Speaker 1: From Bloomberg News and I Heart Radio. It's the big take.
Speaker 1: I'm West Kasova. Today Amazon's big bed on football just
Speaker 1: my payoff. The NFL announcing new eleven year media distribution
Speaker 1: deals with all of US media partners. This collective deal
Speaker 1: is worth more than one hundred billion dollars over the
Speaker 1: next eleven years, with its media partners paying on average
Speaker 1: about double what they paid before. The NFL announced a
Speaker 1: new series of long term TV deals, including a historic
Speaker 1: contract that gives Amazon exclusive rights to Thursday Football broadcast
Speaker 1: you worship during the regular season is expected to be
Speaker 1: down about three from a year ago. It's Amazon They're
Speaker 1: being blamed for this drop, as Thursday Night Football moved
Speaker 1: exclusively to Prime Video this season. Like you heard just there,
Speaker 1: Amazon is paying billions of dollars to lure viewers away
Speaker 1: from the TV networks and onto their prime streaming service,
Speaker 1: And with the Super Bowl coming up fast, it seemed
Speaker 1: like a good time to see how that deal is
Speaker 1: panning out, because if it's a success, the way you
Speaker 1: watch football and just about any other sport is going
Speaker 1: to change dramatically, and maybe not in ways you like.
Speaker 1: And speaking of big bets on sports, at the end
Speaker 1: of this episode, I'll chat with Bloomberg Opinion editor Tim O'Brien.
Speaker 1: He's the host of the new podcast Crash Course, and
Speaker 1: he's launching a series of episodes digging into the booming
Speaker 1: sports betting industry. But first, my colleagues Jerry Smith and
Speaker 1: Felix Gillette. They've been covering the Amazon deal and all
Speaker 1: its implications, and they join me now from New York. Jerry,
Speaker 1: maybe i'll start with you. Amazon maybe a big bet
Speaker 1: on the NFL last September. How's that working at Well,
Speaker 1: they just completed their first regular season where Amazon had
Speaker 1: the exclusive rights to Thursday Night Football, and the ratings,
Speaker 1: you know, they were better than what a lot of
Speaker 1: people expected, but they were a lot less than what
Speaker 1: they did the year before on traditional TV. Everybody in
Speaker 1: the sports media industry was watching this very closely because,
Speaker 1: you know, this is really a new frontier. This is
Speaker 1: the first time that you could watch America's most popular
Speaker 1: sport only on a streaming service. And there were some
Speaker 1: real challenges and real questions going into this one being
Speaker 1: can Amazon pull this off? Just from a technical standpoint,
Speaker 1: live streaming is very challenging. We've seen a lot of
Speaker 1: streaming services broadcast sports and have glitches where the stream
Speaker 1: would just completely crash and fans would miss a last
Speaker 1: minute goal or touchdown. Amazon did not have any problems
Speaker 1: this season. They did not have any reports of the
Speaker 1: stream crashing or anything like that. So just on that level,
Speaker 1: it's a success. From a viewership standpoint, this was about
Speaker 1: a forty percent dropped from what it was the year before,
Speaker 1: when it was on Fox, the NFL Network, and Amazon.
Speaker 1: It was what's called a tri cast, where you could
Speaker 1: watch the games on all three networks. This year you
Speaker 1: could only get it on Amazon. So there was a
Speaker 1: real learning curve for people who have for years expected
Speaker 1: to get NFL games on their TV. Now all of
Speaker 1: a sudden, you've got to teach them. You've got to
Speaker 1: download Prime video, you've got to have a Prime subscription.
Speaker 1: So there was real questions about how that would go.
Speaker 1: And I think that Amazon overall is pretty pleased with
Speaker 1: the numbers, but it was not as much as what
Speaker 1: people were watching on on TV, and and that raises
Speaker 1: some interesting questions as well. I mean, I suppose you
Speaker 1: need to expect that, right, because if you don't have
Speaker 1: a Prime account, which is now what a hundred and
Speaker 1: thirty nine bucks a year. The chances are you're going
Speaker 1: to pay that just to watch Thursday eight football is
Speaker 1: pretty low, So Amazon kind of thinks that's gonna creep up.
Speaker 1: Do you think that that's likely to happen? Yeah, I mean,
Speaker 1: you know, they say that there's about eighty million people
Speaker 1: who watch Prime Video, which is about the same as
Speaker 1: the number of people who are watching cable TV, in
Speaker 1: fact a little bit more. A lot of these people
Speaker 1: had to be trained to go to Amazon Prime Video
Speaker 1: to watch the games. I know that when I was
Speaker 1: getting Amazon Prime boxes delivered to my home, they were
Speaker 1: advertising Thursday night football, and the top of the Amazon
Speaker 1: dot com home page had banner saying, you know, our
Speaker 1: first regular season games on Prime Video. Here's how to
Speaker 1: get it. It's a little bit challenging as a fan.
Speaker 1: You suddenly now if you want to flip between the
Speaker 1: game and something else, you now have to leave the app,
Speaker 1: go to your cable system, flip the channel, and go
Speaker 1: back and forth. It's not a seamless experience like it
Speaker 1: is if you're just watching on TV. But overall, Amazon
Speaker 1: said that that first game was they saw a huge
Speaker 1: increase in Prime subscriptions. So just on that level, I
Speaker 1: think that they're pretty happy about how things went. And
Speaker 1: I think also from Amazon's perspective, they have a different
Speaker 1: business model than the TV network, So it's not, you know,
Speaker 1: just about getting the audience there and serving them advertise.
Speaker 1: It's just bringing them into the ecosystem where you can
Speaker 1: then sell Prime subscriptions, you can hit advertisements, you can
Speaker 1: get merchandise. There's just in terms of delivering time on
Speaker 1: the app, I'd say it's a win for Amazon overall.
Speaker 1: The technology standpoint, I actually thought it was pretty easy
Speaker 1: if you were using on a mobile device. I was
Speaker 1: just like wandering in the house with my phone and
Speaker 1: you know, you could open up the Prime app or
Speaker 1: the Amazon Shopping app. They always had it advertised prominently
Speaker 1: on their one click and you're right in. So I
Speaker 1: think for the first season, I think they probably have
Speaker 1: to be pretty pleased with how it went. Yeah, I
Speaker 1: should mention they also had a lot of help. They've
Speaker 1: got a legendary NBC sports producer, Fred Gidilli, to be
Speaker 1: the producer for these games, so they had NBC essentially
Speaker 1: doing the production for them. So if you watch there's
Speaker 1: a night Football on Amazon it looked a lot like
Speaker 1: NBC Sunday night football games. But the point you made
Speaker 1: before about how m ZON has a different business model,
Speaker 1: I mean, I think that's what's really fascinating and a
Speaker 1: little scary for the CBS s and the NBCs and
Speaker 1: Foxes of the world, as all of a sudden, they're
Speaker 1: now competing for sports rights with these massive tech companies
Speaker 1: who have incredibly deep pockets and also have different business objectives.
Speaker 1: Apple is another company that we've seen get into sports.
Speaker 1: They are about to start a Major League Soccer package
Speaker 1: that they won the rights for, and they had Major
Speaker 1: League Baseball games last year, And all of a sudden,
Speaker 1: you've got a company like Apple. You know, a win
Speaker 1: for them could be you buy more Apple devices. They
Speaker 1: want to draw subscriptions to Apple TV plus uh, they
Speaker 1: want to sell advertising. Amazon they want to sell prime subscriptions.
Speaker 1: They want to sell advertising. It's just a different business
Speaker 1: than you know, ESPN, for instance, which really is trying
Speaker 1: to make up the cost of these very very expensive
Speaker 1: sports rights deals with a combination of just advertising and
Speaker 1: cable TV subscription fees. I want to talk just a
Speaker 1: little bit more about that because one of the things
Speaker 1: you have written Jerry, is that the networks are having
Speaker 1: trouble paying for Thursday Night Football because the league would
Speaker 1: kind of give them the less interesting games and there
Speaker 1: wasn't a lot of advertising revenue or there wasn't enough.
Speaker 1: Whereas Amazon, once you're in their ecosystem, man, they're gonna
Speaker 1: push you every product under the sun, and it's like
Speaker 1: right in front of your eyes. So they could see
Speaker 1: a way of doing it without having to get advertising.
Speaker 1: That's right. I mean this Thursday Night Football just historically,
Speaker 1: all the big networks, Fox, CBS, NBC, they all had
Speaker 1: broadcast these games at some point and they all walked
Speaker 1: away from it because they were losing money and the
Speaker 1: amount of money they were spending was they just couldn't
Speaker 1: make it up on the viewership and the advertising. And
Speaker 1: another thing that's really important to think about with Amazon
Speaker 1: is the NFL is obviously the biggest entertainment property and
Speaker 1: all of TV, but they also want to get other rights.
Speaker 1: The NBA is a really big deal coming up, and
Speaker 1: if you're the n b A, you're really looking at
Speaker 1: what the NFL has done here where they've old long
Speaker 1: term rights to all the big broadcasters. They've also carved
Speaker 1: out a package for Amazon. NBA is thinking about, all right, well,
Speaker 1: are we going to renew our deal with ESPN and
Speaker 1: T n T and maybe we carve out some games
Speaker 1: for Amazon or Apple as well. The NBA, I think,
Speaker 1: was looking really closely at what Amazon did with this
Speaker 1: NFL season, how many viewers they got, because I think
Speaker 1: they are trying to replicate what the NFL is going
Speaker 1: to do and potentially carve out some games for a
Speaker 1: tech company. And also Jerry, I think was fascinating to
Speaker 1: watch this. At the same time that Amazon is, you know,
Speaker 1: making this long term deal and paying a bunch of
Speaker 1: money for the NFL thres and that rights, they're also
Speaker 1: making other bets in this TV streaming ecosystem. They had
Speaker 1: a huge bet this fall with the Lord of the
Speaker 1: Rings prequel, The Rings of Power, and you know, I
Speaker 1: think this is the most expensive scripted TV show ever made,
Speaker 1: ultimately going to be more than billion dollars, And it's
Speaker 1: interesting to think through, like from their perspective, those two bets,
Speaker 1: one on scripted television, one on live warts, what do
Speaker 1: you get more out of? And I would say, when
Speaker 1: you think about the risk reward of those dollars they
Speaker 1: spent The thing that's great about the NFL is even
Speaker 1: in those kind of crappy Thursday night games, like you're
Speaker 1: just guaranteed an audience is going to show up right,
Speaker 1: And a scripted show, you know, even something as big
Speaker 1: as Lord of the Rings, you really don't know ahead
Speaker 1: of time is it gonna work? Is it not gonna work?
Speaker 1: You're competing with endless choices in scripted drama. You know,
Speaker 1: there's just one NFL, There's one game on Thursday night.
Speaker 1: They're gonna come at an exact time and place, and
Speaker 1: you know the audience is going to be there. And
Speaker 1: I just think that has huge value. And Amazon proving
Speaker 1: that they can put these games on without any technological hitches,
Speaker 1: to me, that just sends a big sign you're going
Speaker 1: to see more of this. Felix. The last time you
Speaker 1: were on this show, we were talking about how frustrating
Speaker 1: it can be for the viewers though, when they have
Speaker 1: to remember where all their favorite shows are on all
Speaker 1: these different platforms. Do you think that people are gonna
Speaker 1: want to have all of their sports viewing atomized across
Speaker 1: platforms where they have to have individual subscriptions and passwords
Speaker 1: and user names and all that kind of stuff that
Speaker 1: drives us crazy. Now, I don't think from a viewer's perspective,
Speaker 1: I think the ideal scenario would be to have one
Speaker 1: big bundle where everything is available, almost like it was
Speaker 1: in the previous era of cable and satellite. But now
Speaker 1: you know, like it or not, this whole thing has
Speaker 1: been splintered, and you do you kind of have to
Speaker 1: keep it a little chart of which service you're going
Speaker 1: too for each game of the week, and I think
Speaker 1: that's inevitable in this stage where we're kind of in
Speaker 1: between these two eras, the satellite and TV satellite cable
Speaker 1: era that's kind of dimming, and then this new streaming era.
Speaker 1: I think for the time being, you're going to see
Speaker 1: it even more splintered. From the fans perspective, I think,
Speaker 1: you know, if there's any consolation, it's probably this will
Speaker 1: be the peaks blinter era, and I think five ten
Speaker 1: years down the road, you're going to see more consolidation
Speaker 1: of these services and you'll see more of these games
Speaker 1: ending up on one, two or three platforms. Yeah. Well,
Speaker 1: if you look at what the leagues have done is
Speaker 1: they're trying to balance two things. They obviously want to
Speaker 1: have lots of bidders. They want to get as much
Speaker 1: money as they can, but one of the things they're
Speaker 1: most concerned about is reach, and they're afraid that if
Speaker 1: they go exclusively on a streaming service that they're going
Speaker 1: to lose the reach that they got on broadcast television.
Speaker 1: So what we saw with the NFL is they extended
Speaker 1: their long term deals with the NBCs and Foxes of
Speaker 1: the world. So you still need to get to pay
Speaker 1: TV unless you have Rabbity ears, you still got to
Speaker 1: get pay TV to watch the NFL, and then you've
Speaker 1: also got to have Amazon Prime Video. With baseball, I mean,
Speaker 1: it was the same thing this baseball season. There were
Speaker 1: a lot of fans who were frustrated because the league
Speaker 1: had carved up these little packages of rights where Apple
Speaker 1: had some games on Friday nights, Peacock NBC streaming sir
Speaker 1: this has had a few games on Sunday mornings, and
Speaker 1: so instead of just you know, here's the entire season
Speaker 1: on Amazon Prime Video on Thursdays, you really had to
Speaker 1: like go onto the website for your favorite team and
Speaker 1: look at where all right, where is it broadcasting? Now?
Speaker 1: Which streaming service do I need? Like, do I need
Speaker 1: to pay for this, so it's getting very complicated. I mean,
Speaker 1: another thing to think about what the league's is. We've
Speaker 1: seen some other really big sports rights deals where Amazon
Speaker 1: came in and actually made a larger bid than broadcast
Speaker 1: channels like NBC, and the rights actually went to NBC
Speaker 1: and Fox and CBS. One example is the Big Ten.
Speaker 1: Amazon did not get the rights to the Big Ten,
Speaker 1: even though I've heard that they made a significantly larger
Speaker 1: bid than some of the networks that ended up getting
Speaker 1: those rights. We've seen other streaming services come in and
Speaker 1: actually outbid the broadcasters. And the point is is that
Speaker 1: these sports leagues, as much as they love the idea
Speaker 1: of having a big, depocketed tech company come in and
Speaker 1: throw a big check at them, they are very concerned
Speaker 1: about the fact these streaming services don't have the tens
Speaker 1: of millions of subscribers in some cases that you still
Speaker 1: do on TV. Felix and Jerry, please stick around. We'll
Speaker 1: keep talking after the break. Felix. Right before the break,
Speaker 1: Jerry was talking about something interesting, this tension between the
Speaker 1: leagues where they want to make a lot of money
Speaker 1: off these games, but they also want to have influence
Speaker 1: and reach and be relevant and that the streaming services
Speaker 1: don't yet have that same sort of reach. Did Amazon
Speaker 1: have to really persuade NFL to give them this deal.
Speaker 1: Streaming services offer something that the NFL needs, which is
Speaker 1: a little bit of relief from the growing anxiety that
Speaker 1: everyone has that's in cable and broadcast television. The whole
Speaker 1: audience level is sinking, and everybody is concerned about the future.
Speaker 1: Everyone's concerned about getting young viewers, getting the next generation.
Speaker 1: How are we gonna prove that this thing is going
Speaker 1: to keep going stronger and stronger five ten years out.
Speaker 1: And I think one way of doing that is doing
Speaker 1: these piecemeal deals with the streaming services. And you know,
Speaker 1: it happens to be a moment in the evolution of
Speaker 1: the technology where you know, luckily for the NFL, there's
Speaker 1: someone who can basically overpay for this small piece of
Speaker 1: rights as a loss leader in order to get people
Speaker 1: to come into these services. And I think, you know,
Speaker 1: right now is an incredible time for the sports leagues
Speaker 1: and anyone with any live TV rights to sell them
Speaker 1: for more than their worth to attach platform because all
Speaker 1: of these platforms right now and streaming are going through
Speaker 1: this evolution of their own where for the past fifteen years. Essentially,
Speaker 1: when you look at the evolution of Netflix, Netflix started
Speaker 1: off as an ad free service, right and Read Hastings,
Speaker 1: the founder of Netflix, was always very adamant, We're not
Speaker 1: going to put ads on here. People don't like when
Speaker 1: they're viewing is interrupted. We're commercial free service. That's never
Speaker 1: going to change. Well, it did change right this year.
Speaker 1: They finally said, you know that Wall Street was losing
Speaker 1: patience with some of these streaming services, that we're losing
Speaker 1: a lot of money. Said okay, it's time for you
Speaker 1: to start making profits. And probably the best way to
Speaker 1: start making additional revenue sources is to bring an advertising,
Speaker 1: which Netflix has done, Disney is doing, Warner Brothers, Discovery,
Speaker 1: all the major streaming platforms are now saying we're gonna
Speaker 1: have to bring an advertising and to do that you
Speaker 1: really need live programming because so many advertisers want a
Speaker 1: commercial message delivered to an audience at a particular time,
Speaker 1: and you know, with a lot of on demand programming,
Speaker 1: it's harder to guarantee that you can get the right
Speaker 1: demographic in front of that screen at the right time.
Speaker 1: The best way to do that, by far is live programming,
Speaker 1: and the best way within live programming is the NFL.
Speaker 1: But there's a whole hierarchy and you go down from
Speaker 1: the NFL and then you get to other sports, other
Speaker 1: live performances. That's why you see Netflix now doing a
Speaker 1: Chris Rock live comedy performance. They just picked up the
Speaker 1: rights for a live award show. They're all dabbling in
Speaker 1: it because they need this to grow their advertising business,
Speaker 1: which is another reason that you can just see this
Speaker 1: is all going to grow and grow, That's right. I
Speaker 1: Mean one thing to think about. I think there's real
Speaker 1: questions longer term about the young demographic, the teenagers, fans
Speaker 1: in their twenties and thirties, and how they're consuming sports,
Speaker 1: if they're consuming sports at all. Amazon I mean, one
Speaker 1: of the things that they were particularly proud of with
Speaker 1: this season of Thursday Night Football that they exclusively streamed
Speaker 1: was that they had a younger audience than what was
Speaker 1: on TV, but it was still a fairly older audience.
Speaker 1: I mean, we're not talking about an average age of
Speaker 1: twenty five. I mean, these are still middle aged people
Speaker 1: watching on Amazon Prime Video. I Mean, one thing that
Speaker 1: Amazon did that didn't get a lot of attention, they
Speaker 1: had an alternate stream, which is becoming very popular now
Speaker 1: in sports media where you have essentially a separate group
Speaker 1: of broadcast announcers. So they had these guys do perfect is,
Speaker 1: come on in, coach, come on in. They essentially do
Speaker 1: like sports trick shots. And they're huge on YouTube. A
Speaker 1: lot of people and may not have heard of them,
Speaker 1: but they're very big on YouTube. And they did an
Speaker 1: alternate broadcast of the Thursday Night Football and I think
Speaker 1: that was an acknowledgement by Amazon that, you know, we
Speaker 1: also need to start reaching out and finding new and
Speaker 1: interesting ways to make live sports appeal to the younger audience,
Speaker 1: which is really what the advertisers will pay more for.
Speaker 1: But you know, I think if you ask any nineteen
Speaker 1: year old how are you consuming sports? They're probably watching
Speaker 1: highlights on Instagram or TikTok or Twitter. Are they watching
Speaker 1: the live game? Are they watching a four hour baseball
Speaker 1: game with their parents on the couch. Probably not. So
Speaker 1: I think longer term, all of these broadcasters, whether it's
Speaker 1: Amazon or the traditional TV networks and the league's, how
Speaker 1: are we going to appeal to people who just don't
Speaker 1: watch TV the way that previous generations did. Felix I
Speaker 1: guess one of the reasons why sports are so lucrative
Speaker 1: and they're able to get these big advertising dollars is
Speaker 1: that if you just look at, like, I don't know,
Speaker 1: the top ten shows by audience for a year, a
Speaker 1: lot of them are sports. Is that right? Yeah. One
Speaker 1: of the most dramatic statistics I saw was an article
Speaker 1: from Sportco recently that looked at the top one telecasts
Speaker 1: in the United States in two thousand twenty two e
Speaker 1: d two of the top hundred were NFL games, and
Speaker 1: then you go down the list and it was like
Speaker 1: Kentucky Derby, there was a couple of NBA playoff games,
Speaker 1: that was the World Cup games. It was basically all sports.
Speaker 1: Um and it's the one thing that's really held onto
Speaker 1: an audience in this broadcast cable ecosystem where you know,
Speaker 1: not too long ago, scripted dramas like The Walking Dead
Speaker 1: on AMC we're drawing huge audiences. People were still showing
Speaker 1: up and like, you know, want to watch their our
Speaker 1: drama that has just collapsed. It's just cratering and that
Speaker 1: audience it's disappearing, it's not coming back, And you know,
Speaker 1: all of these giant media companies are really dependent on
Speaker 1: the prior existing ecosystem to feed them revenue and profits,
Speaker 1: and they need to hold on to whatever is there
Speaker 1: in order to fuel their growth in their investments and streaming.
Speaker 1: That puts, you know, these audiences for these live events.
Speaker 1: It makes it even that much more important because everything
Speaker 1: else has just fallen away. Yeah, that's right. I mean,
Speaker 1: if you think about all the scripted dramas, the reality shows,
Speaker 1: they've all for the most part, I mean, they're moving
Speaker 1: increasingly to streaming. So it's it's not so much that
Speaker 1: live sports viewership is like going through the roof. It's
Speaker 1: fairly flat. It's just that everything else in the TV
Speaker 1: landscape has really declined because people expect to get it
Speaker 1: on their streaming service. We'll be right back. So if
Speaker 1: you're the NFL, you're in this enviable position. You're on
Speaker 1: the networks and advertisers are willing to pay top dollar
Speaker 1: for this huge audience. Or you say, the streaming services,
Speaker 1: well you can't deliver us a big audience, so you
Speaker 1: have to pay top dollar and either way, the NFL
Speaker 1: gets paid. Do you think that this calculation is just
Speaker 1: going to start to move from we want relevance to
Speaker 1: we just want the highest bidder. I think it's some
Speaker 1: point there'll be a convergence of those two things. I
Speaker 1: think if you just look at the trend lines, the
Speaker 1: percentage of overall viewing that's taking place in the old
Speaker 1: world of broadcast and cable television versus like the new
Speaker 1: world of streaming. Every year it just tilts a little
Speaker 1: bit further and further and further towards streaming. So eventually
Speaker 1: there will come a point at which the streaming audiences
Speaker 1: will be developing. Not just the buzz of a younger audience,
Speaker 1: not just the buzz of a new ecosystem, not just
Speaker 1: you know, the ability to overpay for these live TV
Speaker 1: rights as a loss leader to get people into their platforms,
Speaker 1: but at some point they're also going to have the
Speaker 1: biggest audiences and the most viewers, and then the advertising
Speaker 1: will also follow over there is that a year from now,
Speaker 1: five years from now, ten years from now. I think
Speaker 1: that's the question that everyone's looking at, is at what
Speaker 1: rate will this all continue to migrate? Jerry, Live sports
Speaker 1: can be a giant money printing machine, but not everyone
Speaker 1: is getting rich. You recently wrote about Diamonds Sports Group,
Speaker 1: which is the largest owner of local sports channels and
Speaker 1: they've been having a tough time. What is happening. Diamond Sports.
Speaker 1: It's a company that's owned by Sinclair, and a few
Speaker 1: years ago, Sinclair bought about twenty of these regional sports
Speaker 1: channels from Disney. So Sinclair really bought these channels at
Speaker 1: a really bad time. This was when cord cutting was
Speaker 1: really starting to accelerate. Just to step back a little,
Speaker 1: these are local sports channels in dozens of markets across
Speaker 1: the country. If you live in Cleveland and you want
Speaker 1: to watch the Cleveland Indians or the Cavaliers, you're subscribing
Speaker 1: to a Bally Sports channel. They're called Bally Sports because
Speaker 1: they did a deal with Bally, the casino company. But
Speaker 1: there's a lot of these channels around the country where
Speaker 1: local fans are watching their local home team through these
Speaker 1: cable channels. Their subscribers are declining because people are cutting
Speaker 1: the cord. This is company that was under an enormous
Speaker 1: amount of debt and is now really struggling to make
Speaker 1: the interest payments on these debts because at the same
Speaker 1: time they are paying Major League Baseball, the NBA, the
Speaker 1: NHL increasing amount of money for the rights to broadcast
Speaker 1: the game. So You've got cable subscribers, which is how
Speaker 1: they were paying for these rights. Those are declining, the
Speaker 1: rights fees are going up. You're already under a mountain
Speaker 1: of debt. And what will be really interesting, and why
Speaker 1: it's such a huge story is because these media rights
Speaker 1: payments that these sports channels pay to the league's that
Speaker 1: affects everything. That affects how these teams decide the salary cap.
Speaker 1: How much players are getting paid depends in large part
Speaker 1: on how much money they're getting from the sports channels.
Speaker 1: So it's a fascinating story that has a lot of
Speaker 1: big implications for the entire sports industry. I'm curious, Jerry,
Speaker 1: who wins out of this. If the regional sports and
Speaker 1: networks kind of fall apart, that audience has to go somewhere,
Speaker 1: right Well, I think Major League Baseball is looking at
Speaker 1: what's happened with these channels and they would like to
Speaker 1: take the rights back. They would like to do some
Speaker 1: sort of streaming service of their own. I mean, this
Speaker 1: is a business that was relying on a certain number
Speaker 1: of cable subscribers who were paying fees to these channels,
Speaker 1: whether you watch them or not. And then not only
Speaker 1: were they losing cable subscribers over the last few years.
Speaker 1: But then your cable provider would maybe put those sports
Speaker 1: channels on a separate tier where not everyone was subscribing
Speaker 1: a lot of people who didn't care about sports were
Speaker 1: still paying to subsidize the sports fans. And that model
Speaker 1: starting to fall apart. And I think the sports leagues
Speaker 1: are frustrated with what's happening. They're frustrated that these sports
Speaker 1: channels are losing subscribers, and they're looking to take their
Speaker 1: local rights back from these channels and maybe do their
Speaker 1: own streaming service. Maybe they could partner with an Amazon
Speaker 1: or an Apple or somebody else. But it's the next
Speaker 1: few months are gonna be really interesting. Felix and Jerry
Speaker 1: super Bowl coming up. We're talking about football, so I
Speaker 1: would be remiss if I didn't us Chiefs are Eagles,
Speaker 1: Eagles Chiefs. Okay, there you have it, Jerry Smith, Felix Gillette,
Speaker 1: thanks so much for coming on the show. Thanks for
Speaker 1: having me. Thanks Wes. You can read more from Jerry
Speaker 1: Smith and Felix Gillette at Bloomberg dot com and shameless
Speaker 1: Plug here. Check out the book Felix has written with
Speaker 1: John Coblin it's called It's Not TV, The Spectacular, Rise,
Speaker 1: Revolution and Future of HBO. As I promised at the
Speaker 1: top of the show, Tim O'Brien is here, my colleague
Speaker 1: and host of the new podcast Crash Course. Hey Tim,
Speaker 1: Hey Wes. Thank you for having me. I'm so glad
Speaker 1: to talk to you about this. Tell us about Crash Course.
Speaker 1: What is the podcast all about? Crash Course is all
Speaker 1: about disruption in the business, political and social spheres, with
Speaker 1: the idea that people can learn something from those collisions.
Speaker 1: So Crash Courses will play both on a collision and
Speaker 1: a learning moment. And so what we try to distill
Speaker 1: in each episode is an understanding of something that is
Speaker 1: epic in terms of the nature of the collision and
Speaker 1: then instructive in terms of the lessons we can draw
Speaker 1: from it. So give us an idea of some of
Speaker 1: the episodes you've done so far. Well, you'll be shocked
Speaker 1: to discover that we launched with Elon Musk, who is
Speaker 1: is sort of the red meat repository of disruptive moments
Speaker 1: like a literal and figurative, metaphorical and actual collision in
Speaker 1: Eddy in every way, we could probably just do three
Speaker 1: and sixty five days a year of Elon Musk, but
Speaker 1: we chose to do just one. We also did an
Speaker 1: episode about the pharmaceutical companies and the COVID vaccines and
Speaker 1: the collision between their inventiveness and their greed. We did
Speaker 1: uh I think, a wonderful episode about the turmoil at
Speaker 1: the top of Disney in the cage match for the
Speaker 1: CEO suite there. And we have a multipart episode newly
Speaker 1: launching that we're very excited about about sports gambling, the
Speaker 1: sports gambling boom. It looks at the growth of sports
Speaker 1: gambling itself. I sat at length with a very hardcore
Speaker 1: sports gambler in Chicago and sort of watched him ply
Speaker 1: his trade. Um. I sat in London with digital gum
Speaker 1: shoes who track match fixing and corruption. And then I
Speaker 1: spend time up in Foxwoods, a tribal casino in Connecticut,
Speaker 1: to look at how sports gambling is challenging an industry
Speaker 1: that's made a lot of money for Native Americans. You know,
Speaker 1: this is such a huge issue. We did an episode
Speaker 1: recently about the UK online gambling problem and how this
Speaker 1: has just become a really bad problem for gambling addiction,
Speaker 1: and how it's now heading to the US. And I
Speaker 1: have to say everywhere I go online now the as
Speaker 1: for online sports betting, they're everywhere. It's just taking over
Speaker 1: the internet. How they are pushing these new betting platforms
Speaker 1: and TV and probably every transit station you through to
Speaker 1: their it's wallpapered with sports betting ads. Um you know,
Speaker 1: odds now scroll across the bottom of the TV screen
Speaker 1: during sporting events. It's it's becoming really woven into our
Speaker 1: daily lives. And I think one of the things that's
Speaker 1: so important about what happened in the UK is it's
Speaker 1: a precursor. We can learn from what happened over there, because, uh,
Speaker 1: the US has never really confronted or tried to contend
Speaker 1: with something of this scope around gambling. Yes, there's been casinos, obviously,
Speaker 1: there's Vegas. There's been you know, back alley betting for eons,
Speaker 1: but it's now been wedded to the internet. It's getting legalized.
Speaker 1: It's in kids backpacks, it's in people's living rooms, it's
Speaker 1: in people's pockets, and it's going to change how we
Speaker 1: relate to money, sports and one another. You know, I
Speaker 1: mean doing three episodes on the subject, is that right,
Speaker 1: three of them? And I think you know, it's a
Speaker 1: narrative approach. I think it's immersive. Our listeners get to
Speaker 1: meet the people were meeting. We take them inside those
Speaker 1: people's world, and I think it's a deep, immersive dive
Speaker 1: into this phenomenon, and it's one that we're particularly proud of.
Speaker 1: But we'll still have to earn our listeners loyalty. What's
Speaker 1: the best part about doing the podcast so far? The
Speaker 1: privilege of getting to understand why all of the crazy,
Speaker 1: destructive and confounding and inspiring and innovative people who float
Speaker 1: around us do the things they do. Tim, thanks so
Speaker 1: much for coming on and talking about crash Course. I
Speaker 1: love listening to it. I'm really looking forward to listening more.
Speaker 1: Thank you, weus thanks for listening to us here at
Speaker 1: The Big Take. It's a daily podcast from Bloomberg and
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