THE BREAKDOWN: FIFA’s Big World Cup Mistake, Horse Racing’s Civil War & England Cricket at it Again (E23)

28:50But also you just saying a more traditional sporting day is exactly that trap, right? Because they don't want to be in a more traditional sporting day because then you compete with all of the other sports on a Saturday. Exactly. I mean, really what they had done is they actually just stopped marketing it properly. So, you know, there was a generation of Londoners growing up who weren't kind of really that aware of it. But they thought, okay, quick fix, move it to a Saturday. We'll get an extra few punters in because it's their day off, etc. And it kind of, it worked a bit. So by the sort of turn of the century, by the early 2000s, you're probably seeing a stand paid for attendance of about 40 ,000.

29:23And then another 10, 20 ,000 on the hill, right? So he was in total attendance about 60 ,000. So then gradually drops off, drops off, drops off, drops off, and finally hits a low last year, 2025, where they paid for attendance, I think I'm right in saying about 22 ,000, which is broadly speaking, pardon the word, crap, right? There are average race meetings in the calendar, courses you, Charlie Stebbings, will barely have heard of that get 20 ,000, right? So for the Derby to only get 20 ,000, bearing in mind it's on the outskirts of London with its own railway station, right? So it is so easy to get to, such a spectacular occasion, you know, is so famous, and yet they were only getting 20 ,000 to it.

30:05So what they decided to do this year was plough a huge amount of money into marketing it by racing standards. I believe, and I'm told, they spent about£5 million marketing the Derby this year. And sadly, it rained. £5 million. pounds five million pounds i'm told right now i stand to be corrected on that but i was told this morning by someone inside racing who should know that they spent five million pounds marketing the derby this year in the hope of getting a massive attendance on the hill which obviously is open air right so you are vulnerable to the weather so one can look back with the benefit of hindsight and say you know given racing's budgets which we're going to come on to in a moment was it a wise thing to devote such a massive amount of money to something which is so weather dependent that is hindsight right if it had been a gloriously sunny day then we look back and go well you know that was a brilliant way to spend money you know it's you know early to mid-june it's normally nice weather if you're ever going to have a moment when you can get loads of people to come so i'm a bit loath to criticize them on that specific point but i am concerned about the overall direction of marketing racing and i'm going to come back to that later on but let's talk about ascot because Ascot is an event that is not struggling.

31:17Ascot is an event that is absolutely booming, right? So having just said that there were 25 ,000 people at the Derby, at Ascot, almost all of which happens during the week, okay, with one day on the Saturday. So you get Tuesday, Wednesday, Thursday, Friday during the week, and then you've got the Saturday tacked on the end of it, right? 300 ,000 people will turn up for that, right? So you're talking about an average of 60 ,000 a day going to the Royal meeting at Ascot. And, you know, the revenues are like really, really, really considerable. So Ascot as a whole, for people who don't know, Ascot as a race course is owned by?

31:55The Royal Family. The King. Yeah, exactly. The Ascot Authority is owned by the King, Royal Family. The total revenue for the year is 120 million, right? So it's a pretty big sporting concern, right? It's not much less than some of the Premier League clubs. And of that, 80 million is the Royal meeting. Wow. Right. So Royal Ascot over four days, five days actually, turns over 80 million quid, which is 70 % of Ascot's total revenue for the year. That's a lot of exposure on your business. It is. It is. But in a way, what can go wrong? Yeah. Like the Royal family will turn up. COVID, yeah. COVID, yeah.

32:35Indeed. As with everyone. Prize money, 11 million quid. It's an interesting little footnote going back to the tennis players' complaints about percentages of prize money and all that type of stuff. That's about the same percentage as the tennis players get, more or less. And, you know, all's rosy with the world. Ascot, fantastic. Isn't it doing well? But all is not rosy with the world because Ascot has started a civil war inside the horse racing world, which is super, super interesting because generally speaking, Ascot is very conservative because it is aware as an entity of its owner, who doesn't tend to be somebody who's going to want to have a lot of controversy around him or her as it used to be.

33:14So when Ascot steps out of line, they can't just decide that. They have to go up to the palace and say, by the way, this is what we're going to do. What have they done? They have resigned from the Racecourse Association. And this happened about three weeks ago. They announced that we're leaving the Racecourse Association. Might seem like a small enough thing, It's not. It's a big thing. What is the Racecourse Association? The Racecourse Association is the trade body that represents race courses. So what? The reason why that's important is the way in which British horse racing is governed at something called the British Horse Racing Authority, the BHA level, is that there are three entities which have control over the BHA and what the BHA does, and therefore what the whole industry does.

33:58Race courses, currently represented by the race course association we'll come back to that later on then you've got um the sort of the the participants so to speak um trainers jockeys breeders etc etc all those types of people then you've got the owners um the race owners association slightly strange body actually but whatever there we are but out of those groups the race course association is the dominant bit because they represent bigger businesses whereas a lot of the other associations represent fundamentally sole traders you know the professional jockeys association is each individual jockey.

34:31The National Trainers Federation is representing each individual trainer, etc. So for the Race Course Association to have a third of the power in racing, actually it ends up being more like 50%. So it really has a blocking vote over British horse racing doing anything. And the way it votes, the Race Course Association, is the way that the Football League used to vote before the Premier League, right? Which is there are 58 courses, and there were 92 clubs in the Premier League and each course has one vote. So if you've got some tiny little course that you've never heard of that only races six or seven times a year and gets no one through the gate, one vote.

35:09Get Ascot, one vote. And what's been happening over a long period of time is that the small courses, of which there are more than big courses, just like there would have been in the old football league, have been coagulating together to block progress and to block the ability of British racing to really compete on the world stage why bring it back yeah just quickly to something you were saying last time is that part of the problem then when you're looking at your solution or that you posited last time around reducing the total number creating the higher quality of products and therefore if you're a smaller race course you recognize you're going to lose out on that because you're going to lose your meats and therefore your business is you've got it you've got it right which is there's something there's something called the levy the levy is a government body which takes money from all the money bet on horse racing and redistributes it into prize money.

36:00Okay. And that spits off for the support of prize money about 90 million pounds a year. And this is absolutely critical because all the other racing jurisdictions, Hong Kong, Japan, Australia, France, Ireland, have state-run betting organizations which feed money into their sport, right? And in most of those cases, they are monopolies, right? So you can only bet with that. So if you go to France to go racing in France, there are not lots of bookmakers. There's just something called the Paris Mutuel, which is their equivalent to the tote. And everyone has to bet with the Paris Mutuel and then a portion, the vast majority of the Paris Mutuel's profits are just funneled straight into prize money, right?

36:41In this country, we have bookmakers and bookmakers have been there long enough and are embedded in the whole thing long enough that there's no realistic prospect of getting rid of them and they're a big part of the landscape and they're big lobbying powers at Westminster etc so it's kind of accepted okay we're never going to get that benefit which is SAG's if we did probably Britain would be the dominant racing jurisdiction in the world but the bookmakers have to make up for it a bit and they do so they are forced to do so by the government through the levy so you know x amount percent of what they make out of horse racing gets funneled back into prize money horse racing 90 million pounds and then the levy board decides where that 90 million pounds goes right and at the moment it It gets distributed all the way through all these little courses and meetings and all this type of stuff.

37:21I'll just give you a bit of an idea of how this works, Charlie. There are 1 ,500 race fixtures a year. Just think about that. 1 ,500. So if we look just… Five a day. Yeah. Basically. Yeah. Almost. Four maybe. So if… I think it's 1 ,450. So yeah, round it down. So we're about four in there, right? so that breaks down roughly into 900 flat fixtures and 600 um sorry 900 flat flat fixtures about six 550 jumps fixtures just put the jump racing to one side for a moment it's on the flat where we have to compete against the rest of the world jumps it's only ireland really only ireland and britain have jump racing so you've got 900 flat fixtures of which 600 on race on turf and 300 odd 350 odd are on what we call all weather tracks again put those to one side a little bit here although they do matter.

38:12So you've got this levy of 90 million, of which, let's say, about 60 million is going to go on flat racing and 30 million on jump racing. I'm just making the numbers round. And that 60 million is being spread throughout 900 fixtures. Okay. Now let's go to Hong Kong, right? One of the most successful racing jurisdictions in the world. The Hong Kong Jockey Club is the monopoly provider of betting, and they funnel£170 million of their profits into prize money. Okay, so you've got£90 million coming in Britain, and you've got£170 million coming in Hong Kong. Okay, fair enough. Britain can make up the difference with better sponsorships and more people on track and all this type of stuff.

38:56Hong Kong has 88 meetings a year. So they have£170 million for 88 meetings. We have 90 million for 900. Well, yeah, that's you, right. 1 ,450 meetings, right? So it's a fundamental problem. And then on top of that, loads of that money gets funneled to the minor tracks, many of whom are owned by one company called Arena Racing Company, ARC, who are basically, they actually do have one big track, Doncaster, but all their other tracks are small tracks. And they basically exist on a levy model, where it's right, okay, we're going to get given X amount by the levy board per fixture. If we keep the prize money really low, and if we keep all of our costs really low, then we've got a business, right?

39:36I won't bore you with what that business looks like, but it's a successful business. It makes, I think, sort of 50, 60, 70 million pounds a year. All of that money is being kept away from the top end of the sport. And that's not true, because the top end of the sport does get some money from the levy board, but nowhere near enough, because that's when you get into the ability to compete. So if you look at the Epsom Derby, the most famous horse race in the world, probably together with the Kentucky Derby, it's equivalent to the US. Epson Derby prize money,£2 million. Yeah, not bad. Japan Cup,£5 million.

40:06The Arc de Triomphe in France,£4.5 million. The Melbourne Cup in Australia,£5 million. Right? So you're seeing that we are well off the pace. And it gets even worse at the races which are just below the top level. And this is a critical category of races. These are for the horses who aren't quite good enough to be absolute superstars, but who are still really, really good. it's the equivalent to the championship in football, right? It's the equivalent to the Boston Men Premier League and the championship in football. At that level, that's where the levy squeeze, you know, of it going to lots of bad races and not going into that level is really hurting English racing.

40:44Because what it means is that prize money at that level is so much lower than the equivalent in all these other foreign jurisdictions for horses of that type, that these horses are just exodus. It's just an absolute exodus. It's rather like English footballers in the 1980s. They are all being sold to race in South Africa, Hong Kong, Australia, the Middle East, etc. Because there is just not the prize money for them here. That then has a further impact in the industry. Because effectively, when you're asking somebody to pay a lot of money to buy a racehorse, you cannot guarantee however much you pay for that horse, however well-bred that horse is, you can't guarantee he's going to be a Premier League footballer, right?

41:19But if he's well-bred enough, you've got a very, very good chance he will at least be able to be a class below that. But if the class of racing below that is not economic, then suddenly you've got a real problem. So if I'm reading this right, you have two options here to correct this. You either increase the prize money total or you reduce the number of meets and focus that prize money on fewer meetings. When you say you can either increase the prize money, how would you do that? Well, exactly. So it would just become a bigger number and a bigger percentage of your total revenues, right? Of whose revenues?

41:52Well, the race courses. Yeah. But they're not very profitable. But my point, whether it's possible or not, If you're in a situation, you either do that and it screws your business model, let's say football and wages, even paying well beyond what they make, or you reduce the number of races and focus the prize money to a smaller group of race courses and meetings. And fundamentally, this is what ASCOT wants to do. What ASCOT wants is to try... This is what sits behind this political move, in my belief. They haven't publicly said this, but I believe this to be the case. is that Ascot basically says, if we want this sport to flourish in this country, it will only flourish because of the top end, right?

42:31You're not going to get suddenly lots of new people becoming involved in the sport because they want to basically bet on something that looks like a dog track somewhere, right? They're going to get interested in the sport because they see Royal Ascot on TV. Be realistic about it, okay? So in other words, for them to be able to make the changes or for the British Horse Racing Authority to be able to make the changes to the fixture list that are required and for the levy board to be able to make the changes the levy board distribution that's required it it can't be blocked by the race course association at the moment the race course association can simply block that and because the race course association is operating on one member one vote it's therefore operating on behalf of the majority of courses which are the smaller courses so just very quickly there are six leading independent courses big ones Ascot, Goodwood, York, Chester, Newbury and Aire in Scotland then you've got the eight small ones.

43:24And then you've got ARC, which is 16 courses, one big one, Doncaster, and 15 small ones, right? So ARC being the group, then gangs up with these small independents, the little ones, which don't have a home and aren't part of a bigger company, and act effectively as a block vote at the RCA. So the jockey club, Ann Ascot, said some time ago, and the other leading independents, we need a change in governance. And you, the RCA, have to come back to us and explain how you're going to change the way you're set up. Now, it's interesting because this happened in football in the 1980s. The big clubs went to the Football League and said, guys, this can't carry on.

44:00Famously, I can't remember which of the big clubs said, I'm not having Grimsby Town, whichever small club he picked, telling the rest of us how to run this industry. Tell Wagging the Dog, it's not going to work, right? And when the Football League didn't address those concerns, the leading clubs went, okay, we're out. That's what's happening here, right? Which the RCA did not come back with a change in governance. as a result of that ask could have gone well we told you we warned you we're off big question now to the jockey club right because actually ask have been quite bold here given that they are one course and given the reputational issues surrounding being owned by the king the jockey club has no such constraints and i've publicly called now in both a couple of speeches i've made and also on this podcast please the jockey club show some leadership this is your sport the members of the jockey club include most of the biggest owners who in turn employ the biggest trainers who in turn employ the biggest jockeys and they have most of the big courses or at least a big chunk of the big courses as well if the if the stewards of the jockey club which are the people who ultimately control the jockey club not chief executive the chief executive has to report into the stewards if the stewards of the jockey club said ask it's right we're going to revolutionize british horse racing then it would happen now i've spoken to former chief executives of the jockey club i've worked for the jockey club in many different guises over the years i've been a consultant there so i do know a lot of the people who have been there i think you know a few of them as well and they are all all the ones i've spoken to are very very clear you know it ultimately the stewards of the jockey club have to take a lead you can't expect the chief exec of the jockey club who's a paid employee to drive this this has to come from the stewards and they have to understand their responsibility to the future of racing so can i just ask from my side again it looks like this would make a huge amount of sense for the jockey club being those massive race courses so they've also got a lot of small ones so so the negative what are they looking at internally and saying the negative impact of us deciding to do this is what well i think first of all they do have small race courses in their portfolio um now my view on that which is driven because when you've been a sports executive you know it's difficult to make these businesses work is you might have to close some of those down, right?

46:10If they don't make sense, or say to them, basically let them float away on their own, give them a board, give them a bit of a cash float and say, if you can make sense for yourself, great. If you can't, we can't keep on subsidizing you any longer. That's not like, we can't be giving you extra. So let me give you an example. By keeping these small courses afloat who all need a jockey club subsidy effectively, that then is taking money away, which is needed for the redevelopment of Sandown Park, which is one of their big ones, which is currently, facilities-wise, an absolute joke. Like stepping back into the 1980s.

46:44That is just a classic example, where you've got a course which should be absolutely part of the elite, but the Jockey Club's balance sheet can't support it because the Jockey Club's constantly having to shovel money out the side to support the small courses. So there are vested interests within the Jockey Club who have links to those small courses, who will go, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah. Whatever they might say, right? That absolutely will happen. I remember making this speech, at a horse racing event with a whole bunch of jockey club people there and two or three of them saying, you're absolutely spot on there.

47:12And then you spotted around the people who were on the boards of the smaller courses, their brows furrowing. And I said, look, if you want to hold point-to-point racing, which is amateur jump racing at your courses, which can, by the way, pull a very big crowd. I've been to point-to-point meetings where there have been 10 ,000 people there. Point-to-point, point-to-point, yeah, et cetera. But what are you holding? You're holding really low-end racing, but no one wants to come to. So what's the point? I know it's a nice place for you to go to lunch six or seven times a year, whatever it might be, and to invite friends to and to be a local grandee, but it's destroying British horse racing.

47:45British horse racing, probably, in my view, instead of 58 courses, the levy needs to be supporting, I'm going to be generous and say 20. 20 courses. 20 courses that would then enable us to be competitive at the top end and just below the top end. And then it would enable us to drive a narrative around the top end of racing, which would make more sense to the general public, rather than saying the general public, oh, by the way, if you want to get interest in horse racing, you only have to follow 1 ,450 meetings every year. It's an extraordinary thing to do. If you actually look in the newspaper, racing regularly has one to two pages devoted to it in the national newspapers.

48:24And it takes up the whole of that newsprint in race cards. Why? Because it's got four meetings a day. So all of its space that should be taken to drumming up interest in the big race on Saturday, like with all the other sports, is taken outlining what the car is at Fontwell or Redcar, which again is just so minority as to be an absolute joke. So look, there's stuff that needs to happen. I will say that there are areas where things are improving. So for instance, the big tracks have, together with the tote in this country, have done a big deal over the last five, six, seven years with the Hong Kong Jockey Club to produce something called World Pool.

49:03Now, this is effectively a mechanism that allows punters from Hong Kong and China to bet into British racing. And that is starting to kick off some big money. So it's operated by the Tote here in partnership with the Jockey Club. It's 100 days a year, of which I can't remember the exact number, but let's say 20 or 30. 30-odd are here in the UK, but you also have days in various other racing jurisdictions when British people can bet into those pools as well. And that is now kicking off 20 million quid a year for the tracks here. So Ascot, Newmarket, Newbury, Epsom, Goodwood and York are getting between them an extra 20 million quid a year as they're betting offtake effectively from the Hong Kong market, betting into the British market.

49:44So that's an example of what you can achieve at the top end, okay? But we really got to let go of the bottom end. The bottom end is not going to really get us anywhere in the next 10 years. I know it's bruised, I know it's Darwinian, but that is sport. Yeah, but it is sport and it's business. So you're in support of what Ascot are doing here, basically, for those of us that aren't. I'm totally... I think they've been brave. I think that they've been strategic and they now need the support of the Jockey Club. Okay, brilliant. Well, you and I are going to be in attendance. We are. We're going to be there together, Charlie.

50:13So, you know, if anyone... So, if anyone's wondering how Charlie's tips get on, I'll let you know next week. Hang off all the Charlies. It's exactly the kind of thing where the person that knows far less than the one that knows a lot walks out with a bit of cash in hand. I wouldn't bet on it. Oh. Tipping challenge. If any of you are absolutely experts, Let's come to me privately. Operation Let's Beat Methven. Come on, let's do it. Thank you again, because that is really interesting, as always, and a development on the last conversation. Really nice to revisit it and have a look at all of that.

50:44And the last time we did do it, it got a brilliant reaction. So I look forward to seeing what people say to all of this. Charlie, this is not the only big thing happening, is it? Because the World Cup, finally. A little matter of the World Cup, which may not have as many people at all of its early stage games as Royal Askin will. Exactly. Yeah, we're talking about 250 ,000 people at the Derby. Well, there's a fair few people that they'd like to transition into the US for some World Cup games on current data. Look, people have been saying to me, it's interesting, how are you going to deal with the World Cup?

51:15Because, you know, it's very performance driven, isn't it? And I think that is true to an extent. You know, there's a lot of what will happen over the next few weeks that will be very much driven on results. However, with this World Cup in particular being in the US, there are some really interesting underlying stories that have been a huge part of the build-up and I would imagine will play a continued part actually during the tournament. Normally, I don't know how you feel, normally I feel like, particularly with the last few when we've had them in Russia and we've had them in Qatar, even South Africa, I remember in 2010 there was a lot of conversation around stadiums not being ready in the political environment.

51:49That quite often has stopped to an extent once the football starts. This feels like it could continue and I fear a huge part of that is going to be because there's going to be a fair few stadiums that are far from full. And if you've ever watched, well, if you ever watched a Club World Cup in the US last summer. Sorry, was that? Exactly, the incredible trophy. Pizza trophy. Chelsea. Pizza trophy. Yeah, Johnson's paint. You know, it was an extraordinary sight when you had these massive teams playing in virtually empty stadiums in the US. Which massive teams? Well, Paris Saint-Germain, Real Madrid, Man City and the biggest of all obviously Palmyras but look there's a huge amount to unpick from this World Cup commercially from a business perspective so I picked out a few of them just for us to have a quick discussion and now before the tournament starts and they're things that I imagine we'll be coming back to some top line numbers that are interesting for us to have a look at just on the total World Cup so the revenue target for this World Cup for FIFA is between 9 to 13 billion and that was a 7 billion dollars so let's say 10 or 11 billion.

52:59Call it 11. Call it 11 billion median outcome. Qatar was 7.5 billion dollars in 2022. So you're looking at a three and a half billion dollar uplift on 7.5. So you're looking at a 50 % increase on revenue being targeted from FIFA. Keep that in mind because we're going to come back to that. Breaking that down, how do they achieve that? Right. So broadcast rights, and again, these are reported numbers. So, you know, bear with us. But reported numbers, broadcast rights are now 3.8 to 4.3 billion. So a 22 % increase on Qatar. Excellent. Yeah. One-fifth uplift. Well done. Brilliant. Well done. Sponsorship, key one, particularly in the US with the value of this market and the appeal of this World Cup.

53:37And it was a challenge in Qatar, wasn't it? Because there were certain brand categories that for local reasons couldn't really stretch their legs. Absolutely. So the$2.7 billion commercial income here, again, anticipated, is a 37 % uplift. on 2022. Again, excellent. Well done. Tickets and hospitality. Now, I'll emphasize reported because there's so much in and around this, but$3 billion is the reported target for FIFA on tickets and hospitality. And that's up from about$700 million, $750 million, right? So you're talking about a$200 million increase on ticket revenue. Is that fair, Charlie? Is that right?

54:21$2.3 billion increase. Sorry. Sorry. What happens when you get into your 50s? No, no, but it also shows the extremity of that number, right? We're talking about seven, I think it was about seven, 750 million on tickets in Qatar. Yeah, sorry. Going to a targeted 3 billion. Yeah. So a 2.2 and a half, 3 billion increase on tickets. And who stumps the cost for the majority of tickets? Fans. So you leverage your exposure for sponsorships. Great. B2B, generally. Broadcast rights, B2B, sell it in. Can we extract value out of that? Great. Tickets and hospitality, the pockets of the people that you need most.

55:00And this ticketing theory, we've had quite a few people comment on the show asking us to look into this. So I'm going to give you a quick story of this. It's probably the most interesting part of the whole business story. So just bear with me, but I'm going to run you through a little bit of what's happened. And I want to start with a quote from Gianni, our favorite Gianni Infantino, who in February said the following, every match is already sold out. we keep some tickets back for some last minute sales of course but every match is sold out february 2026 now it was interesting some fifa officials quickly walked back a little bit of that and said that they're holding some tickets back i think it was about five million tickets and six and a half they said were available so let's say they held back one and a half million anyway that was a very strange um thing to say when even the numbers of tickets that had been sold at the time didn't suggest that the tickets had been sold out and what's the real issue with all of this where's this come from well it started with the information that they gave up front so normally let's use russia 2018 right russia 2018 fifa gave two years worth of time to to allow people to understand how the ticket process would work from buying tickets to planning their travel and they gave that information with plenty of time for the fans to get on board with it in this world cup they started in september they announced the first bits in september and i think they went on sale on october the first the world cup starts in june so eight to nine months of time to plan book travel accommodation everything in here it's quite stressful for a fan the ballot therefore that you went into at the start was also it was kind of like a blindfolded what they call a blindfolded ballot so you'd have this demand generated and people would get on the site but you'd only see the price of some of these tickets when you got to check out so you may have gone in there expecting it to be$60 and suddenly it was$300.

56:42So the point at which you're making that transaction, you could see you've been cornered into that to an extent. Now the most expensive World Cup tickets ever, the justification for that was North American market maturity. One, i.e. this is a region that's used to paying a lot of money for these types of events. So it'll be absolutely fine. Comment on that in a second with the value of the domestic audience versus the international. They also had it as the old gem reinvestment into the game. The more money we make from this tournament, the more we can put back into the game. And then there was another interesting one, which is more corporately, which was their lack of ability to regulate the secondary markets.

57:16So what do I mean by that? They feared if they put tickets too cheap, then a load of people would buy them up and they would stick them straight on secondary markets and make a huge amount of money selling them at$400 rather than the$100 that they bought them off FIFA for. So they decided, hey, well, we'll just change that. We'll just put them at$400 in the first place ourselves we'll act like ticket touts ourselves exactly what firstly on those justifications for very high ticket prices so you said something to me earlier on the market maturity yeah let's go back on to market maturity so basically what they're saying is americans are really rich so let's sting them yeah i think that was just strategic massive strategic mistake why america is a mature sports market that is very used to paying very large sums of money for sports which it has a deep passion for.

58:02So you can charge whatever you want for Super Bowl because tens of millions, in fact, I think we even worked out hundreds of millions of Americans desperately want to watch it live. And therefore there's a supply and demand imbalance. You can only fit, it doesn't matter how big the stadium is, you could never come close to fitting in all the people who wanted to watch Super Bowl. And, you know, that drips down into NFL in general and other leading sports, et cetera. And again, NBA can be very, very popular, sometimes a bit less. So yes, there is an American sports market that has got its head around paying an awful lot of money to watch American sports franchises.

58:38Correct. Right? Does that translate yet to having a mature soccer market? I use the word advisedly because we're talking about America. Who are used to the idea of paying a lot of money to watch soccer matches. No. Absolutely not. MLS matches are cheap. Not many people watch them anyway. going to watch a US men's national team is cheap going to watch women's matches in the US is cheap football is an immature product in a mature market right so that's the first point I want to make it's a misjudgment on the American market the second point is that World Cups are not actually about the domestic market what makes the whole ecosystem go round is that effectively the host country pays a lot for hosting the event knowing it's going to recoup a lot of that money by attracting huge numbers of fans from all around the world to come to their country and spend lots of money in that country, not just on ticketing, but on hotels, on food and drink, on clothes, on all these other types of things.

59:38And that's how the whole thing at least supposedly works on an economic basis. And some of those people who come once will love the country and decide to go back again. Funny enough, the last time I was in the Middle East, I bumped in some people in the airport who were transferring to Doha. And I said, where are you going? we had a bit of time and they said well we're going to Qatar I said well you're going to Qatar on holiday I said alright why is that? Well we came to the World Cup and do you know what we absolutely loved it and they now take their holidays in Qatar because they love Qatar right they just thought the whole thing was terrific so there's also that and South Africa that was very much a part of the thought from South Africa's point of view let's drive it as a tourism destination so effectively what they've done is they've priced out the international market who have to think not just about the ticket prices, but also very high hotel prices, flight prices, all of those types of things as well.

1:00:28And then they've misjudged their own domestic demand, not their own American domestic demand, thinking that that's a mature market for football, soccer, when it's actually not a mature market for soccer. It's a mature market for other US sports. And the amount of dollar that they're willing to spend on soccer is relatively limited. So the net of all of that is that they've ended up with the wrong kind of supply demand imbalance, where they've got huge amounts of supply and limited demand on their own website. So as of about three weeks ago, Charlie, you're about to tell me because you've got the detail.

1:00:59As of about three weeks ago, if you went on to FIFA's own website, you would find huge numbers of tickets available for lots of the group games, but still at very fancy prices. Completely. And I'll give you some context on those prices now that we'll talk about before actually going into that, because you need to actually hear a few numbers on this, right? We have three tiers that were really put. You had a value tier, a standard tier, and a premium tier. in those orders of price. So firstly, this is the first World Cup that's employed dynamic pricing. Dynamic pricing being a change in price based on the demand for tickets to an event.

1:01:29Very simple. If there's higher demand, the price rises. If it's not and you need to shift the tickets, you'll get it at better value. But generally that happens much closer to the actual event. They've also priced games differently depending on who's played in them. Some people, that's all got very upset about this. You know, I think there should just be a standard price for all tickets regardless of who's playing. Other people, again, understand that. But for England's match against Croatia on the 17th of June, let's just use that. Tickets cost in the value tier£198, standard tier£373, premium tier£523.

1:01:55So let's just leave the premium tier to one side and just look at the other two tiers and say that basically, bar the shouting, it's£250 to go and watch one England game. Yep,£800 for a family. Which is not, by the way, not far off, you know, a season ticket in the championship, right? So it's one match, and it's about the same as watching 25 matches of a very high-quality division back home. So that's the level we're talking at here, 250 to 300 quid for one match ticket. And as you say, if you're going with two or three members of your family, you're talking about, and we've spoken about this before, you're getting about 1 ,000 quid on the tickets, then you're talking about another several thousand quid on the flights.

1:02:37This is for one match. Then you're talking about another couple of thousand quid on the hotels. You're probably talking about, just to go and watch one match, you're probably talking about a total cost of 10 ,000 quid. Incredible, isn't it? Scotland's first two group games, if you look at comparison, a little bit cheaper. Scotland against Haiti, for example, 134, 298, and 372. Still£134 a ticket. And how many Haitians can afford to go and do that? Now, of course, people who are actually currently in Haiti won't be allowed into the US in any case, but there's a significant Haiti population within the US, and I'm saying that very few of them would be able to afford to go to that game.

1:03:06So then you're going to lose that carnival effect that you get. Do you remember that wonderful game in the last World Cup when Saudi Arabia played against Argentina? That was amazing. It was terrific. Saudi turned over Argentina in the game itself, but the atmosphere in there, because the Argentines have got a big support, big travelling support, but of course Saudi was local, so they had a lot of Saudi fans there as well. It was really colourful, really loud. That makes World Cups. It does, it makes World Cups. Exactly right, Charlie. So if you look before the start of the World Cup and you say, okay, what are the games I'm really looking forward to?

1:03:36Saudi Arabia or Argentina would not have been one of them, and yet it was one of the most memorable games, that World Cup, for the fiesta. The whole sight and the sound and the smell and everything of it. It's the first game I think of when I think of Qatar. Really? Obviously, I think of the final. Well, it was incredible. But as in just literally, I can picture that stadium exactly as you just described it. And what a triumph for the Qatar World Cup. What a triumph for the Qatar World Cup to be, for the memory to be fixed on such a wonderful occasion as a group game. As a group game that was somehow symbolic of what actually, as you say, once the tournament started, for me, that was one of my favourite World Cups from a football perspective from a football perspective I thought it was terrific there were lots of great games I thought it was really passionate crowds they kept the ticket prices low and this time they've just totally misjudged it and I mean you know then the knockout games just to give you and I'll move it on but it's 500 as the standard sorry as the value tier for quarters 700 pounds nearly for the semi-final and then you get to the final trade description that's on value on that one 3 ,119 pounds for a standard basic supporter ticket for the final so all of this right straight but it's just commercial.

1:04:38We talked about that$3 billion target at the beginning. It's not hard to see now where they're putting some of that dream and numbers on. However, you referenced really importantly the fact that if you go onto the sites now, you'll actually find that despite Gianni's attempt to say that this is absolutely unprecedented demand and we're all sold out, well, the sites say something different. Because FIFA's own site and a few others like SeatGeek, like StubHub, big secondary ticket sales. Touting websites. Touting websites. All right, let's call them what they are. Biggest games, of course, will be sold out, right?

1:05:14We're not talking about those, but just over a week ago, Ticket Data, which is an independent site which tracks kind of the major sporting events in the US, that painted quite an intriguing picture as what they reported week ago on Saturday was that there are still 74 ,000 tickets available across 86 of the 104 matches. That's only part of the story, though. So FIFA's own resale site has been an interesting look at value creation because any ticket bought on that site has a 15 % fee for the buyer and a 15 % fee for the seller. This is the secondary site. So naturally, FIFA wanted to have all the people that were going on a secondary market going onto the FIFA website where they can make off that transaction.

1:05:55Now, that really wasn't working that well. No. Because they still had a huge amount of inventory, unconfirmed, but a huge amount of inventory. within hours basically ticket data reported that the number of tickets on fifa's face value site secondary market suddenly went to about half of that to the 32 000 then that fell to 22 000 just a few hours later so either you've had a sudden flurry of tickets on that secondary FIFA website market or encouraging people to go and buy through the FIFA market has failed and they've gone and had to dump a load of tickets on other secondary websites. Yeah, touting websites.

1:06:39Right, so effectively what's happened here now FIFA have not come out and no comments denied. They basically have just absolutely straight batted it, refused to comment on this. This is people speculating based on figures they've got in front of them and understanding where these tickets could possibly have gone. These are ticketing experts who are making the judgment that a large number of tickets have disappeared from FIFA's website and have ended up on a touting website. And they are making the judgment, these ticketing experts, that that is FIFA dumping tickets onto the market because they themselves, FIFA, could not be seen to be lowering the prices by that much or else they would open themselves up to difficulties with those who they've already charged vast amounts of money to for these tickets.

1:07:18Now, interestingly, the touting websites themselves have said we don't have a direct relationship with FIFA. So in my view, this is my speculation, Charlie. I think there's been an intermediary here who has gone to FIFA and has said, you've got a lot of unsold inventory. How about if we block by a lot of those off you at a B2B price, which you don't have to declare because it's a group discount for tens of thousands or whatever it might be as seats. And we will then try and dispose of those at a profit to ourselves in the way which we see fit, right? But we effectively have been the, we actually have bought them.

1:07:53We have bought them for you and it's now down to us to try and sell them, however. But at least you can wash your hands of it, right? So even if it means you end up not making as much money as you might have hoped to from the ticketing side, A, you won't have quite such empty stadiums. And secondly, you will at least be getting some money for them. You'll be getting some money for them. And every event's worst nightmare is obviously a ticket going to zero. Exactly. These touting agencies are the experts at selling tickets. It's what they do. It's their trade. The thing about FIFA being they only have one tournament every four years.

1:08:20They are not ticketing experts. This is not their expertise, right? They are commercial experts, not ticketing experts. So interestingly, just for some numbers that you could now get tickets for if you go onto the sites today and have a look. I was going to ask you about that. Jordan versus Algeria, right? Jordan, Algeria. Jordan, Algeria, and Santa Clara. Big fall. Two tickets available on face value at£471 can now be bought on FIFA's own site for£171. That's 64 % cheaper. So two tickets. So you're sorting per ticket under£100. Yeah. Excellent. Coming back into where people may go buy something.

1:08:50But have any of those made their way on SeatGeek? On SeatGeek, those tickets were listed at£192 and£172 on StubHub. So you're getting a very similar price on those sites, but what you're seeing is two tickets now affordable for a game that wouldn't have been at the top of people's must-go-to list. Similar for Czech Republic, South Africa, those were down to about£190 for the same. Now, I just had a look interestingly last year just to see what some of the tickets on those empty stadiums in the Club World Cup games. I mean, you could see Chelsea Palmeiras tickets went down to$8 for the Club World Cup quarterfinal just to get people in that stadium.

1:09:27It's amazing what you have to see. To get people to watch Chelsea. It's amazing, isn't it? So it'll be really interesting to see how far those numbers now actually will drop down. It'll be fascinating. It'll be absolutely fascinating. But Charlie, there's a big story emerging here. A big story. I thought that was already a pretty big story. Well, it is. But there's a bigger one, I think. which is the New York and New Jersey attorney generals have a couple of weeks ago subpoenaed FIFA over the manipulation of World Cup ticketing, basically creating what they say is fake scarcity to drive up price.

1:10:01We love a good statement. So Jennifer Davenport, the New Jersey attorney general, said the following, FIFA has turned buying a ticket for this World Cup into a gauntlet of confusion, fake scarcity and impossibly high prices. all at the expense of consumers and hard-working New Jerseyans. There is also on top of this been accusations of those that bought tickets getting tickets that were not represented in the purchasing process i.e they think they bought a good ticket with x view and it's turned out to be one that is far less good because since those tickets came out in the beginning FIFA added two new sections of like exclusive high value tickets at the front of stands.

1:10:43And so some people have basically been pushed backwards or moved sideways in stadiums. So the AGs had two elements, one creating fake scarcity, one selling and misrepresenting a product. And how much the host city is paying for the privilege, by the way? About$250 million per city to host the game. Per city, right? So for you to be one of the World Cup host cities, as a city, you're already paying 250 million bucks. And then you find that FIFA are allegedly screwing your own local voters on even their access, let alone, you know, foreign fans coming in, their access to it. Now, I want to bring this back to what's really happened here.

1:11:17Let's look at the big picture, right? Let's accept the fact that it's a mess, right? I don't think that's controversial, is it? And say, why has it landed up here? So they did 7.5 billion of revenue in Qatar. And because the commercial environment was always going to be much better in the US, and because things like hospitality sales can be better, they've also got more matches, right? So that, in theory, should do better. And you've just got a country which a lot of people want to travel to in any case, et cetera. It was always going, TV rights as well, likely to do better. So for all sorts of reasons, that 7.5 billion was probably always going to rise to 9 billion.

1:11:55Is that fair? Definitely. Right? So 7.5 to 9 billion and Jani could have stood up and gone record World Cup. We've increased revenues by 20%. Okay? And everyone goes, whoa, well done, Jani. Now, his determination to drive it from the 9 billion, which probably it should have been, to 11 billion, that is the 2 billion that is attempting to be extracted from fans. And it's that 2 billion that is causing the problem here, right? Which is if they'd simply gone, look, the commercial sponsors are going to pay big bucks. The TV companies may pay big bucks. The one thing that we now need to do is to make sure it's a great event.

1:12:31We need to safeguard the brand of the World Cup because we need to make sure that other countries want to host it. We need to make sure that when there's another World Cup that lots of fans want to go and all this type of stuff. What they've done is an absolute medium term strategic disaster, which is they basically brought shame on the World Cup to try and screw an extra couple of billion dollars out of it. Really, because that's how Infantino props up his own power base by being able to hand out money to all the little federations around the world. And the more he hands out to them, the more they want to keep Gianni Infantino in position.

1:13:02And we've said this before with our friend Kirstie at the IOC. in a way, it's almost a bit unfair to blame them, although I do blame Jani in this case, because the way the system is set up where each one individual country, rather like the minor race courses, each one has one vote, means that countries for whom an extra couple of million here or there really makes a big difference to them, their vote is going to swing depending on whichever presidential candidate promises them the biggest handouts. And we can talk about this at another time. That has increased this year. Each team's getting$12.5 million guaranteed, even if they go out of the group stages.

1:13:41And that's gone up. Look at the payments, the ones who don't turn up. That's the critical one. Because don't forget, the ones who are most important in the voting process aren't the ones who qualify. They're the ones who don't qualify. But you hit the point, really, which is look at the ones that you don't mind going up, i.e. the categories you don't mind going up. Sponsorship, broadcast. Yeah, absolutely. Okay, increase. But why are those two groups, why are they paying more? because they're buying an amazing experience with a brilliant reputation that is a prestige. And Qatar was a big success.

1:14:10And Qatar was, yeah, and the success of the last one. So they can go, right, that was brilliant for us. That was exactly what we wanted to buy. We had those moments of absolute incredible fandom. You've raised 37.5 % on sponsorship. You've raised 22.5 % on broadcast. Really, now, at the minute this ends, you're right into that next cycle, right? And you're going to be looking at how to increase that. If there's been a shit experience for the fans, which is going to dominate a lot of the press in that your association that comes into this being really positive and is worth all of that increase, that's going to become really challenging for you to justify.

1:14:40So you're not increasing it. You maybe even start looking to reduce it because you realize that if this is going to be the operational model of this organization, it's not probably the one that's going to get us the best exposure. And now when competition, we talked about Charlie last week, Formula One, and, you know, top brands, there's now more competition than ever for these dollars. So in this kind of very short term targeting, they have completely missed, to me, the long-term value. And they've turned what should be the biggest fan-driven event into a commercial outcome. Except that it works in the short to medium term to get Gianni Infantino re-elected to his position at FIFA.

1:15:17And I think that's where we have to leave it. That is the point of this whole exercise, okay? And that is the structural problem with FIFA, is that the president gets re-elected based on the votes of individual small countries. And the more money you give them, the more likely they are to vote for you again. Correct. That's so interesting. I mean, look, we've just said it's going to be a lot about the performance side. I think there's some interesting business pieces. Ticketing is one huge one. We'll cover a couple of others that we've identified in the coming weeks. So we'll save them for that.

1:15:43But I can't wait for it to start. And obviously, well, it's recording Wednesday. It's going to come out on Friday. We'll be one game in, more games to come now. It's very exciting. But thank you so much, as always, and happy birthday from everyone to you, from all of us to you. Go and enjoy the rest of your week. Thank you. Thank you very much, Charlie. I shall enjoy all the parties that I haven't invited you to. And I shall see you at Royal Ascot next week. Fantastic. Thank you so much, as always, for tuning in. I hope Racing Round 2 lived up to expectation and Charlie once again displayed an incredible knowledge of an industry many of us, I'm sure, don't fully appreciate in this level of detail.

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