The investors looking at NBA Europe; what’s going on with NFL stadiums?

0:04Hello, and welcome to Worth Knowing, the sports industry podcast from Leaders, where we talk about what's worth knowing in the business of sport this week. I'm James Emmett. And I'm David Cushnan. On the show this week, we tinker under the bonnet of the British and Irish Lions business model. We unpack what the NBA's commercial open day in London means for its new European League ambitions. And we examine what's going on with NFL stadiums. This is Leaders Worth Knowing. David, hi. Howdy-doody. How are you? I'm very well, thank you, James. And how the devil are you? Really, really well. Thanks.

0:39Nice to be getting back into the swing of things. A double publishing week. We are on a roll. And lots of nice feedback from the episodes that we published last week as well. Yeah, it's very much what some of the industry wanted. Indeed, indeed. Did you manage to listen to the interview that was published on the Worth Knowing podcast feed this week that I did with Ben Calverley, the chief exec for the British Irish Lions. Yes, I did. Really enjoyed hearing from Ben. Interested to get your impressions of him, how he was in the room, but certainly as a listen, what an incredibly articulate guy and articulating in, I think, more depth than I've ever heard, really, the actual reality of what it is like to organise and fund a Lions tour every four years.

1:31Yeah, certainly a very impressive speaker, clear command of his brief and a relaxed and authoritative speaker, I would suggest. Very articulate, very smooth. I really enjoyed speaking to him. I think he was spot on with a lot of the leadership insight that he had from having been in the CEO role for a few years now. The big thing that struck me was the detail behind the amazing stakeholder management work that will have gone into setting up this all new business model behind the Lions. And it really is, I think, a lesson for lots of other organizations in sport. Sport often has challenges with stakeholder management.

2:24the way that ben and his team and the other stakeholders in rugby have come together to put into place a system that incentivizes all stakeholders involved in alliance tour absolutely world class i would suggest and just to quickly summarize what that system is so ben came into the organization i think it was 2018 2017 2018 they were coming off the back of a three cycle deal. The Lions is a very unusual touring sports organisation, get together every four years, collection of players from the English, Welsh, Scottish and Irish rugby unions to tour, usually Southern Hemisphere teams or historically Australia, New Zealand, South Africa.

3:10They're just coming off the back of a kind of three tour agreement, which was heavily weighted in favour of the host nations. And I think there had been a recalibration of where the real value sits. And it really plays into this trend that we're seeing across sport of the biggest sports entities just getting bigger. And I think the Lions would probably consider themselves in their own unusual way to be certainly a big brand. And Ben was able very skillfully to recalibrate everyone's understanding of where the value lies and incentivize through a shared, well profit sharing scheme every stakeholder that is involved in putting a lions tour on so the obvious ones the players the coaches the staff etc the host nation but also the owning unions the lions entity is co-owned by the union the competing union scotland england ireland wales also the leagues that all the teams uh all the players come from and then also the commercial partners so the broadcast entities, the sponsorship entities, all operating now within this system that allows everyone to share in success.

4:22So you have seen, I would suggest, very competitive Lions tours, very competitive games. So everyone is working together to put a good product on the pitch, but also a really impactful operation. These guys are together on tour for eight, nine weeks. In previous years, you know, there would have been squabbles. There would have been arguments that would come from being together away from home for such a long time, but also commercial squabbles about time that you're taking. So the Lions would take players away from their club commitments. They would have sponsor commitments. The host nation wouldn't be incentivized in making it a good game.

5:04That's all gone now. Everyone is pulling in the same direction because of this revenue sharing thing that Ben and his team have brought in. incredibly difficult to do but an example i think for other sports organizations we touched on the ashes of course which uh you know takes place between the um cricket uh unions i suppose for want of a better word of australia and england patently not set up in a way that incentivizes all sides to put on the best most competitive compelling product that they can yeah i think The cricket comparison was really interesting. And the difference is, I suppose, that there's a real clarity in the Lions always being the tourists.

5:50Yes, the opposition may change, but fundamentally, the structure of a Lions tour every four years is the same, as opposed to home and away Ashes Test Series, where you perhaps have competing ideas of, or different at least, ideas of success, depending on whether you're hosting the series or not when it comes to the ECB and Cricket Australia. A couple of observations from my side on the Lions and listening to Ben got me really thinking about scarcity, which is something that we talk about quite a lot on the podcast. And we talk quite a lot about the upside of scarcity as it relates to sports where there's simply more and more volume.

6:33Football is one where there's absolutely zero scarcity. The Formula One calendar is constantly expanding and there's definitely a balance to be struck and the balance is different depending on the sport and the setup of the sport. But there are also downsides to scarcity and it was fascinating, I thought, to hear Ben talk about the way that he has tried to take, particularly with this most recent tour cycle, an eight or nine-week tour, six weeks traveling, a couple of weeks of prep, and build that out to feel like a sort of two-year experience and host a major, essentially sort of arena show to announce the squad in front of 3 ,000 people.

7:13And I think there's, again, a little bit of a lesson there, a case study there for other sports. We talk about the Ryder Cup, the Olympics we've got coming up, and broadening the scope and broadening the opportunity for there to be interest activity in your sport is pretty fundamental to avoid, frankly, it just being forgotten for four years. Extending the life cycle of the story. People are talking about storytelling in sports all the time. You know, it's like putting together one of these movie franchises. You do one that's successful, you develop the story for the sequel but you know what let's add on a prequel and go back and see how we got here what really struck me about um the creation of that new event to announce the you know squad really smart maintaining scarcity of core product but built on the insight that the squad announcements before they did big a big event for them got the same number of impressions the same sort of digital impact, I suppose, it reached the same number of eyeballs that the first test will have done.

8:25Which is an amazing insight. It means in sports marketing terms, at least, you do not need to expand your core product. You can expand other elements of the product and the experience. It also got me thinking about innovation. There's obviously now a long period until the next men's... But not the women's. Lions tour, but not the women's. And that's an innovative new project that will be occupying lots of Ben's time as he talked about. But I think there is something to build on what we were talking about last week on the podcast, the Australian Open and the way that it has continually innovated.

9:03I think there's something in how we frame innovation. I think the Australian Open would be a good example. Maybe F1 recently would be another example of events, sports that have really got almost got their PR right on how innovation is framed. They are innovating from a high level. I think sometimes other sports, and this is, I think, definitely the wider conversation about rugby union at the moment, maybe athletics, track and field, you could throw into this as well. Innovation seems to be framed as being something that's required to save a sport. And I think there's so much going on in rugby union in terms of possible potential new projects, startup leagues, breakaways, R360, which we've seen be delayed, Ultimate Sevens, which is another project being worked on by BIA Sports Group, for example, World Rugby itself rebranding the Autumn Internationals as the nation's championship.

9:58You've got a whole host of new formats, new events in women's rugby as well. And I do think it's really fascinating a sport like Rugby Union, where, and the Lions would be a great example of this. It's that classic, how you innovate, where the genesis of what you have in terms of a product is rooted in such tradition and history. And I think that's probably Ben's almost sort of biggest long-term challenge. Now that one tour is over and planning begins for the next on the men's side. Yeah. It really shows the benefits of a singular focus, I would say as well. I mean, you know, the Lions now exists to put on two tours every four years, one men's, one women's.

10:45That's it. And there's a lot of benefit in that, I would say. One quick other thing to say, there can't be many sports rights holders, sports entities that can count on four major revenue streams, obviously media rights, sponsorship, merchandise, ticket sales for the host nation, but in the Lions case, travel. He said it was almost an equal, you know, those revenue sources are all divided equally. And these things are sort of 10 ,000 person, weeks long stag dues. And the - Yeah, you're not hiring a bus, are you? Well, you're probably hiring lots of buses, to be honest. But the amount of touch points that you have with your fans when you're doing what you do, the amount that you can know about them, The amount of insight that you can pass on to your partners because of the sheer intensity and length of the contact that you have with your fans, probably unique in all of sport.

11:43Indeed. Good stuff with Ben and thanks to him for coming on. Let's do a few signings from this week, James. And it's F1 launch season, plenty of F1 partnerships being announced. McLaren have done a big deal with Puma this week. And Whoop has been confirmed as the new official health and fitness wearables partner at the Ferrari team. And that is very much the category du jour, I think, in Formula One this season. I think we're going to see more of that. We're going to see Whoops and Auras all over the paddock. Correct. Google's Gemini AI product is a new sponsor of the IPL. A three-year deal has been signed at a reported fee of almost$10 million a year.

12:27Interestingly, the BCCI signed a deal with ChatGPT, rival AI operator for the WPL just last November. Indeed. A few job moves or interesting momentous people stuff to tell you about. Wealth advisor Peter Malouk has finalised his purchase of a majority stake in MLS side Sporting Kansas City. That one valued at about$700 million. And Scott Galloway, the business and cultural commentator, who I think goes by the name of Prof G in his various media and on his various platforms, he is the lead investor in a new$2.5 million Series A raise for an LA-based combat sports streaming service, Swerve TV. And I think we're probably going to be hearing quite a lot about that.

13:20Yeah, indeed. But lots of people have got new roles, David, and some of them are very interesting indeed. So the LPGA has hired Chad Coleman as their next CMO. Chad Coleman joins the Ladies Golf Tour from Dude Perfect, the creator outfit. Former NBA and Burnley man Nick Cowell has launched a new agency by the name of Impactful. Christian Harold Baker is the new content strategy director at Two Circles. And Terry Minogue has been promoted to EVP for consumer marketing at Paramount+. He's going to run sports marketing there too. Also in media, former BT Sport and Sky Marketing executive Dave Stratton is the new EVP of global marketing at DAZN.

14:07DAZN always seems to be making lots of hires. Rodrigo Coelho is the new managing director of Sid Lee Sport in Canada. Kieran Murphy has left his role as head of creative and brand at Tottenham Hotspur. He is joining IMG as Senior Creative Director and ProSec Partners MD, Head of Sports, John Schwartz. A lovely man, John Schwartz, has been promoted to partner. So congrats. Yes, indeed. Now, for the remainder of this episode of the podcast, we're going to dig into a couple of the stories that we are profiling in our Worth Knowing newsletter this week and lots going on as ever. But the first one is centered around some activity that took place here in London this week, David, where the NBA, who have been on their global games tour, taking the Grizzlies and the Magic to do back-to-back games in Berlin and then here in London, they more or less hosted a sort of commercial open day in London at a swanky hotel on Monday, I think it was.

15:11Adam Silver, Mark Tatum et al. on a big old stage with a group of, they're very much on message by all accounts. It was closed to media. Sort of friendly executives and prominent people. Zlatan Ibrahimovic was there speaking and many more besides. But this was effectively the NBA clarifying their vision for NBA Europe and pitching commercial involvement, either as franchise owners or commercial partners to a room full of money. Yes, this is the talk of the industry at the moment. I think almost the first thing that anybody that you talk to is keen to know more about, keen to understand what's going on, how it's all going to fit together.

15:58And from this meeting, this event on Monday, and also through obviously the NBA folk being in town over the weekend. We're starting to see a little bit more dribble out about how this can work and who might be involved in it, which I think is possibly the most interesting thing. Pau Gasol is being touted, according to reports, for some kind of ambassadorial role, maybe even a sort of executive leadership role in NBA Europe. And you would sort of imagine that that would make quite a lot of sense, given his name and credibility. Not quite sure of his business acumen, but he could learn on the job, couldn't he?

16:39And there's clearly a lot of activity and has been for quite a while, actually, and it's been a pretty open secret. There's been lots of activity. JP Morgan, RAINN Group, very much involved in trying to speak to everybody that they can think of that might be interested in investing in one of these teams. We've had several of the cities, in fact, probably all of the cities identified that they are really looking to target. Interesting couple of new bits that have sort of come out in various reports over the last few days. Amazon Prime, who were covering the global games as part of their current NBA contract, seemed to be sort of emerging as one potential broadcast partner for this.

17:20although you would imagine that the NBA will be looking to make any sort of media rights sale very competitive indeed. Nike also potentially involved from a commercial standpoint or interested in being involved. And we know FIBA, James, are involved formally as part of this in terms of trying to work together to lay out the governance structure, critically, I think also the player development structure and how that looks. We've talked before on several podcasts about the challenge of establishing this league and it not being seen as a sort of secondary product or a feeder product to the NBA. But equally, that's probably what it will start at least being.

18:09So there's lots in this. We're starting to see some of the names of potential investors in teams come out as well. Yeah, and FIBA will be pivotal in the development of this potential league, not least in its ability as the global governing body to kind of broker some kind of peace between the NBA and the EuroLeague, who are very much now of the mind that the NBA is on its patch. And EuroLeague obviously stand to potentially lose from this. And many of the EuroLeague basketball team representatives were at this commercial Open Day. Real Madrid, Barcelona, Olympia, Milan, Panathinaikos, Asbel, Lyon, Bayern Munich, Alba Berlin were all there.

18:57So clearly there is interest from EuroLeague. One thing that hasn't necessarily been covered is the potential impact on the college system in the US. Because if it is going to be a feeder league. It is a potential route for future NBA players to come and play competitive basketball in a different environment rather than go through the college system. So it means that some stars won't come through college in a way that they previously had. Lots of financiers in the audience there and previously speculated figures around what the NBA is asking for franchise fees. They They want a 12-team permanent league plus four sort of qualifiers and previously reported figures of around$200 million as a franchise fee.

19:40Clearly, that is up for negotiation. But the PIF had representatives at this meeting on Monday and then Jerry Cardinal of Redbird, owner of Milan and pretty much everything else also there and speaking. Lazard, Rothschild, Sixth Street, Blackstone, Arctos, BC Partners, JP Morgan Chase, The Rain Group. Pretty much, you know, who's who of financiers in the room. And as you say, David, this is going to be the talk of the industry for the year ahead. Yeah. The owner of Manchester's Super League basketball team has given an interview to City AM, who I must say are doing some good work on this NBA Europe story.

20:21They're going for it, aren't they? They are. Ben Pearson, who looks after the team from an ownership point of view, the Sherwood Family Investment Office of the US-based organization who bought Manchester basketball two years ago. And they are definitely interested in having a conversation. They believe they can put together a bid that would satisfy the NBA for a Manchester franchise. We think that the NBA has also been talking to Manchester City and Manchester United. But Ben Pearson's point really was that, look, there's potentially a third way here, a more neutral organisational structure for this team that isn't going to immediately alienate half of the city of Manchester when it comes to support.

21:09We are seeing, I think, a combination of new entities potentially being created here, backed by some of the names that you mentioned. Also, some existing football clubs being involved, both in terms of potentially enticing clubs like a Manchester United or a Manchester City or a PSG to effectively create a basketball arm or existing basketball teams, most of whom are playing at the highest level in the EuroLeague to be part of the competition. But that would require what would be quite a controversial transfer from the Euroleague to this new NBA Europe entity. And one interesting report I saw this week was that actually three of Real Madrid's biggest fan groups have actually come out in opposition to any attempt to move the Real Madrid basketball team from Euroleague to NBA Europe, saying that it would be a mistake.

22:08And you're upending all the traditional, well-established structures of European basketball. Fair to say that fans are, you know, historically not so open to change. So clearly raising the money, getting things started, pulling teams or incredible teams away from the EuroLeague is a priority and a challenge for the NBA at the moment. Another one, which will come soon behind, is the development of NBA level arenas, which I guess we in the UK don't think of that readily. We're not really a sort of basketball au fait nation. But I think we sort of assume, because the NBA has come to play in the O2 arena in London multiple times, we sort of assume that that venue is high spec and ready to go.

22:55But really interesting to see or to hear the grumbles about the standard of that venue from various American folks who are over for that game. And interesting, the NBA talks about that game as a sellout on Sunday, but certainly the evidence of some pictures and videos posted online suggested that it really wasn't sold out. And there were a lot of empty seats. Manchester in that arena respect seems to be well served with the co-op live venue that's just been created a couple of years ago. But yes, clearly this is going to be a big priority for the NBA in terms of any sort of package around selling a team has got to come with a significant real estate component.

23:37Yes. And from real estate around basketball to real estate around American football. The second story that we're going to go into a little bit of depth on this week is something that our colleagues at Sports Business Journal picked up on in recent days. And that is that the NFL is becoming an indoor league. So our colleagues... By stealth. Yes, by stealth. Yeah. Our colleagues Ben Fisher and Brett McCormick did the math and realized that by 2031, the majority of NFL teams will be playing in roofed venues. So currently 11 teams play in 10 stadiums that are covered, but fully financed plans are in place at Tennessee, Jacksonville, Cleveland, Washington, Denver, and Kansas City.

24:26And once that happens, by 2031, most of the schedule or the majority of the schedule will take place under roofs in climate controlled, completely, I mean, artificial isn't the right word, but slightly more sterile surroundings than you would be used to with an outdoor venue. And the contrast between American sport and the rest of the world will be stark at that point. Yeah, absolutely. And I think one thing that we're seeing on this side of the Atlantic is there's a sort of generation of football stadiums, now quite old football stadiums that have continually been sort of polished up and fitted with technology, but fundamentally aren't new anymore, are undergoing or about to undergo quite significant refurbishments.

25:12We've seen plans in recent weeks announced by Leeds United, by Nottingham Forest. Fulham have just sort of, I think, finished their latest stand project. Crystal Palace have one that's just about to begin. You also have new stadium projects in Birmingham, in Manchester, suggestions that Newcastle might be looking for that. And I think we are going to inevitably see, and this is where the likes of Populous and KSS are going to be, you know, very much in demand. And we are going to see the application, I think, of at least some of what has worked in the US, both in terms of the stadium design and capabilities, but also the areas around stadiums and what they can be used for come over to the UK and to Europe.

26:01And I think that brings with it a new commercial edge that perhaps we haven't necessarily seen. But it's also going to require, I think, you know, or force some changes in fan habits as well in terms of what your match day looks like. And this sort of tradition of, you know, turning up to a football stadium, you know, 10 minutes before the game, taking a seat, grabbing a pint, whatever, is not necessarily going to be the way forward. as we have started to see with some of the new build stadiums in England in recent years. I read a fascinating piece the other day in the Financial Times Weekend magazine, actually, in the life and culture section, life and arts section, David, and it was by the FT's architecture correspondent.

26:46And it was about, I think it was an exhibition on football stadiums that was going on at the time. But essentially, we're living in a clearly defined era of stadium architecture, at least here in the UK and probably in Europe. And these things go in cycles. So the first great era of stadium design was sort of brought about by a chap called Archibald Leach, who was the doyen of stadium design in the UK around the turn of the century. So he designed so many stadiums. So Ibrox in Glasgow, Highbury, Roker Park in Sunderland, Liverpool Stadium, Everton Stadium, Bramall Lane in Sheffield, Fulham, essentially any what you would now consider to be old stadium, old brick fronted stadium with narrow turnstiles is Archibald Leach and that classic sort of in amongst the terraces of a city design very much of that era.

27:48He was designing for a different era of sport. This was football was a working class sport, mainly for factory workers. the stadiums looked like factories they were sort of familiar to the patrons who would be there very small for very small people pack them all in now the clientele at football games is so different they are being built to accommodate in some cases sort of ambitiously wealthy clientele but usually they're sort of glass fronted big hospitality areas big padded seats they look like banks. So whereas at the turn of the century, football stadiums look like factories, now they all just look like banks.

28:29And there's actually a bit of pushback going back to the US with some of these NFL stadium designs that actually they are all starting to look a little bit samey and, you know, homogenized. And you can understand why, because there's only a select group of architects who are involved. And also there's a use case, a sort of proven use case for these stadiums in terms of how they can be revenue generators and also sort of media studios. And I think aesthetically, there's an onus on teams to try and do something different, maybe with more limited ability to do so. But also, I think just in terms of if you take soccer, things looking the same, all football games looking the same.

29:11I do think actually that's where the World Cup this year in the US is going to look, for better or worse, aesthetically quite different to the last few major tournaments we've seen. Because you are placing, as we saw at the Club World Cup, soccer games within stadiums built very much, in most cases, for the NFL. Yeah, yeah, absolutely. Right, very quickly, Dave, is there any other business? I have some other business. I've got a recommendation for you, actually. A quick recommendation for a sports documentary that I happened across. It's a Sky documentary, and it is called King of Lies, Football's Trillion Dollar Con.

29:53Are you aware of this? So this is the story of, you might remember back in, I think, 2009. Not Alan Stanford, is it? No, it's the takeover of Notts County by frontman Russell King, frontman turned con artist, we can say that, which involved at various points, Sven-Jur and Ericsson turning up as the manager. Saul Campbell involved. Saul Campbell was involved. It is a documentary that traverses many different areas of the world, including North Korea, put together by Matt Lorenzo, a sports broadcaster, lovingly put together. This isn't your sort of standard Netflix documentary. It's a real work of art and a labor of love and he has first-hand knowledge of this subject because he for a short time was involved as the sort of media chief comms guy at Knotts County well worth a watch if you can seek it out I will put it on my watch list I'll put it on my watch list yes I'm going to Australia next week David oh yeah I'll try and do this podcast with you um remotely but I'm going to be in Melbourne for the final knockings of the Australian Open, the AO.

30:56I'll be out there from the 29th, yeah, 29th, 30th. The business end. I'll be out there for a few days. Maybe have a look at your calendar. Thursday to Sunday in Melbourne. And then off to Brisbane for our Leaders Meet Australia event in Brisbane. Lots of elite performance practitioners and CEOs from Australian sports entities there. If you're there and you want to say hello, do get in touch. I'd love to see you. Baller League are hiring for a very interesting role at the moment. Have you seen this? Go on. Chief of Staff. Now, this is a position that I think we're going to see more and more of across sport.

31:33We're already seeing a smattering of these. Essentially, this is a kind of factotum. Someone who can do a bit of everything and is the CEO's right hand. This is somewhere in between Executive Assistant and Chief Operating Officer. Correct. I think so. I think so. And I don't know whether it's appealing to someone who should be more senior or, you know, you're giving someone a lesser salary. Well, if you think about the chief of staff at the White House, for example. Yeah, good position. That's a senior role. Yeah. A lot of influence. Yeah, exactly. Lots of new subscribers to the newsletter. Tell me.