'The Messi Effect' with The Athletic's Paul Tenorio & SailGP's Andrew Thompson

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1:39Bloomberg Audio Studios. Podcasts, radio, news. This is the business of sports. Our aim is always to leverage the global appeal of football. Having representation in college sports is even more important than pro. 10 % of Americans now claim soccer to be their favorite sport. We estimate the youth sports audience has$3 trillion in spending power. The nature of baseball is it is worldwide and it is global. I'm very happy for the WNBA and how the NBA has embraced them. Sportsbooks are not going anywhere and sports betting is only growing. We have a super team running this league and this league is here and it's here to stay.

2:20Bloomberg 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. I'm Vanessa Perdomo-Maglione. And I'm Randall Williams. Coming up today, we are going to be talking about the goat of all goats, reigning World Cup champion, Lionel Messi. He's not here with us in the studio, sadly, but we have the next best thing, the guy who wrote the book on him. But first, we are going to start introducing the start of the show with a little news blast and give context to the biggest headlines of the week.

2:55The Major League Baseball Players Association has made their first formal proposal in collective bargaining talks with Major League Baseball. We know that these talks are not going to be easy for both sides. Randall, can you give us some context on what baseball is heading for for the negotiations this offseason? Sure. So I'll start by saying that if you thought the WNBA and the WNBPA conversations around collective bargaining were tense, that I would imagine this is going to be twice as tense. And so the MLBPA made their first proposal. According to ESPN, the proposal included sharing more local television revenue.

3:36It included a competitive balance tax for top spending clubs, a raise of a base competitive balance tax from the threshold from$244 million to$300 million and so many other details. And of course, this is going to be a very, very long collective bargaining session. There is concern from both sides really about a work stoppage. And really, the principal issue is whether there should be a minimum spending requirement from owners or a cap. And if you ask, we talked to multiple baseball players throughout this year. They are allergic to a cap. It is fatal to them. They do not believe in it. And so if there is a cap, I would expect a lockout.

4:16And if there isn't one and there's a minimum spending requirement from owners, they are going to oppose that. And so what is the balance is going to be the instrumental thing that I think we're all going to find out because baseball has tremendous momentum right now. If you think about the last couple World Series, probably the greatest World Series that I've ever watched and the stars are continuing to grow larger. It's sort of a resurgence of baseball. And if there is a stoppage similar to the potential stoppage that could have happened in the WNBA, that it could stop momentum. I know that both parties want to avoid that, but they have some issues to discuss first.

4:52I was just going to say that, Randall. I mean, it's funny that these things both happen for the WNBA and the MLB right when they're both leagues are surging. So couldn't be a worse time for both parties to start negotiating one of the most important things that they have to negotiate. It's not a simple CBA for either of these parties. And I think it's because of the momentum that they're both having. The MLB, the players have, you know, really hard ground to stand on. But the reality is that the spending floor is what that they would maybe agree to. But the cap is something I don't think they'll ever get to.

5:25Yeah, I don't think a cap is likely. But it really depends on how long old owners are willing to lose money on a lockout and how long players can hold down on one. That's really what it comes down to. And the WNBA, the stakes were very high, but they also had a lot of time. You have to think, the WNBA or the WNBPA opted out of that collective bargaining agreement. I believe that was 2024, the end of 2024, and then they bargained for over a year. Baseball doesn't have that luxury. They're going to need to get the pedal to the metal and get something done or make some progress at some point so that games aren't lost.

6:03Well, I remember the work stoppage back in the early 90s, and man, it just killed the game. And, you know, it took a home run derby with Sammy Sosa and Mark McGuire to at least get some interest back. So I'm hoping we're going to be keeping a close eye on those negotiations throughout the year. Now, let's talk some soccer as we are joined in the studio by Paul Tenorio. He is the senior writer at The Athletic and the author of The Messy Effect. Paul, welcome to the Bloomberg Business of Sports. This book, by the way, which is great, is coming out June 2nd. And I understand now why a lot of people are reading this book, because this man is loaded.

6:49He is$1.45 billion worth of money, according to Forbes magazine. Yeah, well, that's certainly what he's done to the valuation of Inter-Miami. And when you talk about what his impact has been in Major League Soccer, the short-term impact, we have to start with the money. The money that is just phenomenal across the league of what he's done. The valuation of the team has more than doubled. The revenue has gone through the roof. More than$200 million in revenue, the first MLS team to accomplish that. The number one best-selling Adidas jersey in the world. Sold out stadiums across the entire league.

7:26Teams moving, for example, Sporting Kansas City moving from their soccer-specific stadium to Arrowhead and then selling out Arrowhead. So, you know, Chicago Fire had the most revenue in a single game ever playing against Inter-Miami because Messi was coming to town. So this is the short-term impact that he's had. And it really is now about how do you take that and make a longer tail out of it? How do you make the Messi effect last longer than just now when he's playing? Because he's not going to play forever. I love that. I mean, and how are they going to do that? Obviously, the World Cup is this year.

7:59He'll be playing, you know, here in the U.S., which is amazing. And obviously everyone will be able to see him, the U.S. team and all of that. But how do they continue the Messi effect after the World Cup is over? Well, that's a lot of what this book is actually about. As much as I try to take people into the locker room, I try to take them into the boardroom in MLS because the owners are trying to make these decisions of what do we have to do in MLS and the league to make it matter that when Messi was here, to take this moment and extend it. And I think a great example is David Beckham. When David Beckham came to the LA Galaxy, he changed the league not just because of his celebrity, but because they created a new rule, the designated player rule to allow the Galaxy to sign David Beckham.

8:43And that rule changed the face of Major League Soccer forever. It allowed big stars to come like Thierry Henry and Zlatan Ibrahimovic and Kaká and eventually Messi. So the rule was enacted by the owners. It's on the owners now to change the way MLS operates in order to make this league more competitive, more competitive in the domestic sports landscape where you're competing with the NFL and the NBA, college football, Major League Baseball, the NHL, and more competitive in the global soccer landscape, right? The economy that exists all around the world for this sport, they need to change the roster rules.

9:16And so from MLS's perspective, that's where the decisions are being made and still need to be made. From a Miami perspective, I think Cordae Mas has a really good idea about it. And again, it goes back to the example of Beckham. When Beckham signed an MLS, they gave him in his contract this right, this trigger to have an expansion team. That expansion team became Inter-Miami, which eventually brought Messi, right? Well, what did it do for Major League Soccer to give him an expansion team? It kept Beckham's brand linked to MLS. Still to this day, David Beckham, one of the biggest celebrities in the world, goes out and talks about how great Major League Soccer is.

9:52You can't pay for that. I guess you can with an expansion, right? Well, Inter-Miami is trying to do the same thing with Messi. So what did they do? They gave him 10 % ownership in the team on the first contract, more percentage into the team on the second contract. They build a new stadium. They name it the Lionel Messi stand where the fans are in the stadium. When he stops playing, Messi's brand is still going to be attached to Inter-Miami because he's going to be an owner. And the longer that you can create that relationship in the mind of consumers, The longer that this is Lionel Messi's Inter-Miami, the longer you're going to get that Messi effect.

10:28The longer you're going to get people that buy Inter-Miami jerseys because it's linked to Messi. Players that want to sign because they want to play for Messi's team. And so that's what Inter-Miami has done. I think it's actually quite brilliant to say, and now Messi's bought in. Literally, 20 % of the team bought in saying, I want to grow this brand more. And it's a really smart business move. Do you imagine Messi being an owner the way that David Beckham is very forward facing, though? Do you imagine that he'll do that after his career is over? No. You know, Beckham is a different beast. This is a marketing machine.

11:02I mean, you know, you still see him in underwear ads and and cologne ads and all the different things that all the brands that that he's touching still. And he doesn't mind getting in front of a microphone. And he never has. When he came to MLS, he did a whole day of interviews out on the field at Home Depot Center, which was what it was called at the time, with every national news outlet. Messi has given one press conference since he arrived in 2023. He is an introvert. He doesn't like doing media unless it's media in Argentina with the people that he trusts and likes or in Spain with the two newspapers he deals with.

11:35And so I do think that you're going to get less of the salesman. You're going to get less of the guy in front of the microphone. But that hasn't mattered for his entire career. I think that's one of the most alien things about Messi is that he's so good at what he does. He's so good at soccer that people follow him even though they get very little access to him. And in a world where access matters more than ever, where you can follow what athletes are doing on Instagram and they're all trying to have their own production companies and LeBron's got his shows, Messi does none of that. Almost none of it.

12:07His team puts him in some advertisements, but that's about it. and and yet he is one of the most brilliantly popular athletes in the world so will that continue after he's done playing i think so i think having the legacy of the greatest of all time is going to have a you know it's going to last um but it will be interesting to see how much he leans in how much he's present how much he lends his face even sitting in the in the stadium to that part of it and i i i think that what what's interesting is towards the end of my writing this book, actually after I filed the first draft of this book, when Messi, I got into the book that Messi signed the contract extension and he goes down to the stadium and he's there with the other owners, Jorge Mas and Jose Mas and David Beckham and their families.

12:52And the stadium's under construction at the time and they do a video of him signing his extension. And then the four owners walk around the stadium with their families. Beckham's parents were there, the Mas brothers brought their families and Messi's family was there. And I think that's when it hit him. I think like the physical manifestation of his ownership, the stadium being built, like he knew that I'm an owner, I'm not just a player. And that had been true since he signed. But to be standing in a stadium that you own a part of hits home pretty, pretty hard. And I think you've seen him since then start to maybe exert a little bit more control, a little bit more actively within the team right now.

13:30And I think it's because he enjoys the idea of being an owner. So I do think we might see him be a little bit more involved than most people would guess just based on the history of how little he wants to interact. That was senior writer at The Athletic and author Paul Tenario. And you know what? There's so much more soccer to talk about, more about how Messi's changed the MLS, and what this World Cup is going to do to boost the sport in the U.S. So stay with us because we are going to continue this conversation with Paul Tenario up next. That is straight ahead on the Bloomberg Business of Sports for Vanessa Perdomo-Maglione and Randall Williams.

14:05I'm Michael Barr. You are listening to the Bloomberg Business of Sports from Bloomberg Radio around the world.

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14:55I'm Michael Barr. I'm Vanessa Perdomo Maglione. And I'm Randall Williams. We are back talking with Paul Tenorio. He is the senior writer at The Athletic and the author of The Messi Effect. To talk more about soccer in the U.S. as the World Cup is just days away. So let's get right back into our conversation with Paul Tenorio. At some point when Messi does hang up his cleats, do you think he'll have a presence at the ownership level? I remember reading about Michael Jordan in the 90s and when they were collective bargaining and all these different figures, whether it be NFL, WNBA recently, where players are standing at the podium and having conversations with owners, whether that be from the union side or from the ownership level and saying, listen, guys, I understand you guys have a lot of money and I respect your business acumen.

15:43But at the same time, I played in this league. I've made a lot of money in this league. And this is what's best for the league. I imagine that Messi could have a tremendous impact if he was speaking to owners in that way. But it doesn't sound like that is going to happen. Yeah, I mean, I think the owners should be counting their blessings that Messi doesn't like to do media, right? Because if he just came out now as a player and said, hey, this league needs to spend more. And I have in my book, he says it privately to Hort Hamas. What more can I do, right? I'm doing my job. I'm filling all these stadiums.

16:14We're driving revenue into the league that didn't exist before. and what are the owners doing with it, right? Would it matter if he walked into the boardroom and said that? Absolutely. Absolutely it would. And I don't know what his role, David Beckham's, I think, gone to two board meetings, one recently that I was at. And of course it has an impact. Those owners, they like to be around powerful people and they like to be around celebrity athletes, right? That's why they buy teams. They want to feel like they're part of the team, right? And so, yeah, when Beckham walks into that room, you better believe that he's like a magnet and what he says carries weight.

16:51And I would hope that Messi leverages that opportunity. And I think it's something he should want to do. When you own a stake as big as he's going to own in the team, you should be saying what's best for the business. And who knows the business better than I do? I'm the one who played, right? But I don't know. I could see him maybe communicating through the Moss brothers. But I do think it's important. When we talk about dynamics of boardrooms, I mean, personalities are very different in there. Phil Anschutz is not going to approach a meeting the same way Jorge Mas does. He's a much bigger personality than Mas is.

17:30But when Phil Antrim shows up, you know it's important. How do those owners interact gets you to the votes? It's almost like you're in Congress and you have to whip votes up, right? You've got to create a coalition and start to build consensus. And I think that's where people like David Beckham and Messi can be really important. because if you're an owner and Messi sits down with you to have a coffee and says, why don't you come vote with me? I think he's got a good chance to bring some votes over to their side of the table. Hopefully, MLS makes these roster rule changes before Messi has retired from the league.

18:01To your point of how do you get some of this bounce from the World Cup? How do you bring more players? You've got to give the owners the freedom and flexibility to spend the money to bring them. And Messi's going to play in this World Cup. Maybe he's going to win two in a row. Maybe he'll pass Maradona as bringing multiple World Cup titles to Argentina in his time. Don't you want to take that and bring more players to play while people are watching Messi? I think that's really important. We'll see if the league can get there. Obviously, in my book, I kind of lay it out there to say this is the last step needed.

18:33And for the athletic, I'll keep covering every single meeting and trying to see what these conversations are. But the reality is there's a CBA negotiation coming up too. Don Garber is going to be out as the commissioner. A new commissioner is going to come in. Getting that decision right is critical. I mean, Garber's done an incredible job building the infrastructure of MLS, bringing in expansion owners and focusing the money on stadiums and training grounds. But the next commissioner has to come in and know how to get a big media rights deal and how to move the product forward, how to move the soccer forward, so that people say it's worth watching this the same way it's worth waking up on a Saturday morning and going to the local pub and cheering for Arsenal or Liverpool or Manchester United or whoever.

19:16And so that's why I think the next two years coming out of the World Cup are going to say a lot about what MLS's future looks like. I think the interesting thing is that you wrote an article recently about how this team has a completely different job than the 94 team did. The 94 team came in and they established the MLS and they kind of introduced soccer to the U.S. but I love that you said you compared it actually to the 99ers and what they were able to do and how they made the U.S. believe in soccer. What is the job of this 26 team? You know, obviously, if they don't win, how far do they need to get to?

19:53And like Randall was saying, I mean, not a lot of them play in the MLS. So how does them having success then translate to the U.S. soccer market? The further this team goes in the tournament, the more it's going to kind of galvanized the country around them, right? And that's where 99 was so crucial, right? A sold out Rose Bowl, Brandy Chastain scoring the penalty, ripping off her shirt. Everyone was watching that game. It was the greatest moment in the U.S. sports. It was incredible. It was incredible. And it changed the way people thought about soccer in this country, not just with youth participation, but in general, like, oh, we can have a really good soccer team, right?

20:30And then the men have not been able to kind of carry that legacy. They haven't been able to do what the women have done. And that's been consistent. So the further this team goes, the more they can start to change minds about men's soccer in this country. And then after that, the onus goes back to Major League Soccer. Okay, if you are able to make a run, how do you now change your business so that your product lives up to what the people just watched the World Cup? Because those players are, when they play well, they have a high quality level, but you're going to see a difference when you turn on an MLS game versus what you just watched at the World Cup.

21:04They have to close that gap. I call it the perception gap. You have the actual quality gap, which is solved by money. Pour more money into the product, you can close that quality gap. But you have to close the perception gap too. Kind of casual sports fans to say, man, MLS is not real pro soccer. It's not the same level. I'm not going to pay attention to it. Diehard soccer fan statement. MLS is not the Premier League. I'd rather wake up on a Saturday morning. Okay, well, MLS is actually better than most casual fans think it is. But it's right on where those diehard soccer fans think it is. So how do you close that gap of the casual sports fan to say, this league is actually better than you realize?

21:42Well, you do it by bringing more quality in. You do it by creating momentum. And the national team is the start of that. The national team can create momentum where people say, all right, I want to watch soccer. I want to watch soccer. MLS has to take that and carry that momentum forward and put a better product on the field. It's really – I get frustrated sometimes covering this league. You can feel it when I write my columns on The Athletic. I'm like, it's not that hard, man. People want to watch the best product that they can get. Put a better product on the field and more people will watch it.

22:14And that's what MLS has to do. And I think – but I do think there's a huge responsibility on the shoulders of this national team to build belief. That's not easy to do. You've got to go win. You've got to beat some big teams. you gotta have iconic moments that's what we all love as sports fans you know we can pick out games that we watched in whatever sport and remember those moments that stick with us maybe it's a big national moment like brandy chastain the other day i was telling a story my colleagues we went to dc for a meetup planning the world cup my uncle was there and we're talking about going to an nfl game in dc at rfk stadium and i watched from behind the end zone daryl green intercepted a Scott Mitchell pass, returned it for a touchdown, and over time they won.

22:57I can remember the whites on Daryl Green's eyes getting big as he caught the interception. That's how close I was. And it stuck with me. That's sports. Can MLS start to create those moments that actually resonate with people? They're not yet. They have to. And the biggest criticism with that and bringing in more talent, it's kind of what you were saying too before, is that they have to just be able to get more players in because people say, yes, well, Messi's here, David Beckham came. They all came towards the end of their career. So getting bigger stars in their prime is the answer to that. Like you were saying, it's just changing the rules.

23:32I think so. And I think part of it is also this tension and this idea around competitive balance, which is based off of the NFL model, which is not a surprise. Because the founding owners of MLS are the Kraft family and the Hunt family. And they are NFL families. And competitive balance has mattered to the NFL. But that's not the only way to do things. You know, the NBA has a lot of fans. Its competitive balance is not the same as the NFL. People still watch the playoffs, you know, and so baseball, the same thing. You know, people like to root against or for the Yankees. And it's okay to have a big team that everyone loves or everyone hates.