UP216 Other People's Money: Minority Stakes, Gary Neville and American v Arab Investor Cliches

Other People's Money is our regular series on sports investment, with regular co-host Matt Rogan, co-founder of Two Circles. 
Our guests today are Jonathan Lenson and Sam Johnson, CEO and head of sport respectively at Milltown Partners, the communications and public policy consultancy co-founded by Paddy Harverson, the former PR to Manchester United and King Charles, among others.

The conversation is prompted by some focus group work carried out by Milltown in to the reputational challenges that surround football's relationship with private investors, particulary from the US. It was Gary Neville of Sky Sports fame who called investors from North America 'a clear and present danger to the pyramid and fabric of the game'.

Was he right? How many football fans share that view? How does the reputation of American money compare to other sources of investment from for example, Arab countries, such as Abu Dhabi, Qatar and Saudi Arabia, or even Hollywood stars like Ryan Reynolds?

This gets us to other, deeper questions as to the cliches and tropes that attach themselves to sport's relationship with private investment of all types.

This episode of Unofficial Partner is sponsored by We Are Sweet, helping you tell compelling stories in-the-moment, as they happen, from the heart of the action. We Are Sweet captures live biometric data from athletes to uncover great stories, from the big occasions to subtle micro-moments you might not even know are taking place. These are crafted into captivating stories and transformed into stunning visuals ready for your broadcast, live event displays, and second-screen fan experiences, all in real-time. From head-to-head heart rates to anticipated overtakes, We Are Sweet provides AI-driven insights to fuel conversations, inform bookmakers and predict future outcomes, all in the name of deepening fan engagement. Enhance your audience’s understanding of the action like never before by using live data from We Are Sweet.

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Transcript

0:00

Hello and welcome to an official part of the sports business podcast. I'm Richard Gillis. Other people's money is our regular series on sports investment with my regular co-host Matt Rogan co-founder of two circles. Joining us today are Jonathan Lenson and Sam Johnson, who are CEO and head of sport. Respectively at Milltown partners. The communications and public policy consultancy. Co-founded by Patty Harveson the former PR to man United and king Charles among others. the conversation is prompted by some interesting focus group work carried out by Milltown into the reputational challenges that surround football's relationship. With private investors, particularly from the U S. It was Gary Neville of sky sports fame. Who caught investors from north America, a clear and present danger to the pyramid and fabric of the game. So was he right? How many football fans share that view? How does the reputation of American money compare to other sources of investment from, for example, Arab countries. Such as Abu Dhabi, Qatar and saudi Arabia. This gets us to other deeper questions as to the cliches and tropes that attach themselves to sport's relationship with private investment. Of all types.

Sam Johnson: 1:12

continental European football in particular is Lited with people who have bought minority stakes, thinking they were on the route to a majority, and then eight years down the line, you know, they've got a very expensive season ticket and that, and that's basically it.

1:26

This episode of unofficial partner is sponsored by. We are sweet helping you to tell compelling stories in the moment as they happen from the heat of the action. We are sweet captures live biometric data from athletes to uncover great stories from the big obvious moments to more subtle micro moments. You might not know, are even taking place. These are crafted into captivating stories that transformed into stunning visuals. Ready for your broadcast live event displays and second screen fan experiences all in real time. From head-to-head heart rates. To anticipate it overtakes. We, our suite provides AI driven insights to fuel conversations, inform bookmakers, and predict future outcomes, all in the name of deepening fan engagement. So enhanced your audience, understanding of the action. Like never before. By using live data from what we are suite.

Richard Gillis, Unofficial Partner: 2:23

I think we should start off with a bit of biography. Obviously, Matt Rogan, I know his CV like the back of my hand better than my own, the storied life of Matt Rogan. So we don't need to worry about Matt in this sense, but let's, before we get into the detail, and this is all about other people's money. This is The finance conversation, who wants to go first, John, do you want to go first?

Jonathan Lenson: 2:46

Happy to, whatever you prefer.

Richard Gillis, Unofficial Partner: 2:47

give us a bit of background.

Jonathan Lenson: 2:49

so I started my career in strategy consulting. So I studied modern languages at university, went into consulting at a firm called Bain Company, did a mix of things there. A lot of tech, media, telecom, worked quite a lot in private equity actually. Spent some time on Tacoma at the Guardian, and then I jumped over to WPP, and I joined to do a Chief of Staff role for Martin Sorrell, so worked in head office, which is this house in Mayfair, as Matt will remember, with a small group of us, and spent four years working for Martin and for Mark Reed, who is now the CEO of WPP, and then spent a couple of years at WPP. Trying to put various things together in the sports space that led to the one thing that I think went best in my last couple of years at WPP, which was finding a meeting, Matt and Gareth in two circles, and then buying that business for WPP, spent a couple of years. And then I jumped eight years ago to what was a pretty small business at the time called Milltown Partners, which we'll talk more about. Team of just over 20 people joined the COO spent a year with that, became CEO and had been running that business. It was my eighth anniversary at Milltown last week.

Richard Gillis, Unofficial Partner: 3:53

They throw a party.

Jonathan Lenson: 3:54

Not big enough one,

Sam Johnson: 3:55

No, not for 8, 10. You get one at 10 and that's it.

Richard Gillis, Unofficial Partner: 3:59

Yeah. Just the big one, the big zeros. Sam, same question for you.

Sam Johnson: 4:03

yeah, so, I mean, less varied than John's. So I studied LSE, then worked at LSE in sort of external relations, academic partnerships, press office for a little bit, and then got, sort of, completely by chance found a 4 week old company called Militone Partners and joined that as the 6th person on the team. 11 years ago, 11 years ago, this week. So got you beat on that one, Joe. And then from there, we don't, as you can imagine, done a bit of everything across the firm in the early years. And we always did some sport because of what, Karl Vonhoff, Paddy Horvathson was Derek Nufcombe's at Manchester United many years ago. So we'd always done a bit of that. And it was sort of a five, six years ago that we we articulated for the first time, and it's really up pro for this conversation in this series, that, you know, there was we'd always worked with some investors and some owners in football particularly. But, and we were now seeing that it was replacing the kind of eccentric individ individuals of the previous era with a new wave of sort of professional money. And people have seen it as an asset class. And because it's a firm, you know, we understand sport and we understand the culture and the politics and the oddities of it and the governance and all that in Europe and the UK. But also as a firm, we do a lot with investors, with big corporates, with VC in particular and tech. And so we realized actually, we straddle these two worlds quite nicely. And if that's the, You know, a growing trend, then we can help them understand each other a bit more. And so once we articulated that, then we were off the races and we had so we've done a lot with owners and investors around transactions or just around their their general reputation, but also increasingly exec teams, leadership teams, at, you know, rights holders, teams, leagues, competition organisers, that sort of thing around, so how do You know, in a world maybe where you are owned by a professional investor, or at the very least you are trying to fulfill this dual responsibility of being a commercially minded, profit making business and a cultural and social institution that has a bunch of responsibilities and expectations and obligations that Tesco don't and the, you know, the tension that seems to come up daily between those two roles. It's something that we basically spend a lot of time trying to help people navigate or, marry together.

Richard Gillis, Unofficial Partner: 6:27

There's a bit of me, Matt. I don't know about you, but I sort of, I romanticize the maverick individual You know, that we associate with this idea this sort of journey. And we bump into this a lot on this podcast about professionalization, the whole, corporatization of it, which I can see, you know, upsides, but there's a bit of me that quite likes the old Eccleston model of, well, I own everything. I'm just going to make a decision. I'm going to be entrepreneurial. I'm just going to make a few punts. And I'm not going to be told what to do. Now that again is a very romantic idea of Bernie Eccleston, but that's what do you think? What's it, is there a sense of, what have we lost in this journey?

Matt Rogan: 7:08

Yeah. So I'm a Chelsea fan, right? So I grew up with Ken Bates, the archetypal Bernie Eccleston of football, just with less zeros

Richard Gillis, Unofficial Partner: 7:15

And now you've got an incredibly professional sort of leadership team in charge. You've got

Matt Rogan: 7:19

Well,

Richard Gillis, Unofficial Partner: 7:19

who's, you know,

Matt Rogan: 7:21

certainly got an institutional investor with a different strategy in terms of managing 10 years of capital against what would seem like a player training mechanic to drive additional margin and then a stadium deal around it somewhere. So it's a million miles away from Ken Bates. I remember asking Ken Bates at a fan panel once whether they consider tickets for juniors and he actually told me to piss off. Like, so, so

Richard Gillis, Unofficial Partner: 7:48

See, that's what we want. That's the world we want to go back to,

Matt Rogan: 7:50

yeah, so, so I guess, you know, the world has changed. My general view is it's for the better, notwithstanding some of the challenges I experienced as a fan right now, but it brings a different level of expectation and profile and governance and all the things that the guys at Milltown find themselves in day in, day out.

Jonathan Lenson: 8:06

I think it's quite easy often for there to be a shorthand around, you know, different types of money or different types of investor and what that means. And that's not just in sport, right? That's, you know, for any business, I've seen the change in, you know, the 20 years I've been working. The role of private capital in ownership of businesses has gone up dramatically. You know, private equity funds, the scale of funds you know, when SoftBank raised the vision fund for the first time in 2016, that was a hundred billion dollars, ridiculous scale. And so there's a scale thing, but the reality is there are good owners and less good owners of assets. And that's the same for football as it is for any company. And I think it's as there were brilliant individuals who ran things and those that weren't as good. But as you say, Matt, there's lots of positive in the change, but it's not uniformly positive.

Richard Gillis, Unofficial Partner: 8:51

There's also, I guess, just because it is individuals, it's just easier you land, and it becomes about stories, doesn't it? And it becomes just easier to navigate that world. Whereas, I mean, one of the reasons, you know, me and Matt have done this series is the sort of lack of clarity about what the money, where the money's coming from. And by that, I mean, you know, We jump into, oh, it's sport and private equity as a sort of become a cliche, which actually quite often it's not talking about that at all. It's talking about some other source of capital. What do we know? Because you've been doing some.

Sam Johnson: 9:24

Mmm. Mmm. Mmm. Mmm.

Richard Gillis, Unofficial Partner: 9:25

Research, you've been doing some focus groups. What, take us inside this process.

Sam Johnson: 9:30

so we, so research is something we do quite a bit as a firm focus groups, polling, etc. Normally for clients, but occasionally for ourselves when we think we can get something interesting out of it. And this, the idea for this came from something Gary Neville said actually about two years ago. I think it was in the wake of Todd Bowley's All star Premier League game idea when he said that basically U. S. investment in the English football is a clear and present danger to the pyramid and fabric of the game. And it stuck with me because he didn't say Todd Boley is a clear and present danger or the Glazers or, it was U. S. investment as a blob. And you put that against this sort of motley crew of owners that we have and have had. It just was really remarkable that sort of depth of feeling for one country and for investors from that country. And so when the opportunity came up to do these focus groups, I wanted to see if That was widespread, that sort of depth of feeling and fear of American investment into English and European football. So we did these groups a series of focus groups, a couple, all virtual, a couple in the UK, a couple sort of pan European, a couple in the US and we just put to them a fictional scenario of an anonymous investor, an anonymous club, intentionally didn't want to invest. Sort of put names or preconceptions in there, and then we put different versions of what they might say on buying a mid table Premier League club again to name it with the idea of, you know, one was around. Revenue generation and commercialization and increasing system, financial sustainability and all this one around sporting performance multi club trading kind of talent nurture. We understand sport from baseball and NFL and whatever else and one, which was very sort of values and heritage and culture. And we love the community and all that kind of stuff and then just had a series of discussions off the back of that to see where people went with it. All day. How they understood different things, what they thought different things meant. And, you know, a bunch of interesting stuff came out of that. I think particularly for this session, there's three things that were really interesting. One was the complete rejection of, I guess, what we would call synergies between sports. The idea of, well, you owned a baseball team, so no, that's actually, that's worse. That's worse than only nothing because you'll have wrong ideas about sport and about football, and you'll try and impose them on us. Two was, and this was where there was a split between the UK and Europe and the US, where in the UK and Europe, when we said revenue generation, commercialization, everyone went to, Profit and extraction of profit by owners that this is about sort of fleeting funds and in line with poverty. Whereas in the U. S. it was more of an instinctive understanding of that as something that sort of drives team performance and investment and whatever else. Which is ironic when, you know, no Premier League teams make any profit at all, basically, and all the big American teams make lots of profit, which people do extra happily. So, so that was a really interesting. And then the third thing, which was coming back to that Gary Neville point There was a real fear of, they just don't get it, and they'll just change things, and it'll go wrong, and we'll be the sort of victims of that, and it was striking how nebulous that was. It wasn't this kind of, oh what, they want the Super League, or they want to get rid of the pyramid, or they want to sort of pull the drawbridge up and get rid of relegation. It wasn't as specific as that, it was just, they don't get it, they'll do it wrong, we'll suffer, it'll move away from the community and everything else. So I think, you know, it did suggest. People like us who are in comms and PR that the challenge is a communication more than anything because it wasn't rooted in a really, you know, deep understanding of how different types of investors can work or their different motivations and things like that, but it was just this. It'll be wrong. It'll be different. And we'll all suffer because of it.

Richard Gillis, Unofficial Partner: 13:17

Fascinating. That, I mean, so just to clarify, I'm going to hand, get Matt to ask a question in a minute, but who would, who were you talking to? What, who's just, I know it's anonymized, but just give us a flavor of the sorts of people that you were talking about talking

Sam Johnson: 13:29

we, I mean, I mean, the sort of the internal to sort of focus group participation and kind of recruitment or a bit of, but what I understood it was around sort of news, people who consume a lot of news. And then the European ones, people who will had Jobs or positions which brought them into regulation and policy and public policy in some way. So it wasn't and most of them were sort of active football fans as well, but it wasn't just sort of man on the street. It was people who were, considered themselves sort of people who read a lot of newspapers or consume news in some other ways.

Richard Gillis, Unofficial Partner: 14:00

So sort of informed fans, business sort of facing. It's almost a bit like, it's a bit like those in those Sort of Netflix shows, you know, detective shows where they have a jury. I like the jury testing bit where they're checking out who's the, you know, which juries he's folding his arms or he's, you know, she's too old. She's going to, she's going to vote against a lot. I like a focus group.

Matt Rogan: 14:21

so my assumption would be, right, and obviously I'm, I guess I'm in that in great, very engaged, very interested group and spend far too long far longer than this healthy sort of starting to listen to things like the price of football and, you know, things that I start to understand the financial dynamics behind, and it's amazing how quickly things like that have grown in terms of my assumption is people understand a lot more. about why an investor would buy a football club now or what the Glazers might have reportedly been doing at Manchester United in terms of taking cash out or any of those things than they might've done 10, 15 years ago. And with that increase in financial understanding, there's a sort of a tendency we all have to think if you understand, you must think it's okay, but it's a million miles away. There's a big difference between understanding and empathy. And almost, the more you understand, the less empathetic you can get sometimes. Do you notice that coming up in the focus groups at all?

Sam Johnson: 15:19

yeah, absolutely. I think, well, because in the groups, we did sort of touch on other models of ownership, if you will, or other nationalities of ownership, you should say. And there was a particular sort of negativity and distrust towards the U. S. And I think there's a couple of things that one is you said it, that there's some big lasers and they are the kind of, you know, original sin of this, and I think they do sort of loom large over all other U. S. investors who follow. Mainly because they're the exception that proved the rule in buying the one club that does produce profit. And extracting that, and it's evident for many years. But two, I think there's also a much wider than football sort of cultural association of U. S. investors with profit, right? It's Wall Street, it's Gordon Gekko, it's Greed is Good, it's all that stuff and you're sort of carrying that in a way that, you know, people have got lots of thoughts, I'm sure, about investors from the Gulf, they don't associate it with sort of extraction of profit and that's, you know, you'll have a debate around that and all the things that come with that, and that's a very different podcast series, but generally, When it comes to football, people don't, I think people don't have empathy or understanding for the idea of it should exist to extract money from it. Certainly when it comes to Premier League football clubs.

Matt Rogan: 16:32

I always find there's a, it's a slight irony with that insofar as most of them began in the late 19th century, set up by industrialists to make money out of the fact they were giving people a day off in local towns and cities up and down the country, right? So, you know, they were always commercial entities one way or another whether we liked it or not. It's just there's a level of scale now. And number of zeros, I guess, that brings it to the public conscience. So if you flip it around, you're So your approach by somebody in terms of investing in this fictional club that you created, like what are the first things you ask them or test out with them or what would your counsel be? Let's say it's investing in the UK, but it could be ultimately any kind of Western European market.

Sam Johnson: 17:14

I think what we, when people come to us, I mean, if you engage a firm like ours, you're probably you know, you're, you've got some understanding that you need to do this right. That you need to get the communications right and engage with your fans and your stakeholders. Right. But we generally find that people start with quite defensive positioning on it. It's, I don't want to get this wrong. I don't want to make dumb mistakes. I remember one, somebody put it to me once, is, you know, I don't know where the third rail is. You need to tell me where the third rail is so I don't accidentally touch it. You know, that's sensible in a lot of ways, but where we try and get them to is more of a holistic view of this, that your, you know, your communications, your PR, whatever you want to call it, is downstream of your organizational strategy and goals. And particularly, what kind of owner are you going to be? Or is this your full time job now? Are you going to be like, you know, de Laurentiis at Napoli and sort of across every transfer and every deal and hiring and firing? Or is this going to be one of Sort of 50 majority things that you have in your portfolio that you're going to be delegating to an executive team. And from that, then you build a structure and a strategy that sort of enables that. But you know, it's striking how many people don't have a view of that to start with or aren't consistent with that view. And actually I think with one thing where you're, you know, you're prime vector, you're a professional investor might have an advantage over. The eccentric individual is that they should probably have a pretty good idea at the start of how they want the thing to run rather than it being a passion project for a sort of period of time that they then lose interest in or what, you know, I like going in the dressing room when we win, but when they start losing and the fans start getting angry and not really for me anymore, I'll leave that to somebody else. So that's where we try and start them with and then to, it comes down to really answering four questions. All of your comms as an ownership or a leadership group of a football club is who are you? Why have you bought this thing? What do you intend to do with it? And why should we believe it's going to be successful? And actually if you can get those four Right? With credible, honest, compelling answers, you will take people with you for the most part. And everything else, and you know, things we talk about of why have you sold this player, or why have we not bought this player, or why have the season tickets gone up, or why have we got this sponsor? You know, they should all flow from the answers to those four questions really, or make sense in the logic of that.

Matt Rogan: 19:43

I don't think those questions vary very much actually, whether you're a club or you're, you know, I think back to far too many years ago, Jonathan stood in the corner of the office at Two Circles. Everyone looking, going, who's he? You know, we talked through the sort of things that, John, you talked to in terms of the first time you talked to the Two Circles group, you basically know the same things, right? Who are you? Who is a person as well as who are you as representing 180, 000 people? You know, why are you excited about being here? What does the future look like for you? And what does it mean for all of us in the room? Sort of broadly, I remember you standing up and talking to.

Jonathan Lenson: 20:24

hopefully I was convincing. No, you're right. 100%. And we always say exactly that with all of our clients and anything we're doing, you have to be comfortable telling that story. And I'm not just hoping that no one notices that there's something you're not saying, right? So if you're not willing to explain, and we say in our business, and we might come to quite a bit later, in any decision we make for our business, as well as the advice we give to our clients, If we can't stand up and explain to the team why we're doing something in terms of the ownership or the choices that we're making, that's a problem, right? Because that's a critical audience. And so Sam talked about it, you know, in terms of the, these investors in sports, there are a set of different stakeholders. Fans are one of them, right? And hugely important. It's also employees. It's also a set of other connected people, but that's the same, you know, for me, good communications is about understanding who you're, Stakeholders who your audiences are and then not trying to say different things to different people and hope that no one notices

Richard Gillis, Unofficial Partner: 21:19

Well, I think a lot of the strands come back to the fit between the money and. Whatever it is they're buying and let's keep it at the football club, cause it's quite a useful way of looking at it. And there are some universal things that we can pull out. Even to the level of the Americans versus the UAE investor as a, just as a, you know, from that perspective, or it could be a, it's private equity versus more traditional private capital or venture capital or whatever, however we define it. There is a heart of it. Does it fit? Does it work actually? Because. We all know that there's the, you know, we then jump to the end of the story or try to jump to the end of the story is how they're going to get out. Now that's as relevant for. Ryan Reynolds at Wrexham, as it is for the Glazers, as it is for Bowley, as it is for anyone buying a football club, whether it's a group or whether it's a consortium or multi, you know, what is it? What's their plan? If they haven't got a plan, that's a red flag in itself. Do I like the plan? But also let's talk about the nature of the money and how that shapes the behaviour of the ultimately the executive, because that's the, you know, the incentives from that, then set in train all the decisions that we all moan about or jump up and down about. What do we think about that?

Sam Johnson: 22:43

It's an interesting one, and I think, People underestimate how comfortable or resembling clans are to the idea that they will be sold eventually. You know, that's the thing with a football club. It won't be broken up for parts and sold to other people. It won't be submerged into a bigger company. It won't change its name and do something else. It will be sold eventually to somebody else. You'll sit in the same chair and have to make the same decision. So I, you know, I always tell clients be upfront with what the plan is because actually if it's the worst thing you can do is be inauthentic. And if you, to your question about the nature of the money, if you stand up there with having raised A fund that's that everyone can see in your sort of investment material is, has to provide a return of a certain amount over a certain number of years and you say, well, actually, I remember watching the 1975 cup final in college and I always loved Jimmy's, you know, nobody's going to believe that. Whereas actually, if you say, We were able to buy the club for X, we think because of the stadium and where you are and your academy or whatever else that we can actually take you from being a bottom of the table club to a top half club and then it'll be worth 4X and then we'll find someone else to take it on. A lot of people will be perfectly happy with that. And I think it there's an honesty that people sometimes sort of run away from or are fearful of because they think fans are, you know, don't understand these things or want, everybody wants a kind of sugar daddy who's gonna just shower them with a hundred million pound signings forever. People are a lot more realistic than that in my experience. And they can smell when something's not authentic. And if you're aligned, if it's going to be a good 10 years, if you're going to end up in a better place than where you were at the start, a lot of people will be happy with that.

Jonathan Lenson: 24:26

I also think it's important to, and you acknowledge this, Richard, that there's just a lot of different types of investor from a private capital perspective and different deal structures. There's majority and minority, and they're radically different things in terms of the control people exert. There are funds that are purely investing in sport and associated business, and then there are funds who are generalist private equity or debt or credit funds who have a sports practice. There are generalist funds. Who happen to have looked at sports more recently on a deal by deal basis because they've been attracted by it and you've particularly seen that in some of the continental European markets where other funds have appeared having no historic investment in the space. You've got people who are doing long term debt financing deals. I was living in, I'm in New York this week with our team here, and I was with a big, one of the big investors in this space, generous investor with a lot of interest in sports. And as the person said to me, you know, we've done a bunch of deals and each one of them has an entirely different structure. And I think that's, again, something that is somewhat easy to overlook in this. Yes, as Matt, as you say, more people understand more about the finance of sports, but I think often there is still this shorthand of private equity or owner. Which doesn't really take into account the fact that the way it's structured and therefore the time horizons are different. Is this a five year fund? Is this actually a 20 year debt deal? Like, what is it? Are you mortgaging the future of your media income rights? Or are you actually buying because at some point you're going to look for a new custodian to take it forward? And this is where I come back to a bit of what I said before, which is not all owners are equal. And, Sam, to your point, it is absolutely possible for someone to generate a turn, a return from a business And the business being much better shape at the end of that period. And that's not just a sports thing. That's in all businesses. And so I think that's really important to help telling your story of what you are as an investor and what you're trying to do, I think is critical in this for any client.

Richard Gillis, Unofficial Partner: 26:21

okay, so there's a few things there. That's, that, so we've got, let's just talk about majority minority because let's just pick that out because it's very, there's a few things running at the moment and I would list the NFL, you know, is talking to various people about minority Partnerships. You've got the hundred, which again is a sort of interesting case study that, you know, how much does the money want and how much does the ECB want to keep and what the significance of that is. And I can also think of, there's a quite a few women's multi club ownership groups who, again, we've had, you know, Victoire for Mercury on here. And we were talking quite a lot of detail about. What can you buy? You know, so if you want to buy Chelsea women, how much of it? And if you've got a minority state what impact can you have from that capital, you know, that platform. So what do we think about that? Just in terms of just the, that bit of the equation, because again, There's a bit of me that thinks sometimes these minority partnerships come on and actually, so I'm looking at Man United and I'm looking at Ratcliffe and Brailsford and the story that's evolved and if I'm the Glazers, I think happy days, you know, they take, they're now the human shield. No one gives a toss about us anymore. All the stories about Ratcliffe and, you know, trying to get it. public money into Old Trafford and blah, blah, blah. There is a comms bit of it, but I'm wondering what actually you can do with a minority partnership, how much of it and what is required in there? Is it a sort of separation of the sport and the business within a club or within, I don't know, what do you think?

Sam Johnson: 28:08

I think it all comes down to what are the Goals and motivations of the incumbent owner, the seller who wants to remain in the majority, right? You look at something like when Fenway Sports Group sold a minority to Redbird, you know, it was clear that there was a, the equation there was that they wanted to realize some value from the group. They didn't want to give it up. They found an investor who didn't want to run Fenway Sports Group, but saw it as a sort of reliable investment that would sort of gain value of this. So that's one model. Then you've got, as you said, at Manchester United, sort of, they were looking for someone, it seems, who wanted to take on more responsibility for certain parts of the organisation. And they had a minority investor who, you know, it doesn't seem was motivated by financial return but wanted to you know, solve the problem of Man United, which is a, is bigger legacies you could probably have in sport. So like all these things, it's a relationship between buyer and seller and what everybody wants out of that relationship. And you might, you know, if you can find someone who wants to take the hard bit and give you some money for it, but leave you with the rest of it, that's fantastic. But if you can find someone who actually just wants to can, can realize some value for you and leave you to get on with it, then that's great as well. You know, I think you'll see more of these going forward because particularly at the top level of European football, the amount of institutions or people who have the capital to buy a, You know, Champions League, consistent Champions League qualifying club is vanishingly small now with valuations at the levels that they are. So if these owners do want to sort of realise some value out of them at some point it's probably going to be a series of minority investments or some sort of public listing at some point because, you know, the game of pass the parcel of everybody, find someone richer to buy it, lock stock, you know, it's a very small, it's a very small group.

Jonathan Lenson: 30:01

I was having this conversation again, over the course of this week, being in the U. S., the NFL thing, as you talked about, a minority, I think there's a couple of different ways, particularly in the U. S., but I suspect this translates as well, where this happens. There are definitely individuals who who buying minority stakes and that might be two or three percent up to something much bigger where that is not the same as a financial investor and this will often be as we've seen you know individuals who've made their money elsewhere have a connection affiliation they might not have an affiliation but they The benefit of feeling like you have part ownership of something is clearly meaningful, whether it's ego, whether it's passion, who knows what it is for different people, but buying into properties where you are not in control, I think is something, you know, that, as Sam said, there are not huge numbers of people that can buy outright, but there are, and particularly in the US, there are a lot of people who would have the means To put a meaningful chunk of money into a franchise and if the NFL as well as the NBA and others offers that route, that's compelling for the billionaire class to some degree. There's obviously the foreign money and what does a foot in the door look like? And there's some of the what does it, what rooms does it get you into? And that's one of the things we obviously talk about sport. It's one of the very few places in the world where there is both mass interest but there is also high level power and access and influence that you can get from it. Yeah. And then there's a, for me, there's a third model where I guess Optos are a good example of it, where they've been making a set of investments at minority stage in a set of different franchises across different sports. The assumption appears to be that creates a sort of something that you can then list because you might give sort of the general investor access to an index effectively into sports, because I heard at the beginning, a fair bit of skepticism about, well, how do you get out? Right? If you bought 10 percent or 20%, who wants that when they can't control? When I'm, you go to my numbers one and two, right? If you want influence or access and you parcel it up, that's one piece. But maybe instead of having five people owning three to 4%, you actually list an entity that gives people access to 30 or 40 different assets across the sports space. There's still a question of how you get liquidity. Not just for the individuals behind the fund, but like in the individual properties, but I think that's still to be told, but I think that's, that is different from a Jim Radcliffe in Manchester United or potentially what the hundred might look like, where you might take people that are already committed to cricket, for example, as we're seeing sort of some of the initial reporting people that are in the IPL that see this as, you know, Just the next frontier of how to sort of consolidate their interest and investments in the sport.

Matt Rogan: 32:38

the um, the one thing I'd add to all of that take it down a little bit in terms of the size of the businesses is being quite suspicious of minority shareholdings in smaller businesses. If I take it right down to, you know, the kind of seed funding startupy type of site, so I see so many businesses that have taken minority investments from. You know, people who are starry eyed about sport or have made their money in arts or entertainment or cinema or something. And these people had ended up on the board, or they'd ended up as chairman and just not done it, you know. So the 10 percent stake or 5 percent stake put a little bit of money in, ended up as chair and fundamentally disrupting the direction of travel of the business. So, You know, almost like FTSE would end up with a small shareholder, becomes an activist investor and causes merry hell. It's a little bit like that at the really smallest side as well, where it comes back to what Sam was saying, I think about, you know, the importance of the contracting and the sale and purchase agreements and things with the minority investor. So everyone knows what they're getting. And in the startup side in sport, I think we're full of hopeless non execution chairs you put just because they put a little bit of money in the fundamentally clogging up the system.

Sam Johnson: 33:52

I, I think you'll find continental European football in particular is Lited with people who have bought minority stakes, thinking they were on the route to a majority, and then eight years down the line, you know, they've got a very expensive season ticket and that's basically it.

Richard Gillis, Unofficial Partner: 34:08

It's interesting, you know, because we're, you guys are experts in reputation and the word investment as a reputation issue because when you get to things like, I mean, it feels analogous to, I always think this conversation with like the conversations around the NHS, where people are suspicious of private money coming in. And. The question, and we're seeing it again in, we've mentioned cricket, ECB and the hundred is a good case study at the moment, but other NGBs, for example, desperately need money to just grow or to make things better. Football is, you know, the cliche is, well, they'll just, if you just give them more money, they'll just spend it more on players, you know, so what's the point really? But actually. The argument for investment, which is interesting, your sort of, you know, your second point there about, you know, your list of responses from your research, Sam, was that there is a split there. The U. S. recognizes these. or seems to recognize the, power of investment to grow, to make things better, to make things, you know, to move things forward. Whereas British people or UK people, and I am as guilty as this is the next person. As soon as someone is on the news saying, I mean, you know, we're going to, there's a, there's an element of privatizing the NHS, you know, and you're up in arms and suddenly you get very defensive. It's like a Ming vase that can't be, you know, touched. So It's interesting that it's national, so that, you know, your UK, US split, which again feels like, okay, yeah, I could, I can understand that, but there's also something about investment people and set, you know, Matt mentioned at the beginning about, you know, price of football, educating of people. And I agree sort of with that, but actually I think that some of the time. And particularly the football media is deeply suspicious of money and investment and sees investment as a bad thing,

Jonathan Lenson: 36:06

I think that reflects national differences writ large, actually you talk about the UK US difference again, you can go beyond sport here. Attitudes towards wealth and wealth creation, attitudes towards building big companies, again, just look at the technology world. We build extraordinary companies in the UK, they're amazing founders. We haven't got the same numbers of breakout successes and kind of billion dollar companies that the US exists, and that's partly a market size. But there is often something something in the UK about Being more willing to knock people down for making money and being less prepared to embrace sort of capitalism and you feel it, right? I'm in New York this week, a third of our business is in the U. S. There is just a different attitude and it's not uniform, but there is just a different attitude towards entrepreneurialism and making money. And so I think that translates into sport because if people see the idea of people making money out of something, that's not, you know, the first instinct is not often to say, That's brilliant. They must have built something or added value or contributed or done X. There will there's a bit of a sense of fairness and some of those other things that are important. And so I think it's reasonable just to acknowledge that's, that is part of what's going on here. It's part of what the technology scene in the UK grapples with, which is how do we build massive businesses that scale beyond, you know, we build good businesses, but What's the huge ambition that might exist in Silicon Valley and are there enough people and are there enough investors, frankly, in the UK that will back those businesses over the long term? Do our public markets, does the stock exchange sort of reward and embrace and build the conditions for people to build huge businesses where they can get? Really wealthy off the back of it and I think we apologize more for that and I understand why to be clear But we apologize more for it in the UK than it's the case in New York or San Francisco.

Matt Rogan: 37:58

That stock market piece to me is super interesting. You know, having started with a business on a kitchen table and sort of been through and now on its third owner you know, at some point the kind of being able to make four times return over three years stops when you're completely captive in a market and floating becomes a more interesting space. I remember You know, when we sold to John two circles, you sort of sell a multiple of kind, remember? So between eight and 10, and then WPP is trading at 15 and they've made, you go, well, that was easy money for them trading. Profit multiples increased already. I do wonder whether at that size and scale of business, sports really suited to quarterly results. is there actually a sort of a ceiling for sports businesses generally? Because. You know, we are by nature cyclical, teams go up and down, agencies have to remodel and reshape as digital changes the way we operate every two years. AI turns it all upside down again. Do you, I mean, you operate in the financial markets permanently. Do you think sport can actually play a role in there? Or do you think we're top NPE, but not necessarily footsie businesses?

Jonathan Lenson: 39:10

Yeah, it's a great question I think it's hard. I think that but the reality is I think there's lots of businesses that for whom the public market Is a necessary place to create liquidity That doesn't mean it's well suited to it, right? And that's, again, it's just a practical reality. At some point, people who build things or scale things need to find a way of taking money out. And we're lucky. I think now, if you look at the market, if I look now. Compared to 20 years ago when I started working, you've got a whole range of sources of capital, which is very different. And so the fact is you can you can sell your business to a fund, who can sell to another fund, who can sell to another fund, and you can't do that indefinitely, but there are routes to doing that. It's not just exit and public markets. But listen, I saw this with WPP, FTSE 50 business at the time I was there. I don't actually know where it is now. We never sold anything. When Martin was running the business, we bought 50 businesses a year and never sold anything. And the job that Mark has done as CEO has consolidated more and simplified. But the challenge of quarterly reporting for any business of complexity where things don't go in a straight, you know, the public markets work well, if you can leak out 2%, 3 percent growth predictably every year, is sport going to do that? No, and it's interesting to see. What's going on at Endeavor at the moment? It feels, from everything I read, and I have no inside knowledge of this, but it feels like what's gonna stay listed will be the UFC or TKO and sort of that piece of it. And the legacy IMG business gets broken up for parts potentially, or sold to owners who have a different time horizon not on the public markets. And that probably is reasonable and maybe Covid exacerbated it and started to show the sort of the ups and downs in a more extreme way than might have been the case before.

Sam Johnson: 40:50

I think I think I think also a bit of this comes back to the heart of what you asked Richard before, but the skepticism towards investors in sport. Most of most people that we call investors aren't invested their purchases. They've bought an asset from someone else. So to the conversation just having there about how do you sort of unlock capital to grow business and invest? Most football clubs don't have any of that. The money goes from one individual to another, and then the club passes. There might be some sort of equity injection, but generally only if the club's in a really distressed position, and it comes off the purchase price, right? So I think a lot of that skepticism comes from because, or, you know, to the fund, the conception of investment isn't about, you know, Money being injected into businesses to help them grow and invest in their own capabilities But of one rich person selling it to another rich person and they're not really caring about the sort of aftermath of that Which is why I think you know something that We didn't do as part of this research But would be interesting to look into to see that has cut through it all is you know things like the CBC deals in Legon and La Liga, you know, that is actually But more akin to a traditional fundraise of a tech business or somebody else where you've created something, you've created new sort of equity and sold to someone in exchange for the money. That then goes to all of your sort of, you know, the clubs that make up the considered part of the business they invest in stadiums or whatever they want to do with it. I think in La Liga there are a lot of different things. They're not allowed to spend it all on wedges straight away, which football often does, but you know that's a really interesting different model that we haven't really seen football and level before. And when people can start to explain that and point to some positive outcomes of that, I think you might start to see, could start to see attitude change if they do a good job of explaining it. I don't think the, you know, the positive up here of it is immediately visible yet, but that's something different to, you know, someone borrowing a lot of money to buy. Football club.

Richard Gillis, Unofficial Partner: 42:53

do you think there's a, I mean, we mentioned the sort of NGB model and again, I keep talking about the hundred, but I just, it's such a nice case study because it's actually do you think what they've done with the hundred in terms of, you know, Trying to carve something out, which is saleable or sellable to private markets in various guises. Is that what the NGB model is going to be? There's a sort of, it feels like a sort of hybrid. There's going to be, is always going to be, you know, private equity doesn't want the rules and regulations and the pyramid. And, you know, there's loads of stuff that, and safeguarding and all the things that, has to do, but then there's the commercial bit. So. Again, trying to navigate that whilst retaining it's still a public organization, it's still a funded organization. Do you think that's what the next 5 to 10 years is going to be? Versions of the 100? On, you know, from NGBs

Sam Johnson: 43:50

I think so because, well, it depends how well the hundred does, but you know, the reasons for the hundred existing or very clear that something like 75 percent of revenue in English cricket comes from the men's test game and that's unsustainable for any sport, for any business. So there has to be some way of. Sustaining that great ecosystem of cricket that

Richard Gillis, Unofficial Partner: 44:11

and yeah, and we can say, you know, if we, sorry, it sounds, but we can say the same, you know, whether the money is government money or IOC, Olympic top funding or whatever it is, there is a sort of dependency culture across lots of sports and lots of governing bodies. So, but it's trying to work out how they.

Sam Johnson: 44:29

I think the hard bit is, and this is going to sound really terrible investor speak, but you know, how compelling is the product? You talk about national governing bodies, you know, outside of an Olympics. How many people want to buy tickets to buy TV subscriptions for you know, you've track and field. That's a huge one of them. You know, how do you build up excitement for three years and 11 months around track and field outside of outside of living? It's really hard. And, you know, the hundred sort of works because that model exists elsewhere. They're sort of franchise cricket, but also people accept cricket in various different guises and it makes, you know, it makes money. I don't know what the equivalent of the hundred is for as good as the idea might be. I'm not sure what the equivalent is for those kinds of sports that exist in an Olympic

Matt Rogan: 45:16

The interesting one with athletics, I remember an unofficial partner pod, blimey, years ago, where the conversation was, why didn't England athletics create parkrun? Right, so it's not necessarily the case in the Olympic and Paralympic space, it has to be a professional entity, could be an amateur entity, that creates a business model around it of some sort that sustains the sport. And for me NGBs have to innovate and test and do things a little bit differently, whilst never giving away their safeguarding, grassroots governance role, and it might be a participation product.

Jonathan Lenson: 45:48

Well, and that's, Matt, it feels more acute at the moment because we're seeing it in the context of selling or taking investment or people buying things. This has been going on for 10 years, right? I remember when we were working together, I remember having conversations with a range of international federations and NGBs when they were trying to work out what they could create beyond the core competitions and yes, in part to find other ways to monetize, but also to attract a different audience or to retain a younger audience. So there've been lots of conversations in the last 10 years about the fact that kids coming through now aren't sitting down and watching on TV in the same way. And I remember having this conversation with hockey going back, this is again, nine, 10 years. And what does it look like to create a different version and a shorter form version? And people looked at T20 as the model. Again, Not from a just commercial perspective, but how can we create something faster, more bite sized? Look, I went to the 100 a couple of weeks ago with my nine year old son, who is cricket mad, and the atmosphere was fantastic. And I like, I'll go and see a test match, and he can sit through that, but the energy is just The difference in terms of mix of number of families, the gender split was radically different and maybe it's partly just I haven't been to enough cricket in the last few years, but something was working in that,

jonathan_1_08-23-2024_080030: 47:00

right?

Jonathan Lenson: 47:00

A women's game before the men's game. My son knows all of the women's cricketers. Right? Like that wasn't the case a few years ago. And so there's, it's very easy, I think, often to get pulled back by, yeah, but does the commercial return work? But like, if you look at what the ECB has done and what it's trying to do, both from a participation perspective at grassroots, but then getting more people into the game and getting families to access it, there is something compelling there. And like, if you, Sam said, if you build something compelling, then you hope there's an investment case as well.

Matt Rogan: 47:31

Yeah, I mean, if you look back, there's one thing we learned through the Two Circles journey with you. It's, I remember you saying the first time you looked at our client list, you said, well, where's the football? And the reality was football was in a relatively insulated, comfortable position. And it was the clients who had burning platforms that were the first to get involved in cricket was one of those. And so for me we might say the same thing again in terms of future investment deals, where actually some of the most interesting ones are outside of football, where there is more of a burning platform, people getting wobbly about the fact that only the NFL and NBA broadcast rights are going up and the long tail is very long now in terms of client right holders whose revenue streams aren't there anymore from broadcast. What we're going to do differently. That's the really interesting stuff.

Jonathan Lenson: 48:16

I agree, the slight challenge is scale of opportunity financially. So that's like one of the sort of cautions I have is when, you know, in something come, you know, some of these funds if you're a very large fund, you need a deal to be a certain size for it to really make a difference from a return perspective. And actually some of these smaller sports just might not be big enough for them to get involved in. And so you might start to see. You might need to start to see a sort of new funds with different check sizes that can be, can go after this. I think, you know, the people that are looking at football or European football leagues or some of those other things, you know, can deploy more capital into a deal than you can if it's rugby league or if it's netball or whatever the example. And so I think that the model might be right and there might be the need for it, but there aren't necessarily quite as many people there today. Women's football is going to be a really interesting example to see how that monetizes because again, we've been talking about women's sport and the rise of it for more than 10 years. The question of whether the commercial potentially is big enough for pure financial investors in the near term is an open question, I think.

Richard Gillis, Unofficial Partner: 49:23

I've got two more questions before I let you go. And then one just bounces off your directly from your research. You've got the first point you made there, Sam, is that there's the rejection of synergies between sports, which I think is a really interesting point. And it's one that I've sometimes questioned myself in terms of, you know, the, whether it works, whether it's relevant, you know, and where and when it isn't, do you agree with that feedback of your own? sort of focus groups.

Sam Johnson: 49:54

It's an interesting, I think it, it depends what the synergy is, right? And I think from a, from the sports side, probably not. I think you know, there's the whole high performance culture and that's obviously a very different podcast and think as people learn from each other. But I think in terms of running a sport and organization, there's probably not on the business side, you know, it. It's to John's point before about everyone trying to find their own version of T20. Yeah, I think you can't learn things from other sports. I think it's when you try and impose. a model onto something that already exists. And, you know, it's this perennial thing, which again, I think is a lot of people's instinctive reaction to American owners, which is, well, the NFL has, you know, far fewer fans than European football, but it makes 10 times as much money from each of them. So we only need to do a little bit of NFL and suddenly All these football clubs will be hugely profitable and we'll all make out like bandits. You know, it's just, that's never going to happen in any meaningful way. You know, culturally, everything is too different. For you to think you could just transpose something wholesale onto something else and say, Well, this makes more money, so it's better than that. You know, it just has to, one has to copy the other. So, it, I think there's learnings you can take from everything, but certainly the idea that would be the, you know, The credential on which you build sort of, well, I know what I'm doing now. I do agree with the focus groups on that

Richard Gillis, Unofficial Partner: 51:16

So this leads to my second question. It's a sort of bridge, which is that when we were doing a live podcast at the European Club Association, so the ECA, and so the conversation both on the platform, but also around the sort of room, it was about are there any big jumps? So, You know, in terms of revenue. So again, back to your sort of anonymous club, mid table club. There were a lot of mid table clubs, however, defined across, you know, in the room and the scenario being, look, 2030 is just called and the media rights have gone, okay, what are you going to do? So there's that scenario, which gets you to the other question of, are there any other leaps? To be made because a lot of the conversations are all about incremental sort of improvements, nudges and tweaks to commercial platforms and programs and merch and sale, you know, sponsorship. Then there's a player transfer market. Okay. 100 million for a central defender, blah, blah, blah. But actually, then you look at the NBA. And they've gone from 25 billion to 75 billion media rights. And, you know, we've done a podcast on, you know, how influential is the opening up of the betting markets in the U S to that number and how that has sort of cranked up expectations of that, or is it's just the NBA? So it's just might just be a massive outlier and, you know, forget about it. There's only a few of those in the world and they'll be fine and not much of learn to be learned by other sports. What do we think about that? Just in terms of that. Big jumps. Are there any? Cause again, back to Matt's former place of work and his company, I've heard the arguments about fans as customers, moving that, you know, along that journey, changing the frame of how we look at football and sports clubs and making them more analogous to tech platforms and fans as users, blah, blah, blah, blah. What do we think?

Sam Johnson: 53:21

But I think in European football, it's going to be really hard to make any significant kind of structural change, right? To, to how competitions work, to the financial cliff edges that come with performance. Which are, you know, the defining difference of sort of European football versus American sport. I think, you know, I did find that conversation very interesting about sort of football club is Netflix, football club is Amazon, football club is football club. They all, though, it's very difficult, if not impossible, to envision a world where they don't all come back to a really compelling, sporting vision. Like I don't know what fan would want to start buying everything from their club if it was a failing sporting enterprise, unless they stop playing football games or whatever. But so, so I do think you need to have that sort of compelling vision and ambition at the heart of it. You can then try and de risk to some degree. Being revenue, being reliant on sport performance by, you know, opening up lots of different revenues, but it is always going to be anchored in sport and performance. And also a, the story you tell around that about what it's going to be like next season, because. In any one year, you know, how many clubs have a genuinely good on field season that makes fans want to come back engaged and excited for the next season? Three, four, maybe? You know, City, Arsenal, Villa last year. The rest, it's sort of, the rest, you have to offer something which is a compelling kind of I believe in what they're doing. I believe in where they're going. I believe in, you know, this leadership team or this manager or this owner. And I'm going to buy into that, even though we came a thing where it were really crap from December to February, whatever it might be. So I don't know how you unlock any of the side of revenue without having a really compelling vision of that. And that people can buy into and also there was a really interesting article by David Helly and Bloomberg this week saying that, you know, because of that question, that where does the big loop come from? It is starting to cool off the sort of US interest in the Premier League in particular. Now, I'm probably a bit more bullish on that, but I do think those clubs who are stable, Stolid 8 to 10 years in the Premier League, but aren't perennial European qualifiers. That's going to be a really hard sell because there's a big ticket price around that. And how are you going to make that big leap? You know, Ipswich is different. A you know, a Burnley is different. Sunderland would be different. But, you know, a West Ham Wolves, you're going to be looking at, you know, nigh on a billion probably they're asking for 100 percent of it. Simply for West Ham. Where are you going to sort of realize that? How are you going to sort of increase that valuation? That's the tough thing. So I think there are big loops to be made for smaller clubs and teams who can have really compelling visions and unlock other innovative revenue streams, but the, if you're going to be able to sort of sell the club itself to somebody new off the back of that's going to be tough.

Jonathan Lenson: 56:17

the one other thing I would say though in terms of a big leap when you look at the NBA, Or anything at a league level. There are things that individual clubs can do. Right, we've talked about the fact that Samsung is very difficult. The reality is that media rights, whether that is through a traditional cable operator, whether it's through now a new tech platform, that's the big lever, and No individual club can impact that in a meaningful way. And there'd be lots of companies that you look at different models where the bigger clubs want, I might want to break apart or have a differentiated share. But the reality is the products, you know, the reason the Premier League has continued to be as successful as it is because the product is brilliant and the media rights have continued to go up and it's difficult to believe that, that anything can have a meaningful leap. If it's not for external factors and changes in that media market, but if you had not had. Google and Netflix and Amazon and Apple arrive. Would we be in as good a place as we are from a media rights perspective to the NBA? No. And so actually, one of the challenges that sport has is it relies on other people and other factors going on in that market, there being sufficient competition to then keep driving the demand of an incredible product. So I think, you know, if you're a club or a sports company, you have to build the product and hope that there continues to be the right regulation and the other things going on in the market that means there are enough people that are competing to buy what you have that will create that step change. But I don't think the owner of a football club by themselves is going to be able to do that.

Matt Rogan: 57:44

The thing that also interests me outside of the media space that I do think is where quite a lot of residual value in Soccer in most European nations exists is the fact that most of them are slightly ridiculously built in infrastructure in the middle of cities that gets used 19 times a year. And if you look at the way the NFL and the NBA and things have developed their infrastructure, so football is one of the things that happens there, or basketball is one of the things that happened there. You know, we had I think I saw a stat today about the economic value, inverted commas, treat with deep suspicion that Tens Taylor Swift gigs are brought to Wembley and surrounding area, right? So how we think about our infrastructure and the usage of that in a very different way to drive revenue into a stadium, you know, rather than 24 times a year, you know, 24 seven, I think is really interesting and part of the future business model, but it's going to take a lot of capital investment to release that.

Sam Johnson: 58:42

Absolutely. I mean, you look at I think Tottenham or sort of head and shoulders where everybody else from this, and not just the sort of big ticket Beyonce's of this world, but the, you know, the fact that the press box is a co working area that people can pay views, you know, I had all that job. And I guess the inverse. So the mirror of that, I'm sure everybody saw because it went viral this week, this bar in Los Angeles that has the sort of experiential sort of you're in Old Trafford watching a game and it looked, you know, amazing on Instagram or whatever. I think this is quite a fall way down the road, but, you know, if you could make your infrastructure investments in several big markets around the world that you have, you know, you have five Old Traffords, you have five burnabouts at different places and you're essentially, You know, tripling or quadrupling your matchday income every time because you've got this sort of experiential thing somewhere else. That could be something. But again, the investment, the capital investment required for that is so huge that you struggle to see any football club that would want to be able to do it or divert resources from, you know, sporting investment, which is always the single biggest thing for any club.

Richard Gillis, Unofficial Partner: 59:49

There's a question I was looking at the sort of deal around Angel City. And, you know, the number, but was it 250 million? And the question is what are they buying there? You know, is it a football club to your point, Sam? Is it about performance? I have no idea how they play. I know they're famous and I know, you know, it feels like they're more like a retail apparel fashion entertainment brand than they are a football club, the fact that they also play football is, you know, it's anchored in football, but actually I don't. It could be anything they want it to be. And so Bob Iger, you know, he's not a stupid man, and his wife will obey, and they are both smart people. So I think that's part of the equation. Now, again, how useful that is as a case study for anyone else is deeply questionable, but it's, I think it's, when you're looking at these things as investments, Then I think it's interesting that, you know, because when you start to say, right, it's a football club, you do go down the sort of price of money route. It becomes a very sort of 1995 conversation of, you know, it's all about merchandise revenue and sponsorship and whatever. If it's not that, if you can get through the comms battle to break that a little bit, that becomes something different.

Jonathan Lenson: 1:01:06

They go together, right? I'm going down to Miami tomorrow. I'll be into Miami's game tomorrow night. If they win, they get to the playoff, like, there's a lot more people wearing into Miami shirts in the UK and worldwide since Messi went there and since they're good and like that from an investment perspective, yes, they've built a brand, and there's everything associated with it, and, you know, from an investment perspective for David Beckham and the team behind that's been remarkable, but

Richard Gillis, Unofficial Partner: 1:01:28

I think, do you know what, John, I think that as a sort of, and we're going to finish here, but I think the theme of this podcast is can you trust foreigners? It's gone from, it's gone all the way through to American money through to there's a, I think there's a whole podcast to be done on, can you trust foreign fans? Can you build a business on the international fan base? Because. It feels to me, and Inter Miami is a perfect example, that it is incredibly promiscuous and star led and we've always known that, we've known that for 25 years. Would you make a 10, 15, 20 year bet on that marketplace? Because we've all looked at fan based surveys and we used to, you know, and it was, I find them absolutely fascinating because of just how flaky they are beyond obviously the mad nutters who are turning up week in week out.

Sam Johnson: 1:02:19

say, I think the difference with all those examples whether it's. Ancient City, whether it's into Miami, whether it's, you know, the New York Yankees and no, you know, 99 percent of people who wear a Yankees cap don't know how they got on, you know, in their last game, they're closed leagues. So you can't do that. You can't, you can do that because performance will never bring the sort of financial cliff edge that it will in European football. And, you know, you could do the best brand building in the world around. Brentford. If they go down twice, that's the end. You know, that's the end of it. It all goes away. So I think that's, you know, that is the core difference that stops even this sort of international fan base.

Matt Rogan: 1:03:00

I would say whatever, if there's one thing Bob Iger knows, it's running Franchise entertainment businesses, right? You have a couple of years of Pocahontas. She's cool. You rotate her out, cars comes in, come back, stick some Incredibles in, and it's back to Pocahontas. If I was running a global retail branded entertainment proposition, I'd have a bit of Inter Miami here, I'd have Angel City over here, and I'd just rotate them, manage that trend cycle.

Jonathan Lenson: 1:03:26

Maybe that's the future, Matt.

Richard Gillis, Unofficial Partner: 1:03:28

We've cracked it.

Sam Johnson: 1:03:29

That's a romantic, that's a romantic note to end

Richard Gillis, Unofficial Partner: 1:03:31

Yeah.

Sam Johnson: 1:03:32

is, football is Disney.

Richard Gillis, Unofficial Partner: 1:03:34

A Pocahontas finish. We never had that before in 420 podcasts. That's fantastic. Listen thank you so much. for coming on, John and Sam, really appreciate it. Love the research. We're going to sort of share that with the newsletter readership and see where that goes. But uh, as ever, thank you for your company.

Matt Rogan: 1:03:54

Pleasure.

Richard Gillis, Unofficial Partner: 1:03:54

Sam, John, thank

Sam Johnson: 1:03:56

for the invite.

Jonathan Lenson: 1:03:56

you.