Pick a side in The Hundred's culture war; IOC diversity v 9 white men in 125 years; PTO's TAM; Long tail fame v Elvis fame; The College C-Sweet; The kit launch genre; Riches in the niches
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Progressives strike early blow in the culture war known as The Hundred
It’s not enough to watch a game of cricket, you must take sides in a battle for the sport’s soul, between the past and the future. This is the rather tedious framing of The Hundred, the ECB’s new short form event that made a fast start at The Oval last night.
The first match broke records for viewership for women’s cricket, and set the bar for future ticket demand.
ECB head of commercial Tony Singh via WhatsUP: The Unofficial heads up is that it was the most viewed women’s cricket match ever, ahead of our internationals on BBC and the Women's World Cup Final in 2017 (which we won!). It was also ahead of WSL on BBC One, Netball World Cup on BBC Two, so we are thrilled. Sky, who have been an absolutely critical part of building The Hundred, also put the game on their YouTube and I want to give them due credit here. The reach also enabled us to have a record day on general sales for the rest of the comp.
Go deeper: Hear Tom Harrison, ECB CEO on the UP pod #161.
Deeper still: I’m going to an actual match tonight so will have a look for myself.
What does Moritz like about triathlon?
It’ll be a shock to readers of this newsletter to hear I’m not an avid triathlete.
The last time I watched one was at London 2012, when the Brownlee brothers won gold and bronze.
But I’m convinced the sport offers a case study worth following closely, because it has a plan that contains many of the key themes we discuss on the podcast.
The other intriguing bit is who’s backing the PTO. More on this below.
Here’s what I learnt from this week’s UP pod with Sam Renouf, CEO of the Professional Triathletes Organisation here).
The PTO is targeting a gap in the market for professional triathlon.
Ironman is a mass participation event franchise which has changed hands several times in twenty years, most recently for $730m, from Wanda to publisher Advance, the owner of Conde Nast.
But it distributes only a low single figure percentage of its revenue to professional athletes.
So the pro athletes don’t make much money relative to other sports. The best athlete in the world makes about $350k a year and $80k will get you in the top ten.
The PTO was created to build a sustainable commercial future for the sport’s best athletes.
This needs a compelling race series that creates a TV rights market and attracts blue chip sponsors.
Ironman has helped create an audience for the sport, which is affluent and gender balanced. The initial comms is using this data to attack golf, framing the sponsorship argument as a fresher platform for banks and other upmarket categories.
A limiting factor is that triathlons are hard work, so the best athletes can only perform a handful of times a year. How the PTO squares that circle will help determine the success of the venture.
Then there’s the ownership structure.
The ownership of the PTO is split 50:50 between the athletes and Sir Michael Moritz, one of the most successful tech investors of the last thirty years.
Moritz founded Sequoia Capital, whose bets have included Apple, Cisco, PayPal and YouTube.
Sequoia was one of only two initial investors in Google. The 10% Moritz bought for $12.5million was a good morning’s work by any standards, as was the day Google bought YouTube, which made Sequoia $480m profit in less than a year.
Here he is back in 2006, talking about what he looks for in a startup.
Michael Moritz has a few simple rules for investing in internet start-ups: look for people who are pursuing their own ideas for doing something better; prefer youth to maturity; ignore business plans looking a few years ahead; and avoid anyone wearing Armani T-shirts, loafers with no socks or who uses words like 'synergy', 'no-brainer' or 'slam-dunk'.
So, what does Moritz like about triathlons?
Its always fun second guessing the investment motives of a billionaire tech VC.
But here goes.
Two financial acronyms jump out: TAM and SITG.
TAM is the total addressable market for triathlon. Which is substantial if the PTO can get the entertainment end of the product right and crack the distribution conundrum. The subplot is how you define the TAM for sport. I’ve heard several versions, depending on whether you use the global advertising market and/or media rights. Either way, the number is vast, but not always relevant.
Hear Phil Carling on the illusory nature of quantifying European football’s TAM, which persuaded some otherwise rational people to launch The Super League.
The second relevant acronym is SITG, or Skin In The Game, which comes back to the ownership structure outlined above. By including the athletes, the argument goes, the series has a better chance of long term success by avoiding negative incentives.
Actors must bear a cost when they fail the public. A fund manager that gets a percentage on wins, but no penalty for losing is incentivized to gamble with his clients funds. Bearing no downside for one's actions means that one has no "Skin In The Game", which is the source of many evils.
An evolutionary process is an additional argument for SITG. Those who err and have SITG will not survive, hence evolutionary processes will eliminate (physically or figuratively by going bankrupt etc) those tending to do stupid things. Without SITG, this process cannot work.
As Sam Renouf says: ‘Nobody washes a rental car’.
PTO = TAM + SITG…QED, etc.
Long tail fame v Elvis fame
Apropos of long tails.
Lester Bangs wrote a masterpiece the week Elvis Presley died in 1977.
Its final paragraph, and final line, predicted the journey we’ve been on ever since.
Elvis’ fame was truly universal, built by mass audience television: “But I can guarantee you one thing: we will never again agree on anything as we agreed on Elvis. So I won’t bother saying good-bye to his corpse. I will say good-bye to you.”
We’ve since retreated in to bubbles of our own design, erecting barriers between what matters to you and what matters to me.
The long tail is the central idea of the internet, that deep down the rabbit hole there’s something for everyone. You might be one of a few devotees, or one of millions.
But re-reading Lester Bangs again, it’s clear that the type of fame the digital age generates is different. It’s not the same if you haven’t seen it too.
If love truly is going out of fashion forever, which I do not believe, then along with our nurtured indifference to each other will be an even more contemptuous indifference to each others’ objects of reverence. I thought it was Iggy Stooge, you thought it was Joni Mitchell or whoever else seemed to speak for your own private, entirely circumscribed situation’s many pains and few ecstasies. We will continue to fragment in this manner, because solipsism holds all the cards at present; it is a king whose domain engulfs even Elvis’s. But I can guarantee you one thing: we will never again agree on anything as we agreed on Elvis. So I won’t bother saying good-bye to his corpse. I will say good-bye to you.
9 white men in 125 years
The IOC is ‘unreformable’ was the conclusion of The New York Times piece that questioned the role of the Olympics and by extension, the IOC:
As mere entertainment, the Olympics thrive largely on nostalgia and collective memory. Their key conceit is a nationalism fueled by parades, anthems, flag-raising and other ceremonial flourishes that feel detached from global trends. They package harmony without depth, inclusion without context.
Thomas Bach is the IOC president, one of only nine in 125 years, all white men, all from Europe besides one American.
So diversity of thought and world view is an issue: For example, when you hear John Coates talking to women, it’s tempting to wonder what tone he adopts when not on his best behaviour at a global press conference.
“They’ve evolved, or not evolved, this system completely separate from the rest of society,” said Han Xiao, a former member of the United States national table tennis team who is now active in the Olympic movement. “And that’s where a lot of the problems come in, whether it’s with corruption or imbalances in power that lead to athlete abuse or human rights violations. If you’re not keeping up with the advances that other areas of society are making, or you’re not subject to the oversight of society as a whole, it’s kind of predictable that these things are going to happen.”
John Branch’s conclusion asks a good question, which is whether the athlete-as-activist trend will be the thing that ultimately changes the IOC.
The UP Olympic Collection
The insider: Timo Lumme, TOP Man
The long view: Patrick Nally’s Olympic Diaries
The Buy Side: Coke and the Games, with Thierry Borra.
The NCAA and that last days of Rome feeling
American college sport is facing a revolution, but you wouldn’t know it by looking at the accounts; it’s fair to say that life remain’s sweet in the NCAA C-Suite.
$2.9 million: NCAA president Mark Emmert’s income during the 2019-2020 fiscal year.
50%: The drop in NCAA revenue over the same period, from a billion to $521 million between Sept. 1, 2019, and Aug. 31, 2020.
$3million: What the NCAA's second and third highest paid exec took home.
$68 million: The cost of legal fees, mainly for the game changing NCAA v Alston case, that ruled college sport was not exempt from US antitrust law. A further $500,000 went to NCAA lobbyists.
Justice Brett Kavanaugh: "Traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated".
The majority of the organization's lost revenue came from the $702 million in lost media rights revenue due to the cancelled men's basketball tournament. The NCAA recouped $241 million through insurance coverage.
Alt take: The perverse incentives that will follow the NCAA ruling
Enduring sports PR genres: The kit launch
TeamViewer makes its debut on the Man Utd shirt, following their new deal.
Then: Ahead of the 1982 season word reached Old Trafford that shirt sponsor Sharp wanted their product range front and centre.
Now: The ‘leaked’ new third kit story is a summer media staple.
Much to Nike’s disgust, I quite like the new Spurs away kit.
Wales international soccer star Thomas Hal Robson Kanu on the sponsorship’s surprising new category: Turmeric.
UP Coming
Murray Barnett, ex ESPN, World Rugby, F1 and current founder of D2C Sport joins me and Yannick Ramcke on episode 12 of The Bundle tomorrow, our regular series on the sports media rights market.
Here’s ten things we talked about:
Amazon is beginning to look like just another sports broadcaster.
There’s fun to be had over-interpreting the basket case that is the French sports rights market. Amazon price structure for Ligue 1 suggests the end of cross-subsidization, which could be good news for rights owners; increases potential for future rights acquisitions.
The Bundle price inflation: ESPN just announced their second rise in 2021.
Does ESPN have an international vision, or it just an American thing? I live in the UK and never think of subscribing and I wonder if that’s significant.
Does corporate memory shape strategy? ESPN got burnt from their experience with Premier League a decade or more ago, picking up scraps from Setanta and then losing them to BT Sport four years later. Does that experience still shape the company’s strategy, even though the people at the top are different?
The reason Big Tech and football don’t fit seems too obvious: Football is a market by market thing whereas tech platforms are about breaking down that structure, like music, films and shopping. Note, Netflix is going after gaming not sport.
Amazon’s NFL deal is an enormously expensive anomaly.
DAZN x YouTube x Women’s Football: Globalization driving increased sponsorship opportunity; Limited downside, unlimited upside; UEFA’s recent deal for the Women’s Champions League could be the most significant of the year.
When does a rights holder become a betting company? DraftKings new MLB deal includes live games alongside odds. The US discovers betting (streaming) rights, already a constant (and significant source of revenue) in European sports.
Riches in the Niches, or is the Long Tail just too much like hard work?
Turns out there’s more to this clip of disc golf than you first thought. I assumed it was just a freakish thing that gathered a crowd of bearded millennials who were doing it to appear quirky and outside the mainstream. But that’s just 97% of the story.
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