UP499 TKO, On Location and the World Cup hospitality market

0:00Hi, welcome to Unofficial Partner, Richard Gillis here, and welcome to the Sports Business Conversation. Today we're talking about that rarefied air, a place that I never get to go to, which is corporate hospitality. And we're talking with Paul Caine, who's president of On Location, part of the TKO group. TKO bought On Location, along with IMG and the Professional Ball Riders League, from Endeavour. Initially, an offshoot division of the NFL, before a group of private equity firms, including Bruin Capital and Redbird Capital, bought a controlling stake in the company in 2015. And the NFL retained a minority stake.

0:40As you'll hear, it's today got a very broad portfolio that goes far beyond the NFL into the NCAA, UFC, IOC, FIFA, PGA of America. So we're talking about Olympics. We talk about the World Cup in some detail, which is obviously coming up in the States in 2026. And the Ryder Cup coming up in a few weeks time. All events that you may be going to or you may need to know how to get one of those prized hospitality tickets from Paul Kane. Anyway, very interesting conversation. Really enjoyed it and hope you do too. and talking of the nfl roger goodell the commissioner of the nfl is the star attraction at this year's leaders so this podcast is sponsored by our friends at leaders in sport which connects the most influential people and the most powerful ideas in global sport to catalyze discussion and drive the industry forward a new membership offering from them is the leaders club the community for tomorrow's sport industry leaders with 650 plus members across chapters in London, Manchester, New York, Chicago and LA.

1:50Leaders Club was created with the mission to support the personal and professional growth of the next generation of leaders. This is done through members only exclusive events, interactive networking experiences and access to knowledge from experts inside and outside of sport leaders club is for talented people who are ambitious to progress towards the c-suite if this is you or perhaps someone in your team you can find out more about that about membership at leadersclub.com and also remember that leaders week london is now a month away so visit leadersinsport.com forward slash up for more information and use up 15 for a 15 % discount on your summit passes.

2:37And we'll see you there.

2:47Sopranos country. And Springsteen, obviously. Showing my enormous knowledge of New Jersey. I imagine 98 % of people go to those two references, don't they?

2:59Paul Caine:Certainly from the UK, they do, yeah. So before we get into anything sort of more specific, can you just give us a bit of background on you? Because you're a media guy, as far as I can see, and now you're in the hospitality business. But just give us a bit of biography and a bit of background on that. Yeah, it feels sometimes like a departure, but it's 100 % not a departure at all. Because I feel like I've been in the hospitality business my whole career. But I did start, certainly I spent a lot of time in media. I had the privilege of working for two and a half decades for one of the best media companies I could ever think of, which was Time Inc.

3:39Paul Caine:And we produced incredible magazines around the world when magazine media was a leader in the space. Do you remember magazines, though, Paul? I remember them. I love magazines. Do you love magazines? I did. I did at the time. I have to be honest. I haven't read a magazine in a very long time. But I did. I spent two and a half decades, a lot of it with People magazine, which was a privilege. And in that we did certainly a lot with brands and consumers in bringing them closer to the world's most incredible events and entertainment, culture, moments in world history. and in a lot of that we created um hospitality experiences for them so so in the background we used to do that for advertisers and um and in the foreground we were selling advertising and selling magazines and building editorial for consumers i then went on to westwood one bloomberg um all in the media space and then uh and then i actually started to go off on my own doing, creating, you know, investing in small businesses and building businesses that were of interest of mine.

4:53Paul Caine:But I really did miss being in the space of media and entertainment and sports and, and, and having spent so much time in sports and entertainment, it, it's in your blood, you know? And then I just, after three years of, of working on my own and I, I desperately want to be part of a team again and i but i didn't want to just join a company i want to join what i thought was going to be the most incredible company and how i identified that is by saying well you know really there's only one person i would work for i was going to work for a company and that was mark shapiro mark and i met when he produced the people award show when he was the ceo of dick clark he produced that for for us and we built a great friendship but a great business relationship.

5:42Paul Caine:And so I just knew the incredible talent that he was. And for me, that's what I wanted to seek out. So I called him. And at that point, he said he was looking at, on behalf of Endeavor, looking at buying on location as part of the Endeavor family. And I came on to help do the diligence and be part of that team. And then once I decided to acquire it, they asked me if I would stay on to run it. And the reality is, it feels very familiar. and oddly enough there's a lot of people in media from media especially magazine media in hospitality and the reason why is we built for decades incredible hospitality and experiences and that's the transformation that this industry the hospitality industry is going in so are you talking there about there's a period where the you became i'm thinking sort of stuff like over here again it would be like sort of gq men of the year type award shows and just excel you know associated products that you could then sell around the the core editorial brand is that is that what you're getting at so the people award show is a perfect example right here is there's a grammy sitting right behind me there and we built a relationship with the recording academy the u.s recording academy when i was a people um and what we that relationship gave us the premium position on the red carpet, but more importantly, the opportunity to entertain advertisers and build media, I'm sorry, to build hospitality immersion experiences at the Grammys and around the Grammys for these advertisers.

7:20Paul Caine:And that's why it's so familiar is because even at Bloomberg, we did this thing at Bloomberg called Bloomberg X, which was we created these incredible experiences for our advertisers to get closer to what the world of Bloomberg was all about. And they're still doing it today. But that was a very big part of media. The hospitality industry was really about selling tickets, tickets and hospitality. And what On Location has done, and I'm so proud of the team for doing, is they've transformed that concept from being a ticket plus hospitality to now being an experience. and and the different definition of experience is so important when you understand what's going on with the hospitality industry okay let's let's get into that then again the so mark shapiro endeavor buying on location let's just go through that because obviously that that's been well you know just take me inside that then because why because i can see wwe i can see uh ufc and at some point i'm going to ask you to build a bridge between what you do and those businesses but what did they see when they see on location because the and again just get me into on location is i i associate it very much with the nfl and there was a there's a core relationship there which i think still remains but just take us inside that yeah so the on location first of the on location business is we work on behalf of over 120 rights holders all around the world.

9:02Paul Caine:And our role with them and partner with them is to help them take their premium ticketing and to build hospitality, but more importantly, to build experiences that helps them capture more of the value, but more of the relationship with the buyers on the business side and the consumer side for these incredible events. So you mentioned the NFL and the NFL is grounded in who we are because that's who founded On Location initially. And we work across the NFL in the Super Bowl, draft, the Pro Bowl, the Football Hall of Fame. So the full array of NFL experiences, including their global games. And with the NFL, what we do is we work very closely with them to help them take their best seats and to build experiences with that so that there's, one, a stronger affinity for the consumers and the buyers or the businesses that are buying that inventory, building a closer relationship with the NFL, deeper relationship, and really experiencing the best of what the NFL is all about.

10:19So is the NFL is about 40 % of your revenue? Is that right? Is that still the case?

10:26Paul Caine:Not at all. You got to remember, like, since that, the NFL is very much in the center of what we do. But, and it's the way I always describe it to people is if we're a body, the NFL is our heart, right? That's where our heart is because that's where we're grounded. That's where we're founded. That's the center of it. However, in the last five and a half years that Endeavor has had ownership of OnLocation, and now most recently since March, TKO has owned OnLocation. The business has grown quite a bit. From that original portion where the NFL was a vast majority of the business, now we have the World Cup next summer.

11:10Paul Caine:We have the Olympics. We do WWE. We have UFC and we do major events around the world where, you know, we have all the U.S. college NCAA championships, major golf tournaments, major tennis tournaments, NASCAR. You know, a wide breadth of partners that add to what we were founded with the NFL. um but we're not only one entity we're a bad entity so you've got tko and i mean you in terms of obviously your relationship with shapiro you then came in there wasn't a sort of before that you've always been in the tko sort of so we were part of endeavor initially that was in january of 2020 and then this year we moved uh tko acquired on location okay um so what's what's the difference what's have you have you perceived a difference in terms of just the the day-to-day you know tk we love being part of tko tko is a you know it's very focused in pure play sports between the ufc wwe pbr um launching uh boxing on september 13th which we're part of and we do the premium hospitality and experiences for all of those partners internally.

12:37Paul Caine:And what I love about TKO is they are absolutely innovative. They know how to build businesses and brands. They build live experiences. I mean, if you've ever been to a WWE event, you know what an incredible show and experience that is, no matter what seat you're sitting in. That foundation of entertainment and understanding of sports is really what TKO provides. Now, you know, we feel we're at home at TKO because we're so focused in that experience. We're so focused in what fans want from sports. And that's really what TKO is all about. You'll understand again, this is a British view of WWE, but I don't think we get it.

13:23I don't get it. I think it sort of, it doesn't feel like sport. It feels more, you know, if there's a spectrum, it's way on the entertainment side of it. And it's a sort of game show more than a sport, I would say. I mean, don't get me wrong. I think they're one of the most influential companies of the last 20 years in the sports business in terms of what they've done and how they package their programming and all of that stuff. They were years and years ahead. But it's not sport, is it?

13:50Paul Caine:Well, I disagree. You should spend some time with Nick Khan. First of all, they're incredible athletes to start with. And what they're doing within the ring is extraordinary feat. But with any sport, what's the sport? Like when I wear my favorite team jersey, that to me is a story, right? Why am I a fan of that sport? Why do I care about those players? There's a story behind it. It's not just I woke up one morning and threw on the jersey and there I am. That's there's a there's a storyline with every championship. There's a storyline. What makes the Olympics so extraordinary is the storylines.

14:32Paul Caine:Right. That's what people really gravitate towards. WWE is is incredible athletes with well-constructed stories. So, no, it's that sport in the sense of team or, you know, one-on-one competition, WWE is the intersection of story and sport. But I would never take anything away from any of those athletes. Those people, I've been with them. I've spent time with them. These are top tier athletes, finely tuned athletes doing extraordinary feats. And so I believe it. Plus what I also, I've been a fan for a long time. I have to, you know, we just did WrestleMania 59. I was a WrestleMania 3. So I've been a fan of WWE for a very, very long time.

15:26Paul Caine:And I have to say, I've always been impressed with what that product is in the ring. And for On Location, when we were brought on as a partner for WWE, which was before the acquisition, we were working with WWE before they were part of Endeavor or TKO. we wanted to be part of that because we saw what the fan experience was all about I stood you know one of the WrestleManias I remember standing there looking around the stadium and seeing the gleam in people's eyes the families the the longtime fans people kind of lit up that is the core essence of what makes an on-location experience work is a sold-out event with a high demand and an absolute rabid fan and that and wwe stands for all of that so one of the things that i was i was wondering again i've been to a ufc fight and it's you know scary as hell and i the the the crowd and again it's it's sort of that linking that to a non-location my assumption is it's quite you know it's an upmarket it's expensive and it's an upmarket premium offering of hospitality how those two things get together because when i was in the crowd at ufc i said i was desperate to go to a upmarket you know box of some sort but there weren't many there but i'm i'm just trying to get that in my head in terms of how hospitality works and in that environment yeah richard i think that's one of the most important questions i've ever been asked because i know i'd get there i you know i'll get there in the end no i i love it because that's exactly what that that is the right question to ask someone like us who, you know, when we think about where we sit in the marketplaces, are we, you know, is it expensive?

17:21Paul Caine:Is it out of reach? Where does it sit? The answer is that it depends on the event because every event has a different pricing scheme. And we do over 700 events a year. So there's, there's a wide range of pricing here. In fact, this, this weekend, I don't know when this is going to air, but this coming, coming weekend, tomorrow, we're going to be doing the Aerolingus game in Dublin, which is the week zero college football game. And the night before tonight, we're doing the WWE event in Dublin, right? That's happening this weekend. So when we think about an experience, it could be as, it's not about the price point.

17:57Paul Caine:And I, we think a lot about this, okay? It doesn't matter how much you're paying for it. It matters what that experience is. And I love a rights holder that understands that from the cheapest seats to the most expensive seats before you even get to hospitality products. The best way to think about it is like an airline. Every airline takes off and lands basically, you know, the plane, right? No matter where you're sitting, no matter what you paid for that ticket, you take off and you land at the exact same time. But the experience from when you get to the airport to the one you leave the airport is vastly different depending on the type of price you pay and the seat you select.

18:39Paul Caine:And we are in the stadium like an airline. We are generally the business class or at least premium. We start with premium and then we go to business class. And in some cases, we also have private aircraft type of product in the airline analogy. But that airline, whether it's Emirates, British Air, whatever it is, they stand for something. We represent the premium side of it. And what we look at, though, is for some people who sit in business class, it's something they do every single day. They don't even think about it, right? That's just the way they fly. For others, it's the first and maybe the last time they ever get to do it.

19:21Paul Caine:It's a bucket list. We have to respect each and every one of those customers. no matter how much how they paid for it whether they saved a lifetime for it or whether they earned it in the last hour um we have to treat them all with the same level of touch it's funny i i am a massive hypocrite on this question because i you know you you sort of want to present yourself as a sort of man of the people you know the everyman noble savage in the crowd you know all that but then whenever i go i think i really want to be in hospitality you know it was like and i remember going to where was it it was a rugby game a big game a big final european final and uh it was a heineken thing and we went heineken had a their heineken house thing and after about you know two hours of drinking heineken which you know you can have enough of and although you're an american so you'll be you'll be familiar with the uh you know not very good beer but there is a there's a question there of and i led a group saying we need to go back into the real people well you know back back to the where the where the action really is and i lasted about 20 minutes out there and i thought no i'm going to come back into heineken house because it's just like it's just hell out there so i'm i am i love the idea that i'm going to go and have the authentic sporting experience but whenever i go to you know i think i want to be in the i want to be in the once you've sampled it and someone like me i'm never on the i always get a late invite you know i'm never on i'm never the ceo someone has turned something down and they'll say right okay we'll get hold of gillis he'll fill the seat he's me in the room and you think okay that's fair enough but then once you've said what it's it's dangerous stuff it's like you know it's like crack you get a little bit of it and you've got to have more see there's your sales pitch well there is a bit of that like we always say like you know to people who have ever had the privilege of flying private once you do it it ruins you in a way yeah and the same thing with business class right i i would say it's more than the hospitality and this is where i I would encourage you, Richard, to come join us for one of our events, because having that premium hospitality experience in the traditional sense, like what you saw at the rugby, whether it's the Rugby World Cup or a rugby final, is great because you have beautiful seating, great views and beautiful food.

21:33Paul Caine:And that's the core element of an experience. When we build on that, we build on that from there. Many of our guests will have the opportunity to be on the pitch or to meet legends around the sport. They're going to get exclusive merchandise. They have concierges at their beck and call waiting to help them through their experience. They have transportation, beautiful housing, hotel. We even handle airfare and airline transfers for them as well if they require it. We can do restaurant and excursions. Their full experience starts from the moment they either buy it or when they enter the market. and it ends when they go home and tell somebody about it.

22:17Paul Caine:So we look at the experience as a journey, not just the ticket and the food. Ticketing and the food is the core basis of the history of what experiences are all about. On Location absolutely does that. And we have multiple products just doing that for what people want. But what we do best is when we ladder in the experience and we bring you closer than ever to whatever is it that you want to see. okay right let's get in so you mentioned there you've got obviously some big uh the america the olympics and world cups coming up so and let's just talk about the sort of um the marketplace where it is because i sometimes when i talk to you have a lot of people who are running sports organizations that come on the podcast one of the questions they're wrestling with is where they start and stop you know so what are they fundamentally what were they you know they they were event businesses and now they're becoming media organizations they're entertainment but they're redefining themselves in and sometimes successfully sometimes not and that's just an ongoing bit of the conversation hospitality quite often comes up as a leak for them and quite often they have an aspiration to say no tell you what i want i don't want to give the work to on location or someone someone else i want to keep that inside i want to it's like the formula one paddock club that's what i want because i want to keep all of the money i don't want to pay paul and we know he's a you know good guy and he'll come in with all he do all his stuff but actually we want to keep all that money we don't want tko to have it so that's that framing of what a sports body is now and you can when you take it to the very top and you're talking here about the top table of olympics iocs fifas of this world what's the conversation now do they turn you know what are they looking and asking you in terms of because when you then walk out the room i'm wondering if they're saying yeah i'll tell you what we can do that or we can do a bit of that and we need to squeeze paul on that uh look you know we we work best when we're not at it looked at as competitive to them we look we work best when we provide a service a capability and a talent that they don't have in the organization and they can't build it.

24:35Paul Caine:We have a very large company because of the breadth of what we do. And our ability to scale them through sales, marketing, design, and delivery in a way that if they were to try to do it themselves, it would be very expensive for them to build that capability in-house. So all the biggest rights holders seek us out because they see what value we qualitatively bring, but also value financially. You know, we work best when we are part of that business as a partner so that they generate and earn more than they would if they did it on their own with a better experience in the end. And that's when we know we did our job great.

25:22Paul Caine:You know, when it comes to... So just take me through that, because that's interesting. So how do they, what dictates whether they make more with you or in-house? What are the facts? Is that just a price? You can charge a higher price because you're laying on a more added value. It's the private jet argument. Well, we have the consumer base to start with, right? We know the businesses and the consumers that enter around sport. So, you know, with any rights holder, So they know their endemic relationships, but we also widen that relationship given the breadth of what we do. Secondly is we know how to tell the stories through our marketing programs.

26:05Paul Caine:We've got the databases, we've got the technology, we've got the experts that know how to seek out those people and introduce your products to them. and then bring them in ultimately through our sales and concierge teams to build the right experiences that's going to create the right program for them. Secondly is, you know, we can maximize their value financially for them, which is always charged. That is not a one and done, meaning you don't just charge more. You have to create more value. If you create the value, then the prices align with that. And by doing so, it also cannot stop before delivery.

26:46Paul Caine:You know, we put, you know, vast amounts of people on the ground to deliver these products. You know, when we did the Olympics this past summer or a year ago in Paris, that was a huge undertaking. You know, 26 venues and hundreds of sessions and hundreds of thousands of people that we had to navigate through it. So the complexity of it is really, really difficult to do in-house. You really need experts to know how to do it. You know, with the World Cup next year, we have, you know, 16 cities, 104 sessions, right? You know, like the vast amounts of people that are going to be coming through those 16 cities over that short period of time to enjoy the World Cup requires experts in logistics and delivery.

27:35um let's talk about the world cup because again it's it's on people's minds because they're they're looking at packages just take me what's the deal you've got the license are you exclusive with fifa as the license for hospitality and does that just take me through what that means

27:55Paul Caine:well we're the exclusive partner with fifa for global hospitality so yeah so what that means is they work with us where we work directly with them in figuring out first of all allocating the right tickets per session that would uh would be interesting to a hospitality experience customer um and then we are marketing that would be a sponsor but in that case no i mean it's sponsors certainly do um participate in that for sure but it's businesses who want to entertain their customers okay it's fans and enthusiasts so it's a lot of people you know a very wide range could be a law firm could be a car dealer as well as a sponsor um you know there's a wide range of people that want to go to the world cup and either because they're fans or they just simply want to entertain their best customers who may be a fan so do you just take me for a good game this is a born of my ignorance of the marketplace but there's a question there about you need a ticket to get in so where how does that work so are you allocated a a number of tickets by fifa that you then go and package and build build stuff around so each ticket becomes much more valuable because you're layering loads of services and you know bits and bobs around it that's that's exactly right is um we there's an allocation of tickets they we have uh dedicated hospitality spaces in each of the venues.

29:22Paul Caine:And then from there we build the experience, right? So the core foundation is the ticket and the hospitality. And then the experience comes up from there. Um, and the range of prices correlate with the type and depth of experiences that you can do, you know, like here's, here's one notion that I would love to, uh, talk through as we better understand this is people really think a lot in terms of the scale, right? When we think about the world cup, 104 matches, the you know call it a million tickets like there's unbelievable amounts of scale that's going to be in the hospitality world there's a person on the other side of every one of those tickets there's a company on the other side of every one of those uh engagements and we look at each individual and say what do they want most so if you're a small company entertain your best customer how do you best want to do that if you're a bucket list enthusiast who wants to watch england play how do you what what's what do you want from that do you want to follow them we have like we had a product called follow your team which is if you just want to know go wherever england is playing you can do that and that's i'd like i'm a spurs fan i'd like the opposite of that can i go i go wherever they're not i've just there you could do that too you That's the last thing I want to do is follow them.

30:45So are you offering a guarantee? So you're paying in bulk for a set of tickets across those 104 games, million tickets, however, what your proportion is. And then you're offering, it's like a sort of media rights deal. You're offering a guarantee return on those. And then your job is to go back and make as much money as you can off each of those tickets.

31:05Paul Caine:So every relationship with every rates holder is different. So it's hard to put it into any one specific term. But the goal that we have is first and foremost is to drive a qualitative return for the rights holder. And second, of course, it's to drive a financial return. Already, we've sold more World Cup tickets for next summer than they sold in Qatar in total already. You know, we've already driven more value for FIFA already since their last World Cup. That's huge. And that's when we know we've done the job right, is if, one, we have the incredible product delivery. Are you saying more people want to go to a World Cup in the States than they did in Qatar?

31:53That's a shock.

31:54Paul Caine:I didn't say that. What I'm saying is what we've been able to do is really kind of amazing. But when we look at any of our rights holder, we also very much look at what was the ultimate product and how was it delivered and what was the experience. and were people satisfied? And the best note of satisfaction is, do they come back? We have a lot of people that come and buy deeper into every organization and then also, I'm sorry, every one of our rights holders. And then there's people that buy across them who say, I want to go to six, this is how I want to travel. I want to travel through sport.

32:33Paul Caine:Bring me to six different things. I want to go to the Ryder Cup. I want to go to, you know, the Madrid Open. I want to go to... What's it like? One of the things, again, when it was interesting, the sort of bidding for the city bidding process, just going back around, you know, the World Cup and FIFA and FIFA coming to town, when I spoke to a number of the people who are the hosts, you know, in terms of the venues, they were taken aback by how much FIFA wanted and how little they wanted to pay for them. So there was a sort of that that sort of took their breath away in terms of what the demands that FIFA put in and the limits on what they could do locally in terms of making money from each game and what they had, what they could sponsor, you know, if they were naming rights.

33:23I know they've been sort of a change in that recently. But this is the first World Cup. One of the reasons this is, I think this is one of the first World Cups where FIFA is taking complete control of the running of the event. event is it's you know in terms of rather than having a local organizing committee which is always the case and it's a sort of uefa model that they're coming in that they're taking that over if you are looking at it the other way how does it work and and what is the kickback from the or the feedback from the people who are running you know the sofi stadium or whoever it is who are actually hosting the events because what what how do they make money out of this

34:02Paul Caine:yeah you know like um it's so funny that that on one hand it's i i'm not i'm i understand why we keep going back to the money side of it because that is how we measure everything isn't it and it's like the failures on that so i guess the most interesting bit as well though isn't it i understand but when you look at the world cup as an example and or an olympic when you look at the what they're trying to accomplish there's always the duality to it certainly there's the financial return and you're going to hear numbers of economic impact that's going to happen and when the way fifa went with the model is they're working with local host cities so the host committees generally are comprised of people who either associated with the teams politics um business real estate there's a whole compositive i think i think so one of the one of the the again i don't to cross over but the economic impact reports i think are one of the flakier bits of research that you can you can get i think you know it's i i read them and you read them and i think okay well that's let's put it optimistic and i think there is a everyone knows that there is an impact economically of a major event coming to town but if you're leading on with economic impact it's it's it's so finger in the air in terms of just trying to get to an actual number yeah i mean i i don't know how to uh actualize the number i know what my impact is when we do something like let's take the rider cup not it's not an enormous event right but it's coming up in uh next month uh it's like six six weeks or so here in beth page long island in new york coming that that already one is almost sold out in terms of an event.

35:54Paul Caine:The price points and the experiences are really extraordinary. You're getting a lot of value for your money, but you're really doing a lot. But I also can tell you, it's very hard to get a hotel room. The transportation's challenging. Flying in during that time is going to be hard. So one would say we're going to balloon up in terms of attendance. And as a rights holder, you say, okay, my portion of that is going to be just the ticket as people walk through the gates. And I say, and you know, you're going to have impact, right? So we come in, one of the reasons why we're valuable to a rights holder is we say, you know what, we can help you because if we, if we help those guests have this experience they want seamlessly from wheels down to wheels up, then you're going to, as a rights holder, take in more of the perimeter, if you will, and more of the value for the event than just having it leak all over the place.