The "Americanization" of the World Cup, Plus Alex on the MLB CBA

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0:42Welcome back to The Deal. I'm Jason Kelly alongside my partner, Alex Rodriguez. All right, Alex. First of all, how are you doing? I feel like I haven't seen you in forever. You know, we've got episodes rolling out, but we haven't been together for a while. I don't know. I miss you, man. Like, what's happening? I always miss you. And every time we don't see each other, it feels like my brother from another mother's wake on somewhere. But you're busy. I'm busy. But here's the good news. I'm going to be spending a lot of time in New York over the next few months. And I get to see you in a couple of days.

1:13Yeah, exactly. We're going to be hanging out in New York a little bit. I mean, in part because, listen, I got to tell you, and you've seen it. You were at one of the conference final games. New York's pretty occupied right now with the NBA Finals. We'll talk a little bit more about it as the series goes on. But listen, the Knicks, and with all apologies to the team that made you a fortune and very famous, the Yankees are nothing compared to the Knicks when it comes to just electrifying New York City. Right now, you're absolutely right. And the thing about it is, and I'll give Michael Kay credit for this, the voice of the New York Yankees.

1:57He said the Knicks, and it's so true, is the one team of the many teams in New York City that unites the whole city. Yeah. When the Yankees are winning, the Mets fans are pissed off. Vice versa, when the Mets are winning, the Yankee fans, Islanders, Rangers, Jets. That's adorable when you say when the Mets are winning because that hasn't happened in feels like centuries. Go on. But with the Knicks, it's like the whole city is behind them and is the only team of the many, many teams that are in New York that sits right in the center of the greatest city in the world, Madison Square Garden, who may be the biggest star of the franchise.

2:34Yeah, I know. Totally true. It's the world's most famous arena for a reason. I mean, it's also such an amazing time to be in sports because we're in the depths of the baseball season. I got to tell you, I'm loving what's happening down at Truist with the Atlanta Braves. They are on fire. I mean, and I have to say, I was thinking back, you predicted this. You said the Braves have all the pieces put together. And when we get together next week, we're going to, or when we get together soon, we're going to talk more about, you know, your thoughts on baseball. But looming over all of this is negotiations that are happening around the collective bargaining agreement.

3:12It expires toward the end of this year. What are you hearing from people that you're talking to on all sides of the table? What's the state of play for CBA negotiations? Yeah, Jason, and I've had, as being a member of the union for almost 25 years, I have a lot of experience, obviously going back to Don Feer, who was the head of the union, and Gene Orza, then Michael Weiner. He passed, and of course, Tony Clark. And today you have a new regime, which is challenging from a timing perspective of leadership of the union. On the other side, you have Rob Manford and Dan Halem working for the league and the owners.

3:50And I've spoken to dozens and dozens of people from both sides of the aisle. And that's what it reminds me of is a political race where the red and blue are screaming at each other, but no one's listening to each other. And they both think they're 100 percent right. and just going back a little history when the word salary cap comes to uh you know fruition or even if it's even introduced it's almost like uh you know china russia having you know nuclear bombs pointed at the united states that's how uh triggering it is of a word for the union and you're seeing that right now they're so far apart and now they're starting to play the media game and it's just going to escalate from here.

4:32And so it seems like from what Commissioner Manfred has said, a lockout or a walkout is inevitable at this point, even if it's off-season. Is there any chance from what you're hearing that something gets done during this season or it's just going to be a war of words all the way through October and November? Yeah, so just to give you a little bit of how the collective bargain agreement works, it ends on December 1st. So you can have a lockout and yet not miss one single game. You can also have a lockout and then also miss games. And I think it's almost impossible that you will have an agreement in this calendar season.

5:17I think these deals get done at the 11th hour, an hour or two before, in the wee hours of the night, before you miss a game or two. Okay. So we've got months and months of this ahead. Oh, yeah. We're just getting started. I mean, you've been through this, you know, on the player's side. How distracting is it for a player to know that this is going on? Because this does affect, you know, your bottom line very directly if you know that the economics of your game, you know, almost certainly will change in some form or fashion. Well, Jason, let's play it out, right? Let's say you came out of Georgetown.

5:55You know, an average player plays five and a half years. You're in year three. You're about to hit arbitration. You have two young kids and a newborn on the way. And you're saying to your wife, and your wife's asking you, but Jason, are we going to have a paycheck next year? And you have to look at her dead and dying and say, I do not know. And I think what the owners, which I think is a fair point, what they're trying to do is say, hey, you guys are a union of 800 members. You can't have a union where 80 % of the revenue is made by the top 10%. Why not create a system that is more democratic where Jason can elevate his floor and, Alex, you're still going to make yours.

6:35You may not make$80 million. You may make$72 million, but you should be okay. Yeah. Well, I like that in that example that you gave, it was very clear that I was a sort of work-a-day journeyman baseball player, and you were still A-Rod. So that's great. That's great. Listen, I mean, I'm very comfortable with my place in the world, and you are demonstrably a better baseball player than I am, and so I'm just glad you reminded me. It's good for us all to know our roles. That's really good. I tried to get away with that little subtle flex, but you caught me on it. So well done.

7:15And that you were going to get paid$80 million. That's good. That's good. So speaking of, you know, the biggest sports and the biggest sports in the world, the World Cup is upon us. As people are listening to this, they're probably listening to it as they're either preparing for a game or maybe watching a match, one of the opening matches. How are you feeling about this? I feel like, you know, it's been looming and looming and looming. I probably am a little more engaged in the world of soccer than you are, but it's inescapable, man, especially in your hometown. Well, Miami, it feels like is the number one sport here.

7:49And it's a combination of, you know, Messi being down here, Beckham, the championship last year. Obviously, Miami is a melting pot. We always joke around that it's very, very close to America. That's the best part about Miami. And you certainly feel that. And, you know, when you have big games here, bars are open at seven o 'clock in the morning. I mean, that was that wasn't happening here 10, 15 years ago. And it's happening today very often. But quite honestly, Jason, it's very intimidating. There's a lot of information. It's a very fragmented sport, while football, soccer is the largest, biggest sport in the world.

8:23The fragmentation is very confusing to me, but I'm willing to learn more. And we talked to the perfect person coming up in the show, Henry Bushnell. He's a senior writer for The Athletic. He goes through all the big numbers and really takes head on, I think, a lot of the questions that we have around tickets, ticket pricing, ticket availability. It is the story of this World Cup, like it or not. So it's a fascinating conversation and really got us in the mood for everything that's coming with this massive World Cup. So without further ado, here's Henry Bushnell from The Athletic.

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9:40Hi, everyone. Welcome back to The Deal. I'm Jason Kelly alongside Alex Rodriguez. So happy to have with us Henry Bushnell. He is the senior writer at The Athletic, covering the beat that everyone is going to be following more than any on the planet, Alex. It's soccer, football, whatever you call it, the World Cup. as of June 11th is going to block out the sun for the entire world. So Henry is the perfect person to really answer the million questions that we have about this. Henry, welcome to the show. Appreciate you guys having me. Yes, it is a very complex, grand event, and I'm looking forward to digging into it.

10:17All right. So we're going to start where I feel like every conversation that I have about the World Cup starts these days, and probably you too, which is tickets and ticket prices and ticket availability. help us understand and let's just start with you know we're america we're americans here the u.s opener you reported as of this taping has 10 000 tickets give or take available you know this game against paraguay that's going to happen at sofi stadium in los angeles that feels weird like what's happening so basically fifa overpriced the tickets for this game and there's a lot of stuff happening the process has been very opaque like this game will probably be full uh but whereas other games every time tickets go in the market they sell quickly because there is a ton of demand for this event fifa priced this opener as the third most expensive game of the entire world cup u.s against paraguay at the start of this process and essentially they actually probably underpriced some other games and there was way you know demand was you know way overwhelmed them whereas they probably overpriced this game and people aren't willing to pay two thousand seven hundred thirty five dollars or whatever it is for a uh for a second deck you know take it behind the goal um and uh and so it's as you said the discussions around this have kind of over this is the topic of the world cup until now right and uh and i think this game for a lot of people represents just how aggressive FIFA has been with the pricing of it.

11:59And Henry, is it the ticket prices? You mentioned, you know,$2 ,800 or so, plus or minus. Or is it that you have to fill up such a big stadium in SoFi? I think it's both. So obviously, yeah, there are some people who have been willing to pay this price. But whereas, you know, all the stadiums are going to be played in, the games in the United States are going to be in stadiums. There are$60 ,000,$70 ,000,$80 ,000. So SoFi isn't necessarily unique from that respect. And one of the stadiums in Mexico is massive as well. The stadiums in Canada and the other ones in Mexico, they're at least 40 ,000, 50 ,000.

12:36But for a lot of the games, they could sell a 200 ,000-seat stadium, right? For any game involving Argentina, involving Mexico, involving England, involving any of these big teams, they could sell 300 ,000 tickets probably if they priced it right. And I think it's just this was one of the few games that they overestimated the demand for it. No, I think you're spot on, Henry. And the thing is, I just covered recently the World Baseball Classic here in Miami. And Miami's just on fire. Soccer, I'm feeling the energy and the love for soccer. But every game in the World Baseball Classic was absolutely sold out.

13:13And then some, I mean, you know. But I am sure, and Jason here to set you up for your next question, there's just a comment. I'm sure that in LA, the Olympics is going to be played here in a few years. And I'm sure the Olympic committee is paying attention very closely to these overpricing because it is a big miss. And publicly, it looks like a bit hollow. Yeah. And so Henry, somebody made a mistake here. Who messed up and why, do you think? Yeah, we don't know exactly who because as I said, this process has been just super opaque. Yeah. And we don't know how they set the ticket prices. We don't know who they've consulted.

13:50whether in the American sports sphere or, you know, this is a European organization for the most part that has come to America and tried to adopt American sports business practices. And in some ways, I think they understood the market correctly. And in some ways they probably misjudged it. And I think that's, so that, that tension between a global organization, yes, but really a European based organization coming into the United States market, that has been central to all of the discussion around ticket prices and just the different expectations that Americans have versus whether it's European soccer fans or South American soccer fans, people elsewhere around the world.

14:31So we don't know exactly who made the mistake. I would also think that FIFA would maybe argue that they didn't necessarily make a mistake, that when you have to set prices, there's some guesswork that goes into it. and you're never going to hit the mark exactly with all 104 games right and sometimes you're going to you're going to go too low and sometimes you're going to go too high and as long as they ultimately fill most of the stadiums which i think they will if they went too aggressive on some ticket prices that's probably just a function of trying to maximize revenue on this event, which in some ways I think they will.

15:17Now, if the stadiums aren't full, then it's a different conversation. And we'll see. We really have no clue what it's going to be like because, as we said, FIFA hasn't been transparent with how many tickets they've sold and things like that. So, Henry, great point. When it comes to FIFA, you mentioned 104 games. How much money approximately does FIFA stand to make, if you had to guess? So they have budgeted about$11 billion from the World Cup as a whole. Yeah, it's a lot. Now, that includes sponsorship and broadcast, right? Those are two giant buckets. From ticketing and hospitality alone, around$3 billion.

15:58Wow. Yeah, it's a lot of money. And part of that, so that's way up from any previous World Cup. And part of that is because of the hospitality capacity at these NFL stadiums, right? They're going to make way more money from hospitality. And they already have made way more money from hospitality at this World Cup than at any previous World Cup. So it's a big uptick. And yeah, and obviously the other part of that is they're selling tickets for at this stage. every single ticket compared to an equivalent ticket at the last world cup is more than twice as expensive so yeah they're making a lot of money on tickets yeah and it's interesting so i had the chance to to interview johnny infantino the head of fifa a few weeks ago at the milking conference in beverly hills and you know he he made a comment i mean henry you know him well and alex i think you've met him briefly you know i mean he's this larger than life character he's like made of Teflon it's unbelievable and you know he was talking about you know the happy barbarians arriving on the shores of America and Mexico and Canada you've heard him probably use that line Henry you know and I pressed him a little bit and said you know well some of those barbarians are a little grumpy at how much they have to pay for tickets and his response was essentially a variation on what you're saying Henry and I'd love to talk about this a little more which is this notion of these are US market prices.

17:27This is what the market demands. And I guess that's another way of sort of talking about what you are, which is, A, they need to make a lot of money. They're a nonprofit, which is kind of amazing to think about, this nonprofit-ish. This all goes to sort of fund the work of FIFA around the world. So they do have to maximize revenue. But to your point, And maybe I'm not even asking a question here, but more sort of opining on this. Just the optics of empty seats is brutal for and I think it's brutal for something we've talked a lot about on this show, which is what the legacy of this World Cup is, especially here in the United States.

18:10Do you agree? Yeah. And I think it's not just the optics of empty seats, which, again, we're not sure that we're going to see empty seats. It's the optics of soccer being an expensive, inaccessible sport. Yeah, great point. And FIFA, yes, you said they're a nonprofit. They exist to develop soccer around the world. And in their mind, that is making a bunch of money from this World Cup and distributing it across the world to different soccer federations. And there's something in that. There's also a lot of FIFA politics in that. That's how Gianni Infantino stays in power because he can promise all this money to the federations who then vote for him.

18:50But look, another part of developing soccer and growing the game, especially here in the United States, is getting people interested in it. And if the story of this World Cup was all the excitement building around it rather than how expensive the tickets are, that serves a purpose. And so I think the expensiveness of the tickets is going to become an inescapable part of the legacy of this World Cup. And it's doing some harm to it. Now, FIFA would maybe say, and in fact, their secretary general did say this when I asked him about it a couple of months ago. Yeah, but the legacy of the World Cup is also the money that's going to be made and flow to all the soccer federations around the world.

19:32And in that sense, the United States is just one of 211 members. And we sometimes look at this too much from a U.S.-centric perspective when a lot of other countries around the world are, in a way, very indirectly going to benefit from this. But I do think it's doing a lot of harm to what this World Cup could do for soccer in the United States. Henry, one of the things on the ticket price issue that you've done some really good reporting on is some investigations by the attorneys general in New York and New Jersey specifically about how tickets have been priced and the information or lack thereof that's been given out.

20:15Help us understand a little bit of the backstory there and the state of play. Yeah, so this is an issue that really exploded a couple months ago. Ticket pricing, as we said, has been a conversation ever since things started back in September and October. But in April when – so FIFA sold these tickets in categories, right, which we aren't used to in the United States. Like we're used to buying a specific seat in a specific section. FIFA sold them in categories and then had total control of converting those into specific seats. And when they converted them, a lot of fans felt misled by the initial advertising of, okay, if I'm buying a category one ticket, what exactly does that mean?

20:56And FIFA, you know, altered some of the stadium maps. A lot of people felt the stadium maps were kind of misleading. And so that, you know, made this, blew this whole thing up into fan outrage. And the attorneys general are either serious about investigating that and what FIFA did here, and they've subpoenaed FIFA and they're asking for a lot of info. But I think there's also a sense that they know a lot of people are outraged about this, and it is a politically popular thing to do to investigate FIFA right now because a lot of people are mad at FIFA. So who knows where exactly this ends up going?

21:40They haven't released any specific documents yet, and we'll see how there's a chance that FIFA fights this. It's certainly not going to be resolved before the World Cup starts or even before the World Cup ends. But yeah, we'll see where it goes. It sounds like the way they've described it is as a relatively wide-ranging investigation into FIFA's ticketing practices. Interesting. And FIFA is no stranger to scandals and investigations. So just add it to the list.

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22:53This is such a global experience. And like Jason said, this is going to take over the world here in a few weeks. That's all everyone's going to talk about in the world of sports, as we've been kind of having a drumbeat to it. But in your opinion, which specific city or country around the world wins out the most? And as far as economics, as far as logistics, vibes, goodwill? It's a really good question. So the U.S. is really going to be the center of this World Cup. Mexico is going to have the opener. And certainly the Mexican and Canadian cities are going to be a significant part of it. But three quarters of the games are in the United States.

23:28Every game from the quarterfinals onwards is in the United States. So the U.S. is really going to be a hub of it. When you look at who got the best games, and that's really going to determine where fans end up going. I think the games in East Rutherford, New Jersey, just outside New York, it's a really good slate. I think Miami got some games that are really going to light up Miami. as well. And then you look at a city like Kansas City, for example, that, you know, Kansas City is the one, it's the lowest profile of the 11 US cities for sure. And I think people in Kansas City would admit that. And so they're looking at the World Cup as a way to just like elevate the prestige of the city.

24:08And they got Argentina playing there and Argentina even setting up their base camp there. England and the Netherlands also setting up their base camp there. And there's a chance that you know they have one of the quarterfinals as well and there's a chance that that quarterfinal could be argentina against portugal you know a lot of steps to to go to get there so so some of this is going to depend on how the matchups play out uh but there are certainly some cities that got better games than others and i think the ones that i mentioned are among the among the cities they got they got good ones you know you you look at the business of soccer very holistically.

24:46For sort of building on what you're saying, beyond the performance of what happens during this tournament, who stands to benefit long term, whether that's through their local MLS team or through just sort of a broad interest in soccer or investments in the sports ecosystem, et cetera? And maybe that's part of your answer for Kansas City or others. It's a really interesting question because a big part of the story of the organization of this World Cup and all the business around it is that FIFA has tried to monopolize as much of the benefit as it can. And so U.S. soccer and MLS and a lot of these other entities have been trying to figure out how to kind of draft off of it and get some benefit.

25:36but it's been difficult for them because FIFA controls all the revenue streams. They, on the expense side, the cities have to do a lot for FIFA and they don't get much benefit in return. So it really is directly FIFA is getting a lot of the benefit. Indirectly is where you start thinking about all these other entities benefiting from the growth and popularity of soccer in general. So like MLS might not be getting much, you know, much direct revenue from the World Cup. But if soccer grows, and if MLS is able to use smart marketing strategies to kind of convert some of these fans who get hooked on soccer from the World Cup into fans of the local MLS team, then it does have that kind of indirect benefit.

26:25I just think it's very difficult at this stage to a quantify what that's going to be and be just can like conceive how exactly how exactly is that going to materialize itself over the next two months next two months and over the next five years yeah like how can how can they convert these people into long-term soccer fans and we just don't know it could happen in waves it could just be a momentary bump that doesn't really have much of a long-term impact. I'm not sure we know yet. Yeah, it's interesting. I mean, we had Roger Bennett on the show a few weeks ago, and his perspective, as you're well acquainted with, is interesting because we pressed him pretty hard on this idea of the future of soccer in America and whether the game is really going to catch on.

27:20And his response, Raj's response is essentially like, no, the boom has already happened. The problem is, is that most of the soccer fans are tuning into NBC and Peacock on the weekends to watch Premier League. And they're not. I mean, they are definitively not tuning in to the MLS. And so I wonder as someone who thinks about this, and I want to press you a little bit on something you mentioned, is can this have a real effect on the MLS? And what does that look like? Like if you were to paint the best case scenario, is it rising valuations? Is it more fans? Is it better players coming to the United States on the backs of this?