UP560 What is IMG now?

Today's guest Adam Kelly has been at IMG since 2001, connecting the business back almost to the McCormack era. Now President of IMG within TKO Group — which also owns UFC and WWE — he oversees IMG's media rights, production, digital, brand partnerships, and events businesses. This is his second appearance on Unofficial Partner; the first was in 2022, when he laid out a vision for reimagining IMG as a full-service growth partner rather than a transactional rights broker.

Episode Summary

Recorded during the 2026 FIFA World Cup, this conversation uses the tournament as a launchpad for a broader argument about where sport sits commercially in 2026. Kelly's central thesis is that the entry of global streaming and technology platforms — Netflix, Apple, Google, Amazon — is the single most important shift in the sports media landscape, and that it is unambiguously good for sport. Richard pushes back throughout: on the financial extraction argument, on the volume fallacy, on whether global streaming actually serves the kinds of sports that real fans love. It's a genuinely spiky conversation.

This episode of Unofficial Partner is sponsored by The Institute of Sports Humanities (ISH) 

ISH educates sport’s current and future leaders around the world, as the leading independent provider of sports leadership education and insight.

Their Strategic Sport Leadership Masters (MA) is for sports industry executives to study alongside their careers – designed for professionals who want to build on their experience, strengthen strategic thinking, and connect with a global network of peers working across sport.

Applications for the next intake on the 2026 Strategic Sport Leadership MA, starting September, are open.

Visit sportshumanities.org for more information

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Transcript

Richard Gillis, Unofficial Partner 0:00

Do they pay rights fees then?

Adam Kelly, IMG 0:01

me, they will be. Absolutely. And, we know many examples where they're, they're looking at significant investments in, in rights fees.

Speaker 0:09

Hi there. Welcome. It's Richard Gillis here, and you are listening to Unofficial Partner. Today's guest is Adam Kelly, president of IMG. Adam has been at IMG since 2001, so he sort of connects back to almost, the McCormack years. And that's one of the questions I think that we run through this conversation is what IMG is now and what it wants to be and where it plays in this very different marketplace than existed when it was set up by Mark McCormack in the sixties. What is it? What does it want to be and we get into that and we talk about the bets that they're making, but also the threats, bets and threats. It's quite a spiky conversation. I really enjoyed it. I think he did too. We had a chat afterwards. Actually. I saw him at Wimbledon a few days after the, uh, interview he said I was a bit grumpy. He was probably right. It was quite hot in the office when we did the recording. So I might have been heat affected, but I think it's a good conversation and I think you'll enjoy it.

Richard Gillis, Unofficial Partner 1:08

This episode of Unofficial Partner is sponsored by our friends at the Institute of Sport Humanities. I-S-H-I-S-H ISH educates sports current and future leaders around the world as the leading independent provider of leadership, education, and insight for the sector. Their strategic sport leadership masters. The MA is for industry executives to study alongside their careers, designed for professionals who want to build on their experience, strengthen strategic thinking, and connect with a global network of peers working across sport applications are now open for the next intake on the 2026 strategic sport leadership MA starting in September. Visit sports humanities.org for more information and there'll be a link in the show notes. are you watching much of the World Cup?

Adam Kelly, IMG 2:04

Yeah, been watching plenty.

Richard Gillis, Unofficial Partner 2:05

There's so much noise around it in terms of from the commercial business point of view and FIFA and all those things. What do you think is there gonna be a longer term impact of it in terms of the way people view big events or the, uh, is it gonna change anything in terms of the way in which the sports world works?

Adam Kelly, IMG 2:23

So the, uh, is it gonna change anything as to the way in which the football world works? The, uh, I, I had this, We had one of our big TKO town halls and, uh, I got thrown the question, you know, "Is the World Cup gonna be a success in the US unscripted?" and my instinct then is the same as it is now, which is people have this w- there's this weird trend at the moment to of play down... Maybe it's not even that recent. Uh, London 2012, everybody was calling it was gonna be a big disaster. London was gonna collapse. Everybody's gonna be out of town. Same for Paris, same for other Olympics. Th- events, you know, in today's world, I think they take a little bit of time to gather momentum. For some reason, the press and, and, parts of the commercial world like to things to pick at and criticize. But when they get going, it, it captures the zeitgeist, it captures the imagination, and I think it's gonna be a huge success. I only see positives. you know, the, even the hydration break, think, I think people are gonna get used to that idea and, know, may- maybe it's gonna lead to fewer injuries, maybe it's gonna lead to a little bit, you know, as, as we've seen a couple of times in this World Cup so far, some better tactical shifts. I, I don't see, I don't see a downside, and I think it's gonna help the sport grow in the US which, is good for everybody.

Richard Gillis, Unofficial Partner 3:37

when we talk to people on the podcast who are sort of on the brand side, so who've spent a lot of money on World Cup as a sponsor, So they say that it's not FIFA, it's the World Cup. So there is a, there is a difference and they're trying to separate FIFA from they want everyone's mind on the football, whereas FIFA is, and the brand of FIFA is, is sort of getting in the way. Is that how you view it? Do you see FIFA coming out of this as a, its reputation in the US enhanced?

Adam Kelly, IMG 4:06

F- from my perspective, you know, if you're, if you're a governing body, you've g- you've got a real challenging task ahead of you. You've gotta keep, you know, all sorts of different stakeholders, constituents control, appeased, comfortable, happy. But, but the ma- the main obligation is, growing your sport. And I, I think can get lost in some of the political machinations, and of course they, they happen. It's pretty, it's pretty out there, and it's pretty plain to see. But a- as an organization, they, they are driving the pinnacle of the game. And I even said it around the Club World Cup that had a lot, a lot more negativity around it. But I don't believe in trickle-down economics in the rest of the world, but, but I do believe it works in sport the best way to gather brand-new fans is through real meaningful cultural moments like the World Cup. And FIFA are doing a great job in, in building this as by far and away the best and biggest football event that's ever been. I also am big believer you can hold many concepts and ideas in your head and in your belief system at the same time. So you can believe many things about FIFA, you can believe many things about the leadership, how they operate, and at the same time believe that they're doing great for football and therefore great for the sports industry. And, and I think they, I think they are delivering a hugely challenging, event and operation across different venues and a- and across, you know, multiple different countries. I mean, what, what a challenge to think to, to take on. But what they're, they're doing is, you know, combining what I talk about with, with clients, these, these two massive the attention economy the experience economy. And in sport, you get both of those happening simultaneously, which is unique. So building and capitalizing on that. You know, Richard, you can't, you can't predict anything in the world today, but you and I both know come 19th of July, billion plus people are gonna be tuned in watching that Men's World Cup final. That's, that's unbelievable in today's world. And how you build on that, how you develop It how you, drive earnings without kind of in inverted commas exploiting the fans. How, how do you build the right level of experience with hospitality, with travel, with, with all the facilities that they have in the US? Uh, you know, the stadia look incredible. The football's been great. I think the extended window is working because you're getting, these incredible new nations participating for the first time, and I think you're, you're giving the teams, the managers, the coaches a bit more time to get used to their, their setup and, and I think the quality of the football's the best I've ever seen.

Richard Gillis, Unofficial Partner 6:59

It

Adam Kelly, IMG 7:00

you know, how many boxes do you need to tick?

Richard Gillis, Unofficial Partner 7:02

Yeah. I, I guess the, the question from a sort of the lens of the sports business is there's a couple of specifics. I don't, I don't disagree with any of what you've just said, and I think it is

Adam Kelly, IMG 7:13

I

Richard Gillis, Unofficial Partner 7:13

FIFA's...

Adam Kelly, IMG 7:13

We're g- we're off to a

Richard Gillis, Unofficial Partner 7:14

It is

Adam Kelly, IMG 7:14

It is

Richard Gillis, Unofficial Partner 7:16

a football is popular is basically what you're saying, and that's great. But I you know, I don't wanna get into a FIFA conversation particularly, but it's... There are some interesting big threads that come out of it, and one of them is a sort of expansion of the middle of the governing body. So he, Infantino's vision of the world if you look at it, the ticketing question on its own, or if you look at the various other decisions that he makes, it's about expanding the governing body's

Adam Kelly, IMG 7:42

the decisions that he makes, it's sort of like

Richard Gillis, Unofficial Partner 7:42

reach. So a big center. And I wonder if that's I mean, from a company's, IMG's perspective, you're in the, the bit which is wanting to build and create businesses from the work that is generated by a World Cup. So you've got, you know, On Location doing a, a lot of the hospitality. When a governing body's instinct is to get bigger, what's your philosophical response to that? Do you think that's a good thing? You hope that that's gonna get copied?

Adam Kelly, IMG 8:13

I think it goes back to my point, if their responsibility is to grow the- their sport in, in driving new fans to engage with football, you know, foot- yeah, football is big, football is, is strong, but how, how do you continue to build? How do you continue to, extend across the world? It's not, it's not everywhere. You know, there's no, there's no China, there's no India at this World Cup. That's, you know, pushing with a couple of other territories close to 3 billion people who, who are, who are not actively participating and supporting. So I think there's a lot of room for, for football to grow, and that's, you know, ultimately FIFA's responsibility. Building the machine, I, I don't think is necessarily how, how I see them working. You know, they're, as you, as you rightly pointed out, working with, with On Location on their, on their ticketing and hospitality program. My view is sports have a responsibility to, to build fandom. And as, as we're seeing and noticing in North America with, with a, a long list of our clients and partners, um, we've just secured a great new deal to expand South American club football into the US with CONMEBOL. relationship is strong. MLS is strong. NWSL, we just announced a ground, a groundbreaking deal for the WSL in, in North America with CBS. So we're seeing trends all, all lining in a, in a positive direction for football in the US and football globally. And, and I think that's as a result partially of some of the initiatives that FIFA are undertaking, and, and, and that's where I see them playing. You know, how, how much they need to expand their internal machine or, or otherwise. We certainly have a pretty clear view that that very few organizations should be heavily investing in their internal resources and maximizing a more efficient way of working, you know, ideally with, with us at IMG.

Richard Gillis, Unofficial Partner 10:07

Just, just explain that for a second. So you want... You're, you're actually arguing the opposite, aren't you? You're saying, right, okay, we need governing bodies to be much smaller and the work be subbed out to IMG and its competitive base of larger agencies. That's essentially, that's, that's the worldview. It has to be the worldview in the seat that you're sitting in.

Adam Kelly, IMG 10:26

agencies. That's essentially-- That's, that's our view. It has to be done on a different

Richard Gillis, Unofficial Partner 10:27

And Infantino's doing the opposite

Adam Kelly, IMG 10:29

Well, it's a case of how, how do you build the most efficient organization? How do you get utility from your infrastructure? If, if you're one of a handful of organizations, you can probably afford resource up very heavily with your internal machinery, put it that way. But that doesn't mean that's the most efficient and effective way to do it because of the utility you're gonna get from that resource base. So what is the role of governing body? I think it is, you know, organization of calendar. It's driving growth, it's innovation, it's and regulations, it's stakeholder management, you know, for FIFA and, and the global organizations. It is how, how do you work with the confederation level? How do you work with national association level? How do you work with leagues, teams, clubs, athletes? So that, that is their core being and core f- focus. Where I think IMG comes in is real depth and expertise in the capabilities that are needed to drive the commercial program. That, that's been mandate under my watch at IMG, is how do we move from kinda transactional do- doing deals, brokering deals, into one that truly builds and adds value for our partners? And that could be FIFA, it can be at the confederation level. CONMEBOL's a great example. It can support like EuroLeague, like the MLS, like others who have had to reinvent, repurpose, shift, and, and update their assets and, know, supporting them where they don't have the resources in strategy and consulting and insights, then actually executing that program at a much deeper level. So, with FIFA, it's the on-location team. With others, it's, you know, deep season-long, year-long production and content support. In others, for others, it's, it's digital capabilities. So that's how I see the dynamic. They need to grow. They need to build. They need to be strengthened, but in a, in a way that's efficient and effective, then utilizing the expertise, you know, that, that we provide and, you know, others, others do as well.

Richard Gillis, Unofficial Partner 12:42

which I guess gets to the question of what IMG is now, because, again, go back four years, you-- we, we, talked about, the role and you laid out the, the vision at that point, and it was as you've just described. Now, since then, we've got, IMG Arena is no

Adam Kelly, IMG 12:58

The arena

Richard Gillis, Unofficial Partner 12:59

no longer there. what else? I- 160/80. I always get the name of that wrong. 160/90. what else has gone? I'm just trying to think.

Adam Kelly, IMG 13:08

of, we, we build and adapt as we go.

Richard Gillis, Unofficial Partner 13:11

Endeavor Streaming is the one I was missing

Adam Kelly, IMG 13:13

yeah, streaming technology. Listen, we, you know, we, we have built a business over 65 plus years on being pioneers and innovators. So there'll be strategies

Richard Gillis, Unofficial Partner 13:24

But it's a very different business now than it was under McCormack, under various, you know, under Ted Forstmann even. So you've got a different... The legacy of the name is obviously very famous and resonant in the sports industry, but people are now wondering, "Okay, what is it?" And they've seen TKO, that is understandable. We can see where that is going, and that's

Adam Kelly, IMG 13:45

Where

Richard Gillis, Unofficial Partner 13:45

a major player in the sports industry. And now they're questioning, "Well, what is IMG as part of that if it isn't just a ser- another service provider?"

Adam Kelly, IMG 13:54

I would say IMG is, is back to the absolute essence of what McCormack founded and, and created, which was the, the original sports marketing agency. If you go back to the core, sports marketing is the marketing of sports, not marketing in sports. And, and that, and that's the essence. So yes, he started on the, on the athlete side, But very quickly moved into a, a much broader base working with rights holders, producing, distributing, and, and driving value. It's the, the core goes back to what I mentioned with, um, with the World Cup. It's the, it's the attention economy, how do you use the qualities that sport has where, people engage, people, you know, will do anything to watch the match, even if it's not even if it doesn't turn out to hit expectations. But you- you're making and scheduling time to engage with sport. That- that's a truly unique quality. So what have we done under almost seven years under my watch at IMG? We've, we've reimagined the IMG business back to that sports marketing origin. that is building a set of capabilities to move from then we, we were as, as IMG Media, as we were just really doing transactions in sports, so media rights deals, work, by and large the, the two core areas, to really building and driving value long-term our partners. So, so shifting really from being an entity that, that really just, brokers one that's an embedded growth partner. And what, and what we did was kinda reimagine the capabilities that, were needed. So beyond, just media rights really expanding into, and utilizing our global network into much deeper brand partnerships, much deeper, a team of 200 plus now in, in digital and data. We've integrated our event management capabilities so that the partnerships that we form are now looking to build long-term value and, and kind of answer the big questions that the rights holders should be asking themselves, which is you know, not how do we just sell this better, but how do we make the sport bigger, more relevant, and deepen And, there's plenty of examples we can

Richard Gillis, Unofficial Partner 16:23

But

Adam Kelly, IMG 16:24

about.

Richard Gillis, Unofficial Partner 16:24

is the, where are the sort of high margin bits of the business now? Because again, everyone, and this is beyond IMG, but everyone is looking at the bits of the sector that you're in and saying, "Well, actually these are quite, these are very difficult businesses now to make money and to be profitable and to make sizable margins that, excite investors." So where in your portfolio does that, where's the, the route out to a very high margin business? Because the, uh, I see a lot of commoditization in the markets that IMG is and was once dominant

Adam Kelly, IMG 16:58

I think, I think that's, that those are fair questions. The challenge is how, how do you, how do you build your margin? You know, we, we talk about internally the, the client surplus. How do we, how do we add value to the extent that we earn and deserve a slice of the upside? You know, if, these capabilities are, are simple, if this market is easy to access, if, if the services we provide can be replicated by others, we're, we're dead. We, we don't, we don't have a business. So again, my, my direction to my leadership team has been how do we constantly drive incremental gains? How do we think like the athletes that, that operate in our sports? How do we keep improving and, and adding that value? As and where we do that, then we, we take a fair share of the upside and, you know, depends how you look at it, but size and scale of these opportunities means that, that, that can be high margin business versus the size and scale of, of the team that we have. But it, it relies on continuing to build, and grow a pretty, a pretty large portfolio. So, you know, the margins that we operate under are and certainly well-regarded by, by investors. But in order to the returns, if, if we were just looking for margin on its own, we wouldn't be in the production space. If we were just looking for margin on its own, we wouldn't be doing digital consultancy. are lots of segments that we simply wouldn't be in were it not for the fact that when you combine these skills, capabilities, and the output that it drives, it builds the value, which then allows us to access

Richard Gillis, Unofficial Partner 18:40

So what are those businesses? So the production business, what was Seven League, the digital business that is now IMG Digital, what is that driving clients to? Where is the margin at the center that you're... If they, if those are not the loss leaders or if ways in, front doors in, and then you move them into something else, what is the something else that you're moving them to that is of higher margin?

Adam Kelly, IMG 19:04

40, then it moves them into something else. Something else that you're creating that is a higher margin. So it, it's a, kind of process. though, though the, the content creation, the fan identification, fan engagement, the fan development, th- this, this builds the attention. All of these aspects, controlling your IP, producing the best possible content, delivering that content to the best platforms, best outlets. all of, all of that is the build. And then when you

Richard Gillis, Unofficial Partner 19:31

I agree. I agree, Adam, and you know what I'm saying. But I'm, uh, and, you

Adam Kelly, IMG 19:35

I

Richard Gillis, Unofficial Partner 19:35

bit-- the, the bit of the business that i-is exciting from a commercial point of view is the bit that owns the IP, which is TKO. It owns WWE and UFC. That is the answer to your, uh, the question if I can, I can make that leap, but I'm just wondering where if w-we... Because you, if you took, we went back to rugby league four years ago and we talked about, okay, reimagining rugby league, is that a route? So I'm just trying to get to what

Adam Kelly, IMG 19:59

So

Richard Gillis, Unofficial Partner 20:00

what the various bits add up to

Adam Kelly, IMG 20:02

what Sure. But, but th-that's part of the process, Richard, which is you, you build the audiences, you build the engagement, and then we monetize with our partners and on behalf of our partners. So there are three exciting bits to TKO. There's UFC, there's WWE, and, and there's, uh, there's IMG as the three segments. And, you know, on location is, is a, is a big part of that as well. But where, where a rights holder drives the biggest returns is where we make our biggest margins. That, that's just the simple economics. So all of those are the foundational principles and, and structures against which you build fandom, which builds value, we support them on monetizing that value. So biggest monetization streams, as you know, for, for any, any sport their, their media rights in all its guises and the brand partnership space. So we are driving returns in those, in those two capabilities primarily

Richard Gillis, Unofficial Partner 21:02

Okay. Right, let's, let's pick up on one of those then, media. And so I had a conversation with Jonathan Licht at Sky, which we, we published this week. And one of the things that, that stuck with me, it's quite interesting point that he made. Obviously he's, he would, wouldn't he? He's in charge of UK, Sky Sports in the UK. you know, the defense or the attack against global streaming, the global streamers, and what global streamers see when they see sport, one of the points he made is that it's more local than you might imagine, that fandom is much more condensed. That's the job that Sky is doing, is over-servicing a sort of a, an avid sports community in the UK

Adam Kelly, IMG 21:37

UK

Richard Gillis, Unofficial Partner 21:39

a generic streamer.

Adam Kelly, IMG 21:40

a generic streamer.

Richard Gillis, Unofficial Partner 21:41

Let's just talk about that for a minute because again, it talks to

Adam Kelly, IMG 21:44

again, it

Richard Gillis, Unofficial Partner 21:44

IMG, but I don't necessarily wanna talk about IMG specifically. But what do you think about when you look at that marketplace in terms of the streaming market and the assumptions it ma- it's making about sport fandom, I guess is the question?

Adam Kelly, IMG 21:57

guess Yeah, I, I think, I think the entry of the global streaming and technology companies in sport is the single most important shift we will see in, in our industry o- over the next at, at least. And I kind of dig in, dig into why, and, and it's not necessarily at the expense of Sky. I think Jonathan makes up some really good points about, you know, how, how would you nurture and develop a sport in the UK? You, you've, you've gotta work with Sky. if you look at the, the macro, you now have four of the biggest companies in history focusing and beginning to focus increasingly on sport. Apple, Netflix, and Google. You know, fo- followed up by and Paramount as they drive Paramount Plus, but in a different, in a different manner. But the, biggest change that these entities are bringing is that these organizations are the best companies in history in converting audiences and attention into earnings, especially those first four that I'm, that I mentioned. So w- you combine that with the certainty and predictability and audience volumes that, that sport delivers, think you, you quickly see that sport is gonna become central to these global platforms. And I think is gonna be a series of consequences is I, I believe you're gonna see innovation and further progress. I think that's gonna truly benefit sport. as they're able to access more earnings than anyone else has, if you, again, think about it, very, very simple terms, Sky monetize on a monthly subscription basis, a little bit of advertising. Apple, particularly Netflix now, especially Google, they, they are monetizing viewer hours, so every bit of consumption of that content is being monetized. That's much more effective. And then when you t- step back and, and sort of check and u- and understand, well, why, why sport? Again, I reflect on Ted Sarandos. He said, I think it was last year, maybe 18 months ago, he w- he was asked to make a comparison between Netflix and, and YouTube, and maybe it was a bit, bit unfair, but he said, "You know, the difference is that people spend time. They're spending time on Netflix versus killing time on YouTube." Well, I, I, I kind of extract that one step further. For sport, people are making time and scheduling time, which is an even bigger, commitment and, and even greater premium. So you combine, you combine all of that together, the, the things that you know all too well, live appointment to view scarcity, loyalty to community, all of these things. You've got sport as a key acquisition, retention, and advertising tool

Richard Gillis, Unofficial Partner 24:46

I agree with that, that Sport does a great job for those platforms. What should sport extract in return? Just talk to me about what you think the longer term impact of, what's happening at the moment, which is sort of a shift. And if we see YouTube, if we take YouTube as an example, but we'll take the others, what is it that they're, that sports should ex- should expect back from those platforms? And how do we actually do that given their sheer power?

Adam Kelly, IMG 25:11

Well, it's a, it's an economic value exchange, and where, where they see greater conversion to earnings, sport will see greater returns. you, if you look at, y- you look in, in detail at, at Netflix, from, a standing start, what, What they have been able to bring is discovery factor. So from a standing start, they, they have delivered record audiences. Record audiences for boxing, record audiences for WWE, record audiences and huge numbers across, the NFL games that they broadcast. Um, the World Baseball Classic was a huge success in Japan, reached almost 40 million, um, audience over, over the period, and Japan didn't have quite the success they had the previous, the previous edition. So what they bring is big numbers, and what that converts to, and, and, you know, when you understand the metrics, you understand the dynamics, we're accessing, you know, greater returns for, for the partners. So if they're bringing the audience, they're bringing this power, they're bringing this strength, I think they'll continue to invest, they'll continue to innovate, they'll improve the product. And, and, you know, again, one of the things that I mentioned earlier is the, the dynamic the, my macro view is that these, these platforms are gonna be able to convert attention for sports fans in a way that's gonna drive bigger and better returns for sport without, in inverted commas, exploiting the fan, because their ad-funded model is, is the area in which they're gonna considerably grow. Netflix, you know, are gonna generate $3 billion this year from their ad platform. That's, you know, getting close to double ITV. Now of course, you know, they- it's not comparing apples for apples, but if you, if you start to realize the size and scale, how these businesses work, I can only see this being a, a force for good, and we're seeing that they are focusing on sports assets and, you know, investing heavily in producing the best possible content, all of which is gonna drive a big return. So what does sport get out of it? I think a substantial growth and big returns and, and a bright future

Richard Gillis, Unofficial Partner 27:32

What are the economics of, moving from a world of media, rights fees, guarantees, the old television model, the bundle, to this new world that you're articulating What is it? Is it a, just a greater ad share then of the output? the evidence so far suggests that they'll buy bits and bobs or they'll Eventize or they'll, you know, Netflix looks at sport in a different way, which is interesting in and of itself. But actually, if you are a sports you're thinking, "I can't rely on that because it's us this week." it works, great. If it doesn't, we're out. So there's no relationship building really. it could be dancing, it could be sport, it could be anything, cooking. Doesn't matter what the product is. They don't particularly care what the, uh, it's, that it's sport.

Adam Kelly, IMG 28:17

of these football clubs, They don't particularly want the edit

Richard Gillis, Unofficial Partner 28:18

They just care that there is an eyeball attached to it

Adam Kelly, IMG 28:20

I think those are, those are fair kind of skepticisms. Um, but I don't think they truly apply. You know, ad, ad-funded doesn't mean revenue share necessarily. You know, ITV don't offer, um, the Rugby World Cup a, a revenue share on advertising. They understand their ad market

Richard Gillis, Unofficial Partner 28:40

But they pay a large rights fee though, don't they?

Adam Kelly, IMG 28:42

to. No, exactly. But your, your point was, "Oh, does this now mean we're gonna be in revenue share mode?"

Richard Gillis, Unofficial Partner 28:47

But they don't... Do they pay rights fees then?

Adam Kelly, IMG 28:49

me, they will be. Absolutely. And, and, and, and we know many examples where they're, they're looking at significant investments in, in rights fees. It, it's understanding the, it's understanding the dynamics, understanding the model. Netflix were looking at sport for, I think, a good, a good 10 years before they eventually went into a more meaningful test. And when they went into the meaningful test, it literally blew their systems up. The, the Tyson-Jake Paul fight, call it sport or something else, you know, doubled their highest expectations, and that's why they had streaming challenges. And from that point, that lit a fire under the whole organization saying, "We need to do more in sport." And, and that's the power. And Amazon the same. You know, they, they, they start, they dip their toe in the water. They understand the complexity, challenges, a- and, and lots of other issues and concerns, but they will build, and trust me, they, they will, they will continue to do so. And, you know, I, I can reflect on, you know, way back at the start of my, my career at IMG, month that I clocked up 25 years, can you believe? But people were saying, "You know, well, can we, can we afford to move to pay TV in this market? Can we afford to, to move to this particular broadcaster?" Because suddenly, you know, what, what if, what if it doesn't work on their platform, and suddenly we've, we, we've alienated our previous buyers, and we'll never be able to go back? Well, the obligation, the duty, the, at hand is to make sure these things deliver and deliver That, that's, what sports increasingly under our guidance are, are encouraged to do and need, need to focus on, which is not a short-term transaction to, to license your content to a particular buyer. And if the focus is Netflix, it's to m- today, it's to make sure that drives the best outcomes for, for the other side, and that that economic value exchange is we know our fans, we know our audiences. We can deliver exactly what you need, large, heavy attention and audience consumption that you can monetize and that we can benefit from

Richard Gillis, Unofficial Partner 31:04

Okay.

Adam Kelly, IMG 31:05

Oh, am I convincing you? You've got that

Richard Gillis, Unofficial Partner 31:06

No,

Adam Kelly, IMG 31:07

look on your

Richard Gillis, Unofficial Partner 31:07

I'm I think that's my resting face. I'm sorry. I, uh, it's, it's, it's, uh, I get that a lot. I

Adam Kelly, IMG 31:14

it? Well,

Richard Gillis, Unofficial Partner 31:15

that a lot. I'm quite a hard sell on various things, I get the big arguments. when you then drill down, you get to some interesting questions, my working theory is that, you know, the popularity of sport does mask some bad decisions across the industry. And that's the bit that, uh, I think is useful to get to,

Adam Kelly, IMG 31:32

Richard, I f- I, I fully agree with you on that. Uh, the, the challenge that, that I've been really leaning into is this, I, I describe it active inertia in sport. You know, that things have been good enough for too long that people haven't reinvented, that they haven't taken a risk, that they are a chief exec on a, on a three-year mandate, and it's like, "Well, I, I'm, I'm not gonna be taking that challenge on, on my watch 'cause it's too risky." and that has been the biggest issue for sport.

Richard Gillis, Unofficial Partner 32:00

let's pursue that 'cause I

Adam Kelly, IMG 32:01

to

Richard Gillis, Unofficial Partner 32:01

I think it's a really interesting point. So let's just pursue that and build on that. so I was looking at, uh, let's take an example. The PGA Tour yesterday came out and said they're revamping in a couple years' time, in n- not next season, the season after, and it's promotion relegation. It's two, it's a bifurcation of the best and the rest. the argument being that would never have happened in a pre-LIV world. So LIV was the moment where the, it, it shook their world sufficiently for them to have to change from being quite a complacent organization that exactly to your point, it was sort of okay for enough of the time that people didn't need to change. And, and so The LIV moment I think is quite educative, I think from the sports point of view. Let's just park the Saudi money investment question for a minute because I think that's a part of it, but we don't really know the answer to it.

Adam Kelly, IMG 32:52

that's it

Richard Gillis, Unofficial Partner 32:53

But one of the interesting bits is in every sport, that there is a, you know, an appetite in the investor side, but for new product coming in that talks more to a sort of YouTube world than it does to traditional television, you know, all of these things. Three years ago we'd have had the conversation and said, "Yeah, okay, this is the route forward. It's gonna blow everything up and It's gonna be, the market is gonna be broken apart and there are gonna be new maverick-type properties that are overtaking." Since then we've seen a sort of the incumbents flex their muscles and say, "Actually no, we're gonna defend," and it's

Adam Kelly, IMG 33:24

it's

Richard Gillis, Unofficial Partner 33:25

hard moat to take o- take on a l- a large global sport. Where are we now in that argument? 'Cause there's a lot of money looking at sport and saying, "Yeah, sport is asset class. I'm gonna go and I wanna buy a property that's we're gonna be the new thing in rugby, football, golf, tennis." But just give me a sense of the market of that and what it says about sport as a marketplace for investment and the fit between money and sport.

Adam Kelly, IMG 33:48

The sports industry i- is, is very, is very easy to look at at a superficial level and think, you know, it, it is about a tournament structure, or it's about a new franchise, or it's about, you know, high-quality content production, or it's about a, a tweak to the competition structure. What- what- what- whatever it may be. I think unfortunately we're getting a lot of, What's the, the right way of looking at it? Dumb, dumb money. Um, junior analysts looking at sport and thinking it's, thinking it's easy. Um, you know, the, the LIV model I'm sure, you know, had, had that business breaking even within a few years. You know? O- otherwise, why on earth would you write such enormous checks? I think, I think there one of the biggest failings was their, their media strategy and, and how they executed, because they, they prioritized just getting any distribution to actually getting to where the fans are. and fans is really the thing that I, I see so many entities in sport ignoring. E- even the NBA in their, in their whole discourse around NBA Europe, they haven't mentioned the fans once. And, and that, and that's a big oversight, because

Richard Gillis, Unofficial Partner 35:02

But again, it's, it's not surprising. It's about, it's about real estate, isn't it? That's not about fans, it's not about basketball. It's about access to

Adam Kelly, IMG 35:08

is.

Richard Gillis, Unofficial Partner 35:09

unlocking public funds and, and new venues

Adam Kelly, IMG 35:12

Yeah, if, if You if you wanna do real estate, do real estate. That's, that's what I think.

Richard Gillis, Unofficial Partner 35:15

put a basketball team in front of it, it's quite a nice way of unlocking mayoral money.

Adam Kelly, IMG 35:20

Is it?

Richard Gillis, Unofficial Partner 35:20

that's the, I think that's the running argument. That's why they're in Rome, Paris,

Adam Kelly, IMG 35:24

Yeah. And, um, I would still have the same upward inclination with a question mark at the end. Um, the, the problem for LIV, n- I don't, I don't know a single person that watched it live. Not one single person. I've, I've become addicted to golf the last few years. I've asked people regularly at, at the golf club, "Have you ever watched it?" Not a single person. So you've got, you've gotta get these things right in combination. That's what I talk about while we've spent so much time investing in, in the resources and the capabilities and skills at IMG, because it's a real complex set of capabilities that need to come together in the right, in the right way. So for, the PGA, uh, I was with Brian Rolapp last week, and I made the, I made the point to him, you know, I truly believe in the right balance of content. for building a sport, I think the, the number one most important aspect is, is to convince the fan who is gonna casually tune in that this event matters. And It was something that I pushed really heavily when we, when we formed the Euroleague joint venture nearly 10 years ago. I came out with this slogan, which it took them six years to implement, so I was ahead of my time. Every game matters, and that was the big point of difference between Euroleague and NBA back then, is that, you know, the volume fallacy, the, you know, the, the quantity dynamic, you know, you've, you've gotta get these things right because you need to convert casual fans to becoming fans, or at least avid fans. And you can only do that if they happen to tune in and you deliver a super premium quality product that really has meaning. So for golf, you know, I think they're going about it the right way, but I'm happy to share. I said, I said to Brian, "My advice would be you have, you have the four majors, and you have the, the Players Championship," which is, you know, vaguely the, the fifth. But, but I think you need, I think you need three or four more must-watch, must-engage-with additional tournaments. And, and then you can have another set of events on a, on a rung below so that, know, the, the people that are casual will say, "Well, I've gotta tune into this." And that appointment to view that I mentioned earlier, that making time, scheduling time, if it's happening week in, week out, day in, day out, cares? Regular season of NBA, nobody cares. No- 120 games. Who cares? It's meaningless up until the playoffs, and I think that is highly risky and damaging for sport, is that you tell your consumer, "This doesn't matter, so tune in if you like." Because then, then you're into the, the slop, the AI volume, the, the saturation of any old content. So complicated

Richard Gillis, Unofficial Partner 38:15

It's interesting framing that because I think what you're saying is that there are, there aren't enough numbers of people who care about an NBA game on a Wednesday night or a, you

Adam Kelly, IMG 38:25

night or

Richard Gillis, Unofficial Partner 38:25

League game on a Wednesday night or a Premier League game between two mid-table sides. That isn't what the global streamers will pay for, but there is enough people who actually really like it and would really, really hate it if it was taken away. So if you blew the thing up and said, "No, we're just gonna have the best versus the best," that framing is based on a global fan, and I don't believe the numbers you'll feel, you know, this is my skeptical face, resting face. But I don't think the numbers,

Adam Kelly, IMG 38:53

Don't

Richard Gillis, Unofficial Partner 38:53

I don't

Adam Kelly, IMG 38:54

there

Richard Gillis, Unofficial Partner 38:55

I get it that was the live argument and we had Sean Bratches on and we talked to McKinsey about it, it came out of it. But that was the framing that is the blueprint, the Formula 1 of golf or whatever the, the thing is. But actually, the numbers of people who are interested in

Adam Kelly, IMG 39:11

people

Richard Gillis, Unofficial Partner 39:11

NBA game on a Wednesday is sufficient to be a, a market of its own size, but it not at the price that the NBA wants to sell it. So that's the mismatch and actually the, the trade-off is gonna be you're gonna lose, you're gonna, you're actually sort of

Adam Kelly, IMG 39:28

He's sort of

Richard Gillis, Unofficial Partner 39:29

for a big global fan and ignoring the needs and wants of the people who actually care about your sport. This is the argument made against the 100, that actually it's for, it's not for cricket fans. And And I've got to be careful 'cause I've just been invited to one. So that's, y- you get my point that actually there is a market, 'cause I think what's gonna happen over the next 10 years if we're not careful, is that people will suddenly realize that we'll lose a lot of the things that you really, really care about and in significant numbers. So the avid inner core are gonna be lost in pursuit of the big eventer and the global fan who are very promiscuous

Adam Kelly, IMG 40:04

Yeah, I, I don't fully... I understand what you're saying, but I don't fully agree. Uh, I think it's, it's about un- understanding what, what is, what is the correct volume of your, of your content. If you're, if you're producing premium entertainment, you you are, you are producing a, a super expensive must-watch, highly valuable piece of material. you translate an eight by 52 minute series into 112 episodes, are diluting the value. I think that, that's the risk, and it's not about, not about alienating the hardcore fan. I, I think there are fans for the sports that we currently operate and, and more because I think you can continue to build and develop fandom, particularly now when sport is being distributed on the platforms where the audiences reside, which is my, again, back to one of my earlier points. You've got probably now 350 million subscribers to Netflix. You've got 2.6 billion people regularly engaging on, on YouTube, plus, plus the other platforms. You know, for, for Apple, services segment is more than a quarter of their earnings and very high margin. So they've got, they've got a billion plus devices in the world. So these access to audiences is bigger and better than it's ever been. The fans are there, but so is this enormous volume effectively now of, of infinite content. Like you must have experienced the same as, as me, where you know something is AI and video is AI generated, and it looks as good as real. It's a hair's breadth away from being a reality, in which case you're in a world of infinite content, so the choices are there. So if it's not... cuts through that noise, only if you are saying this is a must-watch event, or it is very important to watch, or it is important because it's the hardcore. So there's, there's three levels just there. But the governing bodies and, and that's what we're advising our, our partners and, and clients, and exactly this, this means that they have to be delivering moments that matter.

Richard Gillis, Unofficial Partner 42:15

But matters to who is the question. How many global-- how many properties, sports properties other than the Premier League are genuinely global? There is a few small handful

Adam Kelly, IMG 42:26

World Cup, say

Richard Gillis, Unofficial Partner 42:26

of mega events that will reach that capability. But then when you look at the media right- international media rights of the NFL, the IPL, they are less than 5%, probably less than 3%. So is it that convinces you that that number's gonna skyrocket? Well, that's what you're saying, that you want a, a, the best versus the best and you want every, a, a huge funnel of YouTube to converge on a sport.

Adam Kelly, IMG 42:58

No, I'm, I'm not. I'm, I'm saying premium quality content in the best possible manner to drive the biggest and best outcomes. That doesn't, that doesn't mean global. It doesn't mean just YouTube. It doesn't mean Netflix. You know, it can, it can be... I'm certainly not forecasting the end of, of, you know, commercial television, pay television. Not, not at all. I think there's, there's a, a great period ahead for both of those entities. it's, it's about maximizing and building audience. It, it doesn't, it doesn't have to be global or on a- any particular platform. But it, but it has to be important. It has to cut through. And to deliver those elements, you need the governing body, back to the, back to the start with FIFA. The governing body looking after the, the volume, the delivery, the means, the calendar, the schedule, all of these aspects. un- and understanding their fan base and, and getting their content to the fans

Richard Gillis, Unofficial Partner 43:55

Yeah. I just, I mean, I think that there's a-- We've just done a thing on horse racing and, and, you know, blimey, that is a complicated and an unusual shaped sport, and I think a lot of sports are, and I don't think the money wants that. If the incentive in the marketplace in sport is to, is to be invested in or to gather, um, the money from the streamers, which is where we started, there's an averaging effect. There's a, there's a smoothing off of all of the bits that don't work. There's the sort of local challenge. And so trying to fit that into, a market which is based on people seeing content, so you're turning real people into bot traffic because you're generating numbers is the incentive in the marketplace. what I care about will get lost in that race because the sports that I like are really unusual shaped things. Test cricket, the golf calendar, British Lions tour, all of

Adam Kelly, IMG 44:46

weird

Richard Gillis, Unofficial Partner 44:47

these things are weird things that you wouldn't create, and I don't think the market will create them. It wants a McKinsey Liv type product.

Adam Kelly, IMG 44:55

I couldn't disagree with you more,

Richard Gillis, Unofficial Partner 44:56

Oh, good.

Adam Kelly, IMG 44:57

I, I, I think in, I think in this world that there is exactly room for this kind of hardcore, dedicated niche, sport or, or output or content just as much as there is for the ubiquitous global, which I, I don't think exists. I think it's one of the fallacies again, that other sports and the, and the McKinseys of the world, um, have, which is, you know, well, we'll just make basketball big in the UK. I mean, basketball's as big as, as netball in the UK, and I'm not knocking netball, but you know, they, they have the same participation levels, the same engagement. And if you are a real basketball fan, you watch the NBA, and I don't see that changing rapidly. Uh, we, we have been supporting the growth here of basketball, but it's not an easy fix. Just bui- just build a team. So the... I agree with that aspect. You know, it's not one size fits all, but everything you're saying is exactly how sports have grown. You, you, you seem to disconnect, the, the, the Sky success that they've had in cricket to what could happen in the future with a different platform. It is, it is monetizing attention. You pay for your Sky subscription because you, because you like cricket. If there's a subscription in another service, in another channel, you'd probably subscribe there. Or if you're getting it as part of your Netflix bundle, you'd be happy as Larry. it's not different. I'm maybe expressing it differently, but what we need to do as, as, you know, supporters to this incredible industry that, that, that we love and we've spent our lives working in, is making sure the sports understand what is important. That it is not taking money from private equity, um, unless they're delivering industrial expertise and strength, and the ability to, to understand the fan and build and grow and know the dynamics of what's ahead and looking around the corner for the kind of content they need to produce, for whom and when. You know, tho- those are the things that are fundamental. it's... I think we're, we're looking at the same solution with slightly different approaches,

Richard Gillis, Unofficial Partner 47:07

aren't you owned by private equity? I thought you, I thought IMG was owned by Silver Lake

Adam Kelly, IMG 47:12

They're, they're, uh, they're a majority, uh, majority investor and I'm not, I'm definitely not knocking all private equity. But there are, you know, I think there's a big difference with some of the money that's, that's come into sport, in terms of the outcomes that they've driven versus just putting heavy levy onto an, an organization that didn't fully understand the questions that they should have been asking or, or were looking at in terms of the overall model. But our, our belief, our approach is, know, we can financially support any sport, but we focus on what our, what our industrial machine can bring in terms of upside value. the world of private equity, in, in a number of cases in sport, hasn't actually delivered

Richard Gillis, Unofficial Partner 47:59

Do you think it's just part of the sort of financialization of everything that one of my bugbears is the sort of business argument for sport in sport is out of date and Actually what it's about is just the, the financial extraction of money from fans and that, th- there's a, that's the trend. And you see it, NBA Europe, I think is one of the most cynical thing. You know, I've looked at the deck and I, I just, I think it's, it's so little about sport and fans and what fans want,

Adam Kelly, IMG 48:31

and

Richard Gillis, Unofficial Partner 48:31

and so much about what potential, extraction can be made. that's I think where we are and I see a lot of these sports properties and established ones as well, as you say, getting into bed with m- with money that actually

Adam Kelly, IMG 48:44

partner, but

Richard Gillis, Unofficial Partner 48:45

is the wrong fit

Adam Kelly, IMG 48:46

I agree with a lot of that. Um, it's funny, my, my, big sister is a, is a bit of a hippie yo- yoga instructor, and,

Richard Gillis, Unofficial Partner 48:54

pair.

Adam Kelly, IMG 48:55

Well, you s- you say that. I li- I like, I like a bit of yoga. And, uh, this, you, you hit the nail on the head. So she... I was talking about how at IMG, I, I've really helped the company rediscover, rediscover its purpose. And she was like, "What's that? Making money?" And I was like, "Wow, that, that is not it." What, what we talk about is power the passion for sport. I've got it written on my, on my wall here. what we focus on is, is the fans. And what I truly believe, you know, I've got plenty of videos where you... There was one from a, a, a user-generated video, I'll share it with you after, um, of, of fans going crazy when a winning goal goes in at an Arsenal match from a couple of seasons back. And you've got this excitement. You've got these grown men hugging strangers and jumping up and down like something, a release of emotion you cannot see anywhere else in the

Richard Gillis, Unofficial Partner 49:48

And that is being monetized. That's the bit that is-- That's why money, that's why investment, that's why IMG exists. That's why McCormack started the business in the first place, is to make money from that emotion and that addiction

Adam Kelly, IMG 50:01

so I look at it the other way, genuinely, Richard. I, I look at it as our role is to help sports build and grow. Because I, I look at the world today and culture, morals are, are being slowly eroded. You know, religion, like it or otherwise, you know, is, is being, is being reduced. So people have less and less community aspects in their lives and, and sport in many ways plays that role. You're kind of born into religion, and in many cases you're born into supporting a sports team. What we, what we focus on is how do we help sports grow and develop so that they can reach more fans, so that they can be more successful, so that they can increase their, their reach and audience. Genuinely, that, that's, that's What we wanna do. The, the share of the upside obviously pa- pays the here, we love sport. I tell people, "If you don't love sport, if you're not passionate for what we're doing, then y- you probably should work in a bank or go and work as a lawyer." Because w- we are here to grow sport, and we see it. You know, we, we did some transformational deals over the past couple of years for, for tennis. for Wimbledon, that supports the sport, the LTA in the UK. With Roland-Garros, that supports sport in France. For the USTA, supports

Richard Gillis, Unofficial Partner 51:23

What did it transform? Sorry, I, I, what was the deal and what did it transform?

Adam Kelly, IMG 51:28

So, so we, we help each of them, um, adjust their scheduling, adjust their content production, adjust their go-to-market strategy, and, and secured major revenues for them, primarily from, from the US market in a, in a series of, of transactions. But what, what that means is that we're securing the future of tennis in those territories because those organizations support So that, that's, that's one small example. With, with CONMEBOL, a, a, a partner I'm very closely involved with, you know, the, the president there believes and says, and I've heard this in numerous occasions, he believes he's changing lives what they do with South American football, what they do for communities, what they do in their region transforms lives. And, and we have significantly transformed their whole commercial program so that they're able to more heavily invest in sport in the region. That tho- those are the things that by the end of the dinner, I convinced my sister, so hopefully I can convince you that it's not just about, it's not just about the money. And w- with what I'm saying about the advertising model, that means fans will be able to drive better outcomes for sport without having to put their hands in their pocket, at least directly. You know, the scalability of the ad platform for Netflix and, and YouTube, Google means that you're not gonna have to keep putting prices up to consume the content. It's gonna happen, you know, automatically

Richard Gillis, Unofficial Partner 52:53

Okay. We should get your sister

Adam Kelly, IMG 52:56

Sure. But I want to be a double act next time. Uh, we'll see who's got the worst resting whatever face.

Richard Gillis, Unofficial Partner 53:02

yeah.

Adam Kelly, IMG 53:03

now. There you go. I f- I've won you around

Richard Gillis, Unofficial Partner 53:06

I'm always smiley. You'd be surprised how happy I am. Brilliant. Okay. Good luck, Adam, and, uh, thanks a lot for coming on. Really enjoyed it

Adam Kelly, IMG 53:13

All Right, appreciate it.

Richard Gillis, Unofficial Partner 53:14

just bear

Adam Kelly, IMG 53:15

I just talk to you a