When Hulk Hogan took his final three-count this month, the whole world rightly removed its bandana in respect for the most famous “wrestler” who has ever lived. The tributes and YouTube clips told of the fundamental impact this giant of a man had on a “sport”, and popular culture globally. Like it or not, his legacy just cannot be overstated. An icon who defined his own moment in time and touched so many young kids of the ’80s and ’90s.
He changed America and the sports industry.
When you then reflect deeper about how a sleazy backstreet pastime like pro-wrestling became a multi-billion dollar enterprise, under the vision of Vince McMahon, it’s actually very profound.
Because the WWE is fake.
Scripted drama more than true competition. And in a sector now struggling every day to reconcile authentic sport with commodity entertainment content, the passing of the Hulkster demands a true moment of contemplation, as the WWE is probably the best example our industry has of value creation around new IP. The runner-up in that race is the Ultimate Fighting Championship (UFC), itself the talk of the town these days, after a huge new rights deal with Paramount. Both of these properties, coincidentally or not, are now owned by TKO, the conglomerate previously known as Endeavor that contained William Morris and IMG, run by Ari Gold Emanuel. It is the biggest corporate beast in our jungle.
How can so much permanent value be created out of “fake”? How can something that everyone knows isn’t a real contest be so popular and compelling, also amongst the most intelligent of people? Rick Rubin, the genre-defining music producer, is a sophisticated man, an artist, and a true wrestling addict.
The only TV I watch, Roger.
The answer lies in one strange word, whose meaning has now gone way beyond the confines of wrestling. Or even sport. A word we all need to know.
That word is Kayfabe!
From WIKI, “Kayfabe is the portrayal of staged elements within professional wrestling (such as characters, rivalries, and storylines) as legitimate or real. Although it remains primarily a wrestling term, it has evolved into a code word for maintaining the pretence of “reality” in front of an audience.” Read here.
Paul Tudor Jones (PTJ) from Memphis is one of the genuine legends of macro-finance and trading, with his name often whispered in hushed tones. In this world he is basically Elvis, even hailing from the same part of the world. Here below at the 7:30 minute mark, PTJ explains “kayfabe” so beautifully, in relation to the suspension of reality in current financial markets.
Note how PTJ also loves wrestling. (If you can, try to watch the whole clip, because it is worth more than anything you will ever see on mainstream financial media. This is the big league of insight into money. The macro NFL.)
Kayfabe is known in other circles of illusion and deception by different names. In Italy, spotting it is called the mindset of “dietrologia”.
A search for truth behind the curtain.
Dietrologia is one of those fabulous Italian words that are essential to understanding the unique culture of this peninsula and its people. It is the study of what is in the background, hidden in the shadows, accepting that the obvious explanation (Ockham’s Razor) often won’t be the truth. In Italy, perhaps never.
It is closely linked to the idea of the conspiracy theory, or much better, the 10th-man analysis.
The duty to think that the other nine opinions are wrong. This is the job description of the contrarian, and it is a post very very hard to fill.
Italy has a good few of these people, being the country of The Prince, by Niccolò Machiavelli.
In these crazy and polarised times, of Fourth Turnings, of Thucydides Traps, of Minsky Moments, of geopolitical alliances and betrayals, you absolutely need to read that book.The adjective “Machiavellian” is associated with a pragmatic, even ruthless, approach to leadership, prioritising the stability of a regime over ethical concerns. The end justifies the means. It is one of the “dark triad” of personality traits, alongside narcissism and psychopathy, characterised by manipulation, a lack of empathy, and a focus on personal gain. Accepting the existence of Machiavelli, therefore, demands a certain attitude to life and business, and you just cannot survive in Italy without a healthy understanding of this “dietrologia”.
The Pledge, the Turn, the Prestige.
Christopher Nolan is an award-winning English movie director who, probably more than any of his contemporaries, has challenged audiences with complex plot narratives and mind-bending logic timelines. He is a serious innovative talent with movies like Tenet, Inception, and Interstellar, all being intellectually very challenging films.
Not the best choice to watch if you are already four cocktails deep, or on a first date.
🎶 Baby, it’s the truth, it’s the truth;
I’m like Inception, I play with your brain 🎶
– “On the Floor”, Jennifer Lopez (feat. Pitbull)
Perhaps the least recognised of these Nolan films “playing with your brain” is 2006’s The Prestige, about two rival magicians, hiding the secrets of their trade, intertwined with some very fruity, complex love trysts. Read more here.
“The Prestige” is the third and final act of any magic trick, following the “Pledge” and the “Turn“. It is the payoff, the wow moment that leaves the audience amazed and impressed.
But like the WWE, it is fake. We all know that magic doesn’t really exist in the real world, and that it is all just a trick, an illusion. A suspension of disbelief.
As often with Nolan, at the movie denouncement, the final game-shot is left to his legendary go-to-guy, actor Michael Caine.
“Now you’re looking for the secret… but you’re not really looking. You don’t really want to work it out. You want to be fooled.“
– Michael Caine as “Cutter”.
Boom. This line is today’s Sunday Column.
The financial markets of PTJ want to be fooled.
The sports industry wants to be fooled.
Up-And-To-The-Right Forever.
Our sector loves the prestige. It needs it.
The wow headline, the deals done with scarcely believable revenue and valuation numbers, the billions raised in private equity/credit funds. All applauded to the rafters because, at the end of the day, we want to be fooled into believing that all is well, and there is nothing to worry about. Deep down, our industry doesn’t really seek the truth, even though it is often hiding in plain sight, like in any good magician’s trick.
The prestige is all that matters, and it is all around us in today’s sport news cycle. Everywhere.
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The idea that the Dallas Cowboys are still “America’s Team”, even though the facts show they haven’t been competitive for years.
This clip is the most perfect evisceration of the prestige that you will ever see. delivered as only a world-class actor can.
“All money ain’t good money, Jerry”.
”You wouldn’t know, coz you never been to the show, Jerry”.
– Denzel Washington
Say it again! The prestige is all around us.
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CVC “refinancing” its sports investments, sold by our industry as good news, and not what it really is: a desperate continuation fund.
Read the FT article here.
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The linkage between the Foxtel – DAZN – SURJ – Infantino realpolitik leading up to DAZN buying the media rights for the FIFA Club World Cup.
Previous podcasts and Sunday Columns have offered a theory, without any judgement, about events nothing really at all to do with the inherent appeal and commercial value of this new tournament. It was just an intelligent deal all round, hiding its true nature in plain sight.
And there are so many other media and sponsorship deals in our sector equally impressive on the “reveal”, that just aren’t all they seem. All Kayfabe. All examples of the prestige. Our job, as serious commentators on our sector, is to honestly ask ourselves if we will swallow the prestige, and passively allow ourselves to be fooled.
Or do we take a closer look behind (“dietro”) the curtain, to be better advisors and investors?
The Prestige of Richard Masters.
The Premier League in England (EPL), led by Masters, is about to start an amazing new season of fabulous media rights deals. More games, more money. Splendid. What a positive vibe.
Those within the industry with half a brain, instead, know the truth.
Read The Telegraph article here.
Prestige to the max.
For 30 years now, the EPL’s competitive advantage over every other league in Europe hasn’t been based on a superior quality of football. It’s founded entirely on its outlier media rights values, domestically and internationally, creating a massive revenue gap. This has allowed the EPL to pull away from everyone else, and make a club like Bournemouth sit higher in the football food chain than an AC Milan. But the EPL is now in reality having to throw so much more game inventory to broadcasters to even maintain those amazing revenues.
To be clear, the EPL is still the cleanest shirt in a very dirty laundry, and is the destination of choice for fresh American capital into soccer, but it is no longer in control of its future in the way it was with Scudamore. It’s actually vulnerable.
That’s the 10th-man talking.
Because no one really knows how much Sky UK will bid next time round, as the entire broadcast media sector is going through fundamental, existential change. The EPL today is financed by Comcast in the main, and that is now a company with major question marks over its future appetite for rights. Its share price is down around a quarter in 2025, and it has spun off its traditional cable/pay channels as non-core. When your banker sneezes, yada, yada.
Throw in the spreading virus of piracy, the 3pm closed period, the new UK football regulator, the 115 charges still unresolved after over a year, and there are real causes for concern. Oh, and not a day goes by without a pundit or ex-player lamenting how uninteresting modern football is.
Still not convinced?
Let’s use the dreaded “debt” trap of Elvis/PTJ to make a point. The EPL is awash with the stuff.
But all that is not what we are sold. These things seldom are.
The UFC rights deal is bullish for sport, right?
The media merger between Paramount and Skydance has created a new broadcasting powerhouse, which has now bid aggressively for the UFC rights. A huge statement right out of the gate.
Paramount Inks $7.7 Billion Deal for Exclusive UFC Media Rights on Paramount+
On the surface, it is truly a wonderful and optimistic deal for the UFC, for combat sports, for founder Dana White, for Ari Emanuel. For our entire industry, actually. Big Media is still clearly healthy and wealthy, so the future of sport is fine.
That is the line this week.
A fantastic doubling of rights values, a bold pivot from PPV to Pay as a model, proof of how premium sport will always be scarce and cherished, the worth of an all-year-round sporting calendar for reducing churn at any media company with a subscription model. The UFC is the last big sports property available in America for many years to come, so you pay up.
All true. And valid. Good commentary and insight. This is an era-defining deal, and a personal triumph for Ari Gold as he continues the strategic evolution of the Endeavor group, financed by his PE partner Silverlake.
(For those wanting some serious context on all that, try this previous Column, actually the most popular and best rated ever.)
This was written 18 months ago in an attempt to explain the corporate finance strategy to generate shareholder value for this conglomerate. In hindsight, it was also a very accurate analyst report on the break-up value of the group: the price Silverlake would eventually pay to take it private. It’s worth a read again, even as didactic on high-end finance and principles of valuation.
This week, we saw all of this play out for real. But was everything all that it seemed? Or was it just the prestige?
What would the dietrologist 10th-man say?
Maybe something like this.
There is no way that paying $7.7bn over 7 years makes any financial sense for Paramount, which has taken years of prudent management to get to break even. This deal will now push back any idea of profitability for years, and even if the total monies are heavily back-ended, it doesn’t make sense to any competent CFO. You would need so many new subscriptions, such an uplift in customer ARPU, reduction in churn, to make it work. In fact, the 10th man needs to ask:
“Does anyone know if Paramount has break clauses?”
What sleight of hand could be at play here?
This new Paramount company has had a challenging birth, not least from a certain Mr Donald Trump.
“The merger’s close came just two weeks after it received regulatory approval from the Trump Administration. While now a done deal, the path towards that approval was far from smooth sailing. Months of scrutiny and turmoil surrounded the transaction — particularly amid President Donald Trump’s legal battle with “60 Minutes”, the crown jewel of Paramount-owned broadcast network CBS. With the specter of the Trump administration potentially blocking the hard-fought deal with Skydance, Paramount agreed to pay a $16 million settlement to the President in early July. Critics of the settlement lambasted it as a veiled bribe to appease Trump, amid rising alarm over editorial independence overall. Further outrage also emerged after CBS said it was canceling Stephen Colbert’s “Late Show” just days after the comedian sharply criticized the parent company’s settlement on air. Paramount cited financial reasons, but big names both within and outside the company have questioned those motives.”
Read the whole article here.
Wasn’t Trump a major attendee at UFC events whilst on the election campaign? Isn’t he now part of the whole MAGA Holy Trinity, with Dana White and Joe Rogan? Isn’t there a UFC fight scheduled at the White House’s Rose Garden on the next 4th of July?
Trump had the power to block the Paramount deal, but didn’t. Do we believe that The Donald has ever been an altruist, playing a straight bat without a personal angle?
What was his price?
What have we seen since Trump approved this deal?
- Colbert is toast.
- “60 Minutes” has bent the knee.
- Paramount has paid an exorbitant amount of money for the rights of Donald’s buddy, Dana White.
None of this is necessarily gospel, and correlation never implies causation. Dietrologia doesn’t ever need to be tasked with finding the truth, and the 10th-man isn’t invented to discover the “Dead Sea Scrolls”.
No. The journey is more valuable than the destination, as a forced obligation to think differently, and hesitate before just applauding the prestige.
So let’s ponder some more about what could be behind (dietro) all of this. It’s always a fun exercise to put on the tin-foil hat.
Just follow the money.
Ari needs to make his main backer, private equity (PE) firm Silverlake happy. The piper always wants his/her tune to be played. Remember, we are living in a macro-finance economy where the entire model of PE is now being critiqued. PE can’t find exits to give the capital back to its limited-partner (LP) investors, and everyone is getting a bit stressed. One can choose from a plethora of such “PE is broken” articles like this one.
The Zeitgeist, and the reality, is that the game is up, as the financial engineering of low-interest rates and extreme leverage has seen its best days 5 years ago. Liquidity just isn’t there, and the PE firms are trying every trick in the book to get money out. Do a Google or ChatGPT search on “continuation funds”. Articles like this:
Or just read the chapter in Sport’s Perfect Storm that two years ago explained exactly what would happen, and is now in front of us in sport every day.
Who is a key investor (LP) in Silverlake?
It doesn’t take Sherlock Holmes to find the name of Larry Ellison on the cap table. Read here.
Larry, the founder of Oracle, is a multi-billionaire who also has a son, called David.
David Ellison is the CEO of this newly formed Paramount/Skydance! Furthermore, a managing director from SilverLake, Justin Hamill, sits on the board. Paramount has just bid a staggeringly high amount for the rights of UFC, in which Silverlake has a huge stake.
Kayfabe like the Undertaker lifting himself out of a coffin at WrestleMania.
Have a read of James Mortimer’s excellent analysis of the whole deal here. As James suggests, the ultimate endgame is almost certainly Saudi:
“TKO is in advanced talks with Paramount to acquire the rights for Zuffa Boxing, a new boxing promotion spearheaded by Saudi official Turki Alalshikh and Dana White. TKO President Mark Shapiro has characterized this venture as “low risk,” as TKO receives a fee for promoting the events without bearing the funding obligations. TKO is also set to promote two to three “super fights” per year with the Saudis, for which it will receive additional fees for promotion, media rights negotiation, and hospitality packages. This relationship with a powerful, well-funded Saudi entity serves as a further diversification of TKO’s revenue streams. It allows the company to strategically tap into a massive new market without significant financial risk, making it an even more valuable and appealing asset in the global combat sports landscape.”
In short, TKO will be the vehicle which delivers the Saudis total dominance of the sport sub-sector of combat fighting. And serves up to Silverlake a very juicy exit, so rare these days. Paramount has time to get out of a very bad rights deal, as it is back-loaded and maybe has some very fine print around performance-related break clauses.
Sector analyst and Sport Summit Como stalwart Mark Oliver also has an insightful take beyond the norm:
“Some see a Trump-White-Ellison political conspiracy in this. I don’t think that’s it. Paramount is the studio that made the “Godfather” trilogy and “Star Trek”. And Skydance “Top Gun” and “Mission Impossible”. More recently Paramount+ has “Yellowstone”, “Landman” and “Tulsa King”. It’s about a new Frontier Zeitgeist where tough people (mostly but not exclusively men – think Beth Dutton in “Yellowstone”) have to fight to win in a largely zero-sum world. That’s powerful differentiation where UFC fits very well. It’s a strategic play ideally timed in my view – and should get payback if the Zeitgeist lasts – at least for a sizeable proportion of the US population outside California and NYC. Might also explain the shorter deal for “South Park”, which has a different vibe!”
Remember, it is not about believing the deep conspiracy; it’s about NOT automatically believing the prestige.
That is a very key distinction, and here endeth the lesson. Accepting it is the reader’s choice. But by God, one thing is indisputable, though.
Ari Gold is a world-class strategist, negotiator and deal-maker.
Most people spend their careers grinding out growth in products and services sold to clients. Old-fashioned business. But the really big bucks are always in managing money and moving assets around. Doing deals, clipping a coupon. Corporate finance.
People ask me what I’m positive about in our sector, for return. It’s an easy answer. Get yourself in the middle of deals. There is a lot of capital looking to be deployed in sport. Sport for itself badly needs capital. Match them with imaginative thinking and structures. This is now the Age of the Deal in our industry.
Ari is leading the way. God bless him. The value he is creating for himself, Ellison, White and Silverlake is not just the prestige. It is real.
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