to try to win, right? Like you said, you've been a long time Knick fan, I still can't believe they've been winning for a long time, but the goal is to win. And I think we succeeded. We managed to transform a community, um, help transform a city, build a new stadium, build an entire district and ultimately win a championship. And I think it was a unique experience for the city and for me. Would you like to be an owner again? Um, I want to invest in teams again. I think it's expensive to own a team. We were associated with different things. Where, where do you see yourself investing next? I think we're going to invest in all different leagues, whether it's basketball, hockey, soccer or baseball. Um, we'll probably do something in the Premier League. Um, we want to get involved in women's sports. I think you have a huge opportunity out there. Um, and there's a renewed interest in sports. I think you're literally in the big league, 2nd inning to do this thing today. Has Kaitlin College changed the way you think about investing in women’s sports? I think, yeah, I think the ratings were around 18.4 million. Um, you know, that's more than I've watched a regular season game, right. I think there were only a few playoffs that had higher ratings for the NBA Finals, more than a baseball game, more in the World Series, more than the men's NCAA, by the way. So that tells you there's a lot of interest in women's sports and I think it's only going to stay that way. This conference is getting a little crazy. I'm sorry for forgetting my own name. So, Caitlin Clark. right or wrong? Is that right? We invested, invested in the PGA Tour. That's what we did problems that the PGA had. Um, I think it's a unique franchise. The best players in the world play here. And I think in the next five years the PGA will just continue to grow and they'll be able to work. Hopefully something would survive. How does the average investor invest in sports? And they don't, they can't just invest in teams or leagues? Is there an easy way to do that? I think you'll find that there are more and more people looking into sports funds. So I think investors will have that opportunity, you know, whether you're a small investor or a large investor. Um, but I think if you will It has diversified. You have to find people like me to do it, otherwise you can buy MS G, right? And you can own a piece of Nick. What are you looking for when you reevaluate these investments? How do you perhaps view investing in a sports team or league differently than what you have done in the lending business for many years? I think part of it, of course, is that you want to make money. So let's take a look at what will happen to their media. What will happen to the sponsorship? Is there enough engagement or demand that people want to be part of this team? Correct? And you kind of see it, right? What you found With Caitlin Clark and your first question: There is more interest in women's basketball today. So what does that mean? That means you have higher media rights, higher ticket prices and higher sponsorship because more people want it. So essentially we're looking for businesses to make money from. Let's go back to everyday labor markets, credit investments. What do credit markets say about the health of companies? Business? I think the economy is doing well, right? That's not the problem, that's not really the problem. I think the problem concerns the average American. So what's happened in the last few years is the average American's interest rates have more than doubled, right. So the price of your house has gone up, food and fuel have gone up too, right? So people's basic needs, for the average American, are more expensive. If you look at the economy, the economy is better, right? And that's because the economy is growing, GDP is positive, but unemployment is lower. So all of this is good for the economy as a whole. But I would say for the average American: It's gotten harder. It is harder to find opportunities and loans as the economy is somewhat contentious and has found a soft landing. Oh, I think it's easy to find opportunities for loans. People always need capital, folks. There are always problems. So from what we're doing, um, the fact that you have a slower economy, even though GDP is positive, the fact that interest rates are high actually means that the cost of doing business for companies has gone up, and you find, that some people had taken too much leverage. Um, and they need to reduce their debt. I asked Mark Rowan for a guideline on how to essentially get people so heavily leveraged on three or four stocks. It's NVIDIA Apple Amazon. What is the risk for this? The risk is simply that these stocks won't work. Well, it doesn't seem like it, the great thing about concentration is that when it works, you're really, really happy. If it doesn't work, you have problems. Correct. So let's not believe that. NVIDIA did a great job Great if it works. And it's terrible when it doesn't work. Do you think this kind of focus could work if interest rates stay high for longer? I think it's hard. I really do. I think what happens is when people are nervous, they invest in things that they know really well and that they believe will exist. That's why Apple and Via are doing well. Amazon Meta is another example, but I don't know what's going to happen next year. I know on the credit side, you have all these options on the equity side. I'm not a stock player. So I think things will get harder for you before I let you go. That's not true. I can't imagine that you don't own a sports team. You don't spend 40+ years in credit investing if you don't do a hell of a lot of things right in your life and career. How do you explain that? Your success and what advice can you give to other investors who might be seeing this? I remember Mark, he owned the money, you know, he, he's doing something right? Yes. You know, that's a great question. I I don't think people like the answer. You know, the answer is to work really hard. Correct. And like in today's world they say you have to work really, really hard, you have to be in the right place at the right time. You have to be lucky, but luck starts only for you. Correct. If you work really hard, you have to create your own happiness. And I, you know, I was lucky that I started out as a lawyer and I got into business. I was good at math. But for everyone out there and you know, in any industry you have to work exceptionally hard. You have to be lucky. This is very true. Well, nice to see you. I'm looking forward to really enjoying this conference, Chairman Mark Lasry Avenue Capital Group Thank you for your support. Thanks. It's nice to see you again. She.