Listen to the Sound of Silence.

Sport tends to overestimate its appeal, and takes the loyalty of its customer/fan too much for granted. Like under-appreciating your lover, that may turn out to be costly.

One day he/she may not be there.

Many people, certainly lyricists, and probably all artists, will put Paul Simon pretty high in the lists of the true greats. Up there with Dylan, Bowie, Prince. One of the very elite singer songwriters, twice inducted into the Hall of Fame, 16 Grammys, two of his songs actual included in the National Recording Registry for cultural significance; “Graceland” and “Sound of Silence“.

The latter was written on 19th February 1964 (Wiki), my exact birthday, so I’ve always loved that song and this line.

 

 🎶 The words of the prophets are written on the subway walls and tenement halls. 🎶

Most of us would interpret Simon’s words here as pure counterculture, where the real truth of things, to what you should pay attention, is actually all around us, even in the most humble places, told by the lowest of us.  

Never have we lived in a time when the accepted wisdom of the world seems so out of touch with actual reality. The top 1% own more and more of the wealth, control so much of the narrative, and independent lateral thought is frowned upon and discouraged. If not actively attacked as subversive.

Think different is no longer cool.

So, de facto, we are not best served by the fancy articles and op-eds from educated writers on the inside, from old brand media, all of which can tend towards detached ivory tower. For example, why did so many smart and super-informed players inside the Washington Beltway, talking heads in LA and New York, famous Democrat donors, Hollywood actors, all miss for two years that Biden has been truly senile and unelectable. George Clooney did a fundraiser for Biden merely weeks ago, with all the usual glad-handing, watching as Obama had to physically escort Sleepy Joe off the stage.

What wasn’t clear to you then, George? Did one debate suddenly open your eyes? Are you that shallow and stupid? Why did the same “smart” elites all miss Brexit, or that Trump win in 2016? 

Ivory towers and groupthink. No one wants to call naked on the Emperor, ever. It’s that simple.

Most of us have too much to lose by being seen as part of the awkward-squad, and contrarians are usually relatively lonely, weirdo nerds, eating alone in the corner of the school canteen. But it is they who are very often the real truth-tellers.

 

Popular neon gods are often false. 

So, maybe better to pay attention to the prophets who frequent the subways and tenements. The taxi drivers and shoe-shine boys know better. Glorious clip this one, as Johnny also opines on baseball. 

The lowest of us always know. “Police Squad” called it perfectly.

An old business joke from our day was that MBA just stood for “Management By Walking Around”. Getting onto the shop-floor and asking questions of the old solid front line workers. There lies the real truth, behind the plastic veil of communication teams selling us PR fake and flash.

🎶And the people bowed and prayed, to the neon god they made🎶

Possibly the best description of influencer culture that you will ever see right there, 60 years ago.

Try not to be too influenced top-down. Listen to the bottom.

 

There is always a market for the truth.

Nothing is really new and Paul Simon took his “subways and tenements” lyric from the Old Testament book of Daniel.

A prophecy written on a wall couldn’t be deciphered, and Daniel, a lonely Jew exiled in Babylon, was sent for, to solve it. He did exactly that, and it gave a warning about the imminent fall of the king. Hence the expression “the writing’s on the wall”, as a premonition of doom. 

It’s very easy these days for anyone with an active brain to be drawn towards all kinds of doom scenarios. We live in dark times of increasing instability, intolerance and polarisation, and this can clearly be seen in this crazy election year. Politics in Argentina, UK, France, and soon in the USA, leaves many of us with a scary conclusion of very bad outcomes.

These (geo)politics are exactly part of the Unholy Trinity of problems facing sport. Money and Demographics making up the full acca prediction that dominates the pages of “Sport’s Perfect Storm“.

It was not diplomatically smart to write that book, with such an unappealing and trenchant title, but the overwhelming reception from absolutely everyone has given confidence that there is, indeed, a market for the naked truth.

Because there is very little non-consensus thinking in our industry today, in the endless articles, reports, and podcasts. They are not really discussing the real problems, but merely editing, re-hashing, repeating, promoting the accepted line of the moment. Pulling punches right, left and centre.

Think George Clooney, the Democrat party, CNN, about a month ago. No one was putting the truth on the table re Biden.

And then all of a sudden they were, expecting everyone to follow their new line. That’s not good enough. It’s intellectually insulting.

 

Speak instead to Johnny Shoe Shine.

Open your ears to the everyday folk (and fans) all around you. Your children and friends. The guy in the pub, at the stadium or the track. Someone not in the echo chamber of the fancy seats, on a corporate credit card, with a personal agenda around the status quo.

They will tell you.

Since when did Amazon introduce ads? Fuck that. This isn’t TV, we are paying a subscription. I will actively avoid all of the brands I see interrupting my film. There is not even the skip button.

Word for word quote from this week. 

Ads, in streaming services, is of course one of the big “growth levers”, desperately hoped for, to save sport and its banker (the media sector). More revenues flowing off and around sports rights, to allow the governing bodies to continue to receive the big bids they desperately need.

I’d be very skeptical of all that. Cough, firestick, cough.

 

The graffiti of prophecy is all around us.

A good friend, a Twickenham debenture holder, casually tells you that he won’t be talking up his tickets for the All Blacks game due to excessive prices. He is a man of considerable financial means, but feels “they are taking the piss”. He and others are now for the first time being bombarded with marketing offers for this game, which obviously isn’t “going clean”. Seemingly, even big events now are no longer selling out, and people are starting to pick and choose. 

Of course they are.

An investment banker colleague, again not on the breadline, complains that ever-increasing Ironman prices for his triathlon participation are intensely annoying. Other Triathlons are intelligently instead going cheaper now. T100.

A mid-career sport media entrepreneur, not short of a bob, says he is asking his family which streaming platforms they really want to watch, because the days of just signing up for them all are over. On principle. 

It’s out of the mouths of babes and sucklings (Matthew 21:16) where the real gold is for our industry.

A young Gen Z man, seriously into his motorsports, sent this from Silverstone last weekend.

 

This is Daniel’s writing on the wall. 

Ticket prices in F1 has been a big point of conversation recently (at least for the true motorsport community), because the LOWEST priced ticket for the British Grand Prix hit £300 this year. The American ones (Miami and Las Vegas in particular) are also off the charts. I was at Silverstone today for the F1 qualifying, and will be back tomorrow for the race… and I have to say that from the fans perspective, it is the worst value for money sporting event I’ve ever been to. For starters, the actual view of the track and the cars is very limited. The ticket I have (the £300 one) is for “general admission” i.e., you can enter the circuit, but you can’t actually go into any of the stands that give you a better view. The tickets with grandstand access will set you back more like £500 on race day. I think the thing that makes it really apparent though, is that with a general admission ticket you can SEE the people who have paid more and are getting a better experience than you… in football I’ve never found that to be a problem – there’s obviously a discrepancy in the experience depending on whether you’re sat in row A, row Z or in a private box at a game, but as a fan who has sat in both row A and row Z at football games, I’ve always felt I’m getting ALMOST the same experience as the others around me. In F1, a totally different story. The experience of someone viewing from the ground level (which already costs a lot) is so significantly worse than someone viewing from a grandstand or the F1 “paddock club”. as a result you can basically see what you could’ve had, if you were able to spend more money. Food and drink insanely expensive.

We all know of similar people vociferously complaining about the price changes in English football season-books, some clubs removing child and OAP tickets, others following the American playbook of absurdly high entry-fees to a game. 

If we are here today to talk about the business of sport, as opposed to just sport, all this is called believing in your “pricing power”.

 

The economists call it price inelasticity.

In plain English it means that people want your product so much that your price increases won’t dampen their demand. They will always buy. 

The Sunday Column today believes that this will be shown to be a total fallacy of wishful thinking for our industry, and that those who believe they can always get their revenue growth by increasing prices are going to get a very big shock soon. A surprise as big as those who didn’t listen when they were told that the mean/median sports media rights values were going down, and not insignificantly. 

The music industry is 15 to 20 years ahead of sport’s trajectory. Over the years they have pumped up ticket prices for very big live acts, and for a long time got away with it. The added release into the open, after COVID, also gave them a chance to ask for whatever they wanted from the fan. And they did. 

Not now. Ask Pearl Jam, who we are told are “shocked”.

 

Ask also Jennifer Lopez.

There is now a supply glut of touring bands and festivals, where the very top end of the market is hoovering up the bulk of the disposable fan income. The others are now fighting for scraps, or being cancelled.

Sounds similar to our own industry, as any sport below “premium” top tier now knows. The share prices and bond yields of the listed companies in our sector all tell the same tale. 

 

The party is ending.

It’s getting choppy out there, but people always prefer to be optimistic about storms. 

There’s gonna be a lot of chop in the sports industry. 

“Money”, in the Unholy Trinity, is now too tight to mention for so many, especially the young. When cash and capital were cheap, and easily available as debt, this wasn’t such a painful concern. But now normal people are maxed out, priced out, kicked out of things they consider as prime necessities. Housing is absurdly unaffordable, as are school fees, medical insurance, travelcards; even a lunchtime sandwich.

Sport is not a necessity. The COVID boost effect has passed. Credit cards statements are hitting the doormat.

 

Sport will be sacrificed as discretionary spending.

Especially, if we think prices can always rise with impunity.

People can feel the direction of travel every day, and their anger is increasing. Taking away their sport, making it something only for the rich 1%, is a horrendous error. But that’s the way the industry is going. In fact, our American investors seem to think that it is the main answer to getting their new European assets into profits. Higher ticket prices. 

The entire luxury sector “behind the vervet rope” is also no longer immune. Again the comedians were well well ahead of the curve.

 

Even the well-off are starting to revolt. LVMH is down 15% in the last year.

That, in fact, is my own very clear graffiti on the wall, written in bold heavy font.

Too few now remember history, that the last 70 years of real prosperity (boosted artificially by war rebuilding, a demographic baby boom, and debt) were a bit of an outlier as an era.

Maybe all of this is just part of the “sugar-daddy” culture so prevalent in the world now. You either have serious wedge, and can sate every whim, or you are a pauper. Even the middle-classes are now squeezed financially, and all this feels like an insidious, but deliberate, return to a world of serfdom, where you don’t own your home, and need to beg for a day’s honest graft to put bread on your table.

People would do well to familiarise themselves better with the works of John Steinbeck; Grapes of Wrath, Of Mice and Men, and they should search for the “Ghost of Tom Joad“. 

Times can get very tough. You won’t always just get away with raising prices forever; on replica kits, match-day tickets, and subscriptions, and it is not wise to base your sport business strategy on any of that.

 

Because it will fail. 

Ps. Springsteen was charging $1000 for gigs back at that time. Now not even he is “going clean” on sell-out today. Check out the dynamic pricing of the tickets of live music acts. More truth written on subway walls. 

Sport, instead, needs to de-layer and simplify, to find a cost structure that the working person, the true fan, can afford. In short, the complete opposite direction of today.  

Again, our young F1 babe/suckling hits the nail on the head. 

…considering British motorsport has traditionally been extremely popular with a more working class audience (mechanics, manual labourers, truck drivers etc), I think that long term, when all the new less committed fans disappear, the sport could easily lose the more loyal fan base that propped it up before Netflix and Liberty Media.

Boom!

What a summary that is. Mechanics, manual labourers, truck drivers are Tom Joad, and the personification of the working man to which Marcelo Bielsa refers, when he talks so beautifully and authentically about fans and affordability.

Football (both American and European versions) has always been the pastime of the humble working man, and pricing them out of going to a game, to maximise revenues, is both morally wrong, probably illegal under anti-trust law, and a very very silly business strategy. 

It will rebound like Dennis Rodman. It already is.

Jurors agreed with the plaintiffs that the NFL conspired with member teams to artificially inflate the price of “Sunday Ticket” for millions of residential and commercial subscribers. 

The word to note is again “artificial”.  How many slaps in the face does our industry need, to wake up and smell the coffee? 

 

All this is, indeed, a Perfect Storm. 

The prophet Bielsa also talks about how soccer/football is going entirely in the wrong direction as a product, as a type of play and player, and is losing its appeal. 

This current artificial increase in fans will end. 

What my buddy Grant Williams calls transient fans. Williams would say that the answer is easy.

Focus on real and authentic. 

Bielsa is again 100% right. Never like in these Euros have our DMs been filled with people telling us that they haven’t watched a game, outside their team. My own household skipped the quarterfinals of France v Belgium and Holland v Turkey, and the writing is indeed on the tenement wall. Too many games, played in a modern sterile risk-adverse fashion, with no box-office stars, all paint-by-numbers players scandalously short of energy. 

It’s just very boring, with no thrill of surprise and excitement. In the old days, these tournaments were full of exotic unknown players seldom seen in your local market. No one really knew of Zico, Falcao, Socrates, Junior in 1982.

Guess what, novelty and real talent is very compelling. 

We, proper football fans, don’t need Bielsa, or even Daniel from the Old Testament, to tell us all this. It is all around us.

Whilst England fans won’t agree today, football is in serious trouble.

Why?

 

Saturation doesn’t have pricing power. Ever. 

And the last of the Trinity, “Demographics”, sits right in the middle of all of this. 

Folks under 40 don’t yet know of the hardship of a Tom Joad, but it’s coming. This is the first generation where it is clear that they will be less well-off than their parents. That is utterly dramatic as a betrayal of the social contract that has dominated the last 80 years, and why we are absolutely at a Fourth Turning. We all put up with the waste and corruption of politicians by accepting that our kids will be better off than us. That was the unwritten social contract. In the US, it was known as the “American Dream“, and that too is now of the pipe variety. The kids know.

That lot had it easy. They were the generation of just-turning-up. An average education or degree almost guaranteed them a great job, good salary, with which to buy a first house. They didn’t even need to be that excellent, as the job competition was basically analogue local. The Indians and Chinese weren’t yet in the HR market.

Overheard conversation amongst Gen Zers in Como July 2024.

 

This is where we are, and they are correct.

AI is going to make it much worse. Young people, even with superb qualifications, can’t find jobs, living in a grace-and-favours world of endless internships and the gig economy. You can’t build a project of family, leave your parents house, afford kids, when you don’t have a reliable regular source of decent income.

And they wonder why the birth rate in Europe is almost non-existent. 

 

So these kids won’t buy all our expensive sports and music products. 

Demographics is destiny and the Boomer generation of the West is retiring, having run away with all the money. Europe is now contracting.

But the birth rate is still florid in the new races and populations now entering the Old Continent from the South and East. Those are having lots of kids, and are therefore totally skewing the 3000-year cultures of the Mediterranean. One notes Toni Kroos comments on Germany.

 

Don’t run away from inconvenient truths.

The Muslim petrodollar is a big financier of our industry now, and that is to be welcomed. I do.

But the chances that all this demographic and cultural change just slots in seamlessly are very slim. Let’s observe the imminent Olympics, a perfect case study of the juxtaposition of LVMH patronage, and deep societal angst on the streets. Let’s see how that goes.

It is underpriced risk, and this is a conversation absolutely no one is allowed to have for fear of offence. Like no one could call Biden a bumbling idiot until a week ago.

But one then needs to live with the consequences of sticking this particular head in the sand. Trump, Le Pen, The Reform Party, and basically all the election results in recent years, are the result of not wanting to talk about hot potatoes like mass immigration.

People dismiss all these protest voters as stupid, racist and fascist, and in part that may be true. But the reality is that the person voting for Trump is usually just Tom Joad, scared to death, hoping someone, anyone, from outside the mainstream, can help them get a leg up.

Money, Demographics and Geopolitics is the Sound of Silence for sport.

🎶Hello darkness, my old friend

I’ve come to talk with you again

Because a vision softly creeping

Left its seeds while I was sleeping.🎶

Here is the Central Park Concert of Simon, and his pal who could sing a bit. Iconic.

 

Our industry is indeed sleeping.

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