Podcast Alert: Jahm Najafi – MSP Sports Capital, McLaren Racing, X Games

Transcript

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[00:00:00] Jahm Najafi: When you create an opportunity for teams to be able to compete well against each other. And it’s not just the rich being able to compete and winning every single time and every single year. It becomes more interesting to the fans. It becomes more valuable to the team investors, but also more exciting.

AJ Maestas: Hello, and welcome to the Navigating Sports Business podcast. I’m your host, AJ Maestas, founder of Navigate a data-driven consulting firm, guiding major strategies and decisions in sports and entertainment. We started this podcast hoping to share the interesting stories and experiences of the amazing people we get to work with at Navigate.

And even though they’re visionaries and famous in many instances, their true stories aren’t often heard. Since they’re not on the playing field, our hope is you get to know them [00:01:00] better and learn from them. As we have.

Today I am happy to be joined by Jahm Najafi chairman and partner at MSP Sports Capital, and the head of Najafi companies, your portfolio, Jahm, includes a stake in the X Games, I think you recently exited from the Phoenix Suns, McLaren Racing, and a number of other things I’m hoping come up in our conversation. But first of all, thank you just for being here.

Jahm Najafi: Thank you, AJ. Appreciate you having me.

AJ Maestas: I think so many people fantasize and dream about being an owner. Would love to know what it feels like to be an owner, to sit in that chair. And I know you have an investment mind. I know you’ve come through that world, so I’m really excited to share your thinking in your mind with our listeners.

Jahm Najafi: One of the things that I’m a little bit of cognizant about is the concept of ownership, and I know that that is a normal and typical description of what people do in the context of sports. Sitting in that owner’s box or sitting in the owner [00:02:00] position and sitting in the managing partner of a particular investment and owner board of governors, et cetera.

The way I describe my investments in sports is really a shareholder. The sports teams that are , competing in certain communities are, frankly, in my view, are owned by the communities in which they play and they’re owned by their fans. I am a shareholder and a temporary steward of these investments. Of course a financial beneficiary of those investments in a century , I’m going to be gone, my kids will be gone, but the communities in which these teams play and the franchises play will continue to be there and the fans will continue to be there. The way I think about it is that it’s really, the community ownership is what’s really important, and as stewards of these of these assets, we need to make sure that we do the right thing for those communities.

That’s how I think of that and, but I appreciate your using that and allowing me to explain. How my thought process works.

AJ Maestas: I love [00:03:00] that, honestly, I think fans can feel it when someone is acting as a steward of it, and I think that’s a very stoic view of the that position. You’re not gonna be here forever. This thing probably will be forever or a very long time. And, but I really do think fans can sense that, right? If you’re operating it to benefit yourself in this lifetime, or your children, or you are acting as a responsible steward with that longer vision. So. If I can dive right in, great timing with McLaren, you made an amazing investment, now you guys are winning on the track. Do you mind sharing some insight into maybe your thesis, what you saw when you decided to make that investment? I even want to know what’s next for Formula One, but I know that’s a lot in one question.

Jahm Najafi: Thank you, AJ. When Liberty Media acquired the league at the time. I’ve been a student of, John Malone, and also, frankly, I was a classmate of Greg Maffei in business school, so he and I were section mates. The YPO guy as well, right? Yes. When they acquired the League F1 [00:04:00] League, they talked about some of the strategies that they want to follow in F1, and a number of those strategies were increased presence in the United States at additional races.

Create an opportunity like other sports leagues to provide a cost gap or a salary gap in order to increase competition and makes the team much more exciting to watch and competition. Much more exciting to watch. Ensure, again, the stewardship of the brand as opposed to the historical owners of the league itself.

F1,When that occurred, I became very curious about these teams. Decided to look at acquiring a team in 2018. And it just so happens that Jeff Moorad, who I had met in the early two thousands in Arizona when he was running the Arizona Dialbacks as managing partner and CEO, well, our kids were at the same school together, was looking at the same team as I was in 2018.

So fairly quickly thereafter, we decided to team [00:05:00] up to go after that particular F1 team , which was called Force India at the time. It went through British administration. We were slated to actually be the acquirer of that until Lawrence Stroll showed up in the last minute and significantly overbid us as a part of that process in British administration court, which is equivalent to chapter 11 in the US and I, in fact, I remember distinctly Lawrence invited me to his office to see if I’d be interested to invest in.

We decided to pass on that opportunity at the time, primarily because the strategies that had been laid out by Liberty Media had not yet taken hold or had come to fruition. 2019, we also looked at another F1 team jointly together, and we passed on that opportunity as well. But we met a number of team investors and owners throughout this process and became familiar, much more familiar with the nature of the transactions and the economics so that exists between the league. The F1 teams themselves, as [00:06:00] you are aware in US sports, the teams and the franchises own the league, and therefore the league creates value and each of the individual franchises end up becoming financial beneficiaries of that value creation within the league itself. In F1 is different, where there is what’s called a Concord agreement, which is assigned among the 10 teams and F1 League.

And FI A, which is the regulatory body that oversees the rights to the league, to Liberty Media, or in this case, yeah. Or F1 League, if you will, that is owned by Liberty Media. The conquered agreement was coming out for renewal in 2020, despite the fact that Liberty Media during the 2018 and 2019.

Tried to establish a cost gap, many of the upper teams chose not to agree to those because they were effectively marketing for those brands. Whether it’s [00:07:00] Mercedes, Ferrari, Red Bull, the economics of the dollars that were being spent on F1 teams were coming out of their marketing budget from the corporation itself.

So if you look at whether another a hundred or $200 million. From a marketing budget of a multi tens of billions of dollars of revenue, business was not big, but it was important to ensure to a winning at one team in order to help increase sales for the rest of the brand itself. And that’s the main reason why Mercedes had actually effectively become the team to beat for seven, eight years.

In the latter part of the 2010s when COVID hit within a couple of weeks, McLaren called us and they said, we understand that you’ve been looking around the league for quite some time. We understand you also are very interested and you’re dedicated to invest in this league, and, would you be interested in investing in us? [00:08:00]

And we knew also that now finally, because of COVID. A number of teams, including the top teams at F1, were interested and potentially will plan to agree to a cross cap in order to ensure that all the teams will become profitable. So Jeff and my experience has historically been that when you create competition, when you’ve created an opportunity for teams to be able to compete well against each other, and it’s not just the rich.

Being able to compete and winning every single time and every single year. It becomes more interesting to the fans. It becomes more valuable to the team investors, but also more exciting as a level of competition. Part of our thesis was that if in fact, Liberty Media were to be successful in 2020 to establish a cost gap, it makes the teams profitable.

It makes it much more exciting, fun to watch, and much more interesting. So we decided to lean in fairly quickly within a matter of a very short [00:09:00] few weeks. Came to an agreement handshake to invest in McLaren F1, and were able to close that transaction in 2020. It became the, an investor in the team and had certain rights associated with it.

I became vice sermon of the team. Jeff and I both joined the board. McLaren F1 at the time was losing significant amount of money. And our investment was to ensure that the team will continue to be able to perform on the grid. And that capital that was to be deployed came from us. And the more capital we invested, the more our ownership increased as a result of that capital deployment.

And to McLaren, Zach Brown put together a projection, put together a business plan, or the following, several years we looked at it, we said it requires X amount of investment. We signed a deal and we closed that transaction and committed to invest X amount of capital or the following two to three years, expecting that we would be in a [00:10:00] breaking position three, four years later.

AJ Maestas: Now, there’s been some game changing things, right? Like I think most our listeners are in the United States, so they’re super familiar with Drive to Survive and what that’s done for domestic affinity. But maybe the bigger story is those cost controls, right? So that. Level playing field because you’ve risen to the top of the sport now and there’s a good business model there for ownership.

There was a time right when it, it just seemed like an endless arms race, right? As far as spending, is there something else there that we might not know? What might a fan or an outsider not realize about the timing and benefit to you all in that investment? 2020. The sport was in trouble, I believe. No one knew when they were gonna race again.

Jahm Najafi: Racing completely stopped.

AJ Maestas: Yeah. Yep. So I assume that, you didn’t have much competition as a potential investor. I know we worked on the Oracle deal with Red Bull racing at that time, and now they’re paying a hefty amount. But at that time, I felt like we were able to get a pretty incredible deal for a very low price because, well, [00:11:00] they were hanging by a thread, but I don’t know, is there a story there you can share? You have to be the best timed investor in the history of Formula One.

Jahm Najafi: Thank you. I appreciate that. And I can tell you that this has clearly gone way beyond our expectations. We expected additional two races in the us, which is part of the strategy that Liberty was gonna establish, certainly helped and the largest media market in the world.

And in addition, drive to survive. I think what some people forget is that 2020 was actually the second season of driving to Survive. So the first season came out in 2019 and COVID, despite significant. Challenges that it provided to the league and sports franchises anywhere globally. It also did, it provided the opportunity for the fans to engage in viewership online and streaming.

So one of the benefits of COVID occurred with respect to drive to vibe occurred because people actually discovered drive to survive because they probably around, ran out of everything else to watch, and they [00:12:00] ended up coming across track to survive. And once you watch a season, then you become truly intrigued and interesting.

I am not sure if drive to survive would be as popular as it is today had COVID not occurred. I agree. So it people became so while at the same time the sport had stopped racing and there were economically under pressure, significant pressure, it was also becoming more popular. Just people were discovering it by looking at the driver, watching it.

Okay. What happened is that as a part of our closing, a new conquered agreement, five-year agreement was signed between Liberty Media and the 10 teams in 2020, which, as you may be aware, expires at the end of this year. So we knew that all the 10 teams had agreed to a cost cap, and by far the most important determining variable to investment consideration is the team management team.

I’m not talking about the franchise, I am talking about the management team. During those many months [00:13:00] with Zach Brown and Paul Walsh, who Paul Walsh is the chairman of McLaren Group, which agreed to sell a hundred percent of the car company to CYVN. Paul Walsh is the chairman, Zach Brown as the CEO.

The more we interacted with Zach, the more we realized that we have a truly world-class individual and overseeing this particular franchise. Extremely disarming, extremely down to earth, extremely smart, very thoughtful from a commercial standpoint that truly bereave in win-win relationships with our commercial partners as well as team personnel and is a great mentor and leader and a steward of effectively what amounts to be a thousand person business or company. And we thought that his leadership would be important as a part of this investment.

AJ Maestas: I’ve heard you talk about this before, right? It’s about the people and it’s about leadership. And the next thing I’m gonna ask you about is going to be your new investment in the X Games, but I’m so proud [00:14:00] to have played a role in in connecting you with Jeremy Bloom.

You’re now CEO. He was on our podcast earlier. Any chance you’re willing to expound on that role of those people and those CEOs? ’cause I think a lot of owners in sports don’t see it that way. They think, Hey, the fans are gonna show up. They like, this guy’s just a business guy selling sponsorships. Maybe if you could even give us some color onto what Zach Brown has done to move that business forward, sitting in that seat as a CEO.

Jahm Najafi: One of the things that I look for in any CEO is and not allowing the arrogance of information get in the way of humility, of lack of knowledge. It’s extremely important for any manager team and by ourselves too, to continually question ourselves and our assumptions on a day-to-day basis. Just because of the decision that you made yesterday, may or may not be the right decision today.

You wake up in the morning and you have to reevaluate yourself, but be willing to pivot and be willing to change and be willing to be open-minded about [00:15:00] challenges and opportunities that are provided to you daily. You may make a strategic decision with regard to your business today, and you think that’s the right business.

The fact is your competitors are gonna react to that decision two or three, four months later, right? So it’s a living, breathing. Organization that needs to continuously improve itself and react to everybody else that’s happening in the marketplace. And just because you think you made that the right decision two months ago, that this means the right decision today, that’s an important part of any management team.

And that’s one of the things that we saw in someone like Zach Brown because he is, he is truly an individual that constantly is looking to become better version of himself. Is constantly looking to create the organization, better organization than it was yesterday, and is constantly looking to mentor and challenge his people to make the right decisions on a day in, day out basis.

[00:16:00] Success is making a thousand decisions right? While making 200 decisions wrong along the way.

AJ Maestas: Yeah, I love that. Honestly, because I like that growth mindset and mentality. I’m thinking of the first time I met my career, started in motor sports when I met Zach Brown. He’s reinvented himself. He had wild success 15 years ago, right?

His garage, Indianapolis, all that stuff. I don’t think you would’ve predicted this career trajectory. People would put him in a very similar position and what he was 15 years ago, ’cause he was doing great. So that’s pretty cool to hear. What a nice compliment.

Jahm Najafi: And the, of course, the other part, uh, the other important leadership change that occurred two years ago was, and Andrea, who is the team principal that runs the F1 race team. As you may be aware, McLaren has not just the F1 race team, but at all Indy Indy car race team. We also have eSports, we also have Formula E, so we have a number of teams that Zach Brown oversees. Andrea Stella is the one that runs F1 racing, [00:17:00] and what he has done since he became the team principal two years ago, is that he has truly broken down barriers internally within the organization itself.

In history, some of the good ideas that came out of aerodynamics or manufacturing or design, they were compartmentalized and shared at the top, and he came in and said, you know what? You have a good idea. I want you to share it immediately. So ideas were implemented, weeks are now being done in days, and that organizational behavior change has significantly improved within the people infrastructure and hence the reason or success the past two years.

AJ Maestas: That’s really nice when you’re hitting on both fronts, right? In competition and on the business side. So congrats. That’s amazing. You mentioned Formula E. I don’t know if you’ve. A little bit of a tangent here, but if you’ve heard there’s a group that’s trying to bring a Formula E race right here to Phoenix where you and I live. I don’t know. Have you been in touch with those folks [00:18:00] at all?

Jahm Najafi: I understand that there is a group that seems to, they’re very serious about what they’re trying to accomplish, and I think they may have even picked certain areas for them to consider. But I think it’s very exciting for Phoenix.

AJ Maestas: Yeah. Yeah. The night we had dinner at my house, they had some sort of kickoff event. I, I wouldn’t have timed it that way if I’d known it, but they had some sort of event where they brought a bunch of people in the marketplace together. Are you optimistic about the future of Formula One?

Jahm Najafi: Each race is effectively a Super Bowl. You have 24 races. You have 120 million people that watch each race. And it’s the only truly global sport where there are so many different competitions and so many different countries, so many different, almost all the regions of the world. I am very optimistic that, and this is the growth trajectory is going to continue. It may not be as steep as it has been the past four years, that growth is gonna continue. It’s a very exciting, highly competitive environment, and I think the [00:19:00] difference when you start talking about the nuances and the differences that exist between what’s called a fast car versus what’s called a slow car.

We’re talking about the difference of one second in, in a minute, 30, right? Yeah. So the fast car is going a minute, 29. The slow car is going at a minute 30. So the whole concept of what is fast and slow is very different within F1, and it, continues to improve all the time. It’s even more exciting in next year because regulations have changed.

Some teams may get it right, some teams may get it wrong. It doesn’t necessarily mean that the ones that are doing a great job this year are gonna be a great job next year. So I think 26 and beyond is gonna be a lot of fun to watch.

AJ Maestas: I’m glad you’re optimistic about the future. This is how ignorant I am on the subject. I would’ve thought when NASCAR started to slow down in popularity here in the US and maybe it was oversold a bit, right? In the late two thousands and let’s call it 08, 09, somewhere around there. I [00:20:00] would’ve thought people can barely work on their own cars anymore. Self-driving, autonomous vehicles are coming. What’s the fascination of like the technical specifications? Then? I would’ve thought this would spread globally. Formula EI would’ve thought, oh, the manufacturers will be so interested in competing. You know, there’s a lot of tech innovation happening. This is just a different era in the world, right? It’s asymptotic.

There’s just less room for improvement in a carbon emission type vehicle. And I’m wrong of course. ’cause as I understand it, formula E is not really thriving, right? It’s certainly not taking up at the rate at which electric cars are. It’s not keeping pace with the overall market and Formula One thriving.

I, just, I don’t know. I don’t know if you see something I don’t see there, but it’s just, I do agree it’s the global sport, but it’s amazing to me people are still really into cars and engines and technical performance of cars when I don’t know anyone who can get under the hood and fix anything in a modern car.

Growing up in Alaska, you had to, you could die if you couldn’t fix basic [00:21:00] mechanical issues. Now, 1% of people can put their head, under a hood and know what’s going on. I don’t know.

Jahm Najafi: You’re actually right. Agree with that about Formula E as that Liberty Global recently acquired the league itself, and I think it’s gonna go through similar potential trajectory under their ownership.

So I think that they’ve certainly learned from their sister company, Liberty Media and Teams. Yeah. That’s a good segue to your newest or one of your newest investments, the X Games. Can you share with us what you’re seeing there? Yeah. Action Sports is a huge participant sport, but also viewership sport globally.

Skating is the second most popular sport in Brazil. It would be shocked to know after football, soccer. Yes. When you look at action sports in JA globally, it’s again one of those participant sports that almost all of us engage in as a young person. Whether it’s skiing or whether being able to do tricks on skateboards or whether we do a variety [00:22:00] of different things.

When you’re 6, 7, 8, 9, 10, 12 years old, that’s what you do. And when you talk about action sports, what is the most well-known brand in action Sports X Games? It’s been around for 30 years. It was created 30 years ago as a content play to increase, to provide additional content for ESPN. That’s why it was created.

We think of it as being a league in the action sports world, no differently than NBA and basketball. No differently than F1 and racing. So we are turning it into an actual league where there are franchises that are gonna compete each other no differently than F1 and F1. There are two drivers. The collection of the two drivers points end up becoming the team Constructors champion.

It’s the same thing here. We will have competitors. At Action Sports on X Games that we’re putting on a regular basis several times a year, each of [00:23:00] competitors are still going to get their medals for each competition. They will get points for each competition at the end of the season. You will have an individual winner for that season, but also a team winner for that season.

In F1, what happens is that somewhere around 60 to 70% of the catch will of the league. Is distributed to the 10 teams in a former prize money based on understandings the previous year. That’s the same thing we’re doing here. We’re creating alignment interest between franchises and the league where a significant majority of portion of our EBITDA associated with each winter and summer will be distributed to the 10 teams based on standings the previous year.

And each franchise owner will have an ownership interest in the league itself. No differently than other sports leagues in the us. So you’re seeking franchisee investors, owners. Here, we’ve entered the market and we have a number [00:24:00] of parties that are already in the mix looking at acquiring franchises. 26 will be the first year for the league.

AJ Maestas: Very exciting. And now, will these be global? Will there be they be associated with a country or with a brand? It’s sounding very similar to Formula One.

Jahm Najafi: It’s going to be very similar to Formula One. We’re using our learnings in Formula One in order to establish this and creating franchise value. It’ll be a limited number of teams.

Each team will comprise of both male and female, and they will be competing against each other winter or summer. And we’re going to go around the world. We’re going to be do the same thing as F1. We’re going to have. We send out RFPs to a number of cities and countries on the road, and I can tell you that I was surprised that over 30 respondents came back to us about wanting to withhold X Games competitions in the local communities.

And we will take that around [00:25:00] limited number of people and take it around the world like effluent.

AJ Maestas: Excellent, excellent. And how about the talent? Is there some form of a draft or is it based on country of origin?

Jahm Najafi: A great question, AJ. Yes, we plan to have a draft. We will have a draft. Well, the teams will be picked based random in terms of order, and they will pick athletes.

There are approximately, and for the first time, we will be giving every athlete a guaranteed annual payment where action sports did not exist before.

AJ Maestas: Wow, that’s great. That’s great for so many of those athletes, right? There’s just so little stability in in their trajectory and their earnings beyond sponsorship dollars and you got to get pretty big to get there. Very cool. Very cool.

Jahm Najafi: This is all about athletes and competition and ensuring that they can compete carefully, thoughtfully, and ensure that they’re taking care of as an athlete so they can have long career but also be a part of the team that’s gonna ensure that they will be in those teams. So, the [00:26:00] advertisers can certainly, and sponsors can sponsor teams. They can sponsor the league. Again, think of you may have a sponsor that is at the league, but also at a particular team level too.

AJ Maestas: What’s next after the X Games? I know of one acquisition, I just don’t know if we’re allowed to talk about it, but anything else you’re willing to share publicly?

Jahm Najafi: I appreciate your confidence and ensuring that we are continually looking at a number of sports leagues as well, and our investment thesis is acquiring. And investing in unique situations that require a lot of leaning into the improvement of the operations of the business. We want to ensure that, that we can be a value add to management, so we’re not passive investors in sports where we’re going to just buy a franchise and wait for the leak to lift all franchises and then end up exiting at some point, at some high return in the future.

We want to make sure that we can [00:27:00] truly do the heavy lifting to help the management team and athletes and create value for the long run. So, our philosophy is that we assume, if we do the right thing for our athletes, our employees exit will take care of itself, whether it’s in 6 months or 20 years.

AJ Maestas: Yeah, I really appreciate your time horizon. You think of a typical private investment and there’s this like private equity, and there’d be this time horizon that’s five, seven years, and it puts real pressure on. If you don’t mind me getting personal for a second here. You talked earlier about playing soccer with a Coca-Cola bottle cap.

I don’t know if our listeners know this, but I think your origin stories meaningful. I instantly started picturing; you’re such a tall guy. I started picturing this little version of Jahm and you’re Persian, right? So, you’re referring to Iran when you said back in the old country.

Jahm Najafi: Yes.

AJ Maestas: Yeah. What’s the age difference between your brother and you? May I ask?

Jahm Najafi: Eight and a half years difference. I was 12 and he was 20 and a half. When we lived together in northern part of Tempe, a [00:28:00] northwest corner of Celebs Road and Scottdale Road, there was an apartment called Cedars. So, he and I lived together, and I attended Coronado High School, which is South Scottsdale High School.

It was a great experience for me personally. I didn’t speak English at the time, and I watched a lot of tv. 1975 as a 12-year-old. In 1976, the sons played against the Celtics in the NBA finals, and I was glued to tv. That’s how I learned my English.

AJ Maestas: So you didn’t get excited about potential ownership in the Celtics then with them for sale, the 6 billion. Did that look like the right price to you? I won’t make you answer that, but no, but I had heard that story. That you basically learned English, watching tv, watching the Suns and the Celtics and the NBA finals. It’s unbelievable the success you’ve achieved when you think you didn’t speak English at age 12. Coming over here, I just, I can only imagine.

Jahm Najafi: Thank you. I can’t take credit for it. I think our community, Arizona, Phoenix, I don’t think we would, neither of us would be where we are had we decided to [00:29:00] reside someplace else. Community is incredibly supportive. The people, everybody. And there are lots of people who are very hardworking. But I can tell you that community and luck also have a lot to do.

AJ Maestas: I very much agree with that. Is there anything I can answer for you?

Jahm Najafi: Thank you AJ. Very much appreciate what you’re doing. Navigate your organization that you build because I don’t think people know that you’re the founder and, and instigator and navigator of Navigate. So yeah, Navigate would not be navigated without your mentorship and stewardship and you add a lot of value to the organization. For home. Right. You can solve and interact with.

AJ Maestas: Thank you. That’s kindly to say I, I know it seems like bullshit cause we’re on a podcast here together. But the truth is, I would love to be anonymous and staying in my home here in Scottsdale and hiding out and enjoying the good life here in our beautiful paradise that you and I get to live in.

Jahm Najafi: But in that respect, we’re both the same actually. Believe it or not.

AJ Maestas: [00:30:00] Yeah. Yeah. I’m an extroverted.

Jahm Najafi: We love what we do. We love what we do.

AJ Maestas: Yeah. Love what I do.

Jahm Najafi: Inherently, I’m an introvert, believe it or not.

AJ Maestas: Yeah. Yeah. I’m an extrovert, but I love being at home out here. Can I ask you a couple rapid fire questions before we wrap up here?

Jahm Najafi: Sure.

AJ Maestas: Okay. What do you do to relax?

Jahm Najafi: I swim.

AJ Maestas: Oh. Where at?

Jahm Najafi: I swim in my backyard. It’s my favorite exercise. I actually put a front facing, breathing apparatus, and I put my, once I put my head in the water, I don’t turn my head. I hear no noise. It’s the most peaceful time for me personally. If I have an issue or problem I have to solve, I go swimming and it’s solved in a matter of those 30 minutes to an hour that I’m swimming.

AJ Maestas: Ah, good for you. I love that little extasis or almost a meditative experience.

Jahm Najafi: Completely. Exactly.

AJ Maestas: Do you have a book you could recommend for our listeners?

Jahm Najafi: It’s like asking a golfer if they have a favorite golf course. There are so many different. Outsiders. Recently I read The Outsiders. It’s a [00:31:00] fascinating book about individuals that run organizations that are not very well known, but they run them extremely well efficiently.

AJ Maestas: Alright, I like it that you have this operation focus. What are you most proud of in your career?

Jahm Najafi: My kids.

AJ Maestas: Ah, how many?

Jahm Najafi: Three of them. Twins are 25 and another one that’s 20. So we have three in 13 months.

AJ Maestas: Yeah. So good for you. It had to be quite a thing, to model a family in a United States, in a world that you didn’t come from, in a life that you didn’t get to experience. So good for you. What are you most excited for in the next year?

Jahm Najafi: We have a very uncertain, challenging environment over the next year, I believe. It’s very difficult to predict the nature of our country and the world because of, like what we said earlier, you may make a certain decision that you think is the right decision and there are counterparties that react to it or overreact to it, and then you feel like you [00:32:00] have to react to that.

And that’s really the level of uncertainty. So since I came to America in 1975. I have not felt the level of uncertainty as I do today, even during 2008, 2009, great recession, even during COVID, even during multiple different depressions, recessions that we’ve had since 1975, only because it’s difficult to predict, what’s going to happen. So that becomes exciting and challenging.

AJ Maestas: Yeah, no doubt. I had a debate with my financial planner yesterday on this subject. He’s sharing sort of stable earnings growth, stability in the United States, things that justify the amplified earnings ratio that we see in today’s stock market versus 20, 30 years ago.

And that was basically my feeling of saying, gosh, there’s a recency bias to that. You have to almost come and experience different countries and different. [00:33:00] In modern times the United States, oh, it’s good. It’s stable state. Stable state. We’re good here. And it’s so critical for business to have predictable, stable environment.

That is not what we have. And you have to think there’s a price to pay for that there. There has to be, I shouldn’t say there has to be. You have to think the probability is significantly higher that there will be consequences for that. That have a downstream effect. I just don’t know what those are. I don’t know how to, can’t get my mind around it.

Jahm Najafi: You know one of, one of the reasons the business thrives in the US is the reliability of due process . due process, rule of law.

AJ Maestas: Due process. Efficient markets. Yeah.

Jahm Najafi: When you have questions about due process and you have questions about anything.

AJ Maestas: Stuff could go real bad, real fast. I have a friend who’s just so well read on history and politics. We have a lot of fun debates around that, right? Like how strong or fragile is democracy and how reliable is, it’s just so easy [00:34:00] living in the US and the West.

Jahm Najafi: No we can’t take it for granted.

AJ Maestas: No. Yeah. I would recommend practicing gratitude. That is for sure, because we lead. Very nice lives. How lucky are we to do what we do for a living?

I’m so grateful that you would join us and share a little window into what it’s like being an owner of so many different things in sport entertainment. I really appreciate you doing that. It really means a lot. I know, especially our young listeners will get a lot out of your perspective, so thank you.

Thank you so much for joining us today. Anybody who’s listening, who has questions or comments, my email’s AJ@NVGT.com. You can also connect with us on my personal LinkedIn page or the Navigate LinkedIn page. I’ll pass on anything you tell me to. If you want to find yourself reaching out to Jahm Najafi here.

But again, this is AJ Maestas with Navigate Joined by Jahm Najafi and thank you for joining us on Navigating Sports Business.

Jahm Najafi: Thank you, AJ, for doing what you do. Expanding knowledge and [00:35:00] information.