NBA Europe - the reality behind the franchise sales; plus under-the-radar moves from FIFA and the EFC

0:03James Emmett:Hello and welcome to the Leaders Worth Knowing podcast, the sports industry show from Leaders where we talk about what's worth knowing the business of sport this week. I'm Leaders Editorial Director James Emmett. I am Content Director David Cushnan. And I'm the hanger-on Gareth Balch from Two Circles who's been invited along for today's chat. Yes, CEO of Two Circles Gareth Bolch here. Gareth, thanks for being with us. Special episode, Claxon. Alert. This is very special. We're actually, we're not in the studio. Did you do the movie Zala? Is that kind of, you know, the movie Zala could come back?

0:39James Emmett:One of the old clackers that you spin around your head.

0:41David Cushnan:Well, actually, Gareth, maybe paint a picture of exactly where we are, where we find ourselves. Well, I'm on the definition of a free lunch today, I think. So we've just had lunch here at Stamford Bridge, having followed a morning of judging ahead of the Leaders' Week, which is just a few months away. And we were today discussing the CEO of the year and the deal of the year for the Leaders Awards, which was a thoroughly enjoyable conversation followed by a nice lunch. We're literally in amongst the sandwiches, James.

1:07James Emmett:Yes, we are. I've got the list of allergens here, actually, if you need anything. Don't touch the jalapeno pepper and cheese tortilla. Okay. In my view. Yes, we're here at Stamford Bridge. We've just done a morning of, it's always an enjoyable sort of time of the year for us at leaders where we um invite industry luminaries to come along and judge their peers and the work of their peers behind closed doors chatham house rules and everything um as you say gareth we've done ceo and deal of the year got the synapses going did you were you so did you enjoy the conversation it's always brilliant giving it away well you i think you are what you think in life and therefore you want to hear other opinions so for me to come together with you know five or six other industry folk and and you two fine gentlemen you get a um you come away with different perspectives and you hear different sides of stories you know something about but not everything about and you think oh yeah that is interesting didn't they do really well um you have all the um quandaries of judging anything where you're like oh there's always a bit of this and a bit of that we're doing ceo of the year or ceo of the um of the decade because there's It was a bit of, you know, it's hard to be a good CEO in just a moment, but I thoroughly enjoyed it.

2:20James Emmett:As a CEO in sport, what kind of year do you want to be having to sort of feel like winning an award like this would be justified? From your own perspective, what do you feel like, all right, well, we and I have had an amazing year this year? Yeah, that's a good question. Hard question to be answered. I aspire for team-based awards, not individual ones. And so, and I think, I think what people say about you is, is important. And that was also a brilliant part of the conversation we just had when, when you hear different people's perspectives around what they hear of, you know, both from staff members or indeed from stakeholders or from buyers or sellers of those rights that might be involved in that, you get a real perspective of what a CEO is like.

3:03So for me, the idea, if I was ever thought of in such company would be the idea that you were there as a, as a, you know, supported for or cheerleaded on by your, by your peers in that way, I'd always mean a lot.

3:15David Cushnan:Without giving anything away, one of the interesting elements of the CEO conversations that we had, where we talked about a number of individuals, was actually getting the view of the experts like you in the room around how you weight certain attributes and what you feel is important. And one word that came up on more than one occasion was relentlessness and i just wonder in your sort of you know in your mind of of leadership attributes to either aspire to or that you look for in others where that sort of sits and what other words you're using at the moment because it's always a particular moment a particular time that's a great question and the world does reward relentlessness i think it does i think if you want to be successful at something it rarely works well um first time or certainly not every time and the ability then to just keep going is is a big part of it and so perseverance is a word I use a lot maybe better than restlessness because perseverance I think is a is a very valued quality in in a CEO and a leader and a teammate in equal measure and so you you find people who essentially then are unified by a common goal and want to get after it I think I think the CEO um clearly casts an energy across any organization and therefore if you bring a level of relentlessness to it then i think that is a good quality characteristic clearly we talked about it in a positive and negative light just now and like any strength it has good size and downsides it's a bit like me talking too fast people say it's characteristic of mine sometimes it makes me sound enthusiastic other times it makes me inaudible um and and so relentlessness has that same quality to be sometimes you know really um powerful but also um quite disruptive i think you know knowing the difference between those two things is um is hard it's very it's very hard um gareth we are lucky to

5:07James Emmett:have you join us on this show because this is the second episode uh of the week for us the leaders worth knowing podcast it's the episode that david and i like to sort of run the rule over topical bits and pieces going on in the industry try and provide a bit of context uh and and jump into some of the things that your peers in the industry are doing and talking about at the moment. A few, we'll run it slightly differently today because usually it's just me and David, but here's a few bits.

5:37David Cushnan:We've actually got an expert in, so we'll really change the course of the conversation. I'm just pleased to be here at Ransom Deck making friends. Oh, there we go.

5:46James Emmett:Ding, ding, ding. Right. Here's a few bits and pieces that are going on this week that we're covering, of course, in the Leaders Worth Knowing newsletter. So the NBA Europe bids are in. They had an end of June deadline for bid submissions for this new league that the NBA is intent on starting and has said that it will start next year. FIFA has signed a slightly under the radar deal with the EFC, the European Football Clubs, with Club World Cup expansion or Ahoy. Michelle Kang has bought the Lyon men's team To go alongside her portfolio of women's teams Which includes the Olympique Lyonnais women's team And Bill Foley, the Bournemouth and Las Vegas Knights owner Has just completed his Exeter Chiefs takeover in Prem Rugby Where do we want to go first?

6:47David Cushnan:Well, with your broad experience knowledge of of the industry and you know with your with a sort of overall look at things which of those stories actually do you think has the potential to be the most impactful that's maybe a place to start that is a place to start i well nba europe or fifa is my shortlist for this award um the most impactful thing of the week um probably i mean the the fifa club World Cup will be very impactful to what is the world's biggest sport by revenue or by fandom or by maybe our collective interests. I think what that will do to the football landscape is really quite significant if Infantino continues to bend the sport to his will.

7:38David Cushnan:Well, maybe let's start there and and this um as you say slightly under the radar arrangement um has been formalized and obviously we had the first edition of the newly expanded newly launched relaunched i suppose uh club world cup last summer in the us also a bit of a tester for what we're seeing now with the the world cup itself um mixed reviews for it i suppose mixed perspectives on it i think There always is on the Club World Cup. Yeah, and as we talked about at the time, there's possibly a European view on it versus other parts of the world as well. What do you see as the long-term potential of this as a tournament and the ramifications it might have for football more generally?

8:27David Cushnan:Well, sat here just across the way, you can see world champions painted on the billboards here at Stamford Bridge, which is important to recognise and see in the way that it's celebrated by the current holders of the club or cup i think there is a um i think there's a stark difference in the fandom attitudes amongst um the heartland of the european football nations and the rest of the world's attitude towards this i think the rest of the world which represents significantly more people and even more gdp and even more football fandom uh dollars um are really pro and keen for the for a version of club or cup and and then the clearly there's um those are in maybe the big five European markets where there's more different views.

9:08I think clearly football's got to work through its calendar and figure out how that it stitches together the ability for all these things to rise. But EFC are a fantastic organisation doing great things. They were really central to the success of Club World Cup and supporting its members in their participation in the Club World Cup during the tournament last year. And I think that we see its ever-rising

9:32James Emmett:star yeah they're an increasingly influential organizational sort of lobbying block i would say the fc obviously sort of born out of um well the name change from the eca increased in power following the ill-fated super league attempt this is a the top european clubs kind of coming together under one banner in support of themselves, but also the current status quo structure of kind of European football. And this deal with FIFA sees the EFC and FIFA sort of committing to a joint venture, which is likely to accelerate FIFA's plans to expand the club work up to 48 teams when it next takes place in 2029.

10:25James Emmett:the EFC is likely to endorse and support that because it wants more participation more money for its top participants within the EFC fold. Worth saying that EFC already has a joint venture in place with UEFA which is called UC3 which Gareth you and your Two Circles crew have an agreement with you currently i believe service uc3 on the women's european are you sending a text whilst we're speaking no i'm tratchy but in just a data point very good very good but i thought you were i thought you were no i was trying to remember how many members there are of the fc because a lot and that's the point i was going to make which is that it's commonly when it because it gets talked about in the context of i think it's i think it's roughly 700 i was going to say 600 but i didn't get to the end of the test i say 700 you say 600 i'll come back to it also james don't chastise the guest for i'm bringing a little bit if i was if i was genuinely um ignoring him and texting i would i was schooled myself me and my wife are actively working on our you know one thing at a time approach yeah most prominent prominently i'm just sat on the tv at a time sat on the tv just also yeah texting chat gpt just do nothing yeah yeah so like yeah have a conversation love it so i agree i shouldn't have done that but i appreciate the pickup i'm gonna go 600 we'll take we'll let we'll let the audience determine whether we're right or not six seven hundred but my point about that is that ifc is um when it gets mentioned in the in the you know kind of um from the ashes of the european super league it sort of feels like a cousin and And it's not really.

12:04It represents the majority of, you know, definitely the majority of professional football clubs are in Europe. And that is and that's a really powerful force in terms of how it helps those, you know, mid-table clubs in Poland or indeed in Norway or indeed in Wales all succeed alongside Real Madrid and Bayern Munich and everyone in between. So I feel like the European club or the solidarity that exists across European football is amazing. and clearly that was threatened, or the essence of that was threatened by European Super League. So I think what EFC are doing is, and it's an organisation that's existed long before the European Super League in that regard, is it's mobilised brilliantly to continue to grow the game in a way that protects tradition, delivers solidarity to all those very viable and important, smaller, he says with bunny ears, men's clubs around Europe.

12:54James Emmett:So they've got this joint venture with UEFA and they effectively now together UEFA and EFC one rights holder to commercialize the domestic the club competition European club competitions it looks like this joint venture with FIFA might result in something similar to be determined but if that does come to pass the EFC will suddenly be one of the most powerful blocks in world football. And it's a testament to how Charlie Marshall, who leads that organization, has steered it into this position of influence.

13:35David Cushnan:Yeah, well, indeed. And some of the reporting on this announcement over the last few days has talked about FIFA being impressed by exactly that work and actually wanting to do something very similar so you can see the direction of travel here expanded competitions there's also a point

13:52James Emmett:sorry also it would make Nassar Khalifi uh even more powerful than he currently is indeed indeed

13:59David Cushnan:there's also a point here around the women's game and the plans for the um women's club world cup 2028 is the is the next edition or the first edition of that um which I think has been delayed for a couple of years, but is starting to form. And again, there's a different, but a commercial opportunity there. There's also a hosting piece here. So neither the 2028 Women's Club World Cup or the 2029 Men's Club World Cup have a host yet. And I think there's been some talk of Qatar. I think there's been a suggestion, although I've not quite seen it fleshed out in any detail as yet, that the next men's club World Cup would be a sort of tester for Saudi Arabia for when it hosts the men's World Cup in 2034.

14:53David Cushnan:You'd probably also look at Spain and Portugal and Morocco who are hosting the men's World Cup in 2030. But there's a, you know, theoretically, there's a very interesting bidding process that FIFA will be able to orchestrate around this, which will, of course, help sell it. Let's all go back to Qatar. I mean, I'm loving the Men's World Cup these weeks. Aren't they amazing? But the geographic spread is what it is. And obviously, relatively the opposite in Qatar. So the idea of getting back and having a major event like that, there's lots of aspects of that. You'll see a similar thing, Paris Olympics versus LA Olympics, and it will just help create these questions around, you know, what big and great global events look like.

15:36There's multiple answers, of course. But anyway, so I think that's interesting. I think the Club World Cup in women's football was fascinating because the two biggest leagues aren't in the same continent, which is not true in the men's league, which creates, you know, the men's Champions League is sort of, arguably, being very European about this, a de facto global competition in the sense of the density of the best world players that play in the European leagues. And obviously that's not the case with the NWSL and the WSL. So that creates a genuinely interesting layer about the appreciation for what that competition could represent.

16:08David Cushnan:So talking of transatlantic crossover slash internationalization, MBA Europe, which is the thing that people, I think, across the industry, and I don't know if you're hearing the same thing or talking to the same people. It's the thing that just comes up in conversation more than anything else, almost regardless of who you speak to. Everybody seems to have either a view or a burgeoning interest in some element of this. and James we've seen in the last few days at least a little bit more movement on the NBA's plans.

16:47James Emmett:Well yeah this story of NBA Europe this year at least is just one deadline after another and this week we have gone through another fairly significant deadline in that the NBA set the end of June as the point at which it needed to have received formal bids for franchises across the 12 cities in Europe that it's targeting for this new league. Now, that deadline came and went and a statement, of course, in 2026 released on a graphic on LinkedIn coming from Mark Tatum, the deputy commissioner of the NBA. Was it a nice graphic? Depends what, I mean, it did a job. Okay. It was blue. It was in the NBA branding.

17:40James Emmett:Fine. And I could read the words. Yeah. That's what you want. Anyway, he said it's going to be the largest influx of capital into the European basketballs ever seen and that they have frontrunners, that's the word, frontrunners in all 12 of the cities that they're targeting. Frontrunners that include a mix of established basketball and football teams, he was keen to add. Now, I think that's interesting in a couple of aspects. I don't think the language is clear around we have received bids of our target revenue amount or target financial amount. I think the fact that they have front runners in this process is sort of indicative that they're not necessarily tangible bids right now.

18:30James Emmett:I also think it's interesting that Mark Tatum is increasingly being positioned as the voice on this. This is not an Adam Silver commissioner project. This is a Mark Tatum project. Now, I'm sure he is the most senior executive working day to day on this. I'm just seeing a gentle move of accountability and responsibility being sort of parceled off potentially as things progress. You're asking, is that good succession plan? No, no, I'm just saying something that's been noted. This is very much a Mark Tatum project now, and we'll see, you know, he will live and die by this, I imagine. Now, a little bit further, more reporting on this from yesterday, in fact, ESPN reporting that the NBA has, in fact, received bids from 20 groups across these 12 target markets.

19:27James Emmett:Different reporting earlier in the week suggested that five groups are going or have put down bids in London and that that franchise is expected to go for over the$1 billion that the NBA sort of set as the top amount for these. Gareth, David's right. Did your bid go in? Lost in the post, I think. It went in. Yeah.

19:55James Emmett:David's right. This is sort of level pegging with like what agentic AI are you using as sort of boring conversation in the sports industry. Claude. Yeah, right. Sometimes. What's your view on this? First of all, like, have you been involved in it? We have some involvement. You have some involvement. What's your... No bids from us. What's your top line take on it? I think a good top line take. Clearly, NBA determined that probably means there's one outcome.

20:32Basketball in Europe is one of the great under-indexes of the sports industry fandom, in my opinion. It's a bit like soccer in America. And you can stand on two sides of it and say, well, clearly there's been lots of basketball players for a really long time and playing recreationally following avidly and consuming and wanting to spend money and time on basketball and the rights ecosystem that's been built around that is smaller than it's fandom let's do something about that and there's more smart money than ever in sports and therefore we'll go after it there's also more money than ever in sports which means we can tackle some of these problems in a way that was maybe challenging or not possible 20 years ago so the sort of the the continued hotness of the sports investing sector creates the opportunity need to tackle some of these long-standing inefficiencies or under indexes that we see in the context of Europe and basketball.

21:20So does soccer make it in America? Does basketball make it in Europe in terms of beyond the MLS league that's already created or Eurobasket that's already created in its relative forms when people are saying, I think I can do a better one of those or bigger one of those. It's time and money. It needs time and money. You know, just slapping a prominent European football team name on a basketball team, there's a science experiment called Real Madrid that's had that for a really long time. And if I need a second test for that, there's also one called Barcelona that suggests that's not the whole answer, right?

21:56Because we don't get, we don't fill the Real Madrid basketball games out easily.

22:00James Emmett:Earlier in this judging process today, hopefully you took some cheer from the fact that one of your fellow judges who I'm not sure that you met before sort of referred to you as, you know, the man who runs the fan specialist. You're a fan specialist at Two Circles and I could see you sort of smile. But you are. Marketing works. Yeah, marketing works. Maybe it's authentic marketing. Yeah. But surely, fundamentally, the issue with NBA Europe and creating a new all singing, all dancing American style league is that very generally, basketball fans in Europe are in the south, south and east in areas that aren't necessarily where all these franchises are intended for, which is in the north and west of Europe.

22:51it sure and obviously just worthless yeah um yes i mean to pivot the point though nba europe feels like it has to work in london right yeah bring in paris yeah paris is like paris is most likely to work with all of them because of the heartland of fandom there and and and the precedent that's been created clearly there aren't as many scaled professional sports teams in paris or in france as there are in many other European countries. So France doesn't cultivate strong professional sports teams generating good money as well as others. But Paris, basketball, that's going to get somewhere. London's really hard, right?

23:29Because London is a really complicated, or UK has a really complicated history of basketball in terms of its ability to ever get, you know, to rub two sticks together and get something really rocking. That will become an acid test. Like, it'll have to win in London to get to scale. Lots of people will believe that's going to happen. It will need time and money to make it happen. Yeah.

23:47David Cushnan:And I think London is actually a very complicated market in trying to brand a sports team, the London something. And, you know, it's so tribal, mainly through football. It's sort of historically been, you know, very fragmented, multiple teams in multiple sports operating in the city. It's not a PSG style environment. I know there's Paris FC as well now, but PSG dominating that city. London is definitely a different beast in that regard I also think one of the strands of interest in talking to people about the NBA people keep talking about the arenas and the real estate bit of this and that is presumably something that is going to be either attractive or very much in the thoughts of anybody investing in any of these franchises or both And there are significant challenges, I think, in the NBA wanting to do this at the level of quality that the NBA has become renowned for.

24:55David Cushnan:Because I think, and London would be an example of this probably, there is a lack of sort of indoor arenas that are probably absolutely at the world-class level that you might need. You have the O2 arena, of course, hugely well-established, popular, in many ways, brilliantly operated venue. The NBA has played there. I think there were some mixed reviews of the O2 from an NBA point of view. There are much smaller arenas. There's Wembley Arena, much older. There's the Copper Box. But neither of those strike me as NBA-level environments. So you are going to need something new, which then becomes a long-term development project.

25:35David Cushnan:We're talking maybe five years, a decade.

25:38James Emmett:The real estate thing is interesting though, because a lot of people say that in regards to MBA Europe and these boring conversations that veer between AI and MBA Europe. But they don't tend to go into the fact that the model is very different in the US. And yes, ownership in the US can often be about real estate plays, but the real estate model, the venue building model in US major leagues relies on a sort of system and a history of franchise owners having the leverage of being able to move their teams whenever they want to extract funds from their local authorities to build. That model doesn't quite...

26:23And planning regulation is a massive part of that.