THE BREAKDOWN: Glasner’s Moment of Madness, Manager vs Medical Staff, Tennis’s Pay Problem, & The F1 Livery Goldmine (E03)

24:14So these things are not always flashpoints. These things are not always touchpoints. If you've got the right people in the room who are in the right mindset, who are being bound together by the right culture, then it doesn't need to be antagonistic. I'll tell you one thing which I have seen in the last week, which I do think is a fair charge, is that in an environment where more and more authority is being vested with the technical director, right? why is the technical director not more media and public facing and why is he more obviously not more obviously accountable for what what the outcomes are right because he also appoints or is heavily involved and responsible for appointing the head coach as well so even if the head coach is struggling and failing fundamentally that's down to the technical director it's a good point so you know i have on on our other show i think we've probably had between i don't know you being one of them 15 football league english football chief executives maybe 20 i have tried on multiple occasions to get a technical director to come and join us and have a conversation and you know what it's like we're not exactly sitting there skewering people right you get you get a very fair run yeah nothing now yeah i've asked that question quite a lot why you know why when when when you see these people now making such key decisions why are they not the ones capable of coming and having this conversation so i think it's quite cultural in in foreign countries the td does speak a lot more um germany's good at it right germany absolutely in germany very much so in this country so funnily i'll go back to charlton because it's my most recent um experience in english football but um i've done the same in belgium when we started at charlton our td was quite media facing but when things started to go a bit wrong as they often do um which was very much in the early days before a lot of the changes we've made had a chance to bed down.

26:04He basically became the whipping boy for the fan base, right? Which, I mean, I guess somebody has to be, right? But effectively, the TD is somebody who is somebody you're trying to bed in for the long run and trying to get them sort of in that medium to long-term frame of thinking because some of the decisions that they're going to need to be making are about medium to long-term. So I think that there's a sort of cultural process. I think that the first bit of that cultural process is happening. which is fans are now starting to understand that whether they like it or not, the technical director is a very powerful person within their football club.

26:39And then the fans, not unreasonably, many of them are saying, if you listen to phone-ins and this type of stuff, well, we now want to hear from the technical director. So I do think this is reasonable, but there is probably going to be a bit of pain in between where fans are going to find it or are finding it very, very challenging. And I can feel it in your voice as well, in your body language. that the old gaffer in his sheepskin on the sideline with his little black book of contacts and his little tap of the nose and his brown envelopes to the agents, that there's a bit of the fan that doesn't want to let that go.

27:12But as owners and directors of the club, we want to let it go. This feeds into a second point I know you're desperate to touch on, but it really all comes back to a shift in the role of the manager and a manager being in a position now to have the confidence and authority to know what they know and be fully accepting of what they don't. Klopp was the master of this. Klopp was the absolute master of this. Ian Graham's influence. Dr. Ian Graham's influence on that team, as we both know, when you have those conversations with him. Charlie, it's so interesting. If you read Ian Graham's book, How to Win the Premier League, which I would highly recommend to anyone listening to this podcast, one of the best books about football I've read in the last five or 10 years.

27:47If you, and Ian Graham, Dr. Ian Graham, as he is, who was a Cambridge academic who then came into data analytics and then came into football data analytics off the back of being a normal data analytics, ends up becoming the head of research at Liverpool who drove a lot of their recruitment processes working to Michael Edwards. After leaving Liverpool, Ian wrote this book called How to Win the Premier League. And the really interesting thing was the difference in his relationship between Brendan Rodgers and Jurgen Klopp. Brendan Rodgers basically didn't want to know. He basically said, yeah, you guys have your numbers, whatever, whatever, whatever.

28:20There's this player who I used to manage at a different club three, four years ago. I just want to sign him and that's it. I don't care what the numbers say I just want to sign this player when Klopp came in It was much more a case of you guys are spending so much time looking at this and so much time looking into this That by definition you're going to know a lot more about it than I do And therefore my input is going to come like right at the end of the process Which is once you guys have come up with somebody who you think is going to make a difference Do I agree? Right? Which is a totally different mindset and the reason and I think that's the The core reason that drove five years of Liverpool's success was these functional structures and relationships that were put in place by Fenway, but also the character type of the people in those relationships.

29:05You know, these were strong characters. I mean, anyone who meets Jurgen Klopp knows he's a very strong character. Anyone who meets Ian Graham, actually, Ian is quite a strong character. He's not a quintessential nerd at all. but their ability to be respectful of each other's space and understand that they had a job to do to try and bring the other one on board and try and get the best out of each other and michael edwards indeed overseeing that entire relationship is exactly what i'm talking about it doesn't need to be unpleasant it doesn't need to be aggressive it needs everyone to be supportive of each other the best leaders always talk about the value of the people they have around them and bringing people in who know their trade and in football football managers in particular historically you have had that holistic control and it's worked in maybe the way the game was but without all the data that we have now without all the technology it's a big shift from the egos of managers but we see it come out in lots of different ways and we can't talk about managers and power shifts and everything without referencing some quite astounding incredible language i think used by oliver glasner at the weekend with the sale of mark erhi going through just before the game that they played and him talking about being abandoned by a board who, by all accounts, if I look at it, have actually stuck by him in a multitude of ways over the past year and a half and given him the greatest success on his CV.

30:25I thought he sounded totally mad and deluded. And if I was another club who had been thinking about hiring him at the end of his contract at Palace in the summer, I'd be having second thoughts right now. This is the type of stuff that as boards of directors, this is the type of stuff we look at, which is as well as being a good head coach is this person going to be able to be a good corporate citizen? Is this guy going to be a team player? Is this guy going to be part of it? Let's just examine the situation. Glasner has been there two years. The Crystal Palace project which led ultimately to them winning the FA Cup the first major trophy in their final in their history and then qualifying for Europe don't forget they should have been the Europa League but because of the whole Texture problem it ended up being the Conference League that has been a 10 year, 15 year run a project that's been built up over a long long period of time and the club is unrecognisable now to what it was then in terms of its facilities, in terms of its processes, in terms of the quality of every single thing it does if you go to the Crystal Palace Academy now and I have been recently it is right up there with the big six, it is absolutely terrific and not just in terms of facilities but also in terms of what they turn out they're also producing lots of great players so this is a board and an owner in Steve Parish that knows what he's doing now I've had disagreements with him in the past I think his his and Karen Brady's decision to oppose the deal which the Premier League had done with the Football League was dumb and it led to the creation of the Football Regulator that he and Karen Brady are why the Football Regulator has happened right if they'd actually agreed to let the deal with the Football League go through two years ago two and a half years ago the government would have dropped the Football Regulator effectively it was them saying we're not going to do that deal that led to the government saying, okay, right, we're going to have to have a football regulator since clearly you guys can never agree on anything, right?

32:13Isn't it a 14-6? It's a 14-6 split, and effectively West Ham and Palace managed to get enough other teams on their side to block what was effectively a redistribution of TV rights. So it was very much led by... So I'm not sort of just saying that this is a perfect guy who I agree, but you cannot gainsay the fact that he has taken a club which had been an administration and in league, in championship, but in danger of going into League One. And is now a mid to upper mid table Premier League club, which has just won the FA Cup, deservedly so, and which is quite possibly going to win a European trophy this season.

32:47And he's done that by making calculated risks along the way. And two of the risks came from either just around the time that Glasner joined the club or just before. And those risks were not selling Mark Gahey and Ebereche Eze, who were the two best players in the squad. we need to remember the history on this right just be fair to steve parish and the palace board in the summer of 2024 newcastle offered palace 65 million pounds for mark gay he palace turned it down and by the way gay he had been bought for 18 million from from chelsea right so it's not like he was some youth player and well you know no a significant amount of money had been paid for gay and they turned down 65 million quid for him a couple of years ago.

33:32Eze had also had offers on him. Parrish has turned down£100 million worth of offers for Eze and Gehi in order to enable them to be a full part of the squad last season. And the risk paid off and they won the FA Cup and that has now made Oliver Glasner's career as a manager. And now, six months later, obviously Eze went last summer. He went for 65 million quid to Arsenal. And Gehi's gone for 20 million. Obviously, he's out of contract in the summer, so it would have been zero. In four months' time, it would have been zero. These are full England internationals, Gehi and Eze. They're not like internationals who have played one or two games as fringe players in a friendly.

34:14They are core parts of the competitive England squad. And the fact that Palace and Glasner had them for a year and a half to two years of his tenure at Crystal Palace is an unbelievable tribute to Palace's ability to hold their nerve, to hold their nerve and hang on to their best assets to try and achieve something glorious, which they then achieved and which has now been thrown back in their face by an employee who they pay four million pounds a year. I thought it was absolutely outrageous. I just find abandonment an absolutely extraordinary way in that context. There was such an, he's not even under, Glasner, the thing is, you know, quite often people excuse bad behavior by managers as saying, well, he's under intense pressure.

34:51Glasner is not under intense pressure. His contract finishes at Palace at the end of the season, and he's refused to sign a new contract at Palace, right? So in four months from now, everyone knows that Oliver Glasner is going to be leaving that club. Everyone knows that Palace is going to finish somewhere in the mid-table this season. They're in no danger of being relegated, probably given all the games they've had to play in Europe, et cetera. they're not that likely to hit the top eight either top seven or eight either right they're going to be a mid-table team he's got a phenomenal achievement on his CV of winning a major trophy with one of the non-top six clubs in England got all the biggest clubs looking at him as an option right thinking this guy could be the next big thing etc and then he goes and does this he goes and does this if I was his agent I would just have my head in my hands and just be sort of just say oh my god he's just blown the big job you get players of those qualities and unfortunately whether you like it or not and I'm sorry Palace fans it's a selling club at that level.

35:42Can you imagine Andoni Arreola sitting there going like this having had multiple players at the top level sold to major European teams? There are so many examples of this and it's very easy for us to criticise boards and structures. You can't criticise Palace's board here. They have given up 45 million quid on Gehi to keep him there an extra year and a half. That's a fact. Powerful stuff and a good place to leave it. Yeah. Let's move on from football and move into tennis because, as always happens in the middle of January, you kick off the year with the Australian Open. And I'm excited for this year of tennis in general.

36:21We had such dominance from Alcaraz and Sinner last year. They've won the last eight Grand Slams. Since 2023, they have won the last eight Grand Slams. I mean, obviously, I've seen all the games, but I guess I haven't strung it together like that. Perhaps it's something to do with the previous era. It was so well established that they were the big three. and obviously everyone knows it's now the big two but perhaps the the level of dominance by those big two hasn't yet fully penetrated the non-tennis specialist sort of world but yeah i mean eight in a row eight in a row the last three competed against each other yeah alcaraz winning two and and sinna winning winning one and you look at this now and tennis for so long it its biggest problem was a succession plan wasn't it it was looking at those magnificent years that we have for 20 years of Federer, Nadal, Djokovic.

37:07In particular, those three, you then had players like Murray and Vavrinka coming in and stealing a few great grand slams off those guys. But we really had a concern of whether tennis could hold that audience when that passed on. How important do you think it's been to have two people at the same time, similar ages, coming in and creating not just great tennis, but also great theatre? How important is that to sport? I think there were big concerns in tennis. I know there were big concerns in tennis for a period of about three or four years towards the back end of the Nadal-Dzokovic-Federa era, when they were concerned that pretty much they would all leave the stage at around the same time.

37:48And there wasn't really, you know, they'd been so dominant. They hadn't really allowed anyone else to have enough oxygen to grow. And then just at the moment when they were coming towards the end, suddenly, bang, Sinner and Alcaraz come up together. at pretty much the same age, straight into a massive rivalry. So you're like, wow, I mean, tennis have dodged a bullet there. Tennis has really dodged a bullet. And I think if you look at it, and even on the women's side with Savalenkren, so you just look in terms of the top stars at the moment on men's and women's side, it's looking pretty healthy in terms of capturing public attention.

38:23Because I always say that for sports globally, leaving aside the US sports for a moment, because that's very specific to one country, in terms of the global sports that the rest of the world plays, if you're not football you desperately need to have some characters at the top of your sport who are neighbor who transcend the niche audience that your sport already has and takes you on to the general sports interest stage that's when the big bucks really flow and i think you know it's just moving towards the stage now where people who aren't necessarily big tennis fans are aware that alcares and sinner is a thing right and hopefully over the next few years that just becomes a bigger and bigger thing and hopefully one or two other players as happened in the previous era managed to get close enough to them to not make the semi-finals an inevitability you want at least the semi-finals to be close right I think yeah of course you do and if you have one concern right now it would be the gap between total dominance at the top between those two and what the rest of the player group are able to contribute but it also brings in the really interesting look at the broader player finances within tennis and well it's a big controversy right now isn't it I mean it's really It's really blowing up right now, actually, at the Australian Open.

39:34Firstly, the Grand Slams pay the most money across all of tennis. The interesting thing about tennis is the events outside of the Grand Slams, in comparison, don't actually pay a huge amount. We're talking about$1 million maybe for the top, top ATP 1000 series. And then, if you're going to the US Open, up to about$5 million. This is for the winner? For the winner. Yeah. Now, the Australian Open, in comparison of all the Grand Slams, I think this year is about$2.8 million for the winner. But we're still talking about significant prize money throughout. You're still talking about$28 ,000 if you lose in the first round.

40:07You're talking about half a million if you get to the quarters. So players in these systems are still being remunerated very well. There is still a big discussion point around whether the distribution of revenue is sufficient for the impact and the quality of what the players bring to the product. And what I mean by that is the numbers basically net out at between, let's say, 16 % to 20 % of total revenues across these Grand Slam weeks go to the players. And the players argue this isn't enough. In comparison, we're going to use points like the NBA where we have a player revenue share model where the success of the players is tied to the success of the league.

40:46They get about 40 % to 50 % of those revenues distributed to the players. So you have a group of athletes here basically saying we are the key assets you have. we're independent contractors. We go and participate. We bring you lots of money. And you are not sharing the spoils of that anywhere near to the extent we think we're valuable for. Let's look at those numbers and whether we think a proportional spread of that revenue going to the players at 15 to 20 percent is sufficient for the influence that the players have in generating the money, considering you've just highlighted that a key part of attraction, a key part of elevating the sport to that global audience beyond just a tennis fan is the stars.

41:26And it actually throws light on a broader governance issue, I think, within tennis, which isn't talked about too often. And that is the fragmentation that sits at the top of the game. Right. Now, I've got a belief in tennis and golf that the majors are the grand slams, whatever, are different from the rest of the year. These sports need their big stars during the rest of the year because during the rest of the year, it is by no means a given that anyone will give two hoots about whatever tournament's happening that week. So let's say, for instance, in a few weeks' time, they'll come over to America and they'll play Indian Wells and Miami, which is two big tournaments in the US, outside of the slams, two of the very, very biggest tournaments.

42:12during those weeks the amount of noise that tennis will generate will be dependent on first of all what else is happening in the world of sport but also on things like well you know Alcaraz, Sina, Sabalenka all this type of stuff. During the slams it is an absolute given that tennis will generate a vast amount of noise right these are just huge events so what we're coming on to here I think is an estimation of like how important is any particular individual player to a Grand Slam event when that Grand Slam event is so huge and so big and generates so much noise that actually whichever players are playing is somewhat less important than would be the case in a normal tour event right because as you quite rightly said the Grand Slams sit outside of the tour the different bodies that you mentioned Charlie you've got the individual grand slams so Tennis Australia owns the Australian Open the All England Club owns Wimbledon and so on and so forth these are standalone events then you've got the ATP tour the WTA tour then you've got the governing body the ITF the International Tennis Federation so the interaction of all these things is pretty complex and probably would need, first of all, more time than we've got today, but would also need somebody from the tennis industry here who's been behind those closed doors to explain exactly how all those bodies interact.

43:43But what it comes down to is... Or don't. Yeah, I think often don't. So Madison Keys, one of the female professional players... Defending Australian Open champion. ...said two days ago, as we are the product, it makes sense for us to be partners, right? which exactly encapsulates what you've just said. I now want to read out what Craig Tiley, the tournament director of the Australian Open, has said this week. Not one player has shown any dissatisfaction to me about what we are doing, brackets, about prize money. I'm not really concerned anyway, as I know the facts. What facts does Craig Tiley know?

44:22I'll tell you what he knows. First of all, he knows that with a prize money fund of 75 million US dollars, compared to a normal tour event, about 10 million for a major sort of serious tour event, that it's highly unlikely that any player is going to make the decision that they are going to miss the Australian Open and instead focus on normal tour events. However much their resentment might be about that they should be getting even more, an even bigger prize money fund from Tennis Australia for the Australian Open. Because for here, you're jumping to the eventuality. It's like, well, this can run on for as long as you want.

44:57but until are you really going to not play in these events because you're so dissatisfied? Ultimately, this is like the golf question, right? Now, and I know that you're keen on the golf comparison. The moment this came up, you were like, this is like Liv. And I'm like, well, actually, it's the opposite of Liv, right? Because when Liv golfers were making the jump, what they were het up about was about what their tour was doing, right? They weren't complaining about the majors. They were complaining about their tour. And they were like, we are members of the tour. In fact, pretty much we own the tour because it's called the USPGA Tour, the US Professional Golfers Association Tour.

45:34And the tour itself is not giving enough of its revenue that it does generate to us. In jumping to live, those golfers who were jumping to live, their biggest single concern was to make sure that they could still play in the majors. Because the majors, which stood apart from the USPGA Tour, which also, by the way, do not contribute anywhere near as high a percentage of prize money as the normal tour events do, still pay much more than even the live golf events pay because they are absolutely vast. And because I think the golfers had enough self-awareness about them to know that if they were to say to the Augusta committee, yeah, I'm really annoyed about the prize money.

46:15I'm not going to play at Augusta this year. They know what the response would be. Okay, do one. Fine. If you don't want to turn up, we won't invite you. Go. You go and play in some event which no one's watching, which has no relevance for your future career. So my view is that whilst you're right in saying that there is a serious, intense debate going on at the moment, the question I'd be asking the players is, are you serious about this? Are you actually serious about this? Are you serious about trying to gain some leverage and use that leverage by trying to damage the Grand Slam events? are you willing to give up a couple of years both in terms of creating your legacy in terms of how many slams you win but also frankly in terms of prize money Carlos Alcaraz last year won just over 20 million Sino won just a bit less than 20 million of that prize money more than half was won at the slams so basically if they were to say well we're not going to play the slams because the slams aren't paying us enough money well if the slams then held their line on that then their earnings would halve right because there's no suggestion that the tour itself is generating enough money to suddenly pay them vast amounts more.

47:24The tour itself is, I think, struggling even to pay the purses that they do currently pay. So I'm just not quite clear that the tennis players have got as strong a situation as you think. I hear everything you're saying. If we're looking at them as direct comparisons, which you've expertly just explained and kind of pulled apart there, I, again, agree with you. I'm taking a step back and I'm looking at a sport that I love, that I'm really passionate about, just like golf. I've always been a huge fan of the people at the top of it, the athletes, the stars. And if I'm watching it, I want to see the best people playing.

47:53And those rivalries in tennis are almost some of the best things in sport, I think. It crosses over when you get them. They are absolutely incredible to watch. Some of your biggest mouth-open moments. Because it's direct combat, isn't it? And it's just the blows. Alcaraz and Sinner in the French Open last year, when Alcaraz saved three match points. You're just looking at it going, this is the most incredible thing. It was mega. What I don't like and my comparisons to Live that I'm making are these organisations that are running these sports, turning a blind eye to it, seeming indestructible to the extent where it doesn't really matter what they think because we know we have the power.

48:27And ultimately, whether it works or not, the player's getting to the stage where something like a Liv happens. Any sport which has its key stars as independent athletes is vulnerable to external disruption. Now, whether it's been good or bad for golf, whether it's succeeded or not, Liv has not created a great... Bad for golf and not succeeded. Liv has created a negative environment. You're looking at this and you're going, what could happen with tennis if they just basically shut the players down. The Professional Tennis Players Association that was set up by Novak Djokovic and Vasek Pospisil was specifically done to try and give the players a voice.

49:02They figured if we can band together and present ourselves as one, it's not a union, but it is in as many ways, then we have a much better chance of doing this. Now, I'm not worried about the top of the game. And you mentioned Sinner and Alcaraz in there, and they are extraordinary and they're going to make millions and millions no matter where they play where i get more concerned about it is is this does this argument get a little bit stronger as you go down what i like about it and you and i had a brief discussion is that if we actually looked at where this money was being spent by the grand slams it's in grassroots it's in communities it's going to great places it is we're not looking at money being fluttered away on high transfer fees and sacking managers if you could do it in football no so it's a really important part of the tennis ecosystem.

49:45It is. But making a living as a player outside of the top 50 even, maybe even the top 20. I would say outside the top 20 or 30. Is incredibly hard. Dominic Thiem sat here and said it costs a million to become a professional tennis player at that level. That's the level of funding it takes. So you're already in a sport that requires a huge financial injection. It's huge costs that you have to cover when you're travelling around through the teams, your physios, your nutritionists, your departments behind the scenes which no one sees. and if you lose that and you just create that part of the top of the game where you have a few people succeeding but nothing underneath you're going to dilute eventually a product where right now if there's any concern as i said i'm a bit worried about viewer fatigue i'm a little bit worried that this just becomes dominance to the extent where my interest wanes until maybe that final because nothing underneath that can support itself so the question i would ask is is financial distribution sufficient to maintain a level of competition outside of the biggest players that reach the last four to five days of these tournaments well i think that's a great question and i just had a look and see what the number 20 players on the men's and women's side earn right two to two and a half million dollars a year right now take the tax out of that and take the traveling expenses out of that and take the coaching expenses out of that.

51:09I mean, it's very back of a fab packet, but I'm going to reckon that those two players who are the 20th best players in the world in a sport which is one of the very few sports that is, first of all, truly global, but also quite democratic. I mean, most parts of the world, it's not that expensive to play tennis. Golf can be a bit more challenging, etc. So these are people at the very, very top of one of the biggest sports in the entire world. They're 20th in the world. So if even the number 20 in the world is, during what is inevitably a reasonably short career, not really making the type of money that enables you to put aside a whole heap for retirement and that kind of stuff, then I think you've definitely got a distribution problem.

51:49And I think if the players union was coming forward and saying, do you know what? Carlos and Yannick are doing great here, and they're fine, and they're okay with it. They're not the ones complaining, and Sabalenka is not complaining, etc. As a union, though we are concerned that the 50th best player in the world basically can't make ends meet and we want the grand slams to be putting a little bit more in every single year to try and make sure that enough of it gets spread throughout the professional game to enable a flourishing ecosystem i think though it would be so hard for the slams to argue against that because effectively what we're arguing for here is that money will be take that the slams contribute their profits to grassroots tennis.

52:26The problem with that is that it's grassroots tennis in the countries which are, which host the slams, right? So it's not being contributed to grassroots tennis over the whole world. It's being contributed to grassroots tennis in the US, England, France and Australia. So for the players to really win this argument, I would be saying, we want some of that money that's currently being spent on the grassroots to be distributed further down the pyramid of the professional players to enable a broader, flourishing professional game because that'll strengthen all of us. I think it'd be quite hard to argue against that.

52:57Rabbit holes. Maybe the bigger thing here we should talk about when the ATP season starts is why that's not bigger than it is. That's a huge topic. One to come on to for another day, I think. Perhaps once we're into the tennis season, once we're into one of those periods of the season where we do have... Really interesting to look at. Yeah, yeah. Maybe you should go and buy the ATV tour. I'm barely able even to buy a lower league football club, let alone... You being all of you watching who may have the funds to have done a European tour-style investment. Rather than... It sounds like a 20VC gig to me.

53:26I couldn't even know. See if you can persuade Harry about that. Yeah. But, I mean, tennis is fascinating. I love it. It'll be really interesting to see how this unfolds, I think. And also more broadly, shout out to the Australian Open for doing some really cool stuff. I don't know. We'll finish on it. But that one point slam, like making it more content friendly, I thought some of that was really fun. That was super cool. I'd say my son is currently traveling in Australia, and he sent me a picture one day of him with Kyrgios, who is a real sort of Gen Z hero, anti-hero type figure. And then the following day, just him walking.

53:56And I said, what's it like? Because I've never been to the Australian Open tennis. And he said, Dad, this is mega. He said, this is absolutely huge. Like, this is so much. He said, this is so much more fun than Wimbledon. He goes to Wimbledon every year. He said, it's absolutely terrific. So, you know, yeah, of course, it's about the players. But we have to also recognize that Tennis Australia are doing a phenomenal job. They've actually turned it into, effectively, a three-week event. It's an event, yeah. A three-week festival. Three-week festival, which is, yeah, super, super job. It'll be interesting to see the financial numbers that come out of it this year.

54:26Because I think last year, Tennis Australia made something like 600, 700 million. You know, big, big numbers. It's great to see. Okay. Topic three, the brilliant world of Formula One. And the reason why we're doing this this week is because I'm sure some of you will have seen, and especially if you're a fan, it's the big week where a lot of the liveries are announced. So the design of the car for the upcoming 2026 season. Now, you know, you may think, well, this is a weird thing to discuss. But when you actually look at what the liveries represent, you get into the core economics that have established the sport.

55:02And what I mean by that is the incredible commercial growth that the sport has seen. Up to$3 billion, nearly, was the rough estimate. And bear in mind, you're looking at teams and F1 centrals. And a huge part of that, I think around two, was attributed to the teams. And a huge part of that is how those brands are then presented on the cars. and the reason I was quite keen to talk about it was because it fed into a conversation I had at the start of this month with CMO of Revolut Antoine Linnell who was talking about their new title partnership with Audi F1 and he ran through a number of reasons why they selected Audi as the partner that they most wanted and made it very clear they were approached by a number of F1 organizations as well but everything from the relatability of the brand the premium but accessible brand the color schemes what they represented coming into f1 as like a challenger being a disruptor exactly brought some really interesting discussion points and the f1 community jumped on something that he said because it referenced should we say an aesthetically poor example of a sponsorship being at odds with the core fundamentals of ferrari's brand when they put hp a blue brand on the red car i mean aesthetically um misplaced but not you wouldn't say that hp and ferrari are a particular brand disconnect in general terms right hp is a massive established you know software provider and ferrari is a massive established car provider it's not like there's a brand disconnect in that you can see why hp would choose ferrari as their natural partner rather than a disruptor because hp aren't a disruptor hence why livery is so important so So while the partnership made complete sense and the financials were excellent, what people were talking about was the negative aesthetic of the car.

56:52From HP's perspective, is it not the case that the fact that people were talking about it at all is a really powerful thing? Who's it bad for? I mean, that's the question. I mean, the answer is... Probably not great for Ferrari. But that's the question, isn't it? It's a trade-off here. And I think we've discussed before the value of legacy. right, how valuable is tradition? How do you put a value on it? Because you're trying to effectively forward project and do a counterfactual going for the next 10, 20 years of saying, would we lose significant more money in the future were we to become a bit less credible as a brand?

57:31An example I want to pick up here is the most commercial sport of all, the NFL. So the NFL do not have shirt sponsorship. Now, the moment I say that, everyone will go, yeah, it's true, actually but when you think about it it's unbelievably surprising everyone thinks about the u.s sports and particular nfl as being the most commercialized of all sports and a lot of people who are football soccer people are very concerned about well when we go to america are they going to try and turn it over commercialized etc so is that why chelsea don't have a shirt sponsor this is i've been i've been wrong all along i'm sorry i apologize it's a heritage play it's a heritage it's a heritage play the great history of chelsea is being it's a heritage play Yeah.

58:09So the NFL, not I think, I know that the NFL has made a decision that the long term value of NFL will be greater than the short term cash that would accrue to it by putting sponsors on the shirts. was a massive call because you imagine what those sponsorships on the shirts would be worth across 30-odd teams, right? I mean, you're talking about billions of revenue every year that the NFL is deliberately giving up because they have decided that they are so protective of their heritage and the look and feel of what the NFL means to people that they, almost at any price, they don't want to give that up.

58:47It's a$120 billion broadcast deal, I think it currently is now, that is probably made more valuable because of those types of values. Right. See, it's these detailing, right? So let's go back to Ferrari. So Ferrari have got a color that is so pervasive as their brand that there's even, I'm told, a lipstick called Ferrari Scarlet. Sorry, that came up. I suddenly realized just before I was saying that. That was going to come out just terribly. This is the great reveal of this week. I'm told by my wife that there is a lipstick called Ferrari Scarlet. so that is how you know so when you're even thinking about sort of you know house decoration and paints and all this type of stuff there is something called Ferrari Scarlet so once you start disintermediating that by putting ugly sort of interposed other colors onto Ferrari Scarlet to what degree at some level are you starting to chip away at the pristine sense of history and legacy that Ferrari has now I did a little bit of research on this Charlie and I found out that actually speaking to friends of mine in f1 um that ferrari actually raced in non-scarlet in i think the 60s they were like there's nothing new for ferrari not to race in red you should have a look at this car that um you know john surtees was driving in the in the 50s or the 60s and i was like and i looked it up and i'm like god you're absolutely right um that that's really interesting but in a way that doesn't matter because when you think about motor racing in the 50s at that point it's not a legacy product it's quite a new product at that point right so it doesn't hasn't built up that brand yet which it now obviously has done so the question is ferrari if you're running ferrari or running the race team or thinking forward you know for the next um you're the you're the agnelli family thinking forward for the next 10 15 20 years whatever it might be and you're wondering what's more important is it the 80 million bucks i'm going to get from that particular sponsorship, by the way, it wouldn't be 80 million bucks or nothing, because clearly you could get another sponsor for less that would be more look and feel appropriate.

1:00:52Or actually, am I better off turning it down and banking the long-term credibility of the brand? I don't know. What do you think? I think that it's a question of objectives. And the question that you asked about who it's good for is a really interesting one. this right now. I'm just going to read out the statement made on the birth of this partnership between Ferrari and Hewlett-Packard. Can we just make sure that we keep a camera on Charlie's face while I read this out? The partnership will also entail a shared commitment to advance sustainable innovation and accelerate purposeful technology.

1:01:32What? Charlie, can you tell me what that means, please? Blah, blah. blah blah blah blah blah blah blah blah blah blah blah 80 million dollar check thank you very much is what it means yeah so i mean that is a uh we talked about corporate cons last week didn't we we did that is the most classic if i compare that if i compare that to what revolut said i'm i'm buying revolut right oh completely you know revolut smashed it in terms of hey these guys are cool guys aldis are cool guys they're disrupting f1 we're kind of like that in the banking industry. We're all together in this. We've got the same kind of values.

1:02:09And everyone's like, do you know what, actually? Yeah, fair shout. Fair shout. That feels about right. That there just feels like, come on, come on, guys. Don't take us for mugs. If you're going into that partnership, HP want to maximize their exposure. Hence why they're sponsoring. They're sponsoring the hottest sports asset right now. They've got some brilliant ones as well. They've got Real Madrid. They're creating this portfolio. Real Madrid sleeve, yeah. Exactly. Sorry, sleeve. They're creating this portfolio of top assets. Ferrari's an amazing one to do. So you understand why they do that deal.

1:02:32If you're Ferrari sitting there, you're going, I'm loving this because, as you said, the check's great. But the one thing we have to continue to protect is our heritage, is our values, our cause. And red is now the fundamental of that. I also think it's interesting when you look at some of the biggest deals in Formula One, and this was part of Antoine's point, and you suddenly go, actually, yeah, those title sponsors, they're quite closely aligned just from an aesthetic branding perspective with the teams that they partner with. Mastercard, supposedly nearly$100 million, McLaren. kind of orangey, yellow and red.

1:03:05But that orange thing, Charlie, is quite recent. I mean, for my time working in Formula One, I will say that there is a significant difference between when I was advising the Formula One Teams Association and therefore you were dealing with all of the teams all the time. There were basically two different types of teams, one of which is what were called garages, which built up basically by British engineers and mechanics on their own as independents, right? So you're talking about Williams and McLaren and so on and so forth, Eddie Jordan and these types of guys. And then you have the factory brand mark teams, Ferrari, Mercedes, sometimes Toyota, sometimes BMW, Audi now, et cetera, et cetera, who are basically backed by massive corporations who are getting into F1 in order to try and sell more leisure cars, right?

1:03:50That's what they're trying to do. So if I'm one of the latter category and I am trying to build this brand to try and sell loads of really expensive cars, the whole integrity of that brand is hugely meaningful to me because that's part of a much bigger picture. If I'm one of the garagis, right, so one of the independent teams that's basically having to try and make sense of their business pretty much from racing. I know McLaren does also sell, you know, cars as well, but basically a race team. Then I can be a lot more like, well, we can kind of, you know, We can kind of change our legacy and heritage a bit as we go along here.

1:04:25So, I mean, when I was young, McLaren did not race in orange. Well, it was red and white because they were sponsored by Marlborough. And they actually basically looked like a Marlborough red fag packet, right? That was like Nicky Lauder's cars. But, I mean, that's your point of they were in the early stages of discovery in a sport. They didn't have the association. Yeah, but that orange, that color they're currently sporting is a relatively new thing, is what I'm saying, right? But I think, and maybe I'm wrong, I think that this big partnership, I think, was signed since they became orange. Oh, yeah, absolutely.

1:04:55So whether you're looking, again, you're looking at the alignment. Yeah. Santander was, I think, a partner when Lewis Hamilton was driving. And it was that kind of very, like, it was that metallic silver and red on the car. Petronas and Mercedes has the kind of silvery association. I know that Mercedes have gone black and that kind of changed. But, you know, Oracle and Red Bull, very simple. And the reason I'm using these ones is because they're the main title sponsorships, if you want. They're the biggest ones. They're$60 to$100 million a year deals. Which is roughly equivalent, by the way, to Premier League shirt fronts.

1:05:25It's a similar area. Yeah, exactly. Because quite often we look at pounds, right? $60 to$70 million is generally the top going rate for the top Premier League clubs. And here we're talking about$80 to$100 million. Exactly. So it's a similar kind of thing. It's interesting because you're looking at those numbers and you're questioning, therefore, how much of that value is derived from the representation of that brand on the car. you want to be synonymous with your team in so many ways now because they always talk about the alignment that extends beyond but the the touch point right as a fan i want to be on that car i want to be seen to be that sponsor when lando norris wins that world title associated directly so the livery game i think is a really interesting part of it it's it's the billboard part yeah it's a key financial driver of it the commercial side of formula one's absolutely fascinating i think at some point probably around the around the time of the start of the season or maybe around the time they do testing i really want to get into the cost cap right because the cost cap is what has transformed that industry because i think that when you look at how that cost cap was devised how it is working and everything around it and then you compare it to what's happening in football i think we can draw some really interesting parallels there well that's a big subject for another day it's what made the teams investable but you know i would say the shift the move just to finish off you look at some of these brands coming in now and it's been it's been fascinating you mentioned marlborough there you know being a key one there was alcohol brands ironically were driving it was all that stuff philip morris is still a sponsor for ferrari and and so is um what was it jack daniels was on is on the mclaren car right now i saw that nothing wrong with that didn't didn't see that at all uh but then you know the revolute piece you had okx coming in you had air wallacks as well there's about 500 million dollar plus of new kind of fintech coming in so it's interesting seeing the categories that are now really putting themselves yeah in that market that are recognizing that this burgeoning sport is now somewhere that we really value and want to be placed and most interestingly with Antoine as well just to finish I thought it was fascinating when he really talked about how they valued it being a global brand the fact that Formula One is in 17 of their markets meant he could split that cost that you know eight figure maybe nine eight figure cost between 17 different markets suddenly making it a far more palatable deal on the bottom line of that marketing budget.

1:07:40But for now, I think we should probably leave it there because otherwise we can run on endlessly like I know we always like to do. I don't know about you, I feel less naked today. I don't know. I'm looking forward to lunch. Charlie, as always, thank you. Great chat. Cheers, Charlie. Thanks a lot. Thank you so much for joining us for another big week of sports news. Plenty in there to digest and a huge amount to follow up on in the coming weeks. I'm quickly realising that Manager Mayhem is never going to be far away from the conversation. As always, please let us know if there are any topics you'd like us to cover and send us your thoughts on anything you may feel particularly passionate about that we may have discussed today.

1:08:19We're going to start bringing more of your comments into the show for discussion, so keep them coming. Thanks as always for tuning in and we'll see you next week.