Unofficial Partner Podcast
Unofficial Partner Podcast
UP431 Gareth Balch on why Two Circles has bought KORE
Fresh from an excellent Leaders Summit at Twickenham, or should we say Allianz Stadium, is a conversation with Gareth Balch, founder and CEO of Two Circles agency about the agreement to buy KORE Software, a deal announced this week.
Two Circles is buying the company from Serent Capital, the private equity firm that bought Kore in 2018. Earlier this year, Two Circles themselves sold a majority stake in their business to private equity firm Charterhouse Capital Partners, a transaction which valued the company at £250million. More recently, the company secured external investments from Otro Capital and David Blitzer’s Bolt Ventures.
So, what have they bought, why and what does it mean, for Two Circles and for a sports industry seeking to predict the future shape of the agency sector.
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Hello, and welcome to another episode of Unofficial Partner, the sports business podcast. I'm Richard Gillis. We are fresh from an excellent leaders summit at Twickenham, or should we say Allianz stadium? And we've got a conversation with Gareth Founder and CEO of two circles. About the agreement to buy core software, which the deal announced this week, two circles is buying the company from Sarant capital. Private equity firm that bought core in 2018. Earlier this year, two circles themselves were acquired by private equity firms. Charterhouse capital partners who paid for a majority stake, which valued the company at 250 million. Lbs and more recently. To circle security investments from Octo capital and David blitzes from bolt. Ventures. So, what have they bought? Why have they done it? And what does it mean? Both for two circles themselves and for the sports industry? Seeking to predict the future shape of the agency sector.
Richard Gillis UP:Unofficial Partner is the leading podcast for the business of sport. And you can join our community of tens of thousands of people. By signing up to our weekly newsletter on sub stack, which goes out every Thursday. Or find us in the usual places, LinkedIn, Twitter, Tik, TOK, and Instagram on Unofficial Partner.
Gareth Balch:Did you have a sink? You had a career as a singer?
Richard Gillis, Unofficial Partner:It was cruelly curtailed,
Gareth Balch:my singing career. Was it? Who by? Drama teacher? Just public opinion. Public opinion is cruel. public opinion, eh? Who needs that? That's why you have Unofficial Partners, isn't it? I know, well, you know.
Richard Gillis, Unofficial Partner:We had to find somewhere where it was acceptable for me to do things. Just look at my phone, because I've got the I have the press release hot off.
Gareth Balch:Did you?
Richard Gillis, Unofficial Partner:Yeah.
Gareth Balch:Sorry, I put your printed copy.
Richard Gillis, Unofficial Partner:So yeah, no, I've got the got it all here. So we should say we're at leaders and we're up in the where would you describe this? This is a sort of Hospital a very small quite niche quite cliquey hospitality area Elite, VIP, it feels very elite and it's overlooking, the view is sensational, overlooking Twickenham lengthwise and between me and the pitch is Gareth Borch of Two Circles fame. Hello Richard. Hello there, welcome. We have news. We quite often talk when you've got news. We do, we have a habit. Let's talk about the news, fresh off the press. We are now, it's three o'clock on Wednesday and a couple of hours ago you dropped a press release which was talking about a new acquisition. Let's talk about that. What is it and why and how?
Gareth Balch:Sure. Yeah. So we're really excited today to announce that Two Circles has plans to acquire KORE. KORE, K O R E, for those that haven't heard of it. And if you're an American listener, which I know you may not have many of, you've almost certainly heard of it. And if you're in European, you might've heard of it. KORE is the intelligence platform for the sports and entertainment industry. They provide, we provide fan intelligence and partnership intelligence and revenue intelligence to help sports and entertainment organizations make smarter decisions about how they make money in our industry.
Richard Gillis, Unofficial Partner:What does that really mean? What have you bought? What is Core? What's the difference between Core and other things you might have bought? Well, Core,
Gareth Balch:on one hand, Core's 177 new two circlers. So it's a great team of people. It's a team of people that have been working for over 20 years to build technology. They've invested tens of millions of dollars in the creation of IP that enables sports organisations to run their businesses well. Someone said to me earlier actually when I was downstairs, it's like my operating system. One way to think about it. So if you run a commercial sports business, this is like the operating system for a commercial sports business. It essentially enables me to have all my fans in one place and all those data points I have about them. It enables me to unify and organize those and act on it intelligently. Equally enables me to manage all my partnership assets and what I've sold, what I haven't sold, how much it's worth, how it's performing, how it's been activated, all of that, all in one operating system. All in one operating system so that everyone in the club, whether you're or a league or a federation, whether you're in finance or in legal, more importantly, maybe if you're in sales or in marketing, you can know how it's going, where it's at, how the business is performing. It's an intelligence platform.
Richard Gillis, Unofficial Partner:So from two circles perspectives, there's two bits to this. There's the company itself, there's the organization, there's, so it's a tech platform.
Gareth Balch:It's been, it's a product business. It's a SaaS and an investor might call it a software as a service business. It's been sold as a, as a product.
Richard Gillis, Unofficial Partner:And so what does it add to you guys that you haven't got already?
Gareth Balch:It adds so much. We we've invested tens of millions of dollars in, in IP and technology that does similar things. The reality is the core business was, the DNA and the heritage of the business was in America, ours was in Europe and actually in the years where Two Circles did okay in Europe were the years that Core was being really successful. In America, hoovering up the market, working today with 350 sports organizations across the continent. And that enables them to have a really deep set of data and tools that enable sports organizations to go faster. The parallels with Two Circles in Europe are fair at this point. They, uh, they're coming together, these two organizations, as, uh, as I think about it, it's a dream from our perspective. We've recognized and admired what Core's been achieving for a long time, and it has lots of parallels with what Two Circles has achieved in Europe. And the coming together of these two organizations, I think, will help to, uh, make the industry go further, faster more effectively than it would have been able to do otherwise.
Richard Gillis, Unofficial Partner:So geography is a big bit of this, so the American market, and obviously we talk a lot about the American market and its sort of similarities, but also differences. What, what have you learned about trying to break the American market from over here? Because this feels like you've bought a company which is embedded over there. Yeah. It feels a significant move. Yeah. It allows you to then tell that story. But what is it that you've learned over the last few years where you've said, right, okay, we need to get into America.
Gareth Balch:Well, we've, or every trip, I have a little note on my phone every time I come back from America, I write down things I noticed on the last, on that last trip and it helps to, helps me get into it. It's an amazing journey to learn about how we can help make the American market better. And one of the things I'm really thoughtful or focused on is the ability to really put Uh, fan data at the heart of decision making, using that intelligence to make more money. And one of the things we recognized through the conversations when we were coming together with Core is the ability to take the product that Core has with the world class sales and marketing services that Two Circles has. And in the US market, I think there's enormous opportunities to do that. We're doing it with a whole bunch of folk already. We work with a whole bunch of very esteemed rights holders in the US like the NFL and numerous others. And we've seen that in action, but we've really. Struggled to necessarily bring the scale. I mean, we were 80 or so people in America before, before today and before this announcement. We have an opportunity now, I think, to do something really amazing. And as you know, and I've talked about in different fora before, is that we have a deep ambition at Two Circles to build a better future for the sports and entertainment industry. There is a better future to come. One where the fan is absolutely the center of how we think about both delivery of our, of our sports, of our leagues, of our fixtures, of our events, but also about how we monetize that. And actually, if we can get the synergies around that right, where we're really, really. Fan first in our thinking and absolutely data and intelligence and tools like this operating systems central to that. And then you wrap the right creativity and you wrap the right sales strategies and the ability to monetize with the sophistication that we can do it. We think there's an amazing future that will lead to more growth.
Richard Gillis, Unofficial Partner:I always think that the bit that we don't really understand from, well I don't understand from when I look over at the States and the American sports market is sort of almost how federal it is. It's sort of state by state almost. You've got the NFL, you've got the NBA, but they are quite localized and when you then drill down into the sort of sponsorship question, again, it's quite a strong, much stronger local market. As well as, you know, the big ticket stuff that we make a big fuss about in terms of what the NFL sells centrally.
Gareth Balch:Yeah.
Richard Gillis, Unofficial Partner:That's difficult to penetrate, presumably, in terms of trying to get there, do you have to go state by state?
Gareth Balch:Yeah, look, there's a lot, Core, the product is used by 118 of the 154 professional teams in the top 5 men's leagues in the business. And that's taken a lot of time to develop. It's a lot of it's a lot of airplanes and trips and conversations because ultimately you've got to be there and talk to people. So it absolutely takes time. And certainly that's one of the things that really excited us here is that there's a really, there's a real trust in the market between how core the platform can help a team or a, or a federation really go faster. And that's something we think we can make go even faster at this point, the ability to add more custom technology. Services, which is something two circles is really famous for in here in Europe. There's a real need for that over there. That there's some differences in how the European market and the American markets come together, and we're really looking to borrow the best from both, but also be inherently local to your point around, you just got to be there. You've got to be on the ground and you've got to be, you've got to be where the. where the business is. And there are some of the things that are true everywhere you go, but definitely true in America. And so it's been a really, really great journey for us, but I've long thought and believed that the biggest part of our business would be our American region as opposed to our EMEA or Asia Pacific region. And and we made a big step forward to making that true today.
Richard Gillis, Unofficial Partner:What do they see when they look this way? So we, we, we talked about what you see when you see Core. What do you think they look at? And apart from a check that you've signed, but what is it that they've, that they're looking at?
Gareth Balch:I think I think it's a combined vision to build a better future for the industry. Well, I've, you know, Core was owned by a private equity company. Previously, Seren Capital, who have been, have been a fantastic partner for in us in these conversations. And I think the line they've used a lot is this is the natural home for the businesses to come together, to build better solutions for the industry. Together, we have the ability out of the box immediately. We've already done it to be able to create software solutions and indeed, uh, marketing solutions that are more optimal for the industry. Like media measurement, for example, media measurement is still too similar to how it used to be done before the internet came along. And it's fragmented and it's difficult and it's hard. And it shouldn't be any of those things. It should be in real time, in my operating systems and there for me, intelligent, ready to go. And we've already done that. We've already got the ability to do that in a way that it would have taken years and years for other organizations to get to that point. So I think what Core saw in us when came together and started talking earlier this year seriously about doing this, was this ability to make one plus one equal three and deliver better solutions for our clients, which naturally for me also means better career pathways for our people. And that's something that's really, really important about how we do this. When we've done some of these moments before we've had these inflection points where we've made acquisitions. It's often led to two circlers relocating and evolving their lives. And having great career opportunities. So there'll be loads of career opportunities for the, for the new two cyclists who are joining us as part of this acquisition, but most importantly, there'll be lots of new propositions we can talk to our clients about, which I'm, I'm very excited about.
Richard Gillis, Unofficial Partner:When within Core, they, did they not buy? Hook it. They did. That was, so 2002.
Gareth Balch:2022. Sorry, I could bring it, right? Yeah. So
Richard Gillis, Unofficial Partner:under the bonnet you've that and put me Right. But that, that's a sort of social media measurement or digital measurement.
Gareth Balch:Perfect. It's like the marketing brochure that It was that. Yes, it was that. It was that. That's now Hookit's been subsumed into core and essentially a, a social media measurement, we needed that. The industry didn't used to have that. And that, that originated by some startups. Hookit was one of those startups that came along, did a fantastic job. Scott and the team did an amazing job of building the most accurate and most comprehensive way to measure earned media consumption of a brand when it's placed in a sponsored context. Brilliant. But in it's standalone, it's a bit reductive. It's annoying because I don't just want to know one channel. Me, the brand, or me, the, I want to know everything. So what Core's gone on a journey to do, and, and we've helped them complete that journey in recent months as we've gone through this process, is given a holistic, real time, asset by asset ability to be able to measure the performance of a partnership with brilliant data sat behind it. Most importantly, first party data, that sense of who, where, attribution's happened in a way that I don't think has been available to the industry before, and we're ready to do that tomorrow.
Richard Gillis, Unofficial Partner:So, Just talk me through that then. So, attribution of what to what?
Gareth Balch:So, the attribution, I've made an investment in some partnership assets, either as a, as a brand or indeed I've sold those to somebody and I'm accountable for telling them how they did. And I, as the, as the as the property or the brand needs to get some uh, deeply qualitative and quantitative data to understand how that's performed by customer cross channels in real time. And we deliver that in in a system that everyone can see at, look at, drill down to, act on as well. It's not just a PDF report. It's something that's in real time where I can talk to the customers who did that and how that's worked, where we have all that fan intelligence working in harmony with the partnership intelligence.
Richard Gillis, Unofficial Partner:What do you think in terms of the, the relative markets, sort of UK, Europe versus America? Who is further ahead in terms of understanding the fan? That's the big question and everyone, there's a lot of money riding on around the industry around this place this week. People, lots of people claim to know the fans in various shapes and sizes. What, is there a sort of split there relative to UK? You know, it's
Gareth Balch:such so nuanced and complex. I could talk literally all day about it like this. Lots of things have been true forever in the America's seen sports more as an entertainment product, and we've seen it more as a as a purist product where we're walking in the steps of history. But equally, America does history and tradition brilliantly and creates legends in amazing ways. But those truths are still there. America's much more adaptable to, you know, changing locations of teams or formats of sports or so on and so on. But in other ways, it's really. rigid around how they do a bunch of those things. Some of the big leagues are really struggling to think about how they adapt in the in the change of media consumption and in other areas that's moving really, really well in Europe. So I think to say that one's ahead of the other, I think is overly binary. I think what there are is there's pockets within. The North American sports market, as there are pockets in the European market where there's amazing things happen, happening. Uh, annoyingly still, they still are disproportionately happening in the biggest rights holders, where they've got bigger resources because it's increasingly challenging to have the sophistication to really know this thing called fans best. There's bloody loads of fans. How the hell do I know all these fans? Because ultimately this promise of personalization that kind of got ushered in when the internet came along is true. I need to get to the point where I can personalize it. So to talk about fans in a homogenous group is a really challenging thing to do. But the ability to be able to go all the way down and understand that at a one to one level, a personalized way, and then aggregate that up and then make strategic decisions is possible. And it's one of our ambitions as a business to make that also accessible. That's pretty cool. To everybody, the challenging at the moment is it's, it's really, uh, for the few, because you need some really big resources, brains and systems to make that work. We're basically trying to democratize those systems so that everyone can understand sports fans so that, you know, whatever sport you are, whether you're drone racing league or whether you're whether you're track and field or whether you're, uh, American football, you have the ability to really understand your tribe or tribes and be able to engage with them in the way they want to be engaged with and prove the value of that engagement because it is really valuable and bring that to life. I digress. But my point is this. There's some organizations here in, in Europe who I think are absolutely world class. And there's equally some in America who are so, but there's some who are right next door neighbors and sat outside in those green seats behind us here are chatting to each other who are miles apart, but friendly with each other, but they don't realize how far apart they are.
Richard Gillis, Unofficial Partner:It comes up on our podcast, you know, a lot, which is your number, I remember you were projecting into the future in terms of the, 10 year forecast of the size of this market.
Gareth Balch:260 billion was going to be generated from sports IP rights in 2034 is what we've published. Yes,
Richard Gillis, Unofficial Partner:from 150? 159, yeah. and then the other second line of that was, The big will get bigger. Yeah. And there's a sort of interesting question about what is lying behind your enthusiasm. Yeah. And that number, because again, you know far well, you know, more than I do in terms of people's view of that landscape in terms of the old media rights marketplace question, you know, the media rights will continue. We've seen the NBA go from 25 billion to 75 billion and they'll be fine. Yeah. But. What about everyone else? So there's a sort of question. There's a few things that jump off that. But what lies behind your bullishness that goes from 1. 50 to 2.
Gareth Balch:60
Richard Gillis, Unofficial Partner:in 10 years?
Gareth Balch:Hopefully, there's no lies, if I hear the question.
Richard Gillis, Unofficial Partner:So you're just projecting on your own questions. That's just, that's, that's like a Rorsach test. That's a very revealing response. It's
Gareth Balch:not good. The evidence is that there's more sports fans in the world than there used to be, consuming more sports and those sports fans and that consumption is more valuable within the media ecosystem than it used to be. The challenge is how I build monetization packages around that, and where there might be skepticism in the market about, yeah, but my media rights are going down, or indeed my business is struggling, of which there will be more than there's ever been before for the next ten years, will create a sense of we're all doomed, or, The industry's doomed or indeed that there's there's something bigger at play here and there is something bigger play here There is a transformation happening and how the monetization of sports Work and and fundamentally the sports that are able to deliver direct relationships at scale in an evidence way where I can see and See here and know who those fans are and demonstrate the value that they're bringing to me a broadcaster Or a brand, or a tourism authority, or a sovereign wealth fund that wants, might want to invest in sports to be able to evidence to an investor, because ultimately all those different constituents are just forms of investment coming into the industry. We need to evidence that value. And that value is more valuable than it ever was before. It's also greater than it used to be because of the amount of humans who are consuming and loving sports. And within the broader ecosystem, that's more valuable because they're harder to find now in a world that's fragmented through the internet than ever was before. And sports organizations that are able to evidence that and prove that and deliver that in creative and intelligent ways that as a brand or broadcaster or tourism authority so and so on one they're going to win really big and that could that will be small what you might consider to be small rights holders by turnover today they could do really really well if they understood who they were for that might mean they they aren't going to be for who they used to be obviously politics and governance and these things become challenging at this point i understand that we live with that every day i'll Our job is to help people see through that and be like, ah, we can make our sport. We can have more people love our sport or more people love our team than we used to. If we're able to embrace this sense of being here to service the demand side, as opposed to just necessarily deliver the supply side of always delivered. And that somewhere in there is the opportunity and the natural center of gravity. Of the whole world right now is the big again, bigger. Like I've spent a bit of time in music recently. There's the music, what's happening in music right now is an accelerated version of what's happening in sports. Like the, the, the, the death of the smaller artists and the reduced number of venues they're playing and the way those the way that tours are changing in configuration and how that affects the smaller artists. It's just kind of a, it's a version of the kind of the ATP tour ranking tennis players from 250 to 1, 000 or ATP. It's not, not gender specific. And and we've got to be really wary of how we are enable all All the sports that have relevance in the world to be bigger and better tomorrow. And that needs a real marketer's first lens to knowing my fans best.
Richard Gillis, Unofficial Partner:the sports that who don't look like they're going to be the winners or the rights holders. It's not sport by sport specifically, but a, question that I keep coming back into, which is, it's probably an aggregation question. People will see this move this week that you've, bought core and you've got a tech platform and you've been talking the first party data story for a long time now, forever. So
Gareth Balch:the question,
Richard Gillis, Unofficial Partner:I guess, is, how do they get there is it they're just going to have to work together in some way they're going to have to find some way of aggregating them. intelligence about their own fans because on a club by club basis, even on a sport NGB by NGB basis, it's really hard to see how they're going to. Get to the position that the picture that you're painting of the relationship between Yeah, rights holder and their fans. If you
Gareth Balch:put it in the context of a British Olympic NGB Then you're absolutely saying okay. This is this is tough from here. Just, you know, generic Olympic NGB There's some maybe got more ingredients and potential than others I think aggregation has always worked in as a way of inherently increasing the value of I think that will be true in the future. I think the way the aggregation happens is really important. There'll be some aggregation of intelligence. That's one part of it. Really the aggregation of a, direct relationships at scale is the key way to do it. So as a. Investor in sports rights. And I say that as an generic term, a global term for brands and broadcasters and everyone else under that banner, that ability to be able to deliver scale is really, really important and needs to be with passion around the United cause at the same time, but there's lots of ways to do aggregation of audiences in the way that it's never done before and run different plays than the sports industry's ever run. What we fundamentally need to do where the trick is, if this isn't too conceptual, is we need to make those aggregation plays where we also reduce friction for the customer. Sports is organised in a world where it's tremendously hard for me to consume just more than the Premier League. It's partly why the Premier League is in the world because it's just easier.
Richard Gillis, Unofficial Partner:Yeah,
Gareth Balch:kind of easier. Yeah. And we have to stand on the consumer fan side of it and say, Hey, we've got to reduce friction. You know, like, I'm fascinated by the by the impact that Apple Pay is having on e commerce. It's just destroying it, just because of friction. It's like, is it, are we really all that impatient that we can't be bothered to do three clicks and we just want to do one? Say, yeah, yeah, we can. It's called Amazon. It changed the world. Apple Pay is doing the same just across all e commerce platforms. And then you come to sports and you look at the level of friction that we present to our customers every day, the hot coals we make them walk over to follow us. And that's not okay. That's the intelligence we want to offer. It's to help people understand what fans really want to be engaged with. And indeed, if you start to reduce those levels of friction, how many more fans might come? And where those opportunities are for growth, where you then can create tribes and communities, so more people can love whoever you are as a property. And there's so much opportunity to do that. And the opportunity there is for brands, and the number of brands that want to be part of that. It is more than ever. I think the brand world is starving for wonderful activation platforms, but, but we need to make it easier for them to be part of and not have to go into a, into a brand pitch and be like, all right, let me talk you through how tennis is organized and it's like,
Richard Gillis, Unofficial Partner:yeah, yeah, yeah, yeah. And it might be that that's the point of difference in their it's a bit of a punch in terms of the ego for lots of sports rights holders. They, because it might be that the experience is the difference between me turning up here versus turning up somewhere else. It might be just, it's easier. I'm watching because it's easier rather than I'm absolutely, you know, the, the cliche of the fan and. We tell the stories about why we are a fan of something, but actually it could be as simple as friction.
Gareth Balch:Indeed. The ability to understand the casual fan that's got a high propensity to consume more, the ability to understand that specific segment and that, that behavioral segment exists in every sport is a clue to many places to go, but also, you know, it doesn't have to, I'm talking in conceptual terms, cause you know, until we've got a specific. Property in play here. It's hard to do it, but we need to make that easier for everybody. That's what we're trying to do. We're trying to make it easy for everyone so that the plays are more obvious. So I don't have to do a big long strategy project and hire lots of people and put lots of costs out before the revenue comes along. We're trying to get to the point where it's like, we know these things work. They deliver growth. Let's go and let's grow. Let's go and grow field hockey and let's go and grow Kabaddi. Let's go and grow cricket in Europe. Let's go and grow soccer in America. These things have all got inherent potential and they'll make more people's lives better because sport's amazing. I just think that's like, I'm like so enthralled by that idea that we can take the friction out of those journeys by organising ourselves in ways that are about the fan. And then, and then build, Platforms that are reflective of what a modern day investor is going to want when they're going to come into a consumer business because sports is now a consumer business. It kind of always has been but it outsourced that bit for ages and it made itself a B2B business and you get loads of blue blazer people walking around days like today thinking they're running the industry They're not it's the people who come here when there's when there's actually stuff going on the pitch and we've got to Continue to move towards becoming that or that that industry and I'm very passionate about doing that
Richard Gillis, Unofficial Partner:I can tell Pointed looking out there again. We're looking out into the sort of uh, there's a proxy for the sports business But it's got not a bad one here. You know leaders when the news dropped at lunchtime today So the response was all that's two circles making an acquisition. It's the Charterhouse money they're looking and these are the bets that they're making in the marketplace. What's it like? What's it been like? And because that's, it feels like that going back, it was almost the last time we did a podcast together was when you did the, or when Charterhouse invested in two circles. That moment felt like, okay, This is going to be interesting to see what happens. And we talked at the time about the sorts of decisions that you're going to make and your vision of the future. Because it's actually quite an interesting route for other people to look at and say, okay, well, they're taking that bet. And they're taking that bet. Talk me through that. What's that been like?
Gareth Balch:Well, it's been great fun. It was seven months ago that we sat and had that conversation. And it's been a, it's been a rip roaring seven months in two circles. Towers right across the world. We're having, we're having the time of our lives. We talk a lot internally about building the sports marketing business. Of our lifetimes, internal thing. I'm here, I'm talking externally about it, but it's, but it's an internal thing. It's, we think there's an opportunity to build the business of our lifetimes. One that's going to enthrall, I've got no ambition to do anything else. This is me. This is what I do. I, I, I can't wait from, for my professional career to be defined by what we go on to achieve as a business. There's so much more that we're going to go and do. And I say that on behalf of so many of our leadership team and shareholders in our business who are. Deeply enthralled by this idea of building a once in a lifetime sports marketing business. And what Childhouse has done is just given us another chapter. It's given us another change, uh, stage. And I, uh, we're loving working with the Chapterhouse team. It's been even, uh, even better than we hoped it was going to be. We really liked our, Previous uh, shareholders and we, and we love our current ones, which are obviously being complimented by, by some additional shareholders we brought on over the last six months as well, where we had Hotro Capital and come and join the party, which has been fantastic to, to be able to round out and have the right conversation at the boardroom table. The best thing about our owners and the best thing about the journey we're on at the moment is actually feels like it's more our business. It's more our. Dreams and visions and ambitions that are fueling what we're going to do next and it's ever been. And I'm like, love that. I love the sense of, you know, we're 13 years young as a business and got more than 13 years of, of good news and, and, and good opportunities for our clients to, to grow in the, in the years ahead. So yeah, it's been a, it's been a really fun time and it's it's a privilege.
Richard Gillis, Unofficial Partner:And they are financial people with a target and returns and investment you get into that game. So have you felt that pressure? Has that changed the cliche of working? Within a private equity environment is okay. You've got to make this number by that date.
Gareth Balch:I've got a man in my life called Tim and Tim is amazing. Tim is our CFO and he wears that pressure. My job is to has to build the best company I can. Believe or see or believe in and that only means leading our people so they can lead our clients And so no, no, I don't feel that pressure to be honest. I am really proud of shareholder returns we've delivered for previous people invested in us and We we wrote I wrote the day that chart house came along that it's business as usual at two circles like our investor our investor profile and so on might be interesting to some people But I imagine it's quite a small number of people the most important thing is the impact we're delivering on the industry And that's what I bother myself with rather than our investors
Richard Gillis, Unofficial Partner:I thought one of the most interesting announcements you made was the UEFA women's TV rights or media rights that you're now selling globally. Correct. And again,
Gareth Balch:and sponsorship rights.
Richard Gillis, Unofficial Partner:And sponsorship rights. Why did you do that? That, that felt like an interesting moment. And again, one of the things that I was wondering about was, I don't associate you with that bit of the world. There's a whole part of the jungle that has been doing that for years. And then now suddenly you've popped up in there and it's interesting. It's tempting to project onto that what you might, your ambitions in that area might be.
Gareth Balch:Sure. I think we've been, we've been involved in sports media for a really long time. We were running the NFL international streaming business. Way back when, best part 10 years ago, we were running that for, and did an amazing job of doing that. And we've run DTC media business for a long time. But the B2B, if you like, the bit where you sell me the rights to broadcast this bit of the industry, you're absolutely right. It's a bit of the jungle. We've not ventured much in yet. It needed certain things to happen in the world for To be ready, us to be ready for that. And indeed that bit of the industry may be to be ready for what we had to say. And I think that's increasingly happened in a post COVID world as, as the big media ecosystem has played out and the streamers have come through and the, and the industry shifted to that greatest sense of balance between the B2B and the D2C part of that industry. I think that's. That's been a really important maturity that's needed to happen so that we could, I think, be more influential or impactful in driving the value of media rights. And then the UEFA bit of the conversation, we've had a fantastic partnership with UEFA for a really long time. They're a brilliant group of people and we feel very privileged to work with a rights holder as sophisticated and innovative as they are. And we've been growing and building the Women's Football Sponsorship Programme for them since 2017 and it's been one of our most successful. One of our, one of the proudest bits of work we've, we've been involved in and that, and that, that's, you know, continues now for, for another cycle and we'll continue to help build it to be the most sophisticated and dynamic women's only sports sponsorship platform in the in the industry. I say that on a kind of global cross sport basis, the ability to then enable the media rights to work in conjunction with that platform. We're building for brands to come on and be part of the. European women's football ecosystem. I think it's one that's going to be really, really exciting there. There are so many fans of women's football hiding in plain sight that we need to help to bring out and help broadcasters see that they're there and streamers see that they're there and distribute the women's football Football rights in a way that doesn't reflect or mimic the way that men's rights have necessarily been distributed. But yet get us into those audiences and bring them to the force so they can start consuming more habitually. Because the reality is there's lots of people who want to be fans of and consume regularly the Women's Champions League, for example. But actually, for different supply base reasons, haven't been able to do that yet is our hypothesis. And come back and ask me in five years time how we're going with that. But I think there's an enormous opportunity to produce and distribute those pictures in a way that is. Much more reflective of what fans want. Okay, so
Richard Gillis, Unofficial Partner:just, interesting, let's just unpick that just for a minute. So there's a load of fans that, new fans, so it's an important moment for the women's game generally. My assumption is that it needs to be free to air access. The traditional route would be to make money back on a guarantee is people rush towards pay, pay TV. is there any other route that you're talking, you're thinking about there?
Gareth Balch:There's lots of routes because it's not only about live 90 minutes, but those routes, first to say, those routes are being considered. Of course, there'll be, there'll be do you know what, whether it's the mechanical free to air or, or pay is, is a bit reductive in this world because actually different broadcasters have the ability to be able to take you and engage in different audiences. And indeed there's different broadcast partners you can find in markets that can do it. That can share your vision and in the history of successful broadcast partnerships, you're able to sit down and talk about a customer and groups of customers that you want to be able to grow and be able to produce these pictures and this sport in a way that can engage more fans. And we're looking for partners who can help us do that. And that will be a myriad. It won't be a all free to air. That's way too, you know, we've got lots of markets and we will go on a market by market. We're also looking for a non exclusive and an exclusive partner. Those who really understand the audience and what they can be most effective in doing won't necessarily need a complete They'll need it for the job they're going to do to create the right partnership package to work well for them. We're absolutely find we're going to find lots of partners who share our vision of the world. Wonder that it can be women's football globally and how that can how that can come to, to elevate the competitions to be the best competitions in the world for for women's playing.
Richard Gillis, Unofficial Partner:And because again, my, one of the sort of running assumptions is that the appeal at the moment of, elite women's professional women's football is it skews more towards a sponsor product than it does to a traditional media product, and so the returns from media rights will be less proportionally than it would be in a, Is that your assumption as well? It's a
Gareth Balch:fair observation.
Richard Gillis, Unofficial Partner:So you bundling those two things together?
Gareth Balch:No, no, no, no, not necessarily. No, no. You, what you're doing is helping them work towards a common vision. So we're not bundling them in terms of the go to market, but what we are doing is helping them work in, in, in a symbiotic way, so the ability to say, Hey, here's a vision of where women's football could and should be, because we've got to build it, you know, it's been a, it's been a conversation that's happened in the industry a long time about the need. to build it and to be able to show growth along that about building blocks. But if there's a, uh, you know what I think I speak on behalf of UEFA here, it'd be dangerous what I say, but I think what UEFA believe in and what I'm passionate about is the opportunity for the, for the the, the same commercial partner in two circles in this instance with UEFA taking the media rights and the sponsorship rights to market. In different ways, but with a common philosophy has a really deep opportunity. There might be some opportunity to, to trade some rights there and make a different decision in a certain market to be able to satisfy a brand or a broadcaster's wishes. And we'll absolutely do that, but it's more about philosophy of wanting to build. And I think we have a really big ambition. We'll see the audience of this product go up considerably over the, over the cycle ahead, but more importantly, in the cycles beyond that, this is, you know, we feel like we're, you know, Guardians is something that's going to be here long beyond us. And our job is to make sure we leave it in much better hands than we found it. And therefore growing audience is absolutely the center of what we'll do. And therefore growing value will follow that. And that will therefore help the amazing products that.
Richard Gillis, Unofficial Partner:How is it changing? Do you think that there's a sort of the idea that. What a sports marketing agency has been, has shifted.
Gareth Balch:I think it has. I mean, I, I, I, I feel, I kind of, I don't know, I feel maybe hard to comment a little bit because I've kind of, you're in it. Yeah, maybe. Yeah. So I wouldn't want to lighten a super jet, but I, I, I'll give you one, one thing maybe that I, I recognize is that I think we've moved. We're hope we're moving to a world where we don't, where the agencies don't broker value, but they create value. Yeah. And that's certainly something I've always challenged Josh to do. There was, you know, in bygone eras, maybe ones prior to when I was hanging around here in Blue Blazers myself, there was a different set of values, but there was a lot of brokering. There wasn't much creating, not a value. It was like, I'll take your rights and I'll broker them over here on your behalf. I'm not into that. Never been into that. Do that yourself. We're here to create value, to grow value. And, and long may that continue. I think that's more sophisticated, it's harder, it requires more intelligence, it might require different types of partnership based relationships. You know, the days of, you know, we've never written a minimum guarantee and that's, it doesn't strike me as a sensible thing to do when you're creating value together. It strikes me as something you do if you're brokering value together. And I think there's I think there's some step changes happening in the industry and, and, and maybe, maybe we'll look back on this era and say, Hey, that's one where, because we sprinted to 260 billion worth of value from 159, 10 years earlier, maybe we actually started focusing on how we create the best sports market in the world, as opposed to just squeeze the lemons we've already got. And, and I think that we're in the process of doing that.
Richard Gillis, Unofficial Partner:So that means you sharing the risk as well as. If you're not brokering, if you're creating value, then you want some ownership of that, but you're also going to have to.
Gareth Balch:Ownership is a strong word. We don't own, we don't own our clients businesses, but we do partner with them in them. And partnerships when done with trust and alignment of economic incentives on the downside and the upside can create unbelievable results. If there's creativity and imagination and intelligence right at the heart of Of that, and that's, that's maybe where we're trying to stand.
Richard Gillis, Unofficial Partner:Well, and when you look at, so again, I'm trying to, so the create value is a nice phrase. Does that mean you're looking at creating products? So that could be formats, new tournaments, the hundred. Type events for different sports. So things that appear or is it sort of digital products? Or it could be any of these things
Gareth Balch:all the above ways to present sports in ways that reduce friction grow audiences make more money We love them. Yeah, that might be that We have to go and create a whole new type of sport like the hundred it might mean that we just need to take an old Traditional product that's been, you know, a global championship, it's been rotated around the world endlessly, but never made any money because it's just subsidized by other parts of a sport. And actually said, you know what, if I put that somewhere and made it into like the Hong Kong Sevens, that could be amazing. Hong Kong Sevens is amazing. How many other things could learn from how that works? It might be that we say, hey, this is all amazing, but you just disaggregated your audiences. Keep all your products the same. Let's aggregate your audiences up. It might be we just create new types of rights. Like one of the ways we're making the most money for our clients at the moment is just. Just selling more stuff directly to fans than they've historically done because you create a DTC mindset. And it is the, it's the biggest emerging new revenue line, you know. If we've had event day revenue lines and sponsorship revenue lines and media revenue lines that have towered over the, the, the, the three revenue lines in commercial sport for, you know, the business of sport for the last however many decades. There's a fourth and it's about engaging with fans and selling them products and experiences in ways you've never done before. You need tools and infrastructure to do that. You need some vision and you need some new things. And we're doing a lot of that and I see more of that coming. So these are all just things we do or things that can be done and are all under the banner of growing the value of our clients businesses.
Richard Gillis, Unofficial Partner:It's interesting. I always think of it in terms of sort of public and private. lens in terms of, and governments quite often, you put the governing body or, you know, a federation or a league into that, that box. Governments quite often get accused of trying to pick winners. So they're not very good instinctively entrepreneurial. They're not good at, creating the culture that requires those types of new products, step change moments, There is risk involved, both financial, but also reputation, public money. You spent that on that question mark. So, if you look again, just something like Endeavor, you know, it's interesting what they're choosing to build their next 10 years on in terms of, and it is ownership of content and products and IP. Is that what you're talking about? So you're looking at. creating opportunities in partnership with rights holders.
Gareth Balch:In partnership was my line that you, you, uh, rightly use that. Yes. In partnership, we just announced a, a, uh, a 10 plus year extension to our relationship with the RNA and all around the open, and that's all about injecting that partnership to create more value for the RNA. It's an amazing thing, the RNA and the Open in particular is an amazing product. And there's so much opportunity to be able to take that to wider audiences, to aggregate products and services in different ways than it's done before and create better experiences around that amazing historic golf tournament. And that's what we're talking about. And we'll do that in partnership with the RNA. In a, in a, in an aligned way economically, but where we inject that creativity and that intelligence to be able to find those opportunities and bring those to life. And there's so many ways you can do that to borrow on your public private thing. Maybe that's hard in a, in a, in a really historic, you know, several hundred year old business that does things in certain ways and finds new concepts difficult. Yeah, absolutely. We would love to, we love, we love working in those in those environments, but with a, with a kind of, you know, Speedboat, zooming around, figuring out how we can make a little bit more value and more importantly preserve the value and the traditions of, of that amazing, uh, property that, that, you know, in this case, the R& A and the open, but, but, you know, different cases in other places. And yeah, we will do a lot, absolutely more of that. And, you know, good luck to Endeavor. I think, I think, you know, clearly what they're doing with, with, uh, with their fighting business is unbelievable. And, you know, they're in a very different, uh, they're in a very different place to where we are at this point in our respective journeys. We're not we're not in the business of owning sports events at this point. We're in the business of growing sports events on other people's in partnership with other people.
Richard Gillis, Unofficial Partner:It's quite an interesting question for the future though, isn't it? in terms of whether that's something you'd ever get into.
Gareth Balch:Yeah, maybe. Never, never say never, but not not on the, it's not in the current it's not on the current to do list or indeed any, any time in the years ahead. I can't, I can't say that, but we've got a long way to run, so we'll keep running.
Richard Gillis, Unofficial Partner:Okay. Gareth Borch, thank you very much for your time. Thank
Gareth Balch:you for having me.