Deal Makers Restaff for the Trump Era

Centerview Partners, one of the financial world’s top independent investment banks, has long been known as a largely Democratic outpost. One of its leaders, Blair Effron, is among the most influential fund-raisers in Democratic politics, while a longtime counselor is Bob Rubin, the former Treasury secretary. Rahm Emanuel, the erstwhile Obama chief of staff, also worked for the firm.

This week, Centerview took a step that was widely seen as a counterbalance: It hired Reince Priebus, the first White House chief of staff in the first Trump administration and a finance chairman of Trump’s second inauguration committee, as a senior adviser. In other words, someone who can help the bank and its blue-chip clients “speak Republican” better in the Trump era.

It’s not the only firm looking.

“This is a transactional administration,” Steve Lipin, the founder of Gladstone Place Partners, said on a panel at last week’s Tulane University Corporate Law Institute, a major gathering of mergers and acquisitions advisers.

He added that a new step for an increasing number of transactions is to “email Howard Lutnick,” the Wall Street financier who is now Trump’s commerce secretary.

Deal advisers have plumbed their Rolodexes for connections to anyone with pull in Trumpworld. (There are limits, one recruiting executive said: While relationships matter in this administration, the aim is to find someone who’s respected — but not “too MAGA.”)

These new hires underscore how much the business of mergers and acquisitions has evolved beyond dispensing advice on capital structures and valuations. Clients increasingly want to know how to navigate a global landscape pockmarked with military conflicts, trade battles, oil shocks and political revolutions.

The latest challenge is a second Trump administration that is openly injecting culture-war considerations into regulation, including antitrust approval. A case in point: The Trump family business sued Capital One, accusing the lender of being “woke” and “debanking” it for political reasons — as the bank is seeking clearance for its $35 billion takeover of Discover Financial. (Centerview is advising Capital One.)

Government relations professionals are being hired to help lay out the landscape for a transaction, and in some cases to help make phone calls or bend the ears of lawmakers or regulatory officials.

Some corporate advisory businesses have also hired executives in the Priebus mold. This year, the Brunswick Group, a financial communications firm, hired Jim Bognet, an official in the first Trump administration. (It has also hired Kate Bedingfield, a White House communications director under Joe Biden.)

Others are building out teams to provide expertise and advice on operating in Washington and beyond:

• In January, JPMorgan Chase said that it had created a geopolitical advisory group meant to draw together research and experts for clients. Leading its effort are Derek Chollet, a former chief of staff to Lloyd Austin, Biden’s defense secretary, and Lisa Sawyer, who did stints in the Biden and Obama administrations.

• In 2023, Goldman Sachs announced the creation of a similar offering, the Goldman Sachs Global Institute. The group is led by George Lee, a longtime deal maker, and Jared Cohen, the firm’s president of global affairs and the founder of Google’s Jigsaw tech research and incubator unit.

• The year before, Lazard created its geopolitical advisory unit, a 12-person team that also counts as advisers William McRaven, the former Navy admiral who oversaw the raid that killed Osama bin Ladin, and John Abizaid, a former general who commanded U.S. forces in the Middle East. Its recent projects for clients included gaming out escalations of China-Taiwan conflict and modeling potential Trump tariff situations.

• About three to four years ago, Brian Moynihan, Bank of America’s C.E.O., pushed for the creation of a similar team. It draws on both internal research and government affairs expertise and outside resources to help advise clients across the bank on matters in Washington and abroad.

Executives at many Wall Street firms emphasized that while such teams are often stocked with former government officials, they aren’t formally lobbyists and concentrate on dispensing advice rather than on knocking doors in Capitol Hill.

The need to open doors in Washington isn’t new. Consider Moelis & Company hiring Eric Cantor, the former Republican House majority leader, in 2014, or Lazard hiring Vernon Jordan, the close Clinton ally with a voluminous address book, in 2000. And other banks are known for having employees join the government and return, often several times — notably Goldman, whose many nicknames include “Government Sachs.”

But in an age of shifting diplomatic alliances, unexpected conflicts and an unpredictable American administration, advisers are betting that being able to explain how best to approach Washington and other geopolitical flash points is more important than ever.

“There’s a lack of predictability right now,” Scott Barshay, a prominent deal maker and partner at the law firm Paul, Weiss, Rifkind, Wharton & Garrison, said at the Tulane conference. The administration’s policies are still being sorted out. Our clients don’t know for sure what the near-term future looks like.”

— Michael J. de la Merced

HERE’S WHAT’S HAPPENING

Consumer confidence took a nosedive. Sentiment among consumers tanked 11 percent in March, according to a new survey from the University of Michigan released on Friday. The metric has plummeted each month for the last three months, totaling a 22 percent drop since December. Anxiety about inflation is also on the rise.

The Senate voted to avert a shutdown. Senator Chuck Schumer of New York, the minority leader, reversed course and allowed the Republican-written funding bill to pass before a midnight deadline on Friday. Some Democrats viewed stopping the bill as a way to counter Trump, but Schumer argued that Democrats would be blamed for a shutdown if they blocked the legislation. The move drew staunch criticism from Democrats, including Representative Alexandria Ocasio-Cortez of New York and former House Speaker Nancy Pelosi.

Stocks rebounded after a turbulent week. After sliding into a correction on Thursday amid an escalating trade war and mixed inflation report, stocks rallied after threats of a government shutdown appeared to have been averted. The price of gold, a safe haven, reached $3,000 for the first time.

Intel named a new C.E.O. Lip-Bu Tan, a well-known tech investor and executive, will be responsible for reviving the embattled chip-making company, whose share price has fallen 54 percent over the past year.

Women’s sports kicks off a new chapter

Women’s sports have new stars, new money and an increasing value proposition as television audiences fracture — all of which has led to an influx of investors in recent years.

One of the most prominent tests of whether those big bets can translate to blockbuster returns kicked off on Friday with the season opening games of the National Women’s Soccer League.

After a long period of underinvestment, the league has raised money from big institutional investors like Sixth Street and Carlyle and headline names like Natalie Portman, Bob Iger and his wife, Willow Bay, and Kevin Durant.

And it has notched big sponsors. This month, the league announced a flashy deal with Alex Cooper’s Unwell Hydration.

Now it is entering a new chapter: proving to its investors that the business proposition is a bet worth taking.

“We’ve been fighting for a chance and now we have the chance,” Haley Rosen, the founder and C.E.O of Just Women’s sports told DealBook.

“So how do we take advantage of it?”

Institutional investors have treated women’s soccer like a venture capital investment. The bet is, effectively, that the sport has been so neglected that there’s very likely only to be an upside. In 2023, Sixth Street led an ownership group that plans to spend $125 million on a new Bay Area team, with roughly $53 million covering the expansion fee, a huge jump from the $5 million fee paid in 2021 for a team in Kansas City. Boston notched its own $53 million expansion fee months later.

“It’s a question of how high can you go? And in what time frame?” Alex Michael, a managing director at LionTree, said. “We’re pushing valuations hard and fast across sports, women’s sports being an exceptional example of late. However, audience and, ultimately, revenue need to keep up to continue the ascension.”

Television ratings will be a huge test. As with most sports leagues, the biggest driver of revenue for the N.W.S.L. will be its media deal. In 2023, the league struck a four-year $240 million deal with CBS Sports, ESPN, Prime Video and Scripps Sports. That’s about 40 times more than its last television deal but a fraction of the 10-year $2.5 billion deal Major League Soccer struck with Apple.

N.W.S.L.’s media contract expires in 2027. The short time span will allow it to capitalize quickly on any sustained momentum. But it also means the N.W.S.L. will need to demonstrate real growth in television viewership quickly if it wants to sign a more lucrative deal in four years.

“When I came here three years ago, there were not commercial considerations that we needed to take into account,” the N.W.S.L. commissioner, Jessica Berman, said in January, referring to new business pressures. “We didn’t have media partners that were paying us a lot of money who had expectations to drive viewership goals.”

Last year, the 2024 N.W.S.L. Championship averaged 967,900 viewers in prime time on CBS on a Saturday, an 18 percent increase from 2023, but only a 6 percent jump from 2022.

The N.W.S.L. needs its stars to carry the weight. As the last generation of stars retire — including Megan Rapinoe, Alex Morgan, Kelley O’Hara — the N.W.S.L. has made a major effort to spotlight the next generation of stars, including the gold-winning 2024 Olympic team.

The question now is whether new stars, like Trinity Rodman (who is debating playing overseas instead) will capture cultural zeitgeist in a way that can sustain the league.

And the expansion model to prove out. Expansion teams have brought in big revenue and big names. But selling a new team to investors is only one part of the equation — new investors need to prove those investments can generate profit.

Some of these teams may be an easier sell than others. Angel City FC, the Los Angeles team that sold last year for a record-breaking $250 million to Bob Iger and his wife, Willow Bay, had an average stadium attendance of 19,000 last year, or about 2,000 more than fits in all of Brooklyn’s Barclays Center. Other teams, like the Houston Dash, were only averaging around 6,000 spectators a game. Any new teams would need to prove that fans will show up.

”So far, so good, for the N.W.S.L.,” Michael of LionTree said. “But not all teams are created equally.”

Thanks for reading! We’ll see you Monday.

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