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Bloomberg Business of Sports
Man Utd Plans New Venue; Amazon Closing Streaming Gap Using Live Sports
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- [00:00]
Michael Barr
The FIFA World Cup 26 is coming to North America. Get closer to where business meets the beautiful game with a hospitality package featuring premium seats and entertainment. Get closer to wins on and off the pitch. Register interest@hospitality dota.com interest when you own.
- [00:20]
Bloomberg Business of Sports Announcer
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- [01:40]
David Hellier
The business of sports can be intimidating or hard for a starter to break into.
- [01:44]
Damian Sassauer
We really appreciate when our owners are actually there, you know, with us through the journey.
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Bloomberg Business of Sports Announcer
Teams, ours especially have been very intentional to diversify at all levels of the company.
- [01:53]
Julie Fine
I think we're in the golden years.
- [01:54]
Damian Sassauer
For the NFL and college football. Our demographic reach has continued to expand.
- [02:00]
Bloomberg Business of Sports Announcer
This is going to be really unlocking.
- [02:02]
Michael Barr
The streaming platform for sports fans. Sports valuations are rising. We'll see when they peak. You don't have to be the best in your sport to make a whole ton of money.
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Bloomberg Business of Sports Announcer
Bloomberg Business of Sports From Bloomberg Radio.
- [02:18]
Michael Barr
Hello, this is the Bloomberg Business of Sports where we explore the big money issues in the world of sports. I'm Michael Barr.
- [02:24]
Damian Sassauer
I'm Damian Sassauer.
- [02:25]
Vanessa Perdomo
And I'm Vanessa Perdomo.
- [02:27]
Michael Barr
Scarlet Fu is on assignment. Coming up on the show, we talk soccer and Manchester United's plans to build a big, brand new facility.
- [02:35]
Damian Sassauer
We will also hear from Dan Hunt, of course. He's co owner of the Kansas City Chiefs, but he's got his eyes set on soccer. As president of FC Dallas, he's got big plans for the FIFA World Cup. When it comes to the United States.
- [02:47]
Julie Fine
We'Re in a really unique spot in Dallas because Houston has six matches, Dallas has nine, Kansas City has six. So somebody can make a regional play to see a lot of World cup soccer by staying in North Texas.
- [02:59]
Michael Barr
All that and more is straight ahead on the Bloomberg business of sports. But first we check in on the sports media landscape with some streamers looking to grow in live sports.
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Vanessa Perdomo
Right now Amazon's making up ground on Disney in ad dollars via cord cutters and live sports is a big part of that.
- [03:18]
Michael Barr
Here to take us through the latest research on this from Bloomberg Intelligence is Bloomberg intelligence technology and media analyst Geetha Raghunathan. Geetha, we've got a fight between Amazon and Disney. What is this spat all about?
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Geetha Raghunathan
So this is really so, you know, we had the streaming wars. The streaming wars are over. We kind of know who won for the most part, that was Netflix. Now really the next phase, I would say of this, this whole kind of streaming land grab is become the ad supported streaming wars, right? So now everybody, all of these major platforms, whether it's a Disney, whether it's an Amazon, even a Netfl, has now advertising on their streaming platform and everybody is trying to juice up their advertising business as well as their advertising based subscribers. And this really is just, you know, this makes sense because eyeballs are moving from linear platforms to streaming. And so obviously it makes sense that advertising dollars should also follow. And you know, all of these platforms, whether it's a Disney, whether it's an Amazon, whether it's Netflix, they want to make sure that they have skin in the game and they want to make sure that they're capturing as, as they can off that connected TV ad pie.
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Vanessa Perdomo
You know, tell us how obviously sports must play a huge role in that. Now all these streamers want to get live sports onto their networks and I mean, that's really the only time that I can think of when I'm sitting down watching during a game. That's pretty much what it is. You know, you got to just watch it. So tell us about how sports is really pushing that next ad space.
- [04:58]
Geetha Raghunathan
Oh, absolutely. So sports is really the last kind of bastion for linear tv, which is why linear TV has been really fighting hard to hold on to sports rights as much as they can, as long as they can. But you know, it is kind of, the bundle has kind of finally cracked and we are seeing more and more sports actually leak out of the ecosystem. And in many ways I think Amazon has really Kind of pushed the envelope here, right? So we've seen Amazon make a big play for, you know, NFL, the Thursday night package. And this year I think is really transformative in many ways because they have invested close to almost $2 billion. They're going to be paying about $1.8 billion per year for an NBA package which allows them to stream 66 regular season games. So that's again a huge bet. And again it goes to your point, Vanessa. This is all about, you know, this has become the new battleground for all of these ad supported tiers and everybody wants to make sure that they have the best content. And the best content is sports because that is where you have a captive audience and so advertisers are willing to pay those big bucks in order to reach those audiences.
- [06:11]
Damian Sassauer
You know, Geetha, you just have to remind our audience where do we find games for the NFL this season? I mean, I'm looking right now, right? And Amazon, I know it has NFL Thursday night, it's got the Black Friday, it's got some wild card games, right? You've got like you mentioned linear tv. I can't believe we call, we call it linear TV now, but we're calling it linear tv. I mean they're going to get your Sunday, you know, kind of one o', clock, four o'. Clock. I mean, I think Netflix has Christmas, Alphabet has Sunday ticket. I'm trying to keep track of it all. Talk to me about which medium is going to really benefit the most from sports broadcasting in the coming season.
- [06:47]
Geetha Raghunathan
That's a great question. Content discovery. And you're really talking about the biggest pain point. You have all of this great content, but sometimes just finding it and knowing where to go, it tends to be so frustrating for all of these viewers. I think we are going to see some improvements through the year. So the big, big, big thing that everybody is kind of waiting for in the media world actually has to do with a big sports announcement that's coming out from Disney a little bit later this year, which is for the very first time in their history they have espn, which has always been kind of synonymous with the pay TV bundle, is actually going to go a la carte. So they call it ESPN Flagship. And this is basically all of the marquee content. ESPN content, which traditionally you can only get through a TV subscript, now going to be available over the top. And that's going to happen some sometime in August. And I think what espn, you know, they haven't necessarily made any announcements just yet. We do know that the Product is probably going to price anywhere from about 25 to $30 a month. What they have said is, you know, obviously all of the content is going to be there. They're going to have. They're going to integrate sports betting. They're going to make it as customizable as possible. You know, kind of really, really prioritizing the user experience. I think that's, that's what they're really going for. But I think eventually, once they have a critical mass of subscribers on the platform, they are going to finally, you know, integrate and kind of bring in all of the other different sources. That's the way I'm thinking about it. It's, you know, we still have to see how exactly it plays out, but they're going to, I think, make it easier for people to find all of the sports content that they want to watch in one single place.
- [08:33]
Michael Barr
I want to ask this question and just giving a view on society in general. And I'm old enough to remember free TV. You just flip the channel, you turn it on two, which was CBS4, NBC7, ABC, and you saw what you wanted for free. And I remember one day when I was still living with my mom and dad and I wanted to get cable, my father lost his mind. He was like, why in the world would you want to pay for tv? Well, then, you know, three satellites later, he, you know, he clicked into it. My point is, how did we change as a society from hey, this is free TV to now, forget cable, we've gone all the way to streaming this and streaming that, whatever. Just your view on society. What changed us?
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Geetha Raghunathan
Content is expensive, you know, so if you just kind of look at Disney's content bell, right? They are one of the biggest spenders in the media ecosystem, more than Netflix. So they're spending roughly $25 billion on content every year, of which $11 billion is just on sports rights. So sports is a huge part of the equation. And yes, Disney is paying out for that content. They are. You know, they're. They're paying and they have to get paid. And that's really the whole origin of the pay TV bundle. And people kind of shelling out the $100 per month and really the whole creation of the. The media food chain, if you will, which by, you know, right now is kind of in shambles. But, but, you know, content is still expensive. Sports rights continue to be expensive. I mean, just that last NBA deal, the one that, that the NBA concluded last year, saw a 70%. Not. Not a 70%. Sorry, it was a 270% increase in the, you know, the total rights package. So really exploding in terms of, you know, how we are seeing some of these fee hikes play out. TKO is the other big one, which is right now actually negotiating for both the UFC as well as some of the WWE rights. They're looking for 100% increase. So all of these sports leagues, they know that their content is valuable, they know that people are paying to watch and so, you know, they're charging heavy fees and that gets ultimately passed on to the consumer.
- [10:54]
Vanessa Perdomo
Geetha, you brought up a lot there for Disney, obviously spending all this money. And ESPN still really is that name in sports that everybody knows, you know, is the number one. But so is really the new NBA deal and Thursday Night Football. Really how Amazon was able to close this gap with Disney? Like I feel like Disney has Hulu and they have Disney plus ESPN plus. They have all those things. So I feel like they should be really in a league of their own. How was Amazon really able to close that gap with them?
- [11:23]
Geetha Raghunathan
Okay, so what Amazon did was kind of a little bit sneaky, I would say, but I think it served its purpose. So the, so the way that, you know, normally some of these streaming platforms introduce their ad supported tiers is, you know, they do the Netflix route, right? So if a standard subscription costs $15, you basically introduce an ad supported subscription at about half the price of $6 or $7 a month. What Amazon basically did is they said, hey, whatever you're watching right now, we're just going to stuff ads there. If you don't want to watch the ads, you know, you pay us extra. So they took the exact opposite approach by just making ads the default option for everybody and forcing them to opt out, out of it. So that gave them an instant subscriber base of almost, I want to say almost 150 million. They started out actually by saying that they had about 115 million, we think that's obviously grown over the past year or so. And that just allowed them to not only serve ads, but go to their advertisers and say, see, we already have like 120 million subscribers. Is there any, do you have any.
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Damian Sassauer
Data that's come in where there are, I guess, 50 year old plus guys like me who all of a sudden arrive in streaming and we're actually shopping on TV during the games. I mean, so I mean now you talk about sports gambling. Michael Barr, you see where I'm going here. And maybe we're just now scratching the surface of the potential, right? I mean, Geeth, do you have any numbers there? That kind of talk about people's willingness to sit through commercials and actually shop online during games.
- [12:54]
Geetha Raghunathan
I mean this is such an excellent point that you bring up Damian, because this is really what Amazon's play is, right? The connected TV is just the gateway into really emerging entertainment and E commerce. They want to have shoppable tv, right? They want their viewers to make purchases right from their screens. And so that's exactly what they want. And Amazon, I mean in terms of numbers, Amazon, the way that they've kind of conquered advertising, just about five to 10 years ago advertising was $0 and today for Amazon it's a $60 billion business. In the next five years this is probably going to go to about 100 billion. And a lot of that is of, you know, their E commerce business, right, that the search advertising or what we call retail media advertising. And ultimately they want to do anything and everything they can to juice those. Not only, you know, the number of people that they have shopping but of course also the, you know, the advertising dollars, everything. So everything goes hand in hand here with Amazon. But you're absolutely right. I mean it is, it is that whole integrated experience and they want people to spend more, you know, on their platform and they're doing it through this, through the ads, through what they call shoppable tv.
- [14:05]
Michael Barr
Our thanks to Bloomberg Intelligence technology and analyst Geetha Raghunathan. Up next, we turn to soccer and Man U's plans to build a brand new venue for my colleagues Damien Sassower and Vanessa Perdomo. I'm Michael Barr. You're listening to the Bloomberg Business of Sports from Bloomberg Radio around the world. The FIFA World Cup 26 is coming to North America next summer. It's the ultimate celebration of sports and culture and an opportunity to elevate your company. Get closer to where business meets the beautiful game with a premium hospitality package. Build partnerships in the best seats and suites. Achieve goals over world class food and beverage. Get closer to wins on and off the pitch. Register interest@hospitality.FIFA.com Interest Join Bloomberg in Houston or via livestream on November 4th for the future. Finding the Opportunities this 2025 event series will examine how companies investing in their businesses to create efficiencies, innovating their products and services and improving the customer experience. This series is Presented by Invesco Q. Q. Q. Register@BloombergLive.com FutureInvestorHouston that's BloombergLive.com FutureInvestorHouston this is.
- [15:31]
Bloomberg Business of Sports Announcer
Bloomberg Business of sports From Bloomberg Radio.
- [15:36]
Michael Barr
This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. Sports. I'm Michael Barr along with my colleagues Damian Sassour and Vanessa Perdomo. Scarlet Fu is on assignment.
- [15:47]
Vanessa Perdomo
One of Europe's biggest sports teams, Manchester United, is ready to build a brand new venue.
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Damian Sassauer
The project for a new stadium could cost over $2 billion.
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Michael Barr
Here to talk to us about the project and more is Bloomberg UK business reporter David Helliert. First of all, hello and welcome to the Bloomberg Business of Sports.
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David Hellier
Yeah, hi. Good to speak to you guys.
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Michael Barr
Well, it's a brand new 100,000 seat venue. Tell us about it. Because it looks like it's going to be a big job producer.
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David Hellier
Yeah, it will be a big job producer if it gets produced. It's still very contingent on the government doing its bit and putting in a lot of money into the regeneration of the area. If that happens, it's going to be a very big deal. It was a curious announcement yesterday because we've been hearing a lot about redevelopment, Old Trafford or maybe a new stadium, which would it be? And Jim Ratliffe announced it with kind of bit of fanfare yesterday in London, which was a bit surprising. You would have thought he'd have done it in Manchester in the building of Norman Foster, the architect and. But yet he sort of kept saying, it's only going to happen if the government does its bit. So it's still. It's not a done deal, as it were.
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Vanessa Perdomo
Is there going to be government funding helping build the stadium also?
- [17:06]
Michael Barr
No.
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David Hellier
I mean, they were clear that they would fund the stadium themselves. The club, the company, Manchester United would fund that themselves. But they are making it very conditional on transport links, you know, kind of landscape areas outside the stadium, because they see this very much as a regeneration scheme for the whole area. And they were kind of saying if the government doesn't do that, then we're not really going to build, you know, we're not going to build the stadium. So it's kind of. I think there's a lot to go for here still. But it seemed to me that they were kind of like putting a bit of pressure on the government, saying that this is what we're going to do, we're going to guarantee the stadium and it's going to cost 2 billion. We're going to raise that privately. But we do want you to do your bit. And so I think now it's kind of like bit of pressure. It does fit in, in a way to the government's overall program of, you know, being the number one thing that the government is talking about at the moment, as well as sort of cutting back on other areas as expenditure. But in certain fields, you know, in certain areas, the government's really committed to growing the economy. And then there's going to be a big political debate because should we really be growing the economy through the creation of a football stadium, or should it be through the nhs or should it be industry or whatever? Like I say, the debate is kind of just beginning now.
- [18:28]
Damian Sassauer
Well, David, you have to walk me through this. Let me walk me back a year when Jim Ratcliffe spent about 1.$5 to buy a third of the team. I think Forbes just in December placed man u 14th of all global sports franchises at a valuation of 6.6 billion. And yet I look at Manchester, it's the fifth largest city in the United Kingdom. I mean, it's got, what, 600,000 people there? I mean, London's got 8.8 million. Why should the UK government pay anything to build another stadium in Manchester?
- [19:01]
David Hellier
In terms of the performance of Manchester United, I mean, it's spectacularly bad. The club hasn't been in this kind of situation in the league since 1991, before the Premier League even existed. It's a very, very small chance, but they are doing so badly that they could be relegated at the end of the season and in the championship next season. It is a very, very tiny chance, but it's not impossible. Three teams get relegated at the end of the season. They are very close to being in that fight. Although points wise, it would take a hell of a lot for them to go down. So they're playing really poorly. They've got a new manager. He said it's the worst Manchester United team in history.
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Damian Sassauer
All right, let's not beat up Manu. But, I mean, I. One I just want to get down to is, does the city really need another stadium? I mean, with all that's going on in the UK economy right now, should taxpayer dollars be used for another stadium? What is the benefit back to the economy?
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David Hellier
Yeah, I mean, that is a good question. And there'll be a lot of people that will not be wanting the UK government to put a penny into this. On the other side of the coin, the UK economy, as you say, is very focused on London. There's been, over the past few years, there's been all kinds of government initiatives to encourage growth in the northern part of the country, which is. Which is less prosperous. There was a northern powerhouse that the Conservatives tried to create, but it never really got anywhere and it included sort of improving transport links and everything like that. And in Manchester you do have two of the most famous football clubs in the world.
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Damian Sassauer
Of course, two of them have some.
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David Hellier
I would say Manchester City, you know, would count.
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Damian Sassauer
Well, no, but that's what, but that's what I mean. I mean there's already two steps. I guess what I'm just trying to say is for a population of 600,000 people, right? I mean they already have a hundred. I mean that's the existing stadium, the legendary stadium seats 100,000. So I don't know what are they talking about? Are they Talking about another 100,000 capacity stadium? Is it less than that? I'm just trying to get the thought process.
- [21:06]
David Hellier
Yeah, sure, sure. I mean it's an ambitious project. I mean it's 100,000, which would be the biggest stadium, bigger than Wembley, which is sort of 89,000 in London, bigger than, you know, I mean, Old Trafford. The current man benched United Stadium is already the biggest stadium in London. This would be 25,000 more. So another 30% on top. But you know, Manchester United, Jim Ratcliffe the other yesterday was saying, you know, it is the biggest one, he thinks is the biggest club in the world, is one of the biggest clubs in the world, it is capable of attracting 100,000. And if it does that, and it would do that probably, unless it falls off a cliff on the field, which is it's doing a good job of looking like it's doing at the moment. But even at the moment, even 14th in the league, with no prospect of Europe next season, no prospect of winning the league, it's still getting 74,000 every single week. So there's no shortage of people that want to go to see Manchester United. The question is not whether the stadium should be built at all, but whether the government should put its hand in its pocket and kind of help it to be built. That's the question, I guess.
- [22:14]
Michael Barr
I know we're running out of time, but I want to bring up. Nevermind on the pitch about Man U. Off the pitch. Mr. Ratcliffe has been cutting jobs. He's trying to get cost under control. Can you comment briefly about.
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David Hellier
You know, he's been so tough. I mean, like no other football owner in England in recent years, he's cut the workforce from 1100 by 450. He's cut the meals, the free lunches. He's cut the perks for employees who come down to London for the cup Final last year he cut the Christmas party. He's really sort of what he's, he's kind of bringing carrying over from his chemicals industry background, a real savage look at costs. You know, nothing else been been done before in football. But of course, at the same time as he's doing that, he's losing money on making bad decisions.
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Michael Barr
Bloomberg UK business reporter David Hellier, thank you so much, sir, for joining us on the Bloomberg business of sports. Our thanks to David Hellier for joining us. He's Bloomberg News UK business reporter and.
- [23:15]
Vanessa Perdomo
Sticking with my sport here, soccer. Bloomberg Dallas bureau chief Julie Fine recently caught up with Dan Hunt. He's co owner of the Kansas City Chiefs and is president of FC Dallas.
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Damian Sassauer
And he's making big plans for the FIFA World cup in Texas. Texas. Let's hear a little their conversation.
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Vanessa Perdomo
Big news.
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Dan Hunt
Dallas gets the international Broadcast center for World cup in 2026 in downtown Dallas, Kay Bailey Hutchinson Convention center okay, so what exactly does that mean?
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Vince Tizio
Really?
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Julie Fine
It's the storytelling of the entire World Cup. This is the centralized broadcast center. In the 2022 World cup in Qatar, there were 187 countries that broadcast live, live from that studio there in Doha. And so we have what will be the broadcast center for the 2026 World Cup. And I expect it to be more than 187 countries. And they're saying as many as 5,000 media people will be working at the center and broadcasting daily.
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Dan Hunt
Financially, I mean, it's a boon. I mean, let's talk about that.
- [24:13]
Michael Barr
Yeah.
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Julie Fine
I mean, you have 5,000 people staying here. This is truly the kickoff to the World cup, though. You have so many people that will show up in January or February to start setting up for broadcast because this is the storytelling that goes back to the countries for each match. And there are 104 matches. The low estimates I've seen are $200 million of economic impact for the Dallas Fort Worth area and I've heard as high as 400 million. But you can imagine this is tens of thousands of hotel nights.
- [24:42]
Dan Hunt
And again, this is the second time Dallas has hosted this. That's got some family meaning for the Hunts.
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Julie Fine
It's a big one. Back in 1994, we had the International Broadcast Broadcast center here in Dallas. It was at Fair park. And it was something my father, Lamar was so proud of. He just, you know, it was such a win for the community. I didn't really understand it at the time, but as sort of the evolution has gone on and I've gotten to see these broadcast centers and now these latest generations, these are like, you know, pop up cities bringing thousands and thousands of workers.
- [25:10]
Dan Hunt
You know, obviously there was some disappointment when it came to the final, but again, North Texas getting nine games. And you know, I want to talk about North Texas, Texas is getting the nine games. It's not just the city of Dallas. I mean, AT&T Stadium is in Arlington. There'll be practices at your facility.
- [25:26]
Julie Fine
Yes. I mean, this whole tournament will be spread out throughout the metroplex. We got nine games, which is like nine Super Bowls. We have the International Broadcast center, which is, you know, 5,000 media personalities broadcasting globally. And then we have these base camps that are setting up hopefully in Frisco at Toyota Stadium. We'll wind up with the base camp of a visiting national team. There are multiple ones in Dallas, even potentially ones in Mansfield, maybe Fort Worth. And so it's spread out, but also hotel rooms all across North Texas. We're in a really unique spot in Dallas because Houston has six matches, Dallas has nine, Kansas City has six. So somebody can make a regional play to see a lot of World cup soccer by staying in North Texas.
- [26:07]
Dan Hunt
New York Times reporting today that FIFA is considered considering expanding the 2030 World Men Cups, World's Men cup to 64 teams. Now 2026 is already expanded to 48. What's your thinking on 64?
- [26:21]
Julie Fine
Yeah, look, 48 with 104 matches is unbelievable. The drama that exists around that, but that is a really heavy lift. You're talking about 16 venues in North America. You have, you know, Canada, United States, Mexico, 11 of those in the United States. But these are NFL Stadium. To go to 64 teams I think would be incredibly difficult. I think we need to see how 48 works first. You'll have first time qualifiers that have never actually qualified for a World cup and you'll have teams that may not have been in the tournament for 30 years. And I think this is great for the game, it's growing the game. But 64 is a gigantic leap because you truly will have a disparity between the top teams and the teams that are down near the bottom of that.
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Dan Hunt
Gotta ask, we haven't seen you since the Super Bowl. All thoughts on next season?
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Julie Fine
Yeah, look, it was difficult. I am so proud of what my brother has achieved. Clark has done a fantastic job at the Chiefs. This is a truly a dynasty. And Andy Reid, Brett Veach, Mark Donovan, that leadership team is first class. And look, I think with the salary cap going up, you know, 20 plus million dollars, it's allowed a lot of teams to keep their franchises intact. I think the free agent market isn't nearly as big as people expected. So I'm really optimistic the Chiefs will be back. So exciting times in Kansas City and, you know, I'm just thankful I get to be part of it.
- [27:38]
Michael Barr
That's FC Dallas president and North Texas FIFA World Cup Organizing Committee co chair Dan Hunt speaking with Bloomberg Dallas bureau chief Julie Fine. Up next, we turn to the world of insuring athletes. For my colleagues Damian Sassauer and Vanessa Perdomo, I'm Michael Burn. Are you are listening to the Bloomberg Business of Sports from Bloomberg Radio around the world.
- [28:17]
Damian Sassauer
There are two kinds of people in the world. People who think about climate change and people who are doing something other than about it. On the Zero podcast we talk to both kinds of people. People you've heard of like Bill Gates.
- [28:28]
Vince Tizio
I'm looking at what the world has to do to get to zero, not using climate as a moral crusade and.
- [28:35]
Damian Sassauer
The creative minds you haven't heard of yet. It is serious stuff, but never doom and gloom. I am Akshat Ratty. Listen to Zero every Thursday from Bloomberg Podcasts on Apple, Spotify or anywhere else you get your podcasts. Get the news you need at the click of a button inside your car. The new Bloomberg Business app now featuring Apple Carpl and Android Auto. All your favorite Bloomberg radio shows plus news at your fingertips downloaded free in.
- [29:00]
Michael Barr
The Apple App Store or on Google Play.
- [29:03]
Bloomberg Business of Sports Announcer
This is Bloomberg Business of Sports from Bloomberg Radio.
- [29:08]
Michael Barr
Thanks for joining us on the Bloomberg Business of Sports where we explore the big money issues in the world of sports. I'm Michael Barr along with my colleagues Damian Sassour and Vanessa Perdomo. Scarlet Fu is on assignment. As the sports world grows, so does the rich, which is where insurance comes in. Vince Tizio is president and CEO of Axis Capital. He's here now to take us through the multi billion dollar business of insuring professional and college athletes, teams and leagues against injury and other big risks. Vince welcome to the Bloomberg Business of Sports.
- [29:46]
Vince Tizio
Great to be with you all.
- [29:48]
Michael Barr
I am sure that this is a tough thing to deal with because there's one thing to ensure a baseball player, even a football player. How in the world do you insure an auto racing driver? Because I mean, there's got to be a different risk in there somewhere.
- [30:05]
Vince Tizio
No doubt, no doubt. You know, there are a number of differentiated factors that we account for depending upon the type of athlete, the type of contact sport that they're engaged in. And so there's a whole bunch of risk factors that we look at at including the health and welfare of the athlete themselves and the kind of measures that they take to keep them in good stead. But it is certainly a complicated, but I have to admit a really fun part of our business.
- [30:32]
Vanessa Perdomo
You know, one of the things I think of, Vince, when I the first thing I think of when I hear of like insuring in sports entities and things is looking at something like that happened to Hard Rock Stadium during the Copa America, right, where fans are like destroying the stadium, they're tearing it apart. And you have to really plan for something like that. That's the first thing that popped into my mind. How do you plan for risks like that? What are those unique factors that a sports entity has to deal with?
- [31:00]
Vince Tizio
Well, Vanessa, it's a great example of the breadth of the kind of insurance products that we deliver to not only the industry and the athletes, but certainly the owners of these sports teams, teams, the stadiums that they occupy. And we call this the risk management practices of those entities. Right. How do they protect their clients? What measures do they put in place in ensuring that the stadium is constructed in a stable way? It has risk mitigating factors on egress ingress. And these are all into the recipe of how we assess the risk quality of anything that we put our capital to too. And so it's complicated, but there's a pretty good playbook that allows us to gauge sort of the propensity, as we call it, of loss.
- [31:44]
Damian Sassauer
Vince, you're the president and chief Executive officer for Access Capital Holdings. For our audience, that's a $7.3 billion market cap publicly traded on the New York Stock Exchange stock price, by the way, Michael Barr, up 64% last year. Just for everyone listening, but Vince, I have to ask you this, man. You're out in Bermuda. Is it mid Ocean or Tucker's Point? I mean, what's the better golf course course? But seriously, let's talk about specialty insurance for a minute because you're on air with us for the Bloomberg Business of Sports, talking about insuring franchises, insuring athletes, ensuring a range of different sports related, kind of, I guess, damages or injuries. But you know, my goodness, what a big space it is. So, you know, talk to us about the focus Axis has on this segment of the market. How's it driving the business forward?
- [32:28]
Vince Tizio
So it's a multibillion dollar opportunity for Axis to pursue right between the athletes themselves, themselves, the owners of the sports teams, the facilities that engage where the sports are actually held. So firstly, it's a big market. Secondly, there's a number of insurance products that are sought by those respective entities and we at axis provide the full breadth of coverages. Now we, we do have a sweet spot, right? We think mid ocean by the way is the direct answer to your question. But the sweet spot for us is really the disability, right? Making certain that these life altering injuries are prevented to the degree they can be, but also being there when it really matters and providing insurance for that event. And so that's the sweet spot that we've dedicated ourselves to. Interestingly, we underwrite, we bring this product through our Lloyd syndicate right out of Lloyd's of London in England. So it's a really historic business for us. It's a vast market place and we think specialization is the key to our underwriting success. The improvement in safety protocols and the increasing focus on the variety of sports. You know, you don't have to look much farther than the Olympics and the new added sports that they brought into the regimen at the Olympic events. But also the continued ability to deal with how these athletes are dealing with the increasing pressure, whether it takes the fold of their load time, the increasing number of events that they're participating in, the new technologies that helps them measure the efficacy of how they're training, protecting them in the welfare while engaged the club itself.
- [34:10]
Michael Barr
And I'm going to give a classic example, and we were talking about this off air before about Garrett Cole. Now the Yankees, they sign him four year contract, $144 million. And as my father used to say, we didn't even get out of the get go and then all of a sudden, sudden he has Tommy John surgery over for the season. And by the way, Garrett Cole get well because we don't want to see anything like that. But I mean it's, I mean we're talking now nine years, it was $324 million. I mean this thing, what do the Yankees do? Are they insured for something like this?
- [34:49]
Vince Tizio
They certainly we wouldn't speak about a specific client. But if you just use that illustration, right, that is exactly what they come to the insurance marketplace to help them in that unfortunate event. And so that is an example of why sports teams, and frankly the individual athlete themselves seeks insurance from markets like Access Capital. There's no doubt, I believe that was Michael. That's a perfect illustration of what the sports insurance can provide to both athletes and the sports club and the owners of those teams respectively.
- [35:25]
Vanessa Perdomo
One of the funnyish things I want to say about the, you know we hear that athletes do is they insure their body parts, right? You know, you have soccer players insuring Their legs. And, I mean, I've heard of, you know, like, I mean, celebrities insure their hair or whatever it is. Troy Palmalu was reportedly right that he insured his hair a long time ago. How do things like that really work for a Messi who's insuring his legs?
- [35:56]
Vince Tizio
Yeah, well, it is precisely an approach that we in the insurance industry have to find solutions. How do we assess whether or not Lionel Messi will break his leg and whether or not he's taken the safety protocols to ensure that his physical fitness is up to speed, that his metabolism and his welfare and his heart rate and all of that is assured in order for us to make the statistical bet that he's less or more likely to suffer such a sustainable injury. That goes into some of the actuarial approach that we take in underwriting those kinds of risks. And it is completely common for athletes to ensure the key body part that makes their special sauce come to life on their respective fields.
- [36:41]
Damian Sassauer
So, Vince, do you have, like, a team of insurance appraisers following Leo Messi around to make sure he's not riding motorcycles and skydiving and things like that?
- [36:53]
Vince Tizio
In the event that there's a loss, you could be assured that there's going to be some discovery of making certain that what was represented on behalf of the athlete is certainly being shown in their habits. There's no doubt about.
- [37:04]
Damian Sassauer
Well, you know, I mean, I just, I find your. This segment of the business so fascinating, you know, and you're the first guest that we've had to really talk about the insurance side of the business of sports. And so, you know, from what I. What I know about insurance, it's a business of premiums. And what you're talking about here, you're talking about sports teams and athletes, all of whom have a lot of money, they're good counterparties, they're going to pay high premiums. And it just, to me, seems like this little segment of the market that not a lot of people are talking about. You know, everyone's, you know, looking at the wildfires in la, Vanessa, and saying, oh, all these wealthy high Hollywood producers could afford those homes, but they never took out the insurance because the premiums were too high. Talk to us, Vince, where is the middle ground here? Are you finding a lot of clients who are educated on the topic and are willing to pay these premiums because they're pretty rich, I imagine. Or is it a sales call? Do you have to explain to them what you're doing and why it justifies the cost?
- [37:59]
Vince Tizio
Today, it's much more of a conversation than it's ever been. If you just look at your example. You have LA wildfires, you have hurricanes, you have cyclones, you have floods and you have athletes that are being taxed with increasing participation, greater focus because of social media's ability to exact information, awareness of their effectiveness, the statistics that are being run on all of the range of athletes out there, the knowledge and awareness of bringing insurance as a revenue remedy for whatever they're describing, what they're solving for. It could be the individual athlete, it could be the sports owner, it could be those God awful events that occur in stadiums where there are people being run over or other events of people hurting themselves. This is the role and purpose of insurance and I have to admit it's increasingly a conversation as opposed to a sales pitch. Everyone has seen what liability insurance costs are for commercial entities in the United States. That same concept of risk and reward is a conversation in all facets of insurance, including the sports arena. So it's dynamic, it's certainly a topical conversation and one that we're happy to have a voice and role to play.
- [39:13]
Michael Barr
In to bring up. Obviously we're talking about pro athletes here for the most part, but I'm sure with nil out there, college athletes, athletes, is there a market out there for them also?
- [39:27]
Vince Tizio
There sure is and it's a complicated market if you think about it Michael, because you have the introduction of a number of breach of contract opportunities that these collegiate athletes want to protect themselves, their image, their reputation and so their agents involvement in protecting that athlete is incredibly important. And you know, it's an area where there's established law to draw from. But there's also different unique fact patterns that can arise in terms of how they fulfill the athlete fulfills his or her obligation to the university that they're playing with. And so it's an added dynamic. But it goes to one of the earlier questions just on the range of how insurance can play a role in this ever growing industry of sports.
- [40:15]
Michael Barr
I know if you looked at me now you would say like you used to excel at some sport. Yeah, I really was pretty good at bowling. I averaged like about 212 at my peak. And yes, I see that. I'm sure the insurance.
- [40:31]
Damian Sassauer
I'm sure a ring finger.
- [40:34]
Michael Barr
See there's another story but I know we're running out of I shot a 299 one time and it was a solid nine pin bang. I was.
- [40:43]
Vince Tizio
Oh.
- [40:46]
Michael Barr
Vincent, thank you so much sir for joining us on the Bloomberg Business of sports. We really do appreciate it.
- [40:52]
Vince Tizio
Thanks for having me.
- [40:53]
Michael Barr
Our thanks to Vince Tizio for joining us. He is the president and CEO of Axis Capital. And most importantly, thank you Y o U for joining us. For my colleagues, Damien Sassour and Vanessa Bernomo, I'm Michael Barr. Tune in again next week for the latest on the stories moving big old money in the world of sports. And don't forget to catch our podcast and all your podcast platforms. You're listening to the Bloomberg Business of Sports from Bloomberg Radio around the world.
- [41:35]
Tom Keene
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