1 00:00:05,730 --> 00:00:08,490 Sean Aylmar: Welcome to the Fear & Greed Business Interview. I'm Sean Aylmar. 2 00:00:08,580 --> 00:00:11,400 Sean Aylmar: How's this for a good news story? Next week, 21- year- 3 00:00:11,400 --> 00:00:15,299 Sean Aylmar: old Australian Travis Bazzana is tipped to become the number 4 00:00:15,299 --> 00:00:19,378 Sean Aylmar: one major league baseball draft pick in the US, and 5 00:00:19,380 --> 00:00:22,890 Sean Aylmar: that's expected to come with a $ 15 million bonus. That's 6 00:00:22,890 --> 00:00:25,590 Sean Aylmar: just for signing a deal. The amount of money in 7 00:00:25,590 --> 00:00:28,919 Sean Aylmar: US sport is really quite phenomenal. Just in the past 8 00:00:28,920 --> 00:00:32,940 Sean Aylmar: couple of weeks, basketball superstar LeBron James signed a new $ 9 00:00:33,030 --> 00:00:36,360 Sean Aylmar: 104 million US two- year deal with the LA Lakers. 10 00:00:36,780 --> 00:00:38,729 Sean Aylmar: Whenever we talk about the business of sport, we go 11 00:00:38,729 --> 00:00:42,930 Sean Aylmar: to John Stensholt, business reporter at the Australian. John, welcome 12 00:00:42,930 --> 00:00:43,800 Sean Aylmar: back to Fear & Greed. 13 00:00:44,220 --> 00:00:44,820 John Stensholt: Thank you, Sean. 14 00:00:45,510 --> 00:00:47,608 Sean Aylmar: I know you're a baseball fan. What do you make 15 00:00:47,610 --> 00:00:49,110 Sean Aylmar: of the Travis Bazzana story? 16 00:00:49,920 --> 00:00:52,318 John Stensholt: I think it's a fantastic story. It's amazing story for 17 00:00:52,320 --> 00:00:54,329 John Stensholt: the sport of baseball to get that sort of, I guess, name at 18 00:00:56,040 --> 00:00:58,560 John Stensholt: the top of this draft, right? I mean, the draft 19 00:00:58,560 --> 00:01:00,330 John Stensholt: is interesting. He's going to get that huge bonus, as 20 00:01:00,330 --> 00:01:02,700 John Stensholt: you say, and then hopefully spend a few years in 21 00:01:02,700 --> 00:01:05,039 John Stensholt: the minor leagues and work his way into the majors 22 00:01:05,039 --> 00:01:09,179 John Stensholt: and be a big star where people are getting paid 30, 40, $50 million 23 00:01:09,539 --> 00:01:12,330 John Stensholt: US a year. So it's only the beginning. He could 24 00:01:12,930 --> 00:01:15,450 John Stensholt: definitely be our biggest- earning athlete pretty soon. 25 00:01:16,170 --> 00:01:18,119 Sean Aylmar: What's it do for Australian baseball? 26 00:01:18,900 --> 00:01:21,929 John Stensholt: Oh, look, I mean, it's one of those sports where 27 00:01:21,929 --> 00:01:25,349 John Stensholt: it's an Australian sports star that doesn't fly their trade 28 00:01:25,349 --> 00:01:27,870 John Stensholt: here in Australia. So you think about soccer stars that 29 00:01:27,870 --> 00:01:31,289 John Stensholt: have big names in Europe, other athletes, like, there's, what? 30 00:01:31,290 --> 00:01:35,130 John Stensholt: About a dozen Australians playing in the NBA basketball in America? 31 00:01:35,400 --> 00:01:36,810 John Stensholt: It can be a little bit out of sight, out 32 00:01:36,810 --> 00:01:38,759 John Stensholt: of mind, but I think with the basketball in particular, 33 00:01:39,090 --> 00:01:41,490 John Stensholt: it's become very popular in Australia to watch on TV at 34 00:01:41,880 --> 00:01:44,670 John Stensholt: pretty good times, but we don't have a huge pedigree 35 00:01:44,670 --> 00:01:47,160 John Stensholt: in baseball. We did win a silver medals in 2004 36 00:01:47,400 --> 00:01:50,040 John Stensholt: in Athens, I think it was, and there's been a 37 00:01:50,040 --> 00:01:52,350 John Stensholt: smattering of good players in all stars over the years, 38 00:01:52,350 --> 00:01:54,930 John Stensholt: but Travis has got the potential to be our best 39 00:01:54,930 --> 00:01:57,330 John Stensholt: yet. And I think he's also got that drive and 40 00:01:57,330 --> 00:02:00,269 John Stensholt: determination to want to grow the game here in Australia 41 00:02:00,270 --> 00:02:03,779 John Stensholt: and give it some star billing. So I think from 42 00:02:03,780 --> 00:02:05,909 John Stensholt: a commercial point of view, he'll make all his money 43 00:02:05,910 --> 00:02:08,400 John Stensholt: in America probably, but if he can be a bit 44 00:02:08,400 --> 00:02:09,870 John Stensholt: of a household name in Australia too, it'd be a bit of a bonus, I think. 45 00:02:11,610 --> 00:02:13,709 Sean Aylmar: Now, I know we're a business podcast, but is Travis 46 00:02:13,710 --> 00:02:15,300 Sean Aylmar: the real deal? Do you reckon, John? 47 00:02:15,540 --> 00:02:17,639 John Stensholt: Oh, I think he's a fantastic hitter. I mean, he 48 00:02:17,639 --> 00:02:19,980 John Stensholt: could go number one, right? Which is in the draft, 49 00:02:20,008 --> 00:02:22,680 John Stensholt: which is incredible. This happened in basketball. We've had Ben 50 00:02:22,680 --> 00:02:26,940 John Stensholt: Simmons number one, Andrew Bogut as well, so basketball's very 51 00:02:26,940 --> 00:02:30,210 John Stensholt: big. Baseball's still huge in America, too. We've got big 52 00:02:30,210 --> 00:02:34,770 John Stensholt: NFL players like Jordan Mailata as well. So look, he's 53 00:02:34,770 --> 00:02:36,809 John Stensholt: the real deal. He could go anywhere between number one 54 00:02:36,809 --> 00:02:39,899 John Stensholt: and number four or five. It's funny everyone talks about 55 00:02:40,109 --> 00:02:43,980 John Stensholt: the old Moneyball book based on the Oakland Athletics, and 56 00:02:43,980 --> 00:02:45,389 John Stensholt: they picked number four. And they're a bit of a 57 00:02:45,389 --> 00:02:47,820 John Stensholt: dregs of a franchise at the moment, which is unfortunate. 58 00:02:49,110 --> 00:02:50,849 John Stensholt: I was a fan of theirs, but they're moving to 59 00:02:50,849 --> 00:02:53,009 John Stensholt: Las Vegas, so if he ends up there, I'll be 60 00:02:53,010 --> 00:02:55,258 John Stensholt: a bit worried, but it's probably smooth his way to 61 00:02:55,258 --> 00:02:57,779 John Stensholt: the major leagues quicker and more money eventually. 62 00:02:58,529 --> 00:03:00,840 Sean Aylmar: Of course, I'm a Yankees fan. And John and I, 63 00:03:00,959 --> 00:03:03,480 Sean Aylmar: we've discussed baseball for many years. We all certainly hope 64 00:03:03,480 --> 00:03:07,740 Sean Aylmar: Travis does well, a Sydney North Shore local. What about 65 00:03:07,740 --> 00:03:12,089 Sean Aylmar: basketball? We talk about LeBron James, 39- year- old, $ 52 million a 66 00:03:12,090 --> 00:03:15,210 Sean Aylmar: year. I mean, to be honest, in basketball terms, it's not one 67 00:03:15,210 --> 00:03:17,699 Sean Aylmar: of the great contracts, but for 39- year- old, it 68 00:03:17,699 --> 00:03:21,090 Sean Aylmar: is definitely the greatest contract. How can there be so 69 00:03:21,090 --> 00:03:22,739 Sean Aylmar: much money in that sport? 70 00:03:23,970 --> 00:03:26,548 John Stensholt: Well, it's all about broadcast deals. So the NBA is 71 00:03:26,550 --> 00:03:29,909 John Stensholt: about to double its broadcast deal. It's probably going to 72 00:03:29,910 --> 00:03:34,620 John Stensholt: sign ESPN, potentially Amazon. There's TNT over in America's got 73 00:03:34,650 --> 00:03:37,860 John Stensholt: maybe a last, right? So there's huge competition for the 74 00:03:37,860 --> 00:03:41,730 John Stensholt: broadcast rights that come with that, and it's a global sport as 75 00:03:41,730 --> 00:03:45,210 John Stensholt: well. There's so many good European players and Australians clearly too, 76 00:03:46,110 --> 00:03:48,690 John Stensholt: but the TV money in America is extraordinary. So if 77 00:03:48,690 --> 00:03:51,360 John Stensholt: you think of that doubling your biggest revenue source to, 78 00:03:51,660 --> 00:03:54,209 John Stensholt: I think, it's something like $ 70 odd billion or something 79 00:03:54,240 --> 00:03:56,730 John Stensholt: crazy like that over the term of the contract, it 80 00:03:56,730 --> 00:03:58,380 John Stensholt: brings in a lot of money for the players. And 81 00:03:58,380 --> 00:04:01,500 John Stensholt: there's only 12 players on a team, usually including the 82 00:04:01,500 --> 00:04:03,479 John Stensholt: bench and maybe a few others that come in and 83 00:04:03,480 --> 00:04:06,270 John Stensholt: off the injured reserves. It's a lot of money going 84 00:04:06,270 --> 00:04:09,569 John Stensholt: around to only a handful of big- name athletes, that's 85 00:04:09,570 --> 00:04:10,980 John Stensholt: why they're on those huge contracts. 86 00:04:11,430 --> 00:04:13,140 Sean Aylmar: Stay with me, John. We'll be back in a minute. 87 00:04:19,620 --> 00:04:23,610 Sean Aylmar: I'm speaking to John Stensholt from the Australian. Today in 88 00:04:23,610 --> 00:04:26,428 Sean Aylmar: basketball, back home, we've got Tesla Chair, Robyn Denholm, and 89 00:04:26,969 --> 00:04:32,040 Sean Aylmar: Larry Kestelman buying the women's NBL, the Women's Basketball League. 90 00:04:32,640 --> 00:04:34,589 Sean Aylmar: Can you make money out of that sort of league 91 00:04:34,589 --> 00:04:36,690 Sean Aylmar: in Australia, or is it a labor of love, do 92 00:04:36,690 --> 00:04:37,080 Sean Aylmar: you think? 93 00:04:37,680 --> 00:04:41,219 John Stensholt: Look, there's probably an altruistic element too, particularly with Robyn, 94 00:04:41,219 --> 00:04:44,638 John Stensholt: who is very interested in backing women's sport. Basketball is 95 00:04:44,639 --> 00:04:48,510 John Stensholt: a huge thing for her. They're taking a majority stake 96 00:04:48,510 --> 00:04:51,750 John Stensholt: in the league, that probably values at around... about the 23 million 97 00:04:51,750 --> 00:04:53,580 John Stensholt: marks. It's not a massive amount of money when you 98 00:04:53,580 --> 00:04:57,000 John Stensholt: compare it to America, but it's pretty substantial in Australian 99 00:04:57,000 --> 00:05:00,570 John Stensholt: terms. Some of the private clubs in rugby league or basketball in the 100 00:05:00,870 --> 00:05:05,699 John Stensholt: NBL, the men's competition have been valued around that $ 40 101 00:05:05,699 --> 00:05:10,260 John Stensholt: million mark. So look, if you're dealing in US dollars, 102 00:05:10,260 --> 00:05:12,900 John Stensholt: it's probably a cheap entry point in Australian sport, and 103 00:05:12,900 --> 00:05:15,510 John Stensholt: you become an owner of a team. So I think 104 00:05:15,510 --> 00:05:18,868 John Stensholt: you'll see more Americans investing in Australian basketball, but for a league, I 105 00:05:18,870 --> 00:05:21,960 John Stensholt: think it's... Look for a starter saving the league. And 106 00:05:21,960 --> 00:05:23,850 John Stensholt: if it's someone that can do a good job of 107 00:05:24,089 --> 00:05:26,880 John Stensholt: growing it, I think it's Robyn with that passion for 108 00:05:26,880 --> 00:05:30,450 John Stensholt: the sport and, yeah, having that female entrepreneur behind it. 109 00:05:30,450 --> 00:05:33,839 John Stensholt: And also Larry, who operates a pretty successful league already 110 00:05:33,839 --> 00:05:36,868 John Stensholt: in the NBL. So it's a pretty good combination, and I 111 00:05:36,870 --> 00:05:40,169 John Stensholt: think it'll get better. Is whether it'll get to be 112 00:05:40,440 --> 00:05:44,339 John Stensholt: massive is a different question together. Probably not. Never be 113 00:05:44,339 --> 00:05:47,969 John Stensholt: compared to an AFL, or NRL, or anything like that, but I think it can cover out a really good niche 114 00:05:47,970 --> 00:05:48,690 John Stensholt: at the very least. 115 00:05:49,560 --> 00:05:52,859 Sean Aylmar: In Australia, you mentioned the AFL there in the NRL. Are 116 00:05:52,860 --> 00:05:55,889 Sean Aylmar: there only a handful of sports which can actually get 117 00:05:55,889 --> 00:06:01,049 Sean Aylmar: huge amounts of money off broadcast deals and B, big 118 00:06:01,050 --> 00:06:04,020 Sean Aylmar: money sports? Then the follow- up question that John is, 119 00:06:04,080 --> 00:06:06,990 Sean Aylmar: do you think the AFL and the NRL even more so 120 00:06:07,170 --> 00:06:09,510 Sean Aylmar: can keep getting those sorts of broadcast deals? 121 00:06:10,050 --> 00:06:12,479 John Stensholt: Look, I mean, yeah, question number one is that yes, 122 00:06:12,480 --> 00:06:15,990 John Stensholt: it's really just a handful of sports, AFL, NRL, probably 123 00:06:15,990 --> 00:06:19,349 John Stensholt: cricket now, rugby unions out to the market. Again, their 124 00:06:19,860 --> 00:06:21,990 John Stensholt: TV deal may be break even to what it's now 125 00:06:21,990 --> 00:06:25,200 John Stensholt: at best, may go backwards. Definitely, the two winter codes, 126 00:06:25,290 --> 00:06:28,380 John Stensholt: big money sports, they will definitely still attract a lot 127 00:06:28,380 --> 00:06:30,748 John Stensholt: of eyeballs, but I think that the nuance to that is 128 00:06:30,750 --> 00:06:33,269 John Stensholt: by the time their next contract negotiation has come up, 129 00:06:33,270 --> 00:06:35,879 John Stensholt: what will the free- to- air television networks look like? 130 00:06:35,879 --> 00:06:40,020 John Stensholt: I mean, channel seven is... It's a $ 270 odd million company 131 00:06:40,020 --> 00:06:43,349 John Stensholt: these days on the stock exchange. Channel nine has been 132 00:06:43,560 --> 00:06:47,130 John Stensholt: cutting staff and trying to cut costs. So the question 133 00:06:47,130 --> 00:06:50,789 John Stensholt: is, can those big TV networks still afford to pay 134 00:06:50,790 --> 00:06:53,369 John Stensholt: out those big money rights for sports? And if they 135 00:06:53,369 --> 00:06:56,670 John Stensholt: can't, well, can an Australian sport like the AFL try to 136 00:06:56,670 --> 00:06:58,890 John Stensholt: get a Netflix or an Amazon to actually pay out 137 00:06:58,890 --> 00:07:01,410 John Stensholt: some money for what is a niche sport in Australia? 138 00:07:01,440 --> 00:07:04,800 John Stensholt: It's a very, very difficult question to answer right now. 139 00:07:04,800 --> 00:07:07,230 John Stensholt: It really depends on what the TV landscape looks like 140 00:07:07,620 --> 00:07:09,989 John Stensholt: and where those sports fit into some of those bigger 141 00:07:10,109 --> 00:07:12,720 John Stensholt: global brand scenarios or strategies. 142 00:07:13,620 --> 00:07:15,570 Sean Aylmar: Some of the best athletes that don't get paid much 143 00:07:15,600 --> 00:07:17,580 Sean Aylmar: are the Olympians. And John, I know you're heading over 144 00:07:17,580 --> 00:07:20,460 Sean Aylmar: to Paris in the next few weeks. I'm very jealous. 145 00:07:20,970 --> 00:07:24,120 Sean Aylmar: What about the Olympians? And we've had Michael Johnson, the 146 00:07:24,120 --> 00:07:28,079 Sean Aylmar: former 200-400- meter world record holder of the US world 147 00:07:28,080 --> 00:07:30,270 Sean Aylmar: record holder, come out, and he's trying to develop a 148 00:07:30,300 --> 00:07:32,910 Sean Aylmar: Grand Slam event. We've had world athletics trying to put 149 00:07:32,910 --> 00:07:35,790 Sean Aylmar: more money into it. I believe that the gold medalists, 150 00:07:35,790 --> 00:07:37,830 Sean Aylmar: or some of the medalists this year in track and 151 00:07:37,830 --> 00:07:42,030 Sean Aylmar: field, will be earning money. Is Olympics just a labor 152 00:07:42,030 --> 00:07:45,120 Sean Aylmar: of love outside basketball and a few odd sports like that, 153 00:07:45,120 --> 00:07:46,830 Sean Aylmar: where obviously they've got professionals in it? 154 00:07:47,280 --> 00:07:50,160 John Stensholt: Yeah, it is. I mean, most... I think it's something like half of 155 00:07:50,160 --> 00:07:54,239 John Stensholt: Australia's athletes earn something lower than $ 30,000 a year. I mean, 156 00:07:56,010 --> 00:07:58,260 John Stensholt: the parents have to support them. They get sponsors to 157 00:07:58,260 --> 00:08:01,859 John Stensholt: a certain amount. There's government funding. There's what they call 158 00:08:01,860 --> 00:08:04,559 John Stensholt: the dAIS funding, which is for athletes that are on 159 00:08:04,559 --> 00:08:07,920 John Stensholt: the days bronze, silver, or gold medals, and that actually 160 00:08:07,920 --> 00:08:11,850 John Stensholt: tops out at around about the $ 35,000 mark each year. 161 00:08:11,850 --> 00:08:14,610 John Stensholt: So there's not a massive amount of money for some of 162 00:08:14,610 --> 00:08:18,119 John Stensholt: these other sports that are pretty popular, like the hockeys of 163 00:08:18,120 --> 00:08:21,780 John Stensholt: the world or other Olympic sports like the volleyballs. Maybe 164 00:08:21,780 --> 00:08:24,150 John Stensholt: a swimmer. Some of the swimmers do get some pretty 165 00:08:24,150 --> 00:08:28,001 John Stensholt: big sponsorship deals. I think the dAIS is like an (inaudible) 166 00:08:28,001 --> 00:08:31,020 John Stensholt: full for grand hacker getting paid millions of dollars is probably 167 00:08:31,020 --> 00:08:34,860 John Stensholt: over for now. It's harder going... Government funding is always 168 00:08:34,860 --> 00:08:40,529 John Stensholt: subject to politics. Brisbane 2032 is a carrot for the 169 00:08:40,529 --> 00:08:43,710 John Stensholt: athletes, but also for potential backers. So maybe there'll be 170 00:08:43,710 --> 00:08:46,230 John Stensholt: some better news off that, but I think the issue 171 00:08:46,230 --> 00:08:49,860 John Stensholt: these days is those professional sports, like AFL, NRL, and cricket 172 00:08:49,860 --> 00:08:52,679 John Stensholt: in particular, can pay their younger athletes more than the 173 00:08:52,679 --> 00:08:54,840 John Stensholt: Olympic sports. So that's why you're seeing a bit of 174 00:08:54,840 --> 00:08:57,659 John Stensholt: a drain of players going to those sports these days. 175 00:08:58,529 --> 00:09:01,740 Sean Aylmar: One final. Just football as in soccer, we've got the 176 00:09:01,740 --> 00:09:04,860 Sean Aylmar: Euros. We've got Spain. England over the weekend coming up. 177 00:09:05,490 --> 00:09:09,270 Sean Aylmar: Soccer in Australia, that seems to have ebbed and flowed, 178 00:09:09,270 --> 00:09:12,059 Sean Aylmar: and it seems to be ebbing. I'm not quite sure 179 00:09:12,059 --> 00:09:14,339 Sean Aylmar: which one I'm saying here, John, but yeah, it's not 180 00:09:14,340 --> 00:09:15,360 Sean Aylmar: at it's high. Let's face it. 181 00:09:16,109 --> 00:09:18,988 John Stensholt: No, and the A- League, which I've written about in 182 00:09:18,990 --> 00:09:21,718 John Stensholt: the last couple of months, and they spent $ 140 million 183 00:09:22,470 --> 00:09:25,230 John Stensholt: of private equity money that it's now gone in two 184 00:09:25,230 --> 00:09:27,719 John Stensholt: and a half years. It just shows you the cash 185 00:09:27,719 --> 00:09:30,900 John Stensholt: burn of what these leagues. They're a little bit like 186 00:09:31,200 --> 00:09:33,150 John Stensholt: tech startups are burn through a lot of money trying 187 00:09:33,150 --> 00:09:35,340 John Stensholt: to grow early on, trying to compete with the bigger 188 00:09:35,340 --> 00:09:37,980 John Stensholt: sports, and that's the problem. So yeah, soccer's got its 189 00:09:37,980 --> 00:09:40,500 John Stensholt: issues again. The money's run out. They've had to cut 190 00:09:40,500 --> 00:09:43,620 John Stensholt: back the distribution to all the clubs, so again, player 191 00:09:43,620 --> 00:09:47,429 John Stensholt: wages will go down, and its tougher times. The money 192 00:09:47,429 --> 00:09:49,290 John Stensholt: is really going to just a handful of big sports 193 00:09:49,290 --> 00:09:49,860 John Stensholt: here these days. 194 00:09:50,520 --> 00:09:54,629 Sean Aylmar: And very different to Europe, though, those Spanish millionaires and 195 00:09:54,629 --> 00:09:56,309 Sean Aylmar: the English millionaires. John, I'm going to ask for a 196 00:09:56,309 --> 00:09:57,958 Sean Aylmar: prediction on that. Spain or England? 197 00:09:58,410 --> 00:10:01,800 John Stensholt: Oh, I think the Spanish passing game, and their midfield, 198 00:10:01,800 --> 00:10:05,010 John Stensholt: and their couple of young wingers they've got just sensational. 199 00:10:05,010 --> 00:10:08,069 John Stensholt: I can't see getting past them. And quite frankly, it's 200 00:10:08,070 --> 00:10:09,868 John Stensholt: a bit more humorous to see England losing some of 201 00:10:09,870 --> 00:10:10,738 John Stensholt: these big tournaments, right? 202 00:10:12,330 --> 00:10:15,718 Sean Aylmar: John, is there any sporting question or rich list of 203 00:10:15,720 --> 00:10:17,460 Sean Aylmar: question I can ever ask you you don't have the 204 00:10:17,460 --> 00:10:17,970 Sean Aylmar: answer for? 205 00:10:18,690 --> 00:10:20,850 John Stensholt: Probably not, Sean. No. I'll do my best. 206 00:10:22,260 --> 00:10:24,090 Sean Aylmar: Thank you very much for talking to Fear & Greed, and 207 00:10:24,090 --> 00:10:24,989 Sean Aylmar: enjoy the Olympics. 208 00:10:25,320 --> 00:10:25,769 John Stensholt: Thank you. 209 00:10:26,219 --> 00:10:28,920 Sean Aylmar: That is John Stensholt, business reporter at the Australian. This 210 00:10:28,920 --> 00:10:31,260 Sean Aylmar: is the Fear & Greed Business Interview. Join us every morning 211 00:10:31,260 --> 00:10:33,960 Sean Aylmar: for a full episode of Fear & Greed, business news for 212 00:10:33,960 --> 00:10:36,840 Sean Aylmar: people who make their own decisions. I'm Sean Aylmar. Enjoy 213 00:10:36,840 --> 00:10:37,230 Sean Aylmar: your day.