A colorful entrepreneur named Andrew Paulson wants to turn chess into the world’s next mass-market spectator sport, complete with commentators who dissect the action and show potential moves

November 23, 2013

For Chess, a Would-Be White Knight


If chess were storytelling, Andrew Paulson would be the undisputed world champion, the Bobby Fischer of raconteurs. Not a moment of his rich life is not made richer by Mr. Paulson’s recounting, whether it be working in a science lab at Johns Hopkins University at age 11; his decision to come out at Yale, which he says inspired other gay students to do the same; the brutal murder of two colleagues in Russia who he says he suspects were KGB officers; the playwrights he has inspired; and, of course, his hard-fought business successes, as an American who became a Moscow media personality and pioneer.Now Mr. Paulson, 55 and the former chief executive of SUP, a leading blogging platform in Russia, is turning his narrative skills to a sell that would tax the best pitchman. He wants to turn chess into the world’s next mass-market spectator sport.

The World Chess Federation, also known as FIDE, has sold worldwide licensing and marketing rights to Mr. Paulson’s company, Agon, in the hope that he will become the game’s white knight, able to monetize chess where past efforts have flopped.

Picture it as Mr. Paulson does: chess on television, or in mass-consumed digital feeds, sponsored by the world’s biggest companies, the players as sex symbols with bulging brains, a new generation of apps and hand-held gadgets that make the game easier to understand, and, of course, live commentators.

And, now, the world champion lifts his pawn — no, it’s his rook, his rook! No, he’s setting it back down….

If this sounds like a guy selling beachfront property in Nebraska, Mr. Paulson is ready to make his case.

“Do you realize there are more people in America who play chess than tennis and golf combined?” Mr. Paulson said minutes into our first conversation, in an enthusiastic burst that made it seem irrelevant whether chess is, in fact, more popular. “Who would’ve thought people would be watching golf on TV, and, yet, they are. And all of India is watching cricket on TV. The only thing more boring than cricket is golf!”

Mr. Paulson, who lives in London, has a good idea of what India is watching because he parked himself there for several months in advance of the chess world championship, which was decided on Friday in Chennai. The victor was Magnus Carlsen, a handsome and personable 22-year-old from Norway who made a Cosmopolitan magazine list of the sexiest men of 2013. To Mr. Paulson, Mr. Carlsen is “a sea change in the history of chess, who gives us the opportunity to reveal the individual of chess players rather than their introverted inscrutability.”

In the months leading up to the tournament, Mr. Paulson talked the ear off any Indian advertising buyer or media executive who would meet with him. Chess, he told them, is a chance to pair with a brand associated with strategy, intellect, creativity and winning. And, with Mr. Carlsen’s ascension, sex appeal.

The thing is, although people are listening to Mr. Paulson — and it’s hard not to — they aren’t yet doing much buying. In fact, he turned to India in part because his initial efforts in Europe to gain corporate sponsorship didn’t take. He faces many obstacles, like a governing chess body widely considered to be strange (putting it kindly), some top chess players who think that his efforts to popularize the sport are lowbrow, and the fact that he is promoting slow-motion entertainment in a world of short attention spans.

Mr. Paulson’s first big tournament, in September 2012, had to be moved at the last minute to London from Russia because of an internal dispute among chess authorities, costing hundreds of thousands of dollars. His next big event, in March, was a relative hit. Mr. Paulson said that about five million people watched online, while a few hundred spectators in the London auditorium where the match was held listened to commentators and followed the play on tablets donated by Samsung.

This is what he calls “chess casting,” and it’s his big idea. It involves technology that streams multiple images, including video of the game being played, data showing in simple terms who is ahead, and another image of the game controlled by commentators who break down the action and show potential moves. He envisions providing viewers with readouts of the pulse and eye movements of the players, to show how they are digesting the board.

Still, no big sponsorships followed the London match, and now chess-casting is temporarily on ice. Mr. Paulson has invested $1 million of his own wealth, and things are generally not going well. He will be the first to acknowledge it.

“The view from on high is that I’m failing,” he said, but he soon found the narrative turn he needed: “I’ve got to have some sort of redemption.”

It does seem to be the perfect setup on the board. In Mr. Paulson’s world, failure is the foe that he must, and will, overcome, to get to the story’s satisfying end.

“We need someone like Andrew very badly. We need somebody to talk up chess,” said Malcolm Pein, a former prodigy turned junior chess champion in Britain, who owns chess shops in London and in West Palm Beach, Fla. “The chess economy,” Mr. Pein said, “is so impoverished.”

The chess economy, such as it is, comes down to nine big tournaments a year in the championship cycle, with the top prize money hitting $2.5 million for a world champion. Then there are popular hobbyist websites (chess.com has millions of users), stores and chess software. Chess tutoring is a decent business. But, all in all, on the continuum of sports enterprises, chess is much closer to Scrabble than, say, to the National Football League.

There have been efforts to turn chess into something more, notably via an Intel chess sponsorship in the 1990s, a time that included a 1995 championship tournament on the observation deck of the World Trade Center in New York. But the Intel relationship petered out. People in chess circles say that such partnerships have been hard to cultivate because of a lack of business acumen in the sport.

And chess players can be less-than-ideal ambassadors. In 2012, the current president of the world chess federation, Kirsan Ilyumzhinov, met with Bashar al-Assad, the Syrian president. A year earlier, Mr. Ilyumzhinov played chess on Libyan state television with Col. Muammar el-Qaddafi. On Russian state-owned television and in other settings, Mr. Ilyumzhinov has described his abduction by aliens.

“If the head of the World Chess Federation is a man seen at best to be crazy, and at worst, a monster, if you were IBM or G.M., why risk your reputation?” said Dominic Lawson, a British journalist who writes about chess. Mr. Lawson sees serious challenges to making chess a mass spectator sport but says he does think that Mr. Paulson might be the kind of person who could do it.

Mr. Ilyumzhinov said in an email exchange through a translator that his meetings with the leaders of Syria and Libya were “humanitarian” and “aimed at developing chess in those countries.” He said he believed that “talking and meeting with people is better than executing them.”

As to efforts to popularize chess, Mr. Ilyumzhinov said Mr. Paulson has “done a good job” but that his efforts are a part of FIDE’s larger plans to expand the sport.

Mr. Paulson can claim distance from the governing body and chess itself. He plays chess, but not seriously. He used this seeming liability as a selling point when he recently ran for the presidency of the English Chess Federation. Before the vote, he told people: “I represent the largest constituency in chess. I enjoy chess, I play chess, I love chess, but I’m not a professional.” He won. Now he’s thinking about using his outsider status to run for the presidency of FIDE, creating a challenge for the prevailing chess powers.

Being an outsider is not a problem for Mr. Paulson. He didn’t know Russian when he went to Moscow in 1993, after spending some years as a fashion photographer in France. He grew up around academics; his father is Ronald Paulson, a prolific author and an English professor retired from Johns Hopkins University. His own instincts are entrepreneurial. In Russia, he enmeshed himself in the media scene, and founded a company that started Afisha, a cultural magazine, among other publications. Later, he started SUP, a blogging platform that was one of the most visited sites in Russia and remains a major cultural influence. He declines to say how much wealth he amassed from these ventures, but says it is modest when compared with that of American media entrepreneurs.

What he is rich in is stories. Like the one about the executive who gave Mr. Paulson the keys to a BMW 7 Series vehicle for six months. Or the story about two KGB colonels he worked with in Russia who he said were kidnapped, castrated, taken into the forest, stripped, burned and shot. When asked later for specifics, he pointed to online articles about the brutal killings, but added that his own version “may in some way be both subjective and the product of the narrative rounding.”

Are his stories the unvarnished truth? Maybe. Maybe not, but it doesn’t really matter, said Julia Idlis, a Russian writer who chose Mr. Paulson as her subject when asked by a Moscow theater to write a play about someone who made a mark on the tech sector.

“He is emblematic of the American character,” she said. “For us, Americans are people who think they can do anything, which is both very aggravating and very inspiring.” She describes Mr. Paulson as a master seducer. “He manages to include everyone he talks to into his universe and in his projects and, even if when you get there you realize that reality is not like what he describes, you are already inspired and already there so it’s too late — and you’ve started working.”

After leaving Russia in 2009, Mr. Paulson kicked around Britain, exploring various entrepreneurial pursuits. In 2011, a friend connected him with FIDE, which wanted to breathe life into chess. After he agreed to pay a $500,000 deposit for the marketing rights for 11 years — he says no money has yet changed hands — one of his first steps was to try to create a brand and organization that stand apart from the governing body. His brand is called “World Chess,” with its tagline: “The best mind wins.”

In chess circles beyond FIDE, the view of Mr. Paulson seems hopeful, impressed with his vigor and ideas, but so far unimpressed by the results. Mr. Paulson also seems dissatisfied with his lack of success and with his unfinished narrative.

“So far, I’m an interesting, intelligent, romantic story,” he said. He said he still hoped for what he called a “resurrection.” And he says he can see the way there, if only the sponsors can, too.

“There’s a huge upside for any partners,” he added. “A, they’re getting chess, and B, they’re getting me.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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