16 February 2022 |

Week of 2/14/2022: Perpetual’s Perspective

By Adam Ryan

Kroenke’s wedge into real estate

TLDR: Stan Kroenke, the owner of the Los Angeles Rams football team, hosted the Super Bowl last weekend. SoFi Stadium was built for more than $5.5B, the most expensive stadium in history. This year, the Rams will create a profit of $37M. Creating a long-to-impossible payback cycle for the owner. 

Perpetual’s Perspective: Kroenke is one of the largest real estate developers in the country and his wife is the heir to Walmart. His net worth exceeds $10B. Some billionaires own a stadium for their ego or passion, but for Kroenke it was a wedge into capitalizing on his speciality: real estate. Kroenke built the new Rams stadium in one of the most underdeveloped parts of LA. He was able to develop dozens of acres of land in a major metropolitan area, which is the largest project in the last 50 years. Kroenke may not be making money on his sports team, but the apartments and retail stores around the stadium is where his payoff will happen for the next 30+ years. As a St. Louis native, I think Kroenke is a total snake for lying to St. Louis about his intentions to leave — and the courts agreed, making him pay $750M to the city of St. Louis for not negotiating in good faith. In total the investment is close to $7B, but it appears the payoff will be much larger. 

Financial Times hits 1M paid digital subs

TLDR: FT will soon hit 1M subs according to Sara Fisher from Axios. FT has been one of the first to have a digital paywall and transitioned over to paid subscription trials in 2015. Revenue grew to $593M, up 18% year-over-year. Digital journalism makes up 46% of total revenue. 

Perpetual’s Perspective:  FT has proven the path to scale subscriptions. The company has more than 700 journalists on staff and have accomplished the feat the hard way – through high quality content. But that’s not all I see. I see a team with nearly 200 marketers on staff and a tech team that has adapted and built a machine to convert eyeballs into subscribers. Compare that to The Information, another subscription-focused publication — they have 4 marketers and, from the looks of it, are struggling to really gain large revenue traction. Great journalism is table stakes in a subscription-focused company, but make no mistake: you’ll lose your hand if you’re not investing in your marketing team.

Coinbase ad crushed at the Super Bowl

TLDR: Coinbase, the leading crypto exchange, debuted it’s Super Bowl ad with a QR code ad. The ad cost $13M and the impact is more than 20M visitors to their site. Coinbase offered new users $15 of free Bitcoin and was doing a $3M giveaway that customers can enter. 

Perpetual’s Perspective: I saw this ad when watching the game with my wife and parents and immediately was jumping around like a kid in a candy shop. I couldn’t spit the words out fast enough about how smart I thought the campaign was. They captured “what’s old is new again” (DVD logo bouncing around), mystery (I was guessing who it was), and a reward for both current and new customers. It also sparked conversation — my dad and I went on to have a 15 minute conversation about crypto. This is what great ads do, they capture attention and spur emotion. The traffic has turned into customers, too. There are now more people in the US with crypto accounts than savings accounts. My question: Why don’t media companies make an amazing ad for the Super Bowl? They have the talent, it should come easy.