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Speaker 1: Welcome to a special bonus episode of the Bloomberg Business

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Speaker 1: of Sports podcast. I'm Michael Barr. Bloomberg Business of Sports

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Speaker 1: contributor Don Kissie sat down recently with Earl Patton, managing

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Speaker 1: partner of Rumble Adventures. It's a VC firm that's looking

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Speaker 1: to invest in sports and Africa. Let's dive into their

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Speaker 1: discussion about why Pattent believes the sports and entertainment industry

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Speaker 1: in Africa is on the rise. My journey in sports

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Speaker 1: actually began with UM the NBA, so I worked for

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Speaker 1: two NBA teams. My first start was with the Portland

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Speaker 1: Trailblazers and I worked in what's called UM managing UM

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Speaker 1: Partnership account relations, So all the corporate sponsors that were

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Speaker 1: part of the UM poland Trailblazers portfolio, I managed, you know,

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Speaker 1: their UM relationship with the team with respect to business

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Speaker 1: development and marketing. UM. Then I actually joined the Cleveland

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Speaker 1: Cavaliers on the basketball operations so UM. A lot of

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Speaker 1: that had to do with UM player relations, UH, salary,

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Speaker 1: cap management, scouting, and all of the nuances that go

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Speaker 1: into managing a front office of a basketball team. Working

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Speaker 1: under Jim Paxson. UM when I left the Cavaliers, I

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Speaker 1: actually joined UM Sony, so I had some opportunities to

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Speaker 1: work UM further in the n b A, but I

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Speaker 1: wanted to, you know, kind of expand my bandwidth within

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Speaker 1: the sports business overall. And Sony UM had an interesting

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Speaker 1: UM opportunity in there was called their Broadcast Business Solutions Group,

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Speaker 1: And that's just a fancy guest terminology for saying, you know,

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Speaker 1: all of the production capacity that goes into the television

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Speaker 1: networks and so forth of a sports team UM or

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Speaker 1: even a sports broadcasting like NBA TV or whatever the

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Speaker 1: case may be. So for the for the most part,

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Speaker 1: that was the business business marketing, Yeah, which is so

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Speaker 1: fascinating because when you think of sports today, you think

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Speaker 1: of media. So you're going to Sony. It's like, did

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Speaker 1: you have a premonition or did you just see this

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Speaker 1: is where the industry was going more and more, you

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Speaker 1: know a little bit of both. And interesting enough, UM.

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Speaker 1: The position that I had being that we are doing

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Speaker 1: UM relationships with teams. The fact that a matter that

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Speaker 1: Sony has a consumer division where you know, they did

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Speaker 1: sports marketing on the consumer side, that pretty much gave

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Speaker 1: me a real advantage UM. With respect to kind of

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Speaker 1: closing deals, so you know, and we would embed a

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Speaker 1: lot of the Sony Group companies because you have Sony Entertainment,

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Speaker 1: Sony Music, Sony Television, UM, Sony Consumer Electronics. So when

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Speaker 1: you have the whole UM portfolio of assets, UM, you

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Speaker 1: can really do some interesting things with respect to relationships

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Speaker 1: and sports. So UM from there, I'm in Sony and

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Speaker 1: I had an opportunity for to join UM their fee

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Speaker 1: for project office. So how that happened is UM. One

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Speaker 1: of our actually clients that we were engaged with was

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Speaker 1: actually Arsenal and I'm at a meeting and someone asked

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Speaker 1: me at my attending Soccer X and I never heard

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Speaker 1: of Soccer X And Soccer X is one of the

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Speaker 1: biggest global beautiful game. Yeah, it's the business soccer football,

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Speaker 1: but it's the biggest forum for the business of soccer.

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Speaker 1: And it was actually being held in South Africa. So

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Speaker 1: I just said, okay, you know what, I had some

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Speaker 1: vacation time, so and I noticed that Sony was actually

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Speaker 1: sponsoring Soccer X. So I went to South Africa and

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Speaker 1: met some of my colleagues there and we actually had

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Speaker 1: an exchange about what I was doing in the US

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Speaker 1: and what they're doing with respect to their relationship with FIFA.

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Speaker 1: They just took out a partnership with the World Cup

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Speaker 1: in South Africa in Brazil, and they asked what I'd

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Speaker 1: be interested in in joining, and UM coincidentally, UM human

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Speaker 1: Resources started to unpack what was called a you know,

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Speaker 1: an international a program where you can actually take on

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Speaker 1: the international assignment. So I told my colleagues that you

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Speaker 1: know that I met there that let me work on

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Speaker 1: the U S side to actually you know, be part

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Speaker 1: of the international program and to plant those routes, plant

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Speaker 1: those routes. So I was deployed to headquarters UM in Tokyo,

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Speaker 1: Japan to U join that UM specific group UH to

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Speaker 1: go over strategy and how we're gonna you know, deploy

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Speaker 1: our marketing strategy and our business development strategy with partnership

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Speaker 1: with FIFA, and then UM after that, I was assigned

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Speaker 1: specifically to South Africa UM where I lived UM prior

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Speaker 1: to the World Cup and post World Cup UM to

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Speaker 1: actually manage that activation. Nice. Nice. So, speaking of activation,

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Speaker 1: we all remember the World Cup in South Africa from

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Speaker 1: your perspective, both as someone that was tangled up with

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Speaker 1: it in the weeds on the ground now as an investor,

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Speaker 1: do you think it was a success? I mean, worldwide,

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Speaker 1: the World Cup is always a success for the fans,

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Speaker 1: but from someone that was there from inception to end,

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Speaker 1: I believe it was the best World Cup ever. You

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Speaker 1: think so South Africa, the fans, the media, fans, the culture,

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Speaker 1: UM you know it. And it gave a voice to

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Speaker 1: the power of UM sports in Africa. And I think

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Speaker 1: it was one of the beginning catalysts with respect to

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Speaker 1: Africa's growth within the sports sector. I think that pretty

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Speaker 1: much that in the NBA actually opening up an office

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Speaker 1: during actually the same time in UM pretty much, you know,

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Speaker 1: but put put Africa on the map. I could see

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Speaker 1: that NBA Africa is essentially a brand unto itself right now.

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Speaker 1: Right you've got the b A L and the moves

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Speaker 1: the NBA is making on the ground and both globally

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Speaker 1: with a focus on Africa. You can tell the league

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Speaker 1: is not just looking to recruit the next Lebron. They're

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Speaker 1: looking to build and plant roots. They're doing all kinds

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Speaker 1: of clinics and courts. So let's keep it moving. Let's

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Speaker 1: talk about Africa, the continent, all fifty three countries. As

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Speaker 1: a quote, sports investment. You're managing partner and founder of Rumble,

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Speaker 1: Which word on the street is it's doing really well?

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Speaker 1: You know, I want to talk about venture because after all,

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Speaker 1: this is Bloomberg. Why Africa earl. Yes, you have roots there,

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Speaker 1: You've experienced business there and culture and leisure and lifestyle.

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Speaker 1: But why why now, why would you make this move

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Speaker 1: at this stage in your career? Okay? Very simply, if

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Speaker 1: you're an investor or a entrepreneur or corporation of any

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Speaker 1: type looking for market. I mean that's you know, econ

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Speaker 1: one on one And if I presented you a market

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Speaker 1: that is UM close to two billion in population, UH

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Speaker 1: of the population is under thirty, so heavy youth demographic, UM, mobile, politization,

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Speaker 1: penetration and consumption is highest any from anywhere in the world,

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Speaker 1: and UM seven of the top ten fastest growing economies

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Speaker 1: are based within that region. Would you be interested in

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Speaker 1: said market? Me personally? Absolutely? If I was writing checks,

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Speaker 1: even more so absolutely. Now, UM couple that with the

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Speaker 1: fact that UM, if you look at no venture capital

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Speaker 1: in any type of deployment or any type of sector,

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Speaker 1: Africa receives less than one of VC funding, but yet

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Speaker 1: is home to sevent of the world's population. Now, if

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Speaker 1: you compare that with let's say North America, where they

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Speaker 1: receive six of that you venture capital and fusion but

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Speaker 1: only have five percent of the population. There's your scale,

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Speaker 1: there's your opportunity. You know, got it. So tell me

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Speaker 1: what Rumble is doing today. You founded the firm, you're

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Speaker 1: the managing partner, You've probably done a raise or two

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Speaker 1: or three. Tell us more about that. But right now,

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Speaker 1: as the founder of Rumble Ventures, that's focused on Africa,

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Speaker 1: and let's say, you know, for better for worse other

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Speaker 1: developing markets, what are you looking for? Okay, So quite

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Speaker 1: simply in a sentence, we are investing in the commercialization

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Speaker 1: of africa sports sector and pretty much what that means

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Speaker 1: is that, you know, and let's take a step back.

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Speaker 1: Let's say with the U S. You know, one thing

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Speaker 1: that the United States does very well is that it

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Speaker 1: has a robust sports economy and it's treated as an

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Speaker 1: asset class and as a business. So what we started

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Speaker 1: to on pinpoint was the opportunities in order to scale

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Speaker 1: Africa's um sports business and utilize um that wealth of

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Speaker 1: opportunity in order to bring investors into the fold to say,

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Speaker 1: you know, the growth is growth opportunities there. This is

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Speaker 1: how the market looks with respect to On the advisory side,

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Speaker 1: we've helped leagues, federations, teams and governing bodies structure different

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Speaker 1: business models in order to be receptive of m more

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Speaker 1: global investment. So I'll give you a quick example, UM,

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Speaker 1: one of the largest revenue streams with any UM sports

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Speaker 1: business is sports merchandise. Okay, in North America, the NBA,

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Speaker 1: NFL and Major League Baseball and even Major League Soccer,

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Speaker 1: they negotiate with one merchandising partner. So Nike is the

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Speaker 1: sponsorship merchandise partner for the NBA and the NFL. For example,

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Speaker 1: in Africa, UM, if you take you know, uh, let's

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Speaker 1: say one of their soccer leagues, each team negotiates separately

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Speaker 1: with a merchandise partner, so you know, and quite naturally,

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Speaker 1: the bigger teams are gonna have let's say the Nikes

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Speaker 1: or Adidas, and maybe the smaller market teams may have um,

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Speaker 1: you know, unknown or a smaller let's say merchandise brand

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Speaker 1: where you can bring on better practices to say, Hey,

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Speaker 1: if you structure yourself where you negotiate with one merchandise partner,

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Speaker 1: it gives incentive to the Nikes and Adidas to say, hey,

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Speaker 1: you know, I can actually optimize UM the potential of

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Speaker 1: the growth within sports merchandising. So one quick example of

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Speaker 1: that was during the I think the World Cup in

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Speaker 1: Russia when Nike released Nigeria's UM soccer kit. UM. It

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Speaker 1: was the most heaviest demand UM soccer, Yeah in Russia,

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Speaker 1: in Russia, well globally, but it was UM. Nike did

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Speaker 1: an unveiling of their UM the Nigerian UM national team

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Speaker 1: soccer kid. I literally was getting phone calls to say, hey,

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Speaker 1: next time in this dates, please go to Nike and

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Speaker 1: pick me up. What it was that? Seriously, think about it.

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Speaker 1: These are two emerging economies, right. We know Russia for

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Speaker 1: one thing, but we know Nigeria as an OPEC member

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Speaker 1: state and as a massive oil producer, hugely for the

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Speaker 1: most part educated population. They tend to their more mobile,

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Speaker 1: let's say, than a lot of other Africans in certain economies.

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Speaker 1: That's a fascinating story, to be honest, because the thing

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Speaker 1: is one thing UM the US has is in terms

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Speaker 1: of the advantage of our sports leagues, is that you know,

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Speaker 1: their exempt from they have it anti trust law exemption,

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Speaker 1: you know, because sports leagues in the US or you

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Speaker 1: know quasi monopolies and what that allows them to do

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Speaker 1: is it in order to have a better um fudiciary

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Speaker 1: control is to you know, bring in a wealth of

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Speaker 1: funds or wealth of you know money that you know,

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Speaker 1: the splits between the teams and the leagues what have you.

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Speaker 1: That practice alone is what makes you know, the US

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Speaker 1: sports market so big. So if you take those again

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Speaker 1: best practices and so forth into Africa, UM with growth

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Speaker 1: sectors and sports such as um you know soccer rugby

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Speaker 1: is a huge sport in Africa. You actually have seven

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Speaker 1: African countries that are in the top UM fifty of

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Speaker 1: world rankings in rugby. You know South Africa's number four,

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Speaker 1: Kenya is in the top twenty. But you have other

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Speaker 1: countries such as you know, Madagascar, Uganda, UM Court Devoir,

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Speaker 1: um Zambia and um Boswana that actually have UM world

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Speaker 1: class rugby. Now those countries that I just mentioned, they're

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Speaker 1: nestled within other countries and those rankings that have a

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Speaker 1: way um a bigger GDP. So imagine now if you

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Speaker 1: started to invest in structure and so forth, what the

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Speaker 1: potential that can be you strengthen their league and then

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Speaker 1: if you strengthen their league, you strengthen global TV rights

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Speaker 1: and so forth global TV rights. But also there's a infrastructure, right,

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Speaker 1: it's an investment sports investment within Africa, continental Africa. You

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Speaker 1: and I spoke about this prior to this this recording. Um,

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Speaker 1: it's an entry point, right. If you find someone that

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Speaker 1: wants to take a stake in a team or adventure,

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Speaker 1: that's their way in to the country a k a.

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Speaker 1: The continent. Can you talk a little bit about that, like, how,

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Speaker 1: how are you selling this to investors? Are you selling

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Speaker 1: it as Okay, population is young, it's booming, it's burgeoning,

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Speaker 1: engagement levels are high. But you know, when you think

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Speaker 1: of Africa, there's agriculture, there's infrastructure, there's real estate, there's tech.

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Speaker 1: Can you talk a little bit about that, and how

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Speaker 1: from an investor perspective, it's a ripe opportunity. So let's

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Speaker 1: touch on let's say real estate and tech. Um and

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Speaker 1: I can go into various verticals, but let's touch on

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Speaker 1: those two. So real estate the largest asset class in

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Speaker 1: the world and in the United States. And again I'm

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Speaker 1: doing some you know, comparisons when I go to I'm

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Speaker 1: from Brooklyn, and so if I want to go see

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Speaker 1: a game, Brooklyn's in the house. If I want to

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Speaker 1: go see a game at the Barclay Center, I can go.

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Speaker 1: But I also can live in the area, so I

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Speaker 1: can have They have a precinct, sports priescinct has residential

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Speaker 1: commercial I can go to cross the street to Target,

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Speaker 1: I can go have dinner, what have you. UM. For

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Speaker 1: the most part of Africa, a lot of the arenas

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Speaker 1: and stadiums are built as almost standalones. So one of

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Speaker 1: the things that we're actually working on with UM investors

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Speaker 1: and with you know, UM the respective stakeholders is actually

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Speaker 1: building sports precincts and having these commercial residential entities with

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Speaker 1: a sports stadium, whether it be an arena or a stadium,

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Speaker 1: being the anchor point into which although that entertainment is

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Speaker 1: built around. And so that adds a tremendous value because

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Speaker 1: the thing is is that real estate is transferable in

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Speaker 1: terms of a knowledge base anywhere in the world, so,

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Speaker 1: you know, and then tech um is pretty much an

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Speaker 1: over overarching driver for a lot of this. So if

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Speaker 1: you think about it, you know, Africa is pretty much

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Speaker 1: a mobile first economy, you know. And then the other

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Speaker 1: thing with tech is if you look at the influx

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Speaker 1: of UM investment. A lot of that has gone into

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Speaker 1: fintech in in Africa. UM. But if you're going to

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Speaker 1: grow a system in which payments can be made and

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Speaker 1: then which transactions can be made, then you have to

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Speaker 1: have a other systems of growth in which people can

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Speaker 1: actually purchase certain things. So when I go again, I

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Speaker 1: go back to the merchandizing example, whenever I'm in Africa,

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Speaker 1: travel back to the states that lived between UM, you

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Speaker 1: know both UM. On continents, I'm always asked to bring

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Speaker 1: back something and more in times than not, it's a

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Speaker 1: Yankee hat. Really, jay Z has the Yankee hat. That's

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Speaker 1: what they're looking for. So the kid from wants a

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Speaker 1: Yankee has to bring back a Yankee hat UM to

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Speaker 1: some extent, and they don't want just one the end,

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Speaker 1: they want a new raic Yankee hat. So it's a

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Speaker 1: specific Yankee hat. So I have to go to lids

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Speaker 1: and pick something up. So the thought process and it

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Speaker 1: goes to show you the power, the power of the branding,

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Speaker 1: the image, and just how on the other side of

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Speaker 1: the planet people have their eyes on something that was

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Speaker 1: conceived and created and marketed worldwide from the US so

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Speaker 1: now what are the conversations with investors become and say, okay,

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Speaker 1: you know, can we have conversations with you know, the

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Speaker 1: lids or the other sports merchandizing companies of the world

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Speaker 1: to actually have a presence in Africa UM actually you know,

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Speaker 1: speak to more manufacturing UM direct. And the one thing

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Speaker 1: about Africa is that has a very relaxed trade agreement

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Speaker 1: between transactions in between countries. Now that's recent, that's really

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Speaker 1: it was the Africa Free Trade Cooperation Agreement. You mentioned

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Speaker 1: value right again, you're an investor, You've been here, you've

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Speaker 1: been there, You're highly connected, you're doing your thing. Can

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Speaker 1: you talk about how undervalued this whole process has been.

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Speaker 1: I mean, Africa wasn't in the pitch years ago, maybe

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Speaker 1: even a decade ago. It was a nice to have

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Speaker 1: if we could maneuver our way in. So right now,

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Speaker 1: where do you see the value? Population growth, more and

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Speaker 1: more people coming online. Yes, you're tapping into all these

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Speaker 1: touch points. But if I were sitting here and I said, Earl,

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Speaker 1: here's five hundred million, what would you do with it?

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Speaker 1: What would Rumble do with it? Well, first of all,

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Speaker 1: I would say thank you, and then I'd go home.

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Speaker 1: And be like what did I just do? No, you're

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Speaker 1: you're you would be in good hands with you And

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Speaker 1: the thing is why you would be in good hands

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Speaker 1: is because you can spread that throughout various touch points

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Speaker 1: within sectors of growth. So everything from UM companies that

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Speaker 1: are looking to accumulate data, UM, mobile ticketing, UM, fantasy sports,

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Speaker 1: as well as U sports betting and sports betting is

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Speaker 1: really really taking off in Africa. Sports betting is it

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Speaker 1: as political there as it is here? I wouldn't say

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Speaker 1: it is as political. I mean it's obviously you know,

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Speaker 1: sports betting is going to be heavily regulated throughout various regions.

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Speaker 1: But in terms of something of growth, I mean, you

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Speaker 1: know bet ways, they're UM eight is there. All the

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Speaker 1: major betting houses are are there because for the most

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Speaker 1: part they they pretty much have absorbed let's say the

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Speaker 1: UK and Europe, where betting was pretty much kind of

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Speaker 1: like the first UM point of entry. UM. The US

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Speaker 1: is obviously coming aboard, you know, state by state because

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Speaker 1: there's no federal framework, but Africa is really offering a

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Speaker 1: tremendous opportunity in that space. E sports is also a

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Speaker 1: taking off very UM in terms of popularity sports. So

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Speaker 1: my five hundred million sports another sports betting and the

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Speaker 1: rest in merchandise you can put in merchandizing and infrastru Yeah.

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Speaker 1: But the other thing is is that if you um,

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Speaker 1: what investors also are in tune with is the ancillary

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Speaker 1: support systems that go in with with sports betting. So

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Speaker 1: if you look at you know, owners of NBA, NFL teams,

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Speaker 1: what have you. Yes, they'll own a team, but their

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Speaker 1: other business is also a core business and what they're

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Speaker 1: looking for growth, it's another asset. It's another asset. So

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Speaker 1: if you're looking at let's say the merchandizing space, one

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Speaker 1: of the things that you're gonna have to do is,

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Speaker 1: particularly e commerce, is get those um products in people's hands.

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Speaker 1: So investing in let's say Last Mouth Delivery, you know,

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Speaker 1: it did doing pretty well for Jeff. So whether you're

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Speaker 1: on the rickshaw or scooter, it's yeah, it's doing pretty well.

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Speaker 1: So the thing is when we give advisory as to

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Speaker 1: how to deploy capital, it's in the sports sector, but

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Speaker 1: also to be an entry point into ancillary businesses in

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Speaker 1: which we can take positions. Also Bloomberg Business of Sports

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Speaker 1: contributor down Kissy speaking to Earl Patton managing partner of

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Speaker 1: Rumble Ventures of ec firm looking to gross sports and

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Speaker 1: entertainment in Africa. Thanks for joining us for this special

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Speaker 1: bonus Bonus Bonus episode of the Bloomberg Business of Sports podcast.

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Speaker 1: I'm Michael Bard. Join us every Monday, Wednesday and Thursday

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Speaker 1: as we cover all the big money stories and world sports.

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Speaker 1: You're listening to Bloomberg Business of Sports from Bloomberg Radio

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Speaker 1: around the world.