Inside Edge - Peter Hutton on Cricket, India and the rights market

32:28it's a multiple way and we want to encourage people to publish around our sport because actually that amplifies our sport and our sports stories so i think that that's a really important attitude to bring there's a question there about how sports that a lot a lot of that depends on the athletes not making a great deal of money so the cost base is more controllable and how you get from here to there. So if that is a, you know, and nothing is, there's nothing, there's never one solution. But if that is part of the solution, then if you are football, if you are cricket, if you are rugby, if you are, you know, sports that have grown on media rights valuations and therefore you've got a certain economic factors of which player pay is a significant amount and that's global market or a European market or whatever it is.

33:21How you get from there to a PTO model, which I can sort of see lots of upside to, but they're starting in a completely different place, aren't they? Yeah, but I think the same attitude is right in that you want your stakeholders, whether those be fans or players or influencers or everyone to badge them, you want them to be talking about your stories. And therefore, the more that you can fuel them to talk about their stories, the better. you know again conflict of interest but i have a lot of them um you know i work with this firm greenfly and greenfly is all about the flow of short form digital both video and stills to athletes and to influencers or from fans to organizations and it's about getting the right content seen by the most people in the most authentic way you know if you can get um a a footballer to tell the story of his goal on social media or to show his life behind the scenes.

34:21That's got way more impact than a team or a league posting content. So getting it to people who care to post authentic, show stories that show emotion, I think is a really important philosophy to put behind what my next media distribution strategy is, how I win people through. We were talking before we went on about how 8 to 13-year-olds is always the key market. I remember sitting through a presentation with Manchester City where they were like, all our focus is on 8 to 13-year-olds because your tastes are so shaped by that period. And what you respond to is clearly genuine emotional moments told by people that you trust or care about and that amplifies your instincts.

35:11So the more that you can unlock those different ways of telling stories in a way that still feels authentic and natural, that's how you build fandom and areas of interest. I think that sounds really convincing. I also do wonder if that's sort of an easier strategy for a small sport like a triathlon to adopt where there is not a lot of money in it and therefore any kind of growth you get is kind of good growth. Whereas when you're a much larger sport like cricket, there's this, which I think is in a really difficult position as a large sport but not a dominant sport outside of India, is that you start to worry about, well, if we don't police that and we let that go, then are we basically like, are we threatening our own revenue we do have?

36:01I think it's different with respect in that, You look at a lot of the broadcasters now, and I hold up people like Dave Gibbs, who's now at Sky, and TNT was at Sky. Listener of the podcast. And you get all the best people. And they sort of wrap their arms around this idea of other people publishing because they know that it's driving interest towards the broadcast product. And actually all boats rise if you can get more people to care about something. and while I'm a bit wary of saying you know the broadcast right of x is dependent on how many people actually watch it because obviously competitive tensions are a big part of it the more that you can get people to care about a sport and its story the more people will watch the live broadcast the more that drives revenue um so you know I use PTO as a very easy example because no one expects big media rights fees, although it's nice when we get some.

37:02But I still think that same philosophy is right in terms of how do you get people to post interesting content? And interesting content is often emotional content where people care about something or you get an insight into an individual. So the skills of storytelling are changing all the time. And one of the things that I loved about my period at Meta was that I went in with all these sort of conventional broadcast attitudes and normally I was 100 % wrong. And I had really good people like Jerry Newman, who's now at PSG, or Dan Reed, who was sort of my mentor at Meta. And they could point to the data that said, actually, this is a much more efficient piece of content.

37:48You know, this drove the interest. And it often wasn't highlights. It wasn't teams and leagues posting one minute of goals. it was completely different types of storytelling and and that was a really great sort of learning experience before we jump into meta which i know richard is particularly keen to grill you one i just want to sort of just sense check this and say when you see examples of the governing bodies in cricket or formula one hiring lawyers to take down what are unlicensed reproductions of broadcast coverage from years ago or trying to stop drivers saying things and posting on social media is this the kind of stuff that makes you put your head in your hands and go oh guys here see the bigger picture um yeah you know again i wear sort of different hats and i can sometimes see the piracy on podcast um yeah okay but um but but yeah you know i i saw a post um i'm a big rugby League fan saw a post from one of the guys that I follow in Australia who's always posting sort of archive clips and he sent out the note going sorry guys I've just been closed down basically and you're like really you know that that was great content and it you know genuinely helped me fall in love with some of the old stories of the sport again and you know I think that is a waste but it's more about how do you find these guys and and wrap your arms around them and say okay let's do this together you know you're clearly a very efficient storyteller you know that NBA video science story the the punch line of it in many ways is that the NBA don't just look at what the numbers are but they go actually who's the really good creators out there and now how do we feed them how do we bring them into the system give them access to games give them access to stories and encourage them to publish it's also a sort of a bit of a success factor isn't it I mean there's a lot of sports that would love to be pirated and you know because it's a it's a sense of demand in the marketplace that isn't being tapped and we can have all of the sort of you know we've had series on piracy about the spot of either sports napster moment and all of these things but actually when you fundamentally get down to it there is something there about okay this is a barometer of demand and and you know yes it's it's sometimes it's problematic sometimes it's you know organized crime doing it and sometimes there's you know it's someone doing really great things with rugby league clips so it's a sort of mixed picture but actually it's actually quite focused on a few big sports quite a lot of the time yeah i think honestly it affects everybody in terms of every sport gets it i think there's a big difference between a live stream being um pirated and and clips and storytelling you know and clips and storytelling is often done by genuine obsessives who have a knowledge and a feel for the stories that just you know is way better often than the people who have official jobs in the space right so talking of genuine obsessives alex balfour who was a previous guest on here and he heard you were coming on the podcast and has put a forward a question which i'll again i'll because it's sort of linking to what we're saying so i just want to get it in here we go hello peter and inside edge interested to hear peter's telling of the story of meta's attempts to acquire bcci and particularly ipl rights how close they got how serious they were whether you think they'd ever enter the market again yeah as ever alex asked the awkward question i have to say i just want to do a bit of sort of fangirliness in that I'm a massive fan of Alex, have been since like the early days of Crick Info and listening to that podcast you did with him was just such a brilliant sort of moment for me because I'd sort of grown up as one of those early Crick Info users and obsessives and you know what period that I've now completely forgotten the question but in terms of meta and IPL I can happily put my hands up and go it was all before i i joined which is certainly the story of everything that meta ever did that was wrong it was all before i joined um uh i think you know there clearly was an interest and meta clearly looked at acquiring sports rights and we did a little bit bits and pieces as trials but it definitely didn't fit into the meta business plan you know where meta fundamentally is a platform it creates tools that it wants people to use.

42:25It doesn't see itself as a content company. If it was a content company, it would be policed in a different way. And they all want that. But I think fundamentally, the advertising sales is different. And this is where it's fascinating to see some of the things happening on Google now, in that meta fundamentally sells by audience and demographics, so you can buy a 14 to 16 year old who lives in a certain postcode, maybe you shouldn't be buying 14 to 16, not a very good example but um you can buy a certain demographic in a certain postcode and you can't buy the content that they publish against so when we bought for example champions league rights in south america for meta we had a major problem with heineken who were like we always advertise against champions league we were like actually technically we can't do that but you can buy football fans in brazil who likes the champions league and that is a really big hole in terms of sports monetization because the value is in that brand association with the premium sports brands so circling back to the question i think instinctively for now i don't see meta doing that i don't see them being a buyer of sports rights because it changes their whole to the financial advertising structure you could see them making investments as they are doing around things like nba and vr which is in the x stadium app in the us or you could see them doing deals with the UFC or you could see even deals with sports that could use the Ray-Ban glasses, the meta Ray-Ban glasses.

43:57So there's marketing deals there, but that's not content acquisition deals. And if content is part of the deal, it's not the bit that drives the deal. I hope that's clear. What is now possible with YouTube and the Kaze TV example in Brazil, I think is an absolutely different route and actually is fundamentally much more exciting because it starts to give rights holders or agencies representing rights holders the opportunity to sell advertising against the sport in a more traditional broadcast sense and therefore you can unlock premium monetization which is why kaze tv in brazil just basically bought fifa rights to put on youtube and so that route i think is is definitely possible i don't see it in the dna at meta but meta is an incredibly smart company that read the data that change direction all the time so you also shouldn't write them off did you go in thinking one thing and coming out thinking another oh totally because i remember when you went there and people made a whole load of assumptions of which you'll be very familiar in terms of well this is going to be okay peter with his backstory They're going to open a checkbook.

45:12They're going to become more like a television company. And you had to answer questions around that, around every conference and every area. So and I was always interested what sport, what the conversation was the other way, what what you were talking to internally about sport and whether actually you were selling sport into Meta. And if you scroll back, what cricket, you know, selling cricket into Meta seems like an interesting pitch. oh look the the good thing and and again i was able to use it a little bit in this last sort of cricket world cup period was that you saw incredible data about what sport people liked and what sport people were engaging with and one of the reasons that i was always quite bullish about cricket in the u.s was that you know we looked at numbers that clearly said that cricket was in the top 10 sports in the u.s by numbers of people who cared about it as their primary sport and you know and that was heavily about students and it was heavily about quite a younger demographic but also a successful older demographic as well so you know meta was brilliant at showing you what people cared about and you know someone like alex does a load of work now looking at that sort of data certainly i think you know the sports group that we built up which was about 50 strong at one point and now is probably about 10 people we were permanently advocating for things we could deal with sports.

46:35But that's a tiny amount of people in a company the size of Meta. And the business model is so strong, very difficult to make people change their opinion as to how Meta made money. And fundamentally, it's an engineering company driven by people who care about engineering. And therefore, decisions will be made for those reasons and making the platforms better, and seeing the data that drives those engagement. You know, Alex Schultz, who runs marketing there, You know, genuinely one of the most impressive people I've ever met in terms of his knowledge of how to look at data, come to conclusions, take the right steps on the basis of that.

47:14And we couldn't convince that sport was meaningful enough. One of the things that was most damning was that there's a load of A-B testing within Meta where you say, OK, person A received this content and behaved in this way. Person B received that content and behaved in another way. and you saw no increase in time spent by people who are receiving premium sports content compared to people who worked it was just substitutional you know they spent the same amount of time on the platforms and that meant you hadn't got a very strong argument for making content investments as well as all the other negative reasons for that space it was a fantastic learning experience you You know, and it was really, you know, I think it was necessary for me in that I'd worked in pay TV for so many years.

48:04And you could see the writing on the wall. You could see the decline happening. You could see the layoffs happening. And I think it was really important to sort of understand a little bit more about people's behavior. You know, and I instinctively recoiled from a load of it. You know, I remember we were in one meeting where they suddenly said everything is going to be about individuals posting content, not organizations. and from a sports perspective you're like what like we're not going to pay the nfl guaranteed money for putting on highlights and of course they were right you know in that the numbers didn't go down and the sports organizations largely kept posting the content anyway because they liked the results of posting content so you know big learning experience and a fascinating thing to go through that's a really uh slight unsettling story i think and probably because I'm having the same reaction now as you had in the meeting.

48:55So can I just check a couple of things that I've understood them properly? So when you, because we've fed this narrative of how basically sport is saving TV networks because they are one of the few remaining, this is the phrase we use, appointments to view, you know, guaranteed audiences because of fan loyalty to players or clubs. That didn't move the needle at Meta at all. No. I mean, you know, we certainly got some great numbers, particularly around the soccer that we showed in South America. But overall, on a worldwide basis, looking at all our sports content, you know, it was generally, you know, it was it was nice to show, but it wasn't neat to show.

49:38And I don't want to be seen as sort of decrying the value of sport generally, because I think sport does so much stuff that changes the way that you consume media and you move to platforms that show your sport in the best way. So, you know, it's not necessarily one simple story, but we certainly couldn't make a strong enough argument to change policy at Meta. To acquire something really expensive. yeah and if we'd have shown that there was a real financial reason for doing that then meta responds to data so you know but therefore i sort of reached the conclusion we're at i still think the the platforms you know whether it be facebook or instagram increasingly whatsapp are really important for sports organizations to work with because they're brilliant ways of reaching audience but it's not necessarily about being a platform for live rides well Because the thing I want to know now is, well, if sport didn't really move the needle at meta, what did?

50:41It's authentic personal content, right? And Facebook groups is an incredible tool where you're in a group with your friends talking about something you all care about, whether it's about your year at college or whether it's about all loving making honey. And those communities stick together and there's like this sort of desire to share what you care about. Cricket is a brilliant example of that. The amount of Facebook groups about cricket was staggering. And, you know, you see that shared love and the idea of building a community space. You know, that's what really works. And it's talking to people you care about, about things you care about.

51:25And that authenticity is hugely valuable. there's the institution level but there's also the sort of what fame is now question and the honey influencer to carry on your analogy but just as in there is what it means for cricket players you know and we again people lapse to the Indian superstars the Coley case study of you know how many followers they have but actually you can see other models evolving that play to that those communities in in different ways and it's a sort of across the board you're seeing interesting things happen to fame sporting fame where you've got almost like a it's almost an old-fashioned fame of like a 1950s film star fame they're just separate in another world but then you've also got a much the youtube fame and you know instagram fame is different people feel much more connected to them in a way that, you know, there's a space there.

52:24And I don't, the answer doesn't have to be, and what do the ECB do about this, you know, or what do the ICC do about this? But actually, it's quite an interesting landscape now. Oh, look, I think one of the case studies I throw out there all the time is what the USPGA did, right, where they made a part of the prize pot relative to your social media engagement, you know, so encouraging their biggest stars to tell their stories. You know, having just watched Happy Gilmore 2 this week, you know, incredible to see Scotty Scheffler and Rory McIlroy and stars like that as part of the story. But a brilliant way of touching another audience, hitting a younger demographic, you know, and all credit to golf for thinking in that way.

53:06And it wouldn't be the sport that would normally trip off my mind as, you know, sort of being so youth friendly and forward looking. But great, great work. and would it have happened if Liv hadn't have come into the marketplace but the USPGA tour thing the social media money was before Liv right it showed that they were thinking about it before Liv came okay this is a really good because I thought about golf while you were talking about so it's great that you brought this up and this sort of goes to think about authenticity because instinctively when i hear that the uspga are linking prize money to social media stuff it's just not cool is it meanwhile i've watched like everybody else i've watched bryson bryson's youtube channel and like the most authentic things it comes across as a happy accident yeah i mean am i just am i am i just an idiot here where i'm thinking that this is i think those are two separate questions mike well we can run a poll on that um at the end of the episode but um uh i was instinctively expecting btu to say that to then go on to criticize uspga and say i think this is just what happens when governing bodies get involved in something that they really have no part in but then actually went the other way and said actually that they are they saw this early and they're they're doing some good stuff um and it's just this is now obviously just challenging another of my assumptions which is precisely what we should be doing on this podcast yeah i do want to go back to almost like to the beginning where the question of what cricket does what the difference of cricket is in the sports marketplace and what it was then and you were sort of patient zero for img in india and then you've got this you know that that period of the sport the sort of 20 years of pay television essentially what was cricket's job at that point compared to other sports compared to football there's geography in there but it it feels it's a different shaped thing I'm just wondering what the I mean that the India story was clearly remarkable and I lived through some amazing times there you know and yes I was like the first IMG person on the ground but clearly a load of work was done by people like Bill Sinrich and Andrew Wildblood and Gary Francis and Simon Wheeler before I got there.

55:31You know, and I arrived as the first person on the ground purely by accident in true sort of history stories in that, you know, I got sent out there as the add-on to a bigger deal where Sinrich had done this deal with a BCCI and then sold it to ESPN where we would cover all the cricket play in India. We would sell it to ESPN and we would also make a weekly highlight show about domestic cricket. and obviously in classic sort of built-in rich fashion, he agreed to this and then thought, how on earth are we going to do this? And the answer was to take me from producing Football Mundial and he said to me, you know, what do you think about India?

56:10Do you like cricket? And I'm like, yeah, I love cricket and I'm great with India. Obviously, I'd never been to India. I'd been to Indian restaurants. That's the closest I'd been. And he's like, okay, go to India. And like three weeks later, I land in Mumbai and end up spending the next eight years of my life in India. And the bit producing Indian cricket was some of the worst shows I've ever made, particularly the stuff in the first year, because there was no freelance cameramen. There was no freelance equipment hire people. There was none of those sort of tools that you sort of expect to find.

56:46And we sort of cobbled together stuff. And there were some very generous people helped me in that first year sort of make anything happen um you know including harsha bogley the commentator who worked on those first few shows and we sort of got through it and pay tv in india exploded as star and espn fought over the territory and we were in the perfect place on the ground and you know i ended up sort of living it and uh mark lynch came over who then who produced all the cricket out of pakistan and you know, who now sort of has done all the biggest cricket events in the world as a director. And we built this sort of little team with a load of people taking their first jobs.

57:29Mish Partisaria was our first hire. Hemant Butch came in, who's now directing the Legends Cricket in the UK this week, you know, and just built this incredible IMG office, which exploded from being one person living in a backpacker hotel to something like 100 plus people within two or three years. and the value of cricket in that period just exploded because you've got this competitive tension and a belief that India was a future huge market and all of a sudden it worked. It's interesting. The way you frame the sort of history of it is a series of competitive rights markets, isn't it? Yeah, I think it's really important.

58:07One of the things that galls me even to this day is you get some very expensive consultants, some of whom hire me, to write reports getting the value of our rights is x because of this advertising spot rate or you know this amount of audience then you know the value of your rights is what a broadcaster is prepared to pay for them and it's nice to have a load of evidence going in but if you have the only buyer and they want to pay you one dollar it's pretty difficult to you know build your own store maybe slightly easier now i've got one more question which feeds directly off that um again which kind of circles back to where we started you talked about the potential threat of a lack of competition in the Indian rights market and we talked about the NFL as a possible comparator because what they have done is split their rights across an insane number of packages with different rights holders what do you think the prospects are of something similar happening in Indian cricket yeah it's a really good question right because the the sort of numbers that you need to spend as an exclusive buyer of an indian cricket right is so huge that it's pretty intimidating even to the amazons and googles of the world and you can certainly help draw people in by doing smaller deals you know amazon going into australia and buying the cricket world cup right it's a good example of you know at least it allows them to test the market understand what the demand for cricket is so you know that fracturing can help create a competitive market but also help bring new buyers in for bigger deals as they learn from the data of smaller deals as a fan i find it intensely frustrating and it's bizarre to be in the us where you've got this incredible major league soccer deal with apple where all games are in one destination which in theory is great if you're a committed fan and rubbish if you're not because you know it's one big extra subscription so i think you can argue for fracturing the market is sometimes very good because it can bring new players in and bring new audiences with them and fracturing the market also has negatives in terms of if you're making it more difficult to follow the story year round then you you're going in the wrong direction and just finally just that when you talked about facebook sorry i'm meta and again we're not now as we used to putting all the platforms together and assuming us you know the same strategy when you look at youtube and when you look at amazon and apple you see quite marked sort of differences in some cases yeah definitely and and i think you know google fundamentally has a lot of the same instincts as as meta in terms of it's a provider of tools and it wants people to use the tools.

1:00:54But I think what YouTube TV has done in the US, which is basically a pay platform, has given them a taste for the other sort of business. And the way that they've allowed their rules to have an ability where you can buy out your own commercial airtime, I think that opens up all sorts of possibilities for influencers and for third parties. So, you know, Google's definitely a different look at it. The Apple situation, I'm fascinated by whether they get this Formula One deal over the line in the US because I think they need another sports deal. Otherwise, it's been very quiet for a long time. And I'm absolutely fascinated by the way that Amazon work because it's clearly far more strategic and they move in, they move out, they develop their prime numbers, they've got a clear purpose.

1:01:41And again, Netflix is a different story entirely. Netflix is moving to a two income situation of subscription and advertising. and sport is a brilliant way of bringing their advertising numbers in with people betting on horses that you know. And, you know, Netflix already has a huge audience in India, massive footprint that they could potentially be out there long term, although I think their instincts are still not a broadcaster's instincts. They don't want to do three, four-year deals. They want to own things. They want to have a clear space. So, again, very different attitudes from all of them.

1:02:19And the weakness of the sports market sometimes is that you want them to be who you would like them to be as opposed to listening to who they actually are. Yeah, it's interesting. It's a point that Murray makes on the bundle quite often is that it's not like negotiating with Sky or Fox or they don't have to have sport. And it's not like that there is a just it's a different animal and it's a different negotiation entirely. and there's a question I think just to finish this off in terms of sometimes I hear and you'll have heard it many times about oh well sport should wrap a walled garden around its own fans it shouldn't have allowed the platforms in blah blah blah and here we are you know one of the questions about Amazon is it you know does it just come in learn as much about as it can about fans and then just go it doesn't need to hang around and buy other rights because it's done that job and will just sell stuff to them because that's the animal it is.

1:03:19What do you think about that question? When you hear sports sort of data arguments about ward gardens, pooling rights, pooling data, audience data, Facebook knows more about Spurs fans than Spurs do, et cetera, et cetera. Again, I think it's putting a genie back in the bowl, right? You've just got to accept they're there and this is what they do. And it's all part of your story. You know, I love the story Adam Kelly tells about the deal that they did with Netflix and WWE, where, you know, they got WWE to give up effectively copyright on a load of content, because that's what Netflix needed. And it's that sort of flexible mindset that you need to sort of monetize these things properly.

1:04:03But you just have to accept this is a much more complicated world. We talked earlier about the desire for a simple solution. There is no simple solution. and also federations and organizations clearly need to do a lot more heavy lifting themselves than the world where you used to sell your rights to a broadcaster and they would do the marketing for you you know those days are long gone and so as a result you need to be across platforms not just new but future you need to be across hardware trends because hardware will will drive consumption and it's a more complicated story. It felt pretty complicated in India going back to 93 and 94 when we didn't have the right to put a live signal out of the country and Bill Sinrich got arrested and put in Bangalore jail for a day for having brought in an SNG.

1:04:54But it's still complicated now. It's just complicated in a different way. Brilliant. Okay, well, listen, Peter, thanks so much for your time. And I really, you know, and people listening won't clock that you've got bookcases full of wisdoms behind there. So, you know, if there was any doubt about your cricket fandom credentials, which there are very few, they should tune into the video clips of it. Mike, thanks very much for your time again. Thank you very much. Loved it. Yeah, that was really good. And yeah, come on again, Peter. Thanks, Richard. Nice to be asked.

1:05:34Thank you.