THE BREAKDOWN: Football’s Leadership Problem, US/Iran War’s Sporting Impact & The $1BN College Sports Tournament (E11)

28:58It could be either UAE on the one hand or Iraq on the other hand. But Iraq actually still have a playoff. Well, Iraq have a chance of their own to get in automatically. Yeah. Okay. But the feeling would be, okay, so if you slide Iraq up into the tournament itself, then do you then slide the UAE into that qualifying game? And the problem is that qualifying game happens pretty much next week, isn't it? I mean, so it's really quite awkward. There are then some further rumors, which is that FIFA could, this whole highest rank non-qualifying team from that confederation, there are some rumours that FIFA might get rid of from that confederation and just say, who's the highest ranked non-qualifying team?

29:39Italy. No, but Italy has still got a... No, I've just said if they actually get... Oh, sorry. If they say the highest ranked non-qualifying team from that confederation, if they get rid of from that confederation and they are able to nominate a team to automatically just be in the World Cup, whereas Italy currently have to go through two qualifying matches, there was a rumour that they could just slide Italy straight in which would be a very Infantino thing to do wouldn't it it would be beautifully Infantino you know it would be Infantino par excellence it's basically saying okay well there would be commercial advantages to Italy being there so if it's going to be Italy or Iraq okay you know leaving aside what I think Gianni Infantino's his own antecedents might be which is might well be Italian um from a commercial perspective Italy's non-qualification for the last couple of World Cups has not not been a good thing um from the sort of the panoply of of what now it's sporting integrity which is they haven't qualified but you know when you think about a World Cup with Italy or a World Cup without Italy generally speaking most commercial sponsors most TV rights firms and indeed millions and hundreds of millions of viewers would probably rather see Italy there because they are part of the sort of, you know, the grand sort of rich tapestry of international football.

31:02So it's a bit of a sort of watch this space, I think, in terms of what happens next. But I think we can, I would be, I currently don't have a hat, but I would be eating my non-existent hat if it does turn out that Iran turns up to the World Cup. If they don't turn up to the World Cup, though, I'll be interested to see what happens because countries are disciplined financially and potentially with sporting sanctions if they pull out of a tournament. So I think that would be waived. I think that would be waived under these circumstances. So that's what I was going to ask. With everybody agreeing that this would not be a good thing.

31:37But in these situations, what does special exemption look like? Because you have a host at war with a competitor. they can't guarantee the safety of that competitor. And I think everyone agrees. No one's really arguing about whether they think it's a good idea. And Iran, as you said, have said it, but more interested in the role of FIFA and the role of the government deciding whether a team can or can't play versus whether FIFA... That would have been very interesting if the Iranian Football Federation, the sports ministry, said, actually, we do want to go. Right? Now, as it happens, they've given the out.

32:13They've helped Infantino there by saying we don't want to be there. They've helped out, haven't they? But if they'd actually said, I'll tell you what, we're going to embarrass Trump a bit here. We're going to say we do want to be there. Let's see what they do. That really would have been interesting. That would have put the bromance under real strain, wouldn't it? Well, it seems to be pretty unshakable, even if a little bit one-sided. Although I do love the way Trump calls Infantino Gianni. Gianni. Just Gianni, as if he's a sort of like mid-level New Jersey mobster. Yeah. You know, that's a guy, my friend Gianni.

32:47it's great you just wait until he's on the podium again well of course the famous Peace Prize exactly I wonder just a little window into what remains of Infantino's soul as he watches the scenes in the Middle East and considers that presentation of the Peace Prize just a few weeks ago anyway it hasn't come at a good time has it yeah moving on what's next on the menu managers football managers football managers Managers with experience. Managers that actually can help clubs. Managers that offer something of real value, long-term stability, experience. Can we actually have a look at the whole mania around football managers in general?

33:31Yeah. To include what you've just said, but also to include some other just totally bizarre facts. There were 20 teams in the Premier League, and nine Premier League managers have been fired this season. And we're only three quarters of the way through the season. Twelve in the Championship, so pretty much 50 % of the managers in the Premier League and the Championship have been fired. Three of the fired EPL managers have been at Knott's Forest. the average tenure of a Premier League manager is one and a half years and in the championship it's actually lower than that it's a year and a quarter right and there's one club that I just want to highlight here over and above Maranakis' Nottingham Forest Watford which funnily enough no it's more extreme than Watford even more extreme than Watford I know I mean the good thing about Watford is that they do it every season at least once I'm hoping that Barrow FC don't do this every season.

34:30But Barrow FC have already fired three managers this season, right? So they start off the season with a player who I remember very well when he played for Oxford United, a manager called Andy Wing. Andy Wing was there, having been there the previous season, was there until around about December time. And he was then fired when Barrow FC was in 18th position in League Two. Okay, so just bear in mind that only two teams get relegated from League Two to the conference. So you're looking at 23rd and 24th are the relegation places. So 18th, you're four places, five places above the relegation places.

35:11He was replaced by Paul Gallagher, who lasted one month. Gallagher was then replaced by Dino Mamria, who's just been fired after one month. Six matches, six matches. Dino got six matches to prove his worth. And the team, which was in 18th position when they fired Andy Wing, is now in 23rd position. What can you say? Sean Dyche, fired by Nottingham Forest in February when they were three points above the relegation zone. Five games since Sean was fired, Nottingham Forest have got three points and they're now level on points with the relegation zone. So they're three points worse off than they were under Dyche.

35:48Bearing in mind that Dyche also came in when they were already in the relegation zone. So just think about this for lunacy, right? Forrester in the relegation zone, Sean Dyche comes in with obviously the goal of keeping them above the relegation zone. Daesh gets them above the relegation zone, for which he gets fired, at which point the club then sinks back down into the relegation zone. Make it make sense. Go on. Okay, so I've got a theory. First of all, I think that the importance of football managers in the overall mix of what makes a football club work is way, way overstated. Okay? So if I was to ask the average fan, right, sort of, you know, what impact do you think the manager has on the success or otherwise?

36:36A club of probably 50%, right? It's probably half of the whole thing. We've got a great manager or we've got a terrible manager. You know, either build a statue or else get him out, you know, all this type of stuff. The truth, according to those who actually know about these things and actually have run the data on these things, is that the difference between them is very, very, very small, right? So the amount of difference that a football manager makes, I've checked in with a friend of the show, Ian Graham, the former director of research at Liverpool, now the proprietor of Ludonautics, one of the top data consultancies in the world.

37:09And he says, most managers make very little difference. A good rule of thumb is that the amount of difference a manager can make is the same as one player, right? A very good one, a very good manager might help you to the tune of five points a season, a very bad one might be five points off. Trappertoni, legendary manager, says along similar lines, he said good coaches can improve a team by about 10%. Okay, so think about that in points terms. Let's say you've got a normal mid-table team, 50 points. Again, we're talking about five points. Okay, so Trappertoni and Ian Graham see it in about the same way.

37:44I've read that the 21st group, who's another of the big data analytics consultancy, have also spoken of it being a 5 % to 10 % swing. And this is based on data. So in other words, you've got great control studies with managers because effectively the squad of players normally stays about the same. So you can constantly be judging the impact that managerial changes have. So the actual difference in these guys is, generally speaking, quite small. Now, just a couple of other things I want to throw in there before we get into what happens here. First of all, to say that not all managerial changes are wrong.

38:21And you go back to Trappaterni's point, where he says good coaches improve a team by 10%, but a bad coach can make a team 50 % worse. So in other words, it's not to say that no managers can make a difference. A really good manager can make a small difference, but you can make a disastrous appointment. I want to highlight one such situation. so Norwich City in the championship in the English championship started the season under a manager called Liam Manning and on November the 8th when he left the club were in 23rd position in the championship they had 9 points from 15 matches so bear in mind that Sheffield Wednesday started the season with a points deduction effectively Norwich were bottom really to all intents and purposes they were the worst team in the league leaving a side Sheffield Wednesday who were in a different league effectively, their own.

39:19Norwich then appointed Philippe Clement and since then they've had 42 points from 21 matches which is automatic promotion form. So they've gone from being the worst team in the league to being give or take the best team in the league. Now the Norwich fans instinct will be to say this is because Philippe Clement is an unbelievable manager. But the truth if you look at the performance data and if you look at the squad performance history there, is that basically Norwich had a top six squad that was massively underperforming under Liam Manning, hugely going back to Trapattoni's point, which is a bad appointment, can really crater you for sure.

39:58So what Clement's done is he's come back in, he's got them playing to the correct level, which is probably the fourth or fifth best squad in that league. And then he's added his five points, his 10 % on top of that, because he's a really good coach. And actually his history indicates that he is an outperforming coach during his career as a whole. So that's a way of saying that I'm not going to sit here and say that changing manager is itself a bad thing. Just, right. It's just that most often it's not the point. Normally, the problem that you have at your football club will be, will lie in bigger stuff that sits behind the scenes, the quality of your recruitment processes and your recruitment department, the quality of your academy and the way in which the academy feeds into the first team, particularly your physical performance department and how healthy and how fit your players are, the working culture within the club.

40:56So, you know, again, we go back to Nottingham Forest when the players see Maranakis marching onto the pitch to go and have it out with his manager on the pitch. That has problems to do with working culture in terms of respect, in terms of how people interact with each other, humans around a working organization. There are all sorts of things which are much more likely to be the problem than the individual quality of your head coach, provided that you haven't got to make a disastrous appointment. Disastrous appointments need to be rectified. But provided you haven't made a disastrous appointment, focusing on the manager as your problem is what I call, I always say this because it's displacement activity.

41:31And just to check that I was right about displacement activity, I actually looked up the meaning of displacement activity. this is what this is what the dictionary says displacement activity is an irrelevant behavior performed when a human is experiencing stress and an inability to act in more relevant ways fundamentally it is self-soothing behavior right so when you think about the owner or the chief executive whatever and the fan base their frustration at what they're seeing in front of their eyes and their inability or unwillingness to, in the case of the fans, they can't see what's happening behind the scenes, so they can't address it, even if they wanted to.

42:10They can't point fingers when they don't know what's going on behind the curtain, so to speak. And in the case of the chairman, the owner or the chief executive, very often the problems that are happening behind the curtain are their fault. And therefore, addressing that would mean looking in the mirror and having an honest conversation with the reflection in the mirror and saying, a bit odd, isn't it, that we seem to change our manager four times a season and things carry on being roughly about the same um that might suggest actually that it's not the manager that's the problem here it might be uh whoa crikey might be me but that encourages self-reflection self-reflection is a difficult thing so what you get is a coming together of two um mistaken forces one of which is fan-based pressure to do something or be seen to do something on the one hand and on the other hand you get uh the people in charge of football clubs who do not want to look in the mirror and examine what they are doing and what other parts of the club are doing.

43:04Because changing the manager, whilst quite expensive, particularly if you're a club like Chelsea, quite expensive, is nonetheless a relatively easy thing to do. You call the guy into the office and you say, sorry, it hasn't been working, goodbye. You then bring somebody else in, the fans get excited, the fans get off your back and the whole thing can move from there. Going back to Ian's point, they're a small portion of the overall output, but it's not hard to see why fans may increase the importance of a manager on their team because the manager is always the one that when something goes wrong, they are the ones that get fired.

43:36They are responsible for the team and they're also the ones that can be removed the easiest. I think that's the crucial point. So you're not removing the board, as you said. You're not removing the ownership most of the time. You're not removing the players mid-season. The manager is on the front line. Well, we've had this discussion before about technical directors, haven't we? We have. and the fact that technical directors in other football jurisdictions do take more of a forward role and are held more directly responsible by fans for performance. And I think that would be healthier and I think it would be healthier for managers.

44:05But I think you've got an interesting list. Well, I'll let you explain it. Well, you actually, one of the reasons we wanted to cover it was I think not long after Igor Tudor was appointed the interim at Spurs, there was an article which showed the most experienced active managers in the football leagues. And there's a lot of experience going up and down the league, particularly from English coaches. Now, famously, there is not the equal opportunity afforded often to English coaches in recruitment processes, particularly the higher up the leagues you go. Except, of course, by Chelsea right now.

44:40Except, of course, by Chelsea, who have done a brilliant job supporting the young coaches of this country. Quite right. But anyway, you know, the most experienced active managers, I'll just read out a few of them. You have Ian Holloway at 947 games. You have David Moyes at 941. You have Phil Parkinson at 800. Nigel Clough at 743. Steve Evans at 742. Mark Robbins at 735. Steve Cottrell, 702. Carl Robinson, 672. Eddie Howe, 656. And Lazarus himself, Chris Wilder, at 631. What I'd be really interested to do, and I'm sorry I didn't do the work, is to look at the number of promotions those managers have had compared to the number of relegations they've had.

45:20you'll find that is massively weighted in favour of promotions. They've had a huge number of promotions between them, those managers. How many of those managers are given opportunities at the top level when clubs in a situation of dire need in the Premier League are fighting for survival? The need a manager to come in there and offer a bit of the experience that they've gained in the leagues that have all of those qualities that you highlighted about bringing that team together and being able to add their extra bit to the top, which makes all the difference in this country. How many of those have been given that opportunity?

45:53Ian Holloway's managed in the Premier League. David Moyes has. Phil Parkinson has not. Clough hasn't. Evans hasn't. Robbins hasn't. Cottrell has. Robinson hasn't. Howe has. Wilder has. But in several of those cases, they had to get their own team promoted to the Premier League in order to be given that chance. So an even better question, how many were hired into there? David Moyes. David Moyes. Holloway maybe. Eddie Howe. Eddie Howe. But Eddie Howard, who'd already got Bournemouth promoted up into the Premier League. Yeah. To then make himself a Premier League manager, who then was horrible. But, you know, I remember, I think I said to you when we were talking about this, the one that stood out to me, apart from the chaos that often happens at Watford, the one that really stood out to me was West Ham with David Moyes when we were talking about this.

46:37Because I remember so well fans coming out in the anger that was surrounding the David Moyes situation and the fact that he was still the manager of West Ham a year after winning them their first trophy in 43 years, I think it was. Yeah. 43 years. Yeah. A European trophy, consistent, I think it was three consecutive years of European football. Yeah. And they were basically just saying, we want him out, we want anyone else. The football's boring. That was the thing that was labelled at it most of the time. I think the football's boring. Now, what would West Ham give to be in the positions that David Moyes had them in?

47:11Now, what would West Ham fans give to be in the positions that David Moyes put them in? And what positions were Everton getting themselves into before David Moyes went back to Everton? Exactly. And where are they now? So I think the truth is, is that this belief that a manager can wave a magic wand tends to lead boards, and particularly inexperienced boards, one has to say, in the direction of trying to find the newest, shiniest thing. Who could be the next Guardiola or whatever it might be, right? because with all due respect, those 10 there are not going to be the next Guardiola. By the way, I think Guardiola would find it very difficult to do some of the jobs that they have done, but put that to one side.

47:54I'm also almost taking out the top six of the Premier League in this conversation, and we're looking at anyone that's first ambition should be to retain its position in the Premier League, and the second ambition could be to push for something like Everton or Brentford are doing right now, which is European football next year. those clubs these types of managers but as you said they just want the thing that is going to be more more appealing to a fan I was thinking about this I don't know what you thought to me it's it's safer for these ownership groups to hire the international manager with a foreign sounding name because all that they have to defend themselves against there is maybe a few YouTube videos that some fans have watched or maybe a Champions League run that Ruben Amaran has been on with Sporting Lisbon that gets everyone very excited if you hire those English managers that I said the high likelihood is the fans have an opinion of them they've been to a game where that manager has managed they've seen how they operate and he's called Tony Pulis yeah right not yeah Tonita Punisilo yeah like the the difference between the two may seem trivial but it's the war of the YouTube video fan going and finding the things that they want to see and getting excited about the manager coming into their club versus the proven knowledge that already exists based on West Brom's poor performance when they played us at home seven years ago.

49:09Yes, exactly right. So I totally agree. So if you're a board, what you should be thinking is, is if the data tells me that the maximum I can possibly hope for is a manager who achieves that extra 5%, right? In other words, this isn't about a magician with a magic wand. It's not that. It's somebody who makes sure that I outperform my budget by 5%. That's it, right? So if the amount of points that my budget suggests I should get is 50 points, I want somebody who on a regular basis will get me 53 points. That's the max you can ask for. You're not going to get better than that. The data says that.

49:44Trappertoni says that. It's absolutely clear. I just want to read some data from the 21st group, Charlie. Right. On average, in the six matches before a sacking, the club that's about to sack their manager, on average gets 0.9 points per match. In the six matches after firing their manager, on average they get 1.2 points per match the performance level that's measured by xg okay so that is the sort of the sort of the technical way of measuring football performance which is the subject of much debate but is in my mind absolutely empirical is 1.1 points per match right so what you've got here is tiny tiny differences so the difference between the underlying data, as we call it, the 1.1 points per match, which XG suggests that club should be getting, and the 0.9 points per match that they actually are getting, that is what we call bad luck, right?

50:43And which over a six-game period can easily, easily happen. It can even happen over a 20-game period, right? So that coach is getting a little bit unlucky. A new manager comes in and improves the underlying performance data from 1.1 on average to 1.2, right? So basically, from a statistical basis, just irrelevant, right? What does 0.1 additional points per match mean? It would mean that over the entire six match period, you got one more point, okay? And it then reverts back to just under 1.1 on average after that. So in other words, the vast majority on average of managerial changes make no difference and actually were answering something which is uncontrollable, which is bad luck.

51:28So what you actually have to do is you have to look at the previous 10 matches and you have to say, first of all, are we basically being unlucky? That's the first thing. Because if we are basically being unlucky, then even though it might stick in the craw to do it because I'm very frustrated, that is going to balance itself out in time. So if we're doing 0.9 points per match now, but our average XG PPG is 1.1, at some point we're going to go to 1.2 or 1.3 because it'll just balance itself out and then we'll look clever for not having pulled the trigger. And if you do make the change, just be very clear to yourself that what you're doing is hopefully, if you get it right, you're going to get an extra one point for every five or six games.

52:09Now, that's not to negate the odd occasion, as has happened at Norwich this season, when there was a clearly massively underperforming manager. Somebody with a top six squad who was in 23rd position in the table. So that's the Trappettone bit. That's the freak case, the exception that proves the rule, where the board has to step in and act and say, on our XG, on our results, everything, we are way under where we should be in our belief. We believe we've got a good squad, so we do have to make a change. But generally speaking, you're much better off not making that particular change. Not never, but certainly not on a regular basis.

52:45And you're much better off trying to do the other stuff that sits behind the scenes, which can actually make a much more significant difference. Because if you were to say to most clubs, right, what would make a bigger difference? Marginally improving your head coach or having five extra players fit at any one time? It would be having five extra players fit at any one time. And yet very few clubs really place a microscope on their physical department. It's all about changing the head coach. And also, we are the business side. The cost of doing this is extensive. We sit here and scrutinize the financial performance of clubs weekly.

53:15Well, Watford, according to the Swiss Rambl, in the last five, six years, have spent 20 million on payoffs for managers. Now, that's not Chelsea paying 21 million to Graham Potter at the top of the Premier League. This is a club that is yo-yoing between the Premier League and the Championship. Mostly the Championship. So 20 million is a huge amount of money. That is compensation to the managers, that is backroom staff, but also, don't forget then, there's also the hidden cost, which doesn't get brought in so well, which is each manager that comes in then starts to sign players to fit their system.

53:42So every time a new manager comes in, you have to adapt to the, well, they want to go and sign players to adapt to their system. Now, you keep making changes two or three times a season. That's a lot of additional cash you're spending, as well as the compensation payoffs for these guys. So, I mean, the one that made me laugh, Charlie, was also, I just was reminded, looking through it, of Leeds. Do you remember in the Premier League where they sacked Bielsa? They then bought Jesse Martian. That didn't work out. So they bought Javi Gracia in for a few months. That didn't work out. So then they gave it to Allardyce till the end of the season.

54:10Well, I mean, poor guy had four games and they got relegated. It also has profound human impacts. I think this is something, understandably, this is something that fans really struggle to understand. Because they view the club partially for the numbers, partially for what they see on the pitch on a Saturday. And the players are just like pawns on a chessboard that get moved around. When you're behind the scenes in a football club, the human impact of moments of change can be very considerable. Because this is still a small group of people, fundamentally. If you look at the first team setup of a professional football club, between the playing squad, which might be 23 to 25 guys, the first team coaches three or four guys, the physios another four or five guys, a couple of analysts, etc.

54:54You're probably talking about, you know, 40 people, 40 human beings in total who see each other every single day, who gradually start to get used to each other's ups and downs, wise or wherefores. You know, when we started the pod, we didn't know each other as well as we know each other now. And gradually you start to work out how you're going to interact with these people and what the dynamics are and also what the expected behaviors are. Because different managers have different expected behaviors. And gradually, they often say a dog ends up adopting the behavior of its owner in the end or the personality of its owner in the end.

55:28The same should happen with the football team. Ultimately, in the end, the football team should reflect the personality and the beliefs of the head coach. Well, what happens if you're changing the head coach every three months? You can't ever have that feeling. Well, it's going to be bipolar or very dysfunctional, right? So imagine a dog who is changing owner every two or three months, you know, and one owner would smack the dog for, you know, going and eating something it shouldn't have done. And the next one will pass it on the head and say, don't worry. So how does the dog end up working out how to behave?

56:00It's very, very difficult. And the same is true in football clubs. So just to conclude on this discussion with Nottingham Forest, who are setting the current gold standard of dysfunctional behavior in this regard. I was going to say, Sean Dyche, when I remember when that, I was like, wow. Did you see the background briefing that went on for Maranakis' henchmen on why this had happened? Wait, sorry, which one? Why Sean Dyche had been fired? Why Sean Dyche had been fired. Was it about the dressing room? They blamed the dressing room. Right, so basically what it was is that Maranakis himself was speaking to various of the players.

56:36And apparently in that relationship, the players were telling Maranakis, oh yeah, well, Dyche is a terrible manager, you know, which again, the track record says anything but that, right? The guy has been one of the 5 % outperformers for almost all his entire managerial career. But what that also reveals is a level of dysfunction, which actually is much more likely than whoever the head coach is going to be to make that club underperform. if you've got a situation where the players who report into the head coach that that relationship is being disintermediated by the ultimate owner having offline conversations with people who are meant to be reporting into the head coach how can that head coach have the authority within that working environment to achieve anything anyway?

57:16That was always the interesting Chelsea discussion wasn't it? If you remember it was always the supposed relationships that those big players had with Abramovich directly the spine if you want and where the managers came unstuck was when the players turned around And they went, not for us. Yes. I think, I mean, look, that is still dysfunctional. I think the difference is that that spine of the club, Abramovich and those senior players who were there for a very long time. I mean, you know, we're talking about 15 years, 10, 15 years, that kind of stuff. So they were much more permanent and they were part of the furniture.

57:50And Abramovich himself was also part of the furniture and, let's say, behaved in a more discreet way than the Maranakis does, for instance. I'm not saying it's good I don't think it's good I think it still undermines the authority of the head coach and makes it less likely that the head coach is one of those ones who outperforms by 5 points 5 % rather but I think it was managed in a slightly more discreet way what you've seen this season with Maranakis marching onto the pitch to remonstrate with Nuno at the start of the season and then destabilise Sean Dyche towards the back end of the season you say well of course you're in the of course you're in the relegation zone of course you are you know any club that continues to behave in that dysfunctional way will underperform.

58:31Much more so than by having a head coach who's one or two percent here or there. These are problems which are much bigger problems than that. So just to conclude on this point, I think overall experience amongst managers is massively underrated. Because once they've been through all sorts of these different scenarios many, many, many times, and they've tried various different things, some of them worked, some of them didn't work. Well, that means every time they're confronted with a new issue, challenge, they've got this big memory bank of stuff that they can go back to and go, yeah, I remember this.

59:00I've seen this one before. I've been in this situation before. I think I remember, yeah, I think I know how to deal with it. I think I've got this one. And as I said, that list of managers who have all managed 600 matches or more, their win percentages and their promotion versus relegation percentages, often at not very fashionable clubs, if we're being honest with you, will massively outperform a lot of the new shiny things that are imported into the game. And yet, as you say, generally speaking, they won't be given the better jobs. Well, good luck getting Pulis, Pardew or Allardyce. Now they're fully invested with Uber Eats, aren't they, these days, on the Sun Loungers?

59:36Well, actually, Charlie, I've noticed there's a sort of new pastime for these very experienced, no longer employed managers doing podcasts. That's weird, isn't it? A lot of them do podcasts now. They do. Well, why not? It's an ideal occupation for the underemployed. Exactly. Hey, who are we to put shade on that? final topic for the day is one of the most extraordinary sports topics to anyone who's not in the US I feel we're going to have a look at college sports and in particular so Charlie just said we're going to have a look at college sports that is not a sign to switch off and it's not a sign to go and get a cup of tea stay with us if you felt like that with horse racing last week then just stick around Charlie no one thinks about this with horse racing everyone loves horse racing I don't know what you're talking about they do now.

1:00:26I'm fully confident. But I promise you, stay for this. Let's get to the data to explain to people why this is not the time to tune out. This is the time to really switch on because this is one of the biggest sports businesses in the world. And it's the perfect time to do it because it's March Madness. March Madness. What's March Madness, Charlie? March Madness is the NCAA Div 1 men's and women's basketball tournament. 68 college teams compete over three weeks before a national champion is crowned. It generates over$1 billion in revenue annually, mostly from TV rights. This tournament that takes place over three weeks generates about a billion of revenue.

1:01:07Yeah. Right. Can we speak? A billion. It generates a billion of revenue. Can we just go back into the major European football leagues? Okay. So yes, the Premier League generates about$4 to$5 billion of revenue and is the biggest football league, the dominant football league. And from memory going down from there, you go to Spain at about three billion, something like that. Italy, about two, two and a half billion. But this is for the whole year, not for a three-week tournament. This is for nine months in the case of the football leagues. And the French league, which would not be doing anything like a billion, right?

1:01:42It'd be doing much, much less than a billion. So you've got a three-week student basketball tournament that makes more than French football makes. And most importantly has a TV deal, which is just under a billion dollars based on reported numbers. That, if you put that on some of the leagues, is equally as extraordinary. For three weeks. CBS and Turner currently have that deal until 2032. Look, that's a very a very crass layout of it. What this really is, is a recognition of how big sport underneath what we would class as the elite level is in the US. To understand why this could be, we have to recognize that US sport is a totally different structure.

1:02:29So in other words, in this country and in European countries and in Latin American countries, basically the scheme of it is you're a promising young player, whether it be football or cricket or rugby, whatever it might be, you get spotted by your local club who have some sort of academy or some sort of, you know, youth performance pathway of some kind. You get collared into that at some age between sort of 10, 11 and 16, 17. You get given an elite sporting education by that professional sports club who then sign you to a professional contract when you're about 17 or 18. And then off you go to become a professional athlete.

1:03:09this is not the case with US sports. So if we look at US sports, which constitute the majority of what we're about to talk about here, American football, baseball, and basketball, right? These are the three big college sports that really cut the mustard when it comes to the numbers in US sports in general, but particularly in the college sports world. So these sports operate the draft system. And the draft system is very different. Basically, it means that the major league franchises and those sports do not themselves operate a youth system, instead of which the universities operate the youth system on behalf of the major leagues so that the elite young players play, go to university and play through their time at university.

1:03:55And then the best of them then get entered into a draft system where the big major league franchises then can pick them up on a lottery type basis to augment the squads that they already have. I mean, you know, it's great from the franchise's perspective because they don't have to pay for operating academies, right? It's good from the sports perspective because it means that they can get a more even flow of talent going into all the various different franchises. But up until now, for the athletes themselves, what it's meant is they haven't actually been paid to play until they're about 20 or 21 when they're leaving college.

1:04:29whereas of course in this country and in this continent and indeed in Latin America the top elite performers of the major sports in our geographies start getting paid properly from the age of 17. Flip side of that though which is something we always drill into when we look at the difference we'll have to compare the difference between US and non-US athletes they've got an education. In theory. In theory. In theory. Now I appreciate it's not always as simple as that but the system requires them to be attached to an education facility, if we want to call it that, until they are put into a professional system.

1:05:03Here, Wayne Rooney goes and scores his goal from 16 years, or Max Downing at the weekend scores, 16 he's taking his GCSEs. I can't imagine he'll be doing a huge amount more. He'll be part of Arsenal's team moving forward. So the structures are different. They will have their merits. The structures are very different. But I think the thing to focus on right here is until a court ruling last summer, college athletes, despite being part of sports, which were raking in and are raking in huge amounts of money for both the NCAA, which is the collective organization of college sport. National Collegiate Athletic Association.

1:05:41Thank you, Charlie. No worries. I knew you knew it. Well, I kind of knew it, kind of knew it. I was just trying to dig it out of my mind. When I said the NCAA earlier, I was like, I couldn't remember what it was. I like the fact you picked that one up for me. Thanks very much. And then the colleges themselves also making huge amounts of money. But until a court ruling last summer, the colleges weren't actually allowed to pay the athletes, even if they wanted to, which arguably perhaps they didn't, because they were making huge amounts of money out of these athletes, effectively playing for them for free.

1:06:13Now, we discussed March Madness as being this one massive basketball tournament. And it's just worth mentioning that it's not just about the TV deals. you know when they play the semi-finals and the finals of March Madness this year it's going to be in Indianapolis okay at Indiana State University's stadium and this is a basketball game bear in mind capacity is 70 ,000 right now if you then compare that stadium with some of the big American football stadiums in U.S. college sport Michigan State which is nicknamed the big house their stadium, 107 ,000 capacity, packed to the rafters. Bigger than the Camp Nou.

1:06:50Right? It's more or less the biggest stadium in the world. Penn State, 106 ,000. Ohio State, 102 ,000. Right, basically, you're not even considered to be serious about this, in this sport, unless your stadium holds 80 ,000 people plus, which is bigger than any... You're at university, you're in college. Right, you're in college. It's bigger than any single stadium in Britain. and that's you know it's quite extraordinary any similar club stadium in brisson i should say the university i mean the top college football programs generate you know the university of texas reported 298 million dollars in adjusted revenue loss i mean it's one of the few sports organizations in the world that might that might even make the hong kong jockey club think think twice about its status as the most profitable sports organization the top college football coaches i like think about being at university and like one of your professors or your teachers earns eight to ten million dollars a year there's one one head coach i believe who last year was on 11 million dollars right but that's quite that's quite interesting though isn't it charlie because if you're not paying any of your players as they haven't been yeah right and you've got all this money what's the one thing that you can do fire your manager sorry yeah appoint a manager i should say um but now as from last as from last summer because of a court ruling that basically said it was unfair that college athletes who were basically more or less full-time elite athletes who were helping pull in vast revenues to their colleges, etc.

1:08:14But effectively, this US court ruling said that from now on, they should be paid. And indeed, even that they should be retrospectively paid for the last eight or nine years as well. That was a very significant payment. That's$2.8 billion in retrospective damages to Division I athletes. Those are the athletes at the top US colleges for the years between 2016 and 2024. There's a great disappointment to Mrs. Methven, who stopped playing Division I basketball in 2005, I think. So, yeah, she's going to miss out by 10 years. But the rest of them, some of them are going to make significant sums. And going forward, each individual college is going to be able to spend 20 million bucks a year paying its athletes.

1:08:54So I think there's an important differentiation to make here because the landscape has been evolving for the last five years, if we want. But last year was something you mentioned that it was the house versus NCAA. And what that really did in its most simple form was the schools can now pay athletes directly. In 2021, there was something which is what now is known as name, image and likeness NIL that was passed, which basically said that athletes are allowed to make money from their endeavors associated with being a top level collegiate athlete, i.e. they could get sponsorship money, they could run an advertising campaign, they could monetize their social media.

1:09:31previously everything had run under the guise of amateurism so it was scholarships rather than salary type thing it was no endorsements and no commercial earnings and that's your point is you had all of that money you had 298 million for university of texas you had coaches on 8 to 10 million a year you had universities coaches broadcasters really making billions from this while the athletes were unpaid so that name image and likeness elevated the status of some of these athletes and to the state to the extent where you know the top basketball recruits just on nil deals alone we're making two to four million dollars um which again while you're at college you know performing isn't isn't bad money it's not again but again compare it to just go back to you know the young footballers who are 20 years old um in in a comparable sport right in financially terms a comparable sport who are on five ten million a year just for salaries before you even get onto the image rights and and that kind of thing so it has been a sort of glaring um inconsistency as it were, that you've got the colleges and the NCAA itself, which is owned by the colleges effectively.

1:10:34It's not for profit. It's a not for profit that makes a massive profit, right? There's been raking off billions from college sports. The athletes have been banned in the first place from earning anything and then only allowed to earn from effectively peripheral activities. As from last summer, they're now able to earn legitimately from actually being paid to play right um but even so even if you add up the total amount that they are going to get paid compares the total amount that is being made the ncaa and the college programs are still going to be vastly profitable organizations the interesting part to me was asking the question of right well how does that change the system and there were two things notably one from the nil um situation was this concept of collective so what then came up was groups of companies or very wealthy individuals from areas and anyone that's seen the movie the blind side will uh remember in beautiful hollywood style how competitive it can be recruiting players to go and perform at universities and these collectives will basically pull marketing cash so a few local businesses will put that money in and that will then go into helping recruit some of those players so essentially those players when And it was just NIL deals were being brought to university on marketing budgets and they would make good money from that.

1:11:53So you had that up until last summer. And then when it was being paid direct, it's just good old fashioned now. Universities that have been able and can pay more will attract some of the better talent. And some of the critique I was reading just from a competitive standpoint was, you know, the end of the Cinderella stories. They said they often said within March Madness, you used to get some major upsets. You get an underperforming college or school beating someone way up. said now you're getting that less or you will certainly get that less moving forward because that top talent is just going to wealthier universities even with a cap because obviously not all of those universities will probably max out the cap.

1:12:26Indeed.

1:12:30But you read out those numbers and you actually look at this is a sports business. Yeah. And you have universities operating as top tier sporting assets, managing salary caps, paying huge deals. The estimated value of the University of Texas' sports program, so in other words, if the University of Texas operated and separated off their sports program into being a commercial entity, the estimated value, as you were mentioning in terms of the earnings, would be$1.5 billion. Right. So sort of maybe a lower end member of the big six English Premier League clubs. Something like that. Okay. there are 13 university athletic programs that are valued at over 1 billion.

1:13:20Now, this is basically because of one thing, which is they are enormously popular. It never ceases to, I wouldn't say amaze me, but it takes me aback when I'm in the US, which I am on a regular basis, and meeting up with friends and friends of friends, etc. etc. In many cases, they are much more interested and much more passionate about the college sports scene than they are the major league scene. There's always a big shock to us. So we assume that if someone's really into American football, that their main focus will be the NFL. Very often not. Their main focus will very often be their college sports program, either of the college that they went to or the state university, the state that they come from.

1:14:03And that will be their main what I would call fandom and it's quite when you're in a college sports stadium the atmosphere is more similar to a European football match in terms of the away the away fans the home fans the chanting and all this type of stuff whereas sometimes if you're an NFL game it's it's not quite this it's not quite like that always well how could it ever be when you've got how could you ever have that complete buy-in when your franchise could be moved absolutely right you Whereas the colleges can't be. The colleges can't be. The colleges are tied to their locality. And you've got, obviously, many families from those states where multiple generations of their family has attended that university.

1:14:42So you have those very, very strong ties. It's an absolutely fascinating scene. But it is awkward and difficult for us to compare because I think sometimes people say, well, of course, the university sports scene in Europe would never pay. It's like, yeah, but that's because elite athletes over here don't go to university. It's so deep-rooted, the differences here. You know, any time you look at American sport versus European sport, you are looking at completely different cultures and environments, not just performance structures at the highest end. This is all down to their consumption. Do you know where this causes a big problem, Charlie?

1:15:14Tell me. Is in the development of US soccer, right? Because these other sports can develop and be in this way because they are just American sports for the most part. For the most part. when it comes to football or soccer as they would call it that's a global sport where everybody else is playing to different rules so everybody else in the world is in pure elite development systems from 16 17 onwards right and being paid yeah and being already right in the middle of the whole things like you're saying max down and etc and yet in the u.s they don't have the same established systems because the assumption is, the working assumption is, is that elite athletes go to university.

1:15:58But by the time you've attended university, you're not going to become an elite football player. Forget it. The level's nowhere near good enough. I mean, you're going to be miles off the pace. And there are one or two, you know, exceptions that prove the rule over the last 30, 40 years. I think Landon Donovan of the US men's national team might have gone to college and one or two others. But it's very, very, very, very rare. OK, so when I go to conferences and one of the biggest questions that's always posed is how can America and the MLS, but also the men's national team of America become more competitive, given the scale of population and given the level of participation, which given the scale of population actually quite high.

1:16:39So how can we be more competitive where you'd have to adopt the same academy system that we have? because that is the only way you can compete. Now, Major League Soccer is heading down that route to a degree, but it's difficult for them because, you know, there are lots of talented young elite athletes where the family expectation is that part of the deal of my kid being good at sport is he's going to get a scholarship to college. I was going to say it goes against the fundamentals of a lot of their system. Yeah, it does. So you're reframing their view on education, sport, and professional careers.

1:17:12if you wanted to watch March Madness, Charlie, in the UK or the rest of Europe in the next three weeks, where would you need to go? YouTube? Our old friends at DAZN. Really? Indeed. Oh. Well done, guys. Just a quick plug there, just in case anyone thinks I've got anything against DAZN. Thank you. Well done to DAZN. Well, look, sounds like a great deal for them. Well, mind you, UK's probably not their biggest market, so peripheries are extreme. But yeah, I mean, wow, what a space. I'm really pleased you forced my hand there because it is an incredible business. Yeah, just be aware, viewers and listeners out there, that over the next three weeks, the biggest sports event on the planet is going to be March Madness.

1:17:58You heard it here. You heard it here. And hey, guess what? If we get a few of you watching it, then that's probably a good thing. Charlie, another great week. Thank you very much. Thanks a lot. Thank you, as ever, for tuning into another breakdown. There are some very important and sensitive topics in here, which I hope we address with the care that they require. As for the look into the world of US collegiate sport, I find it just insane how big that sector of the sports industry is and the level to which it highlights the difference between the US sports ecosystem and the rest. As always, thank you for tuning in and please keep the comments and engagement coming.

1:18:32We'll see you next week.