Billionaires: Walmart heir leads group to buy Denver Broncos in $4.65bn deal

In our fortnightly round-up of the world's super wealthy, Jeff Bezos poaches the head of the Wildlife Conservation Society for his Earth Fund and Mike Novogratz says two thirds of cryptocurrency hedge funds will fail

Denver Broncos fans cheer during a playoff game between the Broncos and the New England Patriots. The reported price tag for the Broncos would be the largest for a US sports franchise. Photo: AP
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Rob Walton

A group led by Rob Walton, the son of Walmart founder Sam Walton, agreed to buy the National Football League’s Denver Broncos in what would be the largest amount ever paid for a US professional sports team.

Mr Walton’s group includes his daughter, Carrie, and her husband, Greg Penner, along with Mellody Hobson, co-chief executive of Ariel Investments, the two sides said in a joint statement. The deal, which needs approval from the NFL’s finance committee and league ownership, was worth $4.65 billion, sources said.

Mr Walton, 77, was an early front-runner in a crowded field of contenders vying for the first NFL team to go up for sale in four years. This included billionaires Josh Harris, co-founder of Apollo Global Management, and mortgage tycoon Mat Ishbia.

However, the former Walmart chairman has vastly more money to spend: he’s the 17th-richest person in the world with a net worth of $58.7bn, according to the Bloomberg Billionaires Index.

Ms Hobson joins the group at a time of increased focus on the lack of representation among owners in the 102-year-old NFL, where seven out of 10 players are black, yet no black person has ever held a majority stake in a team.

The Broncos’ long-time owners, the Bowlen family, put the team up for sale in February on the same day that former Miami Dolphins head coach Brian Flores filed a class-action lawsuit alleging racism in the NFL’s process for hiring coaches.

About a week later, NFL commissioner Roger Goodell said the league wanted to make it easier to enable black ownership.

But the steep price of NFL franchises, combined with rules that limit the use of debt and require the primary franchise owner to have a 30 per cent stake in the team, mean only a small circle of people can afford to bid.

Entertainment Studios founder Byron Allen publicly said he was looking to buy the Broncos. Robert Smith, founder of private equity company Vista Equity Partners, who has an $8.9bn fortune, wasn’t interested in bidding for his home town team.

The reported price tag for the Broncos would be the largest for a US sports franchise, surpassing the $3.3bn sale of the NBA’s Brooklyn Nets to Alibaba Group co-founder Joe Tsai in 2019 and David Tepper’s 2018 purchase of the NFL’s Carolina Panthers for $2.3bn.

It would be the second major deal of late, after English football team Chelsea was sold last month for £4.25bn ($5.3bn) to US investor Todd Boehly, who had backing from private equity company Clearlake Capital.

An NFL team would be an unusually high-profile purchase for one of the Waltons, whose family has historically avoided flashy assets, something in keeping with patriarch Sam Walton’s legendary thrift.

Fewer than a dozen NFL franchises have changed hands over the past two decades, with its owners including several of the richest people in the US, such as Stephen Ross, Jerry Jones and Stan Kroenke.

Ms Hobson is the chairwoman of Starbucks and on the board of Bloomberg Philanthropies. She’s married to George Lucas, the Star Wars creator who has a net worth of $7.1bn, according to the Bloomberg Billionaires Index.

Jeff Bezos

Jeff Bezos, the billionaire founder of Amazon, received whoops, hollers and a standing ovation at the Wildlife Conservation Society’s annual benefit last week.

But even the world’s second-richest person, whose net worth has plummeted 24.6 per cent this year to $145bn, could understand why his audience might be a tad upset with him: he recently hired away the organisation’s president and chief executive, Cristian Samper, to work at his Bezos Earth Fund.

“I certainly recognise — and even apologise — that you may not be as thrilled as we are,” Mr Bezos told about 500 people gathered at the Central Park Zoo in Manhattan.

Mr Samper, still on the job for WCS for a few more months, introduced his future boss as the night's honouree.

Mr Bezos is a “truly remarkable champion for the planet” who “has actually changed the world”, Mr Samper said.

While Mr Samper said this gala, which raised more than $2 million, would be his last as chief executive, his rapport with Mr Bezos has already led to a windfall for the Bronx-based conservation organisation.

WCS received a $60m grant from the Bezos Earth Fund late last year for work in the Congo Basin and the Andes-Amazon. And that may be just the start. Mr Bezos has committed $10bn to his fund and Mr Samper, who has already worked there as an adviser, will lead a $3bn “nature solutions” portfolio.

Moment Blue Origin rocket achieves zero gravity

Moment Blue Origin rocket achieves zero gravity

Mr Samper was recruited on a trip to Colombia three months ago with Mr Bezos and his partner, Lauren Sanchez, who is the vice chair of the Bezos Earth Fund.

“We stood in silence, we were out there listening, looking at this vast expanse of tropical jungle,” Mr Samper said.

“We discussed the fact that this one park has more species of birds than all the species found in North America and the vast amounts of carbon that are stored in those tropical forests.

“And at the end of that, Jeff turned to me and said, ‘You know, we must do everything we can to protect places like this’. And then he had a little word in there, and he said, ‘We want you to come here and help us do it’.”

As a boy on his grandfather’s ranch in south Texas, Mr Bezos said he took care of animals, fixed windmills, helped till land and dodged any number of prickly pear cactus.

“It seemed obvious to me then that we have to live in harmony with nature,” he told the gathering, adding that seeing Earth from space, on a Blue Origin flight, solidified his view.

“We need ingenuity,” Mr Bezos said. “Science will drive the work and the starting point will be communities and indigenous groups. WCS is at the centre of such approaches.”

Mike Novogratz

Mike Novogratz, the billionaire founder and chief executive of Galaxy Digital Holdings, said two thirds of hedge funds that invest in cryptocurrencies will fail as a consequence of the current market downtown.

“Volume will go down, hedge funds will have to restructure,” Mr Novogratz said at the Piper Sandler Global Exchanges & Brokerage Conference in New York. “There are literally 1,900 crypto hedge funds. My guess is two thirds will go out of business.”

The former Fortress Investment Group hedge fund manager cited the broader financial market’s reaction to the removal of stimulus by the US Federal Reserve as the reason for the collapse in token prices over the past six months.

Bitcoin has dropped more than 50 per cent from a record high reached in November. Mr Novogratz also attributed last month’s collapse of the Terra blockchain — in which he and Galaxy were investors — to the broader macroeconomic factors rather than to flaws in the project.

“It wasn’t strong enough to deal with the headwinds of Bitcoin prices going down, crypto prices going down. It was a catastrophic loss,” Mr Novogratz said. “The CEO was unbelievably bright and charismatic and there was a tremendous amount of momentum behind what he was doing.”

PwC’s annual global crypto hedge fund report showed that Terra USD (UST) was the third-most popular stablecoin among cryptocurrency hedge funds they surveyed in April, or right before Terra collapsed.

About 49 per cent of PwC’s survey respondents also traded the affiliated Luna token, which Mr Novogratz immortalised with a tattoo.

Even so, Galaxy will continue to expand in the downturn in contrast to rivals such as Gemini Trust, which are laying off staff to survive the bear market, Mr Novogratz said.

The New York-based cryptocurrency brokerage and asset management company wants to be “the go-to place” after the downturn is over, he added.

Ray Dalio

Central banks across the globe will be required to cut interest rates in 2024 after a period of stagflation constrains their economies, according to billionaire hedge fund founder Ray Dalio.

“We believe that we are in a tightening mode that can cause corrections or downwards moves to many financial assets,” Mr Dalio, the founder of Bridgewater Associates, said in an interview with the Australian Financial Review newspaper.

We believe that we are in a tightening mode that can cause corrections or downward moves to many financial assets
Ray Dalio, founder of Bridgewater Associates

“The pain of that will become great and that will force the central banks to ease again, probably somewhere close to the next [US] presidential elections in 2024.”

Markets are pricing in rate cuts in the US in about two years' time and also in other developed economies, including the UK, according to futures.

For now, much of the focus is on the speed of the tightening as more than 60 monetary authorities have already raised borrowing costs in a bid to rein in accelerating inflation.

“It is a structural inflation situation that is going to produce stagflation,” Mr Dalio said.

Even if a global recession is ultimately averted, stagflation may endure for several years, the World Bank warned last week.

The Washington-based lender cut its forecasts for global growth and said the world economy may enter a period of stagflation reminiscent of the 1970s.

Updated: June 13, 2022, 5:00 AM