Sports are tailor-made for the current economic environment. We are experiencing one of the most challenging investment environments of the last several decades, for the vast majority of asset classes. Stocks are in a bear market and bonds are absolutely getting killed, leaving traditional investors with few places to hide. Traditional 60/40 portfolios have had their worst performance in over 50 years. We also have stubborn inflation issues, forcing central banks to downshift global economies and reduce growth. With that as the landscape, professional sports stand out as an attractive asset class based on both predictable, recurring revenues and attractive inflation protection characteristics. Sports league revenue growth has historically remained positive through difficult economic periods, based largely on the long-term contracts in place for national & local media rights, ticketing & premium seating, and sponsorship agreements.
Topic of the week
Investing in sports. Growing. Becoming popular. Family offices are in. What is going on here?
- Private equity firms are investing more in sports teams, leagues, and other ancillary businesses.
- The sector is growing as media rights boost team valuations and leagues embrace institutional investors.
- 14 top private equity firms from Apollo to Sixth Street are betting on sports.
The way money functions in professional sports is changing drastically, and it’s not just because more people in the US are now allowed to bet $5 on their favorite football team every weekend. An influx of private equity investment is shaking up the space, creating opportunity — and uncertainty — as more major leagues and teams start to welcome institutional capital. This year, private equity firms have already spent around $30 billion on sports-related deals globally as of September, after spending more than $50 billion in the sector in 2021, according to PitchBook.
While certain private equity firms like Arctos Sports Partners were established to focus mainly on sports, the industry’s growth has also attracted some of the world’s biggest investment firms, including Blackstone, which has a large portfolio across industries like real estate and infrastructure, but had few sports investments until recently. New firms like Dynasty Equity Partners are also emerging to invest in sports, though they’re just starting to make their mark on the space.
A few factors are drawing private equity firms to the sector. The value of media rights deals have shot up in sports as linear TV battles streaming, with Amazon’s new Thursday Night Football rights the first NFL package exclusive to streaming — showing strong early viewership. Audience behavior is changing as sports media and content have gone digital. And sports betting has hastily altered the landscape, opening a new sector for media, leagues, teams, and other businesses to tap.
As a result, sports team valuations have skyrocketed. The Dallas Cowboys, the most valuable sports franchise according to Forbes, is worth $8 billion as of August, nearly $6 billion more than its 2012 valuation.
“There continues to be fervency in the consumption of sports media,” said Alex Michael, head of LionTree’s sports advisory business that worked on the sale of The Athletic to the New York Times. “As the cable bundle has frayed, you have deep-pocketed streaming players going after a passionate audience that both tunes in and pays, so there doesn’t seem to be any abatement in the value of those sports rights. They grow tremendously, outpacing the economy for a while.”
Private equity isn’t going anywhere any time soon, especially as smaller sports leagues like the Professional Lacrosse League continue to grow and ancillary sports-related businesses seek investors. “A team can be a smart long-term investment, that is tax efficient, scarce by nature, and carries social currency, and that’s clearly an enticing proposition in an otherwise unstable economy,” Michael at LionTree said.
Matt Lindholm, Managing Director, Investment Strategies at CAZ Investments, has a good take on why it is reasonable to invest in sports:
“For many years, professional sports had what was referred to as the two-legged rule, which meant only human beings could invest in professional sports franchises—no pooled funds were allowed. But in 2019, the rules changed. Since then, all major North American sports leagues—except the NFL—have allowed institutional investment capital, under very specific guidelines & restrictions. This enormous change gave us the opportunity to participate in the cord-cutting theme in a much more direct way.
In 2005, just 14 of the top 100 most viewed programs were live sports content. By 2019, that number was 92 of the top 100, and in 2021, it was 95 of the top 100. Sports content is becoming remarkably more valuable as advertisers continue to search for eyeballs, which you can see in the TV contract step-ups across all the major leagues. That translates to higher valuations for the content producers, which are the leagues, franchises, and players.
In addition to fitting in one of our favorite investment themes, sports have several attractive characteristics. Professional sports are an asset class that has generated outsized performance historically, with less volatility, but perhaps even more notable is the non-correlated nature of sports vs. other asset classes. That’s a valuable tool, and it offers the rare ability to become both a return enhancer and a risk reducer for a diversified portfolio. That’s what all investors would like to achieve, and this is a unique way to accomplish it.
Sports are tailor-made for the current economic environment. We are experiencing one of the most challenging investment environments of the last several decades, for the vast majority of asset classes. Stocks are in a bear market and bonds are absolutely getting killed, leaving traditional investors with few places to hide. Traditional 60/40 portfolios have had their worst performance in over 50 years. We also have stubborn inflation issues, forcing central banks to downshift global economies and reduce growth. With that as the landscape, professional sports stand out as an attractive asset class based on both predictable, recurring revenues and attractive inflation protection characteristics.
Sports league revenue growth has historically remained positive through difficult economic periods, based largely on the long-term contracts in place for national & local media rights, ticketing & premium seating, and sponsorship agreements.
Many professional sports franchises own substantial high-value real estate, which has historically acted as a strong inflation hedge. Even more important in our view is pricing power. While we often see prices drop over time in certain sectors due to technological gains, one area that is not experiencing drops is prices at the stadium, ballpark, or arena. The cost to attend a sporting event is typically higher each year than it was the year prior, as most of us can attest!
There is also a great degree of scarcity and strong barriers to entry, leading to high moats for franchise owners. Only four new sports franchises have been created in the Big 4 North American sports leagues since 2000. This is very intentional at the league level, as it is in their best interest to restrict the number of teams”.
14 private equity firms — listed alphabetically by company — that have made prominent investments in sports through 2022:
Apollo Global Management
Apollo Global Management owns a major sports-media property in Yahoo Sports. It acquired the sports brand in 2021 when it bought Yahoo from Verizon for $5 billion. Sportico reported in March that Apollo had explored launching a fund that would focus on the sports industry, mainly technology and media, and potentially professional teams. That’s yet to come to fruition, but suggest Apollo could have big moves to come in sports. Apollo, run by CEO Marc Rowan, is a major player in private equity with $515 billion assets under management as of June 30, and a long history of investing in global media.
Arctos Sports Partners
Arctos Sports Partners was established in 2019 and has already staked its claim to more than 20 major sports teams and sports-related businesses. According to Sportico, the Dallas-based firm has “direct shares” in five MLB teams, including the Los Angeles Dodgers, Chicago Cubs, and San Francisco Giants, which Sportico listed among the five most valuable teams in the league. Arctos also has direct stakes in two NBA franchises: a reported 17% in the Sacramento Kings and 13% in the Golden State Warriors, the fourth most valuable sports franchise in the US. And it owns stakes in two NHL teams, MLS’s Real Salt Lake, Serie A soccer league’s Atalanta BC, and the Premiere Lacrosse League. In June, Arctos bought a piece of Harris Blitzer Sports & Entertainment, which owns the Philadelphia 76ers of the NBA and New Jersey Devils of the NHL. In September, the firm secured a partnership with Smith Entertainment Group, which owns the Utah Jazz. It’s also an investor in Fenway Sports Group, which owns the Boston Red Sox, baseball’s second most valuable franchise, and Liverpool FC. Outside of sports teams, Arctos has partnerships with Elevate Sports Ventures and ticket platform SeatGeek. The firm had $5 billion in assets as of May after raising a $1.1 billion for a second investment fund, Sportico reported.
Ares Management
Ares Management Corporate, a firm headquartered in Los Angeles with $334 billion assets under management, has invested billions into the sports industry during the firm’s 25-year history. Sports is one of several key verticals, along with health care and infrastructure, that the firm has doubled down on in recent years with dedicated pools of capital. Ares raised $3.7 billion of sports, media and entertainment capital in September. And during the first six months of 2021 alone, the firm said it invested more than $1 billion in the sector. Ares currently has about 20 sports-related investments, including deals with teams such as the San Diego Padres and McLaren Racing, leagues like the Professional Fighters League, and ancillary businesses surrounding sports like Rawlings, MLB’s exclusive provider of baseballs. Jim Miller, partner and co-head of the US direct lending business at Ares, told that Ares views sports mainly as live unscripted content, a category that he thinks will only continue to grow as streaming, changing consumer behavior, and globalization increase demand for sports programming. “We believe the sector’s growth is being driven by rising media rights values and attractive long term fundamentals, largely coming from a demand to have more live unscripted content from consumers,” Miller said in an email. In some cases, Ares acts as a lender, as with Rugby Australia, the sport’s national governing body in Australia. In others, Ares may take minority equity positions, like its 34% stake in Spanish soccer franchise Atlético de Madrid.
Blackstone
Blackstone is one of the largest investment firms in the world with $940 billion total assets under management. The New York-based firm’s private equity division has $276 billion of assets under management, but only recently entered the sports space since its founding in 1985. The firm’s investments include Gen Z-focused sports-media outlet Overtime, collectible authenticator Certified Collectibles Group, and the YES Network. Blackstone also considered investing in 2020 in Italy’s soccer league Serie A, the Financial Times reported. Late last year, Blackstone’s head of tactical, David Blitzer, told Bloomberg that more sports business deals were coming for the firm. Blitzer is no stranger to the space, with stakes in several professional teams including the Philadelphia 76ers and New Jersey Devils. Blackstone CEO Stephen Schwarzman is also the largest individual donor to the US Track and Field Foundation.
Blue Owl’s Dyal HomeCourt
Dyal Capital, part of the publicly-traded alternative asset management firm Blue Owl, launched in 2020 a fund called HomeCourt in partnership with the NBA. The joint venture was the first fund approved by the league to invest in multiple NBA teams. In 2021, the NBA changed its rules to allow firms to purchase stakes in as many as five franchises, with no more than 20% stake per fund. But Dyal HomeCourt is still the “only institutional investor that can acquire a pool of minority stakes in an unlimited number of NBA franchises,” Sportico reported. Dyal HomeCourt currently has minority ownership in three NBA teams. In 2020, it acquired a 6% stake in the Atlanta Hawks. And, last year, it grew its stake in the Sacramento Kings to 5-10%, and bought a minority stake in the Phoenix Suns that Forbes pegged at less than 5%.
The Chernin Group
The Chernin Group is a multi-stage investment firm that says it invests in companies that “define culture.” It has focused mainly on growing smaller companies in media, entertainment, and gaming such as Cameo, the board game Exploding Kittens, and Reese Weatherspoon’s media company Hello Sunshine. The firm has an estimated $3 billion in assets under management as of July 2022. Specific to sports, the Los Angeles-based firm is known for investing in Barstool Sports in a 2016 deal that founder Dave Portnoy said valued the company between $10 million and $15 million, and in a 2018 investment that valued the company at $100 million, according to PitchBook. The firm was also one of the early investors in subscription-based digital media outlet The Athletic, which was sold to the New York Times earlier this year for $550 million. While TCG has exited several high-profile sports investments recently, it also led in July the Series D funding round of the Premiere Lacrosse League.
CVC Capital Partners
CVC Capital Partners was founded in 1981 but made its first big splash in sports in 1998 when it acquired majority ownership of Dorna Sports, the rights holders to MotoGP, for $80 million, according to PitchBook. The Luxembourg-based firm sold Dorna in 2006 for more than $500 million and acquired in the same year Formula One for $1.7 billion. The deal would turn exceptionally profitable for the firm a decade later, when it sold Formula One to Liberty Media for $4.4 billion. As of 2022, the firm has €133 billion ($131.5 billion) of assets under management. It expanded its sports investments beyond motorsports with positions in other leagues and governing bodies around the world such as Spain’s La Liga, France’s Ligue de Football Professional, England’s Premiership Rugby, and Volleyball World. The company’s other investments in the industry include Bruin Capital, German-based betting company Tipico, and the Gujarat Titans, a cricket team in the Indian Premier League.
KKR
While the New York-based PE shop may not have a direct stake in any professional teams, it does have a number of investments in supporting players. As an investor in entertainment powerhouse Endeavor, KKR has a hand in a number of sports-related vehicles, most notably UFC. Endeavor — previously known as WME-IMG — in 2016 bought 50.1% of the mixed martial arts promoter at a valuation of just over $4 billion and acquired the rest of the company in 2021. KKR also got into fantasy sports and US sports betting early on, leading a $275 million Series E funding round for FanDuel in 2015. Irish betting conglomerate Flutter bought a controlling stake in FanDuel in 2018 and, last year, upped its stake to 95% in a deal that valued the company at $11.2 billion. KKR holds a minority stake in Flutter. Earlier this year, KKR also invested in PlayOn! Sports, a high school sports media company. That investment helped support PlayOn!’s recent combination with high school sports ticketing company GoFan. The firm’s sports and gaming investments are led by Oberwager, who previously told that “sports will continue to be a focus for us.”
MSP Sports Capital
MSP Sports Capital emerged almost five years ago with a sole focus on sports. The New York-based private equity firm was founded by two industry veterans: Jeff Moorad, a retired sports agent who previously managed the MLB’s Arizona Diamondbacks and San Diego Padres, and Jahm Najafi, who’s currently the vice chairman and co-owner of the Phoenix Suns and a governor on the NBA’s board. The cofounders parlayed what they knew about running sports teams into a platform for investing in teams, leagues, and other businesses within the sports ecosystem. “At the time, I sensed that sports had the opportunity to morph into an asset class or something of a new asset class,” Moorad told. The firm, which has roughly six investments to date, looks for deals with significant ownership or influence over an organization, which sets it apart from some of the other players on this list that mainly pursue minority ownership. MSP holds a majority stake in Portuguese soccer club Estoril Praia, for example. And it owns Spain’s AD Alcorcón soccer club. In December 2020, MSP bought a minority stake in Formula One’s McLaren Racing that would increase to up to 33% by the end of 2022, for a total of £185 million (worth around $250 million at the time of the deal). Many of MSP’s deals hinge on the partners’ relationships in the industry. With the McLaren deal, MSP led the investment and brought on other investors including Ares Management, UBS O’Connor, and Rob Walton’s Family Office as limited partners.
Providence Equity Partners
Providence Equity Partners was one of the first PE shops to invest in sports, starting with a late 2001 co-investment to launch YES Network, the broadcast home for the New York Yankees. (The firm exited the company in 2014 at a reported 4.5x return.) Since then, its sports investments — past deals include Major League Soccer Media and collegiate sports marketing firm Learfield Sports — have largely focused on the commercial rights of sports teams and leagues, or companies that service the sports ecosystem. “The most premium type of media has always been sports,” managing director Scott Marimow told, adding that, with the rise of streaming, “it’s become more obvious given the shifting media landscape just how valuable sports are.” Currently, Providence is invested in certain media rights of the Spanish soccer franchise Real Madrid, as well as in Topgolf (which has merged with Callaway Sports), the owner and operator of more than 70 driving ranges around the globe. “We are bullish on golf, it’s already one of or the largest sector of the sports economy and has a lot of really interesting tailwinds,” he said, pointing to the influx of players during Covid. One area where Providence will likely not be putting its money? Individual teams. “There is a lot of capital going in for smaller passive stakes… they seem like fine investments and very safe downside protection,” Marimow said. “But we look for situations with top-line growth and also cash flow, and situations where we can have a meaningful amount of influence on the business.”
Raine Group
Joe Ravitch’s Raine Group was an early mover in the explosive fantasy-sports and sports-betting businesses, investing in 2012 in DraftKings. The firm has since put money into every subsequent DraftKings raise. Raine helped introduce DraftKings to leagues and sports players across the spectrum, and then helped the company counter push back from state regulators who argued daily fantasy sports should be regulated like sports gambling. Ten years later, DraftKings, which is now publicly traded, is poised for a big deal with ESPN and helped establish a new sector. Of course, Ravitch has a bird’s eye view of the playing field. He’s fresh off deals to sell soccer teams, Chelsea FC in the UK, and Olympique Lyonnais in France. The company is also invested in India’s Games 24/7, which offers fantasy sports and other games. Raine has also backed smaller ventures including the Premiere Lacrosse League and Zumba Fitness. Ravitch has been involved in the sale of some 75 sports teams, from Japanese baseball to Indian cricket to European soccer teams, over the years. “So far I haven’t seen anybody lose money because capital appreciation on a sports brand is perpetual,” he said.
RedBird Capital Partners
New York-based RedBird Capital Partners is gobbling up sports teams around the world. The firm, founded in 2014 with a growth equity focus, has been very active of late. In August, RedBird took ownership of AC Milan for $1.2 billion. Yankee Global Enterprises which operates the regional sports network YES, is also an investment partner in the Italian soccer team, and RedBird owns a stake in YES. The company has around $7.5 billion in assets under management and also owns a piece of Fenway Sports Group, which houses sports teams such as Liverpool FC, the Boston Red Sox, and the Pittsburgh Penguins. RedBird also owns France’s Toulouse FC, the Indian cricket team Rajasthan Royals, and the American football league XFL. RedBird has acquired stakes in LeBron James’ video-production and entertainment company, the SpringHill Company; David Ellison’s Skydance Media, which develops sports-related content through its Skydance Sports unit; and India-based sports-technology company DreamSports, which RedBird was part of an investor group that invested $800 million in. The firm has also exited several sports businesses including, On Location Experiences, a hospitality firm that’s part owned by the NFL. On Location was sold in 2020 to Endeavor as part of a $660 million deal. In September, RedBird sold its 40% stake in OneTeam Partners, an athlete licensing business that was valued at $1.9 billion.
Silver Lake
Silver Lake, the private equity company best known for taking Dell private, holds a stake in Twitter and was a prior investor in cinema chain AMC. But it also has a big interest in sports. Run by Silicon Valley-based co-CEO Egon Durban and New York-based Greg Mondre, Silver Lake owns a major stake in Endeavor Group Holdings, which in turn has a huge sports-athlete representation business and sports-events business. Endeavor also houses UFC. In August, Silver Lake agreed to acquire Endeavor’s Diamond Baseball Holdings, a baseball professional development business, for $280 million, Deadline reported. In late 2021, the private equity giant invested in Australian Professional Leagues. The private equity giant also houses an investment in sports-merchandise venture Fanatics and, separately, in Fanatics Trading Cards. In June, Silver Lake invested in NZR Commercial Co., an entity aimed at growing New Zealand Rugby.
Sixth Street
Sixth Street made its first big splash in the sports arena in January 2021, when it acquired a majority stake in Legends Hospitality, the sports- and entertainment-events company started by Dallas Cowboys owner Jerry Jones and the late New York Yankees owner George Steinbrenner. The joint venture runs the events, sponsorships, merch, and other operations at stadiums where the Cowboys and the Yankees play, among others. Since then, sports have become a major investing theme for Sixth Street, which was spun out of private-equity firm TPG and manages more than $60 billion in assets. The firm zeroed in on sports during the pandemic, when it saw more teams and clubs expand their businesses beyond game-day ticket sales and leagues like the NBA open themselves up to institutional capital. Like the deal with Legends that made Sixth Street a partner of the Cowboys and Yankees, the firm looks for investments in top brands that resonate beyond their sport. It has deals with two of the biggest soccer franchises in Spain — and the world — Real Madrid and FC Barcelona. The deal with Real Madrid came together as the club secured separate financing to turn its stadium into a larger live-events space that could support concerts and more. Sixth Street became a 30% equity investor in the future business of Real Madrid’s Santiago Bernabéu Stadium through a 20-year strategic partnership that also includes Legends. With FC Barcelona, Sixth Street struck a pair of deals totaling 25% share in the club’s domestic La Liga media rights for 25 years. Sixth Street also bought last year a 20% stake in the San Antonio Spurs as part of a deal that included additional investment from Michael Dell and consolidated ownership of the NBA franchise for the Holt family, which is the largest shareholder of the Spurs.
Summaries
FinTech aims to replicate the family office through artificial intelligence
Who: Arta Finance
What: Wants to replicate the family office experience for a wider audience through artificial intelligence. Startup will offer AI-personalized portfolios and alternative investments to accredited investors with the aim of eventually expanding to non-accredited investors. Arta Finance secured $90 million in funding from investors who include Betsy Cohen and former Google chief Eric Schmidt, Sequoia Capital India, Ribbit Capital, Coatue Management and more than 140 angel investors. Members are also plugged into Arta’s ecosystem of financial and lifestyle professionals who can help them protect and enjoy their wealth. The company does this while getting rid of the administrative overheads, salesy conflicts of interest, clunky UIs, and eye-watering fees that often face people looking for financial advice.
Where: USA (Mountain View, California), Singapore and then expanding on a global scale.
When: Debuted this Wednesday
Why:
- It’s all about scaling with little costs. “We’re actually really trying hard to scale as much as we can to get to as many people who we can serve,” said Arta CEO Caesar Sengupta.
- While family offices cater to those with hundreds of millions in assets, Arta is targeting those with $100,000 to several million dollars in investable assets, Sengupta said. “Technology and AI have gotten to the point where we can take a lot of what these family offices do, and using technology, scale it in a way that it can be offered to everyone,” he said.
- There is hope, that AI will bring some efficiency. Arta’s proprietary AI-Managed Portfolios (AMPs) enable members to create highly personalized, automated portfolios using stocks, bonds, options, and leverage. AMPs aim to deliver better risk adjusted returns than alternatives like ETFs, Direct Indexes, or what you could achieve through most Robo-advisors – all while keeping fees low and transparent.
- Investors are after “many more people with smaller amounts of money”. For example BNY Mellon’s Pershing will serve as Arta’s broker and custodian and offer credit lines to eligible investors. “It’s pretty exciting for us as a 238-year-old bank… to be on the leading edge of something as innovative as Arta [Finance] is,” said Pershing CEO Jim Crowley.
- Shailendra Singh, Managing Director at Sequoia Capital India, said Arta Finance has chosen a “massive unsolved problem in the global fintech space. Caesar and team are uniquely accomplished in having built multiple cutting-edge products that are used by billions of internet users. Similar to many other consumer fintech companies we have partnered with, this one also requires a more user-centric approach, a more delightful user experience and a more seamless and scalable platform than likely exists today. We are grateful to be a part of this journey along with the Arta Finance team on their inspiring mission.”
Links to consider
- How money works
- How Many Billionaires Are There, Anyway?
- Daniel Crosby talks with Tim Maurer about helping clients to articulate their life purpose in a practical way
- US ETFs draw almost $500bn of inflows despite grim year for Wall St
- Non-fungible Cash in the Stock Market
- New ‘Prosperity Index’ Ranks US States on More Than Just Money
- Henley & Partners’ 16th Global Citizenship Conference
Infographics
Quotes
Books that caught our attention this week
The Allocator’s Edge: A modern guide to alternative investments and the future of diversification
by Phil Huber
We are entering a golden age of alternative investments. Alternative asset classes including private equity, hedge funds, catastrophe reinsurance, real assets, non-traditional credit, alternative risk premia, digital assets, collectibles, and other novel assets are now available to investors and their advisors in a way that they never have been before. The pursuit of diversification is not as straightforward as it once was ― and the classic 60/40 portfolio may no longer be sufficient in helping investors achieve their most important financial goals. With the ever-present need for sustainable income and risk management, alternative assets are poised to play a more prominent role in investor portfolios. Phil Huber is the Chief Investment Officer for a multi-billion dollar wealth management firm and acts as your guide on a journey through the past, present, and future of alternative investments. In this groundbreaking tour de force, he provides detailed coverage across the spectrum of alternative assets: their risk and return characteristics, methods to gain exposure, and how to fit everything into a balanced portfolio.
Publisher: Harriman House
Language: English
Hardcover: 324 pages
Risky Business: Why Insurance Markets Fail and What to Do About It
by Liran Einav, Amy Finkelstein and Ray Fisman
An engaging and accessible examination of what ails insurance markets—and what to do about it—by three leading economists. Why is dental insurance so crummy? Why is pet insurance so expensive? Why does your auto insurer ask for your credit score? The answer to these questions lies in understanding how insurance works. Unlike the market for other goods and services—for instance, a grocer who doesn’t care who buys the store’s broccoli or carrots—insurance providers are more careful in choosing their customers, because some are more expensive than others. Unraveling the mysteries of insurance markets, Liran Einav, Amy Finkelstein, and Ray Fisman explore such issues as why insurers want to know so much about us and whether we should let them obtain this information; why insurance entrepreneurs often fail (and some tricks that may help them succeed); and whether we’d be better off with government-mandated health insurance instead of letting businesses, customers, and markets decide who gets coverage and at what price. With insurance at the center of divisive debates about privacy, equity, and the appropriate role of government, this book offers clear explanations for some of the critical business and policy issues you’ve often wondered about, as well as for others you haven’t yet considered.
Publisher: Yale University Press (January 31, 2023)
Language: English
Hardcover: 280 pages
Photos
You can see Davidoff cigar lounges in Las Vegas, Beijing, Bratislava, New York. Walk in and enjoy your cigar.
Who was the man behind it and what was his philosophy?
Zino Davidoff was born in 1906 in a small town in Ukraine. In 1911, his family decided to emigrate to Switzerland, more precisely Geneva. There, his father, who had been working in the tobacco business for several years, decided to open a small shop that sold cigarettes and pipes. When Zino came of age, he decided to go to South America to learn more about the magical world of tobacco. After working in small factories in Argentina and Brazil, he travelled on to Cuba, where he was intensely involved with the cultivation of tobacco and the production of cigars. In 1930, he returned to Geneva, where he quickly realized that the climate in which the cigars that were made and stored in Cuba was fundamentally different from that of Europe. For this reason, after a few years in his modernized shop in Rue de la Confédération he built a humidor, which then allowed him to store cigars in the most preferable and aroma-sustaining conditions as possible. It was the first ever humidor, thus making Zino Davidoff the inventor of this important utensil for the passionado. A few months after the outbreak of World War II, 1939 Zino Davidoff received an interesting offer from Seita, the French tobacco monopoly. In view of the precarious security situation in France, he was made the offer of purchasing two million Havana cigars. Zino didn’t let this opportunity pass him by, even though he had to secure financial support from a bank. His shop, now in Rue de Marché, thus became one of the few in the whole of Europe in which one could purchase cigars during World War II. After the end of the war, in 1946 Davidoff arranged a meeting with a Cuban delegation to find out whether it was possible to launch exclusive production for himself and his clients. This is how the production of the Château series began with the Hoyo de Monterrey brand, also called Premier Cru Classé. The rest is a long and famous story for another day.
What Zino had to say about cigars?
“If tobacco is a lost cult, if the cigar is surrounded by a mystery that alludes us, it is necessary to bow before the mystery. We never know exactly why we smoke.”
“To know how to smoke is to recover certain forgotten rhythms, to re-establish communication with the self. If there is a secret of the cigar, it is to be found in the slow movements, the dignified, measured smoking. The movements are more than mannerisms; they are ceremonial acts.”
“The cigar should never be treated like a cigarette. It is something that commands respect. It is the king of the tobacco products and should be treated according to its rank.”
“How can one say that the cigar — nothing but an object — has a soul?”
“In a recent book, Claude Levi-Strauss explains that tobacco has always been an instrument of communication with the supernatural.”
“If I have acquired over the course of the years some bit of philosophical perspective, it is again to the cigar that I am in debt.”
“I have had to refuse service to valets because no honest man will have his servant choose his cigars.”
“In any case, the cigar is even more attractive in its nudity.”
“Use a cigar holder? No, please do not. Who would want to drink a good wine through a straw?”
“You do not fit a cigar into your schedule; you give it a moment and it occupies your time and enriches it.”
“Respect the ash — as you do the rest of the cigar — but do not make it an object of worship, giving it importance it does not merit. It is pretty to contemplate. It is the point of departure for the smoky spirals, the generator of dreams and oblivion. But it also represents pleasure that is past.”
“Don’t forget, a cigar is a companion, and a rare one that will never slip away. You can call upon it at any time. But different cigars suit different circumstances or situations.”
“A cigar cannot truly be enjoyed without contemplation, without thinking. You cannot smoke anything at any time, in any place. A cigar should fit your mood, habits, personality, surroundings.”
“Do not smoke a cigar when working. If you do, you will smoke badly – and what is worse? You will smoke badly when writing, when thinking of something else. The cigar is exacting. It gives its all only to those who are consecrated to it, body and soul. Such an expression is not too strong.”
“All of this is, to say the least, a matter of taste. What is most important is to be sure of your taste. In the midst of all these ifs is one sure thing: whatever your tastes, your habits, your needs, there is a cigar which will be right, one that is adapted to your constitution, which harmonizes with your mood. There is no more faithful servant than a Havana. To learn to choose a cigar which is right for you is to exercise your talent for self-awareness. To find the cigar which suits you is a particular joy.”
“A well-chosen cigar is like armor and is useful against the torments of life. A little blue smoke mysteriously removes anxiety.”
