Rufus Hack, Sony Sports CEO: ‘From The Makers of VAR; Is Tech Making Sport Better? (Ep73)

26:01You're always going to want to have talking points around football, right? If we lost it, we can play. If we have it, we can play. Exactly. So I think there is something to that of it creates talking points around the game. It increases accuracy. There's also some softer factors that I think we forget, particularly with VAR. One is you don't see the career-ending tackles that you maybe had five years ago. They've come out of the game because of it. You don't see the feigning and the diving the Klinsmans of 10, 15 years ago used to have. So the game, I truly believe that as these products all mature within every sport, it will help on both sides of the ledger.

26:37It will help make it more accurate and it will help make it quicker and more entertaining. So then we talk about the fan experience and the pressure on that. It's different in different sports, right? You talked about tennis, when we have it in cricket, rugby, TMOs. Generally, the consistency across those is that the fans can interact when the technological decision is part of the game. In football, for obvious reasons, you know, we don't need to go into it. You show too much of that, it can create some issues. Is there a way to introduce it to football? If there was a pure reliance on technology, do you think it becomes easier to show something in football?

27:05Because there isn't necessarily the target for blame. A fan can't go and try and tear down a decision made on a very accurate piece of technology. But it can, someone sitting in Stockley Park, making another subjective decision outside of the referee's control. I think that helps that there is a level of objectivity. I think it also is, as we talked about previously, really important how you display that. And I actually think Premier League and I know FIFA and UEFA have been behind this as well. It's great that they've started to trial these announcing what's going on to the fans, whether that's through the refs being mic'd up like they do in the NFL, whether that's through having the images or the replays on the screen.

27:44I think one of the things, and again, people within football have been very vocal on this historically. One of the things that football hasn't done particularly well is maybe sell the fan experience of that officiating decision, particularly in stadia, but also on the screen. And I think there's more that you can do to make the fans feel part of that decision journey. and just for the record I'm in no way saying that we should be comfortable with having three to five minute delays around the game like that's not great like the athletes are finally finely tuned thoroughbreds like these guys shouldn't be waiting in the cold for five minutes and so we need to be quicker we need to automate what we can automate we need to display that well but when done well I think it's really really value enhancing do we maybe rugby we do the TMO technology in rugby can you go back maybe too many phases are they checking the wrong things that potentially in rugby, do they overcheck it?

28:38Should you be using it to check scrums or something like that? Or should it just be for really definitive moments in the games and X phases back? So I think there are parameters we can put around it to make it more efficient in its usage. But I would hope that over time, it can be something that really helps the game. Something like tennis. I've actually come to love the implementation of the challenge in a way because I never think it takes too much time out of it. The odd occasion, maybe you wait for a long time. But in general, it's pretty quick. But I also, I don't know, there's something I love about a line judge.

29:10There's something I love about that part of the sport and the fact that you still have people behind each line whose sole job for a huge amount of the match is literally to be on there. And some of the calls they make are incredible. You're looking at it going at 140 miles an hour when Andy Roddick was pelting down a server. How can you see that? To fully automate something like that, do you think we're in danger sometimes of losing some elements of an industry which still make it incredibly special? so we we've had this debate a lot in tennis so electronic line calling was really driven within covid where there was obviously restrictions around people movement personnel etc and the u.s open were the early adopters with electronic line calling then the aussie open followed all england as i said wimbledon are doing it this year atp have mandated that all their i think it's their masters and thousands are going to use electronic line calling from next year WTA are looking at the process.

30:03So I think it's the direction of travel from an accuracy perspective, but also from an efficiency of event operations perspective. Do you potentially lose something to the dressing of the court? I think it depends where you are. I mean, if you look at the US Open, the court looks so clean without any line judges on there. But then you think about Wimbledon and you think about all the line judges there wearing their Ralph Lauren gear, which is I was going to say Ralph Lauren. A nice, responsible asset. And you have to think about those trade-offs. But ultimately, it's the right debate to have, right?

30:37And that's not necessarily why all, you asked the question earlier, why are all organisations not bringing this into the same point? People bring it in at the right speed based on their commercial programme and how they think it's our value. We're speaking at the moment with Roland Garros. Now, ball tracking on clay, there is another dimension. I don't know if you saw the Zverev incident recently in the Madrid Open. We're very confident in that call. But that is actually really... On record. It's a very interesting point that actually where the... And ATP did a really good educational video around this.

31:10Where the ball bounces on clay isn't... The print that's left isn't necessarily where the ball necessarily hit because of the compound of clay and how much clay is on the court. And so there's lots of different variables that can upset that. And obviously you don't want in a final of Roland Garros having an incident like that where it looked on the TV pictures that actually it was out and it was called in. So this is why the pace of adoption has to be really sensitive to what makes that slam or that event special. And it has to be really sensitive to why the fans love that sport so much. Look, we could talk about the implementation of technology and officiating for so long, but there's so much more that you do and that you're involved in, particularly now with Sony's involvement in, shall we say, elevating those fan experiences, creating unique concepts.

31:59And the one thing I really wanted to get into here, which is amazing, it really took me to a different dimension of how I saw the opportunities to consume sport, was some of the work you've done in the US with someone like the NFL, when you've leveraged the IP of different partners to create a different viewing proposition. Beyond Sports is now part of the Sony family. The particular reference that it'd be great if you could talk to you, but I'm sure there's more, is the Toy Story IP being leveraged for the NFL and creating a product alongside that. Can you just tell us how you've been working to elevate that fan experience with these major rights holders, with these big tech companies?

32:35Yeah. So I think if you speak to any sports CEO commissioner, the biggest issue that we'll talk about is how do we engage younger fans? And we talked about that at the top. This is something where I think our industry needs to do better. And it's very interesting. like when we work with the US organisations around this, they're a lot more focused and enlightened around taking responsibility for unlocking and engaging younger fans. Typically, and that's a big generalisation, than they are over in Europe. And again, this leverages the data that we collect. And this is why we brought Beyond Sports into the family alongside Hawkeye.

33:14What Beyond Sports are able to do is they can effectively recreate the game based on all of the data points that you're collecting from the athlete in a virtual environment within a circa one second latency. So once you have that data in a virtual environment, you can recreate the games in any form of IP that you want. And then it almost just becomes like a computer game. You're not constrained by the producer who wants to show you a particular angle because all of the data at the same latency as the main production is coming to you in a digital environment. And then you can start to do some really cool stuff with it.

33:48Like we are just sort of touching the sides of what you can do so what we've done so far is alt casts so we did one with the nfl in december where we recreated one of the cowboys jaguars game in simpsons ip we did the toy story one 12 months previous we did something on christmas day with the nba and mickey mouse ip we've done pretty much weekly recreations this year with the nhl who are really trying to make it more episodic and i'll just say for people if they're actually if we're allowed to on I don't know rights but we'll put some of this in the video if you're listening to it you can check it out on the on the youtube version because it is absolutely incredible to see so I just wanted to tell people that it will be there if they want to have a look and and it's great because the NFL really get behind it and then the broadcasters really get behind it as well so we've partnered with ESPN primarily around the production so far and they they obviously part of the Disney group we can leverage some of their their IP but then you get like I don't know Bart Simpson throwing the uh the touchdown is actually very interesting with the Toy Story stuff which which was the initial one we did with them, they wouldn't actually allow us to use any of the marquee IP like Woody because they were very worried if Woody got injured or he started a fight or something like that, it might not be good for the franchise or the next few versions of it, which was fascinating.

35:00The issues with live sport, right? Protection, yeah. Exactly. So the most recent one that we did in December with the Simpsons IP for the Cowboys Jags game, it went live on Disney Plus and ESPN Plus. They had 5 million viewers. They had an average of a million viewers. the median age of it was 14 versus 56 on cbs or nbc 62 of them never watched an nfl game before and interestingly for us it skewed 52 female as well so really like the nfl were just they want to do more of it and also the great thing about this business as well is so scalable because we're already collecting all of the data in the stadium anyway for officiating and betting and media purposes so all of that skeletal data is getting collected then it's just really putting in a game century.

35:45It's so scalable. And so the constraint at the moment of having these different ways of more immersive, engaging sports content in more personalised, different IP isn't around the supply of technology or the way to it. It's not even really around the demand. I think it's primarily around the rights cycles and some of the rights restrictions. And what we see this as is a new additive asset class that will sit somewhere in between audio visual rights and gaming rights that can potentially be commercialized and packaged up by rights holders in the future. Because that's what I was going to ask. We have, as anyone who listens to the show regularly, will know a huge number of traditional rights holders, whether that's chief executives and owners of football clubs, rugby teams, cricket, you name it.

36:28Huge challenge right now is creating additional revenue, building on the business lines, leveraging new technologies to help create better business, ultimately. It's very easily said, much harder to implement. doing this kind of work how does that impact them how how does that affect their bottom line how does that help them commercialize better so i think initially what this should do is it should provide new content that is going out to a different audience than than your core content and once you have the content in this virtual environment there are so many things that you can potentially do with it so as we talked about you can start to choreograph the game yourself as the digital viewer so you can watch the game from the player's point of view from above from below you can scan around so it becomes a different way of engaging with the content you can then also we've actually built this this product which we're calling working title hawk ai at the moment which is incredibly, incredibly exciting.

37:29Well played. Yes, thank you, thank you. We had to get AI in there somewhere. So we've been partnering with Cambridge University and Football Manager for the last two years. And so we're able now to simulate how a game is going to play out. So a lot of companies have built something where they can simulate the next play. We can simulate the next game, next season based on 20 years of historical data. And this is a really powerful AI tool. Not only are there applications and we're working with City Football Group and others on this in terms of transfer scouting, but there's huge applications in terms of fan engagement as well.

38:04So, for example, imagine you're doing your fantasy team for the week and you want to do a simulation of how one line-up will play versus another line-up. Imagine if you're watching the game and you've got the real-life game going there and then you've got this virtual game side-by-side, you can make a substitution. You might take off Trent Alexander-Arnold and bring on Robertson and play out your game side by side with a real life game, see if you can make tactical decisions better than Arne Slott. The whole opportunity for us to dive into this virtual world with credible data that's based on the game itself and create new sports experiences that can engage younger fans, I think is powerful.

38:41Can I ask you on that? It's a really good point. There's such a common narrative now that the new audience, the younger audience, their lack of interest in things is based on time. right? Things take too long. They want things quicker. They want things shorter. I have issues with that in some ways. I'm interested to see what you think, because to me, what you're actually saying here is if we find a better way of engaging than just putting a product in front and expecting them to watch, actually time's not an issue at all. We have to just create new ways to help them engage with some of this traditional content with some overlays on top to really elevate the experience.

39:14100%. I couldn't agree with that more. Have you ever tried to get a phone off a 12-year-old. It's impossible. They are consuming huge amounts of content, huge amounts of content. It's not like they don't want to engage with sport. It's not like there are any less propensity to do that, either through participation or consumption, I don't believe. I think we just haven't given them the opportunities to do that. Ultimately, they want to engage, as we talked about, with the more immersive, gamified they want to influence the content but they also want to be stars and so i think we want to make fans as stars like you want to give them the opportunity to create their own content by using some of these tools by sharing it with their friends by creating strava like leaderboards and so i think there's huge opportunities to do that so another thing beyond sports did actually they're based out of okma in in the netherlands they worked with the area divisi and there was one team who had a player from Latin America and they didn't have a distribution deal in Latin America.

40:15So they built this product called Game Face, which effectively enabled you to add your own character and then implement it on top of the game and have him run around. And they had like every game, they were getting 500 ,000 viewers of this on YouTube in Latin America. I think the market is out there. The opportunity is out there. How the commercial model manifests itself down the line as we start to move into this thing, I think it is a shift from B2B to D2C. I don't think we know exactly what that commercial model looks like. But you've got to create that currency of engagement and eyeballs first.

40:49And then you've got the opportunity, whether it's new sponsors, whether that's D2C, whether that's micro skins, whatever that economic model looks like, I think the opportunity is going to come. How do you look at businesses that you think are additive to the Sony group? Then we talk about all the areas you're involved. A huge part of what you're doing is continuing to grow. M &A strategy, I'd imagine, is rife. You're always looking at new places. How do you evaluate some of those companies? We're an investment firm here. We always look at this, where to put investment. I'm asking any good tips, but also in all seriousness, what is it that you actually take into account when seeing if it's the right fit for the broader company?

41:26Yeah. I think the way that we think about it, and actually this is a piece of advice that Paul Hawkins, the Hawkeye founder, gave me a few years ago, and I still think about it, is you don't want to buy companies for scale. You want to buy companies that have the X factor. And if you look at what Hawkeye have done, I think it's probably fair to say they have had a revolutionary or transformative effect on sport. They introduced DRS in cricket, line calling in tennis, worked with FIFA for VAR and goal line technology and semi-automated offside. We're now introducing officiating innovations with all the major US sports leagues.

42:02That is pretty dramatic. When we look at what Beyond Sports are doing, we are with Beyond Sports trying to change how fans engage sports content and they're having a real impact. We recently bought a business in the sports biomechanics space, Kinetracks. They are really trying to change the world of trying to keep athletes on the field for longer using skeletal data to try and reduce injuries and improve performance. Our fourth business is a digital agency called Pulse Life. They're really trying to use AI to give different fan experiences. So we're all about having organisations who are not only symbiotic and synergistic with the companies we've got, but actually have that X factor and are able to do something different.

42:42And hopefully it's a cliched expression, but play to where the puck's going in the sports industry versus where it is today. So there's some of the things that we think about. Through the relationships that you have and working with these existing companies that you have, does part of it, you see gaps as you're going through this. You go, oh, actually, do you know what? If we did a little bit more on this side of it, it could massively elevate our operations on a Hawkeye perspective. I think so. And actually, one of the things I always do when I speak to senior people at our partners is say, are there any companies out there who you think we should be thinking about?

43:12And actually, that's where the Kinetracks acquisition came about. I was speaking to someone at MLB, the Chief Operating Officer, Chris Maranach, and said, are there any companies out there that you think would be helpful to have as part of our relationship as we start to build? And he said, there's a brilliant company called Kinetracks. They're based out of Florida. They work with 22 of the MLB teams and they take skeletal data and they're really driving value. And so I think that's a big source of where we can identify some of these gaps and some of these opportunities. And it's all data integration analytics, right?

43:42I mean, this is what's so important now in sport is being able to create this environment where it's just, It's elevating again. It all seems to come back to us either elevating some form of experiential or accuracy piece. But the more we can do within this space, the better the people supporting the rights holders in their mission to create great product, the better the product. Absolutely. And this is where I think the Kinetracks, which is our sports biomechanics company, come in. And you can see how the economics work for that. So the average MLB team, their average wage bill each year is about$150 million.

44:14At any one time, we typically have$40 million to$50 million on the injury list. And so that is a huge proportion of their, 33 % of their wage bill that they can't put out on the mound to start each game. And so actually, if you can start to make relatively marginal gains around some of that stuff, it can be quite transformative to try and improve the product. And increasingly in some of these media deals, particularly in the US, they're actually having to guarantee that the stars are on the pitch for that amount of time. And so we're speaking now with the NBA League office and they're saying, how can you actually help us put some of these guarantees behind in terms of by having this proactive injury prevention tools?

44:55Well, that's such an important point, right? I've had this conversation with a few people before and they were talking about the same. It was the rights deals, the massive rights deals in the billions are being influenced by the media companies going, well, hang on a sec. LeBron James only played in two thirds of the games last season and we buy into that a huge amount now based on the international value of a star. So we're going to pay you a third less. Doesn't that really elevate your influence? I mean, this is where you become so valuable because you can start influencing those top level revenues.

45:22And that's what we're trying to do. And like there was the Moneyball, when was it, early 2000s maybe, the Billy Bean Oakland days. and that was about using sports data to drive trading, transfer, scouting, performance. I actually think we're on the vanguard of a Moneyball 2.0 now and it's going to be about using biomechanical data to influence the same trading, scouting and performance. Okay, can we just be really simple for people who may not know? Biomechanical data basically refers to... So effectively, it's similar to the data that Hawkeye collect but it's skeletal data. So the Kinetrack scheme can collect up to 50 parts on a player's body, but they collect that at 500 frames per second.

46:07So that is huge amounts of data. And what you then do is you've then got a really good view of the biomechanical profile and makeup of a player. And whether that's a pitcher, whether it's a batter, whether it's a fielder. But then you can start to see if they are susceptible to any potential injuries in the future because they are starting to change their typical biomechanical passport. And you can use it either in-game or retrospectively for load management to work out how long you want to keep them on the pitch for. But actually, I think the application of this at the moment is primarily within baseball.

46:42We're actually starting to do some stuff with the NBA now in terms of the form for three-pointers. We're actually doing some stuff with the NHL in terms of goaltender position. So I think there's a lot of applications. We're actually looking at potentially stride length in soccer to infer tiredness levels. So there's lots of ways that you can potentially use this biomechanical data to inform on-field decisions. Do you notice a difference in how you work the adoption of a lot of this with US leagues, major US organizations, and introducing it in, shall we say, European or rest of the world environments?

47:15Yeah. And I think this was something that I think we touched on before we started. It is very different. And having that single ecosystem of the sport and having everything under one governing body, one commissioner, I think makes it a lot easier for them to be strategic and think about actually really long term having the best players playing in the best competition format and optimizing revenues and taking strategies. strategic bets over a long-term period. I think the problem that some of the European sports have, and I was in golf, very fragmented, tennis, very fragmented, football, incredibly fragmented, like rugby, the same.

47:59I think the model that the US have of that governance model and the ability to think strategically and invest long-term is really beneficial. And I suspect that we're going to see some of those global sports converge towards the US model over the next five, 10 years or so. We're starting to see it, right, with the Live Golf, the PGA Tour, the European Tour, the conversation around ventures between WTA and ATP, football, the fight for the scarcity of top talent is only going to increase with the expansion of Club World Cup, Champions League, blah, blah, blah. So I think these things are going to start to come to a head, but I think it makes it, in our conversations, it makes it so much easier for those US organisations who control the full ecosystem to start to drive the more advanced content consumption and potentially business models.

48:45We talk a lot here about all the work you do and how it influences the rights holder, the IP owner. What about what it does for the athlete? the power of the athlete now has never been stronger. The brand of an athlete is often, in many cases, hence why we were talking about the rights deals being influenced as strong as some of the clubs that these organisations are part of. Tell me about any opportunities or ways in which some of the athletes are able to improve their leverage, create new opportunities for themselves, if they are, through some of the work that you do. Yeah, I mean, we typically work with the leagues and about 95 % of our revenue today is from the leagues and we're trying to work increasingly with the teams we don't my current role work particularly closely with the athletes I suppose what what you're getting is you're getting more value around skeletal and biomechanical what the industry calls level three data and that there is obviously lots of conversations happening at the moment around who has the ownership of that data and over time with players organizations i'm sure that there are increasingly ability opportunities for them to monetize that but i guess it's just when they go into you know let's say they're part of toy story ip and nfl again and suddenly there's a huge amount they can do here with an audience who'd never really spoken to them before they're a part of a gaming or disney ip or whatever it may be they've got a they've got a new touch point can they you know can they do that independently i guess or is that still quite centralized in the relationships they have with their owners yeah i think from what i've seen it's more centralized i think but a good analogy that i could potentially draw is from again when i was at the pj european tour and rider cup one of my roles there was a chief content officer and one of the things we did back there in 2015 2016 was really try and make the the athletes stars but drive more irreverent content types and so what we wanted to do was to activate sponsors authentically.

50:40So we did lots of things like we did the Guinness World Records fastest hole in golf. We did how far can you hit a golf ball into a moving car where we were actually trying to show that Callaway balls run long and true and BMW can accelerate from zero to 60 and under four seconds or whatever that is. But when we first started speaking to the athletes about that, the Rory McElroy, the Justin Rhodes, the Tommy Fleetwood, it was impossible for them to get them to give their time for the tour for no remuneration actually after we started to do that two three four five times and you started to see the numbers particularly on social which started to become really material as individual contractors they obviously wanted to be able to sell their patches for more money and actually it became a key part of their armory when they were going into their individual personal endorsements discussions so i think that the power of giving someone a camera and a platform is incredibly powerful and will continue to be powerful particularly for those individual sports that's what i love it's the indirect impact of what you're doing you know so much of this we talk about is very on face value is what we can see in front of us the impacts of it are extending well beyond the broadcast that's improving the technology that's improving for officiating i i we would hope so i mean one of the things we want to do is try and unlock the value of that data for all the different parts of the ecosystem so that's it that's certainly the ambition okay go on we've been dancing around it but i'm desperate to have it let's talk golf what do you like we could do so much i mean you mentioned you're at the european tour you know tell us a little bit about that what was that organization like how was the sport when you were working with it because we hear so much about it now right yeah so i i had an incredible time so i was really fortunate to be brought in by the chairman who came in in 2014 david williams and i came in to do a strategy review with the big question being should we throw our our load in with the pj tour or should we look to continue to effectively be an alternative tour and i then went in-house and became i think i did pretty much most c-level roles there was chief strategy officer chief content officer chief financial officer chief marketing officer chief operating officer over my five years so the ceo at the time basically your organisation.

52:54Well, it was very much Keith Pelley's organisation, the CEO. But he had this thing of, there's four things that make a good executive. Work ethic, attitude, intelligence, and distant fourth is subject matter expertise, which I think I agree with. And so he would sort of give people different challenges at different times. But it was a fascinating business to be part of. And I think that goes back to some of these governance models that we talk about. You've got 200, 250 members and it's one vote per member. So Rory McElroy has the same power as part of the governance than your 200 ranked member, which made it really hard to actually evolve the product.

53:33I think everyone recognized at the time that the product needed evolving. I think we did a study one year, 2015, 2016. There was over 250 72 whole stroke play tournaments in a year. like for professional men's golf. That's individual tournaments. That's not days, right? Individual tournaments. So basically you just couldn't play. Times four. So you couldn't play them all and Sky or NBC or Cano Plus just couldn't air them all. There's just too much. And you didn't have enough consumer clarity. Like our organization was called the European Tour and over half our events were outside of mainland Europe.

54:10And you didn't have the top players playing against each other enough. Like all of these disruptive tours they're trying to do, the whole premise is you just want the scarcity of the top players playing against each other more often and ultimately it was way too distilled down and so one of the things that we were really focused on is is there a a different model a more disruptive model for golf that would enable us i don't like using this analogy now we use this analogy back 2016 about replicating f1 but like having that 16 18 events because the players only play 22 events in the year plus the majors where the top players can play against each other more often and i don't know if you remember actually back in those days there was still the world golf championships which were the four events where players did tend to all turn up and you used to get most of the top 50 for that and so keith and i actually went over we spent time with jay monaghan we talked to him about it but the problem with the golf model back in those days in particular those days you could still argue now but the thing was it actually had it's got a brilliant commercial model around it like pj tour just doubled their media rights deal with nbc and cbs in terms of revenue and then they've got corporate america behind us so every week they have a big title partner a nationwide a visa a sony turning up and paying them 10 15 million for the privilege of having the naming rights for the event and then they do loads of great charity work and stuff so it was very hard for the pj tour to see why they should be disrupting this model that had been so lucrative and so successful And what was the European Tour?

55:40So alongside that, you mentioned the value in the US. The European Tour's business model in comparison and therefore, I guess its relationship with the PGA Tour was... Yeah, so the European Tour at the time was growing and growing quite strongly. But one of the reasons that it was growing so strongly was because we had the trunk card of the Ryder Cup in our portfolio. And so we could use that for leverage for sponsorship deals and particularly for media deals. In what way? By bundling? By bundling it together. and also trying to build narratives around the Ryder Cup that would help the European Tour events, i.e.

56:16this is the last tournament for qualification for the Ryder Cup and having that season-long narrative towards the Ryder Cup. And players participating in the Ryder Cup or wanting to participate in the Ryder Cup would have to perform an X number of European Tour events to be eligible? Yes, I think it started off being 13, including the majors and the WGCs, World Golf Championships. then it came down to four or five but the majors and WGCs were stripped out. There's certain other regulations that used to exist. I don't know if it still do where they had to play their national open. So Henrik Stenson would have to play the Swedish Open, etc.

56:50But ultimately that gave some power in terms of ensuring that you had the top players a certain amount of times each year. And there was also some restrictions over captaincy with obviously the Henrik Stenson thing which transpired in the end. But there was lots of good stuff that happened at the European tour while i was there and it was an incredibly exciting time like keith pelly who was the ceo at the time he's subsequently gone on to be the ceo of mlse like we did some great stuff so we we had alongside my european tour role i was also the managing director of european tour productions which is the biggest producer of live golf worldwide so we not only produced all of the european tour events which is no mean feat going to kenya philippines melbourne each week doing full production like we had a team of about 80 to 200 people going around the world doing that But we actually bought back, we believe you need to be in control of your own production.

57:38So we bought back IMG's 50 % stake in both the production and the distribution business. And then we effectively ran that out of Wentworth, which was brilliant to do. We did the first data distribution deal, actually with IMG Arena, where we employed 60 people, what we called was the world's best gap year, who came around and they would just stand on a golf course with a radar, clicked in XY coordinates of where the ball was. So you could have in-play betting i mean i don't know if you know this but golf used to be the third most bet on sport in the uk really prior to um in 1999 behind football and behind football and horse racing it's now down at 16th because it hasn't had that advent of in-play betting it's behind the tennises and all the u.s sports and so one of the big things was how can we provide more opportunities for people to engage with that as a way of um increasing the engagement around the sports So that was really cool.

58:31But then the big thing in the last year, a year and a half, was very much around where are we going to continue standalone? There's the European tour with the Ryder Cup golden goose behind us. Where are we going to sort of do a deal with the PGA tour and work with them? Or where are we going to align ourselves with one of these disruptive bodies and really have a go at challenging the Gulf infrastructure? What would it have meant to align with the PGA tour? Centralised governing body in charge of all the... Yeah, so ultimately, that was sort of the way that the tours now the european tours evolved so effectively there was a strategic alliance signed with the pga tour whereby the pga tour actually took a i think it was 30 and it later went up to 50 i believe equity stake in european tour productions the media vehicle which controlled all of the production and the media rights and then the pga tour there was some competition alignment.

59:27So the top ex-players from the European Tour, Order of Merit, got onto the PGA Tour next year. And then there was also some sort of financial underpin that the PGA Tour provided to the European Tour members. And so ultimately, there was a long process that Keith, Guy Kinnings, who's the current CEO, myself, went through with the various different options that got taken to the board. And interestingly, again, this goes back to the governance thing. the board said and i don't think i'm betraying any confidence here because this is all played out in the the really good book live and live and let die the board said if we were a portfolio company and we had eight goes at this we would have probably done the disruptive thing but because we're a members organization we're obviously risk averse and this is our members livelihood we can't take a higher risk approach here that's a massive problem i actually see quite often in sport and it's easy to critique them but also you know you have to appreciate that everyone's human and there's generally an aversion to risk.

1:00:24But sport is often compromised by doing that thing that is easier, more consistent and a little bit safer, but may not deliver quite the same level. When we see now this situation in a global game of golf and we have live a massive disruptor in it, why do you think that came in the way it did? Is it simple to just say this is just an increased financial opportunity or did it offer something else that wasn't being given well i think the the reticence why people couldn't get excited about it was actually called pgl first premier golf league and then it and it was backed by rain capital and then it went on to become live and then the pif the saudi public investment fund became more prominent as as financial suitors people within i think the pga tour but certainly within the european tour the big thing they thought was the players won't go and they said the players want a great thing here like earnings are going up i think this i'm going to get the numbers wrong but indicatively it's about right in 2017 the 130th ranked player on the european tour earned about 400k so like you've got lots of players earning a good wage and typically in golf you will double whatever you earn in prize funds and sponsorship so if you're rory mcclellan you earn five million in prize fund you typically get five million in sponsorship if you earn 100 grand prize fund you'll probably get 100 grand of sponsorship so like people are earning good good salaries and we always used to think about earning opportunities earning opportunities were going up and so people thought well the players won't risk this and the first person to sort of put their head above the parapet was phil mickelson and there was in economic terms irrational amounts of money that were getting put to them to be the people who would put their head above the parapet because there's a huge risk risk portfolio to that it's like no one will ever do it until you get offered nine figures to do i mean you're like well i didn't count that into my exactly i'm gonna do it and and i like it comes out a lot well in the full swing documentary like not only are you getting generational wealth but you're also only having to play x times a year versus 28 times a year i love that bit from buster johnson yeah it was that exact moment where he said you know if you criticize me all you want but if someone offered you the chance to be paid more and play less so i get to spend more time with my family doing the things i want i i promise you you're not going to be able to resist that and you're like fair enough yeah it's it's it's it's a tough life being a professional golfer it's a great life but it's a tough life being a professional sportsman like they're away they're traveling so much particularly like maybe the pj tour guys have got it slightly better because they're they're all within the us but like the european tour rank and file they are going down to south africa one week and they're going over to yeah kenya and like there's events everywhere like you're not seeing your family a lot and you've got lots of on costs like you you get to that stage and there's huge amounts of money as yeah and there's a there's potentially a different lifestyle so people were very resistant that the players would go but then the players started to go and there's obviously the upfront friction costs which pif had the vision balance sheet to be able to absorb in terms of paying John Ram 250 million and paying Dustin 150 million and whatever those numbers were but the product's the right product and that's why I sort of was always probably more on the firebrand side of things because you just you know that in 5-10 years time it's not sustainable to have 250 72 or stroke play men's professional games.

1:03:59You need to have the top players playing against each more often and the economic model will ultimately come from the product and the competition structure. So what happens next? How do you see this playing out? There's so much that goes on around it all. We talk about mergers, we talk about both have their great parts but both struggle in areas. What does this actually look like as we move forward? Yeah, I haven't been close to it for the last five years and Guy is a great leader of the European Tour. Jay is an incredible leader of the PGA Tour. I'm sure they have a master plan for how this is all going to play out.

1:04:35I would be very surprised if there is not one single global golf calendar at some point in the next two or three years. I think the PGA Tour is probably, it would probably benefit from having a team competition like an IPL. I mean, when we were doing the initial views of how this model could look like, as an integrated model, we always thought that actually after the FedEx, you could have an eight, 12-week IPL type competition where you had the team format that sat there. It's like it doesn't conflict with any of the majors. It's outside of the core times of the PGA Tour. It would obviously mean that the PGA Tour schedule would have to be rationalized.

1:05:16But the PGA Tour have started to do that already by these elevated events anyway. The top players are playing on those, I don't know if it's 10 or 12 elevated events. So I think you're probably going to get to a place, goes back to the discussion we were having earlier, tennis is facing the same thing. Maybe football will in the future. I think you're going to get to a place where you've got a single ecosystem and a single commissioner and everything comes back together. There's just obviously big sums involved that need to be worked through first. I think any sport where I look at it as the athlete is an independent contractor, if you want, is really vulnerable to this type of disruption.

1:05:50because you can go to the athlete and you can do the deals. You don't have to go through the systems in the same way that you do if you're trying to change a whole governance structure of a Premier League. You look at tennis, that's ripe for it. Athletics and anything similar, it's ripe for it. Golf was ripe for it. It'll be really interesting to see what happens here because I think it will probably, as you say, start to shape how these breakaway leagues are then brought back in. Live and the format may be great, but it's got a distribution issue. I don't know where to go to watch it necessarily.

1:06:17So that is a problem. if I've got a great product, but no one can engage properly with it. And I'm not actually sure the Live Golf product is the right one. So I think the team format is good. I think the amount of golf they play is good. I'm still not necessarily solved on 54 holes versus 72 holes. That's the purest in a sense, isn't it? That is a different debate. I mean, I don't think I've been as emotionally involved in any sports experience over the last 10 years I was as Rory on Sunday a couple of weeks ago. Like there's just that level of drama. Incredible, isn't it? It's just like that is what we all are so fortunate to work in the sports industry for that we get to see some of that stuff up close because it was just magical.

1:06:57I'd love if you were up for it to just ask a few quickfire questions, get your perspective on a few. First one I'd love to do is what's in your eyes been the most effective technology implementation in the sports that we've talked through? I think I would go back to goal line technology because I think you nailed it when you say it's totally binary. it's either in or it's out there's no stoppage to the game and it adds value our ambition is always to not only make the game fairer but make the game more entertaining as well and i think that that ticks both of those boxes what sport do you think needs a shake up the one sport we're really excited about about having a role at the moment is boxing so i don't know if you've come across striker striker yes so did you go to the recent uh i was meant to but it was the same is the baller league launch yes i i was i i did hear about that i was a baller so fantastic i'm a big fan we um we provide the the skeletal tracking and the technology that automates the scoring for boxing for striker so it was it was actually like great to see it brought to life and explain just what it does so historically obviously boxing has been a relatively scoring and officiating has been a relatively black box you've got three people who are sitting ringside and looking to score.

1:08:18And then you don't get any feedback from that until the end where they say 116, 112, won by unanimous decision. And so what we're effectively doing now in partnership with Striker is we're tracking every punch that gets thrown. And so we're able to know the velocity with which the punch was thrown and where it hits on the opponent's body, whether it was on the jaw, on the side of the face, on the head, in the ribs, et cetera. and then you can allocate different points for that based on the accuracy and the power of the punch and so you've got a live by live leaderboard of the scoring and so it becomes much more transparent and much more overt and much more visible now there's obviously fan engagement opportunities there's betting opportunities there's all that type of good stuff but also it just makes the the transparency around the sport much much better what's the hardest part of your job uh that's that's a good question like we're owned by a big corporate and there's so many opportunities in sports at the moment and i would love to be maybe running a little bit quicker around some of the stuff we're doing we're looking to do another acquisition at the moment i mean sony have been incredible with me and with us like since i came in they talked about wanting to invest in sport and what i've wanted to do two acquisitions and they support me on both of those i want to do another acquisition and they're supporting me on that but it's not the quickest moving organization i mean you see some others in the sports industry particularly pe backed and they seem to be acquiring and integrating companies every day i'm not sure that is necessarily the right model either but we have to be very considered and thoughtful it takes a while to get things going i guess there's one it's one thing investing and having them as part of a portfolio when you're a passive investor it's another thing acquiring and then actually owning and running that business to make sure it fits in your model that's where it's much harder for you than it is just as an investor.

1:10:09Absolutely, absolutely. And we're not a portfolio. We're not a sports investor. We want to create a long-term shareholder value by having a big sports company. And the business is great. I've been there four years. We've doubled revenue. We've got significant profit growth. We've got really healthy margins. So the business is in really good shape. And so we've got support from Japan. I suppose the other thing that we would really like to do at some point in the future is a more transformative deal. We've done a couple of acquisitions so far, relatively modest in Sony terms. But as you know, in sport, it's actually quite hard to do something.

1:10:42Like the way Sony got to scale in music was by buying Columbia Records. And then you're immediately number two in the market in what is a four or five player industry. Sport is so fragmented. It's changing so quickly. We talked about potential inflection points in terms of consumption business model. Like it's very hard to actually buy a scale in that. And so you do have to be a bit more, I think, piecemeal in terms of pulling things together. and that obviously creates issues in terms of you say like PMI and integrating companies and all that type of stuff. Look there's no point working in this industry if you can't have a bit of fun at the same time you must have had some amazing experiences was there one that really stands out that you've got to go to or be a part of through working in the industry that's been like wow.

1:11:21It has to so it has to be the Ryder Cup. Ryder Cup 2018 Golf National it was one of the most electric atmospheres and it's not a forced atmosphere either it's so so genuine so authentic and like the first tee was brilliant but actually the moment that really stood out for me i think it was on the saturday and the golf national had lots of natural amphitheaters there and you just had people from the 16th green who were shouting i think to people on the 17th tee and there was just like this back and forth of like 5 000 people who just loving the the action of the golf and And yeah, for me, that was really, really special.

1:12:01I love it. Look, it's amazing. It must be such an incredible job. It's an incredible career that you've had today. I'm sure there's plenty more to come. Not trying to put an end to it. But thank you so much for coming in and sharing. It's been fascinating, completely different type of things to talk about for people than we often do. So thank you for the transparency and the level of information that you've shared. It's been brilliant. Thank you very much. Thanks. Now, that is unlike anything that we've ever done before, but such a key part of what makes the sports industry so interesting in this day and age.

1:12:32The implementation of technology is everywhere. And while we may not think about it or realize it when watching a lot of the games, you can't forget how important it is that we build and develop these products to be able to deliver what we need them to do to continue to improve the sports that we love so much. And increasingly so, these are such valuable industries. When it comes down to something like VAR, decision reviews, etc., you have to have an environment which allows for the right decision to be made as many times as possible. As much as it may frustrate us when we're implementing some of this technology and takes away from some of the purity of what makes these sports so special, getting the right decision has to be the aim for all of these sports to be able to ensure that the integrity stays intact.

1:13:15And what Sony are doing across their Hawkeye developments, but also what they're then doing to create some amazing new experiences, as we heard, leveraging different types of IP and developing fan experiences targeted at lots of different audiences is a truly fantastic way to be able to bring what are often quite traditional sports into a very modern environment. I'm so grateful to Rufus for coming on and talking to us as he did and I hope you enjoyed it too. If you want to see more from today's show you can do so by going to YouTube and typing in business of sport but before we leave you some words from our valued partners.

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