I usually do this in private. But today, I’m going to do this right here. Don’t worry, it won’t take long. It rarely does. Welcome to an unCharles victory lap.
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Over the last couple of days, in sequential posts but not inconsequentially, I made a point. Media needs to be bought — not rented.
It’s as if Ted Leonsis was one of the six people who read this. Because [drum roll] last night, his Washington Capitals bought Cap Friendly.
Apologies if all this hockey stuff is a little too inside baseball. But this is a big deal. Had the terms of the private transaction been disclosed, I would have mentioned them. Alas.
Instead, I’m just going to have explain this. The NHL, like most big leagues has a salary cap. It’s like a budget you have but for teams. Sure. You’d like to by the new OpenAI fridge that chastises you for buying junk food. But that’s out of your budget. So you settle for one that keeps things cold and dispenses water from the door. Budgets. Bah-humbug. Teams have a league-imposed budget. They can’t sign a star player so they settle for a serviceable one.
The league keeps track of spending. But oddly they don’t analyze for nor share it with the teams.
So, along comes Cap Friendly. They logged every signing and trade. Fans would come by to see how much cap space their team had. Voila. An ad business emerged. Then teams would pay to access the Cap Friendly data.
Ted Leonsis knows a thing or two about media. He was President and Vice Chairman of AOL.
Now, the Capitals own CF. The site will go dark for fans. No more ads. They won’t sell data to the league’s *other* thirty-one teams. CF is no longer a media company. In olde school naval terms, it’s not a ship of the line. It’s the Capital’s ship.
Why? Because the Caps don’t have to rent access they own it all. Owning it will give them a propriety edge. No other team can use it. Now, where did I read that? Oh, yeah, “You don’t pour Miller in a Bud pub.”
Coke competes with Pepsi — actually, now, they compete with Dr. Pepper. McDonalds obliterates Burger King. Pizza Hut throws rocks at Dominos. Hertz with Avis. UPS with FedEx. And, Everyone with Google. They’re gentile. They’re still happy to share space. Sports is, on the other hand, competitive by nature. Team A wants, sometimes desperately to beat Team B. So, it makes sense that the Buying of Media of media would start in sports. And, it makes sense that a former media guy would get it.
I really have to wonder if, thanks to this deal, we’ve seen the beginning of a very interesting trend here.
There are soooooo many media companies that cloak themselves as media companies for soooooo many reasons. It used to be cool to say I run a media company. Trust me, it ain’t. Not any more. They used to trade a comfy-cushy multiples. They doesn’t happen any more. Nowadays, they sell ads for pennies and considered worthless. They may not be. Many of these companies could be “data” businesses. Or their learned people who write about markets might be better as “consultants.” Or, they keep audiences entertained between events to create omnichannel experitential media. Or, they help retail. Or, they… right, lots of ways to find real ways to be relevant. This deal could reinvent the middle- and bottom- tiers of media.
Victory lap.