Mark McCullers, Principal of the McCullers Group

00:00

Dave Almy

Hey, Mark, your first job in sports, you were assistant stadium manager for the D.C. Sports Commission. Right. And that was the group that was responsible for venerable RFK Stadium, which, you know, I think we could probably go into a little bit about that facility.

00:14

Mark McCullers

Dating Me, Dave. Dating.

00:15

Dave Almy

Well, you know, hey, look, we've been around the block. It means we've got a lot of important stuff to share. Yes, right. So, but what drew you to that role? Because you had not been working in sports specifically at that time. So, so what drew you to the role and how did it differ from other things you had been doing up until that point?

00:34

Mark McCullers

Yeah, so what attracted me to the role was I was kind of looking for my mission in life at the time. I had a couple of jobs. My actually, my undergraduate degree is in computer science and I had a minor in accounting. So I started out actually selling computers.

00:48

Dave Almy

Okay, all right.

00:49

Mark McCullers

And then I worked, you know, in. In the. In the private sector automating accounting systems for companies. So that base right there, sales and accounting finance, has served me well throughout my career and in the mid-80s. Oh, you have a understanding of computers. Yeah. We want to talk to you.

01:08

Dave Almy

Yeah, it was really starting to explode at that point.

01:11

Mark McCullers

Yeah, that was helpful. What drew me to the industry was a relationship that I had when I was in Lexington, Kentucky at the University of Kentucky. And I knew the executive director of the Lexington Center Corporation, ran Rupp arena, ran the convention center, ran.

01:27

Dave Almy

Sure.

01:28

Mark McCullers

That really was my inspiration was that quasi governmental agency and really more of a community focused that had this neat little sports and entertainment kind of, you know, benefit.

01:39

Dave Almy

Had you looked at sports before and said, gosh, I'd really like to sort of try that out? Or was it more to the point where you said, well, this is an opportunity that falls within a circle of things that interests me. How did, how did. What was that part of it like?

01:50

Mark McCullers

My father was a college football coach. I moved. I moved six times before I graduated high school. So one thing I knew I did not want to do would be a coach. But I've been around sports, college football all my life.

02:03

Dave Almy

So you were sports adjacent all your life?

02:05

Mark McCullers

Yes, absolutely. Absolutely. And so always, you know, had a passion and saw where the opportunity to combine it with a career in business. So, you know, I actually. My hometown's Tampa, so I was able to do an internship with the Tampa Sports Authority. The again, we're going to date me again. But the big sombrero. Oh, yeah, campus stadium. And so I actually did an internship there, which led to the opportunity through relationships. And I believe relationships make the world go around. You know, to have an opportunity to go to D.C. And work in a major market with major sports brands, you know, and you know, at RFK we did obviously NFL and the Redskins, but we did a lot of concerts and a lot of soccer. Really, I would say that's where I got my soccer perspective, especially the 94 World Cup.

02:54

Dave Almy

Had you been soccer interested previously or was that event, when it, when this, when the World cup came through, was that your first sort of eye opening experience with the sport as business opportunity that you could latch onto in the future?

03:07

Mark McCullers

I think I always saw it as a business opportunity at Tampa Stadium. The NASL was still playing, the Rowdies were playing there.

03:15

Dave Almy

You want to talk about. We're dating ourselves on that one. I'm nodding along, going nasl, woohoo.

03:19

Mark McCullers

The dies already cast, you know, so I think I saw it as the business opportunity, but really the 94 World cup was like, oh, this is the product. Yeah, this is what the product looks like.

03:30

Dave Almy

You saw it fully based it really?

03:32

Mark McCullers

Yeah, with some clarity on the entertainment value and the level that the sports played. And I always say it doesn't matter if it's basketball, soccer, hockey, whatever it is, if it's not played at a high level, it's not going to be entertaining. So you tie that with the commercial components of that. That was the kind of aha moment.

03:53

Dave Almy

And then Major League Soccer kind of springs out of the enthusiasm that followed the 94 World Cup. Right. So Columbus was one of the founding franchises and then you had an opportunity to go to Columbus and the Crew. And what I'd love for you to do then is to talk a little bit about the growth of soccer in the US because you really out there at the foundational level. Right. You helped build the first soccer specific stadium with the crew in 99. Now there's 26 of them, actually. I had to look that up. That's not just a piece of knowledge that I have. Men's and women's game exploded, team valuations are through the roof. I mean, you've been working in and around soccer for 30 years.

04:33

Dave Almy

What's your perspective on that growth and where do you think soccer as a sports industry in the US is headed?

04:42

Mark McCullers

Yeah, I mean, look again, I think that, I think the 94 World cup was certainly, you know, a seminal moment. We talked about the nasl. I mean, for those that don't know, the NASL used to draw crowds, 70,000, 80,000 in the middle ends to See.

04:58

Dave Almy

Pele and the New York Cosmos.

05:01

Mark McCullers

So. So, you know, that product, even though NASL and I won't get into why I think that failed, but it's why a lot of sports leagues failed fail because the owners can't help themselves from each other. So I said it anyway, you know, but. But that seminal moment in 94, and it was very intentional. We got the World cup in 94 on. On the premise, the promise to FIFA that were going to launch a Division 1 league in the US and, you know, with the proceeds, you know, which we did. And look, it's a competitive landscape here in the US it's competitive for commercial reasons, it's competitive for talent reasons. So I think there is was some catching up, and I think there's still that happening in terms of the quality of the product in the U.S.

05:49

Mark McCullers

But I think, you know, one of the big differences I see between then and now is just the availability of soccer on broadcast. Back then you could hardly find it. Now you have, what, three, four, five networks that are dedicated to it. And so you just have a lot more access to the game in general, which I think is in part helping fuel the growth of the sport. But, you know, there's a sophistication factor, an evolution factor, I think, and we're seeing that in second and third division soccer now, you know, where more resources are being put in, more investments being put investment in facilities, investment in players, you know, and that's. That investment is starting to show a return.

06:30

Mark McCullers

So I think that soccer in this country, you know, when you look at the growth potential of any sports property, is at a moment right now where you can get tremendous value for potentially a high rate of return.

06:44

Dave Almy

It also feels like there was a moment where like. Like when you think about the NFL and you think about Major League Baseball and we'll call them the quote, unquote, Big four, the valuations of those teams have gotten so preposterously high, right now private equity has to get involved and help underwrite them. Soccer 10 years ago was still a place where if you had some money and you wanted to have access to a sports league, soccer was able to attract a level of investment that 30 years ago was the level of investment that you needed in the big leagues, quote, unquote. Again. So is that part of it as well, do you think?

07:18

Dave Almy

Like that groundswell of available dollars and people wanting to see growth, combined with the broadcast opportunities and the visibility of the league, did that really help spur things along as well?

07:29

Mark McCullers

I think so. I mean, all of those things, you know, interact with each other. Ratings are, you know, obviously dependent on eyeballs. Sponsorship valuation is dependent upon eyeballs and attendance and things of that nature. So, you know, when you boil it all down, it still comes to, you know, basic economic, you know, principles of valuation. But there is a factor in sports, you know, community is a reason people invest. Ego is a reason people invest. No. So it's not always fundamentals, although fundamentals are becoming more and more important. But, you know, I think one of the things that I find very interesting about soccer, and if you look at the sport globally, any market can have a pro soccer team. And I think that soccer is going to build out. We're second, third division men, first, second division women.

08:17

Mark McCullers

I don't see why we're not in fourth, fifth, and sixth divisions in this country like the rest of the world.

08:21

Dave Almy

So you still think there's a lot of room to grow, a lot of communities out there that can support a pro team?

08:26

Mark McCullers

Yes.

08:28

Dave Almy

Well, that might actually lead to the next question, because you were president GM of the Columbus Group for a while. I mean, I think about 10 years before you stepped away and launched the McCullers Group. So first and foremost, I'm interested as a guy who'd been working for sort of bigger and, like, more established sports organizations, you know, you become an entrepreneur. This is, I think, the first time, right. You really step out like this is plant your flag, do your own thing. I mean, I'm wondering how that experience has been for you in sort of planting your own flag, and how has it met or not met your expectations?

09:01

Mark McCullers

Well, I've always been entrepreneurial at heart. In fact, it's one of the things I loved about working in Major League Soccer at that moment in time. You could be very creative. You know, we're forming how this wants to be, and I really enjoyed that. My wife is a private business owner. She's had a company for 26 years now. So I've always been entrepreneurial, and soccer has really given me the platform to try to flex those muscles, if you will. And so when my tenure with the crew finished in 10 years is plenty long enough for anybody to be in a president position of a professional sports organization. Let me just say that, you know, I. Look, I could have moved. I could have gone to another front office, you know, but I've been there, I've done that.

09:46

Mark McCullers

You know, what's my next challenge has always been kind of my career path. And this is. I tell people this is the only part of my career that's going according to plan.

09:53

Dave Almy

Actually that is not something a lot of entrepreneurs say.

09:58

Mark McCullers

Well, no, but you know, so I saw the opportunity and specifically saw the growth in second, third division. And I have, you know, strong relationships with the folks who are running those leagues. So yeah, I was challenging myself and putting myself in a position to learn and grow in a space. Getting outside my comfort zone a little bit, to your point. But one of the things throughout my career, I just enjoyed building things. That's part of the entrepreneurial spirit.

10:28

Dave Almy

Yeah, it is.

10:29

Mark McCullers

And so building teams, building front offices, building stadiums, building communities, you know, it's kind of in my DNA, I would say.

10:38

Dave Almy

Well, let's talk about the McCullough scoop a little bit. Right. And I looked on the website and you positioned as sports and real estate. Okay. Very, very definitive. Right. And you were quoted in the SBJ not too long ago saying that during the last decade, sports and real estate industries have begun to interact in a sustained way. And this is what I want to underscore for the first time. And I found that particularly fascinating. So what I want you to do is tease that out a little bit. Like in your mind, what was keeping those indust more or less apart to this point and then what was the catalyst that started bringing everything together so that you saw the opportunity there?

11:15

Mark McCullers

Interesting question. You know, and I would go back in time and say again, when I was coming into the business, quasi governmental agencies publicly built sports facilities that had professional tenants. And then, and then, you know, the business model had those owners starting pushing for more amenities, you know, more costly, you know, venues and things like that, which, but you know, required private investment. So I think that evolution right there, where we've moved away from this public sector and look, if I could get the public sector to define sports facilities as infrastructure, which they should, my life would be a whole lot easier.

11:55

Dave Almy

But I want to interject here because I think you just said something interesting. It's like they should consider stadiums as infrastructure. Why is that the case? Why do you believe that cities and governments would better served looking at facilities that way?

12:09

Mark McCullers

Because I think it's a valuable asset and it's not just a valuable asset for the professional sports team owner, although it does add value.

12:17

Dave Almy

Sure.

12:17

Mark McCullers

You know, when we're working on these projects and talking to political and business leaders in the market, we're putting together and showing them the whole value proposition. So the projects that we're working on are multi use facilities. Okay. So it's a community Asset. It's not just a professional soccer stadium. And we really also bake in public use into the venue. It's. It's a community asset and we want to activate it. I say we want to make the building sweat. There's a whole lot more value than just to the pro team, is my point. And there's value to the community in terms of brand, there's value to the community in terms of broadcast that's coming out of there.

12:57

Mark McCullers

So there's just a whole lot of value that these projects bring and what makes them worthy of public investment in addition to economic impact and job creation and growth.

13:08

Dave Almy

I think it's a really interesting point in how people think about stadiums now because I think, particularly folks of my generation, the vision of a stadium is this bowl sitting in the middle of a vast parking lot outside city center somewhere, right? It's that it's the old ashtray style of stadiums that we have in our mind. That's just not the case anymore. I love the expression we want to make the building sweat because you're talking about it working in a variety of different ways for municipalities and communities and the way people can engage with. It's not just eight event days at a football stadium. Wash your hands and go, a modern stadium is quite a bit different than that now.

13:52

Dave Almy

And as you look to some of the things that you've seen, what are some of the things like that fit that description that you see as that evolution that really stand out in your mind?

13:59

Mark McCullers

Well, the stadium has become part of the real estate transaction. I mean, there's no differentiating. You know, the stadium is part of the real estate development. And you know, just my career. I started out as the stadium development guy, but you know, in public financing and tax increment financing, you've got to have the development that's going to generate that incremental. So in some markets we got stuck because we didn't have a developer that was ready. Plus, you know, we have, you know, we're building models so that the owner can participate in that and that, you know, that changes the whole economic condition from just the team in the stadium to, you know, the entire development.

14:36

Dave Almy

But I think it's like, it's also interesting to note, like you've got a ton of experience in soccer, but the McCullough's group really allows you to branch out into other areas where you can take the fundamental experience you have in soccer and apply them to other sports entertainment and developer projects. I'm wondering if there's other verticals that you're uniquely excited about as you start to think about where the McCallers group is going to be headed. And then how does soccer prepare you for those like, what's the. What. What's the circles that overlay?

15:05

Mark McCullers

Well, look, and just as a business prudently, we're, you know, looking at our growth opportunities and diversify buying our. Our business model. So, you know, we don't want to be too siloed in soccer, although I do believe in soccer, as you.

15:22

Dave Almy

Might imagine, don't want to get siloed. But you, like, you want to make sure you keep close to where your experience lies. But. And clearly this is a new business, so we got to figure out how to open it up.

15:31

Mark McCullers

So, yeah, there's several verticals, you know, that we're looking at, and in particular, colleges and universities, education general, potentially even K through 12. And, you know, we have some of our team members that have some experience in development in education. So in colleges and universities in particular, the value proposition that I was talking about with cities applies to colleges and universities. They are a community and their constituents want the same thing. They want an experience, they want amenities, you know, and the colleges and universities also want revenue opportunities, you know, for like, you know, land, if they own land and land's not producing, you know. Well, let's talk about how we can, you know, make that asset, you know, work for you. And then all the other intangible values that I talked about apply to colleges and universities as well.

16:19

Mark McCullers

You know, sports tourism is an industry that's just burgeoning and it's going to continue. And I can't think of a market that we work in or that we're aware of that's like, yep, we're good. We got plenty of sports infrastructure.

16:31

Dave Almy

We got enough field, no need for anything.

16:35

Mark McCullers

Never heard that. So, you know, that continuing growth of sports, tourism and youth sports is going to require more infrastructure. So, you know, that's high on our radar. You know, I think events on the event side of things, because we do event management and also, you know, event sponsorship generation and things like that. I mean, we're looking at emerging sports, rugby, cricket, you know, things like that.

17:00

Dave Almy

You also talk to, I imagine, a number of groups and organizations over the course of your week. You talk about colleges and universities. Stadium development isn't always in their wheelhouse of expertise. So as you start to think about how these folks go to start building out new facilities and establishing it, what are some of the things that you advise them on so they don't get tripped up. Like, what are some of the common mistakes that somebody says, oh, we need to build a stadium, like where do they start? We don't want to say where they start going wrong, but where are like the simple unforced errors that you see and go, I could have helped you.

17:39

Mark McCullers

Well, the first thing they should do is go to mccullersgroup.com if I can.

17:42

Dave Almy

Say that in the industry is what we call a plug. That would be a plug.

17:46

Mark McCullers

That would be my first recommendation. You know, but seriously, site's where we always start. Everything emanates from site. And so, you know, I see owners that have already identified a site, maybe somebody's already sold them on that site and they've got all their eggs in that basket. And my advice to them is you should have at least 2, 3 sites running parallel because don't get too locked in. Too many times people have told me this is the situation and it's not the situation. And then you're starting from square one and you lost a lot of time and money. So keeping options open, it also provides you leverage in negotiation. Yeah, so that's one that's key. You know, the other thing is not being properly funded. I mean, these things are not for the faint of heart.

18:32

Mark McCullers

They're expensive and they take a lot of time.

18:34

Dave Almy

Yeah, they've gotten more and more expensive as they've gone too.

18:37

Mark McCullers

Yeah, exactly. And I think this ties into, I'll say, you know, expertise. So if you don't have the bandwidth or you don't have the expertise and you don't know this process, then you're going to be inefficient and you're going to cost yourself money at the end of the day. So knowing what funds are necessary and how those funds need to be applied, we're going to need a lobbyist. Most likely if we're going through for a public private partnership, you know, we're going to need other sorts of resources, maybe pr, certainly legal. So, you know, that's what we do at the very beginning is put together that pre development budget and say, look, you need to have this because if you're not funded then you're going to struggle. And then access to capital.

19:17

Mark McCullers

Capital, Dave, and relatively cost efficient capital, I should say, and qualify that. And financing and underwriting is hard with these projects. Depending on is it a commercial real estate development, is it a stadium, what is it?

19:33

Dave Almy

Well, it's also we talked about previously, these buildings are not just stadiums Anymore. The expectations have grown exponentially as far as what they're going to do. And part of that is due to fandom. Right. The nature of fandom is changing pretty dramatically, too. Right. From the standpoint of the idea of sitting down and watching a game in your seat for three hours is sort of almost like a quaint idea of a bygone era. People want broader experiences when they go to sporting events. They want to move around. They want to take in different views. The sporting event is almost like the thing which everything else is built around.

20:09

Dave Almy

So I'm wondering, as you look at developments and you look at how teams and organizations are addressing them, like, what are some of the trends that they're keeping an eye on to make sure that these buildings stay relevant?

20:22

Mark McCullers

Yeah. Well, I would start with, you know, these developments are destinations, and that's the whole point, is to create an experience. And I would argue that my career has been all about creating experiences. And so you have to take that, you know, from the moment you hit the property to the parking attendant, you know, all the way through to what's happening, you know, inside the stadium, all of that experience is relevant. But inside the stadium, it's a social experience. It's a social event, you know, and that's what makes it unique from being sitting on your couch at home. And there's. I always say there's pockets of communities within a stadium. There's a family area, there's a supporters area in soccer, there's corporate area. You know, these sort of. So you have these social enclaves, you know, within the stadium.

21:04

Mark McCullers

You need to lean into that and make sure you're helping deliver that experience for those folks.

21:09

Dave Almy

And it can't be happenstance. Right. It's like these are things you need to have on the front end of your development expectation.

21:15

Mark McCullers

Very intentional. Must be very intentional. You know, technology is a big one. You know, what happens from a technological standpoint and how that is delivered to the fan, you know, in their experience, in their seat, on their phone.

21:30

Dave Almy

And that's a balance, too. Right. Because you want to have it, but you don't want to be necessarily intrusive. Right. It has to be almost organic to that process. So we want to make sure, like, you've got all the things like bandwidth and capabilities and things like that, but bridging that gap and what that looks like and what technology means is really important to establish on the front end what the fans want.

21:48

Mark McCullers

Yeah, I mean, that's. It's all part of that experience that you have to Craft and curate. Some of it you want to have happen organically. I think, especially supporters in soccer, you know, they don't want to be managed, you know.

21:59

Dave Almy

No, no, they don't.

22:02

Mark McCullers

You know, some of it happens organically, but a lot of it is very strategic and intentional to create those experiences that are going, you know, cause people to make the investment in both money and time.

22:14

Dave Almy

I brought it up earlier that, you know, sports, particularly when we talked about the big four, right? It's making the transition from billionaire plaything to investment opportunity. Private equity is involved, you know, in all the major leagues now. You know, ownership groups are becoming more sophisticated, right. They're bringing people who've been around sports for a long time. How does that impact development now as people stop looking at it from a, oh, look at my sports team. Isn't this adorable? Let's go to sit in the luxury suit and watch the game. To, how's this performing? How are we going to monetize it? How is, you know, what does that look like from a financial perspective? How does that impact it from where you sit? And as people start thinking about these.

22:54

Mark McCullers

Kind of developments, it's very timely because, you know, we're. We're talking to some private equity firms and some. Some things like that. And, you know, I said earlier that ego and community. Well, there's no ego in community with those guys. It is. It's all about IRR and, you know, is this going to. Is this going to hit the returns that we want? And that makes it challenging, but it causes us to be creative. So we combine the commercial and the sports aspects of this whole model to show that irr, that's going to be attractive to investors, but we got to generate more revenue. And, you know, that's. That's really the bottom line.

23:36

Dave Almy

My guess is Mark McCullers, he's the president of McCullers Group. Mark, I want to thank you for spending the time today, fascinating conversation regarding stadium development, how that's changing. But before I let you go, I got to put you in the lightning round. Okay. You know, you don't. You don't know what's about to happen. It's going to be madness. Do you feel like you're ready? You feel like you're ready for this?

23:53

Mark McCullers

Lay it on me.

23:54

Dave Almy

Oh, okay. Well, there you go. Pretty bold. All right. So Mark McCullers in the Lightning round. In your opinion, what current sports stadium has the most uncomfortable seats?

24:07

Mark McCullers

Oh, without question, the Rose bowl.

24:11

Dave Almy

Is number two. Not even close.

24:13

Mark McCullers

I don't have a number Two. I went to the super bowl at the Rose bowl years ago.

24:17

Dave Almy

Oh, yeah.

24:18

Mark McCullers

I got. Had about 15 inches for my butt and about 15 inches for my knees. I was in the middle of a row of about 100 seats and I was seat 49.

24:27

Dave Almy

You weren't going.

24:28

Mark McCullers

I got up and go to the bathroom. I didn't come back.

24:30

Dave Almy

Yeah, that's pretty much it. All right. What's your go to food order when you're at a game?

24:34

Mark McCullers

You know, I, I like brat. You know, you can't do any better than a classic stadium brat. I'm kind of a traditionalist old school guy. So, you know, that's, that's where I would go. That and a good cold beer.

24:48

Dave Almy

It was done intentionally. Very good. All right. You can buy any soccer team in the world. What would it be?

24:54

Mark McCullers

Oh, I'm an IAX guy. So we when in. In the 94 World Cup. The Dutch team was one of the teams there in D.C. Stationed in D.C. And I traded my RFK Polo for a pair of wooden Dutch shoes. And since then I've been a Dutch football fan. And. And you know, IX stadium there is another one that I wish I designed. It's amazing. But that's the team I'd like to have.

25:21

Dave Almy

Do you have the clogs on right now? Are you doing this interview in the wooden shoes?

25:24

Mark McCullers

No, sir.

25:25

Dave Almy

No. All right, last one. This is a tough one. This is a. This is trivia. Ish. All right. You're a University of Kentucky grad as we established. So true or false, the Wildcats football team has a over.500 record in bowl games.

25:42

Mark McCullers

True.

25:43

Dave Almy

You're right. True. They are 8 and 7, barely over 500. Mark McCullers, thanks very much for the time.

25:49

Mark McCullers

Thanks, Dave. Thanks for having me. Appreciate it.

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