Unofficial Partner Podcast

UP476 The $170billion Question: Gareth Balch on Sports Most Valuable IP

• Richard Gillis

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Intellectual Property is the basis of the sports business. 

Two Circles have mapped the global market to create a Sports IP Revenue List. 

Founder and CEO Gareth Balch has analysed what it says about the business of sport. 

Some headlines:

The big get bigger : in the last decade, the % value share of the Top 20 Sports IP Owners of total revenue has grown from 35% to 44%

  • Market concentration:
    • The Top 25 make 50% of the revenue
    • Top 100 make 70% of revenue
    • 65% of the Top 20 grew revenue faster than the market last year 
    • 100% of the Top 20 Sports IP Owners grew revenue faster than the market in the last decade
  • Sport remains a B2B business : 70% of the Top 20's revenues come from sponsorship and media vs 66% of the rest of the Top 500

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Richard Gillis, UP:

So Sports Revenue League. Let's frame it for a minute. There's some really interesting questions in here, start at the top. What is it? Why have you done it? What's thinking behind it?

Gareth Balch, Two Circles:

It is a it's an analysis of the monetization of sports IP in the whole world. Every pound, cents, dollar, whatever you wish of monetization around sports ip. We want to map it, understand it, and share it. And you know what I'm really passionate about the democratization of data. It enables better decisions and we exist to enable the sports industry and sports IP owners to grow their revenue faster. And we think this has got loads of clues, loads of intelligence, loads of trends, loads of insights about how one can do that, uh, more effectively. And therefore we want to share it with. Share it with as many people as possible to enable the industry to grow faster.'cause the industry is growing brilliantly and but has got huge amounts, more potential. So let's talk about headlines then. What's the,

Richard Gillis, UP:

what grabbed your attention?

Gareth Balch, Two Circles:

Well, it, I think it's always important to start at the top. It was 2024 was the record year, the history of humanity for the monetization of sports ip. That's pretty cool. Yeah. We shouldn't walk past record highs. Last year in 2024, the sports ip, uh, all sports IP in the world generated 170 billion US dollars worth of revenue. That was seven percent up on the previous year, which 159% it's way up on where we were 10 years ago. It was 110 million was the equivalent number back in 2013. We've been running about 4.5% CAGR over that period. And so to be stood here today on an industry that generates$170 billion worth of revenue from sports IP annually, which is more than you generate outstream in or more than literature generate. Some way behind video games perhaps but a record high for sports ip. And I think that sports role and its relevance within society and uh, the universe is somewhat correlated to this number. I think it's an all time high and we are in an important moment to continue to navigate for growth. Right. Okay.

Richard Gillis, UP:

So let's talk about winners and losers.'Cause people will look at the list and you always go, it's like school lead tables. You go at the top and then you go to the bottom and you work out, you know, you sort of bypass the middle bits, but there's loads of stories in here. And one thing that jumped out was the sort of level of concentration of the money. So you've got the big number, 170 billion, and within that, I think we've got four sports make up 60% of it. Quick,

Gareth Balch, Two Circles:

quick poll on Unofficial Partner to see if everyone can guess for the four sports or no? We'll do that later.

Richard Gillis, UP:

and then the other number is the top 14 sports represent 96% of the total. So with all these things, people are, will be listening saying, okay, well what, why do I need to know this? What's the lesson for me where I'm sitting? But we'll put that to one side for a minute, but let's talk about concentration. So the big, getting bigger.

Gareth Balch, Two Circles:

Yeah,

Richard Gillis, UP:

I like the big number. Everyone likes a big number. But what's your reading of that concentration question? So

Gareth Balch, Two Circles:

look, the bigger, getting bigger and all e every data point we look at suggests that's gonna continue. We see a world where. There's 4.5% CAGR the industry's had over the last 10 years, 7% last year. Whilst that will even itself out and won't quite hold 7% over the next 10 years we see the, at least a 5% growth rate for the industry o over the next 10 years. And we can see the runway for that. And we think the underlying factors are there for that. And that will be disproportionately delivered from the biggest last year in 2024 off the top 20. All of them were bigger than they were the year before. So a hundred percent of the top 20 grew last year. They grew 65% faster than the market. They're very much nearer, 10% cagr, uh, on average. And we should define cagr'cause you used that a few times. Sorry.

Richard Gillis, UP:

I think that's a word you would, a term you would use within the office that we need. That's horrible. You're right. We hate acronyms here at, to define what means when

Gareth Balch, Two Circles:

I say cagr, I'm referring to the compound annual growth rate. It's simply a compound annual growth rate, and I'm referring to it. In contrast of revenue, this whole conversation piece of work we're having today is singularly about revenue. We understand there's a whole different conversation to have about profit and loss. Yeah. There's a whole different conversation about enterprise value. These are different topics that today were not on, that we've gone blinkers on right down the sports IP revenue conversation. Because in revenue there's lots of conversations to be had, and it isn't the whole conversation, and we're not trying to suggest it is for this, but I think it does enable you to fix some variables and have some great fine analyzing the industry. And then within that, finding that intelligence to grow and

Richard Gillis, UP:

I mean, people's head will go Deloitte's football rich list, which has sort of established the framing of the football economy. That's also revenue based, isn't it? Yeah, indeed. It's not dissimilar in that regard. So it's, it

Gareth Balch, Two Circles:

is

Richard Gillis, UP:

talking about the top

Gareth Balch, Two Circles:

number. Yeah. And then. There are lots of questions within that. Exactly. There's some big differences here, though is worthy of course the Deloitte for Women league's been an incredible source of, I think intelligence for the industry for a long time. The way that we've attributed revenue here.'cause it is complicated. We work in a you know, lots of sports is organized in what you might consider to be a Confederated system. Yeah. And therefore where you attribute revenues really yeah. Either delicate or needs a policy. Right. Every great, all great insight needs great definitions. Our definition here is really simple. The only way to cut the cake, but we've consistently attributed revenue at the first point. It comes into the ecosystem. Right. That's a really important point just to think about when you read this. So, at the first point, the money hits the sports IP ecosystem before it gets distributed. There's an awful amount of distribution that happens within sports. With regards to what happens to revenue but when the NFL top of the Sports Revenue League in 2024, when they do a media deal, for example, we've counted them the revenue once at the NFL level. Yeah, of course. We understand that it gets distributed to Dallas Cowboys and Green Bay Packers and others. Right. And indeed from their down to athletes who are also sports IP owners in their own right. We've counted it at the first point into the ecosystem.

Richard Gillis, UP:

Okay. So that's interesting. So you've essentially,'cause I was looking at the list and people will look at the list and they'll see, they won't see a team in the top 20. I was looking through and I was looking at, it's essentially a lot of event tournament rights holders and governing bodies or, you know, the big one, obviously the NFLs premier leagues of this world. So your system favors rewards them. Over clubs in your list?

Gareth Balch, Two Circles:

Ah, yeah. Look, I don't think it's about favoring or rewarding. I, you know, the NFL wouldn't be there with the first estate, with the NFL as a function of the 32 clubs. They own the NFL suit. So a as the Premier League is, as you wafer is as, the IOC is a body of it's a constellation or an aggregation of rights. Yeah. So it's not about favoring, it's about drawing insights. No, but as

Richard Gillis, UP:

in your system, it now makes sense to me that the NFL are at the top and, the IOC, for example is a good, again Yeah. It's a sort of bundle of,

Gareth Balch, Two Circles:

it's an aggregation. I think what you definitely can't do something like this. It's count revenue twice, right? Yeah. Because then you're nowhere. So, so say you do it the other way round, right? Yeah. So say you disaggregate all the revenue and put it to the source, the point where the rights are inherently owned. IE Yeah. You would suggest that the, uh, media rights are inherently owned by the 32 clubs in the NFL that choose to aggregate them. You could put it down there, even if that was the case, Dallas Cowboys wouldn't make the top 20.

Richard Gillis, UP:

Okay.

Gareth Balch, Two Circles:

Yeah. So, so what that tells you, I think the insight that Dallas Cowboy was amazing organization, we're privileged to work with'em. But what what that tells you is the aggregation of rights really works, and it enables you to create products that deliver more fandom and ultimately are easier to be monetized. In fact, this is a story about fragmentation and aggregation. We've analyzed 200,000 sports IP owners. There are 200,000 organizations or IP owners in the world who are trying to generate revenue from their ip. It's a wildly disaggregated industry. Yeah. It's actually a lot like supermarkets, which draws really interesting parallels. Yeah. Yeah. Oh, there's loads. If you if we, just for a second, define a supermarket, what is a supermarket? If we just, yeah. So what is spo What comes out in a minute? But if you just define a supermarket as anything from a corner shop outwards. Yeah. Yeah. There are hundreds of thousands of corner shops in supermarkets in the world, but actually the concentration of. Revenue generated from the monetization of selling food is not dissimilar from the monetization of selling sports experiences or sports IP experiences in the round. Yeah. And Walmart's the NFL. Yeah. And the Swar group is UFO and e and the Premier League is Tesco. It is actually eely dissimilar if you actually look at the multiples of the differences in the revenues IE how much more revenue Walmart makes than yeah. Than Tesco's. It's, there's some correlation to, what you'll see

Richard Gillis, UP:

here in the, it's also Sports Revenue League, and just to extend that analogy, it's a power relationship as well in terms of the, there's the distribution of the money. So the money comes into the NFL comes into the Premier League, it is then distributed. How much of it is distributed is one question, and then what the relationship is in terms of value creation between the supermarket and Hinz tins of beans. And we all know in supermarket terms there, there is this constant sort of what marketing looks like in that environment is I need to be here, I need to be at this particular position. There's a sort a set of internal incentives that are running within a supermarket. Is that.

Gareth Balch, Two Circles:

Again, I can sort of see and analogy, we can see all those para, we see all those parallels. Look, I absolutely, and we can go off down that rabbit Warren. And what we think is interesting is that sports is a mature market like supermarkets is, but it's grown faster than other mature markets. That talks to some of the hype. Why is that happening? Is really important. And look, two circles don't have much to say about the distribution of revenue. Once you get, get it through the door. We've got a lot to say on getting it through the door, which is, and we think getting more revenue through the door of sports IP owners for distribution debates to to continue. And of course they will. We think that's a good thing. So if there's 170 billion a year that sports IP owners generate can drift to the 260 billion we suggest it can in nine years time then we think that's a good thing. We think that's good for society. I think that's good for the role of sports. In the world and will enable us to build better experiences that are more tailored for what more humans want from their relationship with sports, of which we're still in the infancy of getting. That's right. Even with our maturity. So, so yeah. I can come down to Distribu distribution road, if you wish. But I think the conversation here is so much to learn about how we generate more revenue through the collection of rights and IP that exists within

Richard Gillis, UP:

the world of sport. And it's the, and so to that question, it's the, you look at it the other way. The question then becomes what the Dallas Cowboys do for the NFL top number. that question, what Ferrari does for Formula One, a formula run on the list, Ferrari are not in the top 20 Man United are not in the top 20, the Premier League is. So you've got that aspect, which is always at play in professional sport, isn't it?

Gareth Balch, Two Circles:

Yeah, absolutely. Absolutely. And there's, yeah exactly. Because the, the last a hundred years or so of the monetization of sports IP have told us that the aggregation of rights works to be able to punch biggest. And it absolutely works as we move into a world of, you know, notwithstanding the last month or two and not becoming geopolitics against geopolitics. As globalization happens, there's more buyers who basically want an easier purchase point. You know, there's more brands that wanna buy genuinely global sponsorship products. And there's more, I've, let's part that,'cause I

Richard Gillis, UP:

have got in my list, I've got the word multipolarity in my, uh, you know, so we'll talk about globalization.'cause there is a, but we'll part that for a minute. We,

Gareth Balch, Two Circles:

We tangent it off the big and bigger. Maybe I'll just yeah. Conclude on that for a minute. So, so the, so just do the supermarket thing or turn that into sports IP? For for anyone who's interested the top 25 sports IP owners in the world, and there's 200,000 of these folk Yeah. Deliver 50% of the revenue.

Richard Gillis, UP:

Yeah.

Gareth Balch, Two Circles:

The top 100 deliver of 70% of all revenue generated from sports ip. So nought 0.1, less than naught, 0.1% of sports IP owners are either the top 25, deliver over 50% of the revenue that, that those market, that market concentration exists in a whole range of industries across the world like supermarkets. It's actually quite healthy in some ways, but it's important and interesting to get our heads around.

Richard Gillis, UP:

Right. So a, a sort of build on that or a another bit of the question, another data point that comes out, which when you look at this, the way in which you've framed, you know, you know, the relationship with ip, 70% of the top 20 revenue, comes from sponsorship and media.

Gareth Balch, Two Circles:

Yep.

Richard Gillis, UP:

And 60 per 66% across the top 500. So essentially sport is still remains a B2B business. So it's the, like this, and there is a question here about that shift. How real, how fundamental will the shift away from B2B to B2C B? Which again, is a separate bit of the question, and whether the P, the power dynamic will remain. So whether the NFL its value will fall or you are seeing a power, the power of commercial power moving towards the Dallas Cowboys towards Man United, because that's what people care about. People don't, particularly on a one-to-one a D two C relationship, don't really care about the Premier League. They care about a club. They don't care about the NFL, they care about the Dallas Cowboys. So I can sort of see there's two bits to this. Let's break that down. First of all, are you surprised that still two over two thirds of revenue is coming from B2B sources? It's essentially still a licensing business.

Gareth Balch, Two Circles:

Uh, the way in which it's monetized as a license from business, but arguably the way in which that value's derived the way in which that revenue's derived is increasingly a D two C business. And that's the dichotomy, right? That wasn't true 20, 30 years ago. 23, 30 years ago, it was a straight up licensing business, and the industry's shifting to become a, B two B2C business in the way in the way it accrues its value, or it creates its assets and then it monetizes through B2B. So, no, I'm not surprised by that. I think that's happening. I think the way in which media rights are traded and the way in which sponsor it, rights traders, the two principle asset classes that get out there are shifting enormously and they're shifting to reorientate themselves around this sense of, we're a sports is a business that delivers direct relationships at scale. And indirect relationships at an enormous scale. And we're trying to figure out how we reorientate around that with all the changes that's happening in media, con consumption.

Richard Gillis, UP:

Yeah.

Gareth Balch, Two Circles:

The un the best thing that's happening is last year there was a record amount of consumption of sports in the world. Yeah. There's about 3 trillion hours worth of cumulative human hours spent in human sports. The record, high video's, the underlying driver of that, the platforms that's happening on the monetization methods of those platforms changing enormously to much to the you know, to the amusement of our industry and or to the, you know, it's completely enthralling to try and figure out what's gonna happen there. Yeah. But inherently sports are more, there's more demand for sports in the world than there's ever been from fans. Right. And so in geopolitics, people talk about demographics as destiny in sports fans are the foundation. So for sure we are monetizing the majority of the money through a, you know, certainly at the top end of sports IP monetization through brands and media, businesses investing in sports. But absolutely the foundation, the asset class that they're investing in is fans. And that is that relationship's becoming increasingly causal and

Richard Gillis, UP:

clear. Do you think that's the rationale behind, you're starting a new business today, a new sports, you know, disruptor, they're buying that story, aren't they? I'm looking at some of these new things and they're looking and saying, right, okay, let's start with the fan. Yeah, let's go that route. Their bet is what you've just said, essentially that, that's the growth area in the market. I,

Gareth Balch, Two Circles:

There was something that came out of this piece of analysis we've done recently where the top 20 grew faster than the market in their revenue generation. About twice as fast, they grew about 10% cagr, and actually the rest of the market was near a 5%, which created 7% average. The top 20 grew audiences even faster. So if you analyze of those 3 trillion hours worth of cumulative consumption of sports, the top 20 took a disproportionate share of that, and therefore, growing their audiences both owned audiences and earned and bought audiences faster than others. IE there are more people in the world who are consuming the top, top top IP owners, and therefore there's a direct correlation. Understand the causation the most important, but the direct correlation between those who have grown revenue fastest and those who have grown audiences fastest. Audience growth has a massive impact on revenue growth. And therefore, those disruptors who are coming in and saying, I'm gonna win the day of audiences are absolutely barking up a tree. That's correct. It's not the only tree. As any startup or entrepreneur will tell you, you don't only need to get one thing right to, to succeed as a disruptor in a category. But you absolutely can't win in sports IP if you don't have a foundation of fandom. And that whether you've got a hundred years worth of history and you've got tradition and you've got prestige in your category or you haven't, you are. Yeah. You, the truth is the same. Fans are the foundation and fundamentally, I need more people consuming more often and I need more people to really care about me and I wanna grow that right through the funnel. And if you can do that and then you're smart enough to wrap monetization strategies around that, that are relevant today, then you're gonna start growing at near a 10%. There was 182, sorry I ramble on all day. Go for it. There was 182 organizations in the top 500. Who grew faster than the market. So it's not just the big, getting bigger, there are lots right through the middle. You know, kind of anywhere from sort of a 10 million turnover to 300 million turnover. There's lots of sports IP owners in that category. There. Hundreds, over a hundred of those grew at 10% category last year. The same correlation was true. A deep investment in growing audiences. And doing that in a way that drives fandom. And then finding ways to then monetize around that.

Richard Gillis, UP:

So get fans, monetize, think about monetization later, or you'll do it along the way, but do it along the way. You're gonna wait for a the lesson, I mean, it's quite interesting, the speed at which, you know, the billion dollar business is quite often a useful benchmark in this, isn't it? Yeah. In terms of the speed at which you get to that's quickening and that might just be a function. Is that happening generally, do you think? Well,

Gareth Balch, Two Circles:

there's evidence suggesting that's happening generally in the world. Yeah. Inflation helps out, obviously. Yeah. Yeah. But even if you do it on real world value. Yeah. So, so I think it's. Fascinating though. Who's the fastest sports IP ever owner ever? To race to a billion dollars worth of revenue in a single year is an interesting exam question. The average for those that have surpassed a billion dollars is 82 years. But that's there's lot, there's lots of inflation and time value money you're saying? That goes, but it's still interesting. It is interesting. Yeah. And it,

Richard Gillis, UP:

but you've got like a series of, you get to sort of moats, don't you? And history is one of, is a moat.

Gareth Balch, Two Circles:

Yeah.

Richard Gillis, UP:

And if you are the NFL, you are looking in the NBA and the European football leagues. Yeah. Those are regardless of, you know, it's an interesting metric that, but the acceleration of money into sport has moved that dial very quickly, presumably. Yeah. But there is also something in history which is useful.

Gareth Balch, Two Circles:

Yeah. There's something in history which is useful. Like the acceleration of enterprise value in sport is fascinating. And the and the relationship with this is really interesting. Right. Because. Often there is limit there at the, there is good evidence to suggest that people are driving good enterprise value without yet driving good revenues.'cause equity values always go ahead of revenue growth, right? It's a bet on the future. It's inherently what an equity value is, whereas this is much more a real time assessment of value. Right? So let's just

Richard Gillis, UP:

So the equity value then is sort of the money market's guesses at that's what, where that's

Gareth Balch, Two Circles:

gonna go. That's what equities have always been, right? They're not a, they're a bet on the future of the company not necessarily the past performance of the company. Yeah, clearly it's a past performance is an indicator of future performance and all that stuff but inherently equity value in theory is a lead indicator to what's coming next. But that suggests that there's only smart money in the world and everyone makes great decisions. Evidence would suggest that's not always true, and therefore that keeps us all employed and makes the game fun. C can we go back to the billion dollar thing though, I think? Yeah. Yeah. I think it's fascinating. So, so the fastest ever. Sports IP owner to reach a billion dollars worth of revenue in a year. Is I,

Richard Gillis, UP:

is it obvious?

Gareth Balch, Two Circles:

Yeah.

Richard Gillis, UP:

Premier League.

Gareth Balch, Two Circles:

No, IPO Yes. 18 years. Damn. No, just under that. No, didn't take quite that long. Uh, IPO the new kid on the

Richard Gillis, UP:

block. Who's gonna break the record? Well, it was an acronym I didn't actually recognize on your list. Yeah. What is, uh, C-F-P-C-F-P College. Oh, okay. Play on final right. College football bluff. So, college sport in the us

Gareth Balch, Two Circles:

Well, no. College football.

Richard Gillis, UP:

College football. Okay. College

Gareth Balch, Two Circles:

football specifically college football. So, why then? So CFB is gonna break the record. It's gonna be the fastest, uh, sports IP to exceed, a billion dollars worth of revenue in a year, and it'll do that soon. It hasn't done that yet, but it'll break i's record. Why? I mean, I College shop was probably the second most popular sport in, in us

Richard Gillis, UP:

Yeah.

Gareth Balch, Two Circles:

Sports by fandom, but it was miles away by monetization.

Richard Gillis, UP:

Yeah.

Gareth Balch, Two Circles:

At relatively. And there was no way to know who the best team was.

Richard Gillis, UP:

Yeah.

Gareth Balch, Two Circles:

Didn't exist. It was actually done largely by votes. There was bowl games and so on, but it was votes. I, it wasn't organized around what fans want. I think we'd all agree that fans want to know who's the best at something. There's a kind of, there's a universal truth to that, right? Yeah. That that there wasn't the, there wasn't the Super Bowl for college football. And growth doesn't always fall that far from the tree, right? Yeah. So like sometimes it does, often it doesn't. Often it's the one, you know, one degree inside. It's like, well, yeah, loads of people love pro football in America. Everyone knows that. In fact, loads of people love pro football around the world, or pro American football around the world. And lots of people also loved college football, but the monetization around that was not as a tool sophisticated as it is in pro football. And CFP is a great, the relationship is a great example

Richard Gillis, UP:

of that sort of fan relationship to the college Yeah. Is weirdly strong, isn't it? And,

Gareth Balch, Two Circles:

and nor obviously strong, you know, we don't really get it the same way. It doesn't carry, it doesn't carry but it is enormously strong and it's phenomenally successful. And college football playoffs is a great case study in, in innovation and will be the fastest IIP owner to exceed a billion dollars of revenue.

Richard Gillis, UP:

It's also how people, I know when you meet American people quite often they, I, you know, they will self identify as. From their college, you know? Yeah. It's almost like a way in which they look at themselves. It's

Gareth Balch, Two Circles:

different, it's different now. We've been working CFP for a number of years. It's ama, it's genuinely amazing the way this stuff is consumed and the fandom around it. It's like, oh yeah, now I love anything that other people love. I just think it's brilliant when you find, you know, you find someone who loves a sport. I like, I was speaking to a teammate this morning who was talking to me about their love for lacrosse and we're doing some, and I was like, I just love that. I love listening to someone tell me about, I don't, you know, I, my, my love for lacrosse is less than hers, but I love that. It's so when you, it is so, everything that's loved by others is lovable. And when you find. Things like college football. You're like, wow, it's so, it's so attractive. It's so, and actually there's lots in there about fandom and yeah, my word of mouth is the single greatest marketing channel all time since forever and will always be. And that ability to drive the affinity within your social groups or your most loved groups within your personal life is a really important way that that sports grow. And in fact is where lots of the moat comes from. Right? Yeah. You talk about moat based businesses whenever you get to that generational moment, you know, I was at London Marathon on Sunday, wasn't it fabulous? It feels like it just gets bigger. It's a bit like being an Augusta a few weeks ago. You just like, this thing was special 20 years ago, but surely it can't get any better. Surely it can't, but yet it seems to compound. Yeah. Yeah. And there's lots of that happening in these different things. So when you organize yourself really well as college football has in recent years, you can you can build a unicorn,

Richard Gillis, UP:

okay. Which gets us to. The globalization question I think is quite an interesting time to, just to put that in, because I think the assumption of my adult life has been that is the journey, you know, the route that we're all on and whether the moment we're in at the moment is a blip or you know, or actually you can see a fragmentation into different regions. Obviously America and China being the obvious ones. Now where sport plays in that question is a whole podcast in its own right. I'm not going to, you know, go too far into this, but the assumption if you push it into things like media, for example, and I, you look at what's happening there.'cause that's the sort as we've established, that's the source of most of the money at the top end still and what that wants. And you've got the Silicon Valley and Chinese tech. Platforms who view the world globally and want one ticket and they wanna, you know, they wanna simplify things. Sport is quite stubbornly local college just talked about colleges. That's not one that's gonna travel. In terms of the, you know, if you look at the value of the rights, it's almost entirely in the us same with the IPL to India, same with the NFL. Premier League is a bit of an outlier. It's got an international rights base, which is, you know, the envy of most others. But it's probably that it's unusual. So talk to me about the sort of geography questions around this list.'cause I, again, one of the interesting little bits was 70% of the revenue comes from three countries, us. UK and

Gareth Balch, Two Circles:

just be clear that, yeah, just clear that se 70% of revenue from, uh, companies headquartered in that country, the monetization happens all over the world. But from the, okay. From where the companies are headquartered, is that, is what that 70% relates to as opposed to money value. The value of the money isn't in those markets. Yeah. It's sort of overplaying the Swiss, you know? Yeah. It's the equals the international federations in Switzerland is what you refer to there. Clearly they, as we all know, they Swiss, are really, they really love sports. Their sports, yeah. No, they just they have a good place to, uh, house your international federation. They pay tax essentially. And they make their money all over the world, as we all know. So I, there's the fascinating stories here about geopolitics, I think, or no geo or globalization and geography. No I think I, I would challenge your uh, sort of as assumption a little bit in your question that there are increasingly global properties and the NFL really is, that's one of it way to that as is the NBA and clearly there's much talk about you know, in NBA league in Europe, which is coming and you know, the ever increasing number of regular season games in of the NFL are all kind of hard data points. But the soft data points is the consumption of the NFL outside of America is on a 30 year romp. It's a complete bull market. Like this thing is going places, like the number of people who care about the NFL and consume it avidly outside of north America is growing. And so you've got real good evidence of that as you suggest there is for the Premier League, I would say, you know, whether it's the same or different is kind of in, in yours. I guess it's two. So

Richard Gillis, UP:

the question is you're talking about fandom, I'm talking about the rights market and I guess the TV rights market. I think the NFL is 3%, two, two or 3% international rights. But that's a function of how big the domestic Right.

Gareth Balch, Two Circles:

Be sure that was true. But there was Yeah, exactly. The But what, you know, I've said earlier, equities are a potential lead indicator where the industry's going. Yeah. Fandoms are much better. Lead indicator. Okay. Yeah. And the ability to know and grow your fans will be critical to the success of that. And I think that my, I think my point is there are increasing number of sports IP owners who are organizing themselves and focusing on genuinely global growth. IE more than just 10 markets or more than just 20 markets where lots of sports have historically kind of got to that sort of ceiling gone on. We're really big in 10 markets. We'll take, you know, we'll take that and we'll make that work. And what we're seeing is an ever increasing rise of those that can be genuinely relevant in more than 50 markets. Right. And I think that will I think that will play to some of the macro changes that are happening in the, in media platforms as you alluded to earlier. So is that the level, the

Richard Gillis, UP:

50 markets? Is it a rough time? That's an indicator

Gareth Balch, Two Circles:

of that. I think it's more important about how many people are in those markets and we all know that all, not all countries are built the same. So, so I think the affluence and the demography in there is relevant, but there is certainly a threshold where you start to see where you can start to see that happening. So sports has been I think there's new seeds to push there, and I think we'll see that happening in the next 10, 20 years. Albeit not like a rush of gold, right? Yeah. So like you suggest it, it is historically been a locally constrained business, I would say. I think there's a lot of truth to that, and there will still be lots of brilliantly local sports IP owners who work amazingly well in their constituents in their constituency for the, for their fans. I think what's actually really interesting from a geography perspective in this list is the dominance of the west relative to the east. Yeah. If I can just segment the world yeah. From a country point of view in that way, now 90% of the revenue is coming out of what you'd consider to be west organized. Sports IP owners. Yeah. And and I do think that's astonishing. Yeah. I do think that's astonishing given the rise of the East in from a demographics and a GDP perspective over, over recent times. The West is really good at organizing sports competitions. That's the some aspect of that comes through here that increasingly have relevance beyond their home markets. Yeah. And the propensity to consume pay to be part of that from a fans perspective is really hard. And I think there's, I think it's really fascinating in where that's come from. You know, like the highest, well,

Richard Gillis, UP:

we quite often talk, when we talk about globalization, we're quite often talking about Western, uh, you know, UAFA, FIFA going to America Yeah. Or the NFL going over here. Yeah. We don't talk about Chinese rights holders. No cracking Europe or cracking North America. This list, and

Gareth Balch, Two Circles:

this list is really fascinating to sit and list, look and see where they are. You know, Hong Kong Jockey club is the highest. Yeah. Question. Gross in revenue. IP owner that's headquartered in Asia, followed by the IPL the highest gross in IP out of Africa. Quiz question. Gone. A ACON or the organizers of acon. Okay. Which, you know, yeah. If you, yeah. It's not, it's, but when you think about it until you're like, well, yeah, they know it. It's like, and yeah. If we can sit and talk about where Afro is a continent and have a, you know, yeah. Lots of podcasts on that's but it is fascinating to see what and how that's happening. Although, what's increasingly happening is there is more IP owners making money out of Africa than Africa make out of Africa who aren't headquartered in Africa, which kind of talks to my market's point. There's increasing amounts of that happening. You know, the rise of the Premier League in America is just an amazing story. Yeah. It's amazing. Yeah, it's amazing. As I could talk about NFL and Germany, like, there's lots of great stories that are happening in that regard. NBA in Australia all brilliant market based stories where we'll see more and more of that happening. I think the IOC or the Olympic Games in India will be another story that might kill the next 10 years. So, and I quite

Richard Gillis, UP:

often think about the media rights market and the sponsorship to an extent, but let's talk about media rights as a sort of lagging indicator. It's a really slow indicator. It's definitely LA indicator, very laggy and it's sort of clouds those individual stories. So, you know, you could say NFL in Germany, it isn't being rewarded by the television market to the same extent that perhaps, you know, how real the trend is and how big the fan base is. All of those, as you say, softer questions until they then get translated. So the, one of the problems of analyzing. The sports business is that you then have to go to the hard numbers. Yeah. And the hard numbers are very slow. Yeah. I quite often use this as a, you know, when you're looking at people it's sort of people stay in jobs far longer than they probably should because the TV rights has over rewarded them Yeah. For a very long period of time. Yeah. And it's, you know, they can do whatever they like basically, but the money will still come in. So there's a sort of, you get to a there's a personal element to it. Yeah. But there's also just what it says about where you know, getting a handle on what's actually happening on the ground.

Gareth Balch, Two Circles:

Yeah.

Richard Gillis, UP:

Below those numbers. Yeah. So if you looked at the NFL or the IPL is the same as it 2%, you know, but the story, the anecdote is global expansion. Yeah.

Gareth Balch, Two Circles:

Interest. It's like you've been reading my bucket list. It is our bucket list here at two circles to, to draw a harder correlation between. The consumption and the fandom of sports and the monetization of them. Yeah. We think that would be good for the world. We actually think it would massively help the industry grow faster and there'd be greater trust to it. And we are increasingly able to draw that hard line between consumption and avidity and the monetized opportunities, monetization opportunities, the cloud. I think the

Richard Gillis, UP:

problem, again, if I look at it from my perspective, I haven't got a, you know, skin in the game in terms of, I'm not selling anything in that respect. But when I have been on that side the incentive, the temptation to make the numbers up Is so massive. Yeah. You know, is so the sponsorship, you know, we have got a billion fans in China, you know, those stories cloud that problem. And I'd love it if someone came in and said, actually just tell me the truth about this.'cause then we can actually,

Gareth Balch, Two Circles:

well you can actually really make a difference.'cause there's, you know, when someone might claim they've got a billion fans, then they've probably got. They've probably got a billion people engaging or interested in them at a lower level. It's a definitional thing. Yeah. You know, it's a definition thing than, well, we're all Liverpool fans. Well, I was sports fan of Sunday. We'll capture, we will be captured. Uh, yeah, exactly. We were all consumers of Liverpool for sure. I did. I loved watching the clock on Sunday. It was a real highlight. I was also loving watching, uh, us at the Women's Champions League final, which I thought also thought was special, but that's a wonder of our afternoons. There's so much you can do on a Sunday afternoon. Uh, so I was a consumer of all sorts of sports on Sunday afternoon, and that understanding of consumption and fandom and the desire to pay and all these correlations are really important. Now, I'm not as data driven as we are, we're not stupid enough to think that the, you know, how much it's consumed by fans and how much. Revenue should make as a direct line, but it certainly should be a much harder line that should be drawn there as opposed to one that someone can make up and talk about, which is why we are increasingly measuring consumption of all sports by all humans. Yeah. So how can we understand that more than 5 billion humans who consume more than 3 trillion hours worth of content last year, and how can we start drawing harder lines about why that happened and what happened, and then what the value of that could be, and then start to build that back into monetization programs. And I think if we did that well, then we'll be way over$260 billion worth of revenue generated from sports ip. And we're on the cusp of getting there like none. Other thing I've said here is possible 20 years ago, like it literally didn't exist. You know, the data wasn't being generated from consumption, but the data is increasingly generated from lots of consumption and you're in increasingly able to correlate that to the human so you can know what they did and who did it and then you can start to figure out what you might do about that. And you can start to just take that into a microcosm of a sport. So you take that into something like rugby, there's an incredible ecosystem in rugby and there's lots of value in it. It's amazing amount of value. And actually if you draw that line really hard, then you're like, this is an incredible investment. It's like off the scale, good investment for the right brand. And then you gotta, you've gotta make that work'cause you've got real understanding of it. As opposed to someone coming in saying, there's a billion badminton fans in the world, please buy it. You're like, well there might be a billion people in the world who know what a shackle cock is, but that, you know, that's a difference.

Richard Gillis, UP:

So the, I'm just trying to sort of follow that through.'cause the question, one of the threads as you know well over the last 10 years has been, how we talk to our audiences now. We approach them and you get to the sort of OTT question and and everyone will say we need a direct relationship with our fans. And that's been the two circles mantra for forever. And lots of people are also, you know, are talking about it in that sense. And then the execution of that is, okay, let's give them their own channel of our stuff. So your point, it feels like the way in which you are talking is that route between money and fans is a long term thing. This is a strategy execution question, I guess is that you want a big as bigger number because there is a correlation between that and money at some point. Then if I'm a CEO and I'm gonna be in this job for three years, what do I do about that? And one decision will be okay, I need a my own thing and I'm going to over service that group. And we are now, obviously, people are now questioning these channels. Yeah. The whole media interpretation of the D two C question.

Gareth Balch, Two Circles:

Yeah. I think a single sport or single sports IP owner, uh, direct to consumer subscription, paid video channel is relevant for some, not for others. They're nearly all relatively limited businesses in the context of the overall business. I, it isn't the pathway to gold, I don't think it ever was but it is an important, it is an option to monetize. Essentially what a single sports IP owner, OTT paid for media product can do often is enable you to monetize the most avid fans. At a higher price point or monetize a set of fans who are somewhat constrained by the rights they can consume within your broader media framework. And within that instance, they, those sort of products can work really well. Like, one of the best examples of that is NFL plus, we've been working on N NFL Plus for years is a fantastic single sport streaming product, paid for streaming product generates, you know, millions of subscribers and generates lots of revenue. And it's, and it brilliantly sits in that niche of NFL fans who want who just want more. There's lots of people who just want more in that space and it does a really good job of that. But the idea that a, uh, single sport paid for media product can serve the entirety of your fan universe and get you everything you wanted from what might have historically been a kind of licensed media strategy is pretty, there's pretty limited evidence to suggest that was ever gonna be true and that anyone should ever try that. It's one part of your media, uh, go to market strategy and that could work really well. But going back to your point about direct relationships with fans, someone paying a media subscription or a video subscription is just one way. You create a direct relationship with fans. And there, there was a direct correlation between those that, that grow their audiences but also grow those audiences on owned channels. And starting to get to the point where you're, you know, the aspirational 10% of all humans are engaging with you. If you can get 10% of them to do that with you on an own channel, then that becomes really valuable. And I'm thinking there about data exchange and the ability to understand who they are so I can know more about what they do elsewhere. And that value that then can drive. Into your, into all your revenue into all your revenue lines, not just your media and your brand revenue lines increasingly valuable. And so if you've got, you know, a sports IP on, let's say it's got a hundred thousand people who are consuming their product every year at, you know, load billions worth of hours, how can I get to the point where I know 10 million of them directly? They're the, probably the people who love you most and you love them most.'cause they're also, you know, we're talking about concentration of Yeah. Revenue in small number of rights holders here. The same hack thing happens in those rights holders. There's a concentration of the cause of driving most of the monetization. And you need to, and want to know those people, whether you send them a media description or not. Yeah, I'm not too bothered. That would change over time. But you wanna be able to sell them whatever that is that they might buy. And that might be a D Zone Media subscription might be a Sky Sports media description. It might be yours. It will definitely be all your partner's products. Also,

Richard Gillis, UP:

there's a, you mentioned them before, which is the Hong Kong jockey Club and they are in there at, I'll just get my bit of paper. So. At number three behind the N-F-L-N-U afa, and we'll talk about FIFA in a minute. And while FIFA aren't on this list, but we'll just park that for a second. What's happened with the Hong Kong Jockey Club that's made them number three in this illustrious list above the Premier League? And it's obvious to do with betting, but I don't quite understand why they're there and others aren't. Why are they being, why they captured all of that value?

Gareth Balch, Two Circles:

They are the entry point of that revenue into the market.

Richard Gillis, UP:

Okay.

Gareth Balch, Two Circles:

So the Hong Kong Jock Club operate the majority of the Asian betting market, and therefore all the revenue goes through them.

Richard Gillis, UP:

Okay, so some other bet markets. So what would be the equivalent over here?

Gareth Balch, Two Circles:

Oh, you, I might edge my knowledge a little bit. Yes. Obviously the horse racing in the UK is a world of bodies, but there is a, there's a levy based on all betting revenue that comes in. I think it comes into the BHA by. As its first point of entry, but apologies if I'm incorrect on that. So I think the BHA takes a levy on all betting income in the UK market that then helps to fund horse racing. So that's the equivalent. The difference is it takes a small percentage of that in Hong Kong Jockey Clubs instance.

Richard Gillis, UP:

It

Gareth Balch, Two Circles:

takes all

Richard Gillis, UP:

that money. So, and the question I guess is how sport should capture that into,'cause that's a level of, that's an area of sport fandom. Yeah. It's deep and monetizable obviously. Yes,

Gareth Balch, Two Circles:

very much so.

Richard Gillis, UP:

But the money doesn't flow through other than, you know, it can be manifested in sponsorship deals and the rest of it. But actually what's happening there, what's the lesson? I

Gareth Balch, Two Circles:

think, I think there's three in the top 20 that are quirks to the kind of media and sponsorship combo. Yeah. So lots of the top 20 are basically running a media and sponsorship combo built off the foundation of fandom. Yeah, that's yeah. Three of them on Hong Kong Jockey Club. EA Sports and US Polo didn't quite, yeah. US Polo in at 13 and they've all run slightly different plays now. EA sports is the closest to them. It doesn't, it makes its money entirely as a direct to consumer, predominantly as a direct to consumer business. I, it's got loads of people who care about it. US Polo though differently, right? They're a licensing business and they've made an awful lot amount of money outta licensing their IP for a fashion brand to then go and build a worldwide a worldwide brand and merchandise business from that. And that, and I think the lessons to learn from that are that there's other ways to use this IP and you know, the other category, you know, I've seen private equity decks in sports come in and think, well, there must be another way that we can make money for this fandom. Yeah. Yeah. And there is. Yeah, at scale people are doing it. And so for sure all of those, uh, businesses are, you know, long time in business, either there's some time to maturity in there, it's gonna need a run up to get you there, but there is absolutely ways to monetize. And if you go down further the list to the top 100 or the top 500, there's other examples of different monetization models that don't rely on the foundation of fandom driving and media and,

Richard Gillis, UP:

Sponsorship business. Again, if I go back to my sort of imagined startup and I'm thinking, okay where and how do I get to my billion quid? That gets me on some sort of listing. I think you'll

Gareth Balch, Two Circles:

get there one day, by the way. Yeah, of course. I think you talk about that a lot. I

Richard Gillis, UP:

believe in you. Yeah. Yeah. Podcasts are the root of the No, there's not much data for that. There's a whole, maybe there's more maybe. But I mean, betting is so central. It's so under talked about and it's so obvious. Yeah. And you talk about private equity when you talk about, you know, private equity likes betting because. They see the, you know, it's not TV rights. It's not sponsorship in the same sense, but it's there. It's real money. Yeah. And capturing it Yeah. Is what they, you know, I just find it really interesting that Yeah, it very interesting. They've done it. Yeah. Why the Premier League can't do it.

Gareth Balch, Two Circles:

Yeah. It's

Richard Gillis, UP:

complicated,

Gareth Balch, Two Circles:

isn't it?

Richard Gillis, UP:

That

Gareth Balch, Two Circles:

answer, that's specifically that example. Well, but clearly there are businesses generating billions of dollars of worth of revenue annually from fans of the Premier League betting on the Premier League and other football. We all know that's true. We all know who those businesses are. So it is the economic model. We've sat around that in terms of how much of that share we've wanted to eat. That's, if you kept going with your thought, you get to an interesting place. It's clearly complicated. Why is it complicated? Well, it's, there's lots of, uh, well it's complicated'cause there's existing business models. So you've got existing partners in existing. Infrastructures that you'd need to disrupt. Again, if it was part,

Richard Gillis, UP:

let's park the moral question about be betting and whether they want to do it. Yeah. Whether they want to be seen to be doing it or they wanna be seen to be, they want to take the money but not be seen to be doing it. Whatever the, let's just park that for a minute. Yeah. And get to the, that's a big point. But Yeah, it is a big point. But if you get beyond that, if you are able to get beyond that, then what are the complications? So you are talking about central, local as a, you know, in terms of difference there. Yeah. Yeah. But the way in which the li this list is based on the aggregation of getting around that problem. Yeah. The IOC is on the list because they did it 50 years ago. Yeah. And you know, and they've reaped the reward since

Gareth Balch, Two Circles:

Yeah.

Richard Gillis, UP:

Why they can't do that in betting.

Gareth Balch, Two Circles:

It you, your question I think is a, it is a good question. And it, it is a question of disintermediation, isn't it? It saying there is leakage in my ecosystem. I, there's value from my IP that's being generated that I'm not participating in, and I wanna participate in more of that, that you can think about that in betting. You can think about that in merchandise. You can think about that in, uh, non-live long form media, I think are three of just some of the places you could think about that were the exact same big

Richard Gillis, UP:

leaks, biggest leaks in the sports business. Yeah. What the biggest leaks in sports? I

Gareth Balch, Two Circles:

knew we were gonna hit something good today. Yes. We found the leaks. I think there's, I think that's an, I think that you will see, uh, as IP has become more sophisticated and more mature, then they get more zoned in or laser focused on, on some of that value leakage. Yeah. And they will disintermediate those that are intermediate and value from them. And they'll take more of that. In every example. It will result, in my opinion, in having more, needing more fans to underlie the foundational value of that asset. And having a direct relationship with'em to a greater, lesser extent, will help you get there quicker to understand what, where and how. So you can take that bet knowingly. Yeah. And therein lies some of the route to, to,

Richard Gillis, UP:

I it's, it is interesting because the sort of, I don't, you know, I've say this all lot, you know, time, I don't bet. And, but, and I just want to, if you do, if you can separate the moral questions about it, whether people should, whether they should be encouraged to do it whether, you know, all of those bits, if we just get beyond that and get it to a business conversation, I find it really interesting. So we sometimes go to, what's it called? ICE? Yeah. We go, when it's in London, we don't bother when it's somewhere else. And it is the sports business. You go there and the screen, it's everywhere. And it's Figo, it's Barcelona, it's Manu, they're all plastered everywhere. It's a sports content thing, but it's just. Full of people who are selling gambling products or GA roots to, and we talked about the OTT question and it's a variant of that. Yeah. And I want that money to go into your list. Yeah. Because your list, we can argue the toss about, you know, the merits of it, but it ultimately goes through to the sport, which then goes to the athlete and, you know, you, you can sort of see a virtual, a virtuous line where the revenue comes in. And I'm broadly in favor of

Gareth Balch, Two Circles:

that. We have talked about making the list, you've talked about all the revenue generated from the ip, whether the IPO has seen it or not.

Richard Gillis, UP:

Yeah.

Gareth Balch, Two Circles:

We've broadly done that list for our own purposes. And what sort of

Richard Gillis, UP:

percentage would you think they're missing? What percentage is the leaking More, more

Gareth Balch, Two Circles:

the answer? Your question is more It depends. I will hold that number. We do that work for our clients. And it's a decent amount of money. The thing is, so more

Richard Gillis, UP:

than they're making.

Gareth Balch, Two Circles:

They're losing. Yeah. For Oh yeah. If you had piracy into that space. Well, yeah, definitely. If you had piracy into that, definitely. It's more than they're making. But losing is not the right word. Because this isn't a I dunno what the right phrase for It isn't, this isn't a simple game, right. Because is some revenue lines are best sold by an intermediary or some best, some me, some revenue lines are best monetized through a bundle. Media's the best example of that, right? Yeah. And I think this will prolong be true for a long time to come. It's certainly been true historically where you'll generate more money from sports rights by sending it to someone else who sells it with a whole bunch of other stuff. Then if you sell it directly yourself Yeah. On standalone. Yeah. Nike figured this out. Nike. Were like, we'll just sell. People want our shoes. I'll put my shoes in the shop and off the go. And they're like, well actually, people actually quite like the idea of seeing my shoes up alongside Yeah. Adida Anon and then deciding what I wanna buy. And actually for a whole category or a whole segment of the market that works really well, I had another segment of the market are quite happy to walk into a Nike store and just be drink the Kool-Aid and just do it. And off we go. So there's segments of the market that do different things. It's the same across every, if you take every revenue line, be it merch or be it media or be it, uh, betting or be it ticketing or sewing, so on, there's a different story about how much the f wants the bundle at the point of consumption. Okay. Which essentially affects whether you do or don't allow leakage or benefit from from their synergies. Right. Yeah. So there's a whole bunch of people selling their media rights for more than they'd ever sell it for. In a single version because it supports their bundle and they'll share some of those economics reviews. So you get kind of positive leakage or whatever. What's the inverse of a leak? An increment? Yeah. Yeah. You get additive value. You get additive value'cause of the way you sit in the ecosystem. There are a whole bunch of sports. I can list 10 now that won't appreciate me doing it, but who benefit from that. But there's a bunch on the other side as well. I think what we're getting into here is some of the sophistication the sports industry is gonna increasingly know the difference of, you can only know this if you know your consumption.

Richard Gillis, UP:

Yeah.

Gareth Balch, Two Circles:

If you don't know how valuable you are and how many people care about you, you don't really know which side of that equation you sit on. And the same organization will have different revenue lines sat on different sides of that ledger between, I've got leakage in value there where if I disintermediate I would make more money and they'll have others where they're like, through my intermediary, I'm actually getting an increment in value because I'm benefiting from their economics. Right. Both of those things will exist in the same sports IPO and most of the time. So

Richard Gillis, UP:

again, just to figure out, so betting will probably always be. An outsider relationship.

Gareth Balch, Two Circles:

Wow. Look,

Richard Gillis, UP:

betting

Gareth Balch, Two Circles:

probably will always sit on the leakage point. Wow. Uh, probably in most ipi owners but because

Richard Gillis, UP:

you're run into the moral argument pretty quickly and there's not a big play where do you, in terms of sometimes these questions, you think, okay, one rights holder's not gonna solve this. But actually you get to the Sport Inc. Question. We've had this conversation before about data, but I don't, you know, it's not, we don't wanna get into all of it. Yeah. But some of these questions, if sport did behave as an industry

Gareth Balch, Two Circles:

Yeah. Globally. So if this list, well, if sport was more, if Sports Inc. Was more CFP, right. CFP College. Yeah. Uh, football Plus basically was the colleges coming together and going let's create a a body to aggregate our rights and to create a culmination to the college football season. Good idea. Seen that work before. Let's go. Gonna be the fastest IP to race,$12 billion of revenue if a sport thought outside of traditional lines, IE you know, the college football colleges would've all talked to each other. They'd have had their, you know, their annual conferences and all that sort of stuff. But if you broke some of those party lines and started finding aggregation across the board, we could go really well for sure. There's value to be created from that. However, each of those big things are their own confederated systems. And if you've hung around much of a sports organization as I'm sure you have, you'll know they're all, you know, political and challenging in their own right. And Yeah. Yeah. And find time, you know, find their own time. Just, you know, talking amongst themselves about how they share value as opposed to how they Well, it's bad enough within one sport. Exactly. That's my point. Thank you. Nicely said. That's what I was trying to say. So, but in, in the pursuit of pure growth, if you get over your own Yeah. In a workings. Then there's more value being made. That's some of the things we're trying to get into the conversation. So there, there's

Richard Gillis, UP:

a sort of incremental game of chipping away at the, there's a blacklist, you know, a sort of dark list of this list. There's the sort of alternative list of money for the I for IP sports IP list, which again, has all of these things betting, you know, some of them gr some of them just historical anomalies. Yeah. As you say, the polo thing is fascinating. Yeah. You know, the, you know, revenue from that source and that there will be a, you know, the story of the next 20 years will be a sort of trying to move some of that over and it's not gonna be easy and some are just gonna be too far. But actually we could see it.

Gareth Balch, Two Circles:

It is not a worldy play. It is replicable for the right organization with the right focus and execution.

Richard Gillis, UP:

Okay. FIFA are not on the list. They're not on the list.'cause obviously it's not a World Cup year and it's not a Women's World Cup year. I, which brings me to another question, which is the IOC Central fund is on here at number five. Yeah. Because it's an Olympics. Paris are on at number seven, the Olympics. The IOC central revenue's up 400% year on year, which is, you know, for obvious reasons. Yeah. However, if I look at this, I get to the Olympic Channel. I'm not a big fan of the Olympic Channel as an idea Uhhuh. But I do see how you then say, right, how do we do use Sean's phrase, lumpy revenue. Yeah. Uh, that's not only his phrase, stole that all. He's got revenue. He phones me every morning, just says revenue. Puts the phone down, runs away. Two words. Two words today. What. Yeah. How is there a solve to that?

Gareth Balch, Two Circles:

No, I look, well, there's a solve to, I think for a great great data and these great definitions, we're not auditors. So doing this list enabled us to do so, and what we thought was slightly more commercial way of doing this, IE let's show the revenue in the year it's been monetized. You know, the IOC rightly and fairly will attribute the revenue they generate from their cycle over a, over the sorry the right that they generate from Olympic games. They'll recognize that over a cycle. Yeah. And rightly so. This isn't an, this is a, this is an interpretation of their financial accounts, not their financial accounts. So the money

Richard Gillis, UP:

comes in this year and it goes out over four

Gareth Balch, Two Circles:

years. Yeah. It might, well even come in over four years as well. Right. Okay. So there's, these are different things, but in terms of like the event in which they're primarily monetizing, we've done it around the calendar seasons. Again, trying to get to a truer version of that, that, that is slightly unfavorable to those that are becoming, if you like, 24 7 or always on. Yeah. Always on consumptions and clearly there's consumption of the Olympic games every day. Someone is is caring or doing something with the para or Olympic games or the Olympic Games. So we're trying to get after that, but by definition, therefore, the IC won't be in the top 20 next year'cause of that. And FIFA will be, we're just, we're trying to push a conversation to enable us to start to think in a more sophisticated way about the Monet monetization of ip. And there's seasonality in all these businesses. Be that seasonality within 12 calendar months or seasonality within four for annual years. I think October

Richard Gillis, UP:

is the golden month.

Gareth Balch, Two Circles:

October is the golden month, two and a half times bigger than July. Yeah, just if you crudely do it on when seasons start and end and events happen, it would suggest we should put more events in July. It also correlates with July is the month where humans most want to consume sports at this point. So July is underserved globally is a, is one insight and they're the types of things we think are interesting and thoughtful when when growing things. October does particularly well,'cause all the big US pro leagues are all, all in, uh, in action in October. And European soccer is in full song, a full song at that point as well. So that's basically what's going on. Right.

Richard Gillis, UP:

Let's finish off with just with throwing it forward, and is there a direction of travel here in terms of, do you sort of look at the, this number you are assuming is just gonna keep going up or are there sufficient roadblocks to suggest No, actually we should, this is gonna be a level.

Gareth Balch, Two Circles:

where is it

Richard Gillis, UP:

gonna go?

Gareth Balch, Two Circles:

All years aren't equal, so it won't go up equally every year forever. And next year, are you gonna do this every year? We if it's well received. Okay. If it's well received, we're the ones that like to listen to our our our customers. So if our clients value it, then we'll keep doing it. We hope and think there might be some value in it. The next is probably gonna be a softer year than the initial 2025 will be a softer year than 2024 to be specific. Uh, but on average, that will kind of hold the whole, the kind of 5% CAGR we're anticipating for the next 10 years still feels like a good rule of thumb. So if you sat there writing a long term plan and a sports IP owner, if you're not doing 5%, you're gonna be losing ground on the market, which essentially affects your purchasing power or the quality of experiences. And with that all, so 5% is the key number. That's the kind of right down the middle of the line. We think that's the 10 year average. We think next year will be a bit softer. NBA will go up next year, FIFA will enter the fray with the club World Cup. This year the Olympics will fall back. NBA will go up.'cause of the media, right? Yeah. The media rights not pick next year. That's not year No. To come next year. So, so there'll be some, there'll be some, uh, sort of seasonal change, if you like in that regard. But the number's brilliantly resilient. So we're not moving very much. It's a mature market with relatively high growth. Q why? There's lots of institutional money That's interesting in sports and we see that pretty resiliently going up. And the reason that's recently going up is that we think the. The most important lead indicator is this point around over 3 trillion hours worth of consumption in sports. That number's trended up more aggressively than that 5%, and we think that sports will get more sophisticated about their monetization strategies, as we've alluded to today. And with that, they'll participate more of the value of that of that attention that they generate every year. And with that, we'll have a, an abundance of growth in our industry for a little while to come. Okay. Right. I like an optimist. End there. We are.

Richard Gillis, UP:

Gareth Borch as ever. Thank you very much for your time.

Gareth Balch, Two Circles:

Thank you very much. Pleasure to be on.