Unofficial Partner Podcast
Unofficial Partner Podcast
UP509 Gareth Balch on the State of the Sports Economy in 2025
Today's conversation was recorded at the Two Circles European Summit which took place a few weeks ago at the Institute of Engineering and Technology overlooking the Thames, next to the Savoy.
Gareth Balch, founder and CEO of Two Circles is our guest, and as ever with Gareth, nothing was off limits, and its useful to periodically check in on what he's seeing right across the European and North American sports markets, where they encourage their clients to think about their relationship with the key trends, sharing nuggets of useful information that lurk just below the day to day headlines.
We explore the state of sports business, what fan engagement means in 2025 and the evolving relationship between sports IP, audiences, and revenue.
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Hello there. Richard Gillis here. Welcome to Unofficial Partner, the Sports Business Conversation. Today is a podcast that we recorded at two circles, European Summit, which took place a few weeks ago at the Institute of Engineering, overlooking the Thames next to the Savoy. Very nice. It's too Gareth Bch, founder, and CEO of two circles is our guest. And as ever with Gareth, nothing was off limits. It's useful to periodically check in to see what he's seeing across the European and North American sports markets
Gareth Balch, Two Circles:Ah, I think everyone should know what their leakage is. How can you not? Isn't it dereliction of duty? Not to, in my head it seems like it is. And years before you was hard to know the answer to that. You'd have to guess or whatever. It was expensive or hard. It is. Neither of those things anymore. And it's really important to think about it. We spend all of our time as industry generating attention to monetize it. And this is attention that's being generated, that's being monetized. And we IP owners aren't taking a cut. Oh, that's not okay.
Richard Gillis, Unofficial Partner:Yeah.
If you like, Unofficial Partner, if you enjoy listening to the podcasts, there's a whole world which you need to investigate via the Substack newsletter, which goes to a very significant audience of your colleagues, so you'll be missing out if you don't, uh, read that every Thursday it comes out and, uh, very good. It is too. Okay, here is Gareth Ulch.
Richard Gillis, Unofficial Partner:This feels like I've got a real vibe, a university vibe. I've gone in and as you'll see, I've got like a full notebook of stuff. I'm writing stuff down. As people talk, as you always a good sign. Mission accomplished and it's really interesting. The The location helps. Doesn't it? So talk, talk to me about how many years have you been doing
Gareth Balch, Two Circles:11th? Of our European version. Yeah.
Richard Gillis, Unofficial Partner:And how many people we got in this building now?
Gareth Balch, Two Circles:600 people here today. I think minus plus or minus some tube strikes. I think we've got 600 here today. So it's been a, been a good day.
Richard Gillis, Unofficial Partner:what's the ambition for it? What, what do you hope? Because we are now sitting here. and We should explain. We're at the end of the the day, We've had a series of talks, a load of sort of, uh, small room things, but there's also some keynotes. You Did a keynote earlier Just come out? of A really good one. We'll talk, about that. what do you hope from this, What's the, the the thing behind it?
Gareth Balch, Two Circles:It's really simple. I hope that our clients feel that they've learned something and they feel better equipped to be able to grow their businesses. And it's a. The idea that any client commits to be a, to, to be a partner or to partner with two circles is an amazing thought. I, I, I still, um, I remember our first client and the second, and, and each one every day since, and we value those relationships greatly. And the genesis of this, when we first started doing it 11 years ago, was to say thank you to our clients and try to replay, replay some of the learnings you get. We have a very, um, privileged position to be able to see common problems and unique problems and being able to try and. Um, join some dots using some data and tell some stories, using some case studies to help people recognize both where their opportunities and the challenges are to come out here with a page full of note. A bag full of en enthusiasm and hopefully some, um, some both gratitude to be in the industry and some, and some gratitude for, Hey, do you know what? I just needed my brain stretched today because life's full of, you know, um, tough days and difficult days and so on. But there can't be enough days where we are genuinely inspired and learn in our opinion. So our, our aspiration is to achieve that. If we can achieve that just for one client today, it was worth its mission. If it's several, then we're even happier, and maybe it grows to be something else over time. But, but for today, it's, um, it's a thank you to our client.
Richard Gillis, Unofficial Partner:There is a sort of through line of will you tell me what the through line is? And I'll tell you what,'cause I, we've, we speak on a sort of reasonably regular basis and we talked the last time we spoke, we talked about IP the value of IP and some of the things that you talked about there. I was picking up from some of the stuff that has run through today. There's obviously this relationship between the audience and. Just the popularity. of sports and its Relative popularity to other content, but also that audience link. and the, the, you know, how that then turns into revenue. Take us through what's the, if you had a line through it. What, what was yours?
Gareth Balch, Two Circles:That's a great question. I, and it runs right to the heart of what we stand for because the genesis of every project we do and every partnership we enter into of our clients is that it's working towards growth, growth of audiences, or growth of revenues. And, and that comes from the same body of work. We are essentially a big compounding data set where we're basically learning about what works with, um, both the delivery of a project, but more importantly the, the creation of audiences and, and revenue growth. And so, so the through line actually is a, is a through line through all of, um, what two circles do. and we're just trying to catch that in a universal way today.'cause obviously we're not in a client specific setting. The, the through line's really quite simple, which is, um, we, we, we, it's a very noisy. Media ecosystem. We, we stand in. It's gone through transformational change, accelerated by the internet, but it's really simple. Sports is winning disproportionately than we ever thought before. And it will keep winning if we are utterly focused on delivering what fans want, measuring the attention that generates, turning that into affection that they have for RIP and converting that into relationships that we can, um, identify and or prove to others or monetize for ourselves. Yeah. And. That ability to grow revenues through knowing fans best is essentially the through line. You will grow the revenues of your ip, and those IP revenues are growing faster than they've ever done before. So ignore the doomsayers. They just haven't read the data and know that they're doing it by growing audiences fastest, but knowing their fans best. And yeah, I'm kind of riffing around the same point there, but you get the gist. There is an intrinsic relationship since the history of time in the monetization of sports between sports and its fans. That is now more, um, uh, sophisticated but also clearer than it's ever been through the abundance of data that's created every day. And, and we're just trying to demystify that and tell some stories about it.
Richard Gillis, Unofficial Partner:there's a couple of things that, you talked about previously and has been reinforced here, people won't be surprised, but there's a, there's a lot. of numbers on screen. There's a Lot of stuff that I want, you know, you want that, that are really, catch
Gareth Balch, Two Circles:press pause?
Richard Gillis, Unofficial Partner:You wanna press pause? You wanna press pause, and you wanna write'em there. You just, just wait. You know, I'll get that and come
Gareth Balch, Two Circles:you press pause there,
Richard Gillis, Unofficial Partner:there. so, Let's just pick out a number. okay. You ask the people in the room. This Is a question really about the, the average numbers for the industry and Then everyone's relationship. to it. And there's A couple of those. And you've mentioned before the cer. Mm-hmm. CAGR, and what the industry average is about 7% growth
Gareth Balch, Two Circles:in revenue. Yep.
Richard Gillis, Unofficial Partner:In revenue. So if I am below or above that, that's a nice benchmark. And we are, you know, benchmarks are useful. And again, that was, that was something I've just come out, we, we just a minute ago, so I'm gonna flick through to the end of my, end of. my notes. So the leakage ratio, which is a really interesting one. again, we talked a little bit about this Yeah. When we talked about ip. Yeah. And the only, You know where the revenue goes. Yeah. How much is captured by the rights holder? How much leaks? And Emma? you explain who Emma is.
Gareth Balch, Two Circles:Emma is a lead consultant of two circles, who's been with us for a couple of years and she's fantastic. And she was on stage today doing her thing and she was, um, brilliant to listen to.
Richard Gillis, Unofficial Partner:Really, really interesting presentation. And her. She put a number against that leakage, which is a, um, 95 cents to a dollar. So every dollar that is made by the Official rights holder, 95 cents. leaks. And we talked about, you know, she talked about what type of leakage and the different Forms of leakage. Some of that is inevitable, some of that is pluggable. All of those things, Those averages. What do you want people to go away from?
Gareth Balch, Two Circles:Ah, I think everyone should know what their leakage is. How can you not? Isn't it dereliction of duty? Not to, in my head it seems like it is. And years before you was hard to know the answer to that. You'd have to guess or whatever. It was expensive or hard. It is. Neither of those things anymore. And let, let's just, you, you did a wonderful job of the definition there, so bang on. And it's really important to think about it. We spend all of our time as industry generating attention to monetize it. And this is attention that's being generated, that's being monetized. And we IP owners aren't taking a cut. Oh, that's not okay.
Richard Gillis, Unofficial Partner:Yeah.
Gareth Balch, Two Circles:No, it will happen a bit. Right? The world's not perfect.
Richard Gillis, Unofficial Partner:But
Gareth Balch, Two Circles:Where it's happening, we should know and we should actively choose that. It's either okay or you know, too hard to solve for. But as you say, a hundred and over$150 billion worth of revenue was generated where we, the IP owners made the attention. It was monetized successfully, and 0% of it was taken a cut by IPIs. I think that's greater than it should be. And I think if everybody knew their version of the 95 cents Metric, which is the, the division of that$150 billion. Then you would, it might be the first place you'd start. I think you'd call that low hanging fruit. If you're an incoming commercial person in a sports IP, would you not say,
Richard Gillis, Unofficial Partner:well, I
Gareth Balch, Two Circles:you know, you would start there, wouldn't you? Rather than the idea of having to generate from scratch Unproven. Yeah. With audiences who don't yet know they love you, that you want you, you'd. Start with what I've already done that I just haven't, didn't do my last job of, of getting my cut. And so, so, and, and as I say, you won't solve the riddle and get it all, but at least know what you're not getting and then actively choose to continue to not get it a at least,
Richard Gillis, Unofficial Partner:And what the, the obvious ones, I, I mean my head always goes to piracy is one that would Yeah. Piracy is the biggest one, Media, you know, is just difficult. It's not one individual. rights who's gonna solve It, It needs coordination. yeah. Betting is another one where you can sort of see, okay, well that's gonna go and that's gonna be difficult to. Yeah. For and when we last spoke, I Remember going away thinking Of your list of, you know, top a hundred IP in the top 10 wa or the top 15 was the Hong Kong Racing Club. Yeah, that's right. And that felt, like, Okay. Well that's interesting. A lot of people would land on that. Yeah. There was the polo. Yeah. Ralph Lauren. Yeah. Which again is in oddly high on the list. Yep,
Gareth Balch, Two Circles:yep. Yeah. Yeah. There's lots there. All of the above. There's a long list. Keep going. Another one I really like building on some data points we just heard, um, 10 years ago. Of all, um, brand dollars spent accessing sports audiences. 29% of that went to IP purchases. Seven 71% of that went to buy an advertising space. We went into the Gold Rush, that was performance marketing. And um, now billions and billions of dollars get spent on performance marketing to access sports audiences. Only 19% of that now goes to ip. Owners, IE the ability to get, um, official or exclusive IP that enables to be access those audiences with unique assets. And so what we've seen is a leakage of value where people, brands want to access sports audiences more than ever. There's more of them than ever. They're more valuable than ever, but yet the route to market has been, um, hoodwinked into being. Disproportionately dominant performance marketing market. Now, it will also, it will always be predominantly an advertising first mechanism that, but the 19% should be near a 30%. And that misread is something that the industry needs to correct, and we'll correct that by better articulation to brands about where the value is. That requires a sophistication in known your audiences.'cause if you go into brands and claim that your fans are actually your audiences, they're two different things. You deserve to not get the d the, the deal. And, and, and I could keep riffing down that,
Richard Gillis, Unofficial Partner:Well, that was a, we were in I'm not sure we were supposed to be in it. Um, we, we've tell listeners, listeners should be, you know, should know There is a, there is a sort of RA range of different rooms around. the building. I'll
Gareth Balch, Two Circles:to accreditation later.
Richard Gillis, Unofficial Partner:later. And We have just sort of dipped in and out as many as we could. But we were in a, a really fascinating thing about the UA for, sorry, about, um, uh, it was about a women's sport question and that. Stat came up the 19%. Mm-hmm. And I was asked, I was gonna think I need to ask Gareth about, this. so and it was about the proportion of marketing spend that goes to sponsorship as part
Gareth Balch, Two Circles:Yeah. It goes to purchase of IP as opposed to purchase of ad ad, um, ad units. Yeah. So we're saying of all brand dollars spent access in sports fans, 19% goes on the purchase of ad of, uh, ip. And the, the difference goes on the purchase of. Pla, um, placements is, is to, as a broad brush, um, definition of, of where it goes. And
Richard Gillis, Unofficial Partner:again, a hundred billion, and we, I'm looking at the year was we're saying, I think it was 10 years ago. Yeah. 30%, Yes. Of a hundred billion was going towards ip. Yeah. And the most recent number, I think is, 2024. yeah, It's the bigger top number 250 billion of marketing spend. Yeah. But a much smaller proportion. Exactly. Got 19% is the one that you are saying So, and one of the points being so it's never a straightforward, answer, but the rise of performance marketing. Yeah. And digital. And that has taken up a lot of disproportionate amount of marketing budget. So if I'm A CMO, I'm now looking at those levers and saying, okay, I'm gonna forego what were traditional, marketing levers into a. Something else.
Gareth Balch, Two Circles:well, it's never a straightforward answer, Richard, but Yes, that is the straight answer. That, I mean that, that's the guts of it, right? It's pretty obvious that's what's happened. It's fueled and created some unbelievably valuable companies that are worth several trillion dollars and it's revolutionized marketing. But, but there's definitely an over, um, index or an over bias towards that form of media that we're seeing a correction of in the market.
Richard Gillis, Unofficial Partner:Well, I gonna ask you about the Correction. So what do we know now? So. If we were speaking 10 years ago, or five years ago, people have said, oh, the money's gone. to Facebook and Amazon, Google. Well,
Gareth Balch, Two Circles:I remember being really scared about that. Do you remember? I haven't been scared about that. For sponsorship, I was just scared for sponsorship, but that's bad. I just felt bad. It felt like sponsorship's really good. It's an amazing channel. It's brilliantly complimentary to other stuff. Anyway, that's not totally played itself out, although it's definitely suffered a bit in that, albeit grown in absolute terms in that world. That's not lose our, lose our perspective two x greater now in total income sports. IP sponsorships generates two x more income for sports IP owners than it did on your benchmark, um, 10 or so years ago. So we've had a good run, but other mediums have done much better. Performance marketing be the biggest one of that. Um, but the, the, the, sophistication of how marketeers talk about marketing is like to, to the kind of, you know, go away, your acronyms kind of thing is, is gone through the roof and sports needs to stay in that place. And that's definitely, you know, to go back to your question about the through line. If when we're, you know, made our mark on the world, we've helped the sports industry have a little bit more sophistication with how I think, how it thinks about its audiences and fans and buyers, and arrive in the right meeting with the right person to be able to articulate the value of a sports which is undeniably greater, better, or more wonderful than it's ever been on its societal impact, on its ability to drive brand dollars or media subscription dollars, or you name it, I tell you it's going well. Sports needs to get really what really good at articulating that. It needs to get really good at articulating that to governments as well. So governments continue to understand the socioeconomic impact on the world and our ability to articulate that is, um, as an industry is a real opportunity in one of the through lines we're trying to do today. To get there and to kind of bring it back to your question as I, as I tangent off, um, sit with brands and they bring. Half of the sophistication, even a quarter of the sophistication that some of the um, trillion dollar media platforms do, then it's gonna do really, really well.
Richard Gillis, Unofficial Partner:And that's within reach. Yeah. Now it wasn't, I mean,
Gareth Balch, Two Circles:it's been reach
Richard Gillis, Unofficial Partner:of two circles. He runs in parallel to the rise of the platforms. Isn't it? In some ways true? True. So you've got this sort of true, they were generating enormous amounts of data. Ah, and sport. Didn't know what to do with it. And you were one of the early. Interpreters of that data, I would say in terms of, well, this is what this means, this is what you can do with it. And I wonder what we, where we are now with that, because the level of sophistication on the sports side,'cause people always sort of lapse into, oh, it's old fashioned. It's got, it's still selling media buyers. It's still selling equivalencies, which I'm sure is true to a large, you know, great, to a large extent, but it does feel different and I certainly don't get that sense of coming out of here today. don't come away. thinking that sport is unsophisticated.
Gareth Balch, Two Circles:Good mission accomplished? Um, I hope not. Well, I hope we are next week in that Brian meeting or in that broadcaster thing. I, I hope we carry that.'cause obviously the specificity has to carry into that the sports industry is, um, is more than keeping up with the sophistication of the marketing ecosystem that lives in, I would say, or the media ecosystem that lives in. Can it do better? Of course. Are we, um, tireless in our, in our desire for that to happen? Of course. But it's doing really well and it can get down on itself, but it's come a long, long way. And you, and you just to pick off on your point, you can relapse to kind of like, oh yeah, but it's still a media buy and Oh yeah. It's people to still buy it.'cause the CEO's whim and all that stuff. And that's, you know, there's, there's some, um, you know, everything changes and everything stays the same. There's that, it's radically changed from inside out. What we do looks the same to the untrained eye. How it does it, I say on the behalf of the industry, decades of change, decades of change have happened within a decade. There is, there is a deep change in the way it does that, and one of the things I love about today is it's a celebration of that transformation through the lens of our clients. Today's all about client stories, right? You've heard, you know, dozens and dozens of, of two circles, client stories of, of that transformation. Some of'em are happening really subtly, some of that happening quite boldly. But there's a, there's an amazing transformation happening in our industry. So I, um, I'm, I'm boyed by that
Richard Gillis, Unofficial Partner:one of your clients. So Premier League, I was, again listening in on. that session. and again, this is where we might clip it, clip something in. But one of, so one of the questions, that, uh, Alex Willis, was, Talking about was the, the, the new app, the relationship with Microsoft, the way in which they're looking at the question and the app is obviously an answer to a bigger question, which is the sort of fan question. So just take me through what your lens of that.'cause we always land on the Premier League'cause it's Huge and. successful and people want to learn lessons from it. And it was Really interesting listening to Alex, sort of Really honestly, taking you through the sort of the. the learning curve. Yeah. You know, even someone at the, the very top end of the shot in terms of from, from global sports, perspective, but there are still challenges. in big tech. You know, we've got these ai, you know Yeah. All of that. stuff. But it's, it's interesting. how difficult it is, but What, what's your perspective?
Gareth Balch, Two Circles:Sure. I mean, Alex is brilliant. She's a complete visionary, and it was, it was, um, great to have her here with us today. The Premier League are brilliant. They're a complete visionary. They're the first to say they haven't done it before. And they might have resources or talented people and all those things, but, but, but, um, as much as they might be really good or really talented or whatever they're perceived, most of the time they're either trying to do something no one's ever done before or trying to solve a problem many people have failed to solve previously. And technology category, IP partnerships. With a high level of, sophistication to the activation, and I do think about it as activation as opposed to, oh, you get a bunch of free software is a wonderful graveyard of failures. Over the last 10 years, there is a graveyard of IP owners who've done a technology category deal, thought that we're gonna get their technology,
Richard Gillis, Unofficial Partner:Yeah. um,
Gareth Balch, Two Circles:wishes sold for in a, in a, in a moment. Once the box arrived, the box never quite arrived. The people didn't know.
Richard Gillis, Unofficial Partner:To do
Gareth Balch, Two Circles:with what did arrive, and, and it all ended in tears and Roman many years later. And, and, and, and I don't think the audience, your audience was sophisticated enough to know that that was a list longer than my arm.
Richard Gillis, Unofficial Partner:arm.
Gareth Balch, Two Circles:And Alex is very clear that she's gonna do this different and better. And there's been some that have done it already. Not to say she's the first one to do it, but the, but, but the relationship that the Premier League has struck with Microsoft and Adobe, I believe is, is, is sophisticated. If, if I may say that as was a, I feel, um, uncomfortable claiming sophistication. I'd rather others say it of themselves, but I believe that relationship is very sophisticated and the level of systems integration, data integration, clarity of commercial outcomes. All centered on delivering a differentiated relationship for the fan, and we can then wrap some, you know, dollars in IP fees and other things around that. But the heart of that conversation that Alex would've talked, the, the room through earlier was all born out of, um, the teams collaborating on a technical, on an audience, on a data level before it was talked about assets and rights fees.
Richard Gillis, Unofficial Partner:Well, that's that last bit is I think, interesting. I, I did a thing in the newsletter a few weeks ago, which My only caveat on my question was whether or not sponsorship is a good framework through which to work out long-term tech. Projects because sponsorship always comes to an end and you've then you are what do you do? And I, I think we're the other bit that I sometimes think I looked at that deal that they've done with Microsoft. and with, Adobe, Adobe? And my question was, or it felt a bit like, Like three or four years ago, we'd have been talking about blockchain partners and Web3 partners, and people were saying, okay, build me a blockchain.
Gareth Balch, Two Circles:that a disaster? That moment?
Richard Gillis, Unofficial Partner:Exactly. So tech and sponsorship, tech projects long term. These are things that you are built, you know, and again, you lay AI into it and you've got Microsoft Co-pilot. There's two things. One, you are backing a horse You know, and, and it's, that's difficult. You like, the sort of government picking winners in, in many senses, and that's really hard to do. So Microsoft Copilot, versus Google versus all the others, open ai, all the other um, choices that you could make purely from a technical perspective, it then is wrapped into a. sponsorship thing because that's how sport things. I Just wonder that that's, attention point, I think. yeah.
Gareth Balch, Two Circles:Yeah, it is. Look, I think, um, to my point about less longer than my arm of failures in this space, space, there was a lot of trip wires for, for sports IP and technology to create partnerships that endure, that are great, that, that renewed is a good way of measuring that. And so you point out some of the issues with that as you go.
Richard Gillis, Unofficial Partner:But it's
Gareth Balch, Two Circles:a massive opportunity to, to be done better. So if we can learn from those trip wires and point to some of the things I've done really well, some are really enduring, right? One of one, you know, we have really, um, privileged to have Wimbledon here today. Wimbledon's partnership with IBM is, is as long as, you know, many years older than us, cumulative we put together, I think. And so there's been great examples of that happening already. So it's not beyond the wit of, of, of person to figure that out. There's been too many failures in this noisy world where I was getting distracted by emerging technologies that they felt like the future. And then you back that horse to your point and it runs out. But, the kind of, whether the right back, the right horse or not is, is neither here or there.'cause if you start the conversation. When you go to market with technology, which isn't really a category anymore, it's a literally of categories and, and is and is one of the fastest. If you, if you did bundle up together, everything, you'd loosely call technology, you would, you would find yourself with a, um, near majority of the, of the growing part of the digital money coming into the space. You know, one of the data data points about today is that 60% of. Um, buyers or sponsorship or what, what were they would consider to now to be digital first companies where their revenues or those, and that's kind of a proxy on commerce, right? That's not, that's, but, but that's really important because this technology category is wide ranging. Anyway, a tangent. The technology category is unbelievably, um, high potential. If you start the, um, go to market process to find the right partner with a conversation about what you're gonna achieve together. With the right architects in the room, technical architects, the right engineers in the room, data architects, the right, um, marketeers who talk the combined lingo of how we're gonna expand collective audiences and achieve dual outcomes. Mm-hmm. And that is. Harder than rocking up giving them the sales perspectives and asking what the rights fee's gonna be. That, that, if that comes after the fact and you, you, there is a challenge there to remove or to retain some of the competitive tension that we know drives real value in the market and the, and the fusion of of that system's data and audience led first thinking to then wrap around a rights deal around it, if you can get that right. There are an abundance of techno technology partners, I believe, that are ready and willing
Richard Gillis, Unofficial Partner:to,
Gareth Balch, Two Circles:To, um, invest greater dollars into sports and just
Richard Gillis, Unofficial Partner:to round off, I mean, Alex and you know, will brass at the on, in terms of the commercial side of the Premier League, they would say, well, we need to learn from the best. Why not? do it with Microsoft? You know, So there, there, there's that argument and they're not gonna, you know, premier League is not able to do it, so they're gonna have to do it in partnership in some way and
Gareth Balch, Two Circles:For sure. But, you know, reality is if they weren't gonna spend lots of the flip side of that's primarily we're gonna need to spend a lot of dollars with Microsoft or someone like Microsoft. So, so it's not, it is a lot about learning.'cause we've all got a lot to learn in this space and the world's moving quickly, but there's also, there's, you know, increasing amounts of, um, costs that goes into marketing technology. If I call it that, you know, there's an increasingly. Big, um, cost line, and there's much more effective ways to be able to access that technology you need. And clearly Microsoft's is as, as
Richard Gillis, Unofficial Partner:it was also one of, sorry. And one of the other things was it was quite an interesting, not counter, but just a sort of the, the YouTube story at the moment, which is sort of nonstop, nonstop, relentless. And One of the points that Alex made in the. presentation I was in was, you know, the app, Premier, League app when it came out on the first Friday was the number one app in you know, on the app store. And So the owned environment, it's never either raw and people always want to sort of create, oh yeah, YouTube versus YouTube is a new television and therefore television. is, All of this is just it's noise But actually within that. you've got some very interesting case, studies of this is a case study of owning your. Or just being present for your fans?
Gareth Balch, Two Circles:I mean the, the English Premier League app is tremendous. There's other very strong apps delivering good audiences, but the active monthly users on the Premier League app and the total consumption hours on the Premier League app is a bit a bit eye watering. When I sit and look at the numbers and we've, we've written a long-term plan taking us through to I think 2034 and put the projections around it. It's one of those where you just like hand on the desk and think, really, can we really, is that really gonna happen? Is it really gonna be that big? You're like, yeah, it's gonna happen.
Richard Gillis, Unofficial Partner:is a cultural phenomenon. And they, and the, there was a good question from the floor. it was from, uh, uc, three guy, I can't remember his name, but he, he said about the micro economies around fantasy. Yeah. And again, back to our original question.
Gareth Balch, Two Circles:Yeah. Leakage.
Richard Gillis, Unofficial Partner:leakage. Leakage, Yeah. Where do you put your house? You know, when and where do you step in and wanna put your hands around that and all
Gareth Balch, Two Circles:say it very well. Fantasy's a phenomenon, and I can't say the word as well as you can, but it is whatever it, it is one of those things. Fantasy is astonishing and really within that gamification and you know, literally the biggest story. One of the big stories around that is obviously Dream 11. I think you wrote about that in your newsletter the other week, which I always enjoy and, and you know, it's just amazing about how far and why Dream 11 reached and what that means. And just, you just cut that out in a microcosm, obviously at ultimately as an Indian story. It on one lens, but it's also a completely universal story when you run that across tennis or any number of other sports that, that are both, um, playing on some, on a human craving that exists that we've ultimately. Significantly under and monetize, uh, historically and have continued to underestimate going forward in terms of our ability to build those micro economies around it. Our friends from uc three would've talked about today. So Yeah's, there's a gift that's gonna keep on giving around that. It, it's obviously got some dark sides to it as well because it's a gateway to other things that, that, that needs greater consideration, but it's, um, it's a phenomenal, it's a phenomenal growth engine of the sports industry.
Richard Gillis, Unofficial Partner:The other, um, session I wanted to mention was the. uh, UAFA women's Champions League session Because one of the most eye-catching deals, of the last six months has been the Disney plus entrance. one of your, again, just a bit balling, tying back to your uh, sort of bull market This is the, you know, the, the line going up to the right of fandom of money. and whatever. A lot of that feels predicated on new fans, new audiences, as. you define them, and Obviously women being a, a significant factor in that. So beyond all the noise about women's football and, you know, the day-to-day stuff, actually when the industry steps back and looks at this, incredibly exciting. Yeah. Now However, that, that I think sometimes I think gets conflated into a whole conversation about the decline of the linear rights bundle. And I think people get pessimistic about that and then forget that actually you've got. this whole new cohort or cohorts of people that weren't interested remotely in sport. They were anti sport. in some ways, and now being brought into the to the thing. So Just let's talk about the, that, just the way into that, you know, point is that session. on Uafa and Disney Plus. Yeah, But what's, gimme your,
Gareth Balch, Two Circles:I mean, it is not even that these people, those segments were over generalizing a bit, but those segments didn't, weren't antis sport. They were stood hiding in plain sight saying Hi. Yeah, hi. Is there something for me? Um, and, and we didn't hear them. And, and we are beginning to hear them. The, the, I think the biggest challenge, to your point, you articulated well, the biggest challenge to your point is. Alright, I can get on the train, just, you know, maybe get on or really on whatever into the kind of, it's, you know, there's a real growth story here. And they say, okay, budget next year, how much is it gonna be? And you're like, oh, wow. 15% off, but it's 15% for a really low number, which is really insignificant. This is, this is, I think that, like you say, you can conflate this with a bunch of other macro things going on in the industry, but the, the rate of growth is something that, that I think, um, also our clients. Challenge with, you know, we, we we're experiencing the most amazing women's rugby World Cup at the moment, which we're delighted to, to be part of. And, and it, and it is amazing. Like the Women's Champions League continues to be on an amazing journey and post record after record after record. But it is still proportionately, um. Underwhelming, I'd say if you're just economic about it, um, when you return to the budget page, and I think that's, you know, that's time is, um, time's a great friend. I'm, I'm a big fan of Warren Buffett and the biggest thing I learned from Warren Buffett is the power of compounding this business will compound and compounding once you get your head around it is a beautiful thing in terms of where I'll get to, albeit, you know, just doing 10% a year. Or 15% a year and only therefore get into treble over three years. Is treble enough on the baseline? This is a challenge. The but, but the women's women's sports generally, which I think is the, the point on Women's Champions League is a hero pro product within that and one of the best, um, women's only, um, sports project in the market is gonna do brilliantly. And, and it's been amazing to have Disney's support for that is a great example of, of, um. Of where the breadth of sport continues to eat into other genres and start to exist in different entertainment platforms and just, you know, seeing, um, women's football in, in the Disney Plus platform over the coming weeks, I think it's gonna be like, oh wow, look at this. And, and it gives so many adjacency, adjacency opportunities that have never existed before as we then do conflate it into the change of the streaming age that we now live in.
Richard Gillis, Unofficial Partner:Yeah. And that, that sort of, question of. What happens in between here and there I completely buy into the big picture The, you know, the line going up and new audiences but you do have people with jobs. Uh, you must get this day in, day out of, you know, I'm running a football club and I'm subsidizing the women's side. How long do I have to do this before these new audiences actually turn into money? Gareth is telling me these are. you know, the, the numbers getting bigger and bigger every Year, but on my own micro, lens. I'm running a rugby club, I'm subsidizing, how long do I have to subsidize that? It's, It's, those are the really difficult questions. Yeah. And and it's getting from the audience number through down to revenue, but quick enough so people believe it
Gareth Balch, Two Circles:and ultimately the, yeah. We spend a lot of time on, well, how big's it gonna be? Yeah. And when's it roughly gonna get there? Yeah. And what's it gonna be along the way, and what do I need to do? To either get that to be true or to make it happen quicker. And the answers to that, uh, essentially, you know, particularly'cause there's a lot of private money kicking around this part of, um, the women's sports industry is essentially the game of the speculators at that point. The, the people who accurately get that right are gonna win really big. Because what's unassailable at this point is that women's sports on a one way trajectory to becoming mainstream and mega economically socially. Fanatically in every which way and how, and it's just a question of how big and when and how, the, and the best operators will, will accurately get there and, um, become a super accelerator and winning the day.
Richard Gillis, Unofficial Partner:Okay. Right. I'm gonna, the the last bit that we're gonna talk about, I'm conscious of your time. You need to go. There's a whole room up there waiting to be networked by Gareth Borge. That That
Gareth Balch, Two Circles:I'm not good at networking.
Richard Gillis, Unofficial Partner:Well, You know, you're better off down here talking to us. Um.
Gareth Balch, Two Circles:Um, is your audience bigger than the audience of that? That's the real, that's the real question.
Richard Gillis, Unofficial Partner:So Wim, Well, I, I, wanna talk about Wimbledon. I need to get Wimbledon in because again, really interesting case study one. Again, one of the things that when I, I come away, and this is just in my head because, it's, you know, over the last few hours, it's, it's a sort of unconsidered, there's a question about scarcity. There was a media session really, really good, Really strong stuff. Early on it followed your session about genres. Finding new genres. Finding new areas to play Wimbledon. You know, there's a few things I remember. One was the sort of the, the way in which Tennis fills the algorithm at that Point, why, and How does that happen? The Dip in the Summer was a really interesting point. This is on your session. then. I'm wondering about, that. It was about more, creating more content Mm-hmm. in different places. Wimbledon is all about scarcity. The masters is always about scarcity. is there, am I conflating content Sort of everywhere, all day. Everywhere. More and more and more content wins, which was one of the messages with product scarcity. I'm just trying to work
Gareth Balch, Two Circles:Well, you, you, you are on a contradiction, right?
Richard Gillis, Unofficial Partner:There is a contradiction. There is a
Gareth Balch, Two Circles:is a contradiction. There's a contradiction. And both are true as they often are
Richard Gillis, Unofficial Partner:are contradictions.
Gareth Balch, Two Circles:There. The, the, the scarcity is beautiful, scarcity of rights, scarcity of experience, scarcity of, um, memory is, is, is a valuable commodity in the sports industry. Trades in it greatly, but we also live in a world of abundance. And we talked about that in terms of the volume of media that's getting generated, the volume of media generated is gonna grow about seven and a half times the available media to humans of all types, not just sports. Every type of media be that text, be that audio, um, be that video, it's gonna grow over seven and a half times in the next 10 years. It's like, oh my word. So you're like, okay, how do I, where do I sit in that? We are living in an age of abundance, and what that's gonna do is place a greater and greater and greater and greater value on scarcity. And how do I find the place where I'm both scarce and abundant? Because if I'm totally scarce in this attention economy, live in, you're actually irrelevant.
Richard Gillis, Unofficial Partner:Yeah.
Gareth Balch, Two Circles:But if I'm entirely abundant and available, I'm not as valuable. Right? So therein lies the puzzle. And ultimately what sports have. Has beautifully is this, um, it has so much agility to slice itself up and, and in its physical context it can, it can be much more naturally scarce. Yeah.
Richard Gillis, Unofficial Partner:Yeah.
Gareth Balch, Two Circles:But people like watching people, people like watching sport and so you stick that together and it makes a good big video product. But that's been the case for a long time. But actually the nature of what those video products can now be or video, um. Formats can now be is, is where so much, uh, transformation is happening in our industry right now. And we're just, I'm just, I can't wait for the connection of, um, of that transformation and how fans are consuming it, which is going bonkers by the way, filling algorithms, e eating entertainment in its share content. Once we connect that attention to a new monetization model and it's just about to happen, it's literally happening as it's literally happening in the marketplace for it. It's forming as we speak. And right there is the future of media rights, and what I can tell you is that, um. This amount of money spent on media rights is gonna continue to go up. It's already at record high. Who's buying it and what they're buying and how they're buying it is changing. What we've gotta do is make sure we're creating it, proving its value, demonstrating why there's audiences for it, and then go into that new and more sophisticated marketplace in the old media world. And we're gonna find, um, we're gonna find a new, um, some new best friends and some new money and, um, and creation, A new value for great partners, which'cause sport's more valuable than ever.
Richard Gillis, Unofficial Partner:I like the for you economy, that was a word. that was a phrase that came up. I, I'm gonna use that. Steal that. Take that as my own. Pass it off. That's but value leakage. There is, value is Two circles. Value leakage.
Gareth Balch, Two Circles:Listen,
Richard Gillis, Unofficial Partner:Gareth, has ever, thanks a lot. Really enjoyed the chat. And go, go, network. Go. I'm off. I'm be amongst your people. I'm off.
Gareth Balch, Two Circles:Thank you, Richard.