Meta's former sports leader Dan Reed on three eras of achievement and change inside the tech giant

0:03Hello and welcome to another episode of the Leaders Sport Business Podcast.

0:30You used different conjunctions in the leaders in sport, leaders in sport bit. I thought I might have. I don't know you buggered it up. But I decided not to record a second version because it was going so well. It was very good. It was very natural. There was a lot going on. There was a lot going on on location last week in New York. How was your big trip? Really, really good, actually. Nice to see New York. And a really fascinating couple of days at our force conference. accounts topped and tailed by another round of attention seekers, our private workshop. And then, wow, a big night, long night at the Sport Business Awards, where the great and the good were all in one place, in one room to celebrate winners, losers, but great work throughout the year.

1:19And you had fun, did you? I had a bit of fun along the way as well. A bit of fun. I didn't see you though. I didn't make it in the end. No. Oh dear. That's a shame. That's a shame. It was a shame i was looking forward to it but i couldn't go in the end yeah it was um it was a good couple of days at force would you like a couple of additional reflections on force do you with a little bit of distance with some distance you've had some some things have occurred to you i think well i've had a you know six hour flight back to uh really think about what to stew yeah to certainly not sleep yeah um and uh we talk a lot about point one we talk a lot about the relationship between sports and entertainment and how that is becoming closer and merging and overlapping and sport crashing into all these different verticals.

2:05I think this year compared, if you compare it to the first year we did Force, which was I think four years ago now, the conversation has pretty much become a mainstream one, at least in sports industry terms. And not only is everybody talking about it, everybody's doing it to a greater or lesser extent and developing more sophisticated strategies. There's genuine ROI that is being crafted and then applied to many of these kind of cross-industry collaborations or initiatives. So we talked a bit on the podcast last week about the NFL and what they're doing in the fashion space, but also NASCAR and what it's doing in the gaming space, but in particular, the sort of Roblox Fortnite space as well.

2:49There's genuine returns being seen here. We're starting to see the end-to-end case studies emerge. And I think that's a significant moment. And I think point two, something that was discussed a little bit on stage, quite a lot off stage in lots of conversations is now, particularly with teams and leagues, they are having real conversations about who owns these kinds of relationships internally, because they are not necessarily always directly commercial partnerships. So more than any other type of partnership, they do sometimes straddle content and digital and marketing and fan experience and in-venue operations almost.

3:33So actually thinking about the ways in which organizations might have to reshape themselves as these partnerships become more and more prevalent, I think is going to be an interesting one to keep an eye on. I did venture on one of the panel sessions last week, whether we were about to enter the era of the chief music officer being hired by teams and leagues. That was, I'm going to say, gently poo-pooed by those on stage who included executives from Paris Saint Germain and the Brooklyn Nets and Major League Baseball. But they'd feel that that would fall squarely in marketing, right? But there is a sense that there is going to have to be some rejigging of how org charts look and work as verticals like music and like fashion become more and more prominent.

4:22Because all of this sort of sports entities venturing into activity in the cultural entertainment lifestyle space, if it's not directly revenue generating, and if it is directly revenue generating obviously there is an obvious owner for that all chart wise if it's not directly revenue generating like all these things right it just becomes if in doubt it's the responsibility of the marketing team yes yeah and there's a sort of catch-all nature to that but there is you know some of these things as you know particularly certain verticals i think are going to become more and more important to the sports industry And it might not necessarily be music, which is the one that everybody talks about most.

5:07It could well be fashion, both from a sort of marketing point of view, but also from a merchandise and a retail point of view. But it could also be, and it was something that Osmar Rondala talked about briefly when we talked to her last week, it could be something like art and the creative space there, which is something that we didn't necessarily have on the program last week. but could be an interesting area to explore in in the future really enjoyed when you completely stumped as maroon d 'allah uh with your question which is your favorite vertical yeah we were we were and she was floundering we were being we were being beckoned towards the exit because she did have to make a hasty uh you know hasty retreat into the and she's got some english perspective verticals nerd yeah asking her which of the favorite vertical yeah but she came up with a good answer turns out fashion fashion yeah yeah i tried my best yeah yeah any other reflections or is that the size of it i think that's the size of it um did you go to i know you went to the museum of modern art in your downtime yes did you go to the the shop in the museum of modern art yes well briefly so i think the museum of modern art has got one of the best licensing brand licensing divisions in the big art world.

6:28They do. And actually, at force. There's a lot of merch. There's a lot of merch. There's a lot of branded merch. And actually, they're playing in the same sort of cultural impact space as a lot of the sports organizations are. Because I noted the last time that I was at the Museum of Modern Art that they have a licensing deal either with the Yankees or with New Era. Is that right? Yeah. Which makes total sense when you think about it. In the shop, they're probably still there. In the shop, they sell Yankees caps, but with a MoMA Museum of Modern Art branding on the side, just subtle on the side.

7:02So you can get a MOMA branded New York Yankees cap. Love to know what the sort of, would it be a Venn diagram? Who's doing a deal with who? Well, no, no, but Yankees fans and modern art fans. What are you looking at? You're looking at one right now. Yeah, yeah. One other very tiny thing that I wrote in my notebook that won't make it, sadly, into the newsletter this week because it's not that interesting. Right. Oh, great for the podcast then. Totally. Bank of America are going massive on football, on soccer, in terms of their in-store retail displays. So it's all about the World Cup. They're really, really pushing that.

7:44You couldn't move past a Bank of America store without seeing very, very heavy football branding, which I thought was interesting given now our Bank of America are a club World Cup partner as well. They're definitely a FIFA World Cup partner. Yeah, they're certainly a FIFA World Cup partner. So well over a year out from the big one, they are going big already, which probably bodes well if you're FIFA. Yeah. Now, David, I think it's probably time to introduce our guest for the episode today. Yes. Who have we got? Well, it's worth saying, actually, that you won't be able to do this particular interview.

8:22No, I'm going to leave you to it. I'm going to give you a chance to say whether you think there's anything worth knowing this week after I have introduced our guest for today. We're very lucky to have on the show this week Dan Reid, who is one of Global Technology's leading operators, I would say. He's just come out of just over a decade at Meta erstwhile Facebook. He was the man who essentially ran sport for Facebook in its early days. He was the director of Global Sports Partnerships when he joined in 2014. A big coup for Facebook then because he was very high up at the NBA. He was the president of the NBA G League when he joined Facebook.

9:09And in his early days, there was all of that flirtation with live rights headed up by Dan and the team that he built around him, built a really strong team around him. He was promoted to the role of VP of Global Sports and Media Partnerships. in 2018. And then most latterly, he's been working in the Meta AR, VR, MR division as COO of Reality Labs. So a real tech powerhouse, delighted to bring him onto the show shortly to talk about the journey that he's been on, the journey that Meta has been on, the journey that all of these big tech companies really have been on in their relationship with sport and our sports consumers relationship with sport through them.

10:03So Dave, I've given you some time now to think about whether you think there's anything worth knowing before we get Dan Reid on. Yes, I think what's worth knowing and certainly what's worth keeping an eye on at the moment in the sports industry is Italy. Okay, what's worth knowing Italy? Well, some big things are happening in Italy. They've obviously got the Winter Olympics coming up. They've had this fantastic finish last weekend to the Serie A season with Napoli claiming the championship and all those now somewhat stereotypical scenes of every firework in the world being set off across Naples.

10:36They are absolutely dominating both from a playing and executive level. The world of tennis at the moment and the French Open has just started with Yannick Sinner back from his drug span as world number one and probably amongst the favourites to win that tournament. But they are also making waves, pun intended, in sailing. And a couple of interesting threads to pull together here. We have Anne Hathaway buying into, well, part of a consortium that is buying into SailGP and acquiring the Red Bull Italy SailGP team. By the way, just to insert here, have you seen Anne Hathaway's sort of growing fandom of both Arsenal and the New York Knicks, it seems?

11:26I haven't seen the Knicks, but I've seen the performance she gave of North London Forever. Performance being the operative word. Very sombre. Yes. Yes. I think she's sort of a Marmite character when it comes to people. I think so. We'd love to have you on, though. No, great. I love her. Yeah. but her sort of out and proud sports fandom is attracting as many detractors as it is fans i would say well standby sailing fans because she just bought a sail gp team and the italian one at that uh italy will also host the next edition of the america's cup that was announced last week so naples the aforementioned naples will be the host uh that's a deal done between team new zealand the holders of the America's Cup and organisers of the next one, and the Italian government.

12:14And we shouldn't forget from a sailing point of view that Ferrari are also quietly building away a sailing programme for, I think, offshore races, possibly sort of round-the-world affairs. That was an initiative launched at the start of last year, and I would expect to see some results of that reasonably soon. So Ferrari are coming, Italy are coming, Anne Hathaway is coming to the sailing world. But yeah, I think Italy might be the sports nation to watch at the moment. Forza. Forza Italia. Very good. Very good. Anything from your side? Well, I had thought that maybe I would talk to Dan about that, but I'll give you a little sneak preview.

12:58And that is... Well, you don't need to. You don't need to. Why don't? Why don't? I leave you to it and you speak to Dan Reid. Okay, now delighted to be joined here by, until very, very recently, a senior leader at Meta. It's Mr. Dan Reid. Dan, how are you doing? I'm doing great, James. How are you? Really good, thank you. Really good. Dan, when was your last day at Meta? About a week ago. Okay. And what was the process like? You know, you've been there for 11 years. um you you wrote your obligatory uh linkedin post uh declaring an end to your also on facebook and instagram james come on man obviously it was one of the one of those platforms first just sort of pasted across um yeah what's the process like of leaving a kind of giant like meta you know i never thought i'd be at meta longer than i was at the nba uh 11 years almost 11 years uh at meta versus almost 10 years at the NBA.

14:04And, and, uh, I think that the, it wasn't so much, there wasn't so much, um, a bunch of unique things about meta per se as a company, I suspect, you know, you clean out your desk and you transfer your files and you do all those things. I think it's just like 11 years of relationships that you build up and memories that you have and gratitude you have for the experiences there. So I really spent a lot of time, uh, just meeting with people to say thank you and how much I enjoyed working with them. The people at Meta are truly amazing. It's one of the most amazing collection of people I've ever worked with.

14:36And so that's really how I spent the bulk of my time. I will say maybe the unique thing about me at Meta was I had a lot of devices. I had a lot of proprietary. I worked in reality labs where we you know we we make vr and ar and ai wearables and these sorts of things and um i had a lot of prototypes kicking around the house so uh and my in my desk so i'm still rummaging through making sure i return them all that might be the most unique thing about leaving a place like meta for the job that i have yeah do they do it do they do an exit interview is that something they do um i didn't do a formal exit interview uh but i you know i certainly chatted with a lot of people as I went out and we talked about exit interview things at times.

15:24But no, not a formal exit interview. Not for me anyway. And now, of course, you're banned from the building. You can never set foot back inside and all of that sort of stuff. I'm going back. I'm going back for the food, to be clear. That was part of my exit process was, you know, Metta famously is known for having abundant free food. And I hit all my favorite spots. I had multiple servings. I probably gained five pounds in my last week. So I do intend to go back and partake some more. I still have plenty of great relationships there. Yeah, very good. Yeah, keep the canteen on side. Very good. Dan, when we were going back and forth ahead of this interview, I asked you whether it would be a good idea or how to frame basically talking about 11 years at Meta in different positions.

16:12And I asked, you know, whether a good question would be, for me to prompt you to reflect on the good, the bad, the ugly, the challenges, the achievements, etc. And you came back saying, my goodness, that's a lot to cover. Maybe we can take it kind of era by era. And you basically explained to me that you see your time at Meta in three distinct eras. So first of all, building the sports business, the opening few years of your time at Meta, then expanding into entertainment and product, and then more laterally as COO of Reality Labs and in the kind of wearable pioneering space that is wearable. So I wonder whether that's the way that we should tackle it then.

17:01Let's just go era by era and ask you for some reflections like that. So era number one, the opening years, building the sports business. What was the brief when you went into Facebook as it was there? And how do you look back on that era now? You know, it's a great question because there wasn't a clear brief when I joined. You know, you have to remember this was 2014. Facebook had just bought Instagram and Oculus. Facebook had just launched video. That was the summer of the Ice Bucket Challenge, if you remember that. That felt like a very novel thing, right? Like, oh, video on social network on your phone.

17:42Wow, that's really crazy. And I think that Facebook was starting to get into relationships, working relationships. Really, the relationship was just, hey, athlete, will you post on Facebook? Will you post a photo? Remember my first week, Tom Brady posted a photo of his resume on Facebook, and that was a big deal. uh and um and so the brief was really can you help us figure out what we should be in the sports space you know that was really it was that broad um it was clear we needed to manage these relationships and develop partnerships it was clear we needed to build products that fit for the sports industry that also made sense to support facebook business um and there was really no one in the building who had that expertise at the level of seniority with the level of relationships and knowledge that, uh, that they felt that I had coming in.

18:42So, uh, that was a bit of the brief, I suppose it was a bit of a blank canvas on a platform of a billion and a half people at the time, uh, which was super exciting. And, and so as I think back about those few years building that business, uh, I'm really incredibly proud of what we built, you know, a lot of the foundations of how the sports entertainment industry work today, we helped pioneer, um, you know, the notion of athletes engaging directly with their fans and building a business of building their own businesses, largely based on their social media accounts. That was not a thing when I joined in 2014.

19:19That was part of our vision though. We, we, we viewed, there was a major opportunity with Facebook being a people platform and Instagram being a place for, for creators to build even in the earlier days. And so we really worked hard at making that a reality. And that seems like it's been reasonably successful as it's really changed the nature of athletes' relationship with their fans, athletes' relationships with the media, and so on and so forth. The notion of streaming premium live sports events and premium content on digital platforms. We were one of the first there as well, where, and we can talk more about that.

20:01I'm sure you have lots of questions about our forays in that space. But that was also a very, it was unclear whether or not a company like any of these companies were going to enter that space. And we were one of the first and we solved a bunch of problems. We figured out, okay, well, how do you get the rights? And how do you reimagine how to produce these games in a way that feels native to our platforms. How do you figure out the monetization? How do you figure out the technical challenges of streaming on that type of scale? We were one of the first to do it. Super proud of that. The creator economy and the importance of creators to distribute content and as an alternative, both distribution and monetization vehicle for the industry, we helped bring that along.

20:49So, I mean, I think when I think back in that period, In many ways, we helped redefine how sports content is produced, monetized, distributed, consumed across the board in a really fundamental way. And, you know, when I joined Facebook, I thought maybe there was a good 5 % chance that we could do, you know, stuff like that. And I was really, really pleased and proud of what we accomplished in that run. I would say the other thing I'm really proud of is the team that we assembled during that time. And we put together what I still believe is the best team ever assembled at the intersection of sports and tech.

21:26And if you see what people are off doing now and how their careers are growing across the industry, it's really, really cool to see. and we had a powerhouse team at the time there which allowed us to to get a lot of those things done and you know our fingerprints are over a lot of the products that meta ended up launching during that period whether it's live stories reels branded content all the monetization tools you know we were in the foxhole with the product teams making sure that those those products were not only successful with consumers but successful for the sports world and for the industry and for the fans we'll move on to uh to the sort of the later eras um but i did want to go into sort of double click on if i can use that awful expression um in that that first period i remember there was so much excitement across the sports industry when it was clear that facebook were taking a strategic move into sports when they hired you right and you started building out a team even if it wasn't exactly clear on you know what that looked like you know you were there to work it out.

22:37But clearly, most of the excitement was directed at the possibility of Facebook being an active and powerful player in a media rights buying market. You know, new blood, new money into this ecosystem. It pushes up other entities' bids. And I guess, and you brought in Peter Hutton, for example, who's very seasoned and storied in that kind of world. And you did dabble a little bit in the rights game. You know, you talked about going into streaming. It wasn't necessarily always attached to big rights fees underneath that. But tell me about the strategic journey that you went on when it came to building out a business model with sports media rights attached.

23:26I remember exactly what year this was, but it was around the time we had launched Facebook Live. And as a company, we're really looking to grow in video. You know, YouTube still is by far the largest video platform in the world. But at the time we were maybe second or third. And we were looking, you know, to sort of get closer to YouTube. And it was clear to Mark and the company that even though the sort of news feed and the news feed and sort of the Instagram feed were full of photos and text at the time, that video was going to eat that space. That was very clear. And so we were really looking to see how can we grow in video.

24:08And we were doing all the, you know, all the, the, the smart things, thinking about how we partner with creators at scale. Um, we were getting into original content. Um, you know, we were doing a lot of product work to improve distribution, improve discovery, all of these things. Uh, we need to build monetization tools to incent content creators to produce content. Um, and as the sports guy there, uh, it was pretty obvious to me that there was a huge opportunity in live sports and premium sports content. Uh, you know, one of the first insights I had joining this company, uh, was that, you know, you know, this isn't an insight to people in the industry, sports are fundamentally social, right?

24:52The experience of watching us of live match or consuming sports is just better with other people, whether that's talk radio or actually, you know, visit, you know, being in person, uh, in a stadium. And, uh, and also we were the leader in digital live video. And so it was like, well, this sort of makes sense, guys. We have, we're the leader in life. We want to, we want to differentiate ourself in life. We want content that is social that plays to our strengths and we want to win in video. And every year, you know, the top 100 TV shows in the United States, 97 of them are live sports events or something.

25:26So it was like, you know, Hey, this is, this is, this feels like a really good opportunity for us, uniquely for us. And I know other players hadn't gone into it, but it felt like an opportunity for us and um and so we we it was a it was a pretty hotly debated internally uh because of course it's also very expensive and um and it's very it was a big departure from the historical business model that the company had which is we could content for free uh and you monetize it extremely well across a broad range so there was a lot of skepticism about why would we pay billions of dollars for content that we don't own rights to in perpetuity.

26:10And so there was a hot debate. It went all the way to the board, actually, where eventually I was able to make the case to the board. And we did get a sign off to do some experimentation, which involved, of course, hundreds of millions of dollars to buy. And we bought rights to UEFA Champions League in Latin America. And we worked with MLB to get a game of the week during the day in the United States. And we did it not just at the premium level, but part of our thesis was there's a huge opportunity in the sort of medium and long tail of rights where properties were losing their distribution on traditional broadcasting platforms.

26:51And so we probably had 20 partnerships that we were streaming various things. We were also producing original content like Tom vs. Time and Ball and the Family and things like that. and you know and it was you know ultimately it played out the way that i thought it could we were growing in our watch time we were even though we didn't have all the product tools we needed from monetization standpoint the math clearly could have penciled had we continued to go um you know ultimately at the end of the day it was just too much of a departure from what is one of the greatest business models in human history which is what Meta has had which is that this free content that perpetually self-generates on a massive platform and paired with highly efficient ad products that capitalize on that cost advantage by bringing ever more efficient ad solutions to businesses who haven't traditionally had the tools to advertise small businesses I mean that's the secret of Meta success and while this made a lot of sense for us at the time the bar to make the investments we needed to make it successful was just too high when you're competing with the greatest business model of all time one of the greatest business models and and so you know ultimately that's that's why we ended up retreating um is the the product teams in particular across consumer and monetization were just looking at the stack breaking of opportunities and working with me and And I can't say that they were wrong.

28:25I'm really proud of the swing that we took and everything we did. And again, a lot of the things that we pioneered, like I talked about before. But I certainly think from a company perspective, as a shareholder perspective, the company's done pretty well since then with that business model. And I can't fault it. But it was a really fun time and a fun run. And I learned a ton. I love that an experiment, a test and learn process can still be worth hundreds of millions of dollars at an organization like Facebook. It's amazing. Do you see maybe that hot debate being had again at some point at Facebook?

29:02Obviously, as different kind of mass amalgamators of communities, right, which is what Facebook really is. There are now serious competitors. and all of them are looking at sports rights in some way, shape or form. Do you see that debate being had again in a slightly different era? I think it's possible. One of the best things about a company like Meta is things change quickly. It's amazing that a company of that size can pivot on a dime, whether it's for what we've done with Reality Labs or what's happening with AI right now. There's so many past instances of this, So I wouldn't put it past the company to sort of re-examine that space.

29:45What I'll say is the thesis behind it, which I still think is an opportunity, is someone can come in and play in this digital free-to-air space. All the activity happening with digital platforms are largely behind paywalls. And I'm not sure that that's ultimately great for fans in the long term. And in the history of sports rights, you've always paired that with a free-to-air model that really grows the audience for properties and clubs and then brings them down the funnel where you can sort of monetize them more heavily down the road. And you could argue that actually Instagram, Facebook, TikTok are those platforms today, right?

30:27It's short-form highlights and it's creators and it's video games. These things are now sort of the top of the funnel, if you will. for sports, but I still think there's an opportunity for the actual matches, the actual premium content to be at that top of the funnel free and widely available. And so I still think that Meta could play that role. YouTube could play that role. And, and, you know, that's almost about it, at least in terms of the broadest scale you have in a purely digital space. So, you know, I still think the challenges exist, that it's hard to be convinced to make that level of investment with the business model being what it is.