Carlos Ezpeleta: The Plan to Grow MotoGP , Marc Marquez's Impossible Championship, & Multimillion Team Sales (Ep.111)

28:23Carlos Ezpeleta:And that's, I think it's, actually it's analog to what's happening right now in F1. We have new regulations coming in next year. Big changes in the regulations. And again, we haven't done regulations because, we haven't changed regulations because we think we need to fix a sport. The performance was becoming so high that every now and then you have to say, okay, guys, let's sort of, you know, turn it down a notch. We've also taken this opportunity to remove aerodynamics, to simplify it, because we think that that will be better for the racing, even better for the racing, and to remove the sort of active suspensions that came into Formula One 35 years ago and something similar came into MotoGP five years ago.

29:11Carlos Ezpeleta:So we've removed both of those. The sport should be better on paper. It's fresh cars, new set of cars for everybody. but normally, and this is not a popular thought, in sport, in motorsports, when you're coming towards the end of a regulation, the sport becomes more equal. Straight out of the bat with a new regulation, normally the differences are bigger. That's what history tells you. It is not a popular thought, but that's the reality of the business. Tell me about commercials. We love kind of a breakdown of the business models of sports. and I'd imagine there's a few interesting ones here. If we're starting with commercials, what I'm really focusing on is let's use sponsorships, the brands associations and it feeds into the community, the depth of community that you have here.

30:02What are the kind of big brands, the sponsors like right now? Why are they partnering with you?

30:08Carlos Ezpeleta:So right now I think our strength and I think it's also a bit of a challenge is our endemic sponsors. So a huge part of the investment into the sport is endemic sponsors. So tire suppliers, fuel suppliers, lubricant suppliers, energy drinks, tires. So all of this we're very, very strong at. Our ambition is attracting those non-endemic sponsors who, one, elevate the brand. Two, they're also excellent marketeers and they activate very well. So they will also be pathways for new fans into the sport. That's why non-endemic sponsors are so important. Partners in the blue chip, partners are so important to the sport.

30:48Carlos Ezpeleta:I would say that right now we're seeing a lot of interest. We're also seeing a lot of growth in our business as usual, let's say, so on. Race promotion, endemic sponsors, all of that is going very, very well. So it's very good to have sort of stable ground. When you're moving things over here, it's very important to have stability and growth over here. Yeah, quite often it can be far more impressive or valuable to a brand going, we have 10 million diehard supporters than 1 billion followers. Yes, exactly. And one thing that you see is MotoGP fans, 82 % of our fans watch at least 75 % of our races.

31:30Carlos Ezpeleta:They are so engaged with the sport. If you go to any MotoGP event, go to the grandstands and ask them, you know, what's the top five of the championship? They'll tell you. I mean, they consume... That's an amazing stat. It's an amazing stat. So it's 80... 82 % of our fans watch 75%. 75%. Wow. Yes. So, I mean, we really connect with these people. So, again, these companies, these brands who partner with MotoGP, they see a very quick return on their investment because these people are engaged. They are consuming the brands that they see. They choose those brands before others. so I think you know a big part of for us is to take that you know impact to non-endemic brands as well as you know working on sort of you know state-of-the-art activations cooler activations on site off site that's a that's a big area of focus for us right again if I'm like a modern day consumer brand let's say I'm diving into the Spanish Italian market at a particular level that's an amazing opportunity to do it and you're more likely to stand out in something like because you'd be one of the few businesses at this stage who's really embracing that non-endemic status.

32:43Carlos Ezpeleta:Yes, and you'll have sort of ownership during a number of years. Other sporting leagues are more cluttered in that sense. You can sort of have that ownership over the whole sport. Do the manufacturers like the Hondas and Yamahas, I'd imagine this is an amazing shop window type environment for them. The mindset has always been win on Sunday, sell on Monday. That's why, I mean, Honda is... Win on Sunday, sell on Monday. Yeah, of course. That's been the mindset, and that's why, you know, Honda is sort of the legacy manufacturer of motorcycles. They have had the most success in MotoGP over any other manufacturer.

33:27Carlos Ezpeleta:They're also the biggest manufacturer ever, by which, I mean, they have these, they have, you know, in some of these markets, Southeast Asia and South America, they have over 60 % of the market. And it's because those markets have consumed MotoGP for decades and decades in which they've had these icons and Honda winning, Honda winning. And they know, Honda knows, I must continue to win to continue to retain that market in these areas. So of course, it is a huge asset for them to sell bikes. It is also what breaks them apart to all the other motorcycle manufacturers. Having said that, and I want to highlight this, MotoGP is much more already than motorcycle fans.

34:14Carlos Ezpeleta:Actually, only around 20 to 25 percent of our fans actually ride or own a motorcycle or have a motorcycle license. So it's actually quite skew. People, there's this content of when you come to you know some of the races where you see these huge parking lots of motorcycles it's normally about 10 to 15 percent of the fans who come in motorcycles it's not more than that in most of our markets the reality is that there's there's huge there's there's a lot of motor gp fans who are not even interested in purchasing or buying a motorcycle themselves for the mortars motorcycle brands it is what sets them apart you also you know when you're dealing at that level your unit price you know to conversion 25 is a huge amount for them to still target yeah exactly and you know for them it's sort of the r &d you know the transfer from the technology into their street bikes you know so i think a lot of that is there uh it's sort of like building that you know um reputation but we do see motor gp as a platform to you know promote any brand not only motorcycle brands of course your return on investment is probably higher selling motorcycles than you know watches or whatever but it is already very very high for for any brand because of this conversion with the fans yeah anyone watching and listening tell me about the sorry i've mentioned a couple but just just from you in case i've got anything grossly wrong strongest markets and biggest opportunity markets so we've divided we've done a lot of work with this um i think you know in this in this sort of moment of change that we've had or that we're in and this journey the first thing that we wanted to do is build a team hire new talent bring new global talent into the company people from other sports people from non-sports you know marketeers um so as we've developed the structure the first thing that we when we developed our marketing structure, the first thing that we've done is invest a lot in the data and insights.

36:19Carlos Ezpeleta:And basically seeing where we are now and what do people love about MotoGP and how can we use those things to attract new fans. Not research about why fans love other sports and try to do that to captivate MotoGP fans. I think that's an important distinction. so a lot of what we've done is you know breaking down those markets and we've people people also speak about like US is one market and it's quite I mean it's easy yeah it's like the easy shortcut but I mean you know these are five hour flights you know between those you know so yes they all speak the same language it's the same culture it's one you know unique market but I mean you know I think that Spain is very different north to south, and it's tiny little markets.

37:11Carlos Ezpeleta:So having said that, we see that our mature markets in Spain, Italy, and France, where we've been able to really penetrate those markets and monetize them more effectively than others, that doesn't mean we're dormant in Spain and Italy. We continue to do things to make the sport more mainstream, have more of a presence year-round. And our strategic markets are the US and the UK. And we see that just, you know, one, because of the size and importance of those markets, not only by themselves, you know, fan-focused, but also sponsorship-focused, because the decision-taking of, you know, of brands being central in the US and the UK.

37:57Carlos Ezpeleta:And then we have, you know, the opportunity markets for us, sort of Southeast Asia and South America. So Brazil, Argentina, Indonesia, Thailand, India, China, those, and not that you can sort of group them together, but your way to attack those markets between those three sort of core strategic and opportunity, those, the way to, you know, activate in those markets is probably kind of similar. Do you talk about attention economy much? It's something that comes up a lot on our show.

38:33What eyeballs we joke regularly that you know we are as much on spotify where you know this show one of the platforms this shows goes out on competing with taylor swift as much as we are the next business podcast or sports podcast therefore how are we providing something different how are you continuing to shape what you do in a way that speaks to an audience in a different way like getting a share of that wallet has become harder but it's also an opportunity because once you get that quite often the loyalty of the fans that you can attract states people like building these

39:09Carlos Ezpeleta:relationships now you're completely right spot on um that's the first thing that we've done uh we so one we come from a very good place because out of the 632 million fans in the world 50 of them are under 35 so that's great place to come from second and i think you know just you know this is going deeper into the to the marketing strategy but you're completely right i think in it's a balance because on one side, live sports are the only live content out there that's valuable anymore. It is the only thing that people group to watch with. There's communities around, people want to watch it, they want to watch it live, and they consume that.

39:50Carlos Ezpeleta:On the other side, eyeballs are the hardest thing to catch, and you have a very limited opportunity to catch an eyeball where people are just scrolling on the screen. So when people ask us who our target audience is, people normally break that demographically. They will say, you know, my target is American male, under 35. And what we've done, I think, is we've tried to capture a personality, and we've called them the defiance. So instead of sort of breaking it down demographically, country or age or, you know, gender, What we've done is sort of capture our target audience as a personality. And they are the defiance in a world where, you know, everything feels scripted.

40:38Carlos Ezpeleta:Everything feels unnatural. And everything kind of feels the same and predictable on your iPhone, on your TV. MotoGP, we feel, and I feel very strongly about, can help break that barrier down. Because we are fearless, because we are bold, because we are unscripted. because the only thing that you can expect in MotoGP is that it won't be expected. And going into that personality, it really has to trickle down to everything you do from the content that you produce to how we produce ourselves to how we speak to our fans. And we've centered all of that around our season campaign this year, which is called Magnetic Defiance, which we'll share a video so you can post it at the end of the free content for you.

41:25Carlos Ezpeleta:Amazing, fantastic. Licensed as well, excellent. But it really sort of englobes what we're trying to do here because it is hard to stand out, but we feel that MotoGP, through the unique attributes of the sport, does really have an opportunity to stand out. We've got a very long way through the conversation without talking about some of the incredible personalities and riders you have. And again, a very, very common theme now is the importance of athletes and individuals. People's consumption habits are as much geared towards the individual as they are a team. Historically, that was less so the case.

42:01Now, you have some amazing people in this sport, and you've highlighted the danger element, you've highlighted the skill, but I also appreciate it's more than just taking the helmet off, you know, finding the right way to build the value in and around what you're doing and be authentic. You're not just drive to survive for MotoGP. How do you plan to capitalise on that shift of everyone's interest and attention? hopefully getting the riders to buy into this and help use them in a really authentic and productive way to further this growth and development of the sport i'd have been surprised

42:39Carlos Ezpeleta:if we had an hour conversation without mentioning drive to survive um i'm sorry i did quite well yeah it came on later on and even then i'm saying you don't want to be drive to survive Exactly. No, I mean, it's very, very clear. You could even use the exact same producers, the exact same team, everything the same, and it would probably not have a nearly similar effect because, one, that has been sort of played out now. Like we tried, you know, all the other sports have tried and it hasn't really had that effect anywhere else. so sort of a unique point in time where they were sort of very innovative and so the first thing speaking to the people on our board the first thing we need to try things it's clear as that because on the creative side

43:33Carlos Ezpeleta:one producing company could make the best movie ever and then the same guys will probably so there's no sort of scientific rules for these things So one, we need to try things. Two, I think that people just, and you're completely right, people want to connect with the personality. People want to see a cast of characters, you know, want to see 22 writers. They want to see the silly one, the funny one, the serious one, you know, the reckless one. And that's what will make people connect with them because you connect with, yes, people want to see who wins, but they also want to connect with those riders.

44:12Carlos Ezpeleta:And it is much more than just taking off their helmet and showing their face. It is them showing who they are, and especially showing who they are year round. The biggest growth for us from MotoGP is going to come outside the 22 weekends of races. The other 30 weeks of the year, how are we connecting and you know building those personalities and showing them to the fans that's what's really going to drive growth it seems like last year you had one of the most incredible stories and broader sport if anyone like you know layperson like me who you know isn't deep in the sport if they know anything the names that are probably going to resonate with them may be valentino rossian and maybe mark marquez um seven time and seven time world champions is that correct yeah but mark marquez's seventh came last year under quite incredible circumstances from his last one which i think he won in 2019 he then had terrible injury that hampered him along with troubles you know with bikes and developments etc he left uh honda went to ducati and then won this kind of incredible title last year dominating really didn't he i mean an incredible performance you wouldn't believe it if it was a movie people are calling so a lot of people call it sort of like the biggest comeback in the sport, and I continuously tell people that it's the biggest comeback in sports, period, because other sportsmen have come back, other athletes have come back to, you know, win a trophy, a tennis masters, a boxing game, whatever it is, but to completely dominate after five years of probably the deepest pit that any athlete has been in, where he's had sort of four surgeries.

45:52Carlos Ezpeleta:He's lost his eyesight, recovered it. I mean, it is truly unspeakable what Mark did last year. And I mean, again, not to just win, but to win in that fashion. After all that risk, these guys, they are the best in the world at what they do. They do pretty well for themselves economically. So it's not just like, I'm going to play another football game. It is, I'm going to put my life on the line one whole year again, and then another whole year again. And having done that unsuccessfully for five years, and then come back and dominate the sport, when we're able to find the right format to tell that story, because it's not easy right now, that's the reality.

46:32Carlos Ezpeleta:But I'm sure it'll be a blockbuster because it has all the ingredients for that. And it's, you know, it's going to be, I mean, Mark's career is far from over because he's, I mean, he's 33 this year only i think uh but the achievement is really huge and you know sort of tying his rival you know and now looking you know this year to to to really equal the the historical record well i mean it's really big we need to make sure that we're you know capturing all the content to make sure that when when that story is ready to be told we have that how is the relationship between you operating again for moto gp and your riders and the teams it's amazing hearing you speak about it like that and it's amazing hearing you speak about him like that where's that relationship how's it structured so i mean it's very similar to so like all the other motorsports i speak like this because i'm a huge fan as you can tell not not of mark just of the sport itself we have our agreements with the teams they have agreements with the riders, but we do have a very direct relationship with the riders because of sort of this risk factor and everything.

47:40Carlos Ezpeleta:So we meet them every Friday. We discuss, you know, the safety of that circuit. We also discuss, you know, things like, you know, is the championship, what's the direction? Are there too many people in the paddock? So, and it's sort of a safe place for them. So our doors are always open. And I think, you know, building that trust relationship is very important in this sport more than any other. And is it really important for you to find the right ways to balance, should we say, some of the pressures and the commercialization piece that may fall on the individual riders. When you have someone that stands out as much as he does, you have to make sure that you still have the balance.

48:14You don't want to have an, it'd be very easy to, if I say over-exploit, it'd be very easy to, you know, have a huge reliance on then that one person to do the job. The reality is you still have to build the collective. Yeah.

48:23Carlos Ezpeleta:And I think it's, I mean, it's clear as day because we're in the long-term business, you know, so you don't want to, you know, you don't want to focus your efforts on one single athlete. For us, it's particularly hard because we have a very interesting and competitive sport at the front. And we have 45 minutes. So you don't want to, you know, it's really hard for us to, you know, look back, you know, the fight for 10th when the guys in first are sort of fighting each other. But I always tell our guys in sort of the content production, we need to make sure that we're telling all the stories. Because we sort of, you know, for example, not that he's always going to be at the back, but Gunter, through that new presence in the championship.

49:03Gunter Steiner, this is. Gunter Steiner, this is, yes. The legend.

49:06Carlos Ezpeleta:The legend, yes, the one and only. We need to make sure that we're telling all those stories. I think that's an experience from other sports where some of the fans have been created from some of the people who weren't really fighting for the wins. To be clear, Gunter has now been joined, well, he's joined the sport as chairman of Tech 3. Is that his official title? Is it chairman? President? I think it's CEO, I think it's president. CEO, president. Supreme leader. Supreme leader, if you call him that. I mean, we've had the pleasure of him sitting in your seat. And he is, I mean, as everyone knows who follows motorsport, an unbelievable character.

49:43Carlos Ezpeleta:Gunther has led the acquisition of one of the historic teams of MotorGP. So we're really excited. It's a transitional year for them. This one, 26, as I think they're, you know, of course. And I've heard a lot of very smart people around sports say this, and I think that's why it's probably valuable for them to think the same way, is the first thing that you do when you're sprinting to sports, not do anything for the first year. I mean, don't think that, you know, like you're the smartest cat in the planet and, you know, everything that's been done before is nonsensical and you're going to come in and change everything.

50:16Carlos Ezpeleta:And I think that that's the right approach for them this year is just to come in and sort of, you know, learn the sport, learn the dynamics. Of course, you know, start cultivating those relationships and, you know, build growth for next year. I spend a lot of time of the week speaking to Gunter, you know, between swear words is most of it, to be fair. We did our press conference last year when we announced the deal. And there was bets about how many, you know, how long would go, how long would it go, you know, his introduction into the world of MotoGP before he swears. and i think it was like a minute and five seconds i wonder how many he did our editing team had to pay overtime when they edited our show and we're generally maybe quite relaxed but maybe if there's one or two per show every yeah yeah every fourth word is thank god for ai editing technology when you can program some of that stuff in because it was not easy um but as part of the charm it's part of the appeal it's a different type of profile and personality and focused if you have people away from the bikes as well behind the scenes taking some of that media attention you're you're creating that protected ecosystem but really strong ecosystem yeah it's it's again your cast of characters is sort of your 22 riders you're 11 you know team whatever it is owners principals ceos whatever it is and those are all path like the way that you you want to break it down, you have this sport and you have pathways into the sport.

51:41Carlos Ezpeleta:And a pathway into the sport can be our social media channels, Instagram or TikTok. They can also be Gunter Steiner because somebody, you know, so all of these pathways into our own, like we just want fans of the sport and the sport can be fans of us, can be fans of Gunters, can be fans of Mark Marquez or Fabio Cortaro. It could be any of these pathways fans could come through a sponsor fans could come through a broadcaster or through a new race venue those are the ways that you build a sport up or an excellently executed opportunistic piece of shoulder content that i meant to mention when you were talking before but tell me about uh tell everyone about what you told me yeah so we had um we we had our first race uh the season about 10 days ago in in thailand it was it was a complete sellout so um record record crowd really happy with that and again so it builds sort of on very positive announcements and we're trying to do I think a big thing for us is that we don't we are sort of magnetic and you know very defiant but we take the sport very seriously but we don't take ourselves too seriously so instead of doing sort of the the normal rider parade we got our riders to do a tuk tuk race with exactly what people imagine in Thailand.

53:02What you're picturing now is what it is. It is what it is. It is exactly.

53:04Carlos Ezpeleta:Don't expect like a Tuk Tuk, you know, Motor GP. No, it was exactly. So, you know, we wrapped them up all in the colors. So the riders had to do half a lap and then switch between the teams. The one guy would be driving and the other guy would be in the back. And then halfway through the lap, they'd stop and they'd switch and complete the lap. and just highlights here. The three videos that we posted about TikTok, about the TikTok challenge, sorry. The TikTok TikTok. Yeah, the TikTok TikTok. They are like sort of double the amount of views of the race win that weekend. And the race win was really good.

53:44Carlos Ezpeleta:I mean, it was last lap, people rubbing shoulders, et cetera. And so all these, and it was great. It was, to be fair, we sort of developed from should it be a tuk-tuk parade? Should it be, you know, just want to be on the safe side? And, you know, some of the riders were telling I'm not getting on the back with him. Like, no way, no way, no way he's driving me around in a tuk-tuk for a race. But it was really funny because one of them, like, they did a wheelie with a tuk-tuk. The other guys, like, were, like, leaning, you know, to the sides, like it was a side. You said that was the Aussies, right?

54:15Yeah, the Aussies. I mean, obviously.

54:17Carlos Ezpeleta:Obviously, yeah. So we have two great guys, Jack Miller from Australia and Toprak from Turkey. And they are, I mean, they're hilarious, both of them. They're doing, I mean, by the way, I think they're starting last and they wiped the field. They won by a mile, the Tuk Tuk race. But when they started, they did the wheelie. And that video alone, I think, got like nearly 30 million views on Instagram. You will attract fans through doing stuff like that as much as you will through sticking to your core product. And I think the key is it doesn't have to be one at the cost of the other. Exactly. And I feel that this is exactly what I mentioned earlier.

55:00Carlos Ezpeleta:Our current fans loved the Tuk Tuk Challenge. They loved it. You see the comments, they loved it. So the sports and entertainment, it's not from sports to entertainment. It's both of them, and they're not at heads with each other. I feel people really have to understand that you know and fans really have to understand that when when not only us but other sporting properties are doing these changes sort of long-term growth when I was uh doing all of my extensive research I kind of I wrote a little bit at the end kind of like as a closer and I never do this but I was very proud of it as I kind of got to the end because I wondered whether it would hold up whether what you had said had matched the type of opinion that I have just through through going through all the information my summation of what i saw and how i do feel you've positioned this was that you can either become a much larger entertainment property or preserve the pure racing identity and grow more modestly and conservatively but the key is that you're laying the foundations for growth rather than immediately monetizing everything is that using that obviously highly intelligent entry point those are my ramblings and notes but i feel like from what you've said that actually does meet it don't go and blow everything else out the water first exactly uh and i mean that's very very intelligently said very well spoken thank you i can send it to you afterwards if you want in the motor gp website but i i think it is at this partner summit that we had a couple of weeks ago we we we highlighted the fact that we we want to walk into the right decisions not run into the wrong ones and you know whilst of course me myself as you know part of management we're like we're putting pressure on the team and we're going to do, but we are, we're in a hurry for long-term growth.

56:52Carlos Ezpeleta:We're not in a hurry for short-term growth. We're in a hurry to establish the foundations for long-term growth. And that really synthesizes what we're trying to do. Having said that, we're, I mean, we're coming from a really positive, you know, two or three months. You know, we're, next week is our first race in Brazil. We're back to Brazil after 25 years. We've also announced a new race next year, sort of March next year in Buenos Aires, so downtown location. We've also announced a new race venue will be at the end of 27 in Adelaide, and that will be the first ever sort of modern day MotoGP downtown circuit.

57:36Carlos Ezpeleta:We had a huge Kuala Lumpur season launch event where we We closed the Town and Towers. We had really great content of fans in the MotoGP bikes, and we had music there. We had Pausa. We had the script to British people. Great, great. Yeah. So we are starting to see a lot of quick gains on the investments that we've made during the past two to three years. But you're completely right. One of the biggest values that Liberty Media gives, brings to the table is being able to have that long-term mindset for growth and for basically brand and perception. And the way that we get there is going to be authentic to the sport itself because it's such a strong sport to build on.

58:27Well, we couldn't wrap it up more powerfully. Thank you, Charlie. Carlos, honestly, it's been amazing. I so love having new things to talk about and hearing something like this from the detail that you've given. I apologize and please, I apologize to all the fans. You know, this is, again, Carlos is catering to someone without all the lifelong experience, but it's brilliant to be able to really understand how it works. It's brilliant to be able to put it into the context of things that I do understand and kind of build on those relationships.

58:53Carlos Ezpeleta:So thank you for coming and thank you for being, you know, so open and honest about it. And I absolutely loved it. Thank you very much, Charlie. Thank you so much to Carlos for joining us. As I said at the beginning, absolutely one of my favourite shows and I learnt so much from speaking to him this is something to watch closely I look forward to hearing what you think about it a huge thank you again to Carlos for joining us now if you want to see more from today's show you can do so by going to YouTube or any of our other social channels across Instagram and TikTok there are more snippets to share and bite-sized chunks to consume and whilst you're there please do like, subscribe and follow the show as you will hear from your other favourite pods it makes a huge difference when bringing you the best guests and conversations from around the world of sports, which is of course our end the same.

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