PIF, MMA M&A; There’s money in grievance; Our prior assumptions reveal us; The $100 Saudi bet on Jake Paul; The pull of story; Head v Body; Sponsor deals of the year; Misha Sher’s PB
Overthinking the sports business, for money
The commercial value of a shared sense of grievance
Two weeks ago we were in esports world, aka BLAST Copenhagen.
This week was MMA world, aka PFL Dublin.
Two packed arenas.
Two up-for-it crowds.
Two entire worlds, separate but linked.
Both extremely male.
One friendly and liberal seeming; one scary af.
In both cases, a strong sense of Them v Us.
Us in this case is me.
Being in a crowd is to be self conscious, hyper aware of their projections of me: Sneering, nose holding, morally superior. The middle aged, management class. The status quo made flesh.
Which is broadly true. I am those things - but without the power or money of the management class bit obvs.
I’m a centrist. My tastes are middlebrow. I’m risk averse. Extremes scare me. I blame my mother. Whatever.
These are my priors. My starting point.
You’ll have your own.
Mine reveal me. And it turns out I’m more of a snob than I like to think I am.
I’d love to say I got them.
Saw through the generational cliches to the real person beneath.
But I didn’t.
Instead, I took the piss out of the bloke sat in front of us: all sun glasses and camel coat, the pound shop Andrew Tate.
I tutted when Dakota Ditcheva beat up Valentina Scatizzi, whose eye blew up like a pumpkin.
The pull of story
Audience research is data.
Stadium crowds are story.
And story beats data every time.
Stories are dangerous because they quickly gather a momentum that resists rational analysis, and reveal your deepest prejudices.
On and on and on we go, jumping ahead, joining dots.
Very quickly I got from Jake Paul’s coming to PFL to Russell Brand, Tommy Robinson and this week’s entry, Joey Barton.
Cynical niche channel grifters, manipulating minds, selling volatile snake oil.
Not my kind of people.
All a bit Brexit.
My them.
Hello Head, meet Body
This line of thought gets another dimension when applied to sports administration.
Across many sports, the head and the body are pulling in different directions.
There’s echoes here of the Labour Party dilemma: the leadership don’t like the voters. And the voters can tell.
Whereas the Tories don’t care who votes for them, as long as they’re in power.
I suspect, but have no data to back it up, that the people in charge of MMA are more like the fans in the 3 Arena than me.
They know what the audience wants because they want the same thing.
Elsewhere in sport, it’s the opposite.
I suspect, but have no data to back it up, that The FA for example, don’t much like (male) England fans.
They don’t know, or want to know, what the fans want. They have to rely on market research.
This is a strategic weakness.
Many sports execs are think of their own fans in the aggregate.
The story (the people in the stadium) is cleansed, elevated to the level of data, the point at which the nut jobs become commercially valuable.
As long as we refer to them as marketing abstractions - avids, core fans etc.
Men’s football is a data-led argument.
The women’s game is a story-led argument.
Much of the excitement of the women’s football movement is based on the stadium story not the audience data.
So the incentive for people working in sports marketing research is blindingly obvious: find a bigger number, one that backs up the stadium story and gives sponsors and media (again, people more like me, but not actually me) the corporate permission to write a bigger cheque.
Is PIF betting $100m on PFL or Jake Paul?
There’s an athlete v event brand face off within MMA that’s worth your attention.
MMA is dominated by UFC, obviously.
It’s created that world and created a $12billion business empire.
In August PIF put 100million in to PFL, which a few months later acquired Bellator, the number two MMA brand.
(Interesting detail on that deal is revealed in this podcast, by PFL founder Donn Davies - it was a share only deal).
Together, PFL-Bellator is worth half a billion.
So UFC is 21 times the size.
The question is how to narrow that gap.
Enter Jake Paul.
No pressure.
Pure Barnum and Bailey meets Don King with some jarring sports tech reference thrown in ‘…the PFL Smart Cage…’
PIF Takes
Jon Rahm to LIV has a broader significance.
It’s a power play from PIF at a delicate time in the negotiations.
There seem to be three options for the PGA Tour.
PIF - merge with LIV, and then take on US Senate on monopoly.
Strategic Sports Group - result would be full on civil war with LIV.
Both of above - this gets PIF a seat at the table and gives the Tour a partner (SSC) which isn’t threatening its very existence.
Meanwhile, the Majors can sit back and luxuriate in their ever greater importance to the players, sponsors and media.
Fast forward to the end, and you get to a Major Season scenario, with the four career defining events - Masters, Open, US Open and PGA - extending their influence by creating a whole new event itinerary that sits above the tours.
It’s what the fans, top-50 players, media and sponsors really want.
See also, the fake narrative of ranking points
Btw, the above Grand Slam Tour scenario, which is a live conversation in tennis, was called by Rob Mills in 2017. Read this.
Shorts
The Top 10 Sponsorship Deals of 2023
A hardy perennial, like holly and egg nog.
The one and only Gary Linke’s annual list is up on UP.
Gary never reveals how many of them he was involved in, and we never ask.
Enjoy.
Personal Best
Sportsbiz people list their favourite things
This week: Misha Sher
Thanks for reading.
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