Capital Merges with Labor (LIV / PGA) + No Consensus on Livestream Commerce

June 22, 2023 by Chris Erwin

RockWater Roundup

RockWater analysis to make you a better investor and operator. Today we discuss the LIV / PGA merger and the need for a data-based discussion on livestream commerce.

Capital Merges with Labor (LIV / PGA)

by Chris Erwin

2023 is the year capital merged with labor.

You can thank social media.

Some familiar data…

⚽ Messi getting equity in Inter Miami, and rev share w/ Apple, Adidas
👧 D’Amelios launch new management co w/ Firebird
🚀 Naomi Osaka launches Hana Kuma prod co

Yup, labor is now an owner. But a new datapoint raises the stakes!

Golfers just forced the merger between the PGA TOUR and LIV Golf.

Let’s break it down via biz fundamentals…

Modern sports fans are loyal to athletes, not leagues or teams
Athletes feel underpaid (rightfully so)
Liv paid big $$ to recruit golfers
PGA lost many of its star golfers
Less stars = less eyeballs = less revenue

The PGA’s back was against a wall.

But the deal is not yet done. Time to start asking some important questions…

Are players now worse off? Duopoly, back to monopoly
Will players who didn’t take LIV money, get a rate adjustment?
Will this pass regulatory approval?
What incentives are *really* driving this deal (e.g. what is proposed PGA CEO comp package as new combined leader?)

…always follow the $$$!

Of note, some good reader comments on the post to also consider below. Shout-out to Tom Neveril and Jon Heeter for some good insights…

LIV viewership was 400k per tournament day while PGA viewership was 2.3M per Nielsen
Was merger a result of a trojan horse investment by PIF that gave them control of PGA?
Was the deal more likely a result of the threat of DP World Tour merging with LIV and attracting int’l golfers?
Will be hard for merger to pass CFIUS review

No Consensus on Livestream Commerce

by Chris Erwin

There’s no consensus on the future of US live + social commerce.

So we need a data-based discussion.

Over past year the news has been a mixed bag…

🔽 Once-hot startups shutting down, only $2M raised in ’23
🌐 eBay, Poshmark, Fanatics, Pinterest leaning in
🏴󠁣󠁯󠁭󠁥󠁴󠁿 Social incumbents like Meta pulling back
🌱 100+% YoY live commerce growth

So it’s time to start asking better questions.

About KPI performance, changing brand and viewer needs, and how companies must adapt to new mkt conditions.

I ask these questios to an exec panel at Vidcon tomorrow, Friday, with…

Adi Ronen, CEO at buywith
Mike Westgate, Head of CPG / Retail TikTok Shop
Max Benator, CEO at Orca
Christian Chanel, Live Shopping Host

Our panel will be in the Industry Track at 1:20pm tomorrow in room 304 ABC. Hope to see you there!

BTW, below is some market data I’ve compiled from Coresight and eMarketer. Of note, there’s no explanation of methodology, so who knows where these numbers really come from. My guess is PR headlines from reported revenue by tentpole companies like WhatNot, then extrapolation assuming a normal distribution across rest of market players. That can vary widely. If anyone has any insight here, lmk!