Learn. Share. Evolve…

0:00:13 You could easily spend a lifetime or 100 lifetimes simply observing the flow of goods and services and people from one part of the world to another.
0:00:16 We’ve touched on this in a few recent episodes.
0:00:18 One was about global commodity traders.
0:00:20 That was episode 633.
0:00:26 The other was an interview with a Federal Reserve Bank president about how tariffs will affect the U.S. economy.
0:00:28 That was episode 634.
0:00:33 Global trade is endlessly fascinating, in part because it is endlessly changing.
0:00:43 And one of the most interesting trade sectors at this moment involves not just economics, but politics, cultural identity, and much more.
0:00:48 This is a business that usually revolves around some kind of a ball.
0:00:51 It’s not just about bringing a basketball game.
0:00:54 There are longer term visions and plans.
0:00:59 In China, there are thousands, if not hundreds of thousands, if not millions of Premier League soccer fans.
0:01:04 It’s an opportunity to export America’s pastime.
0:01:10 Today on Freakonomics Radio, how Gulf state petrodollars are reshaping sports in America and Europe.
0:01:14 Why China is building soccer stadiums in Ivory Coast.
0:01:17 And whether Dubai is ready for baseball.
0:01:20 We built this in the middle of the freaking desert.
0:01:21 Like, it was all dust and dirt.
0:01:25 From dust and dirt to millions and billions.
0:01:26 Hopefully, at least.
0:01:27 That starts now.
0:01:44 This is Freakonomics Radio, the podcast that explores the hidden side of everything.
0:01:46 With your host, Stephen Dubner.
0:01:55 Hey, Stephen.
0:01:56 Sorry we’re late.
0:01:58 Dubai traffic is insane.
0:01:58 No parking.
0:01:59 It was nuts.
0:02:00 No worries.
0:02:03 I appreciate you’re making time while you’re working in Dubai.
0:02:06 When you’re back home in the States, where do you live?
0:02:09 I live in Cincinnati, Ohio, the birthplace of baseball.
0:02:16 Cincinnati did have the first professional baseball team, but it’s not really the birthplace of baseball.
0:02:24 When you are a sports entrepreneur, like our first guest today, Cash Shaikh, a little hyperbole comes with the territory.
0:02:25 Okay.
0:02:27 Well, I was born and raised in Texas.
0:02:30 My mom was born in Pakistan.
0:02:34 My dad was born in India with my mom and dad being star-crossed lovers.
0:02:36 I learned a little bit about the division in the region.
0:02:40 It’s also one of the reasons why I’m passionate about how sport can bring people together.
0:02:42 And baseball is my first love.
0:02:47 My claim to fame is my state t-ball championship at five years old in Houston, Texas.
0:02:48 You peaked early?
0:02:50 Yeah, I peaked early.
0:02:54 I played through high school and then, you know, I went to school at the University of Texas in Austin.
0:03:00 From there, I started my career at Procter & Gamble, seven years in the United States and then three years internationally.
0:03:05 After P&G, I went to work for a startup called GoPro Camera.
0:03:06 What’d you do for them?
0:03:15 I was our first head of marketing, so I got to see that rocket ship growth and then go start my first company called Be Somebody, which was a content platform.
0:03:21 Shaikh went on Shark Tank with Be Somebody to try to raise money, but none of the sharks wanted to invest.
0:03:28 He wound up selling that company and eventually started a marketing firm called BSB, as in Be Somebody.
0:03:33 Some of his clients were pro athletes, both current and retired.
0:03:41 I saw that there was an opportunity for these legends of the game that were, like, at the top request list, but then as soon as they retired, didn’t have as many opportunities.
0:03:43 They also had some money they could invest.
0:03:44 They had some things they wanted to do.
0:03:48 One of the first people I started to really connect with was Barry Larkin.
0:03:53 Larkin is a Hall of Fame baseball player who spent his entire career with the Cincinnati Reds.
0:03:55 He retired about 20 years ago.
0:04:01 Larkin was my inspiration for this because he is like an OG of international baseball.
0:04:05 He was the manager of the Brazilian national team in the World Baseball Classic.
0:04:08 He’s done some development work in Asia.
0:04:10 He was in the movie Million Dollar Arm.
0:04:13 That movie is about finding baseball talent in India.
0:04:18 He was like, Cash, what if we took the game to another part of the world?
0:04:21 Like, we took it to the Middle East, took it to Asia.
0:04:24 That was the spark that ignited this journey.
0:04:29 And that’s the journey that brought Cash Shake to Dubai in the United Arab Emirates.
0:04:33 And that’s why we’re speaking with him today about his latest startup.
0:04:40 I’m the co-founder, chairman and CEO of Baseball United, the first professional baseball league focused on the Middle East and South Asia.
0:04:43 It’s a clever name, Baseball United.
0:04:55 United, like Manchester United and all those other English soccer clubs, but also as in United States of America, so that Baseball United feels like an official U.S. export.
0:05:03 We decided day one that we wanted Dubai to be our headquarters, to be the launch pad of professional baseball in the Middle East.
0:05:08 A lot of reasons why the number one tourist destination in the world from a city standpoint.
0:05:15 Again, that is a little bit of hyperbole, but Dubai does make the top 10 of global tourist destinations.
0:05:27 Very cosmopolitan, very innovative city, and also a city that’s really gravitating towards sport and a region that’s really in love and on fire with sport right now in the Middle East.
0:05:29 Name a few things that make that true.
0:05:45 The Middle East investment into sport has been unprecedented, whether it’s investing in American franchises and leagues, building grounds and facilities and stadiums, investing in their own national teams and their grassroots programs.
0:05:52 You’ve got this conglomerate of countries that traditionally the last 50 years have been oil, oil, oil.
0:05:58 But over the last few years, they’ve really been trying to diversify into tourism and also in a sport.
0:06:04 We knew that we saw that we also know that this region, Middle East and South Asia, is cricket country.
0:06:06 It’s the bat and ball epicenter of the universe.
0:06:11 There’s basically two billion people in this region and a billion of them are cricket fans.
0:06:18 We had a hypothesis that maybe we could inspire them to fall in love with the game that we love, America’s pastime of baseball.
0:06:25 To get the project started, Shaikh relied mostly on his own money and on the reputation of some big time baseball players.
0:06:31 I brought on 20 Major League Baseball legends, two Hall of Famers, Barry Larkin and Mariano Rivera.
0:06:34 Some are current players, Ronald Acuna Jr., last year’s MVP.
0:06:43 They’re putting their money in, but in addition to the money that they’re putting in, they’re contributing their name, image and likeness, their social media, their expertise.
0:06:46 What’s your total capitalization right now?
0:06:57 Well, we’re not sharing that, but I think that we did a pretty good job in the early rounds to set us up to have a solid three, four year run at building the foundation that we wanted to build.
0:07:05 Baseball United debuted in 2023 with two showcase games at the Dubai International Stadium, which usually hosts cricket.
0:07:12 Those games featured former stars, including Robinson Cano, who’s 42 years old, and Bartolo Colon, who’s 52.
0:07:23 Baseball United has also organized a regional tournament called the Arab Classic, and the league will return to Dubai this November with a fuller schedule and their own home.
0:07:27 We’re literally building the first ever professional baseball field in the history of the region.
0:07:30 You can drive 5,000 miles northeast, southwest.
0:07:32 You will not find a professional baseball field.
0:07:33 What’s the stadium like?
0:07:35 Stadium is a big word.
0:07:36 I would say it’s a ballpark.
0:07:43 We partnered with some of the best in the world, Musco Lighting, that did the lighting for Great America Ballpark and Wembley Stadium.
0:07:43 They’re doing our lights.
0:07:48 We have eight towers, 15 million lumens, basically Major League Baseball quality lighting.
0:07:57 We’ve partnered with FieldTurf, that’s the best in the world at synthetic surfaces that can withstand crazy heat that we have out here in Dubai, which can get up to 115 degrees.
0:07:59 How does the ball travel in the air there?
0:08:02 I’ve noticed, and I hate that this is happening.
0:08:04 Steven, we built this in the middle of the freaking desert.
0:08:06 Like, it was all dust and dirt.
0:08:10 And it’s beautiful, but there’s still not a lot of things blocking the wind.
0:08:17 And there is a bit of a hard wind that blows in around game time from the outfield in towards home plate.
0:08:19 Did you build it in the wrong direction, you’re saying?
0:08:20 You should have had it blowing out?
0:08:27 We built it so it’s ideal from a sun perspective, but I didn’t accommodate for the wind, so I’m like, damn it.
0:08:30 Wait a minute, aren’t you going to play most games at night, I assume, with the heat?
0:08:32 Well, we wanted to have the flexibility.
0:08:39 We’re purposely playing in what’s typically called winter ball, the winter ball window, after the Major League Baseball season.
0:08:47 And basically, November to February, we didn’t want to compete with MLB, and we know that there’s a surplus of great professional players that can play during that time.
0:08:52 And the weather here in the Middle East is just perfect during that time.
0:08:54 Are you expecting current MLB players to come play?
0:08:56 Yeah, we are.
0:09:00 We already have guys that are freshly, you know, out of the league or played in the league for many years.
0:09:03 Maybe in AAA and they’re not going to make it.
0:09:03 Exactly.
0:09:08 The Major League Baseball system has severely shrunk over the last few years.
0:09:13 They cut the draft in half, they cut the minor leagues in half, so you have this surplus of great professional players.
0:09:20 Like a guy like Didi Gregorius, who has no business in not being in the league, Pablo Sandoval, three-time World Series champion, played in our league.
0:09:23 We’re working on the details of Major League Baseball.
0:09:32 We believe we’ll sign a winter ball agreement with them, which means Ronald Acuna Jr. could come play out here, just like he goes down to Venezuela right now to play in winter ball.
0:09:34 What’s a typical Major League Baseball team contract, though?
0:09:41 I would think that I don’t want my players playing in some winter league, just for all kinds of reasons, mostly injury.
0:09:42 Yeah, you have some of that.
0:09:45 But other teams want their guys, especially the younger guys, to work on their game.
0:09:52 And some guys have leverage, like Albert Pujols, after 15 years in the league, was playing winter ball in Dominican Republic.
0:09:59 He probably was making $30 million in the big leagues, but he probably got paid $30,000 for his time in winter ball.
0:10:06 So the economics are honestly better from a business standpoint, because your benchmarks are versus winter ball, not the big league contracts.
0:10:15 If I came over to watch the Baseball United League in Dubai, let’s say I’m an American baseball fan, describe the experience.
0:10:20 Having a hot dog, drinking a beer, watching baseball has literally never happened here before.
0:10:24 Just the guys walking down the aisles saying, get your popcorn.
0:10:26 Like, nobody has that out here.
0:10:27 You have to find hot dogs, I assume.
0:10:29 We have to find hot dogs.
0:10:31 We just found a partner called Sausage Saloon.
0:10:32 Can you sell beer?
0:10:33 In the UAE, you can.
0:10:35 In Saudi, you can’t.
0:10:38 At the showcase, we had the first ever Budweiser beer garden.
0:10:42 In Dubai, sometimes people see me and they’re like, you’re the Budweiser guy.
0:10:45 And I’m like, well, no, I’m actually the baseball guy, but you know.
0:10:45 Okay.
0:10:49 So you’re bringing traditional American baseball to a new market.
0:10:51 What’s the local spin?
0:10:57 Like when I walk in, how do I know I’m in Dubai and not at some minor league game in the States?
0:11:01 Some of the cultural things on the concession stand menu, when you’re eating your chicken
0:11:06 thick of pizza and music, the local national anthems, the local singers and performers.
0:11:11 We’re taking an approach of honor the game and change the game.
0:11:12 We have new rules.
0:11:13 Like the money ball pitch?
0:11:20 Our money ball is a gold ball that each manager can call into play three times a game when
0:11:22 his team is up to bat.
0:11:26 If the batter hits a home run with the money ball, it’s double the runs.
0:11:27 You had one of those.
0:11:29 The baseball gods were kind to us.
0:11:30 We call in a money ball.
0:11:36 None other than Pablo Sandoval hits it over the fence in center field.
0:11:41 That clip was everywhere of the first ever six run home run.
0:11:43 A 2-2 game is now 8-2.
0:11:48 It’s really interesting just to hear about your various successes and journeys and ambition.
0:11:50 I mean, this is hugely ambitious.
0:11:55 When you think about what you bring to this, what’s your superpower?
0:12:00 I think my superpower is being able to get up off the ground after I get kicked in the stomach
0:12:03 and I got all the sand in my eyes and push myself up and keep going.
0:12:06 We have to change the market, create habit change.
0:12:09 Just the camera people out here, they don’t know baseball.
0:12:11 They don’t know how to shoot baseball.
0:12:12 They don’t know how to follow the ball.
0:12:16 The amount of training we’ve had to do to camera people so they know that when the balls hit
0:12:20 the left field, where to move the camera is another like crazy science project.
0:12:23 So we taught everything from scratch.
0:12:27 If it works, it’s really going to be a billion dollar conversation.
0:12:30 If it doesn’t work, we’re going to lose many, many, many millions of dollars.
0:12:33 And that’s just the game that we decided to play.
0:12:39 Coming up after the break, why sports economics isn’t like the rest of economics.
0:12:42 We had massive infrastructural problems.
0:12:44 We had a hooligan problem.
0:12:45 I’m Stephen Dubner.
0:12:47 This is Freakonomics Radio.
0:12:47 We’ll be right back.
0:13:00 Cash, Shake and Baseball United represent a pure business play.
0:13:04 An entrepreneur betting big on a new concept in a new market.
0:13:06 But he is an outlier.
0:13:12 Most of the global expansion in sport spending involves big financial syndicates or even bigger
0:13:18 government funds, as in the governments of other countries, which means people aren’t
0:13:20 just playing games anymore.
0:13:21 They’re playing politics.
0:13:25 There are lines drawn across the world of sport right now.
0:13:30 We have the Europeans with their sociocultural view of the world.
0:13:33 We have Americans with their very commercial view of the world.
0:13:38 And then we have Gulf investors with their very geopolitical view of the world.
0:13:46 So we inevitably see a clash of ideology, a clash of culture, a clash of the kind of outcomes
0:13:49 that investing in sport is expected to deliver.
0:13:52 That is Simon Chadwick.
0:13:54 I am a professor of sport.
0:14:03 And my work focuses on what I call the geopolitical economy of sport, which is essentially how geography, politics and economics intersect with
0:14:06 one another and how sport is an outcome of that.
0:14:07 How old are you, Simon?
0:14:09 I am 60 years old.
0:14:17 Can you just talk for a moment about how sport, global sport, the business of sport, whatever you want to call it, has changed since you were a kid?
0:14:24 When I was a kid, you didn’t get to pick and choose the sports that you watched and when you watch them, where you watch them.
0:14:28 My hometown is Middlesbrough, which is a steel town, and the club is Middlesbrough.
0:14:34 I remember my father sitting me down in front of a TV screen at a particular time of the day and we watched a game.
0:14:36 There were no other opportunities.
0:14:37 There was no streaming.
0:14:40 It was quite difficult to get branded merchandise.
0:14:42 And so it was about community and family.
0:14:51 Any sense that money or geopolitics would shape what happens in sport were non-existent.
0:14:55 What we now see is a commercial revolution taking place.
0:15:03 There is an increased acceptance amongst fans and others with a stake in sport that if you’re going to survive, you’ve got to make money.
0:15:06 If you want to sign the best players, you’ve got to get the money from somewhere.
0:15:09 There’s been a lot of money in a lot of sports over the years.
0:15:11 Boxing used to be huge money.
0:15:12 Horse racing.
0:15:17 And now some of the big ones are European soccer and American football and basketball.
0:15:19 So there’s always an ebb and flow.
0:15:25 I’d love you to talk for a bit about the overall financialization of sport, how that evolution happened.
0:15:30 And the way in which I characterize this is really in three periods.
0:15:37 You’ve got the late 19th, early 20th century where European sport in global terms dominated.
0:15:38 We see this even now.
0:15:45 You think about Switzerland, which for somewhere between 45 and 50 global sports governing bodies is still the home.
0:15:52 Whether you’re talking about FIFA, the IOC, the FIA, which is the global governing body of motorsport, they were established in Europe by Europeans.
0:16:00 At that time, Europeans had this utilitarian notion of sport, which is providing the greatest good for the greatest number.
0:16:05 So this was about not making a profit and it wasn’t about political posturing.
0:16:08 It was about character to a large degree, wasn’t it?
0:16:14 If you look at the history of European sports, we do in fact talk about muscular Christianity, healthy body, healthy mind.
0:16:19 Same in the US, the YMCA, that was the big part of that movement, the Young Men’s Christian Association.
0:16:30 But by the post-war period, late 1940s, 1950s, what we began to see was the rise of the second period of elite professional sport.
0:16:43 The NBA and American sport more generally is set up on a completely different basis to European sport, where the essence has been much more around strategic development, no state intervention, no subsidies from anyone.
0:16:45 You can only spend what you earn.
0:16:52 And as we know, the NBA and other sports, American football and the like, became hugely commercially successful.
0:17:03 The economic ideology that has gone alongside that, essentially, liberal free market economics began to infuse and pervade across sport.
0:17:06 Okay, so that’s your second era of professional sport.
0:17:11 But we’re now living in this third age of elite professional sport, which is different.
0:17:13 It isn’t just Europe.
0:17:14 It isn’t just the United States.
0:17:15 Obviously, it’s China.
0:17:17 It’s Saudi Arabia.
0:17:18 It’s Nigeria.
0:17:21 It’s India and many other countries across the world.
0:17:22 And what do you mean by that?
0:17:24 Give me an example for India, maybe.
0:17:29 India is elite professional sports best kept global secret.
0:17:38 Indian Premier League cricket is one of the most significant commercial developments in global sport of the last 20 or 30 years.
0:17:50 In fact, in 2023, the world record for the most simultaneous live streams of an event was broken for an Indian Premier League cricket match.
0:17:56 Now, interestingly, I’ve been reading some things just this week about China.
0:18:05 One of the things that China has been trying to do over the last 10 years is to become an infrastructural leader globally.
0:18:09 This is not just about industrial development.
0:18:12 It’s also about geopolitics and diplomacy, too.
0:18:21 And where we have seen more Chinese stadiums constructed than anywhere else in the world, obviously, excepting China itself,
0:18:22 is in Africa.
0:18:27 If we take a competition as an example, the African Cup of Nations, a soccer tournament.
0:18:31 In 2024, the championship was hosted by Ivory Coast.
0:18:36 Typically, the African Cup of Nations is four stadiums where the games will take place.
0:18:40 In Ivory Coast, all four were constructed by China.
0:18:48 And when we say China, these tend to be state entities or closely related to the state entities.
0:18:50 They’re constructed in one of two ways.
0:18:54 The first way is they’re constructed free of charge.
0:18:57 China says, hey, let us build you a stadium.
0:19:00 Now, keep in mind my first degree is economics.
0:19:04 They told us on the first day of my degree there’s no such thing as free school lunch.
0:19:07 What does China get out of it by building free stadiums in Ivory Coast?
0:19:14 What you typically tend to find is that in conjunction with the agreement to construct this infrastructure
0:19:21 is strategic partnerships, strategic trade agreements, whereby China gets preferential access
0:19:24 to the raw materials that these countries have.
0:19:29 It’s oil and gas, but it’s also things like lithium, cobalt, manganese, copper.
0:19:32 Or they say, we’ll build you the stadium, we’ll provide you with the finest.
0:19:36 Soft loans, as they’re called, are less than market rates.
0:19:40 Through this system of soft loans, there is the possibility of default.
0:19:48 When you can’t pay your loan back, that then gives China considerably more political leverage over these countries.
0:19:54 Government officials in the U.S. and Europe have called these Chinese tactics predatory,
0:19:57 but they appear to be successful.
0:20:01 China is now reportedly Ivory Coast’s biggest trading partner.
0:20:04 This is no longer sport as a sociocultural activity.
0:20:08 This is not sport anymore as a business activity.
0:20:13 This is sport being deployed as a policy instrument for geopolitical purposes.
0:20:19 I’m thinking about China, but I’m also thinking about the GCC, the Gulf Cooperation Council.
0:20:24 Saudi Arabia, Qatar, United Arab Emirates, Bahrain, Oman, Kuwait.
0:20:34 These are countries that are geographically fortunate in the sense that they have huge reserves of oil and gas.
0:20:41 But of course, we now live in a world of climate change where people are kicking back against the use of fossil fuels.
0:20:45 And so there is a growing risk for these countries.
0:20:49 They’re very rapidly having to diversify their economies.
0:20:52 And one of the ways in which they’re doing that is through sport.
0:20:54 So that’s the first element of this.
0:21:02 We know in 2008, Qatar, population 3 million people, decides that it wants to stage the FIFA World Cup.
0:21:08 Some people speculate that Qatar bribed its way to winning the right to stage the tournament.
0:21:14 My sense, having been around the international soccer scene, having worked with governing bodies,
0:21:20 having worked with countries and clubs, is whatever Qatar was doing, everybody else was doing it as well.
0:21:27 There are several other countries that have also been embroiled in this big bribery and corruption scandal.
0:21:38 So for the Qataris, sport has served the purposes of nation building, literally being used as the basis for creating the infrastructure of a modern state.
0:21:42 How do you characterize the Saudi investments in sport?
0:21:44 We’ve seen it in English football at Newcastle.
0:21:49 We’ve seen it with the Live Golf Tour, a rival start up to the PGA Tour.
0:21:52 We’ve seen it in all kinds of sports projects all over the world.
0:22:02 We’ve heard Mohammed bin Salman talking about somewhere around 3% of GDP is what Saudi Arabia is looking for its sports economy to grow to.
0:22:05 But there are several political dimensions here.
0:22:15 These countries have really significant public health issues, high rates of diabetes, high rates of hypertension, heart attacks, strokes.
0:22:20 So they need their populations to be more physically active, which of course you can do through sport.
0:22:26 At the same time, sport is powerful, it’s seductive, it’s attractive, it’s appealing.
0:22:37 We tend to forget about the bad parts of countries when their leading sports teams are the most exciting in the world.
0:22:49 So we are looking at nation building, nation branding, soft power, diplomacy, image and reputation management, which some people might call sport washing.
0:22:51 So this is not straightforward.
0:22:52 It is complex.
0:22:56 There are multiple motives underpinning what they’re doing.
0:22:58 But I think the message is very clear.
0:23:02 They’re going to spend and they’re going to do what they think they need to do to get to where they need to get to.
0:23:10 We made an episode a few years ago called What is Sports Washing and Does It Work?
0:23:14 That story is by now pretty familiar to anyone who cares about this kind of thing.
0:23:20 A country with reputational problems tries to clean things up with the spectacle of sport.
0:23:24 What Cash Shake is trying to do in Dubai with Baseball United is different.
0:23:33 He is exporting an American sport and the American sports business model to try to grab some of those petrodollars on their turf.
0:23:35 It is the ultimate away game.
0:23:38 And this has not gone as smoothly as he imagined.
0:23:41 The government partnerships have been difficult.
0:23:42 I mean, these are hard things to do.
0:23:51 If somebody had told me that 60 percent of my job the first two years was going to be government relations, to be honest, even, I don’t know if I would have signed up.
0:23:55 And I say this with all respect to our government partners, I don’t necessarily enjoy it.
0:23:59 I’m more of a builder entrepreneur, not as much on the government side.
0:24:01 What are those meetings like?
0:24:11 I know you’ve met several times with the Saudi PIF, the Public Investment Fund, with the QIA, the Qatari Investment Authority, with Mubadala in Abu Dhabi.
0:24:19 What’s it like to be an American sports entrepreneur coming in knowing you need their participation, their blessing?
0:24:21 What are those conversations like?
0:24:26 There’s basically three groups of government agencies or partners or firms you have to meet with.
0:24:27 One is the group that you mentioned.
0:24:28 It’s basically capital.
0:24:30 They’re sovereign wealth funds.
0:24:33 So it’s much bigger than your typical VC.
0:24:35 These are trillion dollar funds.
0:24:45 Then you have a group that’s basically government leadership, the Department of Tourism, the Sports Council, things like that that honestly we don’t deal with in the U.S.
0:24:51 For example, in Dubai, we work with the Dubai Sports Council, which is the governing body for anything sport.
0:24:56 You can’t do anything in sport in this city without getting their sanctions and approval.
0:25:02 We also work with the Dubai Department of Economy and Tourism, which is basically the engine to build the Dubai brand.
0:25:05 And they need to approve what you do.
0:25:08 And then you have the governing bodies of a specific sport.
0:25:11 Some countries out here had a baseball federation.
0:25:13 India had one.
0:25:14 Pakistan had one.
0:25:15 Sri Lanka had one.
0:25:16 Bangladesh had one.
0:25:17 Afghanistan.
0:25:18 Nepal.
0:25:19 Saudi Arabia had one.
0:25:22 I met with every single federation president.
0:25:25 In the UAE, there was no baseball federation.
0:25:31 So our strategy was let’s go to the Emirates Cricket Board and let’s say, hey, you guys own bat and ball in this country.
0:25:36 Let’s bring baseball underneath you versus us trying to start the federation from scratch.
0:25:45 We had to go through hundreds, if not thousands of rounds of legal and government meetings, policy meetings, approvals on everything.
0:25:52 And when you’re a startup and you’re burning cash every month, that can be a debilitating process.
0:25:53 And yet you’re still there.
0:25:55 Somehow we’re still here.
0:25:57 I mean, we’re losing money right now.
0:25:59 You can politely say we’re investing it.
0:26:00 We’re also losing.
0:26:02 We’re spending a lot more than we’re making right now.
0:26:04 I believe in what we’re doing, obviously.
0:26:10 I wouldn’t be able to sacrifice as much as I’ve been able to financially time away from home.
0:26:13 I just had my first baby with my wife.
0:26:13 I miss that dude.
0:26:14 I want to be around him.
0:26:17 So it’s a sacrifice, but I do believe we can do it.
0:26:27 So, Cash, as I’m sure you know very well, there have been a million startup leagues in the U.S. over the years trying to challenge the NFL, the NBA, etc.
0:26:34 The vast majority of them just shrivel up and die and someone winds up losing a boatload of money.
0:26:39 In this case, you are the person in position to lose that boatload.
0:26:43 So, how do you think about your odds of success here?
0:26:50 The honest truth is it’s a small percentage chance of ultimate success, and I knew that from day one.
0:27:02 The worst case scenario is not actually for me to lose all the money that I put in, which would be painful, obviously, but to lose the money of 20 Major League Baseball legends that trusted me to lead this ship.
0:27:04 So, I don’t want to do that.
0:27:10 But I believe we can become one of the gold standard professional leagues in this region.
0:27:13 We got a win on media rights and broadcast rights.
0:27:15 That’s the number one thing for us to be successful.
0:27:22 On this last point about media rights, cash shake is undoubtedly correct.
0:27:32 From the NFL to the Indian Premier League of cricket to the English Premier League of soccer, the majority of revenues come from media rights.
0:27:37 But so far, Baseball United has not been able to get its hands on that big TV money.
0:27:45 I thought we would actually have broadcasters fight over this, but they don’t want to pay a ton for it right now, especially in this region.
0:27:49 They have a bit more leverage and power, and they’re like, you guys are the new league.
0:27:52 You got to be out here three, four years before you get real money.
0:27:59 What if one of the state investors, one of those sovereign wealth funds came to you and said, hey, listen, we believe in the long term of this, and we want to invest.
0:28:03 And we understand you’re just not being offered any significant TV revenue yet.
0:28:05 So why don’t we manage that?
0:28:08 Why don’t we invest in that so that it’s seen everywhere?
0:28:09 Could happen.
0:28:10 That could happen tomorrow.
0:28:11 That’s the crazy part out here.
0:28:16 Here in the UAE, you’ve got Dubai Sports Channel, government owned, and you’ve got Abu Dhabi Sports Channel.
0:28:18 So any of that can happen tomorrow.
0:28:22 It could happen tomorrow.
0:28:30 But Cash Shake is fishing in the same pool of money that is already sending billions of sports dollars to Europe and America.
0:28:48 The fact that Manchester City have been taken over by what is effectively an arm of a nation state means that they are secondary to the ambitions of Abu Dhabi.
0:28:50 That is Rory Smith.
0:28:52 He covers soccer for The Observer.
0:29:00 I have spent now half my life reporting on sport, mainly soccer, in the UK and across Europe and the world.
0:29:05 Was sport something that attracted you on a deep metaphysical level?
0:29:08 Was it something that you played and fell into following?
0:29:09 How did that work?
0:29:16 There’s probably a short and glib answer, which is that I wanted to be a journalist and this is the easiest sort of journalism.
0:29:17 So you thought.
0:29:19 Yeah, initially it seemed very easy.
0:29:24 Now you do have to have a reasonable grasp of geopolitics to cover sport.
0:29:29 My sincere pitch is I think it remains possibly the best way to explain the world.
0:29:40 If you look at its reach, its scale, the number of people who are in some way invested in it, it is an astonishingly global phenomenon.
0:29:49 And you can make a case that Lionel Messi or Cristiano Ronaldo are among the most famous people who have ever existed, which is astonishing.
0:29:57 In America, baseball was called, in America, baseball was called for many years, and a few holdouts still call it this, the national pastime.
0:30:00 Would you say the same applies to soccer in England?
0:30:12 It’s not enough to call soccer England’s national pastime anymore.
0:30:23 But I also think there’s a lot of places, but I think there’s a lot of places do feel left behind.
0:30:27 If you’re London or if you’re Manchester, you are in the national consciousness.
0:30:36 If you are from Doncaster or you are from Oldham or you are from Rochdale, the one place where your hometown gets its little moment is on the football scores.
0:30:50 But that connection between an English city and their soccer club isn’t nearly as strong as it used to be.
0:30:52 One big change has been ownership.
0:30:59 In 1992, when the English Premier League was launched, 21 of its 22 teams had UK ownership.
0:31:05 Today, with just 20 teams in the league, only four have majority UK ownership.
0:31:16 Ten clubs have American owners and others are owned by investors from Thailand, Greece, Serbia, China, Saudi Arabia, and perhaps most famously, the United Arab Emirates.
0:31:31 Manchester City Football Club, which dates back to the 19th century, is now owned by a holding company called City Football Group, which controls roughly a dozen more soccer clubs around the world, including in Mumbai, Melbourne, Shenzhen, and New York City.
0:31:42 The primary owner of City Football Group is Abu Dhabi United, under the auspices of Sheikh Mansour bin Zayed Al-Nayan, who is vice president of the United Arab Emirates.
0:31:48 This foreign ownership trend was started in England by a Russian oligarch.
0:31:49 Here’s Rory Smith again.
0:31:57 Chelsea, they were bought out in 2003 by Roman Abramovich, who had made his money in the Wild West years of Russian energy.
0:32:12 He arrived completely unannounced and overnight turned it into this remarkable phenomenon that spent amounts in the transfer market we had never heard of, that transformed its team in the course of one summer, that within two years was winning the English title.
0:32:28 Chelsea supporters were plainly thrilled. What about the supporters of all the other teams? Was there an outcry to say, hey, this is not fair? You can’t have some Russian oligarch come in and start spending so much money to make a crappy team good and beat all of us who’ve been doing things the right way? Were people saying that?
0:32:40 You’d like to think so, but not really. Fans have been conditioned for so long to think that the best thing an owner can do is spend a lot of money. The main reaction was, do you think there’s a Russian oligarch out there who’d like to buy my team?
0:32:49 And then describe the next phase. Who are the big, powerful, important owners of the last 12 to 15 years, including Man City, of course?
0:33:03 Well, Abramovich sets the blueprint, really, for how you buy into soccer. So you end up, six years later, with another overnight takeover, completely hidden from public view. Abu Dhabi United bought Manchester City.
0:33:15 By that stage, it made perfect sense that a Gulf state would like to buy Manchester City, or at least one of the oligarchs from a Gulf state, because we had internalised the idea that the Premier League was the playground of the rich and famous.
0:33:25 Manchester City, for a long time, was the secondary force. They were not among the elite. Since then, they have won more Premier League titles than anybody else.
0:33:37 They have won the Champions League, the most illustrious European competition. They pay some of the world’s highest salaries. They have the world’s finest manager. Manchester City Football Club now represents a bottomless river of glory.
0:33:54 In what ways does it matter, though, that a foreign owner of a soccer team in England, which happens to be the most successful team of the last 10 years, is owned by an entity that is essentially a foreign state? To what degree does that matter?
0:34:10 Well, to me, it matters an awful lot. There is this sense that soccer teams belong in a place and belong to a place. We know that they have to be run as businesses to be sustainable, but in an unspoken way, we characterise them as social institutions.
0:34:29 And Manchester is probably the soccer city, in the sense that there’s a historical connection. It’s where the Football League was founded in 1888. It’s the home of the National Football Museum. A lot of the social progression of the 19th century came from Manchester. It’s one of the cities of the Industrial Revolution, the birthplace of Marxism to an extent.
0:34:50 It’s a city with this remarkable history. The fact that Manchester City have been taken over by what is effectively an arm of a nation state means that they are secondary to the ambitions of Abu Dhabi. They are being used for something else. That is, to me, quite an important existential delineation.
0:34:59 The government in Abu Dhabi does say that the Abu Dhabi United Group is, quote, completely unconnected to the government. How do you assess that claim?
0:35:12 I’m sure it is legally. If you look at the payroll, there’s quite a lot of similar names on the two. Whether it’s a technicality or whether it’s a degree of smoke and mirrors, I can see why all parties want to maintain that pretense.
0:35:25 Manchester City has been under investigation for more than 100 alleged violations of Premier League financial rules that are designed to keep clubs from overspending.
0:35:32 They’ve also been accused of trying to circumvent those rules by disguising government funding as partnership revenue.
0:35:41 Arsene Wenger, who was the iconic manager of Arsenal, once said that there have been teams with ideas before, and then they were overtaken by the teams with petrol,
0:35:46 meaning the clubs owned by oil oligarchs. The problem with Manchester City is that they have petrol and ideas.
0:35:52 The Abu Dhabi ownership group has also stirred things up in the city of Manchester itself.
0:36:00 Several years after buying the soccer team, they partnered with the city council on a massive high-end real estate development called Manchester Life.
0:36:09 A report by researchers at the University of Sheffield found that the Abu Dhabi investors got the land on the cheap, with little benefit for the city itself.
0:36:16 There are huge numbers of families who are unable to find anywhere to live permanently, who are in very poor conditions.
0:36:23 If at the same time you have this incredibly wealthy nation-state that appears to be getting favourable rates on plots to develop for luxury flats,
0:36:30 that looks like perhaps the council is not acting in the interests of the citizens as a whole.
0:36:42 So, does the Abu Dhabi ownership group see Manchester as a model for future projects, combining sport and real estate?
0:36:47 Without further ado, I’d like to welcome the mayor of the city of New York, Mayor Eric Adams.
0:37:11 New York City Football Club was founded in 2013 as a joint venture between the New York Yankees and Manchester City.
0:37:17 It is now majority-owned by the City Football Group, the same Abu Dhabi entity we’ve been talking about.
0:37:22 The team is expected to move into its new stadium in Queens in 2027.
0:37:29 The stadium will be named for Etihad Airways, one of two state-owned airlines in the United Arab Emirates.
0:37:37 Mayor Adams has said that the $800 million stadium will be entirely paid for by UAE investors,
0:37:41 but a report from the city’s Independent Budget Office says that’s not the case.
0:37:43 The taxpayers will also contribute a lot.
0:37:45 Rory Smith again.
0:37:52 The New York City experiment, I think, was central to this vision of Abu Dhabi United and this worldwide network of clubs.
0:37:53 You can split that group into two.
0:38:02 One is teams that have been acquired for sporting reasons, and they’re the ones in France and Spain and around Europe that might help with the pipeline of players.
0:38:08 And then there are trophy purchases getting into a market that they think might be profitable in the future,
0:38:11 and that’s Australia, India, China and the United States.
0:38:18 Real estate is just one part of the portfolio when you’re thinking about the global business of sport.
0:38:26 There’s also sponsorship and ownership, and in both those areas, the Gulf states are starting to make inroads in the U.S., especially in the NBA.
0:38:32 The New York Knicks have a marketing partnership with the Abu Dhabi Department of Culture and Tourism,
0:38:41 and the NBA now plays a mid-season tournament called Emirates NBA Cup, sponsored by the other official airline of the UAE.
0:38:47 The Qatari Sovereign Wealth Fund recently bought a stake in the company that owns the Washington Wizards,
0:38:52 as well as the Washington Mystics of the WNBA and the Capitals of the NHL.
0:38:59 And in 2022, the NBA started bringing some teams over to Abu Dhabi to play preseason games.
0:39:03 Some NBA legends were invited to come along to watch.
0:39:04 Hey, guys.
0:39:05 My name is Derek Fisher.
0:39:09 Derek Fisher on American Basketball in the Gulf.
0:39:11 It’s coming up after the break.
0:39:12 I’m Stephen Dubner.
0:39:13 This is Freakonomics Radio.
0:39:14 We’ll be right back.
0:39:29 Derek Fisher played 18 seasons in the NBA, winning five championships with the Los Angeles Lakers.
0:39:37 He retired in 2014 and has since been a head coach for New York Knicks and the LA Sparks of the WNBA.
0:39:39 And these days?
0:39:43 These days, I am husbanding.
0:39:53 I am fathering, coaching some high school basketball and dabbling in some opportunities in terms of strategic advisor and investment situations with some good companies.
0:39:57 Do you have any affiliation these days with the NBA itself?
0:40:09 I’m not an employee of the NBA, but for the last two to three years, I’ve served as one of the senior directors for the basketball portion of the draft combine.
0:40:17 And the NBA has these barnstorming trips abroad to grow the game, which is how I ended up in Abu Dhabi.
0:40:20 So tell me about that trip to Abu Dhabi.
0:40:21 I know you went with your wife.
0:40:23 I’d love to hear what the experience was like for you.
0:40:24 The experience was amazing.
0:40:28 Making the trip, we had some anxiety, you know, never having been to the region.
0:40:30 How are they going to treat women?
0:40:34 Do women have to bow their heads, look down, not make eye contact?
0:40:36 Do you have to wear the traditional garb?
0:40:39 But it was a very normal daily experience.
0:40:45 In terms of the game and the fans and the people, it was very much like a game at home.
0:40:49 You know, fans with jerseys on of the teams that they love to support.
0:40:51 It was the Celtics versus the Nuggets.
0:40:58 So there were a lot of Celtics fans there, which was not necessarily easy for me to sit through the whole time.
0:41:06 But to me, what stood out was the amount of young people that got a chance to experience NBA basketball.
0:41:10 So do you see this as essentially a way for the NBA to grow its business?
0:41:14 Or do you see it as diplomacy for the U.S.?
0:41:16 Or is it more just cultural exchange?
0:41:18 What’s the big purpose behind this?
0:41:21 It’s not just about bringing a basketball game.
0:41:24 There are longer term visions and plans.
0:41:35 There is a strong belief, as evidenced in the United States and other markets, like you can build entire downtown communities around sport.
0:41:39 It’s a socioeconomic growth engine like no other.
0:41:50 The NBA is continuing to test and focus group what NBA basketball would be like in countries outside of the United States.
0:41:55 Who are the right partners from a marketing perspective and investment perspective?
0:41:56 What is the fan base like?
0:41:58 What are people reacting to?
0:41:59 Who bought tickets?
0:42:01 Who downloaded the NBA app?
0:42:09 The NBA is also reminding people or introducing people to why the game of basketball is so special.
0:42:15 Basketball represents what America has historically been, right?
0:42:21 Like so many men and women, girls and boys on the court from all walks of life.
0:42:25 Some that didn’t know where they were going to eat when they were 12 years old.
0:42:27 Some that were homeless.
0:42:29 Some that went to private school.
0:42:30 Some that went to public school.
0:42:33 It’s all universal.
0:42:40 And then, of course, the background of guys, best players in the world are from France and Serbia and Slovenia and all these global places.
0:42:44 And so little kids in Abu Dhabi can dream to be there one day.
0:42:55 When you’re watching these exhibition games there and seeing how the fans are reacting and so on, could you envision a real NBA outpost either in Abu Dhabi or elsewhere in the Middle East?
0:42:56 The answer is yes.
0:43:05 I just believe it will be important not to build it in a way where it’s constantly being compared to the NBA.
0:43:11 We don’t necessarily need a 20,000 seat arena for an NBA Abu Dhabi, an NBA Africa.
0:43:18 Like create a different experience for fans, create a more intimate environment, be as innovative as possible.
0:43:23 So the experience is unique, but you still understand it’s NBA basketball.
0:43:31 There have been many times in history where sports becomes political or intersects with politics.
0:43:50 Given the politics of the world at the moment, I’m just curious how you think about either the U.S. bringing its sports to a country that some people don’t like their politics or a country where some Americans don’t like their politics investing in American sports.
0:44:03 Many athletes long before us sacrificed a lot more than any athlete will ever sacrifice moving forward, literally putting their lives on the line for what they believed in.
0:44:23 We have to keep that in mind as athletes in terms of the impact and the influence that we can have in bringing diplomacy and opening people’s minds up to seeing people for who they actually are now and not necessarily holding on to what they have been and even to some degree what their politics are.
0:44:28 Because I think in America, we’re losing our ability to have that conversation.
0:44:36 We used to be able to stand on a higher moral ground in terms of our own leadership and how we managed our politics.
0:44:40 There was a diplomacy in how we disagreed with people on the other side.
0:44:44 That no longer exists within our own borders.
0:45:01 So then how can we stand on top of the Statue of Liberty and yell across to somebody else that their politics are terrible and look at what you do to those people and we’re still working through stuff that many of our athletes historically were trying to stand up for.
0:45:10 I’m not saying we should have photo ops with men and women that are clearly antagonizing and creating crimes of humanity.
0:45:25 We just have to be careful before we’re yelling so loudly about everybody else’s politics and why we don’t want them to invest here when we clearly aren’t willing to invest with our own people very often.
0:45:29 You know, I’m supportive of it.
0:45:34 I’m supportive of growing all games, all sport in any way possible.
0:45:40 That again is Cash Shake of Baseball United, who’s trying to bring America’s pastime to the Middle East.
0:45:45 Sport is one of the great unifiers of all time in the history of mankind.
0:45:58 Shake, like Derek Fisher, thinks that it’s time to get beyond the moralistic hand-wringing, the idea that the U.S. shouldn’t partner up with Gulf state autocrats with bad human rights records.
0:45:59 What do you want them to do?
0:46:02 Keep doing something you didn’t like because now they’re trying to do something good.
0:46:03 My mom and dad are engineers.
0:46:12 When I was in second and third grade, I lived in Saudi Arabia because my dad worked for Aramco, which is basically the government-owned Saudi oil company.
0:46:17 If I compare Saudi Arabia now to what I experienced growing up, it’s light years away.
0:46:21 Saudi Arabia has changed more in the last five years than the previous 500.
0:46:23 My mom couldn’t drive back then.
0:46:26 The role of women was very different in the employment space.
0:46:28 There’s a lot of different dynamics.
0:46:32 Now, if you go to Riyadh or Jeddah, it’s a cosmopolitan city.
0:46:39 Honestly, most Americans, with all due respect, don’t have a full grasp of geography and cultural understanding.
0:46:44 If I didn’t have Procter & Gamble sending me to 51 countries, I probably wouldn’t have either.
0:46:52 They want to evolve their cultures in some ways while staying true to their roots, which is always a challenge whether you’re a parent or you’re a country.
0:46:59 Also, they understand tourism could be a high-value revenue driver, so they’re trying to attract people there.
0:47:02 Why is Experience Abu Dhabi on NBA jerseys?
0:47:07 Why do you see the Emirates brand across tennis and on NBA backboards?
0:47:09 Because they’re trying to get people to come out and visit.
0:47:14 By the way, as of next week, we’re selling Baseball United merchandise in Dubai Mall.
0:47:18 It’s the first time official baseball merch has ever been in Dubai Mall.
0:47:21 So if the league doesn’t work, we might become a merch brand.
0:47:24 Here’s another scenario I just want to run past you.
0:47:31 A lot of Gulf State investors would like to be more invested in American team sports.
0:47:39 That is so far a very narrow path, but it seems like the path is starting to widen a little bit year by year.
0:47:46 I wonder what would happen if you, by establishing Baseball United in the Middle East now, and even if it doesn’t succeed,
0:47:53 I could see that you personally are setting yourself up as a valuable partner for Gulf State investors
0:47:58 who want to get more involved in U.S. sports leagues, if that’s allowed.
0:48:00 Do you see that as a possible role?
0:48:02 I think it’s a great worst-case scenario.
0:48:05 Dude, this is my biggest dream.
0:48:07 Baseball was always my true love.
0:48:10 I used to be seven years old getting the newspaper.
0:48:15 On Sundays, the back sports section would have all the stats from all the teams.
0:48:19 I would have my spiral notebook and copy every stat into my spiral.
0:48:22 So, I know I can lose a ton of money.
0:48:23 I know that other people can.
0:48:27 But, man, we’re getting to build a freaking professional baseball league in the Middle East.
0:48:30 We get to name the franchises, pick the colors.
0:48:32 Like, you can’t beat this thing.
0:48:37 That, again, was Cash Shake of Baseball United.
0:48:44 Thanks to him as well as to Derek Fisher, Rory Smith, Simon Chadwick, and special thanks to George Sweeting for his insights.
0:48:48 Let us know what you think about this episode or anything we make.
0:48:51 Our email is radio at Freakonomics.com.
0:48:55 Also, I know a lot of you don’t care too much about sports generally.
0:49:00 So, coming up next week, an episode that is definitely not about sports.
0:49:02 Until then, take care of yourself.
0:49:04 And if you can, someone else too.
0:49:08 Freakonomics Radio is produced by Stitcher and Renbud Radio.
0:49:11 You can find our entire archive on any podcast app.
0:49:15 Also at Freakonomics.com, where we publish transcripts and show notes.
0:49:18 This episode was produced by Leo Sepkowitz.
0:49:22 It was mixed by Eleanor Osborne with help from Jeremy Johnston.
0:49:34 The Freakonomics Radio Network staff also includes Alina Cullman, Augusta Chapman, Dalvin Abawaji, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippon, Jasmine Klinger, Morgan Levy, Sarah Lilly, Tao Jacobs, and Zach Lipinski.
0:49:39 Our theme song is Mr. Fortune by The Hitchhikers, and our composer is Luis Guerra.
0:49:41 As always, thanks for listening.
0:49:52 Thatcher had this view that the market should be liberalised, that profit wasn’t a bad thing, that business should be released from the constraints of legislation.
0:49:54 The other thing is she hated soccer.
0:50:01 The Freakonomics Radio Network.
0:50:02 The hidden side of everything.
0:50:07 Stitcher.