Business of Sports
When Italy meets Indy 500
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This week, we speak with Doug Boles, president of Indycar, about the crazy tale of the Italian team taking pole position in this weekend’s Indy 500 in their first ever season. We also give James Dolan some credit for the Knicks (not something that’s happened in the past), and wrap up our visit to a very busy NFL owners meeting. 

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Knicks Shocking Glory

Hey, it’s Ira. New York Knicks owner James Dolan is no stranger to bad press. For many years when the Knicks were very bad, Dolan bore the brunt of criticism for the franchise’s failures. I was working at New York magazine in 2008 when it ran a feature story calling the Knicks “Absolutely, Positively the Worst Team in the History of Professional Sports,” and at Bloomberg Businessweek more than a decade later when it published a headline asking “Is the Knicks’ James Dolan the Worst Owner in Professional Sports?

Along the way, Dolan has been pilloried for his treatment of former Knicks star Charles Oakley, for deploying facial recognition technology to exclude his enemies from venues he owns, for bungling the Knicks free agency pitch for LeBron James, for using his rhythm and blues band to make tone-deaf jokes about the Knicks, for blocking attempts to rebuild Penn Station (which sits below Madison Square Garden), and for allowing Donald Trump to rent the Garden for a campaign rally where a speaker made racist jokes. (Let’s not talk about the time he kicked a Bloomberg reporter out of his band’s gig in Long Island.) 

New York Knicks fans celebrating. (This is not an AI-generated image.) Photographer: Leonardo Munoz/AFP/Getty Images

By 2023, things had reached a point where Dolan told the New York Times he didn’t really like owning teams. (His Madison Square Garden Sports Corp. also owns the National Hockey League’s New York Rangers.) Then a funny thing happened. The Knicks got good. As you may have heard, they are playing in the NBA’s Eastern Conference Finals against the Indiana Pacers. They lost an overtime heartbreaker on Wednesday. Game two is tonight at the Garden. 

The Knicks are four wins away from the NBA Finals. And while Penn Station is still a hellhole, the sidewalks outside on Seventh Avenue are now a party on game nights. Dolan deserves some credit for this. He’s finally done the thing that good owners do: hire well. In 2020, he brought in Leon Rose as Knicks president. Formerly an agent at CAA Sports, Rose has remade the team, bringing in head coach Tom Thibodeau during his first summer in charge and building the roster according to Thibodeau’s specifications. All but one of the current Knicks (Mitchell Robinson) were acquired during Rose’s tenure.

As it happens, Rose has leaned heavily on talent represented by his former employer. Thibodeau is a CAA client, as are four of five Knicks starters, including star point guard Jalen Brunson, whose agent is Leon’s son, Sam Rose. This insularity could easily have become a liability for the Knicks. If things had gone poorly, the team might have looked like a full-employment program for Rose’s old shop. But CAA, as Rose and Dolan would have known, has a strong stable. And Brunson’s willingness to take much less money than he might have under the league’s salary rules has allowed the Knicks to add key players, such as center Karl-Anthony Towns. 

The Knicks may have leveraged their future to get here, but that won’t bother the revelers outside the Garden. After game four of the conference semifinals earlier this month, when the Knicks beat the Boston Celtics, Dolan was the subject of some good publicity, as video of him handing the game ball to a young fan outside the arena went viral-ish. Dolan — fedora on, smiling from the back seat of an SUV — seemed like he was enjoying himself for once.

ICYMI

  • Aditya Mittal, chief executive officer of steelmaker ArcelorMittal, is investing $1 billion into Bill Chisholm’s purchase of the NBA’s Boston Celtics. Mittal is the son of Lakshmi Mittal, the executive chairman of ArcelorMittal, who is worth $23.9 billion. Lakshmi is also on the board of Goldman Sachs, which is advising Chisholm’s group.

  • You know what? Not every team deserves a Netflix sports documentary.

  • In one of football’s more crazy permutations, Crystal Palace won its first ever FA Cup last weekend. Normally, it would then get a place next season in a European competition. But one of its owners might mess the whole thing up. 

  • Todd Boehly, Premier League club Chelsea’s co-owner, expressed concern about the footballing calendar, saying players’ injuries are increasing. His team is also just about to travel to the US for the newly-expanded Club World Cup.

  • Aliya Capital Partners, a Miami-based investment firm, is joining the ownership group that bought out 154-year-old Reading Football Club from Chinese businessman Dai Yongge.

One Happy, Richer, NFL Family

What's going on folks, Randall here. I spent a couple days in Minneapolis this week for the second NFL owners meeting of the year, and this gathering was MUCH more lively.

Let's talk business first. Several deals got approved. The 49ers have three new limited partners. Arctos bought a piece of the Los Angeles Chargers and Charles Woodson took a stake in the Cleveland Browns.

I was a bit surprised the Chargers decided to reenter the marketplace as quickly as they did. The Spanos family has shed 35% of the team in less than a year. Twenty-seven percent went to Tom Gores and another 8% went to Arctos. A funny detail about Woodson's investment in the Browns is that he'll have to remove his name from his wine and whisky brands because it would violate the NFL's alcohol policy. He'll also have Tom Brady-esque broadcast restrictions.

On the private equity front, the group including Carlyle, Dynasty Equity and former NFL running back Curtis Martin were finally approved to begin looking at investments. The consortium originally had Blackstone and CVC Capital Partners as well but those two groups could not come to terms with the NFL's rules and regulations, causing them to exit. The sides went their separate ways amicably, and it's possible that someday Blackstone and CVC gain individual approval.

On diversity, equity and inclusion, the league postponed its front office accelerator program until next year. The initiative is designed to get coaches and aspiring c-suite executives face time with owners in hopes of landing jobs.

Things got testy during the press conference as Goodell took several questions about the league succumbing to political pressure. He denied that. For now, I believe him. Only two accelerator participants have landed jobs since the program launched in 2022. The league's intentions are in the right place, but results aren't there yet. It was time to go back to the drawing board. The revamped front office accelerator is expected to return next year.

Moving onto flag football. Owners approved NFL players being able to compete in the sport for the Los Angeles Olympics in 2028. One player per NFL team can play for each national team participating.

I covered flag football a bit last year after the Paris Olympics. The process to select 10 players is going to be intriguing because there are also pro flag football players in the mix.

As far as the league's plans to start men's and women's pro flag football leagues, Goodell had this to say. 

“What we're looking for are creative ideas, creative partners, strategic partners. At the end of the day, people who bring value to us. Capital's less interesting. What we're really looking for is people who can help make us successful.”

No money, no problem. No creativity? Big problems.

On the field, the story everyone was following was the vote to get the Philadelphia Eagles' “tush push” or “brotherly shove” banned. As you know, we're about the business here at Bloomberg, but if you're wondering how Goodell works, you just got a good look.

Goodell said he didn't oppose the tush push, but numerous reports from several outlets say otherwise. I was told Eagles owner Jeffrey Lurie even targeted Goodell during the discussion about the tush push. ESPN has more on what he said here.

Jalen Hurts executes the “tush push” in the Philadelphia Eagles’ blowout victory in last season’s Super Bowl.  Photographer: Bob Kupbens/Icon Sportswire

Let me be clear, no one knew what was going to happen. Not owners, not team execs and not even league execs. Regardless, Lurie was so worried he brought in former Eagles center Jason Kelce to make the case. League sources told me they believe Kelce swung things in Philly's favor. The final tally was 22-10 for a ban, two votes short of passing the proposal.

Regardless of whether you’re a fan of the play, Goodall showed how the NFL is good at managing a potentially controversial process. Sure, it’s a topic that got all the headlines, but the underlying takeaway from the NFL meeting was that after the latest bunch of stake sales and private equity deals at ever bigger valuations, every owner left Minneapolis a bit richer, at least on paper.

Animated discussions naturally occur when owners or executives have different viewpoints. But so long as business is continuing to grow, how unhappy can any owner really be?

Forza! 

Hi, it’s Vanessa. If you are a motorsport fan, this is one of the biggest weekends of the year. It’s the Indianapolis 500, Formula 1’s Monaco Grand Prix and NASCAR’s Coca-Cola 600.  

This weekend will be the 109th running of the race with an expected audience of 350,000 people in Indianapolis. That includes the grandstands, which hold 250,000 people, being sold out for the first time since 2016.

A few weeks ago, we profiled the Indycar Italian race team Prema. It was a rocky start to their first season in the circuit.

But now Prema has shocked the grid by winning pole position for the biggest race of the year. Driver Robert Shwartzman is the first rookie to win first position for the Indy 500 since 1983.

On the Business of Sports podcast this week, Doug Boles, president of Indycar and the Indianapolis Motor Speedway, noted how big of a feat this is for the newcomers. 

Prema will get its shot at the Indianapolis 500 this weekend. Photographer: Miguel J. Rodriguez Carrillo/Getty Images North America

“They have been struggling, to be honest with you, for most of the season trying to get their feet under them,” Boles said. Heading into qualifying, they were one of the teams that we “thought might be at risk of not even making the race because we weren't sure they could be fast enough.” 

At the Indy 500, the field is opened to special entrants like NASCAR driver Kyle Larson, and Indycar legend Helio Castroneves, who isn’t a full-time driver anymore but at 50-years-old is still chasing a record fifth Indy 500 title.

So given Prema’s performance this year, it was a very real possibility that the team would be staying home.

Shwartzman getting the pole is “such a great story,” Boles said. 

Read More: Italian Race Team Prema Wants To Take On American IndyCar Racing

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