3 - Hardball
"Gentlemen."
The negotiators of the International Sports Media Alliance lined up before me. Ex-lawyers, all of them, the jocks of the business world. The fellow directly in front of me, Patrick Yarld, was even a criminal prosecutor in his younger days. Occasionally I felt stupid and cocky enough to bully the League's board of directors. These fellows would not take my crap so lightly.
Brian, our chief accountant, and Marx, our revenue specialist, joined me on the Pokémon League's side of the table. I took a deep breath.
"Let's get started shall we? And remember, everyone play nicely."
The showdown began in earnest. Each side laid out the facts as seen by them, while the other tried to skewer the facts in the most favorable light for their own ends. Conversation waxed and waned, like a medieval battle fought across the nuanced plain of advertisement revenue. Each word spoken was measured and weighed, terse and almost inhuman in its predatory dissection. It was a game, a high-stakes game, to find the hidden weakness of the other side.
That weakness was a number. For us, what was the lowest raise in our contract that we could accept? For them, what was the highest they'd yield to us? From an outsider's perspective, it was a robotically civil affair. The nastiness was obfuscated, hidden behind the jingo of business negotiations and within archaic legal contracts. Things as innocuous as "mandatory legal arbitration in the case of biased match coverage" could be taken as an egregious insult to a corporation.
"Stone, understand that the vast majority of our revenue comes from commercial advertisement. Corporations are not so impulsive as the public and will readily draw down their revenue if they feel the returns are not worthwhile. Their data is suggesting the purchasing power of the target audience is declining. They can't justify the same level of ad campaigning as we've heretofore enjoyed. Are you suggesting the data is wrong?"
"No, I trust their data is accurate- for the moment. I only ask that you take into account mitigating factors and look towards the future. I concur that the reason for the decline is the greater composition of young audience members, kids, teens, college students without jobs. However, I believe this is not a permanent shift, but an unfortunate age gap."
"Explain," Yarld demanded- politely.
"In recent years we've seen the decline of the old guard, elite veteran trainers who are either retiring or losing their edge. Case in point, former world champions Terra and Drake have retired in the past two years. Case in point, myself and my own retirement. With them goes their fandoms. Older audience members lose interest in the professional leagues when their favorites quit the game. In turn, young trainers with younger fandoms replace the veterans."
"While understandable, we think that should have a negligible affect on the audience age."
"Ah, but it does. We've had an extremely unusual gap in the age range these past few years. My cohort, the 30 and 40-year-olds, who ought to represent the prime of the Pokémon trainer field, was rather weak compared to the generations before and after them. I partly attribute my own championships to a relatively weak slate of opponents during my lifetime. It only stands to reason that the market looks weak, because the most exciting trainers are still young and attracting younger audiences. As they mature, so will your audiences. Here."
I pulled up a data cross-section on the overhead projector.
"38% of newly-qualified league trainers are in college or recently graduated. That is quite a lot, the most it's ever been. Assuming this reflects the general audience that follows them, that means many of our 'young' fans are about to graduate, take up nice, white-collar jobs, and become the perfect consumer for your ad-purchasers."
Yarld furled his eyebrows.
"You may be overestimating the total purchasing power of the upper-middle class."
"Ah." Time to play one of my trump cards. "But isn't it true you've recently entered into deals with Epic Electronics, Chessram Motors, Orange, and Unova Media Corp.?"
"Where did you hear that?!" Yarld twitched, which in this setting was as good as jumping in shock.
"Nowhere specific. Just putting the pieces together from various public sources." And maybe a few personal connections, I didn't add. "Now, those are all high-end companies, with lots of money, and they target college-grad clientele, don't they?"
"They do."
"So, there you go. If you're willing to look just a little farther down the road, you'll be primed for maximum exposure to a money-rich, passionate, tech-savvy audience. Your contract partners will surely enjoy access to that market, right?"
"You're assuming that market will have jobs in three years."
"Hmm?"
He's about to fire his own shot across the table.
"I know you've seen the data and it's understandable if you want to cherry-pick the most optimistic vectors, but ISMA can't stomach the risk involved."
"You're talking about the government-bubble."
"Precisely."
That prickly issue. Economists are worried about the real value of several major governments and the worth of their bonds. Some were predicting a recession, led by a collapse in the government contract market. Worst, with the Pokémon League being a pseudo-government institution ourselves, it's not like we're isolated from the issue. Hell, Yarld just practically accused the League of being overvalued.
That line of thinking could actually see our contract pay-out get cut. That would be a disaster for us. Time to go into the damage control.
"Our vulnerability is not as bad as it appears-"
"Oh really? I find that hard to believe, since your reserve funds have all but drained up. You can't have more than 20 billion pokédollars in the reserves right now."
I winced, which Yarld took note of. We only have 13 billion. Barely a month's worth of operating costs. Another crisis like six years ago would sink the League.
Now I have the unenviable task of figuring out how much of our internal politics I have to reveal to Mr. Yarld in order to assuage him.
"It's true. We're operating on slim margins- yes, even some government subsidies to cover the more critical functions. The best I can offer is that we are financially sound. You're aware that the previous CEO, Lance, was ousted because of the League's floundering public image. However, one of the few good things he did for us was to pay down our debts and get our budget balanced. Even though we saw an astronomical drop in revenue, due to participation- (I winced again, thinking how, in a meeting much like this, Lance was forced to accept an 85% cut)- we are now operating in the black with less than 8% debt."
"Hmm."
Yarld wasn't impressed. For all their talk about risk management, the underlying corporate culture hated conservatism. Aiming small and keeping balanced was antithetical to their world-view. They always wanted leverage, profits, explosive growth potential. They rake in debt like crack addicts. They gamble on big earnings and take astronomical risks. They've become very good at dodging the consequences of their bad gambles by manipulating the financial markets.
Still, I could take advantage of their greed. Not quite yet, but soon. When the time was right.
The above conversation was just a small sample. Three hours passed in exactly the same manner, often repeating the same talking points over and over and over, ad nauseam. It amounted to politely insulting the other side's business practices and profitability- and I felt like I was on the losing end. Still, we both knew that, come noon, we would be walking out of here with a number. Both sides had been pushing this negotiating off for months. Now tax day was close and Nihon, Americia, and Anglander, three of the biggest national mega-conferences, had their payout deadline due this Monday.
"That's that. If you can't agree on your exposure to the government subsidies bubble, we can't agree to heavily finance the risk."
Ugh.
"Could I talk to you, alone?" I nodded for Brian and Marx to leave the room. Yarld's cronies likewise exited.
"So, you're ready to talk hardball," Yarld said.
"Yep."
"Give me a number."
"You first," I insisted.
"I insist," he flung back at me. He had his hands folded in his lap, looking, or attempting to look, relaxed and in control. Sometimes the outcome had nothing to do with business realities and everything to do with personal presence.
"Well, before I do- I want to ask, what do you think the League's highball is, in terms of profit over the next five years?"
He stared at me for a moment. "1 trillion."
"Would you believe me if I said it was closer to 2.5 trillion?"
"No." Flat denial.
"Then here." I handed him a tablet with a particular graphic highlighted.
"This is?"
"Attendance data for the past half-year. And projected data for the next year."
"What does attendance have to do with television viewership?" he asked, annoyed. "People who go to games aren't watching them on tv."
"Do you really believe that?" I asked. "Do you really believe it's a zero sum game, that every seat in the stadium is one less pair of eyeballs on your ads? Or are you willing to accept that stadium attendance is indicative of the overall popularity of Pokémon battles. You see that chart, and tell me that the sport is not about to resurge."
"The data doesn't support that," Yarld said.
I stood, bent over, fists on the desk, so I could look the negotiator in the eye.
"You know and I know and everyone knows League play has sucked for five years. Bad battles, bad atmosphere. Lance wrecked the competitive scene. But look around you. People are still training their Pokémon, still sending their teenagers out on Pokemon journeys, still hitting the gyms. The bond between humans and Pokémon is still as strong as it's ever been, and a big, BIG part of that bond is competitive battling. Trust me, the public WANTS a better League. They WANT bigger, better, harder-fought battles. Recession? Recessions just make people spend more on light entertainment, to drown their sorrows away. There is a massive, absolutely massive reservoir of fan support waiting to burst out again after so many years of mediocrity. That fandom will translate into customers. You just need to believe in it. Believe in us. Give us the support. Look at what I've already accomplished after six months, and I promise you that growth will accelerate. Give me your support, and I promise big dividends."
"Mmm." Yarld is slumping in his chair, as if pushed down by the force of my willpower. Was I good enough? Can emotion and appeal to greed work? He seems like he's just on the edge…
I took out my own smartphone and accessed a video. I began playing it, then handed the device to him. He raised a questioning eyebrow.
"Heard of Winstrate?"
"That guy from Hoenn? Uh, like, tenth-ranked in the nation or there-abouts?"
"That's him. Watch."
The video was a battle- and an exciting one. A young girl, maybe sixteen years old, fought the middle-aged Vito Winstrate. She herself looked like a delicate thing, with a white summer dress and cute, spiky twin hair-tails. Her demeanor proved otherwise, however, as she brazenly commanded her Pokémon through the battle. A Steelix thrashed and broke through multiple Double-Team copies, attempting to get at a Shiftry. The latter was suckered into attacking, managing to land a Brick Break but also bringing it within the grasp of the Steelix. The gargantuan metal snake wrapped around Shiftry and combo'd it with Screeches and Earthquakes.
Yarld became engrossed in the video. I let him watch the whole thing through, noting how he muttered and paid close attention. It was easy to tell, now, that he wasn't simply a corporate money-sucking drone, but also a sports fan himself.
"That is one of our Gym Leaders, I believe, in a match last year. She's young, not even old enough to legally hold the title, but she still managed to beat Winstrate, one of the ten best league players in the nation. I'm telling you, she's the tip of the iceberg. The next generation is full of such talent. All told, it might be the most talented in our lifetime. The most exciting- the most audience-captivating."
"That's subjective, immeasurable," Yarld said, somewhat weakly, while setting the phone down.
Well, he wants measurables? Time to fire my final trump card.
"I'll open in-stadium advertisement to you," I said.
"But that's reserved for the locals," he protested.
"Local governments will be hit harder than federal or world govs if the bubble bursts. They'll pull subsidies, so the local mom-and-pop shops won't be able to afford the space. I can guarantee 20% minimum space, up to 70% if it's a bad recession."
"Name your cut," Yarld said, with a hint of curiosity but also caution. I had him.
"20%," I said flatly.
"8%," he countered.
"18%."
"9%, no more."
"Come on! 14%."
"14%..."
A pause, a held breath.
"Fine. I want to see the stadium access in the contract."
I can't react. I can't show a single sign of emotion. Everything would be ruined. EVERYTHING, if he so much as sniffed weakness.
"Of course."
I held out my hand, which he shook.
"Just think of next year. Sky-high margins."
"We'll see. I hope you're right."
The platoons of businessmen re-entered the room. The next half-hour was spent in details. I gripped Brian beneath the table, a physical warning not to jump when he saw the figure.
14% increase in our contract. 14%! Brach had all but said my job was gone if I could get no more than 4%! Our minimum offer, the increase we needed to stay afloat? 6.5%! 7% to make profits! Ha! No! I had gotten double our lowest acceptable offer. DOUBLE!
I am GOOD!
"Hey," Brian whispered into my ear. "You might want to ask for a pay raise from Brach this afternoon, it might be your only chance you get him on a lurch." He finished by knuckling me in the thigh and a knowing grin. The grin instantly turned to a frown when Patrick Yarld came up to us.
"Well, I suppose the next we'll see each other will be next year's meeting," Yarld said to me.
"If I still have this job, yes," I replied.
"You had better. The company is betting on you."
He departed with his goons.
I didn't know this, actually I never found out, but for your benefit: the TV company's max offer had been 20%. Given the League's position and what I had offered, our contract was realistically worth only a 12% increase. In other words, charisma alone had earned us an extra 2%, or approximately 16 billion pokédollars. Enough to buy, say… a moderately-sized private island or two.
As I exited the meeting room, I reached up and around and patted myself on the back.
Easy there, buck-o. Day's not even half over.