✱ Attention is your banker
Mark Oliver on how sport misreads its sources of capital:
They need to have a different way of running their sport, which gives them more headroom to deny the cheque and to go for longer term business building. Now, of course, third party capital was supposed to do that. But of course, once it comes in, they also want the return.So the terms on which you get the third party capital and the plan they sign up to is pretty important. Otherwise, you end up with just the same pressure to get the cheque in the door to pay off the promised business plan to the the investor.
So I think they need to build more headroom into the strategy by giving themselves time to transfer the business from being too media rights dependent to being more dependent or more dependent or getting other revenue streams and other sources of revenue and building the sport for a more equal kind of exploitation strategy. And they should be using capital to do that. Patient capital. But patient capital is something that's hard to get as we know, it's a big issue.
And ironically, the people who would probably give it patient capital are media companies. Media companies have an interest in building sports themselves and owning part of that sport because they have a long term interest in it. And maybe that's where sports end up. And you can argue that some of what's happened with UFC, etc.
It's about the person who owns the whole ecosystem, including the media rights, etc. Is the person who's got the patience to build a sport. Which in this case is David Ellison and Jerry Cardinale, etc.
And maybe they're the better people because in the end, you need the whole kind of value chain ecosystem to be patient. And that's probably the way through, is control more of your ecosystem, get patient capital.
That has a long term interest in creating a business on top of your sport. And that's where to go.
But of course, ironically, in many countries, the one company not allowed to own a sport is a media company.”
Roger Mitchell, later in the same podcast:
And I always say to sports people, you know, look at the health of your banker and your banker is the media companies. And I bet none of you could tell me whether the share price of Comcast has gone up or gone down in the last 12 months, because you don't care and you should care. You really should care.
This feels uncomfortably relevant to games.
Game makers have spent a long time thinking their banker was the publisher, the platform, the investor, the storefront, the subscriber, the whale.
But increasingly the banker is attention.
Or, more specifically, the companies with patient reasons to want more of it: Netflix, The New York Times, LinkedIn, YouTube, Discord, Meta, Apple.
Games are not always the business. Sometimes they are the engagement engine.
Tiny amusements that meaningfully, measurably and habitually increase time spent on platform.
Which changes the investment question.
Not just: can this game make money?
But: whose ecosystem does this game make more valuable?
In an oversupplied market, with lower margins, shifting tastes and scarce attention, game makers need to think harder about where they sit in the value chain.
Are you selling product?
Building a portfolio?
Feeding a platform?
Creating culture?
Or becoming convenient collateral for someone else’s business model?