UP234 Spotify Barcelona WTF?

Hello and welcome to unofficial part of the Sports Business podcast I'm Richard Gillis. The most eye-catching user this week was the announcement that Spotify, the music streaming company, is buying up almost the entire sponsorship inventory of FC Barcelona, including the shirt of the men's and women's teams, the training kit and a title partnership of the famous Camp New Stadium. To get to what's really happening here, we brought together Tom Gray, Joel Seymour Hyde and Matt Rogan. Tom Gray is a founding member of Mercury Prize-winning band Gomez and a board director of PRS for music. Tom is waging a social media-driven campaign against Spotify and the other streamers called Broken Record, which calls for more of the streaming revenue pie to make its way to artists and songwriters. His submission to the Parliamentary Select Committee is referenced in the conversation and is available to read in the show notes. Joel Seymour Hyde is managing director of Oct. In the UK, the sport and entertainment agency with offices in 22 countries around the world, including Frucht, which is a particular expertise across music, entertainment and e-sports. Matt Rogan was a co-founder and former CEO of the Two Circles Agency and is now non-executive director and a senior advisor in sport. His new book, All to Play for, was published in 2021. And as you'll hear us reference, we recorded Matt's contribution from a car park outside Wembley Stadium, so there's a bit of road noise in the background. For more information, visit www.wembley.com/facil.com. It's the sort of detail that separates this podcast from Radio 4. And the phrase, "I'm having a nightmare in the Wembley industrial estate." is one we've all said. So Spotify, Barcelona, two massive companies in their own right, but I am wondering why they're coming together. So Joel, see more hide. Let's start with you. Give us a bit of context. What has happened this week? Yes, so this is definitely being a deal that's got everyone's attention in the last 24 hours. Really interesting brand going into, obviously, one of the most high profile clubs in the world. A club that's also had well-documented financial pressures, trying to redevelop its stadium. So clearly, an injection of cash of this scale is gratefully received. So if you believe the numbers that are being reported at the moment, it's somewhere around the £230, £140 million. And effectively, in sponsorship terms, pretty much encompasses all of their available inventory. So they're going to replace Rakutan on the front of the shirt. They're going to take the men's and women's teams for that. They're also taking the training kit. And probably the piece that's got the most attention has been the re-titling, I suppose you would call it, of the Camp Nou to the Spotify Camp Nou in that kind of joint naming venture. And we believe four-year deal. So pretty significant commercially, not mind-blowing commercially, but certainly significant. And as I say, has just garnered clearly a lot of attention because bars have affected these packaged, all of their available significant rights together, sold them to one brand. And it's a brand from a category that doesn't often make a splash in the sports sponsorship space. Were you surprised at how low the number was? It's a very good question. I guess probably the answer is yes and no. So big sponsorship deals like this are always to a degree, a combination of valuation and market forces. So there's a base valuation that every rights holder will deem their property as worth. Then ultimately, there's also market forces that play in terms of what the market believes at that point in time. The value it's in, you know, Barcelona who already had a devaluation of their shirt deal from the original number that Raketan paid when Raketan renewed for the extension, they lowered the fees. That's the first warning sign that maybe other things are not entirely healthy from the commercial point of view. Stadium deals, as we know, across the board are actually not particularly easy to sell. So there's a challenge there. Last known as a club, clearly have not had their most glorious few years, whether you look at just pure on the pitch, you look at off the pitch, you look at star players, you know, the squad isn't the squad it was a three or four years ago. You had all those factors together and you'd say, yes, it's probably a pretty good deal for Barcelona right now, but it's not, you know, as much as they would have certainly got three or four years ago, they were looking to package all those rights together at that point. So there's some economies of scale at play. If you stripped down all of those component parts of the package, you would definitely get to a bigger number without question. In terms of what they would have probably been seeking to sell each of those elements individually. But clearly, if any brand is going to come in spending, you know, close to a quarter of a billion pounds on a single property, there is going to be some economies of scale at play and therefore it's probably a deal that you'd say both parties would walk away from reasonably happy or as a colleague of mine, which says a good negotiation is one that both sides should feel slightly pissed off about and it probably qualifies there quite well. Matt, anything to add to that? Because there was a lot of, I don't want to position you purely as the data guy, Matt, because I know you're broader than that. You're a broader person than that. But take us inside this. What do you think? Let's try and second guess, Spotify's motives here. This is a big media, you know, bought a lot of media facing inventory. It says quite a traditional deal for a digital first media company. What's happening? I'd agree with that, Rich, in the sense of it's a pretty traditional deal if we believe that the bits that were leaked to the person launched the approach yesterday are all that's happening here. Because ultimately, Joel's described really well the structure of a fairly regular sponsorship deal. And the owner of fundamentally are in the process of kind of restructuring all of their balance sheet. And at the same time as this Spotify deal, they're also looking to divest some of their production studios business. Right? So just under half of their production studios business, which you believe the hype would be worth about the same amount as the Barcelona Spotify deal. And they're looking to create a relationship with CBC out of the Llega deal for their content rights as well. So there's some bright people on that board at Barcelona, clearly some really bright people at Spotify. And apparently this part of the deal with Spotify was sealed weeks ago. So there's a region that got leaked right now. And I think it's part of a bigger jigsaw puzzle in terms of Barcelona restructuring their balance sheet. From a Spotify perspective, you know, these businesses are subspecies. Are many of them coming, finding growth a little harder to come by now? OK. Tom, when you heard about this deal, what did you think? I think, you know, probably the overarching feeling was well of exasperation and sort of grim kind of resignation to this. Just put it in perspective for you guys, this is the equivalent of about five years of total payout from Spotify for all British songwriters within all of British streaming for five years. That's how much money this is. OK. So, so you start to go, oh God. You know, this is a problem. And of course, we're coming off the back of Joe Rogan that costs 200 million. A man who likes this bread lies and use the N word rather liberally. And which hasn't gone down particularly well as you've probably all seen. And it's come off the back of a million other things and at the same time, which you may or may not be aware of, Spotify present in a pitch battle in the copyright, sort of tribunal court in the US to hold down the amount of money that they pay songwriters, right, which they were ordered to do about five years ago and didn't do based on the technicality and are still trying to keep it down. So, yeah, for us as a trade as a craft, we're just exhausted with them. He seems ridiculous. He seems incapable of reading the room. And of course, what it draws the fundamental to is that Spotify don't really care about music. They are, as you say, a tech company based on venture capital and they could be selling anything and would probably be quite happily selling anything. It just happens that music is the thing that gets the market share, gets them used to take up. I'm just exasperated really. Is fundamentally the answer to that question? I find the Spotify brand peculiar because it's a bit all over the place. For exactly the reasons you say, the Joe Rogan stuff, I guess it comes with that sort of scandy Swedish sort of, there's a softening. It's not, it doesn't feel like Amazon, but below the bonnet. obviously isn't, you know, not much between them. But from your point of view, is it streaming itself? Is it the economics of streaming? Is it Spotify? What happens if Spotify get blown out of the market by Amazon or Apple? Is the complaint the same? You know, you have to understand, of course, being a musician has always been a precarious career, right? The average musician in the UK earns below. You should try podcasting time. Yeah. So the average musician earns below 20,000 pounds a year before the pandemic. We've probably lost about a third of our workforce joining the pandemic as well. We know from statistics. And so we probably, we have 50,000 professional musicians. We're probably somewhere south of 30,000 now. And you know, the problem is people always frame these arguments based on the stars and the people they know. They don't think about the people who do get up and do the job every day. And musicians are people who are fundamentally, tends to be people who have more than one job, more likely to have two jobs than an actor or a photographer, and as well often teachers and people who work in the service industries, two other professions that were decimated by the pandemic. So it's not been good. And of course, if you have dual professions, you didn't get the government's self-employed money as well. So they even fell through those gaps. So it's been very, very rough on the industry. So that's the starting position. Then you have the big old rights holders, the major labels and all of this, you sell the music. And those deals haven't been modernised from the 20th century. So you have the old mechanics of the 20th century distribution, manufacturing industry, still sitting on top of the creatives. And then you've got these tech firms on top of them, just trying to basically, yeah, you just much market share as they possibly can. And of course, these big major rights holding companies are fine. While this is all expanding, and because they are huge aggregators of rights. Right? But for the individual artist, it's a disaster. The crazy thing here is what you really need to understand is Rhapsody, the first streaming platform which started in 2001. We'll play a little game. Guess how much it cost? What to subscribe? How much it cost to subscribe? I'm going for a fibre. It costs 999. In 2001, I guess how much streaming costs now? 999. 21 years. It's something like a 40% deflationary power on the cost of one individual's music listening. Right? And that's before you consider that there's more music in the market now. The algorithmic playlisting is spreading out our listening. Playlisting creates a new type of listening that we're not used to from the past. We used to get loyal to artists and discover all of their work and go deep into their catalog. And all these kind of things. Whereas algorithmic playlisting sort of flattens that experience. We don't get rewarded for loyalty. So it, and of course they want to take you to different places because there's more commercial opportunity when you're taken in those directions. So the experience of individual artists within this system is incredibly poor. You know, per stream it ends up being about 0.0.035 ever pound. So that's about a third of a penny per stream. About a fifth of that might get to an artist if they're not in debt. So a fifth of a third of a penny might make it to the artist. So I think I might have labored this point but you can see how bad spot it is. So I guess I'm trying to, so Matt, I'm contractually obliged to say that you used to work for MTV. I did at the moment that it was much like Barcelona is now. So really big brand but not only underneath that intended direct connection with customers. And so ended up monetising it's brand in all sorts of places and had I tuned to pull it pants down. What do you make of Tom's points there? What relevance is that to sport and what do you make of Tom's basic point about the unfairness of it all? Well look over Ivan enormous amount of empathy for it and a market that's not quite consolidated that amount not far off like I see every day of show easy rich when we look at our book selling on Amazon and then we look at a royalty check down the road and go hey how does that work? So it's in less trouble than the music but not far off the publishing space. Look I guess the reality is talent in music is in much worse shape than talent at the top end of a professional sport. We shouldn't forget that not everyone plays Barcelona. There's a lot of professional sports where elite athletes struggle to rubber penny together as well. If you're not in the top 100 golfers or top 80 probably tennis players professional women or men in this globally then then you're losing money. So like it is a problem with talent generally and I see music as in even worse shape. You know one of the things I noticed recently over the course of the last few months even is you know artists I like really working hard to push distribution of their physical products so whether that CDs or tour concerts or posters whatever it might be in bundles to me directly to circumvent the Spotify's and code. So I bought a well we've bought a Bezden album a Frank Turner album both on vinyl both direct and I hope a larger percentage of what I'm paying goes goes direct to the to the artist because in a world where they can't tour they you know that's their mortgage frankly so one would imagine that most of the players still playing for Barcelona don't have the penny to rub together issue but I do wonder whether what's going on at Spotify is noticing there's a lot more lobbying from artists that Spotify sort this out and they can't run away from the court case forever they kind of find themselves thinking okay well where are other sources of talent we can access and it would provide our contact and maybe professional sport is one of them. I noticed the NFT market blew up around the NBA and I noticed that Spotify are now launching an NFT platform almost simultaneously we're taking on the right at Barça so I just noticed that pattern. What one interesting thing just to comment on on what Tom said I think just coming from the you know slightly more aware of Spotify and some of these brand challenges but probably not quite as deeply immersed in in the artist end of it is I wonder what many consumers will think of this deal because I think you know from the outside of an iE football fan one of the big probably challenges the sponsorship over the last few years has been some of the categories that have been entering you know there's been obviously betting's been a challenging category for sponsorship for a long time and there's a lot of movement towards that ending because of obviously associations of betting and my style then we've had in the last year or to the crypto explosion lots of brands and no one's heard of going into into sponsorship and also a few instances not across the board you know in every category there's good and bad players but a few instances of slightly strange crypto brands coming in and declaring themselves you know in solvent immediately and disappearing or some controversy around fan tokens so it's funny because I think a lot of fans may see this deal just at a sort of high level and go wow that's that's cool that's a music brand coming to sponsor football isn't that so much more refreshing than these sort of you know nasty betting brands or these nasty crypto brands I don't know what they do and you know possibly not really process the engine of Spotify that you're talking about Tom and I think again partly that might be part of the reason for doing this right is there's just there's a broader brand play in terms of brand exposure brand transfer which which is positive for Spotify to potentially both you know hit new audiences because as Matt said some of their growth has stagnated in markets but then also maybe address in their mind some of these you know more challenging brand perceptions they're having on the low because yeah I think what you've talked about won't hit and on people I suspect there's two interesting things that you know obviously in recent months it was a big controversy in the music world but Daniel Axe been taking his money and invents it investing in defense AI so he's he's saying if if if if you want to have the you know the happy warm fuzzies they just disappeared but other than what's interesting about this is that obviously he was making noises about wanting to buy Arsenal wasn't it a few a few months ago and suddenly this happens it it feels like something that's happened quite quickly and I think those two things aren't aren't unconnected as I understand it and I this is on sort of here say albeit from quite a good source is that Darren Dean who's David Dean's son brought this deal to Arsenal who then I think the ownership weren't interested we had that moment in we you know we're Ek and Tieri on reany had a sort of a load of Arsenal people challenge cause that went away as a story and then it's reappeared here and I think essentially they've taken the same they've taken the deal without the the buying of Arsenal story which was a bit of a non-started but I think as part of that this was this is a sort of re-tread of that I'm not sure I mean I think that's true but it's quite interesting because it all speaks to I mean Daniel Axe there's a sort of hubris about the way he runs his business and it's kind of funny it's like oh I can just take the thing that I was going to do with my favourite club and stick it on another one it like it just it's like all right go on then mate there's a point there about the brand and just while we're on it because if we throw this against the another trope stroke cliche of millennial's Gen Z aging audiences and their desire for brand purpose or to buy from companies that are doing the right thing etc. You see where I'm going whether or not actually where Spotify falls in this because it's quite a good test of that. First of all I don't know the age of the Barcelona fanbase, you know I don't know what that looks like but if it was a British Premier League team it would be 40 plus terms of the season ticket average. Likewise I'm not sure how the audience has responded to the departures of people like Messi, Neymar, that again the Neymar story of the fans following the star rather than staying with the team. There was a PSG bump in its Facebook likes and all of that. So Matt I'm picked this for me because you can see where I'm grasping for a question but there is something here about how Spotify and it plays with different demographic audiences and again how that plays into the potential strategy that we're trying to get to. So I've got no doubt that my kids, so what 15 and 12 and older kids, young adults on mid 20s have a very different lens of ethics and ethical purchases. But you and I were involved in a chat yesterday rich with somebody owns a record shop who was saying that those that come in to do the frank turn of route if you like kind of go and buy a physical product because they know more goes to end customer are definitively younger than his than his market generally. They're the what Mark Reckle first used it purchase generally. Whether that the awareness of Spotify as the people leave half of what Tom said to ethically dubious in this context as a minimum really crosses through to all of my son's mates for example yet I doubt frankly I think some of it is probably too much of a business type argument that they've not really got the heads around yet but I think it's going there. Everything I see is around younger generations is a broader context to not asking themselves why not but why why do I go to the festival I go to why do I support the team I to is opposed to just sort of unquestionally taking it from their parents because it's the way things have always been done. So I'm maybe Spotify noticed that in terms of trying to engage with different types of talent now rather than the pure music base where they're bad news is so I'm optimistic that purchases will increasingly be done for the right reasons I'm just not sure it's mainstream in the young audience yet to the extent we all might like it to be I don't know Tom's probably got more direct evidence from the kind of stuff he's been involved in. I mean there's a few different aspects to this I think a lot of like pension funds and people investing in Bailey Gifford and heavily invested in Spotify they see music and think like like Joel was saying they think it's a safe area like well it's not you know it just looks on the surface it's like a cool nice thing right and then you start doing a little bit digging you realize that there's a bit of a mess waiting for you and I think probably instinctually people are going to just go great Spotify music sweet nice football music nice that they think two things I like we just need beer and it's all set and I think that's right and that's a reality you know and it's for people like me to do the work to actually change these things but I think there's a whole like other side to it which is that if this actually does have value for Spotify it's because it actually does play into that older audience because you know streaming and streaming subscription has been something that hasn't been taken on by that older generation as fully as it could and I think there's probably a lot more room for market penetration there. In some ways a bit counterintuitive because I assumed that the people who are paying the subscription levels for Spotify are the older groups rather than the younger groups who want everything for free or are going to scrounge off me. I think there's a mistake in that kind of people who want everything for free actually because really the truth is the reason why Spotify succeeded is because people just want everything convenient they don't want it for free they just want it to be convenient and Spotify is enormously convenient and it's inarguable it's all of the music in the world and you pocket instantly I mean could there be anything more brilliant than that when we used to have to go great digging and searching for like years sometimes to find records it's unbelievable you know. The other bit I'm wondering just picking up on maths thing about kids and purpose I'm wondering if that's a sort of middle class expectation and I think that the mass of the market wants just utility and it wants the ease of Spotify and there will be a fringe it's always going to be a small fringe who will put their money where the mouth is and buy ethically and whatever. Yeah absolutely right but the thing is we got to remember is we live in the world of Twitter and everything else and whether this becomes a problem is all down to optics because it might be a minority who are ethically driven but they can be bloody noisy when they want to be right so so that's where the that's where the pitfall is and has been the pitfall all along for for Daniel and his company is that you know you make the wrong people angry like Neil Young and it ends up being global news right and it doesn't matter whether it's a middle class expectation if the effect is the same you know what I mean it's like it's he stirs up a hornet's nest which he inevitably will because he does it with alarming regularity there will be blowback and it will be felt at Barcelona. Joel what do you think about the decision to sponsor from Spotify's perspective and we've gone through that actually the brand isn't perhaps or the company isn't there's a difference between them what people perceive to be the brand at the front and the reality of the business and there's a little bit there's echoes here of sports washing I don't want to go too far with that but you can see that actually by putting yourself out there with a major global sponsorship you are actually inviting people to start to interrogate your business we're doing now in perhaps more detail than we would do normally and I'm just wondering if there's a question there in terms of whether or not it's actually a good idea to do that because Spotify could easily just have trotted on without sponsoring Barcelona. Yeah it is a good question and I guess it partly depends probably internally on a decision making process around you know effectively we always get some flat how much flat is too much like versus growth and so if you think about this as an investment to generate growth and the reasons they've partnered with Barcelona I mean you know we can debate them so the map gave some great insight above and beyond the right package of reasons why this may be really tried to Spotify you read the press releases and the things that coming out there's clearly something in general around shared audiences new audiences crossover audiences and how both can help grow each other in terms of new markets and the reach of football versus maybe maybe there's some efficiency in certain markets but also in a reach where Spotify doesn't have as much penetration which is clearly something they talk a lot you know again I think to some of Tom's points in everything they're pushing out now around leveraging artists and using as a platform for artists and all those sort of pieces so yeah I suspect in a machine of Spotify's nature and many brands of that size there is always an inherent level of flack for whatever they do and the question will be how much of that can we manage as natural noise that happens whenever we make a big investment or change the algorithm or whatever we do versus actually what this is going to help us achieve from a growth point of view because I guess you know one of the interesting things this is the way that you think about moving ahead into activation is clearly you see where they will try and go around whether it's using the stadium as a concert venue or it's bringing collaboration of artists and players together so that can take lots of different forms and shared playlists or having artists perform or create exposure for each group so I suppose one of the questions there is you know that requires artists endorsement right that and that requires the artist themselves to engage in Spotify and be part of this so you've had on one side the the Neil Young Joe Rogan example on the negative again my naivety here but maybe Tom can answer I'm assuming that there are still lots of artists who play the game in Spotify right who do you know we'll go out in front of this deal be happy to be involved you're going to see Ed Sheeran at Spotify concert the camp now and it knew next year that kind of stuff and so again in terms of sort of perception versus flack if you've got lots of big popular artists endorsing it and celebrating it and wearing a barceressy then they'll probably see that ratio as working for them I would suspect I mean yeah you're absolutely right I mean it's marketing it I mean it's just marketing but it's free marketing oh you can put me out in front of the world and in front of all the barcer fans I mean that's not many artists who would say no to that they'll have to be you know there aren't many opportunities that look like that in the world so yeah you're absolutely right I mean I still sense that there is some hubris here I think Spotify's governance if you look at it is like that classic tech thing where they have like dual share power so so so basically the CEO is effectively you know sheltered from his shareholders in terms of their voting power he can kind of do it once right is the truth of it And some of these decisions I don't think necessarily come from the most. How should we say? Sensible of commercial places. I think my guess is actually the on balance he isn't worrying about the flaky. He just thinks he'll get flak anyway. And he's, and he's, and he's, and he'll enjoy this too much to let it not happen. So it's, he loves football. And, and I don't think he really likes music that much. And, and yet, he's an Arsenal fan. Well, I'm, I'm, I'm, I'm an avatonian. The duality of the Spotify brand. So Matt, I'll correspond from the Wembley industrial estate, which I'll explain in the intro. Don't worry. They will, will place you probably. Part of this, there was a story that sort of grew up because it was Spotify, and it was a digital business. People started landing on the Barcelona database and the fan base question. Can you just unpick that for us and where you see whether it's relevant or not, or whether it's a red herring? Yeah, I mean data and databases are their most fundamental level can have a value for sponsors in many ways. Actually often can be stronger in beta videos. Something like this, if you, everyone got excited and slightly confused about the database number, the first party database number of three million that that Barcelona were reported to have. And, you know, was that valuable? Was that not valuable for Spotify? It's probably worth sort of just chunking that down a little bit. So people understand what actually means. So remembering, of course, it's Spotify fundamentally cares about acquisition and retention. And then the cost of delivery, that was said. Three million marketable people. If you assume, you know, 20% of customers already, 30% are not marketable or not in a market, which would be a target for Spotify. Maybe if they don't have disposable income, 30% are unresponsive to third party marketing. And that's conservative. Then you get down to a level of say, okay, well, maybe we're really talking about half a million people. And let's say we can convert, well, good number, be a couple of percent of that half a million. So let's say they can convert sort of 10,000 people at a lifetime value of 200 dollars, say, or $300. It's laughable in terms of potential value to somebody like Spotify. So the deal is not about the size of Barcelona's database. To that extent, it's a fairly massive, even a show of red herring, I would say, in the whole thing. That doesn't mean that data isn't useful in sponsorship, or anything like that. It just means in this instance, B2C platform, big brand, no particularly large owned audience on a global basis, total red herring. So, and the other number that was readily available, which was then matched up against that, 3 million, was the claimed fanbase. What is it? 300, 500 million people are Barcelona fans. It's a bit like the man, you know, we're all man united fans because we've passed someone wearing a shirt in the street. So do you think that Spotify, given there are data tech business, they would have had given that any serious contemplation, or would they have said, right, okay, it's obviously a big number. There's a lot of people with a warm feeling towards Barcelona around the world, but trying to get from that to driving them to be Spotify subscribers. Is that part of the conversation? I would imagine they said, look, where do we over and under index in our subscriber base across things of music. I would imagine one of those probably is sports and they said, okay, well, there are a finite number of clubs, whether you're a fan or not of a Real Madrid or a Barcelona or somebody, which clubs, which teams, which sports are generally compelling enough for somebody to want to consume content on any platform. In the same way that, you know, we've all watched some of the all or nothing. I've watched the top of them all or nothing and various NFL teams of things I'm not fans of and found them pretty compelling. So I'd imagine it's, you know, we think the sport pool that we can find in the general ether is compelling to us. Barcelona is a brand that would carry across whether an individual in Shanghai is a fan of Barcelona or not. So a deal where there's a content share, talent access, type relationship there is worth a test. I'll just push that to Joel for a minute because this is in my head because we've just done a podcast about about new entrants into the sports sponsorship market or potential new entrants and a lot of them are digital first businesses. I'm not going to get here since because you know, domestic level, but there's a large number of new brands who are coming and they're not Spotify but they are their business model is, you know, they're echoes of it and they are internet first digital first businesses. I'm wondering what that means if you push that back to a sports rights holder with their traditional package of rights of tickets and hospitality and LED boards and all of that that they're selling. There's a mismatch there between what these new brands want and expect and what sport is selling. Yeah, it's a very good question and it's one that's always very easy to look like a lullaby when you answer because it's very easy to say, you know, of course every sports rights package should be far more innovative and have first party data and an exclusive range of media rights that's available via TikTok for browse, use all times. So the reality of a sports rights package and the reliance on the traditional media side of sports doesn't really allow dramatic innovation at the moment and even, you know, as Matt would speak to far more than I can around data and how fan and how clubs collect it and then can provide it to sponsors it's still relatively primitive. I think rather than go down the route of sort of how fit for purpose a sports rights holder can be for these companies because it's it's a long question which we all debate a lot and I think we will know the short answer is of course they could be more innovative but it's it's not easy to move the tanker. The other question is why would a you know a digitally native brand that's making money in a you know in either disruptive way or they've you know they've inverted a category and they found a new way to make money why do they suddenly go back to something that. FMC G brands and supermarkets and credit cards have done for 30 years and I think there's there are lots of different answers and it does come back to some of those you know core components of my sponsorship has tended to work before so there are different reasons brand can use it in broad terms you either got an awareness problem where you want to grow reach quickly you've got an engagement problem problem where. You don't understand or care about my brand and I want to create some emotional connection to my brand or actually sometimes you've got a. Almost a reality problem people don't really think I exist they just think I exist out in the internet and I'm how you know I might trust where the am I reliable am I real and if those are some of those you know classic problems that that brands have sponsorship still remains a really effective way to solve it so whether it's a. You know I think if you look at the online car marketplace piece and in in the UK you've got a bit of a land grab for the inventory to drive eyeballs because they're at that stage of their growth where it's all about market share and once you've established market share you can start. We're doing different types of marketing and then you can have other brands where they have they want to build a bit of brand affinity because people don't really know what they're about or what they're for who they try to communicate with and then I think there's an interest in piece about real estate so one of the great things that sports rights orders provide you is real estate and that doesn't have to be in naming rights and things but the fact that you can suddenly create. You can access to an event you can give people physical tickets you can go to it you can see it you can experience you can touch it you can feel the brand and feel part of something that the brands associated with is often incredibly value on that sort of life cycle of a of a digital brands journey so yeah when you you know I think there is often that assumption that because they're innovative brand it suddenly means they must be the ones to push innovation on a rights holder. But and maybe sometimes they try but it doesn't always work that way because even if a rights holder would absolutely want to it's not that easy and I think even even when you were talking about the sort of Spotify arsenal connection we've seen this before where you know brands of countries and said we don't want to be a sponsor you know we're we're you know we're not the hubris coming we're a bit bigger than the sponsorship you know we're more of a content factory so actually we would like to buy and we've genuinely wanted to buy a new product. And we've genuinely genuinely this was a conversation we had one time we got to buy all of you a you a first media rights because we don't really want to be you know just this sponsor of the champions and then you sort of map out actually the the cost it would require to replace the broadcasters in the ecosystem to do that. And then you know sort of the penny drops in the conversation turns to okay so should we talk about sponsorship and it kind of it comes with. back and you know it could even be similar to the corporate consulting book. Exactly. Yeah. Too much ticket platform again. Yeah. And they could even have happened in this arsenal case where maybe they looked at Arsenal and trying to buy it and suddenly realize that's a two billion dollar question. And then reverted down to sponsorship because it gets them into footprint doing these interesting things they want to do. It gets in a level, you know, to the shareholder point as well that you know, although May raise eyebrows is still palatable and can be justified. So yeah, I think there's this constant wish that the digital disruptors will disrupt everything that sometimes it's just yeah, it's not actually what they even want, let alone what they're there to do. Yeah. It's very well put because there's a bit of me that thinks actually this is a good week for sports sponsorship generally. This is a this is an interesting signal. Yeah. A very forward looking, you know, 21st century brand and they've gone for as we said at the right the beginning of the podcast a reasonably traditional sponsorship route. I mean, genuinely, I'm not not not to exaggerate this since the steals announced we've had three inquiries from, you know, clients or close to clients in interesting categories who said, Oh, we've just seen that Spotify deal. Maybe we should look again about how we approach sponsorship and that's within a day. So it you know, notwithstanding, you know, Tom's points around actually the when you lift the bonnet and some of the challenges. There's no question that for the industry with a sponsorship pattern, it's a very exciting thing because it does awake probably people to think about those type of partnerships in a different way because they see brands like this going to the space. So it's a bit of a yeah, it probably is a bit of an objection of momentum into the into the industry as a whole because it just just awake people to thinking about it in a different way and thinking, you know, any kind of brand, you don't have to be a dusty old brand to think, well, this is a great place for you to play. This can be somewhere for everyone. Okay. I want us to finish off because Tom, you submitted or went in front of the select committee in the How's the Parliament and I was reading the transcript and it was very interesting. Our point people to it in the show notes of this podcast, but it ended with a quite a good tease. It said the music industry presents an example for all digital markets. Not only was it the first to digitize, but we now have a mature digital market that can be used as a blueprint for the understanding and regulation of other markets. Now one of the ongoing themes of the sports business conversation is exactly that. It's a relationship to becoming digitalized content and what actually is a fan, what are football clubbies today and how that's changing or not. But sport and music obviously there's strong links between the two and I'm just wondering this is not a question we're going to answer in the last 10 minutes of this podcast, but I wonder what you've learnt from the process because I, from a distance, I mentioned that people quite often fall to, oh sport will have a Napster moment or it won't. But you've been through it, you're a successful band in the 90s and beyond and then you've lived through this enormous disruption in the core of the industry. What have you learnt from it? Gosh, that is a very big question. Just keep it to 25 points. I think there's sort of a different thought that I wanted to put in your hands which is that actually people see Spotify the wrong way around. Use pitch this idea that they're digital disruptors but they're not. What they actually were were a digital entrencher of the old establishment. Right. That's what they did. They saved the establishment. They didn't save musicians but they saved the distribution of music for money. Because Daniel came from piracy, he ran a pirate platform. He didn't have the licenses. He did it completely illegally until he did get the licenses and he got those licenses by building relationships with the old music industry. And so sometimes people get this all sort of the wrong way around because they think it's just this industry that's been disrupted and how are you surviving it? The truth is that we had a music industry that already wasn't functioning, that already had severe problems in the 20th century. And there's also this over, people overemphasised the whole piracy thing. The truth was though what happened was these three major companies, so in the Universal Monor, were overcharging for music massively, like massively overcharging for it, which is probably where the lesser the here is for football. They were charging a lot of money for it. And the average kid, you know, when I was a kid in the 90s, couldn't you have to work for a whole day or two days to be able to afford one CD, right? Which was not. And as soon as somebody gave me the opportunity or gave any other kid the opportunity to get music for free by just clicking on a bit, or an unsurprisingly, they did it. And the reason being was that the monopolies had already started overcharging. And it was, again, it comes to hubris, right? They pushed it too far. And as soon as this opportunity to get it for free came, people went for it. Now that, those big companies just focus on piracy because they like to get all, so they came along and destroyed our business model. And of course, when Spotify came up very quickly afterwards, it was really, well, actually Apple first came along with, well, we can solve this problem for you very quickly. Why haven't you developed this technology for yourselves? They stepped in and then Spotify stepped in and Apple correctly when they first came into the iTunes store, prize music at half of what it cost in 1999 for a CD. So it went from 1599 to 799 overnight, right? Because they went, this doesn't make any sense. The music doesn't, shouldn't cost this much, right? And then of course, Spotify comes along and gives everyone convenience and total ownership. But I just think that the narrative, the narrative that is publicly told is usually one told by corporations who want to own the history in a certain way to make you feel like it wasn't their own bad commercial decisions that led to these outcomes. And this is the truth of it, is that if there is a lesson, it's, it's, be careful, be careful of monopolies, that's right, in any market. If music is a perfect sun pit for understanding digital markets, what you can see is that monopolies don't work and it doesn't help anybody. And in fact, it leads to less innovation, not more innovation. And that's bad for everyone. I'm sure throw that over to Matt. Matt, what do you think about that analysis? It's interesting, isn't it? Yeah, I agree with it. And actually, I'm sort of found myself thinking about, you know, the genesis of the super league conversations last year and things in that regard as well. Also, the, you know, the relative monopoly we find ourselves in with broadcast television for sport in the UK and less two or three things change pretty quickly. The way I like to look at this, I think, from a professional sports perspective, to say, right here is a professional team who come back to the Hubert's Point, launch their own production studio, who spent a ridiculous amount they couldn't afford on, on, on players, had a stadium in need of redevelopment, didn't really do much and ran their balance sheet up to a horrific place because, I don't know, nobody told them they couldn't, our attempt to intervene in a logical way is fee-for-fare play to the extent that Barcelona now need to make 114 million quits worth of proceeds this year in order to be able to buy anyone through the summer. And so, when you wheel the professional football clock back through the course of the next few months, you have all these assets. You talk to big game about being a media platform, private equity are making overtures to you in terms of what they could invest to support. How do they rework the whole balance sheet so they're a viable media business with private equity supports, a sensible stadium sensible amount of playing players that's fair for the players and a fair deal for the fans. They do all those things without a revolution through evolution. And this will be a really successful beginning of that, but this deals only the beginning of six months worth of balance sheet engineering for Barcelona. We might look back and laugh on this podcast in six months time if, depending on how things play out. Well, you can't often do that. I like the phrase. I'm just going to finish off that phrase that they were entrenching the establishment. So that was essentially the role that they played. And there is an establishment in sport and we all know what they are. There is a big middle, whatever sport that we're talking about. And I think it'd be really interesting. I'm not going to get into blockchain, but the next episode of this would be, well, what if things were different and what if there was a genuinely direct route between artists and fans. But listen. I've taken up a lot of your time and I really appreciate you coming on at short notice. So all Matt's come back for the list and he's been sitting in a car in Wembley car park. He was thrown out at Wembley Stadium. No, he hasn't. He was there for work. He's got a shirt and jacket on. We assume he was there for work. Joel Seymour Hyde, Matt Rogland, Tom Gray. Thank you very much for your time. Pleasure. Thanks.