Alan Smolinisky, co-owner of the L.A. Dodgers, sits down with Yahoo Finance’s Dan Roberts to discuss his team, Major League Baseball, and how the MLB is advancing through the coronavirus pandemic.
DAN ROBERTS: All right, I'm Dan Roberts. We're delighted to bring on Alan Smolinisky for this "Yahoo Finance Presents." Alan, thanks for joining us.
ALAN SMOLINISKY: Thank you for having me. It's great to be here.
DAN ROBERTS: Well, let's start this way. You are a minority owner of the Dodgers. I want to talk about the team, about the incredible season, about MLB, but let's start with your own entrepreneurial story. You've got quite a story, the son of Argentinean immigrants and a self-made entrepreneur. Let's fast forward to how you made your wealth, where you found success in business.
ALAN SMOLINISKY: Sure. I sort of came out prewired for business. I always knew I would be an entrepreneur. My father had started a small garment business, and I used to watch him. And my dad was like Superman to me. I always wanted to be like him. So I had a million small businesses as a kid from lemonade stands to throwing after-prom parties and all this kind of thing.
When I was a freshman at USC, I was the first to go to college in my family. It was a very unique experience. Didn't know what to expect. And I saw there was a major housing shortage at my school. USC only housed the freshman, and then they kicked everybody out.
So I asked my best friend at the time, who was a senior, how do I find an apartment for next year? He says you have to go talk to the people in the community that own all the buildings. So I found a nice building, and it was a Chinese landlord. And he said to me, well, we start leasing on March 6. If you want to get an apartment, you have to sleep outside starting March 4, and he wasn't joking.
So it was like Yankees tickets in the 1960s. We were sleeping on the sidewalk for two nights to pay these Beverly Hills-type rents. And I thought, ooh, there's a hell of a business here. That's a lot of pent-up demand. I'd never met anybody in real estate. I didn't know anybody who owned real estate or built anything, but I just started hanging out with my landlord Brian all the time. Very similar story, immigrant, you know, came from nothing. And all of a sudden we said, why don't we build 1 and then 2 and then 5 and then 10, and it turned into a giant business.
DAN ROBERTS: Considering your real-estate business started when you were in college-- I mean, we don't have to spend too much time on this, but what is happening right now with college amid the pandemic is so interesting. And I know, you know, you have kids of your own. Where do you stand, and what are your thoughts as you watch kind of the effect that this time has had on colleges?
ALAN SMOLINISKY: I feel very blessed not to be in that business. We ended up selling that business. Our buyer went nonrefundable three days before Lehman Brothers failed just before the Great Financial Crisis. So that's a long list of good luck, as my best friend would say. The sun has shined on me. I would not want to be in the student housing business right now fighting with parents to enforce leases and have them invoke clauses and get their lawyers. Particularly the parents at the two campuses that we operated on would have no problem being surrounded by lawyers trying to argue that they didn't know the rent and the kids weren't there. And so yeah, that must be a disaster. I'm very fortunate not to be involved.
DAN ROBERTS: All right, so let's talk about becoming a minority owner in the Dodgers. I mean, for the average person watching, first of all, how does something like that even happen? I imagine people suspect it's all about who you know. But you really had a personal affinity and love for the team. This was kind of a dream of yours, and you made it happen. How does someone buy into an MLB team?
ALAN SMOLINISKY: Yeah, so I've always been a die-hard sports fan, and I think probably around the age of 10 or 11 I realized I wasn't going to play Major League Baseball, probably even sooner than that. But I remember even as a kid, you know, I'd always see that trophy ceremony on TV, and there's this kind of half-balding, out-of-shape guy lifting the trophy, and he's got his wife there and family. And I was like, boy, that seems like a great role. I wonder with that is.
But the truth is I have been a die-hard Dodger fan my whole life. My father was a poor immigrant who arrived in Los Angeles in 1963, and he swept floors for $1.25 an hour and really wanted to be American and learn English. So he became a Dodger fan. He was very close to Dodger Stadium in the Garment District, and he listened to Vin Scully all day, every day to learn English.
So, you know, my love for this team goes way back. Even before I was born, the Dodgers meant so much to my family. So I grew up going to games there.
And if you fast forward, my father got very sick with cancer, and he passed. And what that did to me was really-- it really fast forwarded life to sort of, OK, I'm going to be lying there one day, and my kids and grandkids are going to be around me, and do I want to have any regrets? because my dad spent his last two days talking about how he came to the greatest country in the world, had this beautiful family, everything went. He had no regrets.
So I decided, you know what? I'm going to-- I've always gone big, but I want to go even bigger. So I called one of the largest sports bankers in the world, and I said, look, I've been reading about you for years. I saw the piece in the "Financial Times" a couple months ago, and I'd love to talk to you and maybe do something.
And the first thing he told me was you know you never get your team, right? You're never going to get your team. It doesn't work that way. And he says, you know, but we'll get you in, and then you have good behavior. You'll show you're a great partner, that you're responsible, that you can be counted on, and then eventually you sort of get moved up. It's like the military. They promote from within.
Well, then the Dodgers opportunity came along. And I said, hey, you said that you don't get your team. And so the deal took a little over a year, and we did a lot of interviews and sat with the team to make sure it was the right fit. And it's been the most incredible thing I've ever been a part of.
DAN ROBERTS: That is remarkable you got your team. I want to make sure that we tell the viewers you just in 2019 became a part owner. You and another investor split a 5% stake. And what a year to become a part owner because the Dodgers go and win the World Series, so congrats on that. I mean, what was that like?
ALAN SMOLINISKY: The 5% thing has been reported. It's been a rumor. There's been different numbers. We've never confirmed any percentages. But other than that, yes.
The timing worked out really well. We started in 2019. And so we got a little bit of a season in. We lost to the Nationals. That was absolutely devastating. I was convinced this was my father, you know, sending the vibes that we were going to win in my first year. This was amazing. But yes, this was our first full season, and what a strange season it was.
DAN ROBERTS: Well, let's talk more about that. I mean, you know, I'm the sports-business guy here at Yahoo Finance. I've been covering closely kind of the pandemic effect on all the leagues, and every league came back from the pandemic and from the pause a little bit differently. MLB, for a while there it looked like they wouldn't even be able to have a season, but in the end they got to have a 60-game kind of mini season. How did that affect things? I mean, winning a ring amid the pandemic, did it lessen the feeling at all? What were the other owners saying as the season went along?
ALAN SMOLINISKY: Yeah, no. I think very early on it was clear that this ring would mean more than ever. The amount of challenges, the strangeness of playing in an empty stadium, the constant testing, being apart from your family, playing different teams in stadiums we've never played in, having some players out or opt out, you know, it just made it-- I think LeBron actually put it the most eloquently when he talked about the sacrifices and how it was the most difficult thing he had ever done being away, and that's exactly what it felt. I was at about 15 of the games at the empty stadium. And then, of course, we traveled to Texas, which was also very bizarre.
But the amount of sacrifice and hard work and everything that went into it, I think it just makes it more special. But very unique, that's for sure.
DAN ROBERTS: Now as we move forward and we look to next season, obviously, you know, Major League Baseball really hoping that it can get fans back into stands since the league is so reliant on game-day revenue. What are the other ways that the kind of dragging on of the pandemic, even though on the other hand we've got this encouraging news about a vaccine-- what are the other ways that the pandemic might affect the next season? What are you guys in discussions about for sort of how to continue dealing with that?
ALAN SMOLINISKY: Yeah, it's-- we're very fortunate. I mean, I think we have the best CEO in sports in Stan Kasten. He's actually been a GM longer than I've been alive. I talk to Stan quite often, and I'm very glad he's in charge in dealing with this and that I don't have to play a role in it because, listen, it's impossible. It changes day by day. You know, he gave an interview that sort of got picked up around the world about losses being north of $100 million.
And, listen, we bring the most fans through the gate of any sports team anywhere in the world, right? So this season we probably would have been 4 million, maybe a little over 4 million coming through the gates. So in addition to tickets, right, that's going to be parking. That's going to be merchandise. That's going to be food. You know, even the Dodgers Foundation, which participates in a raffle, their budget comes from that. So it's been absolutely devastating from that perspective, from the revenue perspective.
But, you know, long term, we're a group that looks very, very long term and very big picture. And the franchise has been around 137 years, and it'll be around long after we're gone. And so, you know, we'll get through it, but from a financial perspective, it is really, really challenging.
I'll say one positive thing because I don't want to be Mr. Downer. When we went to Texas and it was the first time all season I had been in a stadium with any fans, even though it only had about a fifth, I believe, 20% or so, it felt really good. It was loud. I mean, it helped that they were almost all Dodger fans, but it felt really good. Like when the ball went out of the yard, it was loud, and that was really refreshing.
So I'm optimistic that even if we only get a small percentage of people in the buildings, it still feels a lot better than that sort of dizzying, strange crowd noise, me sitting by myself trying to stay awake.
DAN ROBERTS: Totally. And as a baseball fan myself, I'm just eager to see fans back in the stands.
You mentioned the longer-term vision. You know, long before the COVID-19 pandemic, there were questions kind of existentially about MLB. Attendance at many ballparks was down. And people love to ask kind of every year, well, what should baseball do to attract younger fans and to stay fresh and compete, especially as the NFL has just grown like crazy and, in many ways, you know, some people argue has become America's sport. As a part owner but also as a lifelong baseball fan, what do you think long term MLB needs to do to really keep fans engaged and attract those younger generations?
ALAN SMOLINISKY: So this is really a challenge. I see it actually in all our businesses. You know, in my day-to-day role running an investment firm and looking at different things, you know, everything's really been disrupted.
I mean, I would even put that back on the NFL. You know, they've seen major rating decreases. And they come up with all sorts of wacky, well, it was the anthem. You know, and then they fight with their pizza sponsor. And then he says, well, no, it's not that. It's the concussions. I mean, so they have a lot of, you know, challenging issues, but we all should. Just like any successful business, we are competing for everyone's attention for entertainment, and there's a lot of different options.
So, you know, I would say that what we've done is put an incredible investment back into the team, back into the park. So, you know, it started with a huge project under the stadium building the new clubhouse and the facilities and everything. But just this last offseason, we spent over $100 million in our new main entrance to the field, and there are so many incredible fan experiences there for little kids all the way up to adults. I can't wait for the fans to see it because it's unbelievable.
And you can come hours early and entertain yourself with, you know, sitting in the replica dugout, watching batting practice from out there, all the new restaurants, several of which we haven't even announced yet. So there's going to be so much to do at the park.
But, you know, there's a long runway with baseball. There's a lot happening. I mean, there's even talk of, you know, sports wagering, how that'll play into baseball.
How about international growth? You know, it's such a beautiful thing that when I look at our roster, I see players from multiple continents and multiple countries speaking all sorts of different languages, and I think there's a ton of growth there. I mean, look at the NBA and how international that game has gotten.
So, you know, the league recognizes it. They're trying to speed up the game. They're changing rules, you know, a little bit without compromising the core of it. But just like every business, you have to compete. You have to stay relevant. You have to stay fun and interesting for the fans in person and on television.
DAN ROBERTS: All right, Alan Smolinisky, thanks so much for joining us. And, Alan, I forgive your Dodgers for stealing Mookie Betts from us from the Red Sox. We'll see how you guys do next season. Hoping Boston plays better.
ALAN SMOLINISKY: Thanks very much for that. That is a wonderful thing. He's a beautiful human being and a real winner.