Rewriting the Playbook: How FMF President Mikel Arriola Is Reinventing Football in Mexico

Speaker A: Call them change makers.

Speaker B: Call them rule breakers.

Speaker A: We call them redefiners.

Speaker B: Hi, everybody, and welcome back to another episode of Redefiners. I'm Tomas Chamoru Premozyk, chief science officer at Russell Reynolds Associates, and joining me for a very special episode today is my wonderful colleague and co host, Marla Oates. Hi, Marla.

Speaker A: Hey, Tomas. It's so good to be here. I'm really excited for today's guest.

Speaker B: Indeed, a very special guest and topic. But before we get started, just a quick reminder to our listeners that they can find all episodes of Redefiners and our sister podcast, the Leadership Lounge, on YouTube. If you're watching Redefiners on YouTube, hit that subscribe button below so you don't miss any episodes. And for our audio listeners, don't forget to. Don't forget to rate redefiners. Wherever you get your podcasts, we love to see your feedback. Today we're going to have a very special topic and a very special guest that is very close to my heart. And also, I don't know about you, Marla, but, uh, I woke up today with a little bit of fever. It's called World cup fever. The World cup is starting in two days as we're recording this on June 9th. How are you feeling, Marla?

Speaker A: Well, I am wearing my classic Austin FC green, uh, to represent. I'm also excited because Houston, a city where I live for a number of years, is one of the host cities this year. And lastly, I don't think you know this about me, but I actually, when I was a kid, grade two, broke my wrist playing soccer. I used to play it over and over and over, and that. That really ended my soccer career as a child. How about you?

Speaker B: Well, there you go. You could have been in the World cup for me. You know, what can I say? I come from Argentina, so, you know, I have to be a football fan or a soccer fan. For our, uh, listeners in the US My first epic soccer or football memory was when Argentina won the World cup in Mexico, which was in 1996. And we're a couple of days away from seeing the new World cup play there. And our special guest today has a connection to Mexico as well.

Speaker A: That's right. And look, while everyone is watching the game and cheering on their favorite teams and athletes, there are thousands of people who've been planning and sweating all the details, the logistics before the blast of the referee's first whistle to start the game.

Speaker B: To help us dig into that, our guest today is Michael Arreola, the President of Liga MX and Commissioner of the Mexican Football Federation. Mikael also serves as Vice Chairman of the FIFA Men's Club Competitions Committee. And prior to joining Liga mx, he spent much of his career in public service within the Mexican federal government. So, Mikel, welcome to Redefiners.

Speaker C: Thank you very much. Uh, Thomas and Marla. It's a great pleasure to be in this podcast with Russell Reynolds.

Speaker B: Fantastic. So before we get into football, Mikael, let's go back a bit in your career and talk about the different chapters, something we'd like to cover with our guests. So you had a successful, uh, career in government, in federal government for many years. Then you were head of the Federal Commission for the Protection against Sanitary Risks. Why don't you share a little bit of color or light on your journey from your beginnings to where we are today?

Speaker C: My education is as a lawyer. I, uh, studied law in Mexico in the Universidad Anaguac. But my main inspiration as the son of a public servant. For many years, my father was ambassador for Mexico in many, many countries. I wanted to work in the government because my passion was public policy. Not politics, public policy. So around 2001, I, uh, entered to the London School of Economics in order to study a, uh, master's in public policy and public administration. So after that I entered to the Mexican government. The Mexican government was in the middle of a, uh, great reform in order to decrease expenditures. So my first task, along with Jose Antonio Mir, who was the chair of the bank, we had to close the bank and to generate another institution which generated coverage to agriculture and generate efficiencies. Then I went to study to Chicago. I wanted to continue my studies in government and also in public policy. So I received, uh, another degree from Chicago. And then I went to the Ministry of Finance. And my job was to prepare all the fiscal documents which were to be presented annually to Congress. And my, uh, position was in the Office of Tributary Policy. So I was the lawyer of the Underminister of Income. And after that I became a regulator. I was appointed by President Calderon as the head of the Mexican fda. And then I was appointed as the head of the Social Security of my country. The Institute of Social Security covers around 85 million clients. Wow. Um, with around 7,500 hospitals. And also it pays the pensions of the Mexican workers. So that was my career in government. And then I run for major, uh, of Mexico City. And as you know, that survey was not in my favor.

Speaker A: I'm curious since you mentioned that experience, Mikael. You know, running for public office is just like A massive undertaking.

Speaker B: Right.

Speaker A: Your whole life is under the microscope. I mean, we see this in US Elections all the time. It's very public. I want to just spend a moment on this. How did you regroup after the loss? How did you move forward? And what did you learn from that experience?

Speaker C: Going from public policy to politics is another world. In politics, you are in a new environment where your future is the next day. So in a campaign, you don't have time or you don't have the capacity to see to the next week or the next month. You have seven months to generate all the votes that you can. And, uh, you don't sleep and you don't stop working. So I think that it is the most important working experience in my life, Marla, that prepared me for the rest of the things I am facing now, the challenges. Because when I look back and I say, I survived a political campaign. I can do whatever I want.

Speaker A: Did it teach you about the work ethic or the thick skin? I mean, what was the takeaway?

Speaker C: Endurance.

Speaker B: Yes. Survival skills.

Speaker C: Survival. That's right. Survival. Because your life changes entirely when you are a candidate. You have to convince every minute of your time to everyone, and the fight is very tough. So if you wake up and you lost one point, your day changes. And if you wake up and you won four points in the survey, then that's a great day for you. You have to learn to go from 100 miles an hour to zero.

Speaker B: Yeah. So, Mikael, let's switch gears a little bit and talk about the transition from public policy to politics and finally to the beautiful game. How was that, you know, the arrival into the world of football? What skills were still useful and transferable, uh, for your new career chapter? And what did you have to learn? Because it's also a very different environment. No?

Speaker C: In this industry, the tradition is to appoint in the management seats former players or former coaches or whoever is in contact with the industry. And, uh, Paco Ruiz Massa of Rossel Reynolds read the scenario, and he told the board of this league, you need a planning guy. You don't need a guy that knows how to put, uh, the 11 players in the pitch or knows how to shoot a penalty. You need a professional guy that has a background of planning, of generating policies in order to recover or generate more, uh, value to the company. Our league is the most watched league in the US for instance. But we were not, in terms of income, competing with the other leagues that are viewed in the US or in Mexico. We needed a huge transformation in terms of generating value in terms of incorporating a governance reform in the league. And obviously we needed a, uh, policy by means of which we could centralize our assets, mainly our TV rights. So that was my proposal when I started with this process in order to appoint a new president of the league. That was in the middle of the pandemia. So it was more difficult because the process was interrupted because the league was cancelled in March of 2020. At the end of 2020, I really presented a, uh, technocratic proposal in order to generate value to the league. And, uh, I think I was able to convince that the transformation of the league was not related to the pitch.

Speaker A: That is a nice segue into Mexico hosting the current World cup games. You know, there's millions of fans out there, but I don't think a lot of people actually think about the logistics and the planning that goes into this incredible game. Of course, there's the logistics at the stadium. Security, finance, sponsorships. There's a transportation for the teams and the fans, and a lot of public scrutiny that goes into every single decision that's made before and after that first game. How did you identify and align with your leadership team and really execute upon your World cup strategy?

Speaker C: Well, let me tell you, Marla, that when the FIFA, uh, committee made the decision of appointing Mexico, Canada and the U.S. to host the 26 World cup, that decision is related to the most productive and integrated region in the world. We represent around 600 million people, but we represent 30% of the nominal GDP of the world. So if you add that to football, you can say that this is the most important event in the history of, of the world, of the history of humanity. If you see the FIFA economic cycle of 2022 of Qatar, the cycle represented $7 billion. This cycle represents $12 billion. So we are hosting the biggest World cup in the world. 104 games, 48 countries staggering. And what is the main target or task of a federation is to prepare the team. And one of the biggest opportunities of Mexico is this World cup because we host, and in sports terms, hosting is a big advantage. So we generated a plan in order to face this challenge, in order to increase the amount of time of our players playing together, in order to increase the amount of games that we play against other very powerful countries. And now we have 73% more time being together as a team than the rest of the world, and 50% more games played before the World Cup. Imagine that Spain played yesterday here in Mexico, and the group was integrated two days ago. Uh, our team was integrated on the 6th of May and in terms of the logistics, we are hosting the event for the third time. We have infrastructure. Our, uh, federal government is quite robust. The municipal governments and the state governments are coordinating since two years ago in order to host this. So our main task as a, uh, federation now is focused on our team and on generating the best World cup in our history because that is connected with the present future, which are the four following years before 2030, the World Cup. We have to generate the sufficient investment, income and interest in order to finance our next process.

Speaker B: And Mikael, talk to us a little bit about the economic benefits, employment benefits and the projections for jobs generated and the impact that this event will have on the Mexican economy.

Speaker C: We expect to receive around 5.5 million additional visitors. The economic effect of on the fiscal year of 2026 is going to be around $3 billion and that represents around 0.5% of the Mexican GDP and an increase in terms of employment on around 25,000 positions in the Mexican economy. But the most important thing here, Thomas, which has an economic effect, is that the opening game on Thursday is going to be the most watched TV event in the history of humanity. And we expect to receive around 6 billion viewers focused on Mexico. That will be huge for Mexican economy and for Mexican future.

Speaker A: We'll be right back with Mikel Arreola. But first let's head to our Toronto office and hear from Navio Kwok, one of our leadership advisors. Navio shares his perspective on whether the lessons learned in professional sport help explain why so many athletes go on to become successful leaders.

Speaker C: Did you know that a surprising number of CEOs and senior leaders spent their formative years on the playing field. Research tracking more than 400,000 Ivy League graduates suggests that college athletes are more likely than non athletes to go into business and finance related jobs, receive an MBA and reach senior leadership positions. So what is it about sport that helps shape effective leaders? In our latest article, we explore four ways that early experiences in sport can leave a lasting imprint on how leaders think, act and perform. To learn more, you can find the full article in our show notes or by visiting russellreynolds.com

Speaker A: now back to our conversation with Mikkel. We did a little bit of research before the show, of course, as we're preparing for today's episode. And we understand that Mexico consistently reaches the top 16 of all the sports teams playing. So that's the huge accomplishment. We are going to be cheering you on as your neighbors, but I want to talk a little bit about pressure. You know, that's A tremendous amount of pressure on you, on your team, really, to perform. And how do you manage that type of pressure when you don't have direct control over the outcome of each game?

Speaker C: So we started planning. Since 24, we generated a plan with the coach. The coach described his targets, his objectives, and we are one of the only countries in the world that generate the two businesses in the same company. The FMF has two lines of business within the company, the national team and the, uh, clubs, the league. So the national team is financing the clubs in terms of generating talent, but that also generates that the clubs have to support the national team. So we generated a plan to ask the clubs for the players before for more games. And that plan was presented to the owners. So we have been implementing the plan. We played our last friendly match last week. So that generates more capacity and more potential to face pressure. What I can say is that we invested all, all the resources of the company, clubs and national team in this project, which is the most important project.

Speaker B: I think no other country will have hosted it three times, right? Or is there, uh, anybody else?

Speaker C: Mexico is the first. And I will have to tell you, fortunately, we're going to host the Women's World cup in 31.

Speaker A: Oh, wow.

Speaker B: There you go.

Speaker A: Awesome.

Speaker B: Marla, if you recover from your injury, maybe you can make it.

Speaker A: I gotta start training now. Okay.

Speaker B: Yeah, exactly. Mikael, changing gears a little bit. You know, we often talk to our guests about technology, artificial intelligence. And although most people don't immediately associate AI with football, we know that for this tournament, there's actually quite a few innovations planned with regards to AI I think they're not yet going to replace human referees. But tell us a little bit about what's planned in terms of your tech partnerships and collaborations to leverage artificial intelligence in the tournament.

Speaker C: Well, Thomas, you have to know, who is Chespirito? You're from Argentina, of course.

Speaker B: Of course. I grew up with him.

Speaker C: Remember El Chavo?

Speaker B: Of course. El Chavo de Locho.

Speaker C: El Chavo de Locho. Imagine who presented our 26 players one week ago by means of artificial intelligence.

Speaker B: Wow.

Speaker C: That was fantastic because he produced three movies called Del Champl, and those movies were about football. Our fan base is so huge in Latin America because of Chespirito. So what we said is we need to send a great message because we are hosts and we are the last UH team in order to present the 26 players and so forth. And we decided to make this bet with eae. And now we are the second most watched video after the UK I think so, yes. We are using it. Obviously what we provide to our uh, uh, clubs as a whole is a system of sports intelligence that we centralize in the league. And we also generated an intelligence department for the national team. It's not only artificial intelligence, but it's statistics for the partners, it's statistics for uh, the coaches, for the referees. Now we have brought into operation automatic system in order to mark the off sites, which is called saud. So technology obviously is one of the most important lines of work in the federation. And we're now investing around $15 million a year in our different systems, including AI. Our employees are more efficient using these kind of new technologies.

Speaker A: I love that. Well, look, as the finance person on today's call, I want to talk a little bit about the numbers. Another place you've just absolutely excelled. We understand Liga MX has seen significant transformation and growth while you've been CEO. For instance, revenues are up 70%, enterprise value is up 30%. You've increased attendance and viewership and really expanded the reach to become, as you said, the most watched league in the US you strengthened ties with megatur League Soccer in the us. You've made a lot of different reforms to allow private investment funds and eliminate the multi ownership of teams. These are pretty big changes. And getting everybody online and on the same page, especially team owners, can be difficult, especially when there's competing agendas. Tell us a little bit about your playbook. How have you led that change? How have you been so successful in terms of the organization and culture?

Speaker C: Well, thank you Marla for that question. Let me tell you that our board is 18 teams and that board represents a lot of Mexican very strong institutions. The university, the cement companies, the most important retail company in Latin America, obviously the broadcasters. So when you see the owners, you can see value generation. When I came to the league, the income was in deficitary terms and we were depending on 86% of our revenue in one partner in BBVA. And now we have increased our income in 270% and we now only depend on BBVA on 16% of our income. We generated obviously a great association with mls, which is our partner in a regional tournament, which is the only tournament in the world between two leagues which is official. And this uh, tournament is now generating an annual revenue of $130 million. And then we have been obviously working on the corporate governance. Marla, we have executed a reform in order to appoint several decision committees within the um, decision making process of our company. And now we are going for the most important project uh, Marla, why the Mexican League is the most watched league, and in terms of market share, we are the lowest because we have not centralized our TV rights. That is the main thing that The Europeans did 20, 25 years ago, and their income increased geometrically. So we need to do that in order to become a, ah, real player in the international agenda.

Speaker B: Fantastic. So, Mikael, we are approaching the end, and we're going to ask you the question we ask all our guests, which is to reflect on whether across, uh, the many exciting and diverse chapters that your career has had, there was any particular redefiner moment that redefined your leadership or really kind of shaped how you are as a leader and how you

Speaker C: lead, I think was a campaign because, um, I understood the vulnerabilities after being on a great tour of increasing my leadership, uh, and importance in the government. After that, you make a stop, which is violent, and you redefine your priorities. My priorities were I want to lead a company. I want to be a CEO. I want to continue with my leadership because the leadership in the government is comparable with the leadership in the private sector. So that moment defined me. That moment obviously strengthened our capacities or capabilities as a, ah, family. We are a family of three. We have a single child. He's now 13. He was seven in the campaign. So we became more strong. The main problem of a, uh, campaign and afterwards is that you lose predictability in your environment. So you have to recover your predictability. And if you are the CEO of the company, you're in charge of that predictability. And after almost six, uh, five years and a half, I entered as, uh, the president of the league, and I am now the commissioner in charge of the league and in charge of the national team. And that has been fantastic for me.

Speaker A: I love the tie. Back to your family, you know, standing up after you'd been knocked down. And now look at you and all the amazing things you're doing for World Cup. Luke, before we part today, we would like to take a couple minutes to go through our rapid fire questions. This is really an opportunity for our audience to get to know you a bit better. We're going to ask you a series of questions, and your job is easy. Just respond as quickly as possible in one sentence or less.

Speaker B: This, Miguel, is like the penalty shootout, you know?

Speaker A: Yes.

Speaker C: Okay.

Speaker A: All right. If you played professional football, what position would you play?

Speaker C: Central defense.

Speaker A: Great. If you could instantly become an expert in something, what would it be?

Speaker C: Golf.

Speaker B: Very good. What's your favorite food to eat while watching a game?

Speaker C: I love tacos and it's very easy to eat tacos watching a game.

Speaker A: What's the best piece of advice you've ever been given?

Speaker C: Discipline, effort, diagnosis in intelligence and execution.

Speaker B: Fantastic. Next one. Um, what do you wish you learned sooner in life?

Speaker C: Economics.

Speaker A: What is one skill you think every leader should have, regardless of industry?

Speaker C: Self confidence. I think that's the most important.

Speaker B: Fantastic. Thank you, Mikael. Before we formally let you go and thank, uh, you once more for your time, let me do or try to do a little wrap up of what state was with me from today's session. And, uh, it was a real, real privilege to listen to you. I mean, I think it's the first time we have somebody who covers, uh, this range of diverse careers going from public policy to politics. I especially appreciate, uh, your sincerity, talking about, you know, the punches and the wounds that you receive when you're campaigning and in the sort of vortex of the political epicenter. But then also a wonderful example of the skills adjacencies and how extrapolating skills from one domain to another, leaders can reinvent themselves. Obviously. Great, great example of how when a door closes in one career, other more interesting and, uh, promising or profitable doors may open towards other careers. And finally, you know, we're very excited about the World cup, but just to get a sense of the economic impact, 600 million people as, uh, the common market that is working together, uh, towards this amazing event that will be watched by 6 billion people, the most watched spectacle in history so far. And I think in an age where we see people often divided or interested in very different things, it's nice to see that for over a month the whole world will be attending to the same event and united for a little bit. So thank you again for a, uh, really inspiring and candid conversation.

Speaker A: Thank you, Mikael, it was so lovely to meet you.

Speaker C: Thank you very much, guys.