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Speaker 1: Welcome to the Bloomberg Business of Sports podcast, where we

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Speaker 1: explore some of the big old money issues in the

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Speaker 1: world of sports. Michael Barr and I'm Danien Sass. Scarlett

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Speaker 1: fo she's not with us. We miss you, Scarlett. We'll

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Speaker 1: see you again later this week. But we are talking

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Speaker 1: soccer and there are a couple of soccer stories that

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Speaker 1: are out there that it's making the headlines and with

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Speaker 1: us Bloomberg's Carolina Milan and Alex Webb, both from Bloomberg,

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Speaker 1: Welcome to the Bloomberg Business of Sports. Thank you for

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Speaker 1: having me. Let's start with Lionel Messi and Carolina, this

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Speaker 1: is uh what you wrote about that soccer superstar or

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Speaker 1: football superstar, Leonel Messi is creating a holding company to

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Speaker 1: invest in sports media and technology globally. Tell us about that. Yeah,

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Speaker 1: it's it's very exciting news because you know, there's been

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Speaker 1: a lot of expectation right about what Messi's next moves

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Speaker 1: might be. Of course, for now everybody's focused on on

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Speaker 1: the World Cup, but certainly he's going to be, you know,

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Speaker 1: looking to make waves in other ways in sports. And

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Speaker 1: so what we know and what what he launched last

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Speaker 1: week is a holding company that is going to be

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Speaker 1: investing in sports, media and technology companies and companies that

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Speaker 1: are in the intersection of all three. So, you know, Alex,

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Speaker 1: I wonder if you could help me out here because

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Speaker 1: for me, um, you hear a lot of athletes. I mean,

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Speaker 1: I'll give you some examples. Michael Jordan with sport Radar,

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Speaker 1: you here, Chris Collin's Worth with PFF. You know, a

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Speaker 1: lot of you know, former pro athletes have moved into

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Speaker 1: the private sector, invested in you know, sport technology companies

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Speaker 1: and done rather well. But you know, you've got Kevin Ranch,

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Speaker 1: You've got Chris Paul, You've got Wayne right. I mean,

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Speaker 1: everyone is doing this. You know what makes line on

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Speaker 1: Messi different. But if you notice something with all those

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Speaker 1: names you just mentioned, they're all American. It is something

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Speaker 1: iron fact, just purely coincidentally, it's gonna be a climbing

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Speaker 1: name drop, at least for Europeans out there. I entered

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Speaker 1: Harry Kane, the England captain on Friday, and I mentioned

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Speaker 1: the fact that Messi had just started or was getting

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Speaker 1: into his own VC firm and he and his comment was,

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Speaker 1: in the US people have been a lot better at

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Speaker 1: this that US American athletes have for a long time

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Speaker 1: had a side hustle, been building their business on the sides,

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Speaker 1: they've got something to go to when they retire. And

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Speaker 1: you know, our colleague Jason Kelly has got a whole

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Speaker 1: video series on this called Athlete Empire. So the fact

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Speaker 1: that obviously Messi is one of the best remunerated athletes

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Speaker 1: in the world, he has plenty of capital to play with.

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Speaker 1: Does he have any particular investment shops, I would hazard

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Speaker 1: the answer is probably no. But if he can be

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Speaker 1: something of a rainmaker when it comes to raising other

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Speaker 1: external for funds and bringing you casting a bit of

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Speaker 1: light on his investments, then that's probably the advantage that

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Speaker 1: he brings to the table. When I asked Carolina more

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Speaker 1: about Lionel Messi, uh, you know the holding company, Playtime,

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Speaker 1: it's based in San Francisco. What made him want to

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Speaker 1: to base it in San Francisco? Here's the holdingcome me?

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Speaker 1: Because we usually think of Lionel Messi. We we think

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Speaker 1: of him in in football, uh and more overseas, But

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Speaker 1: it is the money here in the US. Let's let

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Speaker 1: me put it that way. Yeah, that's a great question.

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Speaker 1: And you know, when when I was talking with sources

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Speaker 1: about this story. Something they mentioned too is that the

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Speaker 1: other thought that was going around was that maybe his

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Speaker 1: entry into the investing world and in the U S

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Speaker 1: would be through Miami. You know, that's a very big

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Speaker 1: hub for Latin Americans and you know, high high net

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Speaker 1: worth Latin Americans, and what when we look at San Francisco.

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Speaker 1: I think he's trying to make a point that he's

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Speaker 1: going to be looking at the tech world at the

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Speaker 1: start of world, that companies that are um right right

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Speaker 1: at the beginning. Although what we also know that he's

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Speaker 1: looking into what they call stage agnostic opportunities. So what

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Speaker 1: that means is that could be anything from seed investments

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Speaker 1: for very small companies or companies that might be incubated

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Speaker 1: through playtime. And actually, um, two of the ones that

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Speaker 1: that they've already invested in that he's already invested in

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Speaker 1: our are of that stage. But um, what what I

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Speaker 1: was told is that he's also actually looking at potentially

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Speaker 1: much larger investments that could even include whole sports teams.

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Speaker 1: So I think to answer your question, Silicon Valley sends

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Speaker 1: a strong signal, a strong sends a strong flare that

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Speaker 1: he is interested in that niche where sports meets technology.

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Speaker 1: You know, Alex, I wonder if we could talk about

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Speaker 1: the timing of this decision, right because let's be clear,

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Speaker 1: you know, Messy, you know, you have to go all

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Speaker 1: the way down in terms of looking at the voting

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Speaker 1: for the ballon dor. I mean, he wasn't he He

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Speaker 1: didn't finish like he has in years passed. Obviously, he's

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Speaker 1: announced that this is going to be his last World

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Speaker 1: Cup and Cutter coming up in a few months time,

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Speaker 1: and and so I'm just curious what your thoughts are

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Speaker 1: on this, you know, I mean, is now the right

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Speaker 1: time for Messy to be, you know, making this type

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Speaker 1: of announce been making this type of business endeavor? And

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Speaker 1: you know, what happens if, for example, you know, he

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Speaker 1: finishes very poorly in the World Cup. What happens if

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Speaker 1: you know, PSG kind of drops out? What I mean,

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Speaker 1: you know, does anything matter from this point out in

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Speaker 1: terms of how he performs on the pitch. I think

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Speaker 1: there are a lot of people out there, and not

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Speaker 1: just Argentina fans, who was like to see Mercy crown

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Speaker 1: his you know, stellar career with a World Cup win.

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Speaker 1: I don't honestly think that Argentina necessarily has a particular

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Speaker 1: stellar team, with you know, him being the main exception

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Speaker 1: to that. That of course hasn't stopped not the Argentina

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Speaker 1: in previous years from from winning trophies when they really

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Speaker 1: only had one you know, top top draw player. I

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Speaker 1: frankly think that the timing on this is probably less

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Speaker 1: to do with him and his retirement plans than it

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Speaker 1: is you know who approached him, right, I'm sure that

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Speaker 1: Covid Gimmi and who is the you know, the person

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Speaker 1: who is actually heading up this thing. I'm sure he

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Speaker 1: pitched him the idea, right, and they've probably been talking

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Speaker 1: about this for a little bit a little bit of time,

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Speaker 1: and then he said, okay, well let's pull the trigger

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Speaker 1: and let's make it happened. Frankly, there isn't a huge

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Speaker 1: amount of venture capital flowing around at the moment. You know,

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Speaker 1: the first strings have been tightened as uh, you know,

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Speaker 1: the yields have increased in the bond markets and elsewhere,

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Speaker 1: which means that actually the appeal of going to venture

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Speaker 1: which is high risk and low guaranteed and no guaranteed

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Speaker 1: returns um if you are someone who has a bit

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Speaker 1: of capital. Therefore, it might be an opportunity moment to

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Speaker 1: get into the space because you might be able to

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Speaker 1: get certainly better deals. So I think, you know, that's

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Speaker 1: probably got as much to do with it as anything

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Speaker 1: to do with his own his own career career ambitions,

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Speaker 1: if you allow me a thought, um, just to to

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Speaker 1: jump off from from what Alex was saying. Um, we

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Speaker 1: know that one of the companies that are part of

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Speaker 1: Playtimes investments match day dot com, which has have a

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Speaker 1: minion who is the person that will be running Playtime.

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Speaker 1: He's also the co founder of this startup, match day

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Speaker 1: dot com. UM. The people around Messie have been very

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Speaker 1: tight lipped about what exactly the company is going to launch,

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Speaker 1: what's there, what's what's actually the the plan that comes

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Speaker 1: to the startup. But we do know is that they're

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Speaker 1: planning to launch it before the World Cup begins in November.

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Speaker 1: So that means that that's got to happen in the

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Speaker 1: next few weeks. And so it seems to me that

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Speaker 1: they're kind of paving the way to and to make

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Speaker 1: a big announcement about this um startup and to be

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Speaker 1: able to say here's one of the startups that Messi

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Speaker 1: has invested and maybe to do that, they needed to

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Speaker 1: make sure that the people already knew that he had

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Speaker 1: a busy firm that was, you know, starting to bet

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Speaker 1: on specific soccer ventures. I'd like to weave another story

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Speaker 1: in here, and this is too either Carolina or the

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Speaker 1: Alex and it's about the Super League project. Now, the

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Speaker 1: last time this came up, this was April and I

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Speaker 1: thought I saw the great pumpkin rising from the pumpkin patch,

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Speaker 1: and then I collapsed and I asked Damien, hey, uh

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Speaker 1: did I faint? And Damiens, I know you did well.

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Speaker 1: I was hanging over you trying to give you CPR

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Speaker 1: and then you know it's the English Premier League says nope,

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Speaker 1: we're pulling out. And that was just like two days

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Speaker 1: later when it first was launched and then it all collapsed.

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Speaker 1: But now according to the new CEO of A twenty

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Speaker 1: two Sports Management, the company promoting the revamp plan, uh

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Speaker 1: and to either one, he's saying, this is very much

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Speaker 1: alive and whoever wants to feel this go ahead. I mean,

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Speaker 1: I'll have a crack if it currently doesn't want to

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Speaker 1: go in. I mean, look if if the reason it

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Speaker 1: didn't succeed before is because the English clubs didn't want

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Speaker 1: to do it, then it seems fairly clear that well

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Speaker 1: then you do it without English clubs, and that seems

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Speaker 1: to be what he's what they're therefore doing. You know,

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Speaker 1: it was always um sort of Bassa around Madrid and

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Speaker 1: UVA who had really been pushing this. PSG didn't get involved,

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Speaker 1: neither did find Munich with the other kind of really

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Speaker 1: big beasts in European football, and they have long been

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Speaker 1: at a colossal financial disadvantage of the Premier League teams,

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Speaker 1: not not just because of the broadcast rights which are

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Speaker 1: so much more valuable in the UK than the r s,

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Speaker 1: where that's fundamentally to do with the way that then

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Speaker 1: they have been negotiated for the past almost thirty years

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Speaker 1: now where there's sextually collective bargaining where other leagues were

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Speaker 1: slow to catch up on that, and that's given them

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Speaker 1: a huge head start. But it's also to do with

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Speaker 1: the ownership structures, whereby we have more essentially sovereign wealth

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Speaker 1: and not least uh sort of natural resource sovereign wealth

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Speaker 1: coming out of the Middle East, which is funding some

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Speaker 1: of our top teams here in England, and so you

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Speaker 1: know that is very hard to compete with when you're

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Speaker 1: Barcelona around Madrid and you can't, um, you have you

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Speaker 1: can't sele equity to fund your playing squad because you're

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Speaker 1: owned by your fans, right, and so that means that

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Speaker 1: your only access to outside capital is fundamentally through debt,

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Speaker 1: and um do you have limits on how much debt

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Speaker 1: you're allowed to raise because of the rules of your

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Speaker 1: fan base st ownership. That means they can't write blank

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Speaker 1: checks in the same way that I mean, you know,

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Speaker 1: I say hyperbolically, but right these massive checks that Manchester

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Speaker 1: City or PSG or Newcasts United hypothetically might be able

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Speaker 1: to do well. And and the other thing too is

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Speaker 1: and I will not mention that the person I spoke

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Speaker 1: to about this, but this person is very important in

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Speaker 1: the soccer world and we were talking about this. Uh,

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Speaker 1: the way it was first presented about the Super League

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Speaker 1: quite frankly, it was all wrong because the fans just

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Speaker 1: you know, made the gnarly face. It's like, well wait

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Speaker 1: a minute, and it's like, what are we doing here?

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Speaker 1: And I'm just wondering if it was sold wrong in

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Speaker 1: the beginning, and now maybe they've learned their lesson and

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Speaker 1: maybe they're going to try to promote this, uh in

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Speaker 1: a more proper way. I mean, you know, I think

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Speaker 1: that like they would like to sell the idea, that

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Speaker 1: was the messaging that they got wrong. I think, certainly

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Speaker 1: when it comes to the UK, the issue is is

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Speaker 1: deeper than that. But you know, they clearly didn't get

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Speaker 1: the messaging. They didn't message it brilliantly. But I don't

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Speaker 1: think that was the heart of the problem, and I

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Speaker 1: think it would be um, it would be something that

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Speaker 1: they would be keen to promote. Now if you can

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Speaker 1: get some sort of super league, which is you know,

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Speaker 1: those sort of big Italian Spanish teams, then you know,

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Speaker 1: maybe you actually just end up with an Italian Spanish League,

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Speaker 1: which these sort of competitions existed in the past, used

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Speaker 1: to have like an you know, British Isles Cup and

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Speaker 1: various other things. Then ultimately it comes down to a

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Speaker 1: sort of how many how many games can you get

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Speaker 1: out of players in a given year. The underlying issue

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Speaker 1: is that one of the reasons that football is so successful,

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Speaker 1: um is also that it's there's so much more passion

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Speaker 1: involved than in some other sports, and particularly and I

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Speaker 1: don't want to cast too many ex versions US sports,

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Speaker 1: and that's because there's relegation and promotion, so there's so

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Speaker 1: much more at stake that if you have a bad season,

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Speaker 1: you get relegated and then you're in the doldence for

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Speaker 1: a few years. So that's why one reason why fans

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Speaker 1: get so passionate about it. Whereas if you have a

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Speaker 1: poor season in the NBA or the NFL or you know,

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Speaker 1: LEAUE baseball, you get topic of the draft for next year,

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Speaker 1: and so you know, it's kind of a bummer that

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Speaker 1: you had a poor season, but there's always next year,

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Speaker 1: whereas like in European sport, there is not always next year.

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Speaker 1: If you've you've got relegated. And so if you create

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Speaker 1: this sort of super league structure which doesn't have relegational promotion,

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Speaker 1: and they've alluded to there being maybe something akin to

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Speaker 1: relegation and promotion in this or qualifying in this new

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Speaker 1: super league proposition, but if you can, if you don't

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Speaker 1: have that same upwards downwards movement, then it's slightly you know,

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Speaker 1: denudes the sport. It makes it less interesting than might

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Speaker 1: otherwise be, and that in itself is a problem. So Carolina,

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Speaker 1: I mean, it's been three years since I less visited

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Speaker 1: you down in Buenos Ares, right, A lad has changed

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Speaker 1: over the last three years. And for our audience to

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Speaker 1: be clear, Carolina is the bureau chief for for Argentina

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Speaker 1: for Buenos Aires Arfice, so pleasure to have a here.

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Speaker 1: But but my question for you is this, I mean,

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Speaker 1: what is going on on the ground in Argentina. I

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Speaker 1: mean is the country ready for the World Cup? Is

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Speaker 1: it going to be you know, aired widely or people

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Speaker 1: going to be able to to to watch you know,

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Speaker 1: Messi's games, are they're gonna be able to see it?

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Speaker 1: More importantly, you know, when Messi's career is over, you know,

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Speaker 1: do we expect him to come back to Argentina to

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Speaker 1: invest in the country too, to be involved in government

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Speaker 1: maybe perhaps or in the private sector. I'm just curious

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Speaker 1: what your thoughts are on that. Wow, lots of lots

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Speaker 1: of amazing questions. So let me take a stab at

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Speaker 1: the first ones first. So as far as whether people

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Speaker 1: are ready for the World Cup. Oh, people have been

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Speaker 1: waiting for this World Cup for years. I mean there's

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Speaker 1: so much excitement around it. The whole city is buzzing

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Speaker 1: about it and we're still, um several weeks away. I mean,

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Speaker 1: for example, just just to give you a feel for it,

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Speaker 1: were already at the point where you turn on the

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Speaker 1: TV and there's um ads for anything that you can

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Speaker 1: imagine have to do the World Cup. There was this

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Speaker 1: amazing ad that was doing the rounds this weekend. It

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Speaker 1: was a beer ad, and but it was just like

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Speaker 1: extremely touching because it was about how people were, um,

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Speaker 1: you know, trying to draw comparisons between the lead up

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Speaker 1: to this World Cup and things that happened in six

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Speaker 1: when Argentina won the World Cup as well, and so exactly.

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Speaker 1: And so you know, I know that that ad went

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Speaker 1: totally viral and because it just speaks to people right

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Speaker 1: who want to believe that this is the year that

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Speaker 1: that Argentina wins the Cup, I mean. And and something

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Speaker 1: else to mention here is that the pandemic was rough

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Speaker 1: in Argentina, and you know, like so many other countries,

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Speaker 1: the economy went into recession. It's it's um. It's been

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Speaker 1: growing very slowly this year. UM it's still still growing

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Speaker 1: but but not that much. Inflation is expected to be

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Speaker 1: a hundred percent at the end of the year. And

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Speaker 1: so I think people can do with some good news.

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Speaker 1: People can do with with some excitement and you know,

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Speaker 1: with all of that, as you were asking me, how

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Speaker 1: are people going to watch this? Right? I mean we

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Speaker 1: are in a in a topic on my situation where

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Speaker 1: people's wages are not catching up to inflation. And so

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Speaker 1: for example, last week the government announced a plan where

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Speaker 1: you can buy appliances including TVs in thirty installments, so

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Speaker 1: that means you can pay for them in thirty months. Uh.

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Speaker 1: And if you ask me, that has to do with

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Speaker 1: the World Cup, right, that has to do with the

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Speaker 1: fact that you know people are thinking, for example, about

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Speaker 1: upgrading their home TVs. In Argentina, there's a big culture

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Speaker 1: of watching games with your friends at in someone's house.

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Speaker 1: You know, you'll get gather some beers and and everybody

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Speaker 1: will get together and bring some snacks there. It's it's

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Speaker 1: a bit different from other places where I know people

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Speaker 1: will will their first thought will be all, I'll go

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Speaker 1: to the bar. Here, it's more something you'll do like

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Speaker 1: it's like a family thing. It's like your your closest friends.

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Speaker 1: They will all get together in a living room, all

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Speaker 1: around a big t and so you know, it's it's

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Speaker 1: interesting there how the economic situation intersects with all the

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Speaker 1: excitement that that's that's brewing for this World Cup. Well,

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Speaker 1: I've been very sentimental with a couple of beers and

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Speaker 1: me watching TV. But that's for another show, uh, Carolina Milan,

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Speaker 1: Alex Webb, Bloomberg's own thank you all so much for

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Speaker 1: talking football with us, and we really do appreciate it

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Speaker 1: right here on the Bloomberg Business of Sports. Thank you,

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Speaker 1: thanks for having us. Thank you so much having me.

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Speaker 1: This has been the Bloomberg Business of Sports podcast. We

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Speaker 1: explore some of the big money issues in the world

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Speaker 1: this show every Monday, Wednesday and Thursday. We talked to

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Speaker 1: some of the biggest names in sports and some of

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Speaker 1: the biggest people in Bloomberg who know the sport front

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