On the latest episode of JaneWallStreet Presents: At The Table, a bi-weekly podcast exploring the intersection of sports, media, and finance through the lens of (mostly) female decision-makers, JaneWallStreet Executive Chair Deirdre Lester sits down with former CEO of CBS News, Stations, and Media Ventures, former President of ABC Stations, and current Advisor to beehiiv and Merzigo Wendy McMahon.

In this near-hour-long conversation, the pair talk through a multitude of topics including:

Change Inside a Legacy Organization

Disruption tends to be challenging inside complex, matrixed businesses with many stakeholders and entrenched processes. But transformation can take root when it begins inside a protected vehicle.

“I have experimented with multiple ways of driving change in legacy organizations and the most effective one I have found is to incubate. You create a lab, you create a startup within, you create a business that lives on its own, and you nurture [and] protect it until it's ready to go into the wild,” McMahon said. “Because the reality is two things can happen. First, if you're building an [asset] that isn't showing up from an EBITDA perspective, maybe you're losing money in year one, year two, or you're only driving a few million dollars that just gets lost on the P&L of a larger organization, you don't want it to die before it ever gets a chance to even breathe. And second, if you're trying to drive change across thousands of people, teams in markets across the U.S., teams globally, it’s really hard to do that unless you have a vehicle of change that you can point to.”

Bundling Inventory to Lift Non-Revenue Sports

Effective ad sales require one to understand scarcity and leverage.

“I oversaw 60 Minutes for CBS News and it was always like ‘We have an [NFL] double header this weekend, so that means the audience moving into [the primetime investigative news show] is going to be outrageous. All of those pieces and parts come together, in addition to the fact that there is a supply-demand tension there still, [to create an opportunity to maximize the value of the inventory],” McMahon said. But “if [an advertiser] wants to be in the AFC and the NFC Championship [games, they are] going to need to also be in Prime, and News, and, and, and. Bundling [a package] around the thing that clients really want and need is the art form.”

To date, few colleges or universities have done it effectively across their athletic department; which helps to explain why relatively few dollars have historically found their way into women’s and Olympic sports.

“One of the universities that I was advising kept on referring to women's sports as non-revenue generating sports. I said, ‘Can we call them emerging sports because we just haven't figured out a way to drive revenue around [them] yet?... We haven't solved that puzzle,” McMahon said. “It may be more about [a school owning] all of [its] IP versus outsourcing it to a third party. And if [the school] owns all of [its] IP, if [it can] create [content], if [it] owns all of the sales, all of the sponsorships, every opportunity that [it] can to drive revenue around [the] program, how [are they] thinking about that from a blanketing and bundling perspective versus a one-sport or two-sport perspective? Once you have someone in the [leadership] chair [who understands how to negotiate], you're going to see more and more money funnel into those emerging, not non-revenue generating sports.”

Advertisers Prioritizing Niche Communities Over Scale

As audiences fragment, advertisers are increasingly focused on the quality of the connection and likeliness brand exposure translates into action.

“It used to be [that companies] were so focused on reach and scale and how big of an audience [they] can deliver [a message to] in sheer size. Now, the most valuable audience is niche; it is a community, a loyal fan base. [If] I'm an advertiser or I'm a client looking to connect, I'm incredibly focused on potential buyers of my product that are fully engaged [with the distribution outlet],” McMahon said. “It's a different sort of mindset from a buying community perspective. Yes, scale and reach is still important. That's why the NFL [remains] so essential to broadcasters and to advertisers... But communities and fandoms are springing up overnight and there's so much trust and intimacy in those relationships between the publisher, the creator, and the person choosing to subscribe or watch or follow or engage or buy merch or go to a game [that those audiences are often more valuable than larger followings on competing channels].”

Sounds like Wendy is describing JohnWallStreet.

📺 Watch the full episode on JohnWallStreet’s YouTube page.
🎧 Listen or watch on Spotify.

We’ll be back with the next episode of JaneWallStreet Presents: At The Table in two weeks. A-Rod Corp Chief Business Officer and Minnesota Timberwolves Chief Strategy Officer Kelly Laferriere will be our guest.

Catch previous episodes of At The Table, including our sit-down with LOVB Chief Growth Officer Stephanie Alger, former Amazon Web Services’ (AWS) Global Head of Sports Julie Souza, Head of Fubo Sports Network & Fubo Studios Pamela Duckworth, former Barstool Sports CEO & current Mule Media Co-Founder Erika Badan, and ATHLOS Acting President Kayla Green on JohnWallStreet’s YouTube channel.

Don’t forget to like and subscribe!