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XLIVE Interview Series
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Tobias Sherman, Foundry IV - Interview (Part 2) (video) - XLIVE Esports Summit 2018

Watch part 2 of our video interview with one of XLIVE’s featured speakers, Tobias Sherman, CEO & Co-Founder of Foundry IV.

Watch Part 1 of XLIVE's Tobias Sherman Interview HERE

 

TOBIAS SHERMAN INTERVIEW (PART 2) TRANSCRIPT

[0:00] Let’s get a little bit deeper, Tobias, you crushed the agency business, you structured a lot of deals, notably the eleague rollout and what you’ve done there. You got out of the agency business man and it seemed like you had a pretty good thing going. What’s up?

[00:15] Yeah. Well, okay. So what I’m doing now an agency can’t do, right. An agency can’t become a game publisher. It’s just not possible. I mean, if you think about it, an agency should be primarily agnostic to opportunity, right? They can’t really play favorites. They do in certain certain areas. Obviously we can see with wme img, my former employer, they, you know, where they went ahead and purchased the UFC, they make big moves. There’s no doubt. But, you know, I think I’m one of the greatest things that both turner and wme offered us initially with eleague was the freedom to go do it. They never interfered with anything. They gave 100 percent support and you know, we went and just did that on the phone every day. And I got laughed at the first name I called, I won’t mention who they were as a European team and they ended up signing up, but they laughed at me. It’ll never work. You’ll never get a major and it’s not going to go to TV. Right. And I said, well, here’s the contract, here’s the, you know. And they laughed, which is fine. It’s typical. And I think that that’s where I live in the space, if I’m not sort of pushing the limits, if I’m not out there saying no, we can do more, we can do better, we can go bigger and we can provide more value while we do it, then I’m failing because you’re right, I could’ve just stayed there and sort of rode off into the sunset. But I feel it’s an obligation when I see all this money flowing in and I and I can see better ways I think to achieve what they’re trying to achieve. And the bottom line is this, we can just cut to the chase here and just say, look, sports teams need to own the product. They need to own the IP. That’s the bottom line. It’s the world they know, it’s what they want to do is what they desire to do and whether they want to wake up to that today or tomorrow or next week or next month or next year, they’re going to make that realization. And I think a lot of them have. And I think where we play in the space, maybe some publishers might not love what we’re doing. Maybe some are saying, why would you do it that way? You could do it the way we’re doing it and make more money, which I’m not about. I think everybody knows that, but I think if they’ll just take a beat, take a minute, it’s going to pan out for everybody much better. So the reason I left was I saw this opportunity to say, hey, we can build something better and everybody can benefit. They might not believe it at first, but they didn’t think so when I was going to do the agency either, right? MLG wasn’t exactly pleased when I announced the agency years and years and years ago when they were the only really the only player in North America. And then, you know, Sundance ended up officiating my wedding. So that’s usually how things go. I think you know, if everyone has a little bit of patience, there is no need to try to be an empire builder here. I think that, you know, if we’re all smart about this, it plays out great for everybody. But you know, the only thing that I will say, the only thing that can really derail this thing is greed, right? I think greed is something, greed and ego are two things that sports has no place for right now. So I don’t care. I don’t care how much money you got a team to spend for a franchise that doesn’t matter to me, shouldn’t matter to you. And shouldn’t really matter your stockholders either. I don’t think that, you know, and I think some publishers agree with that that are doing it and maybe some have a different take, but you know, I think that for now it’s pivotal that whoever is investing has a pathway to value and money and making money because that’s what fuels this whole Party, right? It’s not a charity. And as much as we all love it, if we want to see the show, keep going, we have to make sure and ensure that, you know, the returns are being made.

[03:41] Talking about some character traits, you mentioned greed, how do you ensure that humility is there, that the inclusion is there in the space, given your track record and experience? I mean, you’re a pretty unique place to be critical, right? And, and keep outsiders out and protect the industry. Um, inclusion is something I’m really passionate about. I feel like a lot of people in the space have gone to these ivory tower positions and that inclusions kind of not there, you know, and it’s hurtful for me at least I’d question it. Um, as a Gamer I feel like we all look for that. Gaming was our outlet, what we went for, where do you stand when it comes to that? Inclusion and bringing people really into the space.

[4:19] I got goosebumps right now. You can see it. I mean that’s something I’m super passionate about and I mean that’s another reason I think why I left the big machine as great as that is and as great as we are able to accomplish things and I love the legacy of, of what we leave behind there and you know, I’m sure whoever comes in there is going to innovate further on sort of the things that we’ve laid down and invent new things. But I mean I feel you on that because it’s the same exact situation. Every time I’ve done something in this space I’ve been faced with somebody trying to push me to the side or pushed me out or it won’t work or. I mean it’s gotten a lot easier. Obviously when you get some wins it becomes easier and relationships with people that know that sort of, hey, we’re in the boat together, but there is definitely a sense and that’s why I talked a little bit in the beginning of the interview about saying I’m here to ensure that we don’t whitewash the history of esports. You know, some, some big publisher coming and when you say outsiders, I sort of include some of these aaa titles, outsiders. They could have helped. I mean years ago we wouldn’t have been that hard for them to pick up a phone to Papa John’s and say, hey, we have this grassroots thing that’s really taken off in Korea and we’ve got these North American teams and they’re struggling and everyone’s really pulling together as a publisher. You know, we’ll give you a spot. We’ll give you an item, will give you an end game. But I mean, it’s funny because some of these publishers we’re talking to today, I met with them right before eleague three or four years ago and they were showing me their plans and we were sort of vibing on what could be done in this space. And I’m like, well, you’re going to do in game items, right? No, that’s not what we do. You’re not going to give fans the chance to celebrate their favorite team? So when you talk about inclusion, there’s the business side of it, there’s the fan side of it, there’s the player side of it even because they’re boxed out. I think these new players associations are great and I think everyone has an answer to those.

I think on the business side, we go through these ebbs and flows every five or six years where it’s like, oh, the door’s shut. There’s no more. Which is complete bs. We haven’t scratched the surface of esports. Right? Content is king, traffic has god. Nobody’s figured out how to maximize that yet. And, you know, activations and all these different things, you know, for us, it’s why I’m here today. Like I, I have other meetings in Vegas. I literally flew here to do this, touchdown, talk to people out there talking to Rustin. You know, I met him a year ago. He’s hustling. I like talking to the new young guys that are coming in, the young guns and seeing how can I help them, how can we, it, it might, it has nothing to do with it is purely out of sort of esports, altruism. And I think a lot of people that try to go that route even sometimes get a bad name for doing that. Um, because again, why are you helping this guy? He’s competing. Everybody’s competing with somebody, right? So I think that, you know, I mean, I know I’m on a tangent here, but I’m, I am passionate about the inclusion. I am passionate about the inclusion. I think that, you know, if, if certain people had their way, there would be no inclusion. It’s, we’re going to set the standard of how it’s going to be in. That’s it. If you look at, but that’s an old model anyway, right? Look at the NFL, the NBA, NHL. It’s all worked so well since the sixties. That great 1960’s model television that is now shattered, right? So they’re looking for audience. They’re looking for how to engage millennials and that’s of course what the sponsors want, who pay for everything. So you’ve got a lot of smart people, but I think you’ve got some people going, let’s just use the old model in a new space and we’re just going to hire people that we know in our cronies and our buddies from around Hollywood and around the way that we work with and I think that at the end of the day that’s going to be a subpar product.

Now, one of the greatest things we got from Turner was Craig Berry whobought in 1000 percent to the fact that this needs to be authentic and and just went HAM on learning every aspect of it that he possibly could and was when we would yell at him and be like, that’s a stupid idea. In the early days, he was super receptive that there was no ego in that room. Right. And I think now that’s changed. I think now you’ve got people that are afraid to speak up. Then that’s coming more and more like people are afraid to say things. Teams are afraid to say things. That’s insanity. You guys built this need to be empowered to say things. How could you be afraid to say something? Are you kidding me if you don’t think it’s right to say it or then don’t complain. You know what I mean? Because it’s, it’s never going to change. And I fear that the inclusion rates will drop the more you just give in to that machine. Right? But it’s never been easier than to just grab a camera, even if it’s the cell phone and I mean I won’t use his name, but a certain exec from a network said something awesome the other day said I can go produce an emmy winning show any moment I want, but kids would rather watch Lebron, you know, shot on an iphone at a barbershop, talk basketball. That’s what they’re used to seeing. And that’s, that’s the way media is sort of starting to head. So I think I had a lot of people tell me early on, the agency will never work, eleague will never work, you’ll never make money, you know, you’ll never be able to invest in other companies and all this stuff along the way. And if I listened to any of them, I wouldn’t be here. I think that just drove me. So I know there’s a lot of people out there right now that are like, man, I’m just going to give up on this esports thing. I’ve tried long enough. It’s not gonna work, it’s just, there’s no money. I almost went personally broke. I’ll admit that like I am. I mean I’ve put so much of my own money into it. I really laid it on the line far beyond what I thought I was going to do. Right. I had to stop gap and we blew past that and it all worked out. I think it will. If you’re passionate, you love it when you drive and it guess what? If they’re not going to include you, go do your own. And that’s what I do all the time, right? Like if you kick that door down and say I’m here and I’m going to partner with the best and we’re gonna make it the best and this is how we’re going to do it. But you have to have the idea, support the team. I mean really, it’s not me, it’s Lily Russo, its Simon at Bitball its Scott Merchant, you know, it’s these people I’ve been with for 10, 20 years on my team, right? Because it wasn’t just like one, it wasn’t just me leaving. We all left together to go do this new venture that we think the space needs. And I believe img will benefit from, I believe for sure Wme, IMG will benefit from some of the things that we’re bringing to fruition. And so, but it’s all about the inclusion, right? And, and I know it’s a soapbox moment, but if you’re not out talking to the young guys, if you’re not out to including them in what you’re doing, then you’re missing a big boat. You’re wasting a lot of money and you’re not actually talking to the experts. Everybody thinks they’re an expert and you know, I get paid a lot of money to consult and I’ll be the first one to tell you. We figured out stuff every single day that we didn’t see coming that we didn’t know about and we make mistakes all the time. Right. I think our primary differences, we learned from them and say, hey, this feels a little bit similar, but we wouldn’t have that unless we were, our ears to the grindstone and we’re always out talking to the youth, talking to who’s up and coming and god dang its so special. If you lose, that’s what’s great about east boards. If you lose this community, you lose everything.

[11:10] I can appreciate that. I think you’re talking about leadership at its core, at its finest, on a top level. How can you do more as a leader? I think you’re in a unique position to establish some type of organization or something as a leader, supporting mentorship essentially, for young leaders in esports, young leaders in east ports. We could come up with some acronym for that or something or like an organization that you can bring people in and guys like Sundance and hector, you, you know, you got to everybody. Rishi.

[11:42] These are all my guys. Oh, it’s like everybody just mentioned, yeah, all amazing people by the way in their own right. All could go do what really whatever they wanted to do. And I think that uh, I mean Rishi helped me on a personal level, um, twice and as did quiz. Once, years ago when a deal was going to go south and, and you know, somebody was, was not acting above board and they help 100 percent when I made the call and then recently on a personal level, you know, Rishi really helped me out with um, a sort of, I really don’t want to get into it, but there was a, a person that was not all there, mentally unstable on twitter, and they helped and it escalated all the way, believe it or not, it’s a crazy story, all the way to the secret service because he was threatening the president in Florida.

But putting that to the side, my point is not that. The point is that these are the guys you can call on because they’re the best people in the world. They’re not just great in esports, they’re just great people. So I think to get to your question about doing more as a leader, it’s something we consistently think about. It’s, you know, there is 1000 percent a passionate foundry for wanting to drive new ideas and we want to set up an incubator in Vegas. So we’re, we’re taking the steps to get the incubator set. That really has never been announced, but I’m not afraid to say it because it’s something we’re going to do. Like there’s, there’s no doubt. Um, you know, I think Lilly is doing a lot of great work, not just with, you know, esports athletes and what he’s gleaned from img academy and all those different things, but also where, you know, you can look at the casters, we can look at new influencers that are coming on. If you want to learn how to, you know, how to conduct yourself, how to go ahead and be professional, all these things are all there for the taking. Nobody’s really stepping up to do that. And I think that all promotes a healthier community. So it’s funny you should mention that. We are having conversations with the guy’s face it, us, you know, um, I, I would love to see it.

And esl, face it, whenever you see those guys sort of onboard on the same thing, it’d be great. Right? Like sort of include everybody and shame on us for not already doing it. Right. Shame on me. Shame on Hector. Shame on quiz, not so much Rishi because, you know, that guy’s just a, he works too hard as it is, but the rest of us should have already sort of figured this out. Right? Because you make a good point there, there isn’t enough of that. And it goes back to your inclusion question. So you’re so right. And you know, even the incubator isn’t, doesn’t really put, yeah, that gives you some space and some shared ideas. You get to be around people you make. Might not normally, but I think what you’re talking about could be even bigger and um, and it is our obligation to figure out what that is. And I would challenge twitch, I would challenge youtube and sort of the incumbent media powers that be Turner, um, to say, hey, why don’t we, you know, let’s go establish this. And uh, and you can, you can bet that there’ll be emails flying tonight, thanks to you off the back of this interviewers, rekindling a lot of the discussions we’ve had around, you know, around the mentoring around how to go ahead and help lend a hand to people that, that need it. Because, you know, we’ve all been there in esports, we’ve all been down to our last dollar or last minute, our last opportunity and somehow together as a community, we, we make it work, right? So I think that it’s our obligation to hand that back down. It really is.

[15:04] It’s amazing what you’re saying. And I feel the authenticity and the realness behind your words. And I appreciate it so much means a lot to me personally, an entrepreneur in the space, that’s grinding and hustling to try to just build a sustainable business that isn’t all rainbows and butterflies that some reports may show you, in this space. So it’s a very grindy message that even Jason Lake will, you know, he’s a big one that speaks to it. 10, 15 years of grit and grind and sacrifice that, I mean, like we put it all on the line. So I think having those that have are in a position and strong enough to, to stand on their two feet and kind of, you’re in a position to do it, you know, some of the, the four horsemen of the industry per se, lack of better words. But I think it’s, it takes a unique individual to do that. Um, and I don’t know, I said, but like some other people sometimes could be scared. Um, so maybe an uplift. Others, you know, I don’t know what it is, but…

[15:57] There’s definitely an insecurity out there that, that you have to fight. I’ll check myself a lot. Like if I feel like I like to be happy for anybody, even if it’s a competitor, or something which I don’t think that should be done and there, but they get something right. Like I’m happy for that, right? So, I wear my emotions on my sleeve. I’m a passionate guy but I drive business and at the end of the day that can’t be all. Like, I think that’s also what you’re alluding to and it is actually just really good for the overall health. So, you know, Jason is a prime example. Like this guy, we’ve worked together a lot, um, at wme I would bring him in in the early days to talk to sponsors or potential sponsors want to come in non endemics to explain esports and where it’s been in the history because what better guy. And I think that Jason is very soon to be put in a position to lead us into the future and a lot of ways and at the head of the table. And I’ve tried to get him to that, that position for a long time. And thank God that they haven’t come to fruition because I think now is definitely the perfect time for it. Um, but, you know, talk about a great leader and it all worked out great for him and they, you all see the headlines with Dallas and everything else, what they’re doing in Frisco and the offices and it’s great, but you forget about, it’s easy to forget about struggles in the 15 years of just, again down to the last dollar, the same. We’ve all been there, right? So I think, um, you know, it’s important to have a guy like Jason sort of forefront because he reminds everybody. One, he inspires people that are having a hard time in the space to stick it out and that it’s gonna work, like put the time and put the work in, you’re going to get there, and then you know, two, to be able to celebrate with because look where he’s at and I can’t wait to see what comes next for Jason Lake in that organization because complexity is going to be right in the thick of it. Because I think for the longest, Jason had not benefited from some of the things that other players did, like you said, instead of uplifting somebody, you know, he always played it above board and that doesn’t always get you the best roster of the best players, the best influencers, right? Sometimes that puts you in the last position. Nice guys finish last. But um, he has, one thing about Jason is there’s a level of professional courtesy with him that he always extends and I think that more team owners need to extend that professional courtesy to each other.

Right? Because if you look at everything I’ve done in the space from the venture capital deals, television, media rights, eleague, the player representation, in some instances the publisher representation, consulting for the brands. I’ve never owned a team, right? Notice that. Nowhere in there did I own a team and there’s sort of two reasons for that. One is if I own a team, I can’t work with any other teams, right? Which would kill me because I love, that’s not my role in the play in that, that’s not my role in this space and I’ve had plenty of offers and I’m like, I’m not your guy. You know what I mean? I’m, I might, you’d have to save me from myself. I’ll probably help every other teams still. Right. I’ll finish dead last in the league every year. So, but I think that, you know, you’ve got guys like Jason that that is his role and that is what they should do because they’re built for that and he knows that he, he’s an expert in that realm. Right. And so the more. Where’s the next, Jason is my question. You know what I mean? Like we can never have enough good team owners, right? In these sports teams right now, the number one thing that they need, the number one commodity in the space is expertise. And I think, you know, sports teams need to be, they know that they need to bemarried to this right now. And I’m having a hard time. Right? I have multiple teams. They call me all the time. I feel like I’m one of those jobs, search engines right their like who can we hire, who can we hire, who can we hire? I mean, you know, my former assistant, I’m Brett and I shouldn’t even say assistant. I mean I say assistant because I’m so proud of how far he came. He was very, wasn’t assistant very long. Within a year he became president of Nrg. Right? And I think he’s doing a great job with that org through Andy Miller who called me how to hate to give you. This guy’s my horse here, I need him. But to your point, the inclusion, it’s a great opportunity for him. It’s going to hurt me, it’s not going to benefit me, but it’s going to benefit him and I think that we need more of that person. Right? So wherever that person is, they need to step up and be heard and be known to say, Hey, if you’re a sports team that’s looking for expertise, I’m your guy. And maybe there needs to be a forum created for that or its own, you know, know there’s a few esports job searches out there that sort of highlight that, but expertise is at a minimum right now in the space and something that I feel like, you know, it’s something that, the answers are there, we just need to find those people because the orgs need them and without, without that touchstone that, that Rosetta stone to what’s real in this space, it’s gonna get bad fast. I mean, it’s going to be boring and they’re going to lose viewership and it’s going to be a crappy output. Right. I think that if everybody you mentioned make sure that it’s not that. You know what I mean? Everybody that you mentioned, make sure it stays real and in the community is aligned because if you’re not aligned with the community, they’ll let you know fast.

[20:45] Cool, man. Thanks so much for an amazing interview. Thank you for what you do and let’s build some leaders!

Yeah, man. Thank you!

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