Reputation, Regulation and Cake

 If there is one activity, we have in common during the Covid pandemic, it is watching more series on streaming video platforms, especially Netflix or Disney+. There was one famous saying that featured in the eco-anarchist manifesto anonymously submitted to newspapers across America by Ted Kaczynski, also known as the Unabomber. In case it passed you by, he wrote: “You can’t eat your cake and have it too. To gain one thing you have to sacrifice another.” One of the most notable aspects of this saying was the reversal of the saying most of us use, “you can’t have your cake and eat it” which led to the identification and eventual capture of Kaczynski.

Listening to recent arguments and counter arguments about football and the Super League in particular, this quotation came to mind. Most European fans want their teams to win or at least compete with an equal chance of winning, including promotion and relegation, at every level. Winning at all costs is no longer acceptable. An independent regulator is the key, according to some fans and the British government who are now conducting a full review after the Super League fiasco. But, as soon as your team fails to win the league, qualify for the Champions League, secure promotion or gets relegated, the first cries for new players and investment can be heard as fans leave the stadium……

Back in streaming land, the giants of the industry are slugging it out. Netflix reached 203.7 million subscribers by the end of 2020 but only added 4 million new subscribers in the first quarter of 2021. Disney Plus added 9 million to reach a total of 109 million and a stock price which has soared 60% in the last year. Unsurprisingly, Disney’s direct to consumer business unit, including Plus, Hulu and ESPN posted an operating loss of $290 million on $4 billion revenue for the quarter. And Disney expects to lose money from its streaming business until 2023. This sounds a lot like “having your cake and eating it” as well. In America there are more video streaming subscriptions than people, with 340 million subscribers and 330 million people. Really, it’s true.

What do Ajay Banga, Jensen Huang and Reed Hastings all have in common? They are the top three ranked CEOs in the Brand Guardianship Index 2021 published by Brand Finance. They represent MasterCard, Nvidia and Netflix respectively. The survey explores the concept of ‘celebrity CEOs’ where the likes of Mark Zuckerberg, Jeff Bezos and Elon Musk feature strongly, as well as ‘reputable CEOs’ who are led by Joanne Crevoiserat, CEO of Tapestry, Sheikh Ahmed bin Saeed Al Maktoum, CEO of Emirates and Julie Spellman Sweet, CEO of Accenture. All of them successful and well rewarded for their performance, reputation, and brand leadership.

So, when someone proposes to increase the reach and entertainment of a sport like football to 4 billion fans around the world, why does the proposal come crashing down in 48 hours? The Super League was ill-conceived and poorly presented to say the least. But if there is growth and market potential in sport, why is this not treated or viewed in the same light as the dreams, investments and risks faced by the likes of Netflix, Disney, and other pioneers?

Whether we choose regulation or reputation, we need a bigger cake. If we are not willing to explore new opportunities, it will not make any difference how you like your cake.