THE BREAKDOWN: Does Bezos’s Money Matter to Liverpool, LIV Golf’s $300m Miracle, & The €4.2bn World of MotoGP (E32)

26:55Now, there'll still be plenty of people from my generation above hanging around. You know, pay TV is not going away. But overall, one might expect it to start coming down. Now, Now, Barca and Real, and we've covered this on the programme before, have basically mortgaged their next five or 10 years of revenue to build these massive new megastadia, which means that their revenue are now at that 1 billion plus type level, leaving behind the Premier League clubs at which that's 700, 750, 800 million type level. if the Premier League clubs want to fully exploit their potential they're going to need to get up to that sort of a billion plus level and they're only going to do that by building bigger stadia and therefore what I would be much more interested obviously Man U have put forward their plans for a stadia of this kind but I would have been much more interested if it was like right basically Fenway saying if we're talking about Fenway's plan for the future and Fenway being fully back committed to a plan for the future it would have been really interesting if they'd done a deal where they'd said, right, we want actually this money from Bastia and Bezos to come in as growth capital because actually Anfield's simply not big enough.

28:04We're going to need to build a 100 ,000-seat Anfield if we're going to really progress going forward. Yeah, I mean, look, you said you want one of the top clubs to do it, as you just said at the end there. Man United have committed to doing this. So we will have a club. Obviously, Spurs have built an incredible stadium. It's a 60 ,000, right? So it's not necessarily as big as some of the others. But we've seen a club that really, let's just say natively, if it wasn't in that stadium, wouldn't should maybe be doing about 400 million, move up to 650, 700 million. If you get, as you said, if you can get that stadium right at a Liverpool or Man United, you can easily go from a seven to a one billion.

28:39But let's be realistic. Fenway, I would think we could agree in general, have been a good owner. And the fans would say that they have been good owners, all things considered, of Liverpool Football Club, particularly from the situation they brought them out of. the biggest challenge they've had has been ticket pricing if they go and build that stadium that takes the heart of liverpool football club out of it anfield is this is probably one of the few clubs where i i personally just don't think you can you can touch a lot of that now the flip side to the fans is you go well then you have to accept that you're going to potentially be left behind from a financial perspective if you don't or pay more money exactly i was going to say ticket price is lower, right?

29:21So my point is that, with ticket pricing being your biggest problem, your fans are going to, and Liverpool fans will listen to this, Charlie, for the five minutes you've just said, and they will go, no, Anfield's sacred. You couldn't do that, blah, blah, blah, blah. Then you look at, as you said, the ticket pricing thing. Well, they've got 55 or so thousand seats at the moment. Demand is going to be high. They have to increase those prices. If you do go and build a stadium, you're going to be able to keep those prices slightly down. You're going to offer more seats. So while you may lose some of that Anfield tradition, it will also allow you to support Liverpool Football Club affordably for the next however many years.

29:55It would be an interesting conversation to have with a fan group. Just on this particular piece of news, this feels to me like it's Fenway taking money off the table. We're already break-even on our investment. We've already sold some minority. Now let's take in a real proper chunk of change here. right? One and a half billion, thank you very much. That makes this a knockout investment, no matter what happens from now on. It buys us a bit of time to work out what we're going to do next, how we're going to go about it, because it still feels to me like there's still a lot of flux at that club. I noticed the other day, there were rumours that Richard Hughes was going to be leaving as sporting director.

30:30And, you know, it just doesn't feel like there's a whole heap of direction at the moment. But once you're taking one and a half billion out, perhaps that enables them to take a deep breath and say, right, that's sort of us done for a bit. We're not selling the club because otherwise we would have sold the club we've just done a minority investment now let's reset in terms of where we're going next so watch this space it's going to be interesting to see what happens next it's i think you're right charlie in saying it's a less interesting piece of news than one might think the set of a minority stake i guess if one were to draw one big thing from it is you know is this sort of as you see in american football oh is this getting to the stage now where seriously the richest people in the world simply feel like they have to have a stake in a Premier League club because it's just what they do.

31:12But anyway, I think we should move on because as you say, I think there's probably rather less to this than meets the eye rather than more to it than meets the eye. We need to move on to live golf. We've just seen over the last 10 days or so, we've seen the first significant bits of news flows since the problems which we predicted really hit back in March, April. We predicted this would happen back in January. And in March, April, the Saudis announced they would not be continuing to fund the live tour after this season. And there were even rumours at the time, Charlie, that Liv would struggle to make it to the end of this season.

31:44And so it has proven, right? So it has proven. So just to bring listeners up to date, the Liv tour is quite a limited thing in any case. It's only 15 events, right? And the last of those events, and this is one of the big attractions for some of the players, actually, was the last of the events was to be held at the sort of start of September, which then basically meant that from mid-September until the end of the year, live golfers were basically on holiday. They could cram their playing into a time period that was January until August, right? And then have four months off. What's not to like about that when you've got guaranteed money on the table?

32:22So the last - Dustin Johnson, big fan of that. What? What was that? Dustin Johnson was a big fan of that. Dustin Johnson was a big fan of that. Pay me more money to play less golf, perfect. Yeah, absolutely. So the last event of this season was meant to be the end of season team championship, which was in Michigan. And the prize pool for this event was intended to be 40 million bucks, right? So this was the big conclusion to the team element of the live thing. And don't forget, this is one of the few innovations that they brought in, which could truly be said to be an innovation. I don't regard not having a cut as being an innovation.

33:00That's just as easy for players. But team golf was an innovation on a week-to-week basis. so by canning the team championships and bringing the team element into the end of season singles championship which is happening um i think this week in fact in indianapolis um that basically means that this yeah this week's event in indianapolis is the last event of live 2026 and it basically says that the saudis pulled the saudis pulled their funding to the degree that they couldn't even fund that last tournament right so it makes the whole thing very real so that's one bit of news flow. The other bit of news flow is that at the same time as this was becoming apparent, Scott O 'Neill, who's the commissioner of LIV, chief executive, CEO of LIV, whatever it might be, announced in a rather curious fashion, Charlie, I don't know what you think, that he had secured new investment for LIV 2027.

33:56Couldn't say who it was. Couldn't say the deal had actually been signed and agreed, simply said, by the way, we have been able to attract new investment for next season. It felt to me like what we call in PR a dead cat, right? Which is you throw something on the table because you know there's some really bad news coming. And you hope that the thing you throw on the table distracts from the bad news. And to a degree, it kind of worked, which is that I saw in the mainstream sort of English language international national media. There was quite a lot of coverage over this new investment. There's actually been very little coverage over the fact that the final event of the season has been ditched.

34:33Now, at the same time, there are obviously major question marks of whether John Ram and Bryson DeChambeau, who are the two global stars who are currently playing on Live, will still be playing in it next year. There are rumours that not all the bills have been paid, that not all the players have been paid, and so on and so forth. And there was a players meeting recently that I think was led by Bryson at a recent live event to consider what next steps would be. But it's quite clear from Scott O 'Neill's comments, which I'll come on to in a moment, which bordered on the delusional, that he is seriously contemplating a live in 2027 that exists without Ram and DeChambeau.

35:14And I'm not sure where this statement sits. It's not a Belgian Football Federation statement. It's not an HP statement. It's not a UEFA statement. It's more of a sort of Alice in Wonderland statement, right? So he's asked effectively what Liv would be like without its two stars. And he said, I define it, by which he means stardom, a little bit differently. For instance, I don't think that there was a bigger star on the planet than Dean Burmester in South Africa recently. Now, Dean Bermeser, for those who don't know, is a journeyman South African player who was on the US PGA Tour and without anyone outside South Africa even noticing it, moved across to Liv as part of the flock of golfers who went across there to earn easier money for less golf, as Charlie says.

36:03And Liv has had a relative success, or should I say a lesser degree of failure with their South African event than they have with other events, right? So they're clearly hanging their hat on, well, we've got quite a few people to come to our South African event, and our leading South African golfer is Dean Burmester. Am I pronouncing that Burmester right, by the way, Charlie? Yeah, I think so. I mean, so well known, obviously. So well known that you're… That's a big star. And as a golf fan yourself, I'm surprised you don't know that. Well, I'm sure that's on me, as they say, given that he is the biggest star on the planet, according to Scott O 'Neill.

36:41right so we are being asked to believe that there is going to be a 10 event live tour next year right that's the background briefing that will exist without ram and dechambeau where the biggest stars on the planet dean burmester and cameron smith are going to be the big draws and that there is a massive investor who's coming in to back this concept are you buying it charlie

37:10um no i'm not charlie i've been questioned i think it'll happen i think we can both agree that if it does happen it'll be a ripping failure but do you think it's going to happen do you think there is an investor do you mean look charlie we we've played this game in life and when we both have ventures before where i i've been you've been told that money is coming you think an investment is going to land like until that money is in the bank you you cannot say otherwise indeed so So with them saying that documents have been signed and it's going to September in a vote and announcing it now, there's probably something in there where they have to do that again for the players and the relationships with the players as their contracts are now moving into the next season where they probably have to make some of those announcements.

37:51But let's be very real. Until that cash is there, it is very much up in the air. And look, you said, I joke. No, I don't buy it. Genuinely been questioning my insanity and everything that you understand about good investments and where to make money and what looks like value and what doesn't. Because let's just be very clear, right? LiveGolf has failed with a$6 billion injection of capital. $6 billion. the reported investment here and that's sorry six billion over five five years the reported investment here is 250 to 300 million dollars for the next i think we'll basically to take it on for the next year but i think internally they think that could secure it for at least the next couple of years what makes you think you could achieve something with 250 million that you couldn't with six let's just be really basic on that okay and and the truth is you can't so then it asks the bigger question.

38:49Let's be realistic, right? Live Golf is dead. Live 1.0 is gone. So everything that we know, when we're talking about Live, that is over. With$250 million coming in, that cannot sustain one player contract that they were signing, let alone a whole field, plus the events, plus everything that comes with running this. So whatever we're going to see moving forward, whether it happens or not, is going to be dramatically different. Bryson came out in a press conference a few days ago and said, the investor from the conversations I've had has a new and fresh vision on this product, followed up by it won't be changing too much.

39:26Well, if that is the case, then we might as well just quit and go home now because it cannot sustain the spend that it's had previously. Charlie, look, there's a number of things. Firstly, I don't know, and we haven't been privy to the nature of this other than Scott O 'Neill's statement saying that there's an agreement in place with a lead investor. We're going to have to assume this is an equity investment rather than a distressed debt or more complex financial structuring, which, by the way, could well happen and could be far above our abilities to scrutinise on this show. But if we're just assuming it is that type of investment, they've got huge issues running forward.

39:59As the debt within the company, they've got player contracts that are huge liabilities for them. Now, there's been talk about a Chapter 11 bankruptcy, which essentially means that they would have the right to restructure some of that and move some of those contracts and the money owed into things like equity schemes for the players. Don't even get me started on this. This is probably the bit that I'm most concerned about because in the statement that was put out, they tried to make this a huge win for everyone. This is the first time the players will be the majority equity holders in a major sporting tour.

40:33Equity means value. What value? What value are these players going to have moving forward? This business has no value right now. So if you're transferring cash owed to players, to equity, that's assuming that one day those players are going to be better off than they would be if they had got that cash for them to actually look at this as a really good deal. I don't know about you, there is nothing to me that says you can get rid of all of the liabilities that Liv has now, you can turn it around with$250 to$300 million, you can create value on top of that to make a percentage of that equity worth something to all of these players, so that eventually one day you can miraculously find a buyer who's going to pay you something significant enough to give those players back a proper portion of cash.

41:17Let's play this out if it's Bryson's contract, right? Let's just use the big numbers, right? If he got a 500 million deal, which was being talked about previously as him renewing on Liv, let's say he got a 2 % ownership of the whole of Liv. Liv would need to sell for 25 billion for him to back a equity model over his cash model to make that worthwhile. So it's a complete Begazi fallacy, whatever we want to call it, to suggest that this equity model for the players is a good thing. We have to say this with a big reported. In the golf world, it's widely reported that BC Partners, which is a P private equity credit firm, are the investor.

41:53Now, they supposedly have said that the continuation and participation of some of those key players is important to their investment. So you're going to have to find a way to keep those players other than just pay them huge sums of cash. I'm very keen to see how they manage to do that. I'm going to massively speculate, but if PIF owe a huge amount of money to some of those players on contracts, I could see maybe a settlement agreement with some of those players, which would still give them a significant amount of money and a significant enough portion to keep them involved in a lived structure for X amount of time that would allow BC partners to take that majority stake and not have to worry about serious injections of cash just for player contracts.

42:36That's huge speculation on my side, but that's the only way that I could see that happening. More importantly, Charlie, I had a little look at BC Partners. Do you know another big investment that they made in sport? Do you know what that was? No, who was that? They invested in a company called GSE Worldwide. Now, GSE Worldwide is a big sports marketing representation talent agency. Do you know who GSE's major client is on the golfing front. Bryson? So the same company that has invested significant cash in one of the representation agencies for Bryson DeChambeau is going to be the company reportedly that puts money into LiveGolf.

43:14Yeah, and this is going to be my speculation was that when I heard that there was a supposed investor into LiveGolf, I sort of felt it's likely to be an entity or somebody or something who could be lent on or who would have some sort of ulterior motive. You know, I was going to speculate that it might be someone close to the Trump family. Many of the live events are played at Trump venues, for instance, or somebody who might want to be on Piff's right side, who comes in with a face saver, which enables the whole thing to continue. You know, so that kind of wheels within wheels type thing. You remember when it came to the whole TV deals around the Club World Cup and the circularity between Saudi winning the contract to host the World Cup at the same time as Saudi and DAZN paying what didn't seem to be an obviously good value amount for the TV rights to the Club World Cup, which enabled Infantino to say the Club World Cup was a success.

44:15There was a sort of circularity going on. So I don't know, my instinct is since there is no business case that can be made for it whatsoever, my instinct is it will be one of those wheels within wheels type transactions where there's enough face saving benefits slash agency benefits slash side benefits slash being good friends with PIF benefits. because one thing that is true, Charlie, is a vast amount of money has been raised in the last three years by the major private equity firms to invest in sport. And that money has to find a home, right? And that's what's driving some asset valuations to slightly strange levels in and around the sort of fringes of sport, which is that once they've raised the money, the only way which they then attract management fees on deploying that money is when they actually make investments.

45:06So even if the investment might be, a bit high on the risk reward scheme, higher than might normally be attractive, it can still be better than not deploying the money at all. So, Charlie, I agree with that. But interestingly, BC is not an Apollo, a KKR, an Aries, right? One of the big US funds, let's say, at five plus billion, where, you know, okay, I still personally, I still think it's mad. Other people may disagree. But as you've said there, deploying that capital is actually tough in this market at that when you have that amount of it and you've got a number of organizations operating. So, you know, could you have done something with one of them potentially?

45:43The number is what it would actually take to invest properly in this if you were going to have a crack at it. I mean, 250 to 300 million, you know, all I'm looking at is what's going to be the future injections. Just like you would, Charlie, if you're buying a football club, right? It's not about necessarily what you pay for it. You know that. It's about what you're going to have to put into it to continue to not just run it properly, but build value into it so that one day you can hopefully make some money out of it. And this is the big change, right? Liv is now going to have to operate as a sovereign wealth entity into a private capital entity.

46:10And the minute you go from that to that, money is important. I kept checking myself going, hang on, Charlie, you always criticise people just for looking at the monetary value of things. What about the secondary nature? You just touched on maybe some of the secondary natures here. But I don't really see the secondary nature for a BC of doing this if they didn't genuinely believe they could make some value out of it. But I was asking myself, why did players come and play for Liv in the first place? The only reason was for cash, right? So even just from a motivations perspective, well, actually I say that, that's a lie.

46:41Dustin, as I've just said, Dustin Johnson said that he was playing a bit less and he loved that as well and got more time. So, you know, fine, the package was good, but the majority of it, let's not kid ourselves, was the huge fees that a lot of the players got. It was the, you get paid for turning up, not just for making a cut. They're saying that, you know, now prize pools will go down to$10 million an event. They were at$25 to$30 million an event. You're not going to get the major sign-on fees. Your equity, as we've discussed previously, is only worth anything in five to 10 years' time if you eventually manage to put something together.

47:11And even then, it's probably not going to reach the cash that you thought you were going to get when you came in. There's a lot of it that, to me, I just don't understand it. I genuinely don't. And I think Scott O 'Neill, look, to be fair to him, look, he's the CEO and his job is to try and keep this thing alive. And he's going to put across a narrative and talk about it in ways that anyone who is slightly critical of this whole thing will pull apart like we've just done. I don't blame him for that. It's the reality of his position. So yeah, if I can leave it on one thing, there's a craziness to it from a financial perspective.

47:41The thing I really worry about is who's getting in the players ears going, hey guys, this is an amazing equity scheme for you. Be a part of this. Honestly, it's all going to be good. You're owed that money, but we're going to give you more equity. I hope there's really good people around them, the ones that are getting promised a lot of this value, to put some of that into context and build a realistic picture of it. Because otherwise you can see an unfortunate position for a few of them coming to fruition. Moving on from an uninvestable sporting entity, as we see it anyway, and very happy if anyone from Liv wants to come on and explain to us why we're wrong.

48:14We'd always be delighted. Into an event or a series that is in a much more interesting spot, right? So last weekend was the British MotoGP, the Motorcycling Grand Prix at Silverstone. That's only one event on the MotoGP circuit. And Charlie and I thought this would be a good moment to do a deep dive into MotoGP and where it's at, where it's come from, where it's going to. And, you know, this is just at that time of the year when we've just had the French and the Italian and the British. And I think the Spanish, the sort of big legacy Grand Prix's have now happened. So we can take a health check on where they are, but also look at the recent acquisition of MotoGP by Liberty Media, who, of course, acquired Formula One 10 years ago or so.

49:06Yeah. Nicely teed up. Well done. Yeah, I think the thing to say is this is a huge sport with a massive fan base and great history. And there's only a certain amount that we'll be able to cover in 15 or so minutes. So, you know, we can we can develop this going forward. I think it is a really interesting story to explore now, not least because Liberty have bought it for 4.2 billion euros reportedly. I say reportedly, Carlos Espoleta, who's the chief sporting officer who I have spoken to, said that on a show that we did with them. So, you know, if we can take pretty accurately that Liberty paid 4.2 billion euros for MotoGP, there must be some significant value.

49:46you would assume that a company riding the wave that Liberty are and the reputation they have through what they've done with Formula One, where they see significant value in this sport. Now, like me, Charlie, when I first did a MotoGP show, I must admit, I didn't know a huge amount about MotoGP other than Valentino Rossi and Marc Marquez and some crazy crashes that I'd seen online. And maybe, you know, when I was younger, you know, a few glimpses of races, it had never been something that had properly captured me. And I think that's probably down to just the wealth of sport that's available. And, you know, if it was a motorsport, Formula One had been the thing I'd covered.

50:16But when I did get into it, I really started to appreciate how big this sport was. And I don't necessarily just mean big from the breadth of fan base. I mean big from the depth of fan base. The audience for MotoGP globally, and we're always careful how we say these, but let's just say it's over 600 million people. Last year, I think, was it over 3.6 million spectators went into the 22 races throughout the year. There's a real geographical element to it. Spain, Italy, France host a third of the events, the Grand Prix's, and they are a huge portion of that fan base. So you've got depth in some areas, but you have little global breadth if we want for a sport.

50:59Now, if you're looking at a value, that's a concern potentially, or it's a huge opportunity. You can see Liberty looking at that and going, if there's great attention for this in those markets. Fantastic. That's a call we can build off. But there's a massive opportunity for us to go and take this into new areas. What does that remind you of? It reminds me of Formula One 15 years ago, where you had an enormous European audience, and where America basically wasn't interested at all. And where they'd lost the threads a bit in Latin America as well. And Liberty made the bet that they could crack the US.

51:36And in so doing, they would totally change the business dynamics of the sport. I think it's worth noting that Liberty are not the first major financial institution to own MotoGP. It was actually originally bought by CVC back in 1998. And that's before CVC owned Formula One. And the only reason why CVC gave it up, which is quite interesting, is that when they then bought Formula One, the European Commission said that they would have to divest themselves of MotoGP because only MotoGP and Formula One would give them too much dominance within the motorsport space within the European Union. So I'm not quite sure how the same rules haven't applied this time, because obviously Liberty have been allowed to buy both MotoGP and Formula One.

52:25Anyhow, they bought it, CBC bought it for 80 million bucks back in the 1990s. And they sold it to Bridgepoint, another private equity firm once they were forced to divest of it for 500 million bucks. So they made a good turn over seven or eight years. And then Bridgepoint have held onto it for the thick end of 20 years. They sold a bit of minority along the way to then exit it at 4 billion bucks. Now, it might sound like 500 million to 4 billion is a great return. But actually, that's not how a private equity firm would see it over 20 years. 20 years is effectively three fund cycles. So you're talking about what we call continuation vehicles, effectively, where it would have been in a Bridgepoint fund, it wouldn't have been deemed ready for sale.

53:12So it would have been put into the next Bridgepoint fund at a certain slightly higher valuation, and then into the next Bridgepoint fund. So I mean, it's not a bad return for Bridgepoint over that period, but it certainly doesn't suggest that they were able to do anything with it that really changed the mold, particularly given that in general terms, sports business valuations during that time went through the ceiling in many other different areas. So effectively, Liberty are betting that as kind of sports and media operators, which Bridgepoint aren't, they're a private equity firm, as sports and business specialists, that they are going to be able to achieve something that CVC and Bridgepoint were not able to do, which is to turn the sort of latent demand for motorcycling and motor sort of sports, but two wheel variety around the world and coagulate it into MotoGP.

54:05So if you look, for instance, there's a lot of demand for motorcycle racing in the US. I've seen motorcycle racing in the US. It's just not MotoGP. Now MotoGP itself, Charlie, is a as a brand name has not been in existence for all that long. It was it was around sort of 2530 years ago that it was changed. Up until that point, there were various different championships of prestige, frankly, of which the top one, generally speaking, was 500cc. The 500cc World Championship was reckoned to be the marquee, the blue chip event. And when I was a young whippersnapper growing up in this country, in the UK, the biggest motorsport celebrity in the country, two wheels or four wheels, was a man called Barry Sheen, who was the 500cc double world champion.

54:56He was an immensely charismatic Cockney who was, you know, used to smoke on the grid before starting the races, had beautiful girlfriends, was a real sort of high living James Hunt style type figure. But that gives some idea that when Sheen was racing at Silverstone, you had crowds there that at the time were absolutely the same as for a Formula One Grand Prix, maybe even bigger. I mean, he was a more famous person than Nigel Mansell was in the UK at the time. So effectively, what I think the sport has lacked somewhat in the last 10 to 15 years are marketable stars outside of two, maybe, Valentino Rossi and Mark Marquez being two who even I would recognize and go, okay, yeah, those are big names.

55:42But they haven't been able to develop, unlike Formula One, those types of rivalries and charismatic people who do stuff outside of the track and the whole thing becomes a great show, it's very much carried on being something for the enthusiasts. So I'm going to be really interested to see the Liberty playbook. How much of the Formula One playbook are they going to apply to this, Charlie? Yeah, and let's be honest, right? That's what Formula One removed the helmet. Sorry, Liberty Media, Drive Survive. Liberty Media decided that Drive Survive was going to be a great tool for them to do a lot of this.

56:15They removed the helmet from the drivers. We got to know everything about them, plus the people behind it. Interest grew because it was a human story. It was people. It was sport. It was everything packaged into one, plus high intensity, incredibly dangerous, exciting. Well, I say exciting, sometimes exciting sport. MotoGP is insane. Races can't really be longer than 45 minutes from an hour because the intensity on the bodies and the physicality that is required to race some of these is so intense. MotoGP is both objectively more exciting and more dangerous. There's much more overtaking because obviously the size of the motorcycles compared to a car makes it more feasible to overtake.

56:54And because the drivers are so obviously physically exposed to the track, it's extremely dangerous. So if you're into adrenaline and speed and real daredevils, et cetera, MotoGP really should be more your thing than Formula One, which has become a driver enclosed within a car. As you say, once the helmet's on, there's not much you can see about that particular driver. I mean, motorcycling is a more physical sport where they have to wrestle the bikes around the place. It is unbelievably exciting. I've been to Silverstone. I think maybe it was Donington, actually, to watch a MotoGP event or 500cc.

57:31I can't remember which one it was, 20, 25 years ago. And I've never seen anything like it. I mean, it was so adrenaline-fueled. I mean, the whole thing was, you know, you could see the drivers fairly close up. So it is an interesting sports mystery as to how it's never quite managed to crack. Not never, but how outside of certain core markets, particularly Italy and Spain, it hasn't quite managed to crack the broader market that that's got to be the belief of liberty i'm really excited to see who comes in as potential buyers of teams if they're up for sale have a quick look at the teams charlie it's a good point right so basically just just to summarize to to people there are 11 teams five of which are what we call factory teams so that's where the manufacturer themselves has the team just like in formula one where you have mercedes um uh and so on so forth.

58:23In motorcycling, you have Ducati, you have Aprilia, you have Honda, you have Yamaha, who own their own teams. They then also supply engines and technology to six independent teams. And those teams currently, which obviously are the ones that can trade because the factory ones by definition, well, they could trade. We've seen that with Mercedes recently, but not currently so much the case. But those teams are currently trading at about 50 million bucks. Now, if we think that Formula One teams right now, Charlie, are being valued at... Well, over a billion minimum, up to six billion. Right. Premier League level.

59:02The cheapest Formula One team you're probably getting is about one and a half billion now, right? I think you'd say. Bottom of the grid. Right. So the Delta... And Mercedes' valuation in our first show was six billion is what George Kurtz brought into it at six billion. We just talked about Liverpool being valued at 4.5 billion. Yeah, right. But we've also noted, Charlie, that prior to Liberty's takeover, the smaller Formula One teams were being valued at 100 to 150 million bucks. Well, yeah, I mean, and that's generous, Charlie, right? I mean, if we're being really honest, they were worth pretty much nothing.

59:35If you're looking at the mid-2010s, I mean, they could barely survive. But on that point, you know, that's the key element. they were businesses and underperforming businesses. They've been built into franchises. And if you're looking at what you've got a MotoGP opportunity now, can you make these businesses? Can you turn them into those similar franchises? Now, that price, I always look at the gap between total asset value and then the key components of what makes a MotoGP, i.e. the teams. You've got pretty much 100x difference between what some of the teams are trading for and what the total value is.

1:00:09Now, I remember when I first saw this, I was like, someone surely got this wrong. Someone's massively overpriced, one's massively underpriced. The more I've got into it, I think, to be honest, yes, maybe, maybe four plus billion was punchy from a buy price. Actually, the economics of it, I don't think, I actually don't have it right in front of me. I think it was about eight, nine times revenue. The top end of sports valuations, if we're looking purely at that metric, not ridiculous. The teams, however, that makes them viable. If they can put an ecosystem together where you get really smart and exciting investment coming in and deploying cash alongside what they can do as MotoGP Central, you've got the foundations for a good organization.

1:00:52Now, they don't have cost caps. So we talk about Drive to Survive, but as we've also mentioned on many an occasion, what made Formula One really big and a lot of the business it is today was the implementation of a cost cap because it just meant that investors didn't have to come in, lose bucket loads of cash to win things. They don't have that in MotoGP, but it's kind of a subtle change and I spoke to Carlos about this on the show. I think he said a 10 million euro spend would get you 0.05 seconds gain. So he said it's not even if you spend ridiculous amounts of money trying to improve the speeds of these bikes it's not actually going to give you a huge advantage.

1:01:26To get a second ahead which would be a huge advantage you would need to spend 200 plus million. I think that's special pleading from Espeleta and he knows that it would be much more attractive with a cost cap but they haven't been able to get the manufacturers to sign up to it which is just where Formula One was before. So he sort of says, well, you know, yeah, okay, we don't have a cost cap, but it doesn't really make that much difference. It makes a huge difference. And the reason it makes a difference, Charlie, is something that you mentioned in relation to buying football clubs earlier. And is if you can have business certainty that over a five-year period, your entity is not going to lose money on an operational basis, you as the new owner of that team can plan your investment around marketing.

1:02:09You can actually say, right, we know we've got the operational side locked down because I think they actually receive from MotoGP, each team receives about 8 million in TV revenue distribution. Right. So let's just say that they had a cost cap of 10 million or 15 million. And you say, right, OK, we're getting 8 million from Central. We're then getting 5 or 6, 7 million from sponsorship on a reliable basis. OK, right. So we are now operationally break even. So any money that I now invest into my team is going to go into marketing my team and try and make it into the franchise, which then enables the valuation to rise.

1:02:46And without the cost cap, you never quite know where the next frontier might lead if one of the other teams then gets a big new advantage where you might have to then follow to be competitive. And without being competitive, you don't have your attractive franchise and so on and so forth. So for me, this is going to be one of the big battlefields for Liberty, in fact. over the next two to three to four years is persuading all of the teams, guys, all of your valuations are going to massively increase if you agree to a cost cap. It totally, like, screws with my mind that people don't understand this.

1:03:24And we'll have to come on next week because we haven't had time this week to cover football cost caps where there's big news flow at the moment. is I speak to football club owners who simply cannot comprehend that losing less money would make their entity more valuable. They literally can't understand it. They say, yeah, but if I lose less money, that means I'll be less good at football. If I'm less good at football, then I'll be worth less money. No, no, sorry. The cost cap applies to everybody. It doesn't just apply to you. It applies to everybody. And therefore, everybody becomes worth more money.

1:03:56Yeah, but what happens if I want to beat this other team? Forget it. It doesn't matter. You want to become worth three to four times as much even without beating that team. Now, if MotoGP can get that into the franchises, the franchises will rise in value or the teams will rise in value. And it will also mean a reallocation of capital away from spending on trying to get faster into actually becoming better marketed, better businesses, et cetera. They'll be able to hire better executives to run their commercial and marketing side and all this type of stuff. So I think this is - It actually improves your technology investment to an extent because you're more refined in what you're doing.

1:04:33You're not just spaffing loads of money to try and do stuff. Again, taking it back to football, Charlie, this is why I call the differential between Brentford and Stoke. Whoever runs Stoke knows that they've got an owner in the Coates family who own Bet365, who are basically willing to spaff as much money as they possibly can find on Stoke City because they just don't care and it's their club and they want everyone in the town to think they're great people. right and then you've got brentford where it's one person who is a wealthy person but not a billionaire um who every pound counts everything has to get measured there has to be efficiency in every single thing they do who wins at football compared between brentford and stoke the ones with the billionaire spaffing money or the ones who are running a tight rein the ones who run on a tight rein which again is the other thing which is very hard for owners to understand within sport anyhow the long and short of it is is i think both you and i are quite excited by moto gp as a proposition and with what liberty can do for it.

1:05:27I enjoyed it this morning as I was getting, I know when you were excited by something because I get loads of messages and screenshots of articles and I think, oh, he's in a hole here. He's enjoying it. The MotoGP, so the event that we had at Silverstone at the weekend, you know, should we say statistically, I've seen some negative commentary around it, you know, UK and racing. This is around the attendances. Around the attendances, yeah. The attendances were about 100 ,000 over three days with 45 ,000 on the main day. Listen, by general standards, that's pretty good. But it's true to say that in case of the British Grand Prix, that is somewhat down from its peak of about 150 ,000.

1:06:07At the same time, not to be too Anglo-centric about it, the French Grand Prix has been breaking records. Up to 300 ,000 now on a reliable basis every year is going there. And the Italians are up to almost 200 ,000 and the Spanish are up to almost 250 ,000. So you are seeing massive attendances just with a little asterisk that says, I think that Britain is suffering here from not having had a very preeminent motorcyclist for quite some time. Carl Fogarty, who was the world's super bikes champion, which is a different series, was the last big English-British motorcycling champion, really, and that was 15, 20 years ago.

1:06:42Now we've got Carl Crutchlow, who rides and who is a good rider, but he hasn't managed to break into that upper echelon of British sporting celebrity. Whereas if you look at Spain, Italy and France, during that last 15-year period, they've had competitive riders. Completely. And that was why I wanted to bring that up. Because I thought, you know, for us and any listeners in the UK, if you've seen any articles on this in the last few days, it could have had a negative spin on it. If we look at it, and as I said, take away the English perspective, look at it as a whole, it's actually doing quite exciting stuff.

1:07:08And the audience demographics are quite exciting as well, which I think at Liberty would like. You know, over half of the global fan base remains under the age of 35 based on the data they've done, which is hugely appealing for a sport at the moment. their viewership grew on average by 9 % across each Grand Prix last year and the social following for over 60 million followers so you know there's lots in there to like and hey look Liberty have done great things previously as we've said just to say they won't do it again I think they'll be some really interesting things they've only just started they bought it a year ago so watch this space this sport in the next 5-10 years could become something big completely agree there we go so I think we're now heading over to Substack aren't we Charlie?

1:07:46yes we are going to head over So we're going to head over to Substack now, Charlie, and we're going to start the first part of our Premier League season review. And it's not going to be just the normal who's going to score the most goals. We're going to do it from the business side because we get a lot of comments across all the shows asking for our perspectives on some of the teams, the businesses they've been doing and the ownership structures, etc. It's very hard to touch on all of those in the main show. So we thought let's go on and have a look at each club and how they stand going into the new season.

1:08:11So come and join us on Substack. But if not, we will catch you next week with Charlie, hopefully in another very exciting, colourful, flamboyant shirt.

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