NFLPA Embroiled in Controversy; NY-NJ Projects Big Boost From World Cup

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1:05COVID was one of the best things that ever happened at golf. The NFL is a bulletproof business. Racing's unique because there is absolutely no reason why we can't compete with the guys. Come on, is pro pickleball real? Are people really going to tune into this? If you're playing money ball with a huge bag of money, you're going to be really, really good. Bloomberg Business of Sports from Bloomberg Radio. This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr, along with my colleagues Damian Sassauer and Vanessa Perdomo. Coming up, we'll talk about the recent turmoil gripping the NFL Players Association, and it led to NFLPA Executive Director Lloyd Howell's resignation.

1:46We'll talk with a friend of the show, Marty Edel, of Goulston & Storrs. The executive director was found to have a conflict of interest. He was working for the Carlisle Group, a private equity group, while he was the executive director of the NFLPA. We'll also talk sailing with Red Bull Italy team CEO Jimmy Spithill. All that is on the way on the Bloomberg Business of Sports. But first, with the FIFA Club World Cup and CONCACAF Gold Cup behind us, we are now full steam ahead to the FIFA World Cup hitting the states next year. And right now, officials in New York and New Jersey are anticipating an economic boost of over$3 billion from it.

2:33Joining us to talk about how big of an economic win hosting the World Cup could be is Bloomberg News sports reporter Sri Taylor. Sweet, welcome to the Bloomberg Business of Sports. You wrote a great article. It involves New York and New Jersey, and they expect a boodle coming from the World Cup, the FIFA World Cup next year. Tell us about it, if you can. Yes, so New York and New Jersey are jointly hosting the final match, and they're projecting a$3.3 billion economic boost to the entire region, so that's the entire state of New York and New Jersey from hosting the FIFA World Cup. And that is a little under a year from now where the final match will kick off.

3:17So let's just clarify, that's eight matches? Like, is the$3.3 billion economic boost got to be from all eight matches, right? Including the final? Yeah, all eight matches at MetLife Stadium in East Rutherford, New Jersey, including the final on the 19th of July. I'm glad we mentioned that MetLife is in New Jersey because that's my point here. As a Jersey girl, I'm very defensive about this. I'm very defensive about MetLife in New Jersey and people need to know this and they need to remember this. And it's always, you know, we're always saying it's New York, it's New York, whatever. So what I'd like to know, is there any indication between the, is there a split difference between the two areas?

3:58Are they expecting people to stay in Jersey at all? Or is the NJ Transit really going to get, be the biggest winner in the New Jersey economy from people coming from the city. Right, so I'm a Jersey girl too, and I do hate to say it, but it is a little trickier to stay in a hotel around MetLife Stadium, so that's why I think the states are kind of making this a joint effort, because a lot of people are likely going to be staying in New York. Their hotels are going to be there. They're probably going to fly in to either LaGuardia or JFK, and then they are going to hop on New Jersey Transit from Penn Station, and then New Jersey Transit will take it from there and then shuttle people to the stadium.

4:39So, you know, we might see a little bit of activity in New Jersey, too. You know, just people kind of going to MetLife Stadium and, you know, buying food, buying drinks. And, you know, we'll get some people staying locally, but I can predict there will probably be more people in New York. I think it might just be a little easier. You're expecting about 1.2 million fans and tourists. You try to put an extra 1.2 million people in this area. Where? Where are they going to go? Where does he have the room? We do have the room. We do. Definitely now that hotel prices are going to be going up. Oh, for sure.

5:21But, I mean, you know, it's going to only do great things for the area, I think. And, you know, I think Atlanta and other host cities, like I think Atlanta is also expecting a$1 billion boost. So the cities are ready. They know what's coming. And they're going to try to, you know, only reap the benefits of the chaos. We have a sophisticated audience. So we need to do a little history lesson here. You know, I'm just looking at this economic impact summary that's released. But it was released on Monday by the New York, New Jersey host committee. Right. So obviously they're incentivized to fluff these numbers a bit.

5:53But that's$3.3 billion they're projecting. There's what? I don't know, 104 matches across 11 host cities, right? Let's just, I mean, I'm just going to do back of the napkin, say$15 billion is what they expect to generate, you know, in total across the whole FIFA World Cup. Qatar generated$7.5 billion in 2022. For those who remember, it cost Qatar$220 billion to put it on. I mean, a massive dislocation. And by the way, if you look back at Brazil in 2014 or even Russia in 2018, I mean, again, there's this sort of black hole of spending and the economic impact, I guess, the argument as it goes, doesn't really offset the amount of money that's spent.

6:33What makes this time different? Because obviously they're only projecting$1.7 billion in spend across New York and New Jersey to generate this$3.3 billion. Sounds like a good investment to me, but is it accurate? I would say it's accurate. I think that across the country, FIFA is expecting 6.5 million people to attend the tournament, which is just the highest attended sporting event ever, maybe? You guys probably know that better than me, but that's the phrase that I'm seeing thrown around by them. And, you know, they're also expecting the tournament to drive up to 40.9 billion USD in gross domestic product.

7:1740 billion? Is that the number, really? 40.9 billion. Wow. And that is, just for anybody who can do the math, six times what the World Cup generated in 2022 in Qatar if that holds. That's an incredible amount. Well, the thing we have to remember there, Damien, is one, this is an expanded tournament. So they're playing more games. They have more teams than ever before. and in those other regions, one, Qatar, they just... It was a full build-out. I agree. It was a full build-out. You're absolutely right. Great point, Vanessa. They built everything out. We don't have to build anything. So there's all of those things that go into that.

7:50And even in Brazil and in Russia, they also had these structures that they built that they stopped using and things like that. That's the biggest part of this. I do think those numbers are inflated. And one of the things, Sharita, I'd like to talk about that they're not seemingly paying attention to or really noting in this is the problem that people are going to have with visas and people are not risking coming to the U.S. What do you have to think about that? I mean, it's kind of at the forefront of my mind. I don't know if the administration is thinking about it as strongly. I mean, President Donald Trump, who refers to the FIFA President Gianni Infantino as a good friend of his.

8:33They're very chummy. He has super high expectations for next year's turnout. And when asked about how a lot of the success of the games are riding on how the U.S. will manage to ease the international tensions brought up by Trump's trade war, his mass deportation mandates. Yeah, didn't he say it'll make it more exciting? He said tariffs will make the FIFA World Cup more exciting because there'll be more tension between nations. That is an unbelievable statement. And I guess the fact of the matter is, Do you think there'll be any sort of negative backlash toward the United States because of this, because of these tariffs?

9:09Is it possible that people just boycott the games entirely? I think the games are going to happen regardless. But I think what we've seen with some, you know, other large sporting events that have kind of kicked off since Trump took office, for example, the, you know, Boston Marathon earlier this year. I was talking with the head of a tourism agency, Meet Boston, and she said that, you know, we do have a lot of concerns about Canada because this was, around the time Trump was coming in really hard on Canadians and he was threatening tariffs. I think that a lot of Canadians were not feeling it.

9:44They were like, I don't think I'm going to go as a spectator, I don't think I'm going to go as a runner. That was a really major tension point when the marathon was leading up. This will probably be that, but tenfold. Trying to put this in a delicate way. With the Trump administration's policies, tourism has gone down in the United States. Is the FIFA World Cup the difference, the one-off that's like, look, this is the product to bring tourists in? Will that be the case for the U.S.? And will Canada say, OK, I'm going to come and see this? Yeah, I think it's not even just Canada, it's Mexico. People around the world, I was going through the list, the very long list, of who Trump has either imposed tariffs on or threatened to, and that's some of the bigger teams.

10:46That's Mexico, Brazil, Canada, Japan, the UK, South Korea. These are a lot of fans that are hoping to come here and stay here for a long time and go to cities that they probably never otherwise would, like Kansas City or Atlanta or Miami. The World Cup should be a very rare, large opportunity for the U.S. to regain its good standing with the rest of the world. I do think that, depending on how it goes, depending on how Trump kind of positioned himself leading up to the games in this last year, you know, it could either make or break the games. About 26 ,000 jobs are going to be created by this.

11:39And yes, we all know restaurants and yeah, yeah, yeah, yeah, yeah. But I'm talking about the guy who owns the food truck. he's like, hey, let me back this thing up in here so I can get part of this money that's coming in. And it's the people like that are really going to benefit from this. Yeah, absolutely. And, you know, this is a great opportunity for a lot of those folks who kind of rely on that mini ecosystem around these stadiums when there are huge game events and football and the Super Bowl and obviously the smaller soccer tournaments like the World Cup Club and basketball games and stuff like that.

12:26So a lot of these smaller vendors will reap a lot of benefits from this. But I guess my concern when I was talking to some analysts that are looking closely at this, they were like, well, a lot of this will be one-time jobs. and then they will lose them and they're contractors. And then so, you know, these jobs will be generated. That's a lot of jobs, 26 ,000. But, you know, they're temporary. A lot of them are. So we will see. It's definitely good for the time being, but not to be a negative dance scene. Vanessa, you get your tickets yet? Listen, I'm going for work, okay? And that's my ticket.

13:08Well struck, Vanessa Perdom. I'm going to the World Cup for work. I've heard it all. Our thanks to Bloomberg News reporter Shreet Taylor for joining us. Coming up next, we turn to the world of sailing with the CEO and co-owner of Red Bull Italy, Jimmy Spithill. For my colleagues Damien Sassauer and Vanessa Perdomo, I'm Michael Barr. You are listening to the Bloomberg Business of Sports from Bloomberg Radio around the world. This message is brought to you by Apple Card. Apple Card members can earn unlimited daily cash back on everyday purchases wherever they shop. This means you could be earning daily cash on just about anything, like a slice of pizza from your local pizza place or a latte from the corner coffee shop.

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14:53I'm Scarlett Fu. And I'm Paul Sweeney. Subscribe today wherever you get your podcasts. this is bloomberg business of sports from bloomberg radio this is the bloomberg business of sports where we explore the big money issues in the world of sports i'm michael barr along with damian sassauer and vanessa berdomo our next guest is one of the greatest athletes in the history of competitive sailing and is the subject of a new docuseries called unchartered sail gp We're talking about Jimmy Spithill. He is the youngest skipper ever to win the America's Cup and is now team CEO of Red Bull Italy. Jimmy is here to talk with us about the team, the Rolex Sail GP Championship, and the state of sailing.

15:45Jimmy, welcome to the Bloomberg Business of Sports. Oh, hi, guys. Thanks very much for having me. People keep calling it a niche sport. I'm not so sure anymore because people are starting to get to know this sport. And one thing that has helped is that you have been the subject of a documentary that is out right now. Yeah, look, I think sailing wasn't a sport, you know, and it was definitely viewed as something probably for the elite. You know, you needed quite a lot of equipment. And so let's say the barrido entry was generally not open for everyone. And I think as technology has gone along and I think just as the sport's evolved, that's, you know, that narrative is well and truly out the window.

16:31And certainly now, if you look at where SLGP is at the top end of the sport, it's, you know, boats doing over 100 kilometres an hour. They're powered by nature. There's some real risks. So it's a lot more like, I guess, auto racing, yet the team functions like any other high-level sporting team, you know, like a football or a rugby team. You know, they've got certain playbooks. They've got to work together. And so, yeah, it's fascinating to see it. And I'd even say to get into the sport now at a lower level, the barrier is even lower. Because of technology and foiling, you can now go and get a foiling surfboard and essentially an inflatable batwing and you're out there.

17:12So going into the days of having to have a trailer and boats and all this sort of gear, it's this sort of whole, you know, advancement of quantum leap in technology and construction and carbon fiber, et cetera, has really changed the game, I think, from the very bottom to the very top. To have this sort of team based thing that a lot of people understand how that works. Do you think that's what changed the game kind of for sailing is this team format that everyone kind of understands and can follow along with? Yeah, I think you're right because it is, from the outside, it's a very, let's say, confusing sport to understand.

17:48You know, like where are the boats going? What is the course? There was a whole lot of rules and then even the sort of technical jargon. I mean, I used to confuse myself and I'm a professional sailor. So I think a big part of it was really trying to simplify it. The other thing I think that the top of, let's say the top end of the sport before Sails UP was probably the America's Cup. and that was something that was really every four years the rules would constantly change they still do and and you didn't have that regular season the other thing was that the boats for a big part of the america's cup were man i can tell you it was a little bit like watching paint dry i mean while it was okay to sail them but to watch them it was just it wasn't like it was you could look away and have a conversation and look back and it didn't look like a whole lot of changed the third thing is probably, let's say, stadium.

18:36You know, having a stadium and fans there in the bleachers and watching and being able to hear that crowd. And that's, you know, notoriously in sailor racing, it's been, oh, let's take the course as far away from land as we can. Let's get it perfect and let's not let anyone get too close. Well, Sajjip is the opposite. Very tight racetracks. When we just recently raced in the Hudson in Manhattan there, the races are 12 to 13 minutes long, 12 boats, very tight racetrack with sideline boundaries. One sideline is literally the spectator stands and you can almost reach out and high five the athletes.

19:11I think, you know, the other thing is having a very, very tight and squared away broadcast, you know, where fans, when they turn it on, they get an understanding, they get educated and all the athletes are mic'd live. It's one of the very few sports where men and women compete together in the teams. and so yeah we're starting to let's say have the right ingredients to produce something that i believe well we're already seeing it in terms of our our tv and media numbers but starting to get out of let's say what was called a niche sport and for people that are just interested in sailing to to more mainstream and when you look at the audience i think it's about 20 or 30 percent are actually just sailing audience the rest are non-sailers and a lot of racing fans actually I admire you so much, and I want to bring up an extreme positive, but I have to start out, unfortunately, with the negative that happened.

20:05You were ousted from the Oracle Team USA when new ownership came in, and then you established Red Bull Italy, and you're just kicking butt. And I admire you for establishing the team. Can you take us through that process? Yeah, well, sure. I mean, look, I got involved with Sailor Juppie in season two. During season one, I was involved in an America's Cup campaign and sort of finishing that off. And Larry Ellison approached me and Russell Coost to come and lead the American team at that stage. They just finished last in season one at no sponsors. And so we immediately took the team to the final.

20:43We had a bunch of fantastic commercial partners. But anyway, I was thinking at that point, look, I'll probably, this is my long-term plan here with the team. And I had an ownership option on the team. Now, while looking for partners, we received what was then a record offer for the team to be purchased by a guy named Ryan McKillen, who was one of the early Uber guys, and a consortium he had put together. Now, at that point, I had an option. There was one catch in that offer, and that was that, well, they wanted to field their own team, so really start again, and they wanted a full American team.

21:20I was born in Australia. Yeah, my wife and kids are American, but so they wanted to go all American and run it their own way. So, yeah, it was an interesting process because it was either, well, how do I treat this? I could block the deal and just stay here and keep looking to build it up. But at the same time, I'd been competing with an Italian team in the America's Cup. And I thought, oh, what an incredible opportunity to now, one, go through the process of a sale of a team, but essentially start again and start from scratch as opposed to taking over an existing team like I did with the American team.

21:55And that's really what led to Red Bull Salgi Pidoli. And it's just been such an amazing ride to get here. We're the newest team. We've got the least amount of hours, but we've just got a fantastic lineup of guys and girls in our roster, huge fan base. I mean, if you've ever watched Italian fans, they're some of the most passionate out there and also a very, let's say, educated marketplace as well in terms of commercially and audience. So, yeah, it was just a great opportunity. It was a win-win. It was a win for Sailor Gb to bring someone like Ryan and the group he brought in to take over the American team.

22:31And at the same time, for me, it was just, I mean, how many athletes get the opportunity to, one, even get involved in the ownership of the team, but to be able to do it twice? And with a completely new group, different culture, et cetera, I just thought, wow, what an opportunity. The whole idea of an athlete who's done the whole sport, done it from the top to bottom, and then going into a CEO role, but also still competing, you're still a skipper and things like that. And then you co-owner, CEO, how you wear all those hats. Tell us about how that informs you in a unique way in running the team.

23:09I think it's like a lot of businesses. And even when you look around at other successful sporting franchises, I believe some of the most successful and valuable are the ones that are ultimately influenced or run by ex-athletes. Because it's a little bit like armies or generals. Sorry, generals in the army or admirals in the navy. The guys that have been in the trenches, have been out on the water, been there on the ground and then worked that way up. they really know what has been going on in the whole process. Now, I'm not saying that's the only way because clearly there's examples of, well, admirals and generals that haven't gone that way and in people that run these teams, all sorts of sporting teams and franchises.

23:54But I believe if you really want to have a full understanding of what it's like and to really gain the respect of people on and off the water, if you've got that sort of background and knowledge, there's no shortcut to that. You don't just get that by clicking your fingers and reading about it. If you've lived and breathed it, you've made mistakes and had the growth, that's a different level of education. And I believe I've always been inspired by athletes that have been successful on the field of play, but then the ability to go out of their comfort zone and be successful off the field of play, almost like a second career.

24:29and at the same time, benefit I'm also finding is being able to impact and now help and provide something for the next generation. That's in itself something really rewarding. But at the time when I was competing, to be quite honest with you, that was never really something on the back of my mind. When you're competing, all you're thinking about is the game and to win. But now when I look at all of the ingredients, yeah, it's been fascinating just to be able to play the different roles and get, let's say, a full circle picture. One of the investors in SailGP, a very famous name, Anne Hathaway.

25:09Tell us about that because now you're attracting some really big names involved in this that people instantly know. Yeah, well, that's true. I think if you look at the group that we've assembled and the team, It's just, I mean, as the founder of the team, if I could have just drawn up a wish list, I'm not sure I would have had the courage to say the names we've got. It's unbelievable. I mean, we've got some incredible entrepreneurs, businessmen and women. We've got some amazing, from all walks of, you know, we've got amazing actresses, athletes. And ultimately what that means is we just have such an awesome group to go back and call on their own experiences and their lessons learned to apply to our, let's say, sports and entertainment product that we are growing together.

26:05And if you look at all the other teams, there's some incredible names as well, like some of the businessmen, some of the funds, some of the Mark Lazaries with the US team, athletes, Killian Mbappi, Sebastian Vettel, actors, Ryan Reynolds, Hugh Jackman. I mean, the list just goes on and on. And so I think it's all good and well for me to come and tell you how good Sale GP is or what I think the teams are worth. And it's a little bit like selling your own house. You can think it's worth a billion dollars. But at the end of the day, the market will tell you what it's worth. And here we are again.

26:44The market will tell us from an investment point of view, well, is this investable? And what's our market value? Now, if you look at the growth we've had in just five seasons, especially starting out when we're in COVID and what people thought was a niche sport, well, we've got a pretty big range of sophisticated men and women investors. You look at the valuations now, you look at the TV numbers, and even getting feedback from the hospitality and the racing experience live. Again, you will think I'm biased. I am biased. But you only have to now look at the data, the results, and the people that are investing in these teams.

27:20They're not the majority of them. Again, they're not sailing fans. They really see the value here. Our thanks to Jimmy Spithill, team CEO of Red Bull Italy, for joining us. Up next, we turn to the NFL and a controversy that has shaken up the NFL Players Association. For Damian Sassauer and Vanessa Berdomo, I'm Michael Barr. You are listening to the Bloomberg Business of Sports, Bloomberg Radio around the world. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real, lots of firms throw a couple flashy funds your way and call it a day.