Novig's New York Mets Partnership & Growing Sports Prediction Markets

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2:30This is the Bloomberg Business of Sports. We re-explore the big money issues in the world of sports. I'm Vanessa Perdomo-Maglione. And I'm Randall Williams. Michael Barr is off this week. Coming up today, we're talking about prediction markets with the CEO of Novig, Jacob Fertinski, which recently launched nationally. They also just announced a partnership with the New York Mets, becoming the first prediction market to sign a deal with an MLB team. We also hear a little of a conversation I had alongside Bloomberg TV's Romain Bostic with Jake Paul. But first, let's run through some headlines taking over the world of sports.

3:03Starting with the story that took over last week in sports news, but the deal died before it even got started. FIFA decided not to go through with their initial proposal to look for outside private investors. Randall, what happened? So FIFA had a deal with Joshua Kushner's thrive capital that would have valued a potential for-profit arm of FIFA at$20 billion. The amount of money that would have been invested was$4.2 billion that would have then been distributed amongst FIFA's 211 members, which roughly is$20 million per federation, per soccer federation. And so, of course, UEFA, who is responsible for all of the European teams that competed in the World Cup, that compete internationally.

3:51UEFA had a big stance against this. CONCACAF came out against it. And ultimately, they really killed FIFA's plan. It lasted less than a week. When this was all unfolding, we were constantly talking about it, constantly checking in on what was going on. I didn't think it was going to go through, but I didn't know it would die so easily. I thought that it was going to be a bigger fight than it was. Like they would go through the vote. Right. Just because the timeline. Of course, Gianni Infantino has talked about expanding the tournament to 64 teams. And that vote, I believe, is or was scheduled for the middle of August.

4:28And then the vote on the investment would have been in September. Therefore, the investors would have been able to cash in pretty early. And we didn't even make it that far before I think UEFA just really stomped out the plans. One of the things even too is that UEFA came out and CONCAC came out, but also FIFA employees came out and said this was a Gianni Infantino plan and we had nothing to do with it. So now it kind of looks like his presidency might be in jeopardy. Yeah, I think what's interesting about the plan is that the idea that some of these soccer federations need money is not foreign to anybody.

5:04I mean, look at the World Cup in the round of 16, the teams that are left. A good portion of them are European. And the reason for that is because they have soccer systems set up so that, you know, some of their national stars can compete very early on and then they go on to play in the Premier League and come back and compete nationally. But for Gianni Infantino, his sort of rebrand over the last couple of years to be one of the top sports executives in the world, alongside, of course, a Roger Goodell, an Adam Silver, a Rob Manfred. I think he's sort of been on a campaign and this would have been part of that.

5:36And part of that campaign would have been a rise in his earnings. He's reported to make between five to six million dollars. And with this potential raise, it would have saw him get at minimum five times that. And so at that point, I wonder. Part of this deal was him getting more money. He would have gotten a raise as well. Now, the amount. That was seen in the proposal? It was. It was reported by the Times of London. It was reported by a couple of different places. Now, the number varies. The lowest I saw was$25 million. The highest I saw was$65 million, which, of course, is Roger Goodell money.

6:12But I think FIFA makes a ton of money from the World Cup. And this is fresh off them making$15 billion. And so then you turn around and be like, OK, now we're going to sell stakes. We've made so much money. Let's make a little bit more. I think that there were a lot of federation to her like, whoa, whoa, whoa, whoa, whoa. Like you did a great job, but not that good. Giles Turner, who is our managing editor, he made the argument that the number was too low, that if this was an offer that the soccer federations could not refuse, if FIFA valued its for-profit entity at$100 billion, then... And was able to give each federation, they were only going to give them$20 million.

6:49Right. So now what if it's$100 million that they're giving? That makes it probably a lot easier or a lot harder to refuse. Right. But$20 million, France, Spain, Portugal, they're like, I'm good. Yeah. They didn't need it. So do you think this puts his presidency in jeopardy? It was pretty much a lock that he was going to go forward and be the next president. I do. Because UEFA has not turned around and said, you know what? We forgive you. They remain stern, saying we don't trust him anymore. And UEFA is the biggest opposition for Gianni Infantino. And that also, you know, one of the things that's happening at the same time is FIFA has media rights that are going to go for sale.

7:29And they are expected to include the hydration breaks. UEFA does not like the hydration breaks. And so this brewing battle between UEFA and FIFA is not going to end. Even if Infantino does win his presidency again, they're going to continue to fight him. But if he doesn't, then UEFA has defeated him. So I think this battle is going to go on probably for several years. It'll be really interesting to see. I mean, we know they want to keep the hydration breaks, but having the hydration breaks be in the 2030 World Cup, where it's based in Spain and Portugal and Morocco, it doesn't seem like it would go off very well, even for the fans that are in the offense.

8:05The next thing that we obviously had to talk about is the MLB trade deadline and how the Dodgers just continuously get better, even though they were already the best team in baseball. Yeah, I think dynasties are good for baseball. I wouldn't say I'm rooting for the Dodgers, but I do root for a good story. And sort of this whole narrative that the Dodgers are unbeatable. But if you look across the standings, the Dodgers seem to be the most beatable fantasy team ever. They have a stacked lineup that they still have to win the championship. But ultimately, what does this mean for the CBA negotiations?

8:41and everybody is up in arms about what this will mean for those and the Dodgers' supremacy, I might say. It is. I mean, but baseball is just a game where you can lose games and you will still be the best team in baseball. So maybe they are the most beatable, but it doesn't change the fact that they're a super team. I think that they can still turn it on in the playoffs as we saw last year. But if they lose, I think any argument for a salary cap probably dies with that. Even if it shows, oh, you don't need to have the most expensive team to win. But it helps. We see that every year, though. We see that every year.

9:16Okay, the last thing we have to talk about is the merger that was announced last week with MVP and the PFL that will now make them the second biggest combat sports company in MMA and boxing. You report a lot on the UFC. How do you think this—do you think Dana White even cares that this happened? Do you think the UFC will ever see anyone else as a competitor? I don't think the UFC is even concerned, really. The UFC has been doing well, although they lost$30 million on their White House fight. They spend a lot of money on the show. And the reality is there's just not a lot of mixed martial arts promotions that can fill up a 20 ,000-seater arena.

10:01And if you can't do that, you can't compete with the UFC. The UFC sells out Madison Square Garden. And they sell out T-Mobile Arena and they sell out arenas around the globe. The PFL and MVP are not there yet. I've been to a PFL fight. It was at the Madison Square Garden Hulu Theater, I believe is what it was called when I attended. It's not the same as going to a garden. So I think the PFL and this merger have a good ways to go. But I remain interested in seeing if they can compete with the UFC because the UFC has had a dominant presence over mixed martial arts forever. Now, we asked Jake Paul about this on Bloomberg TV, and he had some interesting thoughts on UFC as well.

10:42So let's listen to that conversation. Here's a small part of my conversation with alongside Bloomberg TV is Romain Bostic with Jake Paul, co-founder of MVP Nakeesa Badarian and PFL CEO John Martin. You know, there is sort of a competition with Dana White and UFC. And I am curious as to how you're positioning this new MVP up against that. I mean, they've got obviously the big backing with TKO, the big deal with Paramount and all that. So you're going up against a force in terms of not from a business perspective and probably in a lot of other ways as well. Are you staring him down head on? Are we making too much of that?

11:19Yeah, 100 percent. 100 percent. Yeah, it's war as far as I'm concerned. We're here to make Evan May great again. And there's so many things going on behind the scenes back and forth, mostly them attacking us, manipulative things. I can't even be in my own brother's WWE matches because TKO has blocked it. They don't want me to get any publicity from the WWE. So there's so many things going on behind the scenes. It's war, and it's only going to get crazier. But it's Coke versus Pepsi. It's Nike versus Adidas. This is exciting. And we're five years in with this new relationship. They're 30 years in.

12:02So we're the new young hungry kids on the block. Dana White, you know, is at a press conference. Like didn't even know who was fighting or what he was talking about. Just berating a reporter. They're old. They're worn out. They're public. They're like, hey, we did this. Yeah. And we're coming to eat their lunch. And they should be scared. and they are scared. That's why they're doing these tactical moves behind the scenes. And this is beautiful. This is capitalism. This is entrepreneurship. And this is the game of life. So it's very exciting. Jake, you're doing something that I don't know if you did this when you set out and you created MVP.

12:36You know, when you created it, people kind of had this idea that you're an influencer and this isn't real boxing. And now you're acquiring one of the biggest players in mixed martial arts in this game. do you think you change the perception of what people think you set out to do here i don't know like i don't really care like i i think uh yeah people always like have some sort of opinion and i just like prove my with my actions and and words i do definitely talk a lot of smack but um i just don't really care like we're doing it regardless of what what they think So I would say the track record proves that I've made more of an impact in the sport of boxing than any boxer that's alive today.

13:29And no one could argue that. I could sit there and argue. You like shrug your shoulders. I would quibble with that a little bit. Who would you say that? More than Tyson? You said alive today? Tyson outside the ring? Outside the ring. Oh, you're talking about outside the ring. Oh, I'm sorry. I thought you were talking about the sport of boxing. Not in the ring. Outside the ring. Actually helping fighters change. Who do you think has made a larger impact than Jake outside of the ring for other fighters? For other fighters, I don't know. I mean, I can't quibble with that. I thought you were talking about in terms of boxing as a sport.

14:00And look, I don't take anything away from Jake. We all know that he brings a lot of attention to the things and the smack talk is a big part of boxing. It's way more than attention. It's actual change. And me grinding on business calls and working with fighters and teaching them about branding. The attention and the posting is actually such a minimal part. That's the easy part. That's the easy part. That was influencer boxer and co-founder of MVP, Jake Paul, alongside his co-founder, Nikisa Bedarian, and PFL CEO, John Martin. You can hear more of it now on the Bloomberg Business Sports Podcast.

14:38Get that on Apple, Spotify, and the Bloomberg Business app, or wherever. you get your podcasts. Coming up, we'll talk about prediction markets with Novik CEO Jacob Fortinsky. That's straight ahead on the Bloomberg Business of Sports. For Randall Williams, I'm Vanessa Perdoma-Maglione. You're listening to the Bloomberg Business of Sports from Bloomberg Radio around the world.

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17:16This sports spotlight is brought to you by Capital One Saver Card, founding partner of iHeart Women's Sports. Did you know that this year, Kelsey Fendler, a Grand Canyon River rafting guide became the fastest woman, youngest woman, and first American woman to row solo from California to Hawaii? Fendler's journey took 43 days, 17 hours, 55 minutes and 59 seconds. Earn unlimited 3 % cash back on dining, entertainment and at grocery stores with the Saver card from Capital One. What's in your wallet? Terms apply. See CapitalOne.com for details. This is Bloomberg Business of Sports from Bloomberg Radio.

17:53This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Vanessa Perdomo-Maglione. And I'm Randall Williams. Michael Barr is off this week, But a few weeks ago, the three of us had the chance to sit down with the CEO of Novig, a prediction market that has started to make some waves across the industry. Following a CFTC designation, Novig was able to expand to operate nationwide. On top of that, they recently became the first prediction market to partner with an MLB franchise, having signed to be the official prediction market of the New York Mets.

18:26Novig CEO Jacob Furtinsky joined us in the studio right before he made the announcement. Let's take a listen to that conversation. Jacob, welcome to the Bloomberg Business of Sports. My goodness, the World Cup is behind us. Now, I'm not going to lie, it's like the third place match was better than the first place match. But anyway, I mean, it's like your thoughts about... There were certainly a lot more goals. Yeah, really. You tell me, you know, your thoughts about the World Cup. yeah i mean i it was one of the best sporting events i'd ever seen first of all thank you so much for having me um since i was eight it was a dream of mine to go to the world cup and it was great to see messy and all of my idols in person um i think it was an incredible tournament i think messy's performance i think probably will go down as one of the greatest uh sporting performances of all time especially at his age it's you know lebron-esque uh you know even you know greater than that in some ways.

19:26I think, yeah, the third place game was, I kind of wish that were the final. Those 10 goals, I mean, that was crazy. You know, two in the last five minutes. But the whole tournament was incredible. We saw incredible growth on our platform. And I think, you know, I really hope this marks a shift in how Americans view soccer. Unfortunately, the U.S. men's team didn't quite meet expectations, but I think it really, you know, gave Americans a sense of the passion and why this is such a beautiful game. A lot of hot takes in there for me. But it's the greatest sporting performance of all time. The greatest sporting performance of all time is really interesting.

20:01I mean, I think it's a hot take considering he walked a good amount. But I'm not trying to, you know, turn down this legacy that is messy. I think he's incredible. But I do want to talk about the growth that you said you were seeing on Novig and just how important these massive moments are for growth for you guys. Yeah, I think for us as a company, it was huge. I think we saw more users come to our platform during this period than any other event in our company's history. Saw hundreds of millions traded on the platform. And, you know, I think, you know, in a macro sense as well, it's huge for prediction markets.

20:44I think it really is this moment where prediction markets are becoming mainstream. People are starting to understand not just that prediction markets exist as an alternative to sports books, but really why they're better. And they, I think, are starting to understand the fundamental difference and the value that prediction markets provide. So, yeah, these huge moments are always, you know, a pivotal moment in this industry. The World Cup, you know, one of the, aside from the Super Bowl, the most watched events of the last 20 years. and, you know, people want in on the action. It's fun, especially for a sport that you're less familiar with.

21:22I think having, placing a trade on the outcome, whether it's messy to score a goal or there to be, you know, I had a lot of friends that said, oh, soccer is so boring. No one ever scores a goal. On every single game, I'm going to place a trade on the under because, you know, I think I'm going to win. And at the very least, you know, it'll be a hedge. It'll either be a very fun match or I'll win some money. And so people are starting to, I think, you know, deepens their engagement with the sport and with the event. And yeah, it's been awesome to see. So major sporting organizations are embracing Novig, and that includes like the MLB and of course the New York Mets.

21:56I wonder from your perspective, why do you think we're seeing more organizations who are willing to sort of shake hands with prediction markets and other organizations like yours to further demonstrate business? It's a great question. So yeah, we're very proud to be an authorized prediction market of the MLB and to sign our first big team deal with the New York Mets, which is the team that my family is rooted for for generations. And it's really awesome to sign that partnership. I think we're the first prediction market to sign any deal with the MLB. And I think you see more institutional adoptions of prediction markets because they're better from a regulatory perspective.

22:36They're more consumer friendly. They're more fair. They're more transparent. And I think for so long, sports betting was seen as this sort of shady operation. There's sort of a taboo around it. And the real reason why that's the case is because the house always wins. It's rigged against everyday sports fans. That's the reason why sports betting feels kind of icky sometimes, is that 99 % of sports fans, sports bettors lose money. And what prediction markets do is create a level playing field where winners are welcome. Instead of betting against the house, you're trading against other real sports fans.

23:06And so that, I think, is something that is more palatable for these large institutions. And I was listening to your podcast from December where you're talking about how prediction markets should scare the sports leagues. And I think at that time, which is only eight months ago, it did feel like the Wild West, so to speak. I think now things have changed a lot. You see more rules and regulations around this category. And, you know, it's something that we're very excited to pioneer is, you know, being a leader in integrity and responsible trading and making sure that we have the most transparent, fair and consumer friendly platform in the industry.

23:45So I do wonder from from that perspective, because not all of the organizations have have, you know, not just with yours, with Novig, but not all sporting organizations like the NFL and NBA have embraced them. They've had some conversations and are continuing to evaluate different business propositions. But from your perspective, is this controllable? We've seen on the gambling side of things and not necessarily the prediction market yet, but we've seen a good amount of scandals, I'd say, specifically in the NBA and the MLB. And so with prediction markets coming in, do you think that it adds another layer of potential chaos?

24:20Or do you think that there is a level that that the sporting organizations and organizations like your own can sort of shake hands and be like, listen, this is how we're going to regulate. This is how this is going to be different. Do you think they're both possible, regulation and the partnerships, or how are you viewing it? Totally. I mean, our view, which I think is frankly different than some other prediction markets, is that regulations around this category are not only inevitable, but they're necessary. People want to feel like there's some guardrails and there's some rules around this category.

24:48No one wants to feel like this is the Wild West. This is why we're against this happening offshore on blockchain-based exchanges. We think this should be regulated. And I'm encouraged by the federal government's attitude in how they're addressing this category, ensuring that trust and integrity are the priorities. We actually started as a state regulated business. And so I've dealt personally with state regulators and federal regulators. And there's not a doubt in my mind that the federal government is far more capable and ought to be the ones sort of overseeing this category. I think it's much easier to catch suspicious trading activity, whether that's on insider information or people trying to manipulate outcomes.