PagsGroup CEO Steve Pagliuca Talks AI, Sports

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Jonathan Ferro** (0:07)
Let's turn to sports. World Cup fever erupted across the country. More than 50 million people tuning in for the US match against Belgium, making it the most watched football game in the country's history. It comes as valuations for sports teams surged to new records. The world's top clubs more than doubling in value in the last four years, with private equity and media deals injecting massive amounts of capital. Steve Pagliuca, senior advisory partner at Bain Capital and co-owner of Atalanta Football Club joins us now for more. Steve, welcome to the program, my good friend. It's good to see you. How do we translate this fantastic interest in a four-year World Cup cycle into a bigger, stickier interest in club football being played around the world, all season, every year?

**Stephen Pagliuca** (0:51)
You're seeing that already with the World Cup, but I think fundamentally what's going to have to happen for soccer in the USA to be a top-five, dominant sport is the economic structure is going to have to change. Right now, the payments for players in UK, Italy are probably five to six times what they make in the United States. The best talent really is centering on the Premier League, Syria, and the leagues in Europe.
Unless you change the economic structure, you're always going to have lesser players in the United States.

**Jonathan Ferro** (1:26)
And Steve, one thing I've found as well at the youth level, and it was a surprise to me coming to this country more than a decade ago, is that for the rest of the world, this is a very accessible, almost working class sport. You don't need money to play football in the rest of the world. What I've found here increasingly, Steve, is that this has become a rich kid sport. Steve, what can we do about that at the ground level for youth football in this country, in America?

**Stephen Pagliuca** (1:52)
Well, I think we have to look at the whole ground level grassroots system.
As you know, Europe, it's very easily to get trained. These clubs can have boys. We have an academy of 452 boys in the Milan area in Bergamo, and it's very cost-free, and everybody can play. So we have to look at the United States system and say, how do we get away from it just being a rich person sport where you can get the training and get training across the country?

**Jonathan Ferro** (2:23)
At the same time, Steve, conversations often descend, I think, into what can the US learn from the rest of the world. I do think the global sport can learn something from the US.
The Seattle Seahawks and evaluation of that franchise I think speaks to that. Selling for a close to $10 billion for a franchise that outside of this country, I hate to say it, hardly anyone will know what that team does, let alone where it plays. If you say the Seahawks to anyone and say Italy, Steve, they don't know what that team does. And yet they have a valuation at a multiple of a football club out of Europe that the whole world recognizes. What can Europe and the rest of the world learn from the way sports is ran in these countries to make sure that we get full valuations and the kind of franchise values that we see across this country, Steve?

**Stephen Pagliuca** (3:14)
Well, first of all, big advantage in the USA sports is there's no relegation. So relegation, which is, has always been happening in English football and the rest of Europe really gives you more risks as a club. Number one. Number two, the economic structures of the USA sports are better with cost controls. There's a hard cap in the NFL. NFL is kind of the, I would say, most profitable and best run league out there with a hard cap so that the clubs can generate revenues.
So really getting a system over in Europe where there is more financial fair play, cost control, and maybe playing around with the relegation rules could make the values go a lot higher.

**SPEAKER_4** (4:00)
Steve, for a lot of Americans, this has been the first introduction to FIFA really firsthand. Do you think they've done a good job with the World Cup stateside?

**Stephen Pagliuca** (4:10)
Well, if you look at record revenues, I think they're creating the World Cup has created 13 billion over the cycle, 10 billion right now.
And so far, the games have had more interest, I think, than any other games in the history of the sport. So I think it's hard to be critical. Obviously, there were some issues with pricing and crowds, but so far, it's gone very well. It's gone very well for America. I know up in Boston, they're now in love with Scotland. I think we ran out of beer in the whole city, which I never thought could happen, but it's been an amazing experience for everybody.