15/03/2014 Talking Business with Linda Yueh

million. It's the UK's fourth biggest ever lottery win. Now on BBC

News, it's Talking Business with Linda Yueh.

$100 million is no small sum. That was needed just to compete in the

America's Cup. Sport is an extensive business that requires sponsorship

and fundraising. We find out how professional sports men do it. In

Singapore, we are Talking Business. Ben Ainslie is the most successful

sale in Olympic history, winning four gold medals. He is here to

compete in the extreme sailing series and he is the first Briton to

win the America's Cup, and now he is hoping to raise $100 million to fund

his own team to compete in the America's Cup. I caught up with him

to find out how it was going. The America's Cup has traditionally

been for a very wealthy individuals, billionaires, but in recent history

we have seen a shift more towards the commercial model with teams like

Emirates Team New Zealand being a commercially run team, and in

Britain we have had a number of challenges but have never actually

won the America's Cup. The American team won the trophy, took it away

back to America and we have never seen since, and we formed less team

a couple of years ago to build it up as a commercial team to deliver a

realistic challenge and hopefully bring the America's Cup back to

where it started. It has an awful lot of money to try to raise. Where

do you go for that kind of money? We have a commercial model but we also

have included and that private investors. One trunk of funding will

come from investors in the team and the rest through a number of

sponsors, partnerships we have at the moment that we hope to take for

word. It is a lot of money to raise and likely a lot of professional

sports, at the highest level you have to have this funding to have

the right equipment and personnel. How far along are you in the

fundraising? Since the last America's Cup we have focused on

private investors for which we have a huge amount of support back in the

UK. We have a great group of national investors coming in trying

to underline part of the budget, and around about 70% of that target for

our private investors is underwritten, so we still have

somewhere to call but we are still confident that we will have that

private funding we need. The next target is the commercial sponsor

ship which kicks in and the next couple of months as we get the rules

for the next America's Cup and the dates and the type of boat, and we

can deliver that took our commercial partners. What is the money actually

used for because you said sport is expensive. It is really sailing's

version of Formula one and while effort has gone into cutting cost,

it is still very technical so you need a design team and you need to

design and develop smaller scale versions of the boat you will

eventually race. That takes place over a two or three-year testing

cycle. You end up with around 80 people split between sailors,

designers, managers, and really putting that together which is where

you need the funding to have the talent in terms of design. Larry

Ellison that backs the American team, do you need a Larry Ellison

type that candlelight 300 million? -- can dole out. That is one way of

doing it. There are couple of other billionaires who have been involved

recently and will be again. Patrizio Bertelli also has a team. In a way,

it is difficult taking on this extremely wealthy individuals to go

out and find the money commercially with the help of some private

investors. In a way, it makes you more focused to have an unlimited

budget and you can waste a lot of time and money on areas which are

not that important. You are obviously very familiar with

the whole business of sport and sponsorship but this will be new to

a lot of people. How do sponsorships work? You have been sponsored by a

company for many years when you are competing at the Olympics, so maybe

just a little about how that process works and how much money is needed

to compete in a sport like sailing. For me it is about building up a

relationship which is why we wanted to build this team commercially, so

rather than one individual we have a long-term plan. We also want to

compete farther down the line so it is building those partnerships. You

obviously have to give good return for that to continue so we work

incredibly hard to get exposure and return to clients and sailing is a

great sport for that because it is really diverse with lots of

different types of ceiling. The America's Cup is the pinnacle and it

is expensive but ceiling at the grassroots level is very inexpensive

and it is often a misconception that it is an elitist sport. I guess for

a lot of people they will look at the boat and say you could not do it

without sponsorship, so how do younger athletes get started? B-side

is a love of the sport of course! Any sport at the highest level, you

have to have professional athletes and you have to train. If you're

trying to win the Tour de France, that is an expensive project,

cycling at a grassroots level you get on your bike and off you go.

Certainly for kids, here in Singapore they have the best young

sailors in the world, they are the dominant team. We are seeing that

sailing globally is really taking off at a grassroots level. You

started young yourself. What has been the secret to your continued

success. I have been incredibly lucky to have a huge amount of

support and I started off with my parents and then through the years

with different coaches and mentors. At the end of the day it comes down

to hard work and applying yourself because in any walk of life there

are very talented whatever you do, and the difference is how much you

are willing to put into that to reach that goal. That is the

difference between being successful and not.

You are often viewed as being a very good tactician and I think you have

displayed it through different types of racing. What is your secret? A a

lot of that comes down to experience and people often talk about ceiling

as a very physical sport but it is a little like playing chess. It comes

down to experience and seeing the situation and replaying them

mentally. I have been through this situation before and this is the

next move, so it is very strategic and tactical, and the more you go

through the situations the better you are to try to make the right

decision. Tell me a little bit about what you are doing in Singapore.

Extreme sailing, I don't think a lot of people will have heard about it,

so what is it? The Olympics and America's Cup are probably the

highest profile, but the extreme sailing series is quite new, four or

five seasons, and it is exciting because we have stadium racing so we

come to a venue like we have in Singapore which is very tight, and

you would not normally be to race. -- be asked to race. It makes for a

very exciting racing for the spectators. The latter is part of

the challenge and you go out and do battle and we have already had quite

a few collisions, but it makes very exciting racing and we have a global

circuit which is great for our commercial partners. You described

to me earlier how when you compete in the Olympics which stages

matter. Just explain a little more about that, because I found it quite

fascinating. That comes down to the strategy of the campaign and in the

America's Cup they are tend to be four-year cycles and then the

Olympic sailing, only one competitor permeation is able to compete, so if

you have a country like Great Britain which has a lot of talented

sailors, it is tough to qualify to compete in the Olympic Games so you

have to look at it strategically to say the first goal is to qualify.

Then you have to target the Olympics themselves is all over that four

hears that is really about working up to different targets and making

sure that you may little on day and performed when it matters. Finally,

what lies ahead in future? Politics? Politics! I have interests

outside of ceiling and I am interested in politics. -- outside

of sailing. I find political shows fascinating but it is hard to see

anything beyond the next America's Cup. Such a challenge, pulling

together the funding and getting the right management team in place.

Focus on that form now and see what happens afterwards.

That was Ben Ainslie talking about his efforts to raise $100 million.

It is not just ceiling. Sport is big business and it is estimated that

the global sport revenue will set $145 billion next year that a growth

rate of nearly 4%. Ticket sales are still the biggest source of revenue,

however TV advertising and the return of financial services as

sponsorship is driving the sporting industry to new heights. Joining me

to discuss the business of sport is Marcus Luer, founder of total sports

Asia, Royston Wee, Singapore's top fighter who has had two days funding

to support himself, Ramu Sasikumar, a former national football player.

Welcome to all of you. Help us understand, this global sporting

business, what are the sources of revenue? There are basically three

main areas, with the big ones being ticket receipts, television rights,

which means what you watch on TV. And then of course around the world,

sponsorship. Those are the three big buckets. Depending on each sport

that can vary but in general you would have one third of each.

What is the breakdown in terms of revenue for a football club? There

are various revenue streams. A lot of the clubs depend on the ticket

gates, match day revenues on a that is one. It varies in the different

regions. The Premier League club, the revenue is very different.

Generally, the breakdown is with ticket revenues, what you get from a

centralised pool of television rights, your club sponsorship, all

the various activities of the club does. It is a mix of quite a few

things, but the main revenue stream would be the television rights, of

course. What is interesting there is that the big clubs have revenue

streams that will not just come from the local market. It doesn't just

mean an international sponsorship comes with it. The bigger teams in

the world gets revenue in areas where they never appear, and that is

the ultimate trick, how much can you take advantage of the fans you have

around the world? Manchester United claim that they have 300 million

fans, and that they could get $1 from each van, that would be 300

million pounds -- $300 million, and that is the ultimate trick, and that

is what everybody is trying to figure out. No-one has worked it out

yet, but that is the big next Bush. -- next push. How do you feel about

the financial pressures in your sport? Are there particular ones

that you are targeting, for instance, getting more fans to come

or to do more merchandising of your sport? For an athlete, in order for

us to get sponsorships, we have to be recognised, and we have to train

hard and perform, because if an athlete does not perform, no-one

wants to sponsor you. Firstly, being in an organisation helps all stop

big promotions and everything. -- helps. Big promotions and everything

will stop winning. That attract sponsorships. They will want the

logo on their short and it will be more marketable. As an athlete you

have to definitely train hard and make sure you show results. Is that

the main thing that a sponsor would look for, a winning athlete? What

are the traits of an athlete that would attract a sponsor? Winning is

the obvious. You are world-class, you are a gold medal winner, a world

champion or top of the league that you can be in your sport, that is

the obvious starting point. Not everyone can be there. There are

many athletes out there who are not number one in the world that attract

a large audience or large revenue streams because they are different.

I think an athlete needs to come up with his own story. What is

different about him? How did he make it to where he is now? What

sacrifices did he have to make? That is what the public can relate to,

and when the public relates to him, that is when the sponsors want to be

there. Social media it's hugely -- social media is hugely important. I

have 100,000 people following me, that is a ready-made market all of a

sudden which ever existed in the past. In the past, you knew there

were fans out there, but you can quantify it now and there is a value

to it for a sponsor. Let me bring you in on this. In terms of seeking

sponsorships or getting an athlete a sponsor, how much of it is based on

returns, for instance, getting something back for what you have put

in, how much of it is because on the I love the sport, he is the best in

the league and I love his story? Everything is about return on the

investment, even if it is a $10 deal or a $10 million deal. Athletes must

take it upon themselves to give that value back to the sponsor, whoever

it is. Social media is a thing that you can quantify now. In the past,

there was not a playing field for a lot of athletes. Now, the athlete

can directly interact with their fans, so that is the brand

connection, and that is what sponsors are looking at. Can he

recognise or represent my brand to these masses? It is hard to target

audiences. If you are marketing I do look at the mix, and if you have got

1 million people died you can reach to an athlete, that is a great

platform. -- people that you can reach. He wants people to recognise

your brand. The guy might not be a champion, he might be somebody who

is aspiring, a young athletes that could be looking at an Olympic

pathway, but if the brand wants to get behind him, they want to create

heroes, they want to get behind certain athletes and create a hero.

There could be brand out there saying, that is groovy, he is

growing in his MMA career lets get behind him. Let's grow him and if he

becomes a champion than we are the ones behind him and we make it

possible. It really depends on which stage the sponsor is in. There could

be a big sponsor who wants to come in, but there might be other brands

that want to grow with the athlete. That is where we come in. We

evaluate the sponsor and say these are the properties that you want to

back or the athletes that you want to back. That is where we make our

money, I suppose. No pressure on you, you have to represent a story,

you have to win and represent your country. What do you have to do to

attract these countries to say, yes, I am going to pop the sponsor's logo

on your shirt? I never thought about the media. To me it was just plain

and simple, train, wind and just have a good Tahrir, and Ashok are a

good career, and when the media hit me, I was -- just have a good

career, and when the media came to me, I was surprised. The importance

of the media, how it shapes and athletes, these are the factors that

attract sponsors. Does it change your performance, all of this

pressure to get sponsors? Or would you just not focus on it and think,

I just have to wait? That is the thing, you have to focus on that,

otherwise, how much you have to raise to be an athlete? Mentally it

is very challenging. I do not think of the outcome. When I prepare, I

want to enjoy the process, and I focus more on the process than the

outcome. Being an hour late -- being an athlete, it is very difficult, so

just enjoy the process and let it go. How much do you need to raise to

make it possible to be an athlete? There are a lot of things that have

to be sacrificed, especially in MMA. It is a glorious sports and we make

a lot of money, that is what people think, but that is not the case. We

have to spend a few thousand dollars and fight cameras, travelling,

training, so the amount of money that we make per fight, minus the

costs come a week do not really make that much. -- costs, we do not

really make that much. If we lose, we take less money. Sometimes we

make a loss. It is not that easy, coming into being a fighter. Before

we conclude, top tips. As he rightly pointed out, I think he has got to

be media friendly. You have to look out for your image. We are the ones

you're going to bring your money, so be open. -- we are the ones who are

going to bring you money, so be open. Create something which is

unique. Think about what makes you stand out, not just in the ring,

because that is just about the performance in the ring itself, what

a great example, I worked with a gentleman many years ago called

Princess theme, who was one of the best fighters in the world. --

Prince Zeena. Normally it is about the big guys, but he had created, he

was not just a bad athletes, but he would come in on a flying carpet and

have all sorts of ideas of how to protect himself and then he had a

very unique style in the ring. He was one of the highest-paid athletes

at the time because he was so unique. Figure out how you create

something where people go, I remember, when I watch you, I

remember you because of something. I am going to be watching out for

whether you have a flying carpet! We better leave it there. The pressures

can be considerable. Sponsorship deals are among the reasons that

sport is such a big business globally. The key seems to be

winning fans to the sport. That is all we have time for this week.

Check me out on Twitter. Join me next week.

That evening. There has been anti-of excitement today, but sporting

activity and also weather-wise. -- there has been plenty of excitement.

Dry weather is allowing these weather fronts to topple across the

North and the isobars are squeezing, which means we have seen some

showery