TOPICS
1. What is the Power Law?
2. How it applies to Sports/Entertainment
3. Proving My Point
4. What If You’re Not a Blockbuster?

POWER LAW EXPLAINED
1-2 INVESTMENTS DRIVE ENTIRE RETURNS

Sebastian Mallaby wrote a book on Venture Capital and how it is a game of bets. In many cases, only 1-2 investments driving returns for the entire portfolio.

The majority of startup investments go to 0, so it’s argued that the ones that are the most promising should receive an overwhelming amount of resources and attention compared to the rest of the portfolio.

WHAT ABOUT SPORTS/ENTERTAINMENT?
IN SPORTS, WE CALL THIS A BLOCKBUSTER…

Funny enough, years before The Power Law was written, Harvard Business School Professor Anita Elberse wrote about the Blockbuster effect.

Anita argues that building a business around blockbuster products such as the movies, television, shows, songs, athletes that are hugely expensive to produce and market is the surest path to long term success.

In other words:

Sports Teams, Movie Production Companies, Podcast Production Companies, Record Label Companies, etc. should allocate most of their resources to the TOP 1-2 dawgs….

PROVING MY POINT
SO WHAT’S HAPPENED IN THE PAST WEEK?

• The Kelce Brother’s Signed a Deal with Amazon’s Wondery (podcast production company) Worth More than $100 million

• Jeanine Buss on Lebron being the Lakers’ highest paid player “He’s still a bargain to me”

  
  
  

  

  Source- EuroNews

• Cristiano Ronaldo Breaks YouTube Subscriber Record with his Channel Debut

DO YOU SEE WHAT I SEE?

The top athletes/entertainers/companies receive the overwhelming majority of money, investment, listeners, deal flow, subscribers… We’re talking in some cases the top 2 per category.

REALITY CHECK
SO WHAT IF I’M NOT A BLOCKBUSTER?

I am talking to you since you’re probably not Lebron, Ronaldo, or Curry.

You’ve had a great career, but we live in a hyper competitive world where you need to stay creative on ways to generate income, subscribers, followers, downloads, and/or purchases.

If you’re an athlete, this means providing insights on the industry you’re working on outside your sport to set up a differentiated wedge into making money after your career.

If you’re a fund manager, this could mean partnering with like-minded athletes to differentiate yourself in the market.