Private Equity in the NFL? & Gen Z Loves Their Sick Days
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the NFL is poised to make big changes to its ownership rules. Jeffrey Lurie, I'm coming for you. Then Mr. Softies is having a hard go of it recently. Can the iconic ice cream truck survive another summer? It's Tuesday, August 27th. Let's ride. ♪

Huge music news out this morning. Oasis is getting back together. The British band responsible for the song currently being strummed horribly in college dorms across the world. That would be Wonderwall announced a reunion tour next year with 14 dates across the U.K.,

This was a long time coming, but not totally unexpected. The brothers behind the band, Liam and Noel Gallagher, had teased an announcement on social media over the weekend, sending fans into a tizzy. The brothers hadn't played together since splitting up after a backstage brawl in 2009 and have been publicly feuding ever since. Guess they're not looking back in anger.

I feel bad for two groups of people, actually. One is the audiences of those poorly-strung renditions of Wonderwall. But then two, it's Ticketmaster execs because they are not prepared for the level of demand coming their way. If we go back to Oasis's heyday in the 90s, more than 4% of the entire British population applied for tickets to Oasis.

to see them play at a festival in 1996. To put that in a numbers perspective, 250,000 people got to see the band play over two nights, which was a record in itself, but Oasis could have sold out another 18 shows based on the level of demand, so the heiress to her ain't got nothing on the Gallaghers.

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One of the most exclusive clubs in the world is on the verge of admitting new members for the first time. No, it's not Toby and Neil's Treehouse Fort. No girls allowed. It's NFL owners. In a vote later today, the league is expected to allow private equity firms to gain equity ownership in NFL teams.

It'd be the last of the major U.S. sports leagues to welcome PE firms and institutional investors to the ownership ranks. The NBA, MLB, NHL, and others have allowed it for years. So why only now are Bob Craft, Jerry Jones, and other mega-billionaire owners inviting PE to get some pigskin in the football game? It really boils down to one thing.

Team valuations have gotten so expensive that no one, not even the richest people in the country, can afford to buy a team. Investor Josh Harris, who is not lacking for money, needed to cobble together a group of 20 investors in order to buy the Washington Commanders last year for a record price of $6.05 billion. Even Jeff Bezos considered buying the team and thought better of it.

The lack of people who can afford NFL teams presents a big problem because it's led to a liquidity crisis. If you're a current NFL owner who wants to cash out on your investment, even just a slice of it, you can't because there's just no one to sell it to. The league hopes that by adding more

more PE firms to the ownership mix. It'll solve these liquidity issues and help fund more transactions. Right. It's a problem for the NFL because you severely limit the number of possible owners out there in the world. And then it also, it ties up so much of the owner's existing money in the franchise that they can't

spend it on things like improvements or a new stadium or something like that. So they do just want this new line of minority ownership to be very streamlined, to have this cash available for them. And the NFL did go about this very deliberately. There's only seven approved partners who have borderline unlimited money when you combine them all together, over $2 trillion in assets under management. So they can tap these PE fountains of cash to do stuff like

make those stadium upgrades that a lot of owners want to do. Yeah. And this is not going to be majority ownership. We should say it's going to be capped likely according to reports at just 10%. But when you just look at the skyrocketing valuations, it is a bit astonishing about how valuable NFL teams have become. The NFL is one of the, it's,

by far the biggest property on TV. They signed a media broadcast rights deal that's worth over $110 billion over 11 years. In TV, it's really the only game in town. Let's just go back to some recent transactions. In 2018, the Panthers sold for what was then a record price of $2.3 billion. Four years later, the Broncos sold for twice that amount, $4.65 billion. And then last year, the Commanders, which

is certainly not even the most valuable franchise in the NFL. Sold for $6 billion in all, franchise values have almost tripled in the span of five years. And even the Jeff Bezos's of the world are thinking about writing a $6 billion check for the Washington Commanders. And they're just saying, uh-uh.

I can't do that. So the question is, what do PE firms want with the NFL? Because again, they have so many assets under management. Blackstone, Carlisle, and Aries alone have $1.9 trillion in assets under management. So the NFL, even though as big as it is, is a drop in the bucket, but still...

They're in the business of finding outsized returns, and the NFL has definitely provided that. I mean, its total valuation of the league has risen 710% over the past 20 years. The S&P 500 is only up 660% over the past 20 years, so it's been a very good deal. Plus, team valuations tend to be

a little less volatile than maybe stocks. You can ride the roller coaster of the S&P 500 or you can park it in a team like the Commanders and just have it go up. It's a very non-correlated asset. It's pretty decoupled from the broader market in general. So those are some of the reasons why PE is zooming in on the NFL. And yeah, so...

Any guesses on who maybe the first team will be pending the approval of this to tap into this PE fountain of cash? It's looking like the Bills potentially, they want to build a new stadium. So that has been, the owner Terry Pagula has reportedly wants to sell a stake in his club. There are also some rumors are that

The Los Angeles Chargers owner, Dean Spanos, could sell the team as well. So those two teams look to be first. But if we're looking at what happened in previous leagues when they allowed PE ownership to come in, it took a few months for things to shake out. The NFL is restricting the amount of buyers here. They're just going to tap like six or seven PE firms who have experience buying teams or have been in the sports game. But.

There are a lot of PE firms in the sports game across U.S. sports. According to PitchBook, 62 major U.S. sports teams do have connections to private equity money. That includes 20 NBA teams, 18 MLB teams, 14 MLS teams, and 10 NHL teams. So there is a lot of PE money swashing around the U.S. sports landscape. And then when you look overseas...

It's completely different because you look at sports teams, soccer teams, and they're just completely owned by sovereign wealth funds like Abu Dhabi and Saudi Arabia and things like that. So it's completely different over there. They are awash in money, and the NFL just for so long has been this very, very, very exclusive club of owners. And then don't forget the NWSL as well because Carlisle's only—

Sports Investment is in the Seattle rain. And then Sixth Street, another one of those PE firms that are tapped to provide liquidity to the NFL, they are majority owners of NWSL's Bay FC. So that's another place where PE firms are parking their cash. Now let's take a look across the country at some interesting stories happening at a city level. Up first,

Philly, the home of Neil Fryman's extended family, just made a new process known as eviction diversion permanent in the city. Fresh off a successful trial period, eviction diversion requires landlords to go through out-of-court negotiations with

with tenants before they can sue to remove them. The goal is to reduce legal actions landlords take towards tenants while helping people avoid losing their places to stay. And it's worked so far. Court filings to remove tenants are down 42% in the last 12 months compared to the annual average. Just 35% of renter households make enough money to afford a median price apartment in the city, according to Redfin. So there are lots of Philly tenants interested and enrolled in this program. And nationwide, evictions have jumped back to

pre-pandemic levels after lots of federal tenant protection programs expired. But Philly is bucking this trend. Totally. I mean, the country, mayors across the city are looking at what Philly is doing here with this diversion program. And they're saying, wow, this is really the gold standard for keeping people in their house and from being evicted. And preventing evictions is so critical to avoiding this cycle of poverty, because when you get evicted, it goes on your record for

And when you try to apply for housing in the future, it makes it that much tougher. So housing advocates look at keeping people in their houses just by any means possible. And this is one super effective program that is so important for sort of keeping people in their houses and, uh,

not on the streets. And, uh, this, this Philly, uh, program has been doing so well. They made it permanent. There's also been pilot programs across the country in Michigan, in Durham, North Carolina, in other places. And housing advocates say, let's look at what they're doing in Philly and keep it up. Meanwhile, landlords, they don't, you know, you'd think that they would push back against this, but, uh,

They are getting money as well through a $100 million program that will pay them back rent and one month's rent if they try to negotiate in good faith with tenants. So there are these two programs going hand in hand. And when they go to an eviction court, oftentimes they don't get that back rent. So they say this is at least a positive step in that direction. And then part of the program too, these diversion programs, is you get appointed a counselor that can help you build a plan to bring to your landlord to say like, hey, I can...

pay off the background. I can also make rent payments going forward. And they get creative doing stuff like tapping into your tax returns or maybe putting some of your security deposit towards rent. So it is not only just cash from a city program. They also are just trying to work with renters at an individual level to try to make sure that these don't all have to go to court because usually no one ends up happy there. Someone ends up without a home and the renter and the landlord may not even receive the rent payment. So this is

trying to do the best of both worlds and it's looked very successful so far. Now let's head to Houston, Texas, a city that had been on the cusp of reinvention, long known for its highways and driving culture. Houston had been changing course, constructing bicycle infrastructure projects and spending billions of dollars on public transit. There was a sense that Houston could chart a future not focused only on cars.

Until a new mayor entered City Hall in January, according to a report from The Washington Post, Mayor John Whitmer and his administration have stopped work on those bike lanes and delayed parts of a $7.5 billion public transit expansion. The mayor's office says they're more focused on improving the transit networks that currently exist and making roads safer instead of adding costly new routes.

But it's not that the money isn't there. Biden's Inflation Reduction Act and the bipartisan infrastructure bill is dangling billions of dollars to local governments to build out greener transportation options, and cities and states around the country are taking advantage. For example...

Rhode Island nabbed $55 million to improve its public transit fleet. California and Nevada got $3 billion for high-speed rail. And with the help of federal money, Los Angeles pledged to make the 2028 Olympics car-free. But it seems like the new Houston leadership is going in a different direction than much of the rest of the country, which has left transit and bike advocates fuming. Right. You're feeling whiplash if you are a bike advocate, a transit advocate, because you are on this path towards...

public transportation towards safer streets. And now you're back to maybe a more car-centric, a more oil and gas-centric pathway. It is just confusing too, because this is just totally the time to do it with so many federal funds available. But Houston is just such a car city. It always has been. Roughly 90% of Houston residents own a car. It's a huge city, 665 square miles. I

That's certainly true in Houston. It's the fourth largest city, but it also has the widest freeway in the country. It's downtown. If you've ever been to downtown Cluson, it's really encircled on all sides by highway. So it's just very much a car-centric city. And when you have this potential hope to maybe get away from that and then right back to more car-centric, it's a little tough if you're a Houston resident.

Our final story takes us to New York City, home of Morning Brew Daily, and also the worst fare evasion of any major city in the world. According to the New York Times, every weekday, around 2 million people board an MTA bus, and about half of them travel.

don't pay. The transit authority puts the figure at 48% through the first three months of the year, and it's mainly a bus issue, but subway fare evasion is also big as well. About 14% of subway riders hop the turnstile, though roughly twice the number of people ride subways compared to buses. It's led to a remarkable amount of lost revenue for the MTA. In 2022, the Manhattan...

Manhattan Transit Authority attributed $315 million in losses to bus fare evasion and $285 million to subway jumpers. Neil, $600 million, over half a billion in lost revenue. That is huge. Why are there so many fare dodgers in FNC? I don't know. It's a...

Very unique problem. Look at fare evasion across the world. Just go back to 2018 because this is the most recent data we have on global cities. The evasion rate was 18% in New York in 2018. Now we know it's much higher. But around that time, the rate was 11% in Paris, 5% in Toronto, and then in London where you can get fined up to...

to $1,000 for not paying when you're boarding transit. The evasion rate on buses was only 1.5%. So it appears that there is a big enforcement issue in New York City. The Union for Bus Drivers says they tell their drivers not to...

just drive. Like, don't even... Don't confront people whether they're paying or they're not paying because your job is to drive. And if you confront a passenger, it could lead to violence, harassment, things like that. So they're just saying, just drive. Don't even think about it. So there's clearly a major enforcement issue. The MTA says they need to get more enforcers there to make people pay. So...

They don't have this massive budget shortfall, which is going to be $1 billion by 2028. And all of this funding that was supposed to come from this congestion pricing plan that was axed at the last minute by the governor is also setting them short $15 billion. So there is a huge, huge shortfall here. And it appears like a significant amount of that comes from fare evasion. Up next, the Chinese video game that is breaking records.

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China has got its video game mojo back in a big way. The new game Black Myth Wukong from small Chinese studio Game Science has been out for a week and is already one of the fastest selling video games ever. In three days, the game sold 10 million copies, a faster pace than Blockbuster's Elden Ring and Hogwarts Legacy. On its first day, it became the

most popular single-player title on the PC platform Steam, beating out other famous titles like Cyberpunk 2077. This is, without a doubt, a smash hit and a historic breakthrough for Chinese video game companies to show they can develop a game with global appeal. So what is Wukong about anyway? It's an

action-adventure game centered around the mythology of the Monkey King, a celebrated literary character that has provided inspiration for many pop culture retellings. In fact, Monkey King in Japanese is Son Goku, yep, the main protagonist in the manga Dragon Ball. But beyond the rich source material, maybe the reason the video game is flying off the shelves is that it's just really good. As one reviewer from The Verge said, it goes incredibly hard.

It looks incredibly hard, too. I was just looking at some gameplay on YouTube, and it looks beyond my capabilities. But yeah, this is a big win for China's gaming industry because previously, China has mostly been a smartphone juggernaut. Tencent churns out just these massive mobile titles that do really well, but

until Black Myth Wukong, they really haven't had what they just consider like a triple-A game with those really high fidelity graphics, this really intricate gameplay, kind of like the Dark Souls Elden Ring variety where it's just really hard to beat. So people are falling in love with just...

The entire story of it, they love the graphics and they love the gameplay. And it's just a first out of China. And China is really pushing it hard, too, because it does celebrate like a pretty key myth from Chinese culture. And it sparked like an actual in real life tourism boom as well. Videos posted on social media show a ton of people streaming to the temples and shrines that are depicted in the game itself. And they're saying this is a...

like a moment of cultural discovery for Chinese people to see part of their history because the Monkey King was first introduced in a 16th century novel. So it goes back centuries and it's been retold in so many different ways ever since. So people are going to these actual places depicted in the game and sort of rediscovering their history. But the controversy around the game,

is tied to how China is trying to push that cultural expansion and trying to push it in a positive light because some streamers have reported that they've received a list of topics that they weren't supposed to talk about while playing the game. Some of those topics include feminist propaganda, COVID-19 quarantine. So streamers have, some of them have just stopped playing the game because they don't want to be

censored in that way. And actually one stream, this was an eight hour Twitch stream where the name of it was COVID-19 isolation. Taiwan is a real country. Feminism propaganda that got more than 300,000 view. So even though this is a big win for China culture, some feel like they're overstepping and trying to craft the narrative too much. So there's been a little bit of pushback for streamers in that regard.

You feel a tickle in your throat, a palm to the forehead comes back a little hotter than usual. Do you tough it out and show up to work anyways, or do you call in sick? Your answer probably depends on what generation you hail from, and it's what I want to talk about on today's edition of Toby's Trends, where I take a deep dive into the internet and emerge with a trend you should keep your eye on. Gen Z is racking up sick days at a rate much higher than other generations.

As the use steadily filter into the workforce, the amount of time people take off from work has also steadily risen. Sick leave was up 55% in 2023 compared to 2019 among companies on Dayforce's HR platform, while Gusto's data from 300,000 businesses show a 42% jump.

And it's young people that are the ones driving the increase. The 35 and under bracket on Dayforce had a 29% jump in sick time from 2019 compared to just 16% for the older crowd. Now there's no one answer for why the youths are taking time away from the desk, but experts have some thoughts.

the pandemic made people more conscious of their health. Mental health days are becoming more and more common and waves of layoff might just have workers less inclined to sacrifice their wellbeing for an employer. But Neil, it's clear that the calculus is changing when it comes to sick days. Totally. I think those numbers are,

absolutely insane. Fifty five percent increase in sick days from before the pandemic till now. It's clear that covid somehow, you know, rejiggered our relationship with work where it's far more acceptable or people feel far more comfortable taking taking off. I think the rise of remote work also has a lot to do with it. Remote workers are more vulnerable

are more likely to use sick time than in-person workers. That may just speak to a broader flexible culture at your company. I think the universe of possible ways you can call in sick and for possible reasons has also expanded, as you mentioned. Mental health related leaves of absence increased by 300% from 2017 to 2023. So it's far more acceptable now to be like, I am so burnt out. Let me just take sort of a mental health day. Let me reset. Let me recharge.

That is far more acceptable. I don't know. I don't remember 2019 at all. But if you were to say something like that, your boss might have like raised an eyebrow a little bit. And now it's just like, OK, take your time. And if you have a little tickle in your throat, I think after COVID, just physically people, people being physically ill. I think everyone at the office is like, yeah, please don't come in. Right. But and

A lot of HR experts are saying presenteeism, where you're just pushing employees to show up no matter what. It's just bad for everyone involved. You're not going to be productive at work. You probably aren't giving your best. You're maybe making other people around you putting their health at risk as well. But then...

Obviously, the calculus changes depending on what job you have. If you have a remote white-collar job, it's much easier to call in sick. But say you work retail or something, you are losing hours. You are losing money as a result of it. So it's just different in whatever industry you're in as well. But then a lot of experts have pushed back and say, hey, setting boundaries is great, but you can almost set boundaries so much so that you can –

damage your prospects at work. Like if you really push it to the limit, then maybe your boss, maybe some people will, you can boundary yourself into unemployment as people say. Um, and they also advocate, don't just actually take a vacation. If you're going to take a vacation, don't take these quiet vacations where you half work half don't. So there's just a whole new dialogue, a whole new discourse around the PR the, the place of sick days in our culture. And it's definitely young people who are changing, uh, the most.

All right. So I apologize for what's coming next, but I have to little sing a little song to introduce this next story. Oh my Toby's already his hand is in his face is in his hand. You recognize that? I hope. Yes. That is the Mr. Softy jingle, a sign that a soft serve ice cream truck is coming into your neighborhood and you better have napkins ready for

Unfortunately, the next generation of kids might not recognize that jingle. And that's because Mr. Softee numbers are plummeting. According to CNN, there are now only 630 Mr. Softee trucks in the country, down from more than 2,000 at the company's peak in the 1960s. Higher costs and higher competition. That's what the company's independent franchise dealers say is eating away at business. I should say licking away at business. Ice cream, ironically, is high.

Hot right now, and these trucks must contend with bougie ice cream parlors and Mr. Softie imposters encroaching on their turf. Meanwhile, the cost for everything has gone up, especially for auto insurance and maintenance, pushing franchisees to hang up the sprinkles for good. Toby, I don't want to talk about Mr. Softie going away. It's too sad. Instead, what is your soft serve ice cream order? Chocolate, vanilla, or twist?

I have a very specific soft serve ice cream order and it's vanilla, but dipped in the chocolate stuff that hardens around it. It's just so good. Mr. Softies is at a different level than everyone else. I've tried the Impostors. It just doesn't hit the same. So I am fully on board with keeping Mr. Softies alive. It's just a bunch of...

broader trends that are converging in a way that makes it very hard for Mr. Softies to continue. I mean, everything is more expensive. Insurance is more expensive. The hot weather, actually, we keep having record hot summers, summer after summer. And that's actually not great because there's a sweet spot for temperature for ice cream. If it's too hot, people don't want to go outside and your ice cream melts too quickly. So they've been pointing to the weather as another. Your equipment breaks down quicker as well. So it is tough because...

Ice cream is hot. There's a Van Luyns on every single corner here these days, but that's why they're struggling. So I hope Mr. Softee's can figure it out because it's truly the best ice cream out there. And there's just fewer kids. I mean, people are having fewer kids, which means less people flocking to the truck to get ice cream. The average household size...

has dropped from 3.5 people to 2.5 people in the United States since 1940. Mr. Safis, we are pulling for you. Let's wrap it up there. Thanks so much for starting your morning with us. Have a wonderful Tuesday.

To yell at us for getting Wonderwall stuck in your head or to share any other thoughts on the show, send an email to morningbrewdaily at morningbrew.com. And we humbly ask that you also share Morning Brew Daily with your friends and family to help them stay up to date on current events.

And if you're drawing a blank on who to share it with, Toby has an idea. I want you to share it with someone named Neil or someone named Toby. If you know someone other than us, I want you to like Spider-Man pointing me and say, hey, you should check these guys out as well. We don't have the most common names. I don't know if this is the most effective share tactic. I don't know anybody else named Neil.

I don't know anybody else. Neil Diamond. Okay, yeah, I'll text Neil Diamond and say listen to Morning Brew Daily. Okay, let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer. Uchenwa Ogu is our technical director. Billy Menino is on audio. Hair and Makeup is getting the band back together. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.