THE BREAKDOWN: Burnley’s £35m Win Opens the Floodgates, F1 on Water is Making it’s Mark, & The World Cup is Great (E24)

23:51The Premier League has gone off in a totally different direction. It's always been the case. You need this safety valve because if the Premier League doesn't have a mechanism for dealing with disputes, then effectively the courts have to become involved. Now, what the problem with the courts becoming involved, the problem with the courts becoming involved is, first of all, if it happens to go to jury trial, anything can happen, frankly. Secondly, it's also, you know, there can be a massive waiting time for normal court matters to come before a court, right? So at least this way, the Premier League controls the process and the timing of the process, even if it's an independent commission itself that decides.

24:27I just want to go back and just lay out the original issue. I'm not going to lay with the point, but you've said it already. So Everton breached PSR in 21-22 by£19.5 million pounds, which is quite a big breach, but not a massive breach. And that's£19.5 million over the£105 million allowed threshold that the Premier League has put in place. Exactly that. Thanks very much. So that season, Everton finished two places above the relegation spots, and they were four points ahead of Burnley. Burnley had a superior goal difference, significantly superior goal difference. So it really is four points. It's not four points, could be five points.

25:11It's four points. Yeah. Okay. So effectively what happened is that when in November 2023, the Premier League's independent commission decided that they had breached these rules significantly. David Phillips Casey, who was the chairman of the commission, in his judgment, he specified that it would be possible for other clubs to make claims. Okay, so this was specified. This wasn't something that Burnley have come up with out of the blue. This was part of the entire process. And again, it's part of the safety valve. It's important that people understand this, that, you know, if these types of disputes don't get settled in this way, the disputes don't go away.

25:57They have to then get settled in a different way. And that probably does mean having, well, I would say the traditional court system starting to get involved in football, which is something that we definitely don't want. So binding arbitration by an EPL independent commission is, to my mind, exactly the right way to go in terms of sorting out these types of disputes. So what happens next? What happens next is that Burnley and Leeds, who were the team that finished one place above the relegation zone, both come out and say that they are considering taking action through this protocol against Everton.

26:34Now, Everton then reached a private settlement with Leeds in September of last year, September 2025. What were Leeds claiming about? Leeds were really claiming about effectively the merit payment, right? Which is, well, if we'd finished one place higher and you'd finished one place lower, that would have been two or three million quid. I know it sort of sounds like a small enough amount of money, but nonetheless, it's still reasonably substantial. And that was settled, I was about to say out of court, let's say out of commission, that was settled in September. Now, the fact that it was settled, and it's never been clear exactly what the settlement was, but that basically, to me, says that Everton accepted prima facie that Leeds did have a case of some kind.

27:16Otherwise, they could have said, no, take it all the way to the commission. So, in other words, there's a bit of, you know, the lady is protesting quite a lot here in the case of Everton when they've already, to my mind, tacitly accepted that there was this potential route, which they kind of had to do. because the independent commission had already said that this route is open. But that was a relatively small amount, whereas what Burnley were claiming for was clearly going to be a much bigger amount, which is, well, we got relegated. And what was the, effectively what we're talking about here is a legal term called loss of chance.

27:48So the loss of chance to Burnley of not being in the Premier League for that following season was obviously much more considerable than Leeds' loss of chance in finishing one place higher in the Premier League that season. okay so it's also just one of these original claim was was for quite a bit more yeah right they were saying this should be 50 55 million or something like that so for it to end up at 26 million effectively the commission's gone well okay we don't go with you all the way on this but we do think that there has been material damage caused here and we now require on behalf of the competition organizers we now require everton to make good on that now just to finish off my initial thoughts on this.

28:32First of all, I think that this, personally, I think this is an appropriate process and an appropriate outcome. I think it makes the jeopardy of breaking these spending rules much greater. I think up until this point, I've been at so many conferences and speaking to people who work with or around Premier League clubs, and they've been treading this very fine line on spending rules. And almost the attitude's been, most of the time we'll get away with it. And on the odd occasion that we might not get away with it, well, we might get a bit of a points deduction, we might get a bit of a fine, but we'll probably just deal with that.

29:07It's okay. I think what this does is it says, I'd be very careful about thinking that way. You want to make sure that you are well within the spending regulations, because actually this could go very badly wrong for you if what you do is then deemed to have gained an unfair advantage over other clubs who then have loss of chance. Yeah. And I think it's important to state that in this case in particular, which probably hasn't helped Everton. After year two, they were very close to the 105 million threshold, which actually set in process and in motion a number of things that the Premier League then did to observe.

29:38This wasn't a massive surprise at the end of year three when they posted that loss because the Premier League had warned them they'd basically had to get, I think, every transfer that they or every player deal that they'd done in that time approved by the Premier League. And they said, look, if this is going to happen, you have to be aware that you're going to be pushing those boundaries. Everton's claim at the end was that they didn't know that they had been in breach. Well, really? It was. And that wasn't accepted, right? In other words, they basically said, look, if we had known in May of that year that we were potentially in breach, we'd have just sold a player or we'd have sold our women's team or something.

30:13Okay, so there's different... So their defence is that Burnley were relegated in May. Yes. And the year-end accounts is end of June. Yeah. So 1st of July, anything before 1st of July, Everton are basically claiming it doesn't matter. Because they could have rectified that situation. Well, certainly ending before June the 25th. So their defense is based on the time frame. But there's no way they couldn't have been aware that they were going to breach that. Because at the time, again, if you look at, I think the Premier League reporting on this, they were continually in contact with Everton on their overspending and the danger that they were sitting on breaching these positions.

30:50Now, again, what does Everton not account for? Another team being able to come and take that from, or take something from them, whether it's their understanding of the rules of the Premier League and individual clubs not being able to go after each other, or as you say, just an acceptance of the previous penalties that have been handed down and a willingness to accept that. But what does this do now? Because this is where, Charlie, you and I really landed on this being so landmark. Over the last few years, we have seen a number of financial punishments for clubs breaching profit and sustainability.

31:19We have seen Nottingham Forest get penalised. We have seen Leicester get penalised. We have seen Manchester City with, and this is the huge one, 115 charges over their head. February 2023, this is all happening since February 2023, those punishments. So while Man City are sitting here with those charges, these clubs with a far fewer number of charges are living out the real life penalties. Don't even get started, nor should we, on Chelsea and the way that they've been punished. not yet for PSR related, but potentially for more severe breaches if you look at the conduct with which they were managed.

31:56When you look at the backhand payments, if I'm allowed to say that, to agents and their acceptance of a 10 million fine for fees being paid to agents between 2011 and 2018. Which now, by the way, Charlie, just to reassure you, wearing your Chelsea hat, now sits outside the statute of limitations. So in other words, this... Does it? Yeah. Okay. It does. And one of the reasons why, yeah, you get big relief there. So during 2024, Arsenal, Liverpool, Man U and Tottenham all served notice that in the event that Man City were to be found guilty of those 115 charges. And by the way, they still deny those allegations, to be absolutely clear, that they reserve their right to pursue claims against them.

32:39Why did they do that? They did that because the statute of limitations was coming up on those claims. In other words, this case has been going on for so long that there was a real risk to those clubs, and we'll come on to what they might potentially be able to do in a moment, that they needed in 2024 to get ahead of the case and say, it's not our fault this case is taking so long. We are effectively playing a provisional in golfing terms. We're going to put our claims in so that if this does go the way in which we think it might do, that we're not timed out. So those are the reservation of rights notes that they put in.

33:11Exactly. From a legal perspective, maybe you do, maybe you don't. What's the difference between when the breaches were committed versus when the breaches were found to have been committed? Because for Chelsea, this was a relatively new finding, but it happened quite a few years ago. As I understand it, this is about when the situations happen. In other words, let's just say for sake of argument that some historic misdemeanor by a major club in the late 1990s came to light now, 30 years on, you wouldn't be able to go back and say, well, hang on a second, we would have won this league or that league.

33:46I mean, we've been fortunate enough to be sent an absolutely comprehensive note on this entire situation by our friends at Onside Law. It's brilliantly incisive in understanding where the real issues are. And I think what we're looking at here is we've already mentioned that the situation to do with the Man City allegations and where that might lead. But you also have to start thinking about scale as well, which is, in this case, a judgment was made on, okay, what were the actual real loss of chance to Burnley? And also, what was the probability of it? So they, in other words, came up with something that said, well, it was 51 % X or Y.

34:25So effectively, if the panel accepts that, then they might apply that 51 % to a loss of chance and say, okay, so let's say the total amount you actually suffered was 50 million, which is what you're claiming for. but we think that it's only a 50 % chance of you having actually had to suffer that 50 then we come to 25 million which is the 26 million that they've been awarded. In a situation like that with Manchester City where the loss of chance to the teams who have made those claims is the loss of chance to have won the Premier League in certain years when Man City did win the Premier League.

34:57Now assessing that loss of chance is going to be a whole lot more complicated because in the case of Burnley actually it's quite easy. You say, okay Burnley, you went down and you got your first year parachute payment. Your first year parachute payment was 55 million pounds. If you had stayed in the Premier League, you'd have got a full basic payment for the Premier League, which would have been about double that, right? So you'd have got about 110 million pounds. And therefore, the amount of financial damage that you've effectively lost, because we know that your stadium was still full and so on and so forth, is basically 55 million pounds.

35:27And therefore, we're going to apply a probability to that. Okay, so then the 50 % of that, as you said, comes to 25. So then actually that 25 makes sense. In some ways, Everton were very fortunate that Burnley bounced straight back and got promoted again, right? Because otherwise you could have stretched it out into future seasons. But let's just try and think, this is going to be much more complicated. In the event that clubs like Tottenham do get to make their claim, let's just speculate, they do, whatever reason. Assessing what the financial damage has been to Tottenham of never having become the Premier League champion that they might have become.

35:59That is a very, very difficult assessment to make, even to the valuation of the club. Spurs haven't come close when City have won. Spurs came close when Chelsea did. So Spurs would have the strongest case if they could go for Chelsea. Okay, but also Charlie, this is my point and I've struggled with it because I don't want to say that just because the outcomes are complex and the punishments are complex, it doesn't mean that there shouldn't be punishment. But when you're starting to look at this, if you applied punishment similar to what we've seen here between Burnley and Everton, could this get very quickly out of hand if City get punished by the Premier League and then have a number of claims from clubs who have not won the league, who have not qualified for European competition?

36:44Could a club who's been relegated and lost six points to City throughout a season have a case because those six points that they lost to City were detrimental in them going down? How far can this go? Well, I think in this situation four clubs have made clear their statement of claim, right? Right. So now other clubs will be timed out on that now in the case of City. So I think we have to part the City case, not least because I'm just very conscious always in discussing what are still ongoing cases or situations that, you know, we have to keep on reminding ourselves that City do deny these charges and City do basically say, look, we don't think we've done anything substantial wrong here.

37:21So I think we sort of just reserve our judgment on this particular case. But let's look to the future. Let's look at the future and ask ourselves the question, if I'm an executive, chief executive of a Premier League club, and I see this whole situation playing out, what do I do? In terms of what kind of instructions do I push out internally within my own organization? Don't lose money. Whatever you do, do not breach spending regulations. Whatever you do, do not even come close. Don't even put us in a situation where if we've made one slight miscalculation or something that we were expecting to happen doesn't quite happen, or if the Premier League decide that something that we thought sat within this year should sit within another year, make absolutely sure that you are well within whatever the spending regulations are.

38:08So really what we're looking at is a messy outcome for a short term, but something that's going to influence the future of the game in the way that really it needs to happen. if we're going to get this game back in order and make it viable, you need to stop this kind of behaviour. Yeah, it stops that treading the fine line sort of act, which so many clubs have been going through in recent years. And I think just, again, it's another reinforcement on top of having the independent football regulator, on top of moving to squad cross ratios rather than the old P &S system. This was, by the way, a breach under the old PSR system.

38:45but we're now moving on to a system which is easier to apply and clearer and where the Premier League and the football regulator will be peering over the shoulders of clubs and pretty much it's the time to be able to sort of stop them in real time as happens in Spain. In Spain, I don't know if you remember when Barcelona tried to sign a couple of players a couple of years ago, La Liga just stepped in and said, well, you can't register them. You just can't play them, right? So in other words, we've been a little bit behind in this country And I think that's because there's been this like rather wild west culture in our football industry for some time where executives who've been around the game for quite a long time.

39:22And I came across a lot of these people, mostly now in their 50s, 60s, who have been around for 30, 40 years, who quite like the idea of being able to just wang lots of cash at things if they're in trouble. Right. So they've always sort of made the argument, well, you know, you don't want to stamp ambition out of the game as if wanging loads of cash at some short time problem is ambition. ambition is not easy right because it's not their money absolutely it's not their money it's other people's money um and it makes it much easier for them then to speak with their owners and say look if you really want to make sure you're going to stay up i'll tell you what the best thing to do is give me an extra 50 million to spend right now and it's interesting isn't it this breach of everton's we should say does not relate to the current ownership right this is the mashiri usmanov era of everton where things were unbelievably chaotic and i think if there's anyone to feel sorry for in this whole, you know, sorry saga.

40:14It's the freekins who now - Well, I've seen it reported that there's a good, well, not a good chance, let's say, there's a chance that they could go and claim it off any money owed to Machiri. So Machiri, I think, interestingly, only got 25 million in this whole transaction. Right. Which, if you're looking at this fine, if they have a reasonable grounds to do it, could wipe off that money. So it will all depend on what the reps and warranties in that sale agreement actually, looked like. And the problem of Mishiri having received such a small amount of money in the first place for the sale of the club is, you know, one would suspect that the reps and warranties weren't necessarily all that favourable to the buyer.

40:52Probably is probably Mishiri's way of saying, okay, you can have the club cheap effectively, but just, I want to make damn sure you can't pursue me in the future. That would be quite a normal way to go in a situation where the club's being handed over for a relatively small amount of money. It's worth also saying that Everton's financial punishment here isn't going to be put towards their PSR. So that is something that they were very keen to understand very early on. And that's very important money at this level. Charlotte, I'd also be interested to know, would Burnley be able to use that money as income?

41:21So again, if we're moving to these new squad cost ratio rules and you're looking at what you're able to spend versus money coming in, I'd imagine if it's not going towards Everton's PSR, Burnley couldn't claim that that's revenue that they could then leverage to spend more on players. Right, you really put me on the spot on that one. Would this be regarded as being football-related income? I'll tell you what Charlie I'll get back to you next week on that one that's a really interesting question I'll have to get on to some people who understand the precise application of the rules and regs more acutely than I do they've helped us out immensely indeed

41:54I think while the appeal is going on at least Everton have said they don't want to make the payment because they see Burnley's financial situation as pretty poor and they believe that if they give them the money and the money is spent and Everton win an appeal they won't get it back so there's a lot at play There is a lot of play. I don't think reading the judgment and reading legal sort of views on the judgment. I don't think personally, personally reading everything around this topic, including the excellent note that we've received from onside law. I don't think that that appeal is going to be successful.

42:26because I don't think the grounds that they're laying out, if you read the detail as to what the grounds on which an appeal even can be successful, I don't think it's easily arguable that those things have been breached. The grounds on which you can appeal a judgment that's made by an independent commission in the Premier League are very, very narrow. It's not good enough to say, well, effectively, like you would do in a civil court, you'd say, well, I don't really like that verdict. I want effectively, I want a retrial. That's not the way it works. You have to say that actually there's been a specific thing which hasn't been taken into consideration at all and which we now need to be taken into consideration.

43:01I think that's really difficult. This is a really bad look for the Premier League. I put it in the basket of you need to break a few eggs to make an omelette. And I think there's a lot of stuff going on at the Premier League right now which I really applaud. I think it went for a really shaky period when effectively the executive of the Premier League rather lost control over the constituent clubs and you started to see some quite knife-edge votes happening in terms of even having proper rules. Now they've got a proper set of rules which are roughly in line with UEFA. UEFA did them a massive favour because once UEFA said we're going to move to proper spending restrictions, that then meant that half of the Premier League who want to play in UEFA's competitions were going to have to move on to a proper set of spending regulations.

43:41That then meant that those clubs then wanted the rest of the Premier League to be on proper spending regulations because they were going to be forced to anyway. and that has reinforced the Premier League executive's hands and I think stuff like this reinforces the fact don't dick around don't piss us around, bad stuff can happen to you if you do that. So yes in the short run I'm sure that the PR people at the Premier League aren't jumping up and down and saying wow this is a great look but behind closed scenes do I think that Richard Masters, the Premier League chief executive is starting to feel I've got control back of this situation, I think this is heading in the right direction, I think he probably is.

44:17Interesting. Okay, good summary. I like that. Well done. Should we have a look at something fresh? Something new? Ah, something which is, you know, away from the grimy world of sort of, you know, football and sports industry lawyers and compensation claims and arbitrations and appeals and all this stuff, out onto the open sea. Oh, it's beautiful. Out onto the open sea. I can imagine you actually in that rather nice linen shirt, you know, on the deck of a yacht. Yeah, it would have been my Monaco GP. Yeah, I was going to say, is this I had a wedding Chaz I had a wedding is there any lingering resentment at your failure to make it to Monaco this year Charles I had a wedding I had a wedding it was a lovely wedding it did stink it did stink it sung a little bit which is why you brought your Monaco outfit into work but it is an outfit which I can imagine in Monaco and that is a good segue into what you want to discuss now which is it would work perfectly in the SailGP environment it would work perfectly in the SailGP environment I'm excited to look at SailGP firstly we love looking at new sports and it's not really a new sport is it it's a new sports for the breakdown Yeah, we love looking at new sports.

45:17Oh, new sports for us, for us, absolutely. We love it when we touch on a sport probably for the first time is how I should have phrased that. SailGP, however, is something that I've had a relatively good insight in for the last couple of years, not least because I've interviewed the managing director. And there's been a huge amount in the kind of investment side where, you know, you've seen opportunities come about for investing in some of the franchises and the teams and therefore having a lot of kind of research and behind the scenes look at where this business has really thrived and where there's some opportunity.

45:43I remember a conversation that we had some time ago. and by some time ago, I mean right when we started this podcast, when I was sort of listing out the various things that didn't make any sense to me whatsoever about the sports industry. And I had somewhere on my list, Cell GP. And you said, no, you're not understanding it. You don't get it. And you then lined out to me at the time why actually you think this is going to make sense. So ever since then, I've had a little asterisk in the back of my mind saying that when the summer months come and when Cell GP really comes into European focus, that I want to pick your brains on why this actually is a sports asset, which is going to be a valuable thing going forward.

46:17Well, I remember exactly when it was. And I think the reason I said it wasn't necessarily because I have an undying belief that the league itself is a brilliant product and a great commercial opportunity, which it's doing well and it's doing really good things. What I do believe is that it's a very good example of where value can sit for investors. And when we're continually talking about investing in products and sport or assets and sport, we very often look at the primary value i.e this company makes x amount of money it is therefore worth three times its revenue yeah that's not where a lot of sport gets its value rightly or wrongly this market trades in slightly different ways a sale gp entity right i'll give the context in a second but a sale gp entity has a power because of the product because of the luxury element to this you you go and race in some of the greatest cities in the world i mean you look at the uh i've rode some of the races down this year.

47:09You look at where they go. They go to Perth, Rio, Hong Kong, Abu Dhabi, New York, Bermuda, and Portsmouth. Who wouldn't want to go to those places in the world? You go and sit for a weekend, two-day events. Generally, you go and watch some of the most incredible technology in sport, the hydrofoils that the team's race are absolute kind of state-of-the-art, technology-driven machines. They can go up to 100 kilometers an hour on the water. I mean, don't really float they fly that's what people say they fly through that astonishing i've seen it yeah and what you create is this kind of it's formula one on water right and that's really what russell coots and russell coots legendary new zealand sailor uh three-time america's cup winner gold medal winner at the olympics and larry ellison the founder of oracle um did when they founded this organization they wanted to create this element of competition commerciality luxury around the sport because up until that point really sailing have been a slightly dislocated sport in as much as it gets every four years a lot of prominence at the olympics and then every now and again a lot of prominence through the america's cup which is a series of races um which enables the hold of america's cup to be taken on by various challenges yeah um and then you've got other sort of particular regattas like in our case the cows you know the roll regatta at cows on the isle of white every august and there are various other regattas i remember going to phenomenal event in germany called the kill regatta which is one of their big social events in germany every single year but these are all a bit sort of one-off here and there it there hasn't been anything to bind bind it all together and it's a little bit actually we're talking about f1 you know you're going back to the old days of f1 where there are all sorts of grand prix in all sorts of different parts of the world sometimes even happening on the same weekend as each other with some drivers going here some drivers going there so it looks to me that what what CellGP is trying to do is trying to codify and put structure around a sport which up until now has been dislocated.

49:05Is that fair? Well, if you look at the reasons Russell Coos really wanted to set up at the beginning, it was a frustration that the America's Cup kind of had an ability to reimagine the event as commercially sustainable and really, most importantly, an entertainment property. And when he had the idea, so Team USA, the America's Cup had Oracle as a backer. And therefore, when the idea, I think, to create a breakaway, what's the most important thing you need in a new league? You need financing. and Larry Ellison just for context for those of you that don't know his current net worth is 247 billion dollars so if ever you have a man capable of making your dreams come true and creating a new league which as we know from other discussions we've had in sports which have been very capital intensive and he'd been involved in yachting for a long time Larry Ellison I mean going back decades and decades he had and that you know when you're looking at this and you're going right okay we want to create that entertainment property we need to create this amazing atmosphere where technology is right at the heart of it and it's quick and it's exciting and it's short enough to capture the attention, but long enough to get the value of a weekend.

50:01So two-day events in these beautiful cities. I talked about where the secondary value is. People coming into these events, right? You go and buy a team and you get an opportunity to go to these beautiful cities. Imagine how much business you can do taking some of these people to it. It's the age-old, you know, you can do business on the course, but in a modern environment. And I had people saying, yeah, well, you know, you may think that$35,$40 million,$50 million for this team is madness based on the commercial performance of these teams right now. But if I tell you I can do eight to nine figures worth of deals in single weekends because I have an asset which is a unique experience to take people to, then that is a pretty strong proposition for me to go and make that investment.

50:40Secondary value. Yeah. So, you know... Can I take a thing back to basics? There'll be some stuff here that you know, which I think that the listeners and in some cases me would really value knowing. First of all, right, when was CellGP set up? 2019, I think. Right? So it's actually, it's not new. Sorry, 2018. Okay. Give or take. Same applies. So it's really got going post-COVID. How many franchises are there? How many teams are there? There are 13. There are 13 teams, and those teams have been sold by the Central League, effectively, to new investors. You're saying at 30 to 40 million, have those been the sort of prices?

51:22Yeah. So what you had originally was the teams were branded as countries. So you had a nationalistic element to this, creating natural competition and also natural fandom. You would have groups of people that wanted to back a team. And I think it has, because what you were able to do at the beginning is create an early attention that gave people a purpose and a reason to watch it. Because, hey, guess what? Even if I don't really care about this new league, I care about my country. And if I like sailing and my country is a part of it, and I get some of the sailors that I'd associate with, because they got talent in that were well recognized.

51:52And were they pegged to the countries, so to speak? So mostly, yes, but there have been occasions. There was enough. There was enough rooting in countries that it wasn't a total sort of farce, right? But really at the beginning, the first couple of years, you had teams going for$5 to$10 million. Yeah. Okay. So should we say a reasonable recognition of the early stages of a tournament, a league, an event with a price that was justifiable. Yeah. Mark Lasry then paid$35 million in 2023, what his investment firm did for the US team. So in 2023, you'd got it up. So let's say 2018, you were 2018, 19, 20, you're five to 10 million.

52:302023, you had 35 million. The Italian team in 2024 went for$45 million. The latest team sale was at$60 million this year. And the next iteration, they expect to be 70. I mean, if you listen to them, really what they're saying is, there's going to be$100 million assets relatively quickly. And what I love about this, if you remember the conversation we had a couple of weeks ago about women's professional football, which has spawned a lot of debate. We can probably do a bonus episode purely on the various views that have been expressed online about that discussion we had about professional women's football in this country.

53:04But my fundamental criticism of it was not that there shouldn't be elite women's football and not even that elite women's footballers should not be paid. My point was is that by effectively predetermining that they were going to start at a certain very high level and then massively undershooting on the revenue required and the proof points required to justify that very high level, everything's had to be chopped back from there. Whereas what it looks like to me from here is they've done this exactly right. They've started off at a low level. They've allowed those early teams to get in quite cheaply, but then be proof points for how this really works and why this is then going to work further.

53:37You've then got an upswing of value where the franchise is becoming worth more. That then creates momentum and belief. And that means that you then start dragging in even more people. So there's a point I really want to drill in on here on that. We come back to Formula One. What, apart from Drive Survive, what made Formula One investable? Cost controls. This had cost controls from day one. That's really interesting. It had cost controls for two reasons. Firstly, every boat is the same. Right. Are they exactly the same or essentially the same? again, that'll go too deep into my understanding of every boat.

54:10The build of these boats has to be the same. They have to be the same boats, i.e. you cannot go and spend another£100 million trying to create the better boat than your opponent. And therefore, your R &D cost, your cost is going to be much lower. And what SailGB do is they put money into a technology hub, which is continually trying to innovate on behalf of the series. So any developments that are made comes centrally from funding. that goes into a like an innovation lab if you want to call it and the innovation lab will be working behind the scenes to try and improve the boats across the board that's so it means individual owners don't come into this thinking hey guess what if i throw another 150 to 100 million at doing the boat i'm going to win they can't there is also a 10 million dollar cost cap in place so like the top performing teams you know they're approaching 10 million dollars actually there's quite a few of them that are doing 10 million dollars just in commercial revenue alone now.

55:00So you're starting to see real value. You're starting to see break-even hit in the series. You're starting to see profit occasionally being shaken off in the series. In really a short space of time, as you said, if we say that COVID was quite a difficult time for anyone operating a global event series, let's judge them post-COVID. You're talking about the development of a league and$200 million was generated in 2025, which was a 66 % year-on-year increase. So there are some really strong elements in here that I think point towards this being a very interesting proposition of new emerging IP being leveraged to create some value.

55:36And that's shown in how they've gone about attracting investors into it. So if you look at some of the people that got involved in some of these buys, it's brilliant. You've got Ryan Reynolds and Hugh Jackman who invested in the Australian team in 2025. Anne Hathaway was part of the team Italy. Sebastian Vettel bought into Germany. Kylian Mbappe bought into the French team. And commercially, the brands. We were talking about Formula One again, like Rolex, DP World, Emirates, Accor, KPMG, Fever, top quality brands. Exactly who you would want as a premium piece. What these races are also doing is they're creating about$230 million of combined value for the regional host.

56:15Because this is now seen as a really great kind of it functions as premium tourism. It does. Here's a trickier question. Does anyone actually watch this stuff? So do you know what? Broadcast is quite interesting, as is live. So a key part also is onshore racing. So they call it onshore racing, i.e. It's close to the shore. Quite a lot of sailing can sometimes be far out at sea, and you can't create the atmosphere on the coastline. This has to be relatively close so that they can create the stadium atmosphere in sailing. But broadcast also is an interesting one because CBS are the prime broadcaster for it and have been since inception.

56:52and it's been going well and they're just renewed for another couple of years. But they're under a time buy arrangement and so really SailGP are still like they're still buying their way onto the platform and they're not yet at the stage where you've got networks bidding for these rights. They're still in the process of proving this has value as a viewer entity. But do you know what, Charlie? SailGP in Spain last year set a record for the most viewed event with 23 million viewers across 200 territories. The average about 18 million viewers. so the numbers are the numbers are solid right there's something to build on i think if you're looking at the overall proposition there's enough in there from a value perspective where there are people coming in here recognizing value even if it's not how we generally judge value in sport to say do you know what i want to keep being associated with this because product is good it's fast it's entertaining when you say it's entertaining i'm you know the those tv audience numbers are half decent by the way right so i'm you know So therefore, those people find it entertaining.

57:51So therefore, de facto, it is entertaining to a degree. But it strikes me that there's something which is almost cleverer than that going on, which is basically to say, okay, as a sport, we are never going to be a mass market sport. Therefore, what we do need to do is absolutely capture our alpha within the premium market. We've got to package something here which the premium market can really buy into, both in terms of the very rich parts of the premium market buying franchises. the next bit down from that having some luxury tourism around it the next bit down from that turning up to the odd race and their home territory but also buying into the brands who are sponsoring it and actually if all we do is get all of that absolutely spot on we've got a really decent proposition now if eventually we can end up getting enough tv audience to drive some tv rights money as well great but we're not based off that because that's not that's currently not even in the business plan well as i said you've got teams here, we look at how teams in other sports generate revenue.

58:52We know that over-reliance on broadcast is an increasingly concerning element of any business model. This is basically looking at organisations that can create enough sponsorship to break even. Just sponsorship. Do you know what's really interesting about it, Charlie? You and I had a meeting last week with Giles Morgan, the former head of sponsorship for HSBC and Howden Insurance subsequently, who did the whole British Lions sponsorship. And Giles is now a consultant really advising the market on how to make yourself attractive to sponsors. And the thing which he is obsessed by is tribe, right?

59:24This tribe is so clear. This tribe is so clear. And what Giles says is that the total numbers you're doing is less important than absolute clarity and spending power around who your tribe is. And it seems to me that what this is, is an absolutely brilliant commercial proposition. And if anything happens on the TV right side, that's the cream and the cherry on the cake. But the cake is having something which really hangs together for the big brands. Ben Ainsley actually teed it out very nicely, I saw in a statement. So Ben Ainsley is head of Team GB, SailGP, which is actually the Emirates GB Racing, they're the defending champions.

59:58They won last year for the first time. And he just said, sailing has never had a commercially successful league or series of events before. The key is continuity, racing around the globe, consistent teams, consistent branding, athlete recognition that builds over time. Speaking about Ben Ainslie, probably a story of another day, but, you know, he's deepened some challenges with Ineos. He has a very significant current dispute against Jim Ratcliffe and Ineos. Have you followed any of this? I have. It's quite an interesting one. It is an interesting one. Considering that Ineos' claims are actually on the boats.

1:00:27Yes. And their rights over these highly expensive, I think up to like 180 million was spent on some of the development of some of them. Yeah. But Ben Ainslie now has got an umbrella company really. So it includes the America's Cup team for GB. includes the SailGP team another indication of Ineos' relatively rapid and dramatic retreat from a lot of their sporting assets with the exception of their stake in Man United of course of course or Ratcliffe himself in Man United but of course we should do another one to be honest that dispute between Sir Ben Ainslie and Sir Jim Ratcliffe two of the most prominent British success stories of the last 20 or 30 years in totally different fields would be a really interesting bonus segment for another day we don't have the time to look at it now no it's not and I just want to because we've been talking a lot about prize money and I missed it out.

1:01:10You know, just interesting to see what they've actually been putting up for some of the teams. So, you know, the winner of each, there's 13 of these events that go on throughout the season, 13 teams, 13 events. The winner of each takes$400 ,000. The winner takes all championship final at the end of the season is$2 million. And the total prize pool is$12.8 million. So they've created a nice financial pool of cash. But it's quite modest, isn't it? It's modest. It's quite modest. And again, I like that. That prize pool is reflective of where the series is right now. We can give you something, guys, but we're not going to pretend that we are F1.

1:01:41Effectively, what women's professional football has done is it's tried to pretend that it is men's professional football before it's got revenues which are ending like it. It's taken elements of Formula 1 and it's taken to how it can apply it in a different environment. And it's recognised that there are lots of things in sailing that will also speak to a similar demographic that Formula 1 has managed to. As you said, tribe. Yeah. Tribe. So I'm keen to talk about it. You brought it up as well because, again, it's very easy to be continually critical of a lot of things that come up. However, while this is absolutely not perfect, and trust me, there's plenty of questions, as you said, you could develop and have around the longer term financial viability of this as it grows and scales and as prices go up.

1:02:17It's working right now by the looks of it to an extent where you're seeing development, you're seeing interest increase, and you're seeing fans pay attention. The challenge is, can you really continue to bring people that don't know much about sailing that new fan base in and start to care about this sport? Because that was one of the aims of Russell Coots and Larry Ellison right at the beginning. But I'm sure Larry Ellison will be quite relieved now that he doesn't have to finance the whole project because he did for the first few years, even if you've got$247 billion. So yeah, go and watch some of the events.

1:02:49It's on now. They're pretty much on. And how do we find it if we're in this country? What's the best way to find it? Charles, don't do that to me. Design?

1:03:00It's on TNT Sports or Discovery Plus or HBO or whatever the helmet is called now who knows but no TNT have the rights for it in the UK platform let's all head down to Portsmouth this summer head down to Portsmouth or if you want you know you can get a Rio yeah well we could do but I'm not sure if the breakdown expense count yet reaches that far Charlie no we need a few of you to keep joining us on Substack and maybe speaking of which we'll be going over to Substack now and having a little bit of fun in our bonus segment but for those of you that aren't there yet thank you so much for joining us what are you doing come over Charlie that was That was good fun.

1:03:34Thank you as always. Thank you very much. Thank you so much as always for tuning in an interesting take on the success of the Premier League's regulations and what it means for the future. Some short-term pain for long-term game looks like it's on the cards, but well worth it if it brings everything into line. Head over to our sub-stack, which the links are in the bios below as we finish with another massively influential football topic with the Premier League getting its mandate to strike a deal with the EFL. Charlie is on top form as you'd expect, trust me. thank you again for joining and we'll see you next week over the last eight episodes we've talked about what obelisk sports does and the thread running through all of it is simple wherever there is a performance element in sport there is financial exposure and wherever there's financial exposure they can build a structure to manage it promotion bonuses relegation cover manager buyouts fa cup run incentives champions league qualification hedging talent retention packages sponsorship valuation gaps prize money guarantees for touring professionals if you've been listening and thinking we might have this problem you probably do and you're not alone most organizations in sports do the good news is it's fixable quickly and more affordably than you'd expect any club sports team brand or individual is welcome to reach out for a conversation no obligation just a chat to see if obelisk can help obelisk sports helping sports organizations build ensured performance structures that stabilize budgets reduce risk and unlock greater upside visit obelisk sports.com and thank you for listening obelisk sports limited acts as a consultant to Gamepoint Capital, which is authorised and regulated for insurance business in its respective jurisdictions.

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