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The ROAR Podcast: Mike Carney · The ROAR Podcast

• Brice Clinton: He started his career as an engineer at NASA. A few years later, he was working at a concession register at a big league ballpark. Mike Hardy will tell you, those two things are closer together than they might sound. Mike spent a decade with the Washington Nationals. He arrived in 2015 when the club was collecting almost no usable data about its own fans. He left running business operations with a World Series banner in between. But the memory he goes back to isn't the parade. It's coming out of the shutdown, zip tying seats, remanifesting the ballpark, everybody doing work that was nowhere in their job description. Today he's building on deck partners, the minor league baseball venture platform inside Avenue Capital's group sports fund. Three clubs so far: Vicella, Montgomery, and Wilmington. And here's where gets interesting. Most sports real estate conversations start with the same premise. The venue is the anchor. The district around it is the return. Mike's thesis runs the other direction. On deck isn't a developer. It isn't trying to earn its return on real estate. It wants whatever gets built around the ballpark to push more people through the ballpark gates. Symbiotic, not one way. In a smaller, midsized market, he argues, that isn't a stretch. Ballpark already is the entertainment hub for the whole community. Adam and Mike get into it all. What institutional capital unlocks in minor league baseball? What multi-club ownership buys a lean front office? And why Mike sees AI in minor league baseball as a growth play, never a headcount play. Plus, where he's still unwedwilling to let it near the fan. I'm Bryce Mitten, and this is the Roar Podcast. Adam Grossman: Welcome to the Roar Podcast. I'm your host, Adam Grossman. With me today is Mike Hardy. Mike, welcome to the podcast. Mike: Thanks so much for having me, Adam. Adam Grossman: Yeah, thanks for joining. we were just talking a little bit before we jumped on about how we're friends and we're hoping this conversation r resembles some of our conversations that we've had in many ways, in some ways not, given some of the things we both had to deal with when we've been talking in terms of calls from bosses or owners. So hopefully we'll we'll just we'll be able to carry our friendship into this conversation. So looking forward to it. want to start the conversation. We start all our conversations, which is tell us a little bit about. yourself and how you got to the role that you're in today. Mike: Absolutely. Well, again, thanks for having me here. joined what is now called on deck partners last year in May as part of the Avenue Capital Group under Mark Lazary and Sonya Gardner and and really you know our purpose was to you know come into minor league baseball communities and build something great and really leverage all the great things in these towns and and continue to add upon all those great things. Prior to this new venture. was with the Washington Nationals for 10 years, the last half of which was leading business operations for the team. really loved the Washington Nationals, love Major League Baseball, wanted to be able to stay in the industry and and try something new and and really invest in these these local communities. and this this opportunity came at the right time. Adam Grossman: Yeah, we want to dive into these opportunities and what you're doing and particularly both inside the ballpark and outside the ballpark. I think there's a lot of ground to cover, but as people know who listen to the podcast, we always say we like to start at the beginning and particularly about your time with the nationals. So how did that opportunity come about? how did your role evolve and what are some key learnings you took away from your time at the Nationals, particularly more earlier in your career? Mike: Yeah, sure. I so I started with the nationals in twenty fifteen, coming off a consulting career. I started my career at NASA as an engineer and moved into data engineering and ultimately really saw a great opportunity in sports and being able to leverage data, just like you, Adam. Right. Adam Grossman: Laddery gets you everywhere. And you I obviously wasn't a NASA engineer, so clearly there's nothing more difficult than going to space than maximizing revenue at a sports team. Mike: Yeah, space and sports, they may actually have more similarities than you think, but Adam Grossman: Yeah. Mike: but but it was it was clear that at that time, you know, data wasn't being leveraged to it to the greatest extent. on the especially on the business side of sports. I think the the sports side and baseball had been pretty well developed after money ball and a lot of investment in analytics. on the business side, it really wasn't the case. And there was a lot of opportunity to be able to to come in, really build a true best in class data environment, build better fan relationships. And that really got me excited. It was a a really exciting time back then. It was still pretty new. Our CRO at the time, Valerie Camillo, she was a leader in this space, believed in the value of data to drive decisions. And we we did a lot of great things, won a World Series in 2019 and built a business off of that. But really, you know Fan preferences have evolved quite a bit post pandemic, especially post-pandemic. And I saw an opportunity where, you know, the fan relationships continue to evolve, data continues to evolve to evolve, and the ability to build truly great relationships with their fans where they really feel like they're the brands know them and they know the brands. that was something new and interesting that this opportunity presented. Adam Grossman: Yeah, I can't let the pitch go by when you talk about data and baseball and obviously having to make the dad joke pun about the pitch. But you mentioned some of the early opportunities using data. What were some of those early opportunities that you saw, either on tickets, partnership, fan experience, or fan engagement side? Mike: Well, mean originally with the nationals, there was very little data that was collected at all. the the ticketing platforms were used to to run a ticketing business. there was not usage of that data for for other purposes. Major League Baseball was instrumental in coming to the table and and you know, helping us with some of that you know, to scale that infrastructure and built a great, you know, built partnerships with Google and others to be able to to scale that infrastructure. And you know, by the time, you know, came around 2022, 2023, there were, you know, each of these teams had a lot of data on their fans where there were there was an ability to be able to to market the fans in the ways that fans wanted to be marketed to. And all of that is still relatively new. I mean, really was within the last several years, that and I can only really speak for baseball since I know it the best, that that there was there was a lot of headway in in being able to to leverage data in ways that weren't weren't you know previously available. And I think that that's that's opened up a whole new way for teams especially to to build relationships with the fans that that didn't exist before. think about things like food and beverage data or other kind of digital engagement data. Surprisingly, and maybe some fans or your listeners would be surprised by this, but it really hasn't been leveraged until very recently. That that was pretty surprising to me, but it's it's come a long way. Adam Grossman: we definitely wanna delve into that 'cause I you as somebody who's looked at data across multiple sports, it is very consistent in terms of what the usage of data is, how data can be used, and particularly new tools that can be used to analyze that data. There was, a challenge on human capabilities, technical capabilities, clearly artificial intelligence has dramatically impacted data analysis and definitely want to get back to that. But one of the things you brought up is really interesting is how fans want to be marketed to. obviously some people think of advertising, promotions, partnership as is this something that fans want? And I think there is a lot of evidence that there is a desire from fans to get information, get promoted to, see what offerings are. But how did you look at, even early at the Nationals when you thought about how fans wanted to be promoted or marketed to? what was your thought process and what was your thinking in terms of engaging those fans? Mike: At the end of the day, you know, we want we want to build wholesome fan relationships. And if and if you're just spamming your customers with with promotions they don't care about, you're you're not going to have a very long relationship with those fans. And and so what we we try to focus on, you know, seeing how our customers were engaging with especially the loyalty platform that the nationals had. and and we we would run campaigns where we would we would give out free loaded value to certain customers based on what they've done. As truly a surprise and delight. they weren't expecting maybe it was a five or ten dollar food and beverage credit or something else. this just creates good relationships with the fans. And, you know, it doesn't, it doesn't cost us much to do that. And the fans are gonna buy a ticket and come to the game and and create a vibrant atmosphere for our players. So we tried new things like that and and found that that it was it was really valuable. The more the more valuable the promotion. and targeted the promotion that you can provide to the customer, the more likely they are to engage with that promotion. And and what I found is customers and fans aren't afraid to provide their data if they feel like they're getting some value out of it. Right. another promotion we ran was was Kids Eat Free. We ran Kids Eat Free all summer at the Nationals and we're looking at doing that, doing that as some of our minor league teams. Hugely successful because what we want is for families to be able to come to the game and bring their kids and and have a good time, get ice cream and other things. It like it this is all about driving better relationships and memories, you know, amongst families. And these these kinds of promotions, if run the right way, can really drive that value. And it's all about making sure that that you're you're delivering that for the customer, for the fan. And we've you know, not saying that everything we did was a home run, but but but it was, you know, the we we learned from the ones that weren't. And and then, you know, leaned into the ones like kids eat free that really were s super successful. Adam Grossman: One of the things is also is a question that I'm sure you got a lot. at the time was you mentioned obviously the nationals winning the World Series in two thousand nineteen. The team had a run where it was making the playoffs. I'm from the D C area, so I'm a nationals fan from growing up for as long as the team as long as I grew up there and obviously the team was relatively recently moved to the DC metropolitan area onto the DMV, but one question that often comes out and particularly in your role, how do you tease out winning an on field performance in promotions and understanding what's the impact of winning versus the work that we're taking on the business side to try to engage fans, particularly the types of promotions you're talking about? Mike: It's it's a great question and and one that that's very, very hard to discern. Th certainly a model can can can tell you that, with some degree of specificity, but the reality is that the ebbs and flows of a season, you know, really vary from year to year and and they do have a really strong impact and correlation with with you know, how you're driving revenue. Even something as small as going on an in season winning streak has a meaningful impact on in your revenue. as as does an in your losing streak, right? So you know, I I think we try instead of focusing just on, hey, our model says that our team's gonna win 85, 90 games this year, instead focusing on, okay, when we do go on this five game winning streak, what's our plan? How much are we how much are we going to leverage up and how much are we going to increase our marketing and promotions to to be able to lean into organic demand that's already there? The press is already reporting on us as you know, winning five games in a row, there's a lot of momentum in the market. Let's lean into that. And conversely, if we are going through a quiet period, maintain that that baseline level of of, you know, brand awareness within the market that, you know, we're still out there. but maybe just to tune it down a little bit, right? And then that's where we can begin to see how our fans are interacting with that. How does engagement change in these kind of peak periods and valley periods? And that's just all about running a business. Adam Grossman: one of the things that came up, obviously the team was very successful. COVID strikes, the team obviously had a change in direction in terms of some of the players that it had. So starting with COVID, you're a business leader, you're in sports, this is all happening. what was your thought process, takeaways as it was happening and then, how did it kind of evolve as COVID and the response to COVID was evolving and games started happening again? Mike: I was it was a very challenging time to say the least, as it was for us. Adam Grossman: I don't mean to laugh. It was definitely a challenging time, but you know Yeah. Mike: For for all of us in sports entertainment, I mean, you know, a l a lot of of of businesses certainly had haircuts to the revenue. You know, in in our industry, revenue goes virtually to zero overnight. And so we had to spend a lot of the time you know, figuring out what we were gonna do with staff and and costs and how we were managing the business. And that was a really challenging time. what you know, what what I thought was really interesting though is we started to come back and And the the social distancing measures were in place. And some of the fondest memories I have with with my team was when we came back and you had to start, I mean, this is kind of crazy to talk about now, but zip tying the seats and re manifesting the ballpark and doing all this stuff. it was it was actually quite great for culture, you know, as you're coming back and doing this and you know, it's everybody hadn't seen each other for a while. So I think to me that's what sports entertainment's really all about, especially team side sports, where you have these moments where, you know, you're truly family with your with your team because you're you're with them so much during the course of a season. and and you know, you're you're doing things that aren't always aligned with your job description because it's just what the what the day requires. And and so I think you some of those moments, some of those silver linings that came out of it were really, really important. And ultimately then, you know, drove us to be able to get back up to speed faster. Adam Grossman: If you can say, is there one non job responsibility experience that you had that is particularly memorable, either at that time or in general? Mike: man, I guess concessions cashier. I did that a few. Adam Grossman: Yeah. Mike: you know, we we were we were trying new things at concessions and mobile ordering and other things. And it's a it's a really especially in concessions really fun operational problem to solve. But I I think you really only learn how to do it if you're on the job, right? So it's Adam Grossman: Yeah. Exactly. Mike: that that was probably that was probably case in point. Adam Grossman: Yeah, I guess some a form of undercover boss there, but doing the actual work. But the other thing Mike: Hey, there we go. Yeah. Adam Grossman: on that front, again, at at the time the nationals obviously decided to go in more of a rebuilding direction. And that's always that's a challenge that a lot of leaders face, right? Particularly on the business side where you have less or little control over the on field product. And that can change the relationship with the fan and fan expectations. And this is also at a time where you're starting to progress in your career and taking on more leadership roles and a more leadership role at the organization. So what were your thought process in terms of how the rebuilding process was going to impact, potentially business metrics and business operations. And then the second part, which we can get to in a bit, is just kind of your leadership journey and your leadership path. And how did that start to change within the organization? Mike: Sure, yeah. So on the first point, it was certainly when the team goes into a prolonged slump like like the team did, it just requires greater communication and transparency with with the ownership group and the baseball operation side. you know, we we felt like we you know, we we went about it in a way that we had pretty firm grip on what the numbers were and where they were gonna fall in in in any given year. And then, you know, it's it it's just a a conversation as to how things progress from there. And But it's it it's no different than in how any I mean to me, it's no different than how every other business is run, at least every good business. you know, there's gonna be ups and flows in performance. whether that performance is driven by the team on the field or any other external factor, Adam Grossman: That's a good point. Mike: right. It just it it you need to just understand w how those how those you know performance affects your business and be able to make sure that everybody's aware of of what that's gonna be and and we're all aligned on the plan forward from there. I would say that for the most part, there's there aren't often very many surprises that come in baseball. Maybe COVID is a major exception, but there's an there's enough data out there that generally speaking, you have a pretty good pretty firm grasp on where the how the team performance flows and how that affects the business. And and you know, it it becomes a budgeting exercise from there. So it it's I I don't want to oversimplify it, but But there are, there's, there's a lot of data out there to be able to to base your business plan on and and you know it's just it just just working through that. Adam Grossman: one thing I did want to drill in on a little bit is you mentioned alignment and alignment both internally, managing up or managing down. So Think that's easy to say, harder to do. and that was a big part of anybody who's in a senior position in sports. we're not gonna bring up the clippers, even though that is just came out today, but in terms of ownership conversations. But the main thing is from your side, like how does that work, right? How do you gain alignment? How do you understand across the organization, communication up and down without you know going into specifics, but just your general thought process in terms of how do you get that type of alignment so everybody's moving in the Mike: Perhaps it's a cliche answer, but transparency is the is the way to do it. Up up and down. create, you know, create a business plan. Make sure that that your ownership group or or your CEO or whoever it is is is on board with that plan. Communicate that plan with your staff. And and frankly, even when you're building the plan, your staff should be involved in how the plan gets built. They should feel that they're empowered to build the plan, that their plan went to ownership as one collective group. if if if you follow the process upfront the right way, it's much easier to manage the ebbs and flows of the of the season when things will inevitably change than it is if you don't get the plan right at the or the alignment right in the beginning. And if your team feels bought in and your ownership group feels bought in, then it just it just makes the season a lot more a lot easier to handle because the because the alignment is there in the first place. aligning on strategy, aligning on revenue. the the whole thing, where we're making our investments and why all of these things are really Adam Grossman: I mentioned and alluded to earlier, you're now becoming a more senior leader, you're the chief revenue officer at the Nationals. how is your perspective on leadership evolving and changing as you're moving through the ranks and moving up the ranks? what have you been learning are there key lessons learned as you were moving through the organization from a leadership perspective? Mike: Well, it's there there's it's no doubt that the decisions get harder. I Adam Grossman: Yeah. Mike: I I'm not gonna say that you're always a hundred percent aligned with your team and how you wanna drive certain areas forward. You know, there's gonna be areas the business are gonna focus on more than others, and you know, the the respective VPs within their areas are always gonna be passionate about their area, and sometimes the business needs to make harder decisions around that. That that became more challenging. But again, getting back to the original point, if there's transparency and honesty around why you're doing what you're doing and and you know how that impacts you know this particular department's strategy or or even their their personal compensation or anything like that, that that conversation is still much easier to have. If they if if if anyone, senior or not, understands the rationale for why things are happening, they may disagree with the rationale. But at least they understand what why the decision was made the way it was. And the worst thing you can do to me, up or down, is surprise. surprises shouldn't happen. There there should be a way to be able to have a process and communication that that that there's transparency around it of whatever decision's being made. and then at least the the the team, whether it's a ownership team or a staff team, you know, understands why that why that Adam Grossman: last thing I want to ask about before go to your new and current role with on deck partners is that data conversation. from when you started in 2015 to your end of your tenure at the Nationals, what did change from a data perspective, from a technology perspective, particularly in driving business results? And what are you, most happy about or pleased about as the data technology platform iterations changed over time but from the beginning to where where you were when you left the organization? Mike: Yeah, I'll I'll give Major League Baseball credit on this. this the centralized platform that they they helped build in partnership with Google, that that really you know set us off on a a really great path to be able to then layer on national specific elements and and processes. That really helped a ton. to me, the you know, having a customer data platform that that allows us to be able to really understand our customers and then create processes and marketing flows that come from that. Again, that really all developed post-pandemic. it w it's all relatively new. AI was just starting to you know be used, I would say in more in kind of bespoke ways before I left the nationals. we can talk more about that in the in the next part. But from from a technology perspective, I would say that business intelligence and and reporting and and and marketing automation those were were all in in pretty good shape by the time that I left and and that and again that was all relatively new and it was all built off of the backbone MLB it built and and then the tools that we we put on top of Adam Grossman: even the customer data platforms, particularly outside of baseball and the idea of integrating, marketing automation, integrating multiple workflows, better targeting fans, that's obviously something we focus on a lot at Roar and at Surge, and something that, having the right technology, particularly AI enabled, a agentic workflows, something we do want to talk more about. But we talked a lot about on deck partners, so now I want to get into that in full tilt. obviously you're a senior executive at the Nationals, A, what is what is now on deck partners and B how are you, how did you get interested and approached about the role? Mike: Yeah. So you know, I was with the Nationals for ten years, was really, you know, I was looking to stay. I love baseball, played baseball, been in baseball a long time, and was interested in in staying in the industry, but doing something just a little bit different from from team side business operations. And I was I was introduced to to Mark Lazary and his team via major league baseball and major league baseball made the connection there. this was early 2020 five and late twenty-four, early twenty-five. And and you know, really enjoyed my conversation with with the entire Avenue team. it really the the the strategy, the thesis around minor league baseball, and really leaning into the fact that it's r it's these communities and the ballparks is the central entertainment hub and and having effectively a monopoly on entertainment in these in these markets. Certainly there are some other options, but the ballparks in these in these communities really is the highlight of entertainment. whereas, you know, it's you can't really say the same thing in Washington, DC. There's there are just so many different ways to take your family out on a weekend. And and seeing kind of seeing the avenue strategy and how avenue operates really gave me a ton of confidence that the combination of the team that that was behind us, as well as the industry that we're going into, in this case minor league baseball. that that foundation was there. That's the most important thing to get right. Once once you know I came on board, started building a team, started building the technology that would be behind it, you know, it's it's only made me more bullish on on the opportunities that exist in in minor league baseball because the communities have been so welcoming to us, open arms, the municipalities that we're working with, oftentimes who, you know, have the who own the ballpark and and we lease. Everyone has been so supportive and welcoming and and really excited about us coming in and and doing new things that that it's it's really just kind kind of confirmed the the thesis we had in the beginning and that that you know these these communities are so rich that it's it's gonna lead to to really great things, you know, once we can really get a get get stabilized and and get get get the growth machine going. Adam Grossman: as listeners will know, here comes another multi part question, but We'll start from the beginning, 'cause I think that's the features and benefits, but who is Mark Lazarie? What is Avenue Capital? What is the thesis that you're talking about from a minor league baseball perspective? particularly for people who aren't as familiar with either what's been happening in minor league baseball, obviously what Diamond Baseball Holdings had done previously. can you give us even who Mark Lazarie is and all the things in the success he's had in the sports industry? Can you just give us kind of a little one on one on all of those questions and how you got to on deck in the first place. Mike: Sure. Yeah, Mark Lazary and Sonia Gardner, you know, Avenue they formed Avenue Capital Group, you know, 30 plus years ago. it's been in in it's had myriad investments in business. you know, Mark was a the the owner of the Milwaukee Bucks. He owned the Milwaukee Bucks for several years, built the Deer District there, built a very successful Bucks team. the established the sports fund within Avenue Capital Group in twenty twenty-three and with with a focus really in in our case, and I'll get more into this, but in on on operational improvement, which is what you know, which is what on deck partners ultimately became. so on deck partners is a part of that sports fund within Avenue Capital Group. we we were established last year. We really announced and came to market in December with the announcement of the acquisition of our first two clubs in Vicelia and Montgomery. now I've acquired a a third club in Wilmington. And and and You know, I part of the thesis, as you alluded to in your second part of the question, the thesis that we have really is is an operational improvement. And, you know, building taking these great foundations that these clubs have had oftentimes for decades in their in their individual markets and and building upon what's already great, but just providing more scale that these clubs wouldn't have organically. A lot of these clubs they have very lean staffs. it would not be surprising to see these these teams pulling the tarp for a rain delay, working concession stands, you name exactly yeah, we have that in common. Adam Grossman: you that's you, right? You're gonna go and work we already know you have experience there. Mike: But but it's it it is there's so much work that's done by so few people at these clubs that if you can bring some best practices and some skills, especially related to things that require that, like technology, it it can really provide step change. growth for these for these clubs. And that's that's what we're all about is not changing anything that they're doing about the way that they're running the business today, but layering on top of it, bringing new capabilities, bringing new technologies, you know, bringing some sophistication around, you know, how you go about securing funding for municipalities for ballpark improvements. th those kind of things will will go a long way so that the teams really can focus on what they're really great at, which is fan experience, driving a great game operation. that's that's really what we're trying. We're trying to be additive to that process. Adam Grossman: Yeah, can you make it a little more tangible in terms of operational efficiencies, technology, and in particular why a multi-club ownership would be helpful in driving the types of efficiencies that you're talking about? Mike: Sure. These these technologies, although although you know, the cost of these technologies, you know, marketing automation technologies, fan engagement technologies, while they the costs have certainly come down, they're still largely prohibitive for for teams that just aren't generating that much revenue. They're they're they're oftentimes in smaller, mid-sized markets. it it is it is much easier for a multi-club ownership group to be able to spread those fixed costs over a larger base. and and provide them at the clubs for a rate that would be a fraction of of the rate that they would have to go to market to buy from. And and we provide that ability where we can secure all this centrally and then deliver all these capabilities locally in a way that is completely customizable to the individual fan base. So I think, you know, circling back to the first part of the discussion, on deck partners has a lot of similarities to what a a business strategy and analytics group would look like at a local team. it's a little bit bigger and it's it's got a little bit more scale to it. But but the the approach and the impact is is largely consistent where we're building best practices and capabilities that instead of delivering to local departments within your team, we're delivering them to clubs entirely. And so the the approach is slightly different. but how we're going about it is, or the execution is slightly different, but the approach is largely the same. And and that's that's what's enabling us to be able to deliver this value and tell the clubs like, hey, really focus on these things. You don't have to focus on these things because we're delivering all of that on your behalf. Adam Grossman: And part of what, is interesting about the opportunity, and obviously interesting from a Roar Surge perspective is the real estate component. you've mentioned that with Wilmington and you mentioned that with some of the other opportunities, and you mentioned obviously being a dominant or the dominant entertainment option. So can you talk a little bit more about what your thesis from a real estate mixed use development perspective and why minor league teams are attracted from that perspective? Mike: Absolutely. Re real estate and mixed use, certainly, you know, Adam, you've you've been right at the center of all this for a while now. Adam Grossman: Yeah. Mike: you know, it does seem like everyone's doing it. But what's unique Yeah. I think what's unique though is that some of these these minor league markets, these smaller mid size markets, they haven't been at the top of the conversation. And it's very challenging for you know a team in Visalia, California in the Central Valley or or you know other similarly sized markets, you know, to go to a big developer or big capital partner and say, hey, like I I want to build a mixed-use development, a sports-anchored mixed-use development around our Visalia ballpark. that's that's a really hard conversation to have. And and so our thesis is that you know, we are not real estate developers. we are team operators, investors in teams, investors in communities, where the team is going to serve as that hub. And so, you know, we aren't here to generate a return on the real estate investment. What we're here to do is make sure that all the real estate that goes around these ballparks, of which we certainly hope there is real estate mixed use that goes around the ballparks, that should all be with this with the strategy of driving more people into the ballpark. That's that is that is what we're we're all about is driving greater fan attendance, driver great, driving greater fan engagement, really enhancing the fact that these ballparks are these entertainment hubs for these communities. And if we can expand upon that entertainment hub and include things that go outside the baseball game, that's fantastic. It just should all make sure that it's one integrated experience so that fans keep associating, you know, these districts that we're building with. having a great time with their families, creating memories, like that's that's really what what our strategy is. Adam Grossman: we do hope that you do generate returns from the investment. Obviously that's something we think it's very crucial and valuable. But it is interesting because this is something that I brought up both with the team at Surge and externally is usually people think of sports the name of our company is sports and entertainment real estate global holdings and focusing on sports as anchor to drive visitation, foot traffic, and retail. One thing I think is underplayed is the opposite, is exactly what you just said as a thesis, that the mixed use development can drive foot traffic to the game and it can be a symbiotic relationship rather than, more of a one-way relationship. It's interesting that's part of your original thesis for the real estate development. Is that something that you organically came to? Is that something just based on the nature of minor league baseball? Or how did you guys, think of that even driving having you know that the mixed use in the real estate drives traffic to the ballpark or even has a more symbiotic relationship. Mike: We we just saw that that in in the markets this this developed organically to answer your question directly. we we saw the ballparks that that you know w our teams are are playing within and and said, Hey, these areas have they have rich populations, you know, dense populations, oftentimes sometimes it's a small density, you know, within you know, around the ballpark, but you already have this this natural foundation and you have land around the ballpark that that you can you can exercise. Right? Why why would we not continue to expand the footprint of the ballpark to be able to create these new experiences as as long as they are, to your point, symbiotic what the ballpark experience is. And so, and then we started having conversations with some of the local developers, you know, local real estate partners, the municipalities, and there was kind of this universal alignment that that there's a great opportunity and us coming in and and being able to invest in these areas, you know, would certainly help to accelerate. And and that so you know just got us more excited about the potential Adam Grossman: I think. Mike: to look outside the ballpark and what other opportunities could be out there. Adam Grossman: are there consistent themes in terms of programming mix, whether that's residential, retail, office, commercial, hospitality, are there things that you think would work particularly well in minor league ballparks or stadiums or concepts that particularly work well to achieve the objective that you've been talking about? Mike: We're we're, you know, candidly we're not that far along yet. Adam Grossman: Yeah. Mike: but what I what I would say though is that, you know, residential is really interesting to us. That's that's been a common theme we've heard within the municipalities we operate within. We've actually also heard it from the major league teams related to player housing in particular. you know, player housing is a can be a challenge in some markets where oftentimes the players are either staying at places that that aren't up to par or they are staying far away from the ballpark or potentially both. you know, the more that you can co-locate and have a great living arrangement for the players, so that there is this symbiotic relationship between the where the players are going after the game, where they're in the game. that that's a really important piece of it. So that's that's helping to inform. But again, we're we're still pretty early on in the process. And these are just all kind of ideas that are floating in our head for now. Adam Grossman: one of the other questions that we have and I do wanna end The AI technology conversation, one of the things that you're at the center at is institutional capital investment into the sports industry. And that's something that's very top of mind, very present. whether you're talking about the Lakers, you're talking about team ownership, franchise ownership, the mixed-use development paper that I originally authored had a big component of institutional capital getting involved in sports. So from your perspective, what are the advantages and how does having the backing of Avenue Capital influence the decision making? process, the strategy, the themes that you're looking at, because it's a topic that obviously a lot of people are thinking about is how does institutional capital, particularly from larger scale private equity players, how is that impacting and how do you see that impacting what you're doing on a day-to-day basis? Mike: Minor League Baseball is actually one of the best applications for institutional capital because the message that I can deliver to the communities about the fact we're investing in these communities and creating a better space to create memories and creating more events throughout the year, these are very easy messages to deliver to the community. And they deliver a great return. If done well, they deliver a great return. And so you have a positive message to the community about investing and creating more experiences. You have a positive message to your institutional investors about the fact that this capital is going to be generating a return. All that is is great. You know, the minor league baseball, therefore, is one of the best examples of that. You know, these teams, these teams oftentimes are run very well. They're run very well within the bounds that they have been given. but but there's an opportunity to do more for all the reasons we've discussed earlier in the podcast. And and those those are really the the areas of capital that that institutional capital can come in and really do well. that would just be very challenging to do without that behind. Adam Grossman: last part of the podcast here is about artificial intelligence and technology. you mentioned that on deck has only been around for a relatively short amount of time. You're hiring people now, in a context where artificial intelligence is growing. obviously before we get into that, how have you seen artificial intelligence grow and develop as a leader in sports and somebody who's been data forward, and how has it impacted your thinking as you're building an organization? Mike: Right now, ar artificial intelligence is still used in a relatively bespoke way within within teams. There there certainly are some teams that are out and on the leading edge of it. however, I think the vast majority of teams are still in discovery phase around how they want to to you deploy the technology. For us, we actually have the benefit of having a blank canvas. We didn't come in with any entrenched technologies, we didn't come in with any entrenched executives who felt one way or the other. you know, myself, our COO Jeff and CFO Shirag, we're all very technology forward. you know, we are we we we have already and will continue to expand upon our AI deployment. I think what's what's interesting and different about the minor league baseball application, perhaps relative to other sports, maybe, but but certainly within broader consumer industries, is that this is not a head count reduction play within artificial intelligence. These teams run so leanly already. This is a growth play. And and if it's a growth play, that means that the artificial intelligence needs to interface with your fans. Anytime you're you're interfacing a non-human in in what is a deeply connective game in these communities that that are so rich in relationships, just candidly, you need to be very careful with how you go about deploying it. So We we are are cautious very much so on the on how we're deploying AI from a customer-facing perspective. where we are more aggressive is on internal workflows. And and we we have we have deployed technologies to help to streamline sales processes, to help improve internal communication. we're a remote workforce because of where our minor league baseball our ballparks are located. how we communicate with each other, how we develop business plans, how we develop capital plans. So I I I would say that while we are we are, I would not call us on the leading edge of AI right now. I I would say that we are we are progressing at a pace that I feel is appropriate for for where we are. We are going to do more and we're gonna continue to lean into it. But but anytime you're you're you're facing your customers, I think you just need to have an extra layer of caution, especially within these communities that we operate in. Adam Grossman: Can you, if possible, give tangible examples of either interacting with the customer or or from a business perspective of where you've actually used AI to achieve the objectives that you're talking about here? Mike: from a customer facing perspective, only on creative, creative and and and marketing distribution, meaning all of that still flows through flows through our team. AI is is used in the creation, and then there's it it's all managed local by managed by the team. An example of something that would be customer facing that we're gonna have a lot more hesitation on is how you interact interact with a, for example, you know, a group sales customer. trying we launch a new group sales space, we're we're trying to sell an existing group sales customer. on that space. I think how those tools are deployed and kind of what opt-ins you have around the the customer knowing that they're engaging in this way, like that this all just requires more thought and and we're not there yet. On the former example, you know, this is just increasing our reach, increasing awareness around things that we think customers are going to find compelling. using AI to be able to to More dynamically create customer segments and ensure that the customers are receiving targeted messages that meet the the profile that they want. These are areas that AI does very well already. It improves the customer experience and and it's all being it's still all being done by our team. So these are areas that that we're gonna lean in pretty heavily to at the outset, while some of the more customer-facing areas require more thought, development, you know, conversations with customers. fans like those those areas are gonna take a little bit more time. Adam Grossman: you mentioned that AI as a growth productivity tool. we agree with you that there's a lot of use cases, a lot of upside in terms of increasing revenue, increasing productivity, empowering your team, teammates or people at your organization to their job better, more efficiently, in ways that that tr align with the KPIs or key performance indicators or metrics of the organization. For you, what does that look like? If if this is successful, if growth happens, what does that look like if AI is powering that growth? Mike: The the operation of a game is is quite complex. I know fans hopefully feel like it's very seamless, but but we should be able to dramatically increase the the fan the the entertainment aspect of the game because we're gonna be able to to do promotions better, we're gonna be able to leverage scoreboard content better, we're gonna be able to integrate scoreboard and music and lights better. There all these areas I think, you know, have some ability to be controlled centrally and have a have AI. involved in and how they how they fit together with the clubs, how they're deployed at the clubs. And ultimately the fan is going to feel like the game is that much cooler, that much more entertaining, and and that drives more ticket sales, that drives more butts and seats. This this is where I think we can really get a lot better. Because there is just right now a heavy manual element to how the game entertainment and experience is run. And and these are areas that AI should be able to do quite well. without detracting from anything in what the staff is doing today and with and and certainly while enhancing what the fans experiencing at the ballpark. Adam Grossman: By Carney, thank you for the time. It's great to have you on the Roar podcast and thank you for your insights. you're on the front lines of a lot of things that people are really interested in. And it was great to hear your perspective on those. Mike: Thanks, Adam. Always a pleasure.