The EuroLeague's Expansion Play: Exclusive with CEO Chus Bueno

0:05Hello, everyone. Welcome back to the next episode of Streamtime Sportsman. I'm Chris Stone, the community, joined as always by our CEO, Nick Meacham. Now, Nick, we're at SportsPro Investment Summit. It's always good to be back in person, and this is going to be a special episode this week. We have covered a little bit sort of the growth of European basketball in the continent over there and some of the supposed rumors, information about the NBA's investment. It's really interesting right now, I'd argue the five best players in the NBA are all European, so it's a real hotbed of things. But you've got a little bit of an exclusive interview that you were able to do with someone that's going to give us a little bit of insights on this episode.

0:39I think it's one of the biggest topics and most exciting things happening in European sports right now is this conversation around the future of basketball in Europe and whether the NBA is going to come in and hit the ground running with this new NBA Europe concept or whether EuroLeague is going to come to the party with a new strategy and do something different there. All those parties will come together and launch something in partnership. But I got the chance to speak to the CEO, Chus Bueno, of the EuroLeague, who actually just spoke also on stage at the event. And we went into a bit of the detail of their plan, their approach, their willingness and interest to work with the NBA, the questions about their plan or the NBA's plan, a really 360 look at how they're looking to approach this situation that's facing them.

1:25Well, we'll hand things over for that interview, Nick, but everybody do tune in because like I said, it's a very interesting topic. Great time for Europe when it comes to basketball. We also had one of the Antetokounmpo brothers here as well, which was nice. Always good to have professional athletes with us, Nick. Definitely is. That content will probably be on a few different channels. And pretty cool. He's probably the tallest person I've met. Were you not at Sports 4.ai when we had Greg Oden? Oh, yeah, no, he was bigger. Yeah, he might be the tallest. I was like name dropping NBA players now, but yeah, there you go.

1:53Superstars on stream time. But thank you, and we'll hand things over for this interview.

2:03So, Truth, welcome to Sports Pro and the investment event here. I'm just curious, you've been in the CEO role now at EuroLeague for a while now. How have you settled into that role, given you were previously at the NBA for many, many years and been in basketball all your life?

2:16Chus Bueno:has been very exciting. Of course, I was in Lazon and previously I was working at the world green arenas and working for the different properties, football, tennis, but I've been all my life in basketball. So, when the EuroLeague and the recruiters called me that, okay, I had the thought about a recruitment coming back to basketball and coming back to the EuroLeague or European basketball, I was like, okay, I think I'm coming back home, right? And so I went through the process. It was super interesting. I wanted to align a lot on the vision and at a glance because I was just joking, like, you're going to be me, but I'm going to be you as well, right?

2:59Chus Bueno:But now that I'm here, I've been very happy and fortunate to be in the EuroLeague in this particular time. I know that for a lot of people, it's like a very difficult time because of the NBA, because of some issues that they had before. But I think that that was the challenge. And so far so good. I'm super happy with the job that's the team and everyone at the EuroLeague has done the alignment with the owners, everyone in class. I was being very supportive and I'm very happy. So for those that haven't been following the EuroLeague's journey and scale that it is today, give us a sense of what is the EuroLeague in terms of the size of it, in terms of the teams and anything else you can give us an insight from a business perspective.

3:45Chus Bueno:Yes. So basically when I came in, I wanted to understand three things for the owners, but also for the team and the executive. So hopefully it's a house required one. First of all, the people need to understand what's the value of the year. It's not our competition that you sign. The year league is a platform. It's a big IP that has been 26 years in the market and has bought. So we wanted to know what's the value of this part. So we hired the service department, WNK, and they told us that it's 1.4 billion. Then people were surprised like, oh, so the ULIC today is 1.4 billion. Okay, so what's the value of the teams?

4:26Chus Bueno:So we think about franchises, and we're gonna come back to that. It's like, okay, let's think, and instead of being in a license that you played in this competition three, five, 10 years, you're a franchise. what would be the value of the teams if we are all becoming franchises and it was different values the minimum was 60 million and the biggest one was about 300 million so it's like okay so I have a franchise that is let's put the average between 150 to 150 and I'm in a league that is 1.4 billion value so that's a big value and they were not thinking about this before that indeed and then of course is a competition that is 20 teams play 13 they have this long term license which they're going to become franchises so they understood okay this 13 does this value in this competition that this competition has this brand and we have another 17 teams the one is coming from the Euro Cup our second tier competition and the rest are coming with quiet cards that was the situation so they're like okay how we move this to the next level and the idea that we shared and the board bought was, okay, let's become all franchises.

5:39Chus Bueno:Now we understand the level of the investment or the valuation of our teams. Now we understand the value of the league. Why we don't become franchises, all of us, and we can create some other franchises and create an expansion, go to the market, and get another three or four or five bucks. And how much this will be for the teams getting all this money for the expansion fees, but also what would be the value of this competition if we are in more markets with more teams and big brands. So that was where we were and where we wanted to be in the next 40 hours. And the board bought it. Unanimously, they approved the plan.

6:21Chus Bueno:And we decided to move to franchises and to go to market expansion and to get them additional, I keep saying up to eight franchises because we moved to 2040s next season. But it could be five, six, whatever makes sense. You don't have to rush. So what is the structure of the ownership, the mix of EuroLeague? Who owns it and how connected is that with those teams and franchises? Because obviously there's other leagues where the franchise owners own actually the league as well. So what's your model? So today we have a model where the teams, the Eke shareholders, are the owners of the EuroLeague and EuroLeague properties.

7:00Chus Bueno:and the actual holders are 75 % teams and 25 % are leagues. The Hewlett and some domestic leagues, nine domestic leagues. So all of them together is 100 % of the actual, which are the ones that created the IP, your league IP, and then your league events where it's the operator of the IP. So you're looking to, you've got this new plan and the plan is to bring in new franchises, expand the league um what do you see is the opportunity and the challenge perhaps with that approach i'm obviously going to get into what's happening from the nba side in the second but just taking that approach on how how do you see that playing out so first um the plan is your point we're gonna convert these long-term licenses into franchises Then once we have these certain teams, franchises, we're going to see what markets make sense for us.

8:01Chus Bueno:We will give a franchise. So we're going to expand and scale our business. Of course, when we scale our business, it's to do more but to do better. You're not scaling the right way, right? So being more and being better, who are the teams or the markets? Because when we think about franchises, we don't think about the existing teams that are not franchises today. We're not long-term licenses. But we think it's like, okay, maybe it makes sense to go to London, to Rome, to Berlin. Maybe it makes sense to rescue some big IPs that are basketball IPs, but maybe if they want to become franchises, or we offer them to become a franchise, they're going to have investors behind, but because they see certainty, long-term project, and playing against the best teams in Europe, Monica BVI.

8:53Chus Bueno:And so whether it's basketball teams, big APs or big markets, we are looking at the three different types of potential franchises. So you clearly have a plan lined up. There's this other basketball entity who you know well who's looking to come into the market and that's been much publicized on their plans. What's your thoughts on the NBA coming into Europe? So for those that don't know me, I've been 13 years at the NBA, so I know the NBA well. I've got a lot of friends there, including I'm sitting with the commissioner, the deputy commissioner of the United States, I'm not the head of Europe, George.

9:29Chus Bueno:And I was actually part of the team when I was there that were thinking about if we come to Europe, what we should do in Europe. So I'm very familiar with the intention of the NBA coming to Europe. before I came here there was a little bit the the teams of the ownership was very reluctant to everything that was coming from the NBA one of the things that we were discussing at the poll level is if the NBA is coming and they are raising billions as they're saying and they're an extremely good operator as they are we should be open and don't be afraid and we should be open to explore the opportunity to maximize If we want to increase our revenue 200%, maybe it's better with the NBA than without the NBA.

10:14Chus Bueno:Maybe not, but we assume the Bay is yes. So let's be open, let's explore, let's try to if they are coming, they are finally coming because I know that they're in a process and they intend they're coming, but still they have to enhance the cities and sponsors or things like that. let's be open to see how we can mark spice because the country if we have two leagues yes we have to compete we're fine, we will but it's going to be fragmentation in the market and fragmentation not only dilutes value fragmentation creates friction and when we're competing you know the things that are going to happen that you're not going to lie and if we can avoid this cementation and restriction I think that it's my responsibility, their responsibility the executives are defending and protecting the interests of a lot of owners and people and asbestos and partners and TV partners to explore what it will be the best way for everyone at least to try and at the end we have to compete, we have to compete and so what's your thoughts on their plan, you've obviously seen the details of it Do you think it's a viable model to come into the market as they suggest they can?

11:30Chus Bueno:Well, I haven't been in the day long. Let me start by saying that I don't have access to these numbers. What I would say is that I wish I was here three years earlier. And for me, the right approach would have been to do a bill with the Year League and then go to the market and find more money to get. because you have certainty. You have the biggest IPs, the biggest clubs, the biggest fan base, biggest cities. And then you show to the market and investors certainty, track record. Already the baseline is huge because you have the best of the best and how you go from there, how can they support investment buy.

12:12Chus Bueno:For me, that would be the best part. And by the way, every margin acquisition or when someone is coming to the market, they're trying to do this with the leader of the market because it's better to go from here to the start of the game. At the contrary, I would say that coming along for me has much more risk, much more uncertainty. They don't know the teams. They don't have cities. They say the cities that they want. They don't have the fan base in some cities. I think it's very risky. Execution risk and reputational risk is on the table. So I would have bought that. And that's what we both know that it would be better for both sides, not for only one side.

12:54So what would that look like if you were to actually end up working with the NBA on this in some way? Have you got any ideas as to what the construct of that relationship could and would look like?

13:06Chus Bueno:We, I mean, this is not a proposal, but it was in the past, and I think that this is some sort of the framework that we should work. For me, it would be easier if we have 13 teams. we add the five, six markets that they're talking that we don't have teams whether it's Manchester, Lions we have in Europa or Berlin or some, Rome and we add those teams to the existing franchises. We become franchises, we already do that and then we have these 13 plus these five, six markets and I think that having all these teams from really already in and going to the market to find somebody else will be better and maybe the money will be there.

13:52Chus Bueno:So the money that will be raised will be similar money. We can still do that. We can still do a partnership and then complement this with the city that is not an existing jury. And what we will do with this money that is raised, say the NBA wants to give me money and we get some money and to compensate the people that have been 26 years building this business, fine. If they can also, we can also allocate some money for working capital, do a rebranding of the partnership and your jury, you name it, that doesn't matter. That will be great. So things like this, I think that it would be the normal way to do in a partnership.

14:34There's been mixed reactions to the NBA's proposal and suggestion coming into the market. There's also been mixed reactions to the plan and suggestion that you've released as well. What's it been like to see how the markets reacted to the way you presented this plan of almost fighting fire with fire a little bit by coming up with this new franchise model as a reaction to the NBA's interest in Europe?

14:56Chus Bueno:Well, I mean, this is about the franchises. I have a lot of friends inside the board. Because, of course, they're colleagues for many, many years. And they knew, because I thought they'd been in 2022 when I was voting a legend six or three, that they had to move me that direction. and I was explaining how they should do it. And I was even considering investing with Sixth League and Legends to help them to do this transformation. So remember, I was working in football, tennis, golf, but in basketball, I wanted to do something. And the idea that I brought to the former CEO is just, let's try to do something like this.

15:33We can invest some money from my power equity owner

15:36Chus Bueno:that was Sixth League back then. We didn't end up doing anything. But that idea was even before the NBA was announced that they would come. So for me, just implementing this was a no-brainer because I was thinking about this many, many years. I think that the market, not only the existing news, the market saw this as the right. We need to leave some spaces, some spots for the EuroCup. So we have promotion, relegation, maybe a couple for buy cars. But the market needs certain. And I'm aware that meritocracy is in the world. And I want to protect that. EuroCup, maybe in the EuroLeague, if we expand to a bigger number.

16:25Chus Bueno:But in order to get money, investment, certainty, people investing in one billion arenas, they need something. The investors, they said. So moving to this world of franchises, I could see that the market reacted very fast, very well, and say, if you're doing this, we can't. And today, we have more than 20 people interested in getting one of the six-seven franchises. We're going to pay around$100 million, maybe a little bit less, just to have one franchise tomorrow. So the certainty, the plan, the vision has been validated by the market, because sometimes you make assumptions, but maybe the market isn't a buy.

17:08Chus Bueno:the market bought our plan because it's very certain, it's very simple. We have this business, we have this revenue, we have these brands, we have these audiences, we have this in social media, everything we have with the data, we have all the 26 years of trial record. And with all these changes, this is the valuation of the company in three or four years. The same algorithm, the same format shows that we will be almost four billion in five years if we accepted the path. So we are doing 2X, a little bit more than 2X in four years. And they have seen this. And that's why we opened the data room last Wednesday.

17:48Chus Bueno:And we have already today, not even boundary, four teams that we need to do by after today. And the process is two months. But in five days to get four of the six is not about done. Do you know if any of those potential investors are looking at both the MEA's approval and yours? Or is that one of the things you have to navigate? Yes, they are. I mean, I understand. When the investor is looking to invest in basketball in the market, they want to see everything. When you want to buy a house, you want to see all the houses in the neighborhood that you want to live. So I think it's a normal exercise.

18:25Chus Bueno:It's two different models. They have to choose. So basketball is clearly one of these sports that in some ways you can say has a really strong following and backboding Europe already. Some would say that it still has so much growth in it. That's something that you're obviously saying. Some people obviously say also that EuroLeague's had a long time to build this European league, and it's taken a long time to get to this point. You're obviously suggesting that there's a lot more growth there. But some people are saying that this one it needs is a new player to come in and disrupt the ecosystem.

19:02What's your view on that? Do you basically feel like, look, we're on track. Do you think that there's some accuracy that maybe it's been slower than expected to grow the EuroLeague and people like the NBA can help bring that forward?

19:14Chus Bueno:So here, the biggest assumption at this point is that we have a lot of fans here. Number seven, the seventh biggest year by far. but football, soccer from the media market monetize 92 % of the media market sports media market in Europe and basketball is not even 2 % so if we have 10 % of the funds that football has in the second one why we don't get 2 % of the media market which could be if the sports media market is 125 billion why we don't get 2.5 billion versus hundreds and that's the gut, right? And this is where everyone can be there. Everyone agrees that the NBA is fine, and we do as well.

20:02Chus Bueno:But basketball, not the EuroLeague, basketball, the NBA, FIBA, domestic leagues, we are getting this 10 % of wishful. Different reasons. One for me is also the presentation. We are so divided that it's not helping to put everything, put everybody together to maximize it. Yes, that's one. But also, one of the biggest issues is that we, and this is something that we are going to change now, but we have a very weak direct-to-consumer strides. And if we believe that we have 65 million in France, well, we don't create what we're doing, EuroLeague Plus, which is our digital direct-to-dashumer platform that we're going to open in September, where we can maximize our fund base, providing great experiences, colliding great interactions and also increasing growth.

20:58Chus Bueno:So whether it's our OTT, predictions, betting, merchandise,

21:07Chus Bueno:chiquitin, you name it, we're going to have everything that is in the ecosystem in the direct-to-recruiting relationship in one place. Because if we have the 65, but we say that we have 10, 11 hardcore facts, Just imagine if we take$9.99 of each of them, each of them, two months. That's a billion riders. And we don't do it. So what needs to happen to get$1 million of these 65 paid$9.99? Could be scriptural, not typical. But could be also with betting. Could be also with fantasy. Could be also, at the end, it's just to strike. $100 of 100 euros a year would equal for each of our half of us. If we do that, then all this value that we're losing, you cannot get.

21:57On the notion of going direct to consumer and tapping into that hardcore fan base, why has it been that the EuroLeague hasn't taken that step yet? Has it been more just not had that as a priority to maximize those media revenue streams? Or has it been taking a different approach to date?

22:14Chus Bueno:Well, I think that it was more focused on the B2B business, I think. and you need to have a clear idea about what you want, how you want to build the relationship, the fact. And we had the OTG, it was one place, we had the red side gigs, one place, different backends, different developers, different back, all of them great. But we were one here, one here, one here, one here. So what we're building now is just one platform. It's going to be your platform. It's going to be the source code, it's going to be ours. And then to this platform, we're going to add the best of each, the best of the OTPs, the best of the editing or prediction, the best of, and then having everything in one place, you can interact with each cross-marketing and we can have the better relationship and the stem better, the behaviors, not only the interaction and maximize all this business.

23:05Chus Bueno:And for whatever reason, where I was not here before, was not in place. So this is the biggest gap. I think I saw an announcement recently that Rihanna Dredge has showed their support to your plants. Can you just talk a bit about that, what that means? Well, since day one that I joined, I was optimistic that not him, it was Alas Bader, he was Ferenc Vache, but they didn't sign it. Very happy, very happy that I think that the people, board, the GMs and the owners are getting more confident with the plant. It was super important to have a light man. the group was a little bit divided now everybody has a clear idea of what we want to do where we want to be in three years this is the money that is coming from the first round of expansion fees and this is the money that we are expecting in the 2030-2031 of expansion fees which is a big amount of money for the owners this is the plan that we have on the business side we are adding more assets we are adding more markets we are expanding to new territories but much more in detail It's not just a real, it's a vicious thing.

24:16Chus Bueno:And they bought it. And they feel like now they have a plan. They're happy about it. And I think that, of course, the reality task that Anthony Bazzi joined it is a strong signal that, okay, we want to be in the best league. We want to be here. And you have a plan, so we are in. And, of course, if the NBA comes and we can maximize the opportunity with the NBA, let's do it. But let's do it all together within the year, which is a little bit the change of me of course. So we're going to wrap up shortly, but I want to ask a couple of quicker questions. But basically, how realistic is it that you do both come together with the NBA and Yuri?

24:51How realistic is that at this stage? Well, I see that, again,

24:58Chus Bueno:that would have come earlier. We will not have today two models that are paid. So let's be honest. They have a model that too much with our model or our models and their model. we both had to make changes. And I think that the goal is how we're going to do it in a way that we both win. And I think that realistically speaking, we're not there yet. And we need to sit down more times and more time to think about this. And again, we have to both be generous in the approach. we either say, okay, come to me and shut it down and come to my franchise's model. It's not a war. So we both have to be flexible.