Narrative Equity

Renowned philosopher Pep Guardiola, on playing Real Madrid in the 2022 Champions League semi-final at The Bernabéu, said: “If we have to compete with their history, we don’t have any chance. Their history speaks for itself.” City would go on to lose that semi-final tie, and in the aftermath, pundits spoke about their inability to get past not just the team on the pitch, but the ghosts in the stands of the Bernabéu.

Narrative Equity is an effort to name and track the accumulated belief surrounding an institution. Institutional belief is shaped by history, identity, performance, and perception. It carries inertia, and can feel like it’s moving at a glacial pace until all of a sudden, everything begins to turn.

The framework expresses an institution’s position on the Belief Curve, a scale from -100 to +100. Zero is the threshold that matters: above it, belief is compounding in an institution’s favor; people are bought in and generally see the world from a glass half full perspective. Below it, belief is working against everything the institution does; glass half empty. Crossing zero tells a story. A club moving from -8 to +3 means something; moving from 42 to 51, something, but less so.

The Narrative Equity framework has launched in sport because sport is where belief is most visible and feedback is fastest. Outcomes arrive weekly or even more often, narratives play out in public, and the stakes, especially for fans but really for all parties, are existential. But the application does not need be limited to sport: any institution people believe in, or have stopped believing in, carries narrative equity and can be analyzed through a similar lens.