When Bob Caporale advises prospective owners about the No. 1 challenge they will face if they buy a team, the sports investment banker taps a pearl he has been using since starting his boutique Game Plan in 1994.
He and partner Randy Vataha tell them that sports is the only business with its own section in the newspaper, its own TV channel and now, of course, one can add a slew of digital offerings.
“There is media focused totally and entirely on sports today,” Caporale said. “At least when it was newspapers, it was the next day. Even for someone who has been CEO of a public company, it is still different and it is why I always make that point.”
For Sal Galatioto, who got into sports finance a few years after Caporale, the challenges he describes are less timeless and more current, like virtual reality.
“If you spend $2 billion for a stadium and people stay home, then what?” Galatioto asks. Yes, he said, team owners will control the content rights distributed through VR, but big venue investments could come under pressure if more people watch from home with new technology that provides the experience of being at the game.
Galatioto also tells would-be owners that they should be concerned about what the younger generations are watching, as they navigate to areas like e-sports.
“How many young people watch baseball?” he asked.
The other challenge Galatioto faces now is finding buyers who can afford the skyrocketing valuations of major league teams. Caporale sees this too, and said it has added imperative to the control owner to deliver on the investments made by the limited partners necessary to afford the purchase.
That said, Caporale tells prospective owners to stay out of the way of the playing side of the business.
“I try to get them to understand the owner should be the owner and it is different from being the day-to-day operator or a manager of a business,” he said. “You need to hire the best and brightest persons you can find, essentially the team president, a day-to-day operator. And being the owner is very different from being the day-to-day operator.”
