00:00 Brian Sozzi

Welcome to a new episode of the opening bid podcast. I’m Yahoo! Finance’s executive editor Brian Sozzi. Like I always say, this is a podcast that’ll make you a smarter investor, period. And of course this podcast is sponsored by our friends at Vanguard. Very special guest on this episode: Jason Wright, managing partner and head of investments at Ariel Project Level. Jason, good to see you. Last time I saw you, smack in the middle of the pandemic,

00:28 Jason Wright

Yep.

00:29 Brian Sozzi

I was in my, uh, ex-girlfriend’s, uh, kitchen, uh, defrosting meat. So it’s good to see you in person and new job for you, too, right?

00:38 Jason Wright

Yes. Yes, yes, it’s good not to be in that environment again. I remember trying to decide if we’re gonna open the stadium and sell tickets and what that was gonna mean and trying to revive a franchise when you have no revenue.

00:56 Brian Sozzi

You weren’t even called the Commanders at the time. We were like watching a football team.

01:02 Jason Wright

Yeah.

01:03 Brian Sozzi

So before we get into what you’re doing at Ariel, level set for us. How did you go from working, uh, in the NFL, uh, in a president capacity to now you’re at Ariel getting ready to make some major investments?

01:19 Jason Wright

Yeah. I mean, my time with the Commanders couldn’t have been better. I mean, we took over in a moment of crisis where we had to completely break down and rebuild the organization, a rare NFL team that was starting to bleed out financially, which doesn’t ever happen in that business model. But, you know, we turned over 85% of the workforce in the process. We set a new trajectory, grew revenue by more than 50%, local revenue, the part we could control. Expanded e-commerce by 9X. So we got to a healthy business, sold the team in the process, and then transitioned it over to Josh and the team and did a couple important things before I left. Yes. I got a stadium deal done on the way out, which was important to get done. And then I just got to enjoy a great season

02:42 Brian Sozzi

Josh Harris, owner now, yes.

02:57 Jason Wright

on the tail end. It was so great to just be able to enjoy winning on the field, you know, and see all the stuff that you get done on the business side be matched by this wonderful performance. It was so great and I had no idea exactly where I would land. I just knew it was the right time for the shift and making the handoff and I’m so grateful to have landed at Aerial Investments, a firm that has such a rich history of values-based investing, both values that they hold as a company and looking for value in the market, of patience, of zigging when others zag, and at an opportunity when women’s sports, the economics are finally meeting up with the performance on the pitch, field, and court, uh, at a time when no one has come into it with scale and size, and we get to do something really unique and I’m fired up about it.

04:26 Brian Sozzi

And for those not familiar with your story, you played in the NFL, right?

04:31 Jason Wright

Yeah.

04:33 Brian Sozzi

How did that help you deconstruct that culture at the Washington football team at the time? It was, it wasn’t good. It just was not good.

04:56 Jason Wright

Yeah. Well, I mean, one, it helps you really partner with the football side of the house much better. They have some implicit trust on you as a business leader that you’re not going to do things that harm them, that’s gonna get in the way of competition and build culture. And it’s actually the same thing for us now as owners of teams. You know, as I was recruiting head coaches, alongside our principal owner in Denver, we own the Denver NWSL team. That’s women’s soccer here in the US. When we’re recruiting head coaches, the fact that I’m a former athlete and understand the dynamics of a locker room and then ran a team gives them much more confidence in coming there under an ownership group that’s not gonna put unreasonable pressure on them or force them to do something that’s not in the best interest of the women in the locker room. So it just helps with trust. And when you have trust built at the top of an organization, you’re able to make a lot more progress a lot more quickly.

06:08 Brian Sozzi

Is there a learning curve going from the president of operations to, okay, now you’re a portfolio manager? Is that sort of basically it?

06:22 Jason Wright

Yeah. That’s it. That’s it. I mean, we, I do everything from the pipeline, fundraising in pipeline, all the way through to the investments and the diligence, to the backend of value creation in the portfolio. It’s great for me because personally it brings back together all the experiences that I’ve had over my professional career. It’s part McKinsey consultant, which I did

07:00 Brian Sozzi

Partner at McKinsey, yeah.

07:02 Jason Wright

at McKinsey as a partner there for seven years, running our back office SGA practice for the Americas. So it’s bringing back that lens of looking hard at the P&L of companies, the ultimate upside full potential opportunity, running a diligence in a really rapid manner with rigor. It’s bringing that back to understanding how sports really generates value, where the revenue lines are coming from, and having the relationships to catalyze that on behalf of the investments that we make in our portfolio. So it’s really a full circle thing for me and then to work under Melody and John, and specifically Melody who founded this fund and leads this with me. Uh, to see her work ethic, to see her values at play, the way she thinks about who she partners with and who she doesn’t has been inspirational to me and I’ve never been outworked before. Melody outworks me every day. And so I am also pushing harder than I ever have, even in peak crisis mode at the Commanders. And so I’m, I’m really enjoying it.

09:08 Brian Sozzi

You are working with two folks we’re very familiar with at Yahoo! Finance: John Rogers and Melody Hobson.

09:16 Jason Wright

What have they told you right from the get-go, uh, regarding the mission for, for project level?

09:24 Jason Wright

Yeah. It’s actually probably not what people would expect. It is a traditional Ariel Investments investment. We look at women’s sports as a small cap of sports. It is smaller valuation than the big men’s teams, which are getting very high and some say may be starting to ebb and even out and how far they can grow. The small caps are women’s sports that are lower valuations with massive growth potential, a very rapid growth trajectory that are undervalued and misunderstood. And that’s classic Ariel. Searching the market for undervalued, misunderstood assets and we’re coming in at a time where because of Ariel’s history and the scale of our fund, we can invest at scale across the whole women’s sports ecosystem, whereas other firms that have focused on women’s sports in the past haven’t been able to do that. So we can be higher at the cap table because of the size of our fund, the type of LPs we’re attracting because of Ariel’s reputation and strength. We’re able to exert some operational influence and control that allows these women’s sports franchises and leagues to change the narrative on what they’ve been in the past, which is they gotta lose money and then you get some valuation exit because someone really cares about women’s sports and pays a high value on it. No, they can be EBITDA positive franchises and leagues that run very profitably and bring cash into a portfolio in the meantime. And we’re bringing that sort of operational rigor because of where we are in the cap table. And then we’re investing beyond just the teams and leagues in youth sports, which is already a high margin business. I don’t know if you know anybody with kids ages 5 to 18.

11:29 Brian Sozzi

Yes.

11:30 Jason Wright

You know where their time, their money, is going every week and every weekend.

11:45 Brian Sozzi

It’s going, it’s sporting goods and gas in the SUV.

11:48 Jason Wright

Massive numbers.

11:54 Brian Sozzi

Massive numbers.

11:55 Jason Wright

In massive numbers. So these are really profitable businesses and a traditional private equity roll-up play is a very lucrative business there, and it creates the fans and players of the future for these women’s leagues.

12:12 Brian Sozzi

Before you, uh, sat in that seat on the podcast here at Milken, we had Rich Paul, of course, LeBron James’s longtime agent. I call him a super agent, super businessman, whatever you want to call him. He said women’s sports are high risk. Are they?

12:32 Jason Wright

I don’t think so. They are not. I think they are high growth and that comes with some measure of risk because you don’t get growth with no risk whatsoever. Um, but it is not higher risk than any other asset class. And it’s because we’re in a place now where women’s sports are actually the growth engine for all of sports. And it starts at the grassroots level. 41% of high school athletes are girls now. What does that mean? Going back two decades now into youth sports, we have families that are used to spending their time and money on watching girls compete very competitively at a high level. Those are the families that are naturally becoming financial participants with professional women’s sports teams, and it bears out in the numbers at the attendance. For, for example, for attendance, the WNBA is up 48% year over year.

13:57 Brian Sozzi

Big numbers.

13:58 Jason Wright

The NWSL is up 26% year over year. The most recent NWSL media contract is 40X the previous one. It won’t jump that high again, but it’ll jump again a large amount. Viewership is up. The, the last World Cup for the men and the women, the Women’s World Cup had 300 million more viewers than the Men’s World Cup final. Things have changed. Women’s sports is now no longer women’s sports. It is just emerging sports. It is the growth engine for all of sports. And so if you’re betting on the future of sports, which has always been a solid business, uncorrelated with the markets, lasts and through recessions, lasts through the pandemic, this is the place to invest. So I don’t see it as any higher risk than anything else and it’s very high growth.

15:14 Brian Sozzi

So pick this apart for us. How do you, how can the average human invest in women’s sports?

15:23 Jason Wright

Yeah. I mean, there are funds like us where institutional investors coming in, not many, because we’re catching up with men’s sports and the amount of institutional capital that’s coming in. We’re targeting ultra-high net worth families, but there are ways to get involved in women’s sports in a more grassroots way. Um, there are collections of community organizations that are getting in to buy stakes of women’s teams because the valuations are more accessible. They’re in, in solid women’s teams and solid leagues, they’re in the low to mid two hundred million, and there are folks that can get in at that level if you pull capital together. But more importantly, people can participate as fans in a way that you can’t sometimes in men’s sports. Men’s sports have become really expensive.

16:16 Brian Sozzi

$6.1 billion for the Celtics.

16:20 Jason Wright

$6.1 billion for them. And then what do you pay for season tickets? It’s well, you can’t, you just don’t go. So the average family, whereas this used to be the gathering place for all of America, for all of the globe, for your average family to go, build memories together, father and daughter, mother and son, your coworkers from work. That price point is inaccessible in a lot of men’s sports at scale. It’s still very accessible in women’s sports. So this has become the gathering place that those other sports once were, and that is very good for business, and it drives valuations up over time because you have the greater part of the American and global populace coming to these games.

17:10 Brian Sozzi

All right, hang with us, Jason. We’re going to go off for a quick break. We’ll be right back on opening bid.

18:09 Brian Sozzi

All right, welcome back to opening bid. We’re here at the Milken Conference. Of course, opening bid sponsored by our friends at Vanguard. Having a great chat here with Jason Wright, managing partner and head of investments at Ariel Project Level. So what investments will you make this year for Ariel?

18:29 Jason Wright

Yes. Yes. So we’ve made two warehouse investments where our first fund close will be sometime in early fall. We’ve made two warehouse investments so far. We are, uh, the owners of the Denver NWSL expansion team that will start play in 2026. Really proud of our efforts there because we have taken a very hands-on approach given my background as an operator, supporting the principal owner Rob Cohen and the growth and development of that team. Many of the things they have to navigate I navigated at the Commanders. So I’m able to help them avoid some missteps.

19:08 Brian Sozzi

When did we become the old people in the room? I know, exactly this. I’m like the old grizzled guy now. And we’ve been able to really bring a bunch of value there. We’ve already set an NWSL season ticket record. We have 11,500 season tickets sold. We don’t play a game until 2026. And that is indicative that the way we select markets to invest in at a franchise level, based on our knowledge of the industry, is proving out really well. We also invested in League One Volleyball, which is a professional women’s volleyball league that will rise to the level of the WNBA and NWSL over time. But maybe more importantly, and why we really like the investment, was built on a 20,000 girl member youth volleyball business that has great margins. The team there has a great inorganic growth strategy to take mom-and-pop shops, bring them into one standardized environment, improve the quality of instruction for the girls, the experience for the families, and by the way, take costs out so margins are better. Traditional private equity roll-up play that we’re really excited about seeing a very great growth on and a great exit within the timeframe of our fund. And we’ll make more investments like that and data analytics companies that support the whole industry. So we can help women’s sports modernize and really have EBITDA that supports the valuations. And we’re looking in the other major leagues, the WNBA and others.

21:25 Brian Sozzi

Are you investing in any infrastructure at all?

21:28 Jason Wright

We are. We are. We really like the live work play real estate investment opportunities that exist around the venues that women play and practice in. That could be the venues themselves, being the neighborhoods that develop around them, which are often a combination of residential and retail, and even the unsexy businesses that support them: janitorial services, security and parking. Those are really important to have a great guest experience.

22:07 Brian Sozzi

Recurring revenue and they tend to park

22:13 Jason Wright

Thank you. At these places. Great revenue line items for a broader investment portfolio. And it’s not only good for women’s sports to have highly professionalized, high quality vendors to rely on in that space, which has been elusive in sports for a long time, but also great for our LPs because they have a different return profile than a women’s franchise, which you may need to hold on to longer to see max value. These will trade in a normal hold period. They are cash generating and they allow money to come back into the portfolio and to our investors in a way that resembles commercial returns. And that’s what we think is needed now. Women’s sports has deserved sophisticated investors, and that’s what we plan to bring to the table.

23:18 Brian Sozzi

You know, I love this conversation, but because I was having fun talking here, we haven’t mentioned tariffs once. I mean, this is, this has to, you run the tariff-proof portfolio.

23:31 Jason Wright

This is it. It’s tariff-proof, it’s recession-proof. For example, youth sports is a big play for us. We’ll invest a ton of our fund in youth sports. The last thing that you’re going to pull back on as a family in America or elsewhere is your kids’ youth sports. You’re gonna scrimp by on rice and beans before you pull them out of soccer. And so all the investments we’re making are recession. We’ve seen it through several down cycles. Pro sports stays the place that people want to escape the challenges they experience in economic uncertainty. It becomes an ecumenical gathering place. There’s nothing for us to import, maybe a little bit on the merchandise side. There’ll be a little bit of noise if there’s something with tariffs.

24:32 Brian Sozzi

You don’t need the $70 t-shirt at the game, right?

24:35 Jason Wright

But it’s okay. I’ll invest in a hot dog.

24:40 Brian Sozzi

It is generally tariff-proof. Just sitting here with you now, you are very clearly passionate about this topic, what you’re doing. Why?

24:51 Jason Wright

I grew up a fan of women’s sports. The way that I talked about accessibility being a challenge, my family experienced that earlier on. My dad ended up having a great business, but before he did, we couldn’t afford to go to Lakers games or Raiders games or any of that stuff. We grew up season ticket members of the LA Sparks. So in the early 90s or mid 90s when there was the first version of the WNBA, that’s where we went. Those were my pro sports heroes that I got up in close and personal with. Lisa Leslie, Haixia Zheng, Tameka Dixon, Penny Toler, Allison Feaster, Mwadi Mabika. I can remember that whole roster. I was so excited to be around them. So I have always seen women’s pro sports as pro sports in general, and now the rest of the market has caught up to people like my dad. And it’s exciting to be a part of that. So I have believed in it for a very long time, and it’s been a very natural transition for me.

26:13 Brian Sozzi

Oh, jeez, double MBA, watching them too.

26:30 Brian Sozzi

What have you learned about investing from a John Rogers?

26:33 Jason Wright

Oh my gosh. Their ability to, one, see value where others don’t by combing the details. John and Melody are people of details. They’ve built Ariel on paying attention to the minutiae, whether it’s

27:02 Brian Sozzi

You have courses on Melody, too.

27:04 Jason Wright

Yes. It’s, it is based on, like, for example, even in personal things, you show up early to meetings. When you’re scouring the market for investment opportunities, you look at both tails of companies that could be in play. You look at stocks that are across the market. You apply rigor and you apply a consistent analytic approach to it. All of these things allow you to look under every rock, which not everybody’s willing to do. It can be a tiresome thing. It can be tedious to be fully comprehensive when you’re looking for a stock to choose if it’s Ariel writ large to put into one of their mutual funds or for us, to really look for an asset that maybe isn’t on the radar with other folks but has the ability to grow in the market, be it a data analytics company or an NIL company that’s off people’s radar. It takes time and effort to do that. What I’ve learned from Melody and John, it’s worth it. It’s worth it to spend that time. It’s worth it to be a little sleepy at the end of the day instead of just following the crowd and trying to get in on the popular investments.

28:46 Brian Sozzi

Lastly, before I let you go, if we’re having this conversation five years from now, what are you doing?

28:53 Jason Wright

I’m still doing this for sure. We want to be the KKR or Carlyle of women’s sports, that everything in women’s and emerging sports comes through Ariel Project Level. And fortunately, because of Melody and John and Ariel’s reputation, we are seeing an ordinate deal flow, and we’re very grateful for that. But we expect the returns of our portfolio, the way we treat our LPs, the way we show up in the market, to make sure that everything flows through us, because we want to be stewards, not just of this fund for our LPs, but of the entire women’s sports space. It’s gonna be on a great 10-year run no matter what.

29:44 Brian Sozzi

These valuations are going to continue to skyrocket. Do you think these sports teams will continue to sell at these levels? I mean, some folks that I’ve talked to here, they can’t believe that the Celtics sold for 6.1 billion. They don’t own the stadium, right?

30:01 Jason Wright

Yeah. That’s right. Men’s sports, you could question it. Have they gotten to the level where they start to level out? But we see women’s sports as a small cap of sports. They don’t have to catch men’s valuations to see a four, five, six more on these investments right now of where they are. And we expect that that is absolutely going to happen in the next 10-year timeframe. But we want this to be a 30-year run for women’s sports. And in order to do that, we want to invest in all of the infrastructure that surrounds women’s sports, fully professionalize the industry, and see this whole thing take off. And I want to be dead in the center of that in five years.

31:00 Brian Sozzi

All right. Well, good luck in your latest venture. It’s good to see you in person for a change, Jason Wright. Talk to you soon.

31:07 Jason Wright

Thank you. Good to see you, too.

31:08 Brian Sozzi

Appreciate it. All right, that’s it for the latest episode of opening bid. Thank you so much.