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The $32 Million World Series Win
THE JOE POMP SHOW: Today’s episode is with Rich Kleiman, the longtime manager and business partner of Kevin Durant.
Listen on Apple Podcast, Spotify, or watch on YouTube — enjoy!
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Hey Friends,
The financial impact of large sporting events is often debated.
Some economists say that the influx of people attending games and spending money at and around the stadium creates a financial windfall that drastically benefits the city.
In contrast, other economists claim that the financial impact is overstated and that using taxpayer money to build a stadium based on the promise of future local economic inflows is almost always a bad idea.
In most cases, I tend to agree with the latter, but let’s use the World Series as an example.
This week, the Atlanta Braves won the World Series, beating the Houston Astros in six games and taking home their first MLB championship in more than 25 years.
Houston had the better regular-season record, which means they had home-field advantage, but since the series ended up going six games, each team received an equal number of home games — three in Houston & three in Atlanta.
Again, each economist has a different estimate when it comes to the boost in economic impact that a city will see from a major sporting event. Still, most estimates claim that Houston & Atlanta would see an average of $6 million to $8 million per home game.
But the problem isn’t that these estimates aren’t accurate — it’s that they are just relatively meaningless.
For example, Houston’s gross domestic product (GDP) in 2019, or the market value of all goods and services produced throughout that year, was $512 billion.
So, even if they played all four home games and saw the higher estimate of $8 million in economic activity per game, that would still only be $32 million — or 0.006% of Houston’s annual GDP figure.
For Atlanta, at a GDP of $372 billion, it’s a very similar outcome.
To be fair, this isn’t necessarily a bad thing. It’s better to win the World Series, celebrate with your fans, and bring in $30 million-plus in revenue than not to make the postseason at all.
Still, keep this in mind next time a major sports team asks for hundreds of millions of dollars from taxpayers to build a new stadium. Of course, every situation is different, and there are always pros and cons to each, but typically, the overall impact of these financial projections is often overstated.
I hope everyone has a great day, and we’ll talk tomorrow.
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THE JOE POMP SHOW: Today’s episode is with Rich Kleiman, the longtime manager and business partner of Kevin Durant.
Kleiman & Durant have co-founded multiple businesses together, including The Boardroom, a media company at the intersection of sports, music, art, and culture, and Thirty Five Ventures, an investment vehicle they have used to make over 75 investments in companies like Coinbase, Postmates, WHOOP, Robinhood, and more.
In this conversation, we discuss:
Working with professional athletes
Building a media company
How Rich evaluates potential investments
The impact playing for the Warriors had on their business
How athletes think about money
What Rich would do differently if he had to start over
Listen, Subscribe, and Enjoy!