THE BREAKDOWN: Eddie Hearn vs Dana White, The Crazy Business of The Masters & Tottenham Are At It Again (E13)

26:03Yeah. Right? That's not blue on a red car, is it? Right. And he then made a few comments about how Eddie Hearn just works for his dad, right? That's the easiest stick to bear. People use it all the time. And Eddie Hearn came back with some quite amusing quotes. I wasn't expecting him to be so effed and flustered so early. Dana White works for Turkey a la Sheikh, really. So effectively he's saying that Dana White is just an employee. He's been working very closely with the Hearns also, to be saying, and match them for a number of years. As I said earlier on, that's the interesting thing about the whole thing is that Saudi's effectively got feet in both camps, right?

26:39So now Zafar has staged a few early fights, a few early promotions, and they've been in relatively modest situations back in America. And Eddie Hearn says, at the moment, Dana White's vision is staging mediocre fights in his garage in front of about 112 people. They're miles off the pace. I bet Dana White's got a hell of a garage. Yeah. I'm not sure that's going to console him when he hears that quote. So this whole thing is kicking off massively and it's clearly going to become an absolute dust-up. What was the response? What was the response of the Hearns to this? You nick our fighter, what are we going to do?

27:19So that was the... So a bit of context around this. The broad assumption from a lot of people, particularly in American sport, has been TKO is massive. TKO is going to crush the Hearns and Frank Warren. Yeah. Right. Leaving aside, you know, let's just first have a look at the scale. Right. The scale of it is, broadly speaking, that TKO's total revenues across the various different things they do is about$2 billion a year. And Matchroom Sport, which is the Hearns business, is about$250 million a year. Yeah. Right. Boxing, I think, was about$80 last year. Yeah. So the Hearns have got a beautiful family business.

27:57Out of that 250 million revenue, they apparently make around about 50 million pounds profit a year, which is a much higher profit margin than TKO have. And on top of that, TKO is laden down with a big chunk of debt, almost 4 billion of debt, which they are paying big chunks of interest on. They're paying an average, I think, of about 8%, 9 % interest on that debt. so it's a classic highly leveraged almost private equity style like sort of roll up where they're trying to right let's just get as much scale as possible even if we're not making as much money as perhaps we might be let's just try and squash the opposition and then the big profits will come later on so I think the assumption is you just squash the Hearns the thing about the Hearns and Frank Warren for that matter they're street fighters I mean the you know particularly Frank Warren came up through the very hard school of you know East London unlicensed boxing in the you know 20th century going on to become one of the biggest.

28:52I think Frank Warren has put on more than 200 world title fights. More than 200 world title fights. That's the scale of his impact on boxing in the last 30 to 40 years. And the Hearns obviously, you know, dominate other sports as well as being big, big players in boxing. So I think the sort of assumption from Dana White was what does, you know, what did he say again? So competing with the Hearns is like beating up babies. And then the news broke that the Hearns had signed the most prominent of the UFC fighters, the heavyweight champion, Tom Aspinall, to a management contract. So suddenly, I mean, to say that the gloves are off is absolutely understating the situation.

29:33But I think they will find that competing against the Hearns and Frank Warren is a bit like this. It's what we might call asymmetric warfare, which is you think that by being a big corporate, you can squash them. But suddenly you find you've just taken a shot to your ankle. Suddenly you find that something happens left field. And I saw that Frank Warren, who's got a long, very successful history of litigation, by the way, should say, he's a very successful litigant, that he is suing Zafar for one billion. Okay? That's a mixture of Zafar and Salah, the Saudi-owned entity, which is part of the whole Zafar thing, so Turkey, Allah, Sheikh.

30:10And, again, the thing is, is that as these shots are coming in, Hearn taking their best fighter here, Warren suing for a billion here, It just takes up vast amounts of mind space. It creates a lot of sort of uncertainty within the whole organization. And this is kind of what happened to Liv. Liv sort of got hobbled by the USPGA doing this and then a golfer doing that and then a TV company doing that and a sponsor doing this. And they basically spent their whole time fending off or trying to find ways around lots of litigation and lots of problems instead of what they imagined to be the case, which is just marching the tanks onto the lawn and just winning outright.

30:44So I think it's going to be absolutely fascinating what happens in the next year to two years because it is a very complex landscape. We need to develop that Tom Aspinall point. We do. So Tom Aspinall is the current heavyweight champion in UFC. He's a Brit. and famously said he'd actually only spoken to Dana White, I think once in his whole time at the UFC. You look at the relationship that Eddie Hearn has with his fighters, my God, it looks like he can't get them off the phone. Anyway, what Matchroom have done, it's a really cool move in and around sport. They've recognized an opportunity to create a talent agency, which is the origins, actually, really, of what the Hearns were back in the day.

31:26Steve Davis with Barry Hearn. Eddie Hearn was a golf agent, I think, before he really came into the whole Matchroom organization. So, you know, their roots are very much in building real value and brand around a lot of professional sports people. And they do it unbelievably well. Unbelievably well. Unbelievably well. Now, they've identified this opportunity in sports maybe where they're not acting as promoters, saying we're going to build a talent agency where we can get some of the top talent from, let's say, rugby or UFC or football and create these brands around individuals who have a lot more to offer than just their performance on a pitch or in a ring.

31:56now Tom Aspinall for you know one of the most successful fighters in combat sports is not a household name he's also British generally with our sports people we really elevate the value of our sports people he again even here is not a household name Eddie Hearns recognised that and he's basically gone in two fingers way to UFC well you know you guys can't probably monetise and commercialise your top fighters I'm going to be able to do that for you we're going to build a brilliant brand around him now importantly This is a commercial contract. So this is not dealing with Tom Aspinall as a fighter.

32:29This is not bringing Tom Aspinall into boxing yet. This is Tom Aspinall as a brand. He will still fight in the UFC. He will still fight in UFC, Charlie. But let's just play this down the track. Let's imagine that the Hearns were to sign three to four to five to six to seven UFC fighters. And let's just say for a moment that UFC continued to pay their UFC fighters rather modestly, which they do. and let's just say for a moment the Hearns decided actually guys we can make you more money than UFC we've now built your own individual profile so a fight between the two of you is going to have it's own scale and it's own size outside of the UFC label at which point UFC loses it's grip on that particular type of fighting so I'm sure that's what the Hearns are thinking here the Hearns are thinking just as Dana White is thinking we can take candy off the baby when it comes to traditional boxing, Queensby Rules boxing, the Hearns are looking at it and going, hang on a second, these fighters aren't that well paid.

33:28We can probably get them a lot better paid because our promotional genius will mean that we can make them household names, which will then come with big TV contracts. So Zuffer's way into their world is to pay Conor Ben a lot of money, more than them. Their way into UFC's world is to build the commercial brand that UFC's failed to do around its fighters. I don't think either of us think that that is where that stops for either of those organizations. They're playing each other at the same game. they just identified a different opportunity to target. And they have different strengths. And they have different strengths.

33:54So Zuffer, TKO, have balance sheet strength, right? Just the ability to say, right, we are a massive multi-billion dollar organization and we can afford to take a big cash hit up front by simply paying a fighter a lot of money to jump ship in some way. And then the Hearns strength, and Frank Warren's to be fair as well, is in the personal management and promotion of athletes in general, but boxers in this case, and to be able to take their out-of-ring earnings to a whole new level, but also then, once their profile is built in that way, to sign individual TB contracts around that particular fighter.

34:32And that is why this is so fascinating. And this is a clash of the titans. This is a clash of sports business titans. They are both, in their own way, right up there in the pantheon of international sports business people, Dana White and the Hearns, right up there. Yes, the Hearn organization is smaller, but they own it. Dana White doesn't own what he has, right? He is now an employee, effectively, of somebody else's organization. But those two as entrepreneurs, Barry Hearn and Dana White, have been right at the very top for the last 10, 20 years. And now they're going head to head and it's absolutely fascinating.

35:03And so people are keeping an eye on, and because this will happen more, particularly with an agency like this, is the difference between commercial representation and contractual, should we say, performance representation. That's where this can happen. Interestingly, did you see Henry Pollock has also signed? I did. the rugby player, Henry Pollock, Northampton Saints and England rugby player, Henry Pollock, who if you are a rugby fan, or again, if you're not, he's one of the few players recently that has started to break out of the rugby bubble. Young, 21 years old, blonde hair, mad celebration, sticks his tongue out of the hacker, everything that pisses the traditionalness off, basically.

35:36But there's a brand in here. Eddie Hearns looked at this, he's gone, I'll have myself some of this. This kid has something. I know what to do with him. And I have absolutely no doubt that they will know exactly what to do with him. But this is so good for rugby. Rugby needs someone to come in and build profiles around these stars. That's where it's always struggled. Eddie Hearn will give that. When Henry Pollock signed for them, it actually supposedly, reportedly, came from an outreach from Stellar Rugby, which was Henry Pollock's agent, going, we actually need some support commercializing. This guy's such a talent.

36:11So you had an agency who looks after his playing contract, reaching out to someone who would build and develop the value of his commercial. So you start to get a world now. It is unusual, isn't it, Charlie? Because generally speaking, those big agencies would view themselves as being multi-service. So it is a slightly unusual situation where one of the biggest player representation agencies in the world who are not limited to just looking after the contract at all. No. They often will look after players, social media and so on and so forth. I'd love to know what was going on behind the scenes because normally agencies keep their clients so close.

36:46They hate the idea of letting them out of each other's sight. That's why it shocked me. That's why that bit really surprised me. Is this going to lead to more cooperation between Stella and the Hearns, I wonder? It just feels odd that it would be a one-off in this way. Completely, but maybe it's the very long-awaited and much-needed recognition of play where your strengths are. And if those agencies do really well in contract negotiations and on the player management side, should we say, and you have someone that's driving that commercial value. If you have Henry Pollock, who is more commercially valuable, he's going to be driving bigger contracts and better deals for the agents who are working on that side.

37:21Now, you could try and play your hand in the commercial side, but if you don't have to reach the network, the contacts, the mind to do that effectively, then it's highly unlikely you're going to fully capitalize on it. For viewers and listeners who don't know, Stella are one of the very, very, very biggest sports representations agencies, particularly in football. I found that really interesting. But, you know, again, you see this agency, you see the Hearns, you see them applying their talents and their skills outside of it into different areas. But really what you're talking about here is just developing world class brands around these stars, whether it's Tom Aspinall, whether it's Henry Pollock.

37:53Luke Littler. Or Luke Littler. Exactly. Steve Davis. Barry Hearn is somebody who made massive international sporting stars out of snooker players, darts players. You know, these are English pub games, and yet they made their participants massively wealthy. This is what they're good at, and this is not something recently learned. You know, Steve Davis was with Barry Hearn from the late 70s. So we're going back like 40, 50 years of expertise in this particular area now. So keep your eyes on this one. As sports industry fights go, this one is going to be immensely entertaining. this is a topic we'll be coming back to no doubt if you guys want to watch something and get a little bit more on the um organization the netflix matchroom series i thought was actually very good gave you a great insight into the variety of work that they do across their multiple sports and how to really do something well i mean i know we're both fans i'm a big fan of them i like what they do um i think sport it's what it's about they're also just people that are grafted to get to where they are.

39:02Nothing's been given to them. Huge admiration. Huge admiration. I mean, I look across the sports industry in many cases, I think, guys, come on, we can do better than this. We can be bigger, we can be bolder, we can be more charismatic, we can be more entertaining. And then you've got the Hearns and you go, well, we need to follow in their footsteps. We need to understand what is possible. Because if making darts players into international global superstars is possible, then most things are possible. So anyway, it's going to be a massive fight, Really interested to see how it pans out. I couldn't tell you which way it's going to go at the moment.

39:34So from the mad, the extraordinary, the overtly...

39:42Testosterone-fueled, macho. To the world of absolute purity and integrity. Elegance and serenity and beauty, which is Augusta National on the US Masters, Charles. One of my favourite four days. I mean, you have to clear the diary, don't you? You do. It's one of the very few sports events in the whole year. And bear in mind, it's four days. It's not one football match. It's four days. Anyone who's serious about golf knows that for the US Masters, you have to clear the diary. You can't be booking evening engagements because, of course, because the time difference here in Europe, we get to watch the US Masters in our evening, late afternoon and evening, which is absolutely sort of perfect time.

40:24but woe betide any of our other halves who book dinner engagements during the Masters. My other half is down with me for four days on watching that. I know, but she's a keen golfer, isn't she? She is, but also it's one of those few golfing events and I've had it from a number of people. Even if you're not a golf fan, there's something entrancing about it. And timeless. Everything is, it just feels in place. It's kind of, it's quite mesmerizing. Not a blade of grass out of place. Hand weeded. Hand weeded as Augusta National is. But I think the thing which is not discussed all that often, and probably the Augusta National Organising Committee would like it this way.

41:05Sorry, guys, but please do not withdraw the invitation that you're about to make to me to fly over next week on the basis that we're about to do something that you don't want us to do, which is look at the business that lies behind the US Masters, because it is the most bonkers sports business I have ever seen. It is, right, how can I put this? You're excited. Right, I'm excited. I'm excited to say this. It is the only sports business I know that tries to make less money. That's the headline. I mean, it's, let's go for it, Charlie. Let's explain what we mean by that. Firstly, the numbers are actually quite closely guarded.

41:43So everything we're talking about here, we're calling on information that has been released in the last few years. And when I say released, should we say not like through necessarily any official Masters channels, but people have legitimately enough got their hands on some of these numbers. So just let's really ground this in here. I think what we can all agree is maybe don't take it to the exact, but we're talking pretty accurately in the broad context of where the Masters is making money and where the Masters is leaving money on the table. Anyway, sports organizations want to maximize how much money they generate through tournaments, through their clubs and their assets.

42:18And that is not the game of the Masters. So what do we mean by that? Well, really, what you have with the Masters is you have a reputation that seems to matter far more than a commercial output, i.e. they care about the brand, not the bottom line. Now, traditional sporting revenue, Charlie, and most teams, most organizations, they love to make money through media. TV rights. It's beautiful, beautiful revenue. And the reason for that is you don't have to sweat it yourself. So all you have to do is once every five years, you hold an auction and you say, this is if you hold rights that everyone wants, of course.

42:57There are plenty of rights that not everyone wants, but that's the story of another day. But for the rights that people want, which the Masters is evidently one of the most valuable or most sought after rights around. So pretty much every TV organization would want the Masters rights. What do you reckon you'd pay for those? So hundreds of millions, wouldn't you? So normally what would happen is you'd run an auction for your domestic rights. So that's for the US market. And then you'd run various auctions for various packages of your international rights. And whoever paid the most would get them, broadly speaking.

43:28Now, there might be one or two markets where, you know, for instance, here in England, we have a situation where the government says there are certain key sporting events, the Grand National Women, which do still need to be shown on the national broadcast, the BBC. And that's true in a few countries. So it's not absolute, but generally speaking, whoever pays the most gets the rights. And that money comes in nice and clean. The TV company comes in and pays the money to televise the event. They then have to monetize it in their own way through advertising, through subscriptions, through whatever, sponsorships, whatever it might be.

44:00And the rights holder, that's the organisers of the event, just get a massive clump of change landing on their doormat every year or once every six months or whatever it might be. So you'd assume the Masters would, as one of the most prestigious sports tournaments in the world, drive significant value through their media rights? They could charge pretty much whatever they wanted. But do they? No, they don't. They do exactly the opposite. So first of all, they have taken the decision that they are going to give their US rights away for free. Sorry. The US Masters Organizing Committee gives its domestic TV rights away for free to CBS and ESPN.

44:42CBS has long been the mainstay of Masters Broadcasting. Indeed, they've had the same presenter doing it for almost 40 years, which rather sums up the whole thing. Right. So they give these away for free. Not only that, but the production costs incurred by CBS and ESPN. This blows your mind, right? So what happens is CBS and ESPN, at the end of televising Masters Week, work out how much it costs them to televise Masters Week. Do you know what they do? Send an invoice. They send an invoice to the Masters Organising Committee who pay them, who pay their production costs. So it's basically me going, right, Charlie, it's cost me a few million quid to put this on.

45:23Here you go. I'd like it if you could pay me back for that, please. I go, yeah, sure. No worries. Here you go. Yeah. Money back in your account. So first of all, you can have the rights for free. And secondly, we'll actually pay you for all your costs as well. So this is absolute bonanza time for the networks. Yeah. But is it? Yeah. Because. There's a flip side to that. There is a flip side to that. And this is where it becomes really interesting. because on a normal basis, if those US TV channels were televising live golf, in each hour of broadcasting, they would have about 20 minutes of advertising during the hour at various different points within the hour, obviously not in one block, but at various different moments, there would total 40 minutes of golf and 20 minutes, 18 to 20 minutes of advertising.

46:06The masters say, oh, you can have them for free. In fact, we'll even pay your production costs, But you can only have four minutes of advertising because what we care about is the experience of the viewers. We care that the viewers have the best possible experience of watching our golf event. And they don't just confine that to the TV viewers. They also have it to an even higher degree with what they call the patrons. Those are the people who actually turn up live to watch the Masters at Augusta National. So not only are ticket prices, badge prices, the ones that are formally bought through Augusta, they trade at about 50 % or even less compared to what they would do on the black market.

46:51Okay? So Augusta are deliberately keeping the prices of those badges limited. And once you have one of those badges, you're a patron for life, and you can only pass it on to your spouse in the event of you passing. Right? So, and then there's a waiting list. Buggins' turn. dead men's shoes literally who then you know when unfortunately one patron and his other half eventually pass on to a better place then the next person in gets that badge and so on and so forth so they are paying have you got the ticket prices there so tickets as you said called badges basically it's run on like a lottery right well that's the other way so you've got the patrons but then you've also got a lottery it's both yeah so so but I said you've described the patrons perfectly this is if you just want to go and watch in the ballot then the other side of it if you or I decided we want to go and watch the Masters this year, we would enter a lottery.

47:39You'd enter a lottery. You have a 0.5 % chance of winning in the lottery. 0.5 % chance of getting a ticket. If you win, the tickets cost between$100 to$140 a day. So I don't want to be that sort of, you know, Marie Antoinette figure saying, well, you know, 100 quid's nothing. But 100 quid... $100. Sorry,$100 for the sporting experience experience of a lifetime is basically de minimis because don't forget that when you're watching a day's golf is a whole day's golf it's not a 90 minute football match and let's put that into comparison right if you're going to a premier league football match that's around the similar cost yeah for an average premier league for a normal premier league match if you're going to a cricket match what much more there's a test you know those are now 130 40 pounds if you're going And how much do tickets sell for on the secondary market?

48:32Up to, well, 10 times that. Right. So the minute they go on the secondary market, you're suddenly getting over$1 ,000. Right. So the Augusta Organizing Committee could be selling their badges to watch at Augusta National for$1 ,000. And instead, they're selling them for$100. And really to put that into context, the overall revenue number is rumored around$140 to$150 million a year. In total. That's in total. That's all revenue streams. Not just tickets. So that's total. The badges element of that is about 50. So if you have$140 to$50 million a year on everything, if you just tried to find, let's say you found the middle ground between what the master seller ticket is for and what the secondary market does, and let's say it was$500 a ticket, which people would still pay.

49:24I'd be one of them. still be right oh exactly you would make another 140 to 150 million so they would almost double their revenue just by finding the middle ground without fans even feeling exploited and that's just on badges and that's just on badges that's that's still that's still with the tv tv rights being given away for free yeah okay and charlie we're about to hit i think both yours and my favorite part of this because you would assume right okay so we're going we're going through this and we're going right okay so they give their tv rights away they make 25 million on their international tv rights i'm not sure they said that so they sell those for 25 million dollars which is still very little for what they could charge.

49:58You're then giving the people that actually come in to watch the Masters a very cheap ticket, around$100. There's going to be a catch here somewhere. We're going to have to start rinsing these guys. They really soak them when it comes to the concessions. It must cost them a fortune once they're in. Once they're inside, it must cost them an absolute fortune, right? For food and drink, that's where they finally get them. But does it? No. Right. So, I mean, this price list, in the way it's laid out, perhaps, I don't know if we can find some way of graphically showing this. We will show this graphic on the screen for any of you watching.

50:33So, it both looks like, in font terms, it looks like something from the 1950s, but it also looks like the prices of, someone's forgot to put the prices up since the 1950s. So, a… This is concessions, right? This is food and drink. This is food and drink, right? So, an egg salad sandwich is$1.50. That's one pound. A Masters Club sandwich, that's sort of the full big thing,$2.50. The most that you can spend on a sandwich is ham and cheese on rye bread, which is – no, that's not right. Sorry, classic chicken sandwich,$3. Okay. Pricey. If you want to have a beer,$4. Okay, so$4 is about three pounds for a beer at Augusta National, and so on and so forth, and so it goes.

51:19I think I saw it. I think you could order the entire menu for$66. The entire thing. All the sandwiches, all the drinks. For$66. Everything for$66. That's a round of four drinks, football ground around here. Absolutely. If you're in town. That is extraordinary. Yeah. Just generally put that into the context again of what an experience is all about for a fan. Going out, having a great time, getting the opportunity to get a ticket and enjoying yourself while you're in there. whether we like it or not. Now, price pays a huge part in that. You can genuinely go and enjoy your day without breaking your wallet.

51:55Yes, but I think we go back onto the almost gratuitous nature of their generosity, which is, I agree with you. If I go to an event and somebody says, when I want to have a beer, that's 15 bucks, I just feel bad about it, right? That's 11 pounds for a beer, even for those of us who quite like a beer, even accepting that you're on an event, I just sort of feel bad about it. three quid, really? If somebody charges me six quid for a beer inside a major sporting event, I'm very happy about that. I'm very happy about that. I'm happy to give them money and I think they've actually treated me very, very fairly.

52:31So again, it's an area that currently brings them in about$8 million a year when realistically you'd think that that could be more like 30, 25, 30, something like that. And still be reasonable. And again, still be reasonable, still be within my expectation. of what I would anticipate paying. Yeah. So the one area where they do make, and I have to say it's not actually because they overprice this, but their merchandise numbers are quite extraordinary. And if you were to be really sort of strategically analytical about it, you'd say the reason why they're able to sell this much merchandise is precisely because of everything else that they do.

53:11In other words, keeping the whole event that pristine, keeping the whole event that pure, keeping everyone that happy and that admiring of their brand means that they can sell an extraordinary amount of merchandise. But even that they do eccentrically, Charlie, because you can't buy it online. So that's the key. You can only buy Masters merch at the Masters. So exclusivity, that feeling of being there, you're not breaking your bank, buying your beers and your sandwiches. You're probably looking for somewhere to spend money. So, hey, come to our merch store. And how much do they generate an hour?

53:48They take$1 million an hour over the till in their merchandise shop. The average spend per head of a master's attendee on merchandise is$1 ,000. So I guess you could say all of that money they've given up on the ticketing side, all that money they've given up on the concession side, they get it back in a really voluntary way. Because the thing about the ticket, you need the ticket to get in. The thing about the food and beverage, you're there, you're hungry, you need something to eat and drink. It's not voluntary. But the merchandise sale is entirely voluntary. There's no compulsion to buy merchandise.

54:19So they get it back in such a way that people are really happy about spending it. In fact, they're proud of it. And also, secondary market's big for it as well. Have you read about the gnomes? The gnomes? No. So in the shop, they have this thing called master's gnomes. They can't have gnomes. As in little garden. They can't have garden gnomes. So they have garden gnomes. And each year, they change the design of the gnome. So a gnome will be wearing a stripy top one year, will be wearing a red top another year. And we'll always have the Masters logo on it. And so they've created this like collectibles market.

54:50And the gnomes sell for about$50 in store. But these are, as you can imagine, enormous collector's items. So they've created not just lines of clothing and brands, they've actually created products around there that people then do get their hands on. And as you can imagine, the secondary market for gnomes... It's so eccentric, Charlie. It's so eccentric, right? I mean, just the idea that you have an entire commercial strategy that ends up with you selling garden gnomes for$50. I mean, just the mind boggles. It is a very, very eccentric organization. Just looking at it here, you know, to your point of where they make money, it is fascinating.

55:23Because if you're talking about, let's say, the four key pillars we've just gone through there of revenue, TV rights, tickets, merchandise, concessions. Generally, in a sports organization, that's how you'd expect it to go. TV rights, you know, doing most of the heavy lifting. You then have your tickets. Your concessions and your merchandise may trade. Maybe the concessions are merchandise. Merchandise is$69 million, reportedly, of the$140 to$50 million. I mean, it's an absolutely incredible proportion. I actually had it down here as 80 last year, as being 80 million last year. US as a proportion of the 150 million US overall.

56:01So it's more than half of their total income. So it completely flips. But the beauty of it is, as I said, it's so voluntary, right? So you can go to the Masters and no one's telling you you have to buy Masters merch. You don't. You choose to do so. You're proud to do so. You're happy to do so. So it is all about their live patrons and their viewers being looked after as if they are genuine partners of the event. Do you know where you do get screwed? Oh, I imagine that renting a place or taking a hotel room in the vicinity of Augusta during that week might be quite expensive. In one. So they have actually something that's basically known as the master's rule.

56:37And this is in the US tax system. What it is, is it's an IRS rule that states that you can rent your house out for 14 days a year and it won't count to your annual tax return. And the reason they've done that is because these people who live close to Augusta in Georgia can rent a four to five bedroom house out for$30 ,000 a week. $30 ,000 a week. Tax-free. Tax-free. That's the key point, tax-free. So you've got the locals who basically go, right, well, we're out for a few weeks. We'll go straight to the Bahamas or wherever they want to go and enjoy for that price. You come in, take our house. I don't know about you.

57:25I just find it's incredible. It's extraordinary. It's so unsport. everything we always talk about is maximizing. And this is just, this is control. We haven't even spoken about the commercial partners, right? They've only got six. Yeah. Bank of America, AT &T, IBM, Rolex, Mercedes, UPS, as far as I'm aware. Yeah, that's fine. And they take in, you know, a certain amount of money from those entities, but it's that money they use to give to the broadcasters to pay for their production costs. Isn't it also those companies that, they're the adverts that are running the four minutes? That's right. Or mostly, anyway.

58:01I have to check back on that when it comes to US coverage. But the critical thing here is that those commercial entities, obviously, very much selected for being on brand with the masters, big, established, blue chip, and all that type of stuff, but no advertising hoardings. So you will not see around the green as you would do in a normal event or, you know, around the tea or in various different places, advertising hoardings. So the extent of their partnership is quite, again, very carefully controlled. You're not allowed to look like you are actually funding and owning the event partially because you're not, frankly.

58:37You're actually a relatively small part of the mix. But anyway, I think sort of just to wrap this sort of or to take it on to a more strategic level. The reason the masters can do this and leave that much money on the table is because they do not feel the need to transfer that money to the participants, the golfers, in order to attract them to play. First of all, because 150 million gives them a really good prize money pot anyway, right? So they've got plenty enough to pay really good prize money. $21 million pot,$4.2 million for the winner. So they've got plenty enough to pay a competitive prize money pot.

59:11but also really they know and this is where the self-confidence comes from that every single golfer wants to win that green jacket and therefore they don't need to go and blow it out the water they could blow it out the water when it comes to prize money they could simply be the biggest prize money event in the year by miles but they choose not to be there so what's the point in that the golfers all come here anyway they all want to win the green jacket of course we should give them proper rewards but we're not going to go like live golf or something like that we're not going go crazy there's no need it's no point it's a bit vulgar let's try and make sure or even just your standard pga tour event yeah which which wants to attract the players and so they have three to four million for the winner price they have to do so otherwise the players wouldn't turn up whereas the masters know that they will there's only one sporting event which even vaguely reminds me of the u.s masters in its ability to control the environment control how it looks visually control everything about it, which is Wimbledon.

1:00:04Now, Wimbledon certainly do charge you a lot for concessions on site. And tickets. And they probably, I think Wimbledon, to be fair, also view themselves as having a slightly broader responsibility to the game as a whole because quite a lot of money that the All England Club makes does get dispersed more widely than Augusta disperses their money, right? So there is a bigger picture there. You could say they're commercial. They are more commercial. Model is. But so if you're a partner, let's say you're a Barclays or an Evian or a Rolex, where you are allowed to advertise and how you do it, if you look at the advertising boardings around Centre Court, it all has to be in Wimbledon colours.

1:00:42It's literally like green and yellowy gold. And it's very small. Very small. So it is a feature. It is not the feature. Yeah. And that is probably, like, that's the closest they could be. Now, of course, they could charge less on concessions. They could charge less for tickets. But as you said, their responsibility is broader. Yeah, they choose not to. But it's a prestige. Yeah, exactly. Wimbledon is a prestige. But Wimbledon and the Masters are two sporting events which have maintained and even enhanced over the decades their absolute preeminence within both their own sport, but also in global sport.

1:01:21So when I'm in America, which I am a lot, and I speak to American friends of ours, American friends of ours who are somewhat interested in tennis but aren't obsessed by tennis, would be more focused on watching Wimbledon than they would the US Open, their own home event. And likewise, I think golfers here or people who are broadly interested in golf here probably are a little bit more interested in watching the Masters than they are the Open. And I actually looked, last year the viewing figures for the Masters was higher than the viewing figures for the Open, even in this country in the UK. Now, it's a relatively small difference, but nonetheless speaks to the fact that that's how big the Masters is.

1:01:59The Masters, even though the Open, or the British Open as American calls it, is our home event, even though it happens during the summer, during the day, everyone can watch it, etc. Even despite all those things, the viewing numbers in this country are bigger for the Masters than they are for the Open. And the core of the final, protecting their product is the most important thing. It's kind of a lovely way to think about sport for once, isn't it? Because it is just so different to how we talk about things. It's funny because we've just gone from speaking about the very tactical grappling going on between the Hearns and Dana White, which, let's face it, probably doesn't think too much about the grandeur of the sport in 30 to 40 years.

1:02:34It's all about the here and the now and the business and that type of stuff. Then you've got the Masters thinking in 50-year horizons about how can we make sure we keep this legacy pristine for future generations, which is quite extraordinary. But I thought it was just really interesting to sort of pick apart because, frankly, until I did the research on this, and probably the same with you, I was obviously dimly aware that the Masters was less commercialized than most sporting events. You can see that very clearly, very plainly. But actually picking apart just how much money they're leaving on the table, total revenue is$150 million.

1:03:03It's estimated by industry experts. If they decided to fully commercialize it and sell their TV rights in a fully commercialized way, that number would probably be$400 million,$450 million. So they're leaving about$200 to$300 million on the table every single year to keep their event how they want it. We now move back into one of our favorite topics, but we can't avoid it because it keeps coming back, and it keeps coming back with a vengeance. Tottenham, Eagle Tudor has been fine. Just such a big story, isn't it? Such a big story. Sorry, Charlie, I interrupted. No, no, I mean, you're right. It's such a big story.

1:03:33And I kind of look at it and go, do we talk about it again? Are people getting bored? We can't not talk about it. Now, I have a little treat for you first. because this has been going on and developing. Everyone's been talking about how great it was that we identified this a few weeks ago. But there've also been a few other comments on some of our shows going, Charlie's original show with you, they've gone back in. They've found our business of sports show. What did I say? Well, I'm going to show you what you said. There's no chance the spurs go down. I'm going to show you what you said because a lot of people have been calling up on it.

1:04:09I would also say that that show has flown in viewership since you started the breakdown, which is fantastic to see. But we'll play it for, I'm going to play it for you here, but we'll also play it for everyone at home. And I just want to get your thoughts on it once we're finished. This is from an interview I did with you two years ago. This is indeed. Right, I see I look a bit younger. Well, unless you are gold plating everything, then you are basically an idiot. And I think that is the problem that you've just alluded to in terms of what's happening at Spurs, where the owner slash chief executive, whatever, has done a, by any stretch of rationality, has done a phenomenal job.

1:04:48Look at what it was when he took over. Look at what it is now. There is no argument. Done an unbelievable job, right? Spurs is now going to be a big six club for the foreseeable future when that ownership took it over. It was mid-table in a poor stadium, you know, with no great revenues. right so that transformation is formidable and i'm really extraordinary and if it hadn't been now charlie honestly you can't i mean i thought you were talking about the show we did before christmas not while i did two years ago no no and look this isn't charlie this isn't me okay this is this is a fan you're saying i've never seen this happy this is a fan base this is a fan base that we have that is um fair play to you guys by the way fair play because you found it started the comments coming we suddenly saw this spike in the show like what's happening here and just assumed it was because obviously you were joining us in this lovely setting every week but after the Tottenham sections we've been doing I think it was that line Tottenham will be a top six club for the foreseeable so I think we recorded that about August 24.

1:05:57That's correct. So that was at the beginning of the year where Spurs last year won the Europa League but finished 17th in the league and really that's the start of the downfall. I think when we were talking about this, we've really been referring to it as the last 18 months or now 20 months. Right at the stage where, if you were going up to that summer, you were feeling pretty good about Spurs because to the type of things you were saying, all the development had been in the right places. They got an unbelievable killer stadium. The infrastructure was great. Now it just needed that on-pitch improvement.

1:06:27And actually, if you extrapolate, if you were to take that interview on quite a bit further, what you'd find is I would have said that Daniel Levy was an outstanding businessman, but probably not necessarily an outstanding on the football side because it was very difficult to be outstanding at both. So even at that point, I think there was a sort of general acknowledgement that there had been and there was underperformance on the football side. But of course, what I did not foresee, and I don't think to be fair, many people foresaw was that level of underperformance would go from marginal underperformance into a death spiral.

1:06:58now let's just just go back and just talk about what's happened since then what has happened since then is there's been a massive falling out at ownership level between daniel levy who i described as the effectively the owner slash chief executive actually his title was chairman as it happens but whatever it might be and his senior shareholder the guy who owned more of the shares but had much less influence over the running of the club joe lewis and those two have been in business together for 25 years. And the whole thing had operated in a pretty calm way throughout most of those 25 years. Joe Lewis was quietly living in the Bahamas, making lots of money, doing lots of other things.

1:07:35And meanwhile, Daniel Levy on his behalf was running Spurs and Levy himself owns 30 % of Spurs. And the whole thing sort of operated in a reasonably calm way. What happened not that long after that interview is that there was a massive bust up behind the scenes and no one really has ever got to the bottom of why that was there are rumors around the idea that the lewises wanted to see the club sold and that daniel levy had been perceived in some way to be blocking that but that's never been confirmed that was just a sort of rumor that that was something that was sort of happening you know behind the scenes but what did happen is first of all um during that season that we're talking about season 24 25 a new chief executive was appointed clearly without Daniel Levy's you know wishes against his wishes and placed into the club to take effective executive control over a large chunk of running the club but at that point still with Daniel Levy in position so you already had a disconnect there going between somebody who was effectively Joe Lewis or Lewis family appointed and and Levy still being in the club and then a few months after that Levy was unceremoniously ejected literally don't come into the office will send your belongings in a bin bag.

1:08:47He was ejected. And it's, again, never become clear why that ejection was as brutal as it was. All I can tell you is that football clubs are delicate ecosystems. It's basically a relatively small number of people compared to big businesses. We're talking about 100, 200, 250 permanent employees, all of whom know each other, and all of whom work in two quite tight sites, one of which is the stadium and one of which is the training ground, the academy, the training ground. So these people are sensitive to what's going on around them, who is in charge, who is making the decisions, who's my real boss, etc.

1:09:23And when that thing becomes dynamically pulled apart, so that people don't really know who's in charge, people don't really know what strategy is being followed, you've got a new chief executive, but is he really the guy in charge? Or is Daniel Levy still in charge? You'll probably find that one of them was based at the stadium, the other one was based at the training ground, there'd be rumours about who really, how they were getting on and all this type of stuff. So I think that there was a certain level of underperformance that was already there. And that was acknowledged in that interview. But I think the sheer extent of the underperformance has come from the behind the scenes bust up and the consequent lack of strategic clarity, leadership about where they're going.

1:09:59And if you look at who they brought in, that's really important. It wasn't just some puppet chief executive. It was Vinay Vangiteshom who had been chief executive of Arsenal just a year before. a significant figure to come in and run the club. So, I mean, yeah, what is Daniel Levy's position when that happens? Now, that is probably the point to start on here because if we're talking about what's just happened and Igor Tudor, what has the executive been doing in the process to bring a manager in at this stage of the season? And we talked about last week people being out of their depth on the executive level, dealing with a club, fighting for survival at the bottom of the league.

1:10:32This is not where Vinay and Johan Lang, the sporting director, expected to be or have been necessarily previously in their work. The decisions, therefore, they make to try and save the club from relegation are unlikely to be the ones that are going to prevent that eventuality if they don't have the understanding and experience of operating in this type of environment. What is true is that sort of controversy had followed that manager around in every position that he got into. So even at clubs where he had done okay, he still hadn't lasted very long in those positions because of blow-ups behind the scenes or personality clashes or whatever it might be.

1:11:08Now, they would have taken the judgment. I'm confident in saying this. They would have taken the judgment. Well, those blow-ups tend to happen after six months to a year. We're not fussed about six months to a year. We're fussed about now. And what we see in this guy is that in the majority of clubs that he goes into, he gets quite a quick improvement in form and results, even if subsequently it tells off. was it six or seven out of ten his first ten games i think that was about his track record wasn't it right he's been winning he he generally is speaking someone who goes into a group of players who have been slightly underperforming and is able to achieve that famous new manager bounce right now we spoke a few weeks ago about how that is largely mythical the new manager bounce and actually the differences are relatively small but there is the odd manager here or there and i'll discuss one of them later on who by force of charisma and personality in the short run can shake a group up.

1:11:59And you can imagine that in any working environment, same in a restaurant, same in an office, a certain type of charismatic leader can come in, shake things up, and get things moving in the short run, even if you're not addressing the big things in the medium term. That's a massive risk to take at this stage of the season. Totally agree. Right. So I'm just explaining what I think they were thinking when they did that. What they underestimated very, very clearly is the particularities of the Premier League and of Tottenham's actual problem, right? So it wasn't just a group of players marginally underperforming.

1:12:31This was a group of players in free fall operating in a league which is brutal and unforgiving, where even a game against another bottom four sides like Nottingham Forest is still going to be very competitive, very difficult. And unless you are organized and sorted out, you are going to lose that game. And I think that was the bit that was sort of missed in this. And I think, again, going back to what you said, I'm agreeing with you. It's a horses for courses point. If you are a chief executive or if you are a technical director who has been used to dealing with clubs that are down at the bottom ends of that table and you understand instinctively, hang on a second, that we're going to need to grind some points out here.

1:13:08We're going to need to be smart. We're going to need to be a bit more pragmatic. We're going to need to win a few games 1-0. We're going to need to get a few 1-1 draws across the line. Every point's going to matter. We're going to need to have a manager who comes in and simply organizes the players. Now, one of the things, I remember when we went into Sunderland in 2018, not that long before Big Sam had been brought in, when Sunderland had been still in the Premier League, he had been one of the firefighters who had come in and had just kept them up in, I think, 2015 or 16, something like that.

1:13:40Around that sort of time, maybe it's 2016, 2017. Anyhow, it was interesting speaking to members of staff about what Big Sam actually did. Because the perception of him is different to the reality. Big, gruff guy who speaks in a very gruff way. But actually, internally, he was like a teddy bear. He put his arms around everybody in the whole club, took all of the stress on himself, removed the stress from other people. And critically, when it came to playing side, he just put round pegs in round holes. And he did something which really good managers do. He never asked any of the players to do anything that they couldn't actually do.

1:14:17because when a player is under pressure, they need to go back to their knitting. They need to do the one thing that made them a really good player in the first place. If you are a head it and kick it centre-back, you need to be played in the back four and played on the right side of a back four and just told, head it, kick it. Don't try and pass it, just head it and kick it. Now, what's happened with Tudor is he's come in with ideas. Well, if we played in a totally different way, if I started playing players, this player, I know that's his best position, but I could play him out of position there and next week we'll tweet the system around again and we'll do something different.

1:14:49That is the exact opposite of what Big Sam does. And at the same time, calling players out in public and all this stuff. So Big Sam is the opposite. Put an arm around everyone. Try and get a united spirit. Round pegs in round holes. Don't ask people to do things that they're not comfortable doing under pressure and start putting the pressure back on the opposition side by being hard to beat. Start saying that nil-nil is actually an okay result. Now, if Spurs, just imagine this for a moment, Charlie. if six or seven matches ago when Igor Tudor came in if Spurs had been in the mentality of saying do you know what for the next six or seven games if all we do is just get five points draws we just draw a few matches we don't need to win games let's just say we get four or five draws during those first six or seven games where would they be now?

1:15:34they would be odds on favourites to stay up but it was the attempt to come in and actually try and hey I've got international players here hey it's Tottenham Hotspur hey and this is i think to go to the executive level this is where the problem happens which is and i said this on the last show there would have been a degree of internal humiliation about the acceptance at that point because don't forget we're now six weeks ago so this isn't yesterday this is six weeks ago the internal acceptance that you actually need to go route one and that you need to be solid at the back and you need to grind out a few results and you need everyone just to be doing the things they're good at it would have been really really tough for the Tottenham senior executives to get their head around that at that point because they've never been in that situation before.

1:16:14And there'd have been a bit of it which almost internally accepted how badly things had gone wrong. Ego versus outcome. We asked last week, you asked, and we didn't come up with the name. And then we thought of it straight away afterwards. What manager fits the Roy Hodgson, the Sam Allardyce, the Alan Pardew, the Tony Poulos mould, those managers that were brought in for this specific reason? Sean Dyche. Yeah. Now, if Sean Dyche, even, look, I'd hang my hat on it now and said even if he was brought in now, Tottenham stay up. I think that's probably right. I've got another name to put into the mix who is a former Tottenham player as well who has quite a track record of doing this thing, which is Gus Poyett.

1:16:57And Gus is fiery. Gus is fiery, right? But Gus is brilliant at organising a group of players. He's still managing. Yeah. Yeah, he's literally just won the title in South Korea, the double actually. And prior to that, he was a very successful manager of the Greek national team for three or four years. He hasn't managed in the Premier League for a bit, but he did exactly this job at Sunderland as well. He did exactly the same at Sunderland from a worse position. He took them from a worse position and kept them up. And what Gus gives you is a mixture of positive charisma, right? So not negative charisma like Tudor, but big, strong, positive charisma.

1:17:32But he's also underrated in terms of organizational capacity. and I just saw the other day that he put his name forward and I thought if I was a Spurs board I'd think really seriously about that Do you think they're about to make the same mistake again if they go for De Zerbe because De Zerbe's not I wouldn't go near De Zerbe because he's not I mean he's a project manager he's a project manager and that's just not what you need right now and I don't know if you saw the Tottenham Atletico game yes I did and they were just passing from the back I mean it was an absolute disaster but De Zerbe's going to want to do a lot of the things that the players have clearly struggled to do he's also going to want to implement a tactic that, as you've just highlighted, isn't necessarily in the player's best interest or playing to their skills and their strengths.

1:18:12So right now, why go after the manager that has that strategy? Why? And if you're the executive and just keep coming back to that, I get that it's embarrassing and humiliating. Is it more embarrassing to get relegated or hire Sean Dutch or Gus Poet? What's more embarrassing? I know which one I'd take. Now, fine, day one, yeah, fine, cop it. You're going to have to cop it. But if you end up getting relegated... Yeah, I mean, personally, I don't think there's anything wrong with appointing Sean Dyche or Gus Poyer anyway. They've both been successful Premier League managers. What's the problem, right?

1:18:43But there's an element in manager selection these days of the flavour de nos jours. You know, so now De Zerbe went into Brighton, who were on a, you know, absolute roll at the time, with everything behind the scenes being organised perfectly. And every manager who had been into Brighton at that point had made a big success out of it. current occupant a little bit little bit less so but still there well clear of relegation no problems there then he's going to Marseille Deserbe has and he's done okay there he's done quite well there so I'm not saying that he is quote a bad manager in a very difficult place to manage in a difficult place you know I'm sceptical about the whole good manager bad manager thing but is there anything in his track record that indicates that in a very short space of time he can grab hold of a group of demoralised disillusioned players and do the pragmatic difficult things that need to be done on the training pitch.

1:19:32There's nothing there. So it's a wing and a prayer appointment, right? If they'd managed to make that appointment at the time that Tudor was appointed, giving De Zerbe a little bit more time and an international break as well, remember, because there's an international break at the moment. So a couple of weeks to implement a few ideas. Would I have understood it? Yes. I still don't think it would have been the right thing. Tottenham fans will be able to say, I think the crossover between him leaving Marseille and Frank leaving was almost exactly the same. I can't remember whether it was just a few days after, but it was very close.

1:20:05There was definitely an option at the time. Definitely an option. I think Deserby kind of was indicating at the time, if media reports are to be believed, that he would rather wait until the summer to then have that full sort of pre-season and all that type of thing. So we don't know what's going on behind the scenes, but I think what we can say is the two things. I've just had a talk sport understands. notification come through. That. I promise you, this is literally as we've been recording. What does TalkSport understand? TalkSport understands Tottenham reach agreement to make Roberto De Zerbi their next permanent manager.

1:20:36De Zerbi it is. Sorry, Daishi. As we've been recording. As we are recording live. We didn't give time for Daishi and Gus to have the benefit of our support. If that is true, then they've gone for that decision. It's clearly questionable and it is being questioned by us and by other people. Every single element of Tottenham is being questioned right now. And having been in senior executive shoes when things aren't going very well at football clubs, I'm, you know, I'm wary of rubbing salt in those wounds because it's not easy. It's not as easy as people might think. It's a very, very difficult place to be when things are going against you and the club's in a spiral and results are in a spiral.

1:21:15It is just saying show leadership is easier said than done. Everyone else knows better. Everyone else knows better. And you've got staff heading off in lots of different directions in terms of who they're blaming internally and who they're attaching their colours to which masks and all this type of stuff. So this is not easy. Would you have sacked Ange? Oh, yes. I would never have appointed him in the first place. I think he's wholly unsuited to be a Premier League manager. He needs to be manager of a club in a league where his club is so much better than the other clubs in that league that they can afford to attack with nine men.

1:21:46Celtic. Celtic. Celtic's his perfect job. Celtic is his absolute perfect job. Not now. Not right now. Now, in general terms, if Celtic have acquired the players that their revenue advantage gives them the opportunity to acquire compared to the other Scottish clubs, they can afford to put nine men beyond the ball and to play in that way. But what happened at Spurs is when you then try that against really competitive teams and you get too many men beyond the ball, and then you ask your own teams then make shuttle runs back on a continual basis, you end up with loads of soft tissue injuries. So anyway, putting all that to one side, this judgment to appoint De Zerbe, whether that was a good judgment call or not, will be revealed after the end of the season.

1:22:32And the reason for that is because they are currently about 50-50 to go down, right? So in other words, De Zerbe comes into a situation where Spurs are almost as likely to get relegated as they are not. and yet still, speaking objectively, they have better players than the other teams who are potential relegation candidates. So in other words, he has every opportunity to avoid relegation. So if he does avoid relegation de facto, it was the right decision because they've landed themselves a project manager who also managed to achieve that quick sort of stopping the rot. if they do get relegated then clearly it was the wrong decision because with that group of players even the ones they can put on the pitch at the moment with that group of players a Sean Deitch or a Poyot probably would be able to stay up and then Deitch comes in next year I mean yeah I think Spurs is a great motto isn't it to dare is to do I can't see that as being Deitch he's particular mantra but anyway to dare is to do leaving that to one side to dare is to do hey yeah I mean I mean, it's a weekly topic, but hey, do you know what would be interesting?

1:23:41If they win a few games, suddenly, obviously, as you just said, 5.6 points. Meanwhile, for the next week, I'm going to trawl through every bloody interview you've done and I'm going to find the embarrassing bits and I'm going to put them into a montage. And the whole of next week's show is just going to be you over the last four years saying various things which have turned out not to be true. If we ever have a situation where for some horrible reason we can't record a week, that can be the filler show. But what I would say is it wasn't me. it was brought to my attention the timestamp was put in that show people you guys are on it you guys are on it very good Charlie doesn't like it but you're holding into account Spurs will be if I could only I could play it again guys play the loop again Spurs will be a top six club for the foreseeable or if not if not even worse than that anyway look I had my bit of fun I'm glad I'm glad it made you happy the squad the squad had their fun as well so happy so happy so add that to Masters Week and and a nice bit of matchroom.

1:24:39It's hard to get a better show from you. It's great. Thank you, Charlie. Thanks, Charlie. That's a wrap. As Charlie's blushes subside, these stories are ones that I have a feeling we'll be talking about in the coming months, particularly the Dana White versus Eddie Hearn story. This is going to be a big tussle in the world of boxing and one that will have significant impact on the industry from a business and legal perspective. Watch this space. I would also very much like to go and experience the$1.50 egg salad sandwiches at the Masters. So if anyone has any links to that, please make it happen next year.

1:25:13It'll be very much appreciated. Thank you as always for tuning in and we'll see you next week.