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Speaker 1: Hello, I'm Michael barn and I'm Scott Sashnik. On this

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Speaker 1: weekly podcast, we explore the big money issues in the

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Speaker 1: world of sports and talk to some of the biggest

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Speaker 1: players in the industry. On this week's show, we talked

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Speaker 1: with the head of Media Banking at Barclays, Peter Cohen.

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Speaker 1: But first let's look at the top stories of the week.

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Speaker 1: Joining us is Bloomberg Business of Sports reporter Evan Noby Williams.

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Speaker 1: And let's start with a topic. This is rather serious.

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Speaker 1: At ESPN. They are of changing the leadership there because

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Speaker 1: of John Skipper. He is stepping down because of substance addiction. Now,

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Speaker 1: obviously we wish him well and he hopes that he

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Speaker 1: gets treated for this, but this does cause a problem

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Speaker 1: at the sports network already going through some issues. A

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Speaker 1: terrible year at ESPN ends on the worst note possible

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Speaker 1: that the guy in charge of so much of what

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Speaker 1: they do, the direction is leaving. Uh like nobody saw

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Speaker 1: it coming inside or outside. So to replace a guy

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Speaker 1: like Skipper at a tough time when subscribers are down,

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Speaker 1: you're looking to move to digital and wind millennials, I mean,

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Speaker 1: just a difficult thing to do it. Yeah, And there

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Speaker 1: were people that were kind of calling for his job

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Speaker 1: already before he signed, before they announced this extension a

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Speaker 1: couple of months ago. As you said, I mean, this

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Speaker 1: has been a rough year for ESPN, between the series

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Speaker 1: of layoffs, the Jamil Hill controversy, the Barstool Sports controversy.

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Speaker 1: They're losing subscribers, they're delayed again, they're they're over the

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Speaker 1: top rollout. Um. Is there a chance that this ends

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Speaker 1: up being good for ESPN that obviously under Skipper they

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Speaker 1: had some troubles this year. Is there a chance that

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Speaker 1: that whoever comes in can maybe right the ship or

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Speaker 1: maybe steered this company in a different direction than Skipper?

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Speaker 1: Was what we hear? What justin Connelly and Connor Shell

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Speaker 1: or tools to take over? Yeah, and George Bodenheimer came

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Speaker 1: back on an interim basis. Yeah, So you're dealing with

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Speaker 1: a a distribution person and connollye versus a content person

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Speaker 1: in Connor Shell. I you see different people value different things.

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Speaker 1: It's hard to see a positive. I don't see a

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Speaker 1: positive in any way. And losing a guy like John Skipper.

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Speaker 1: Everyone in the industry knows respects John internally, He's so

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Speaker 1: highly thought of by the people that worked there. So

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Speaker 1: ESPN has got some things to figure out, that's for sure.

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Speaker 1: Let's see how they do it. Another major topic involves

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Speaker 1: the New York Islanders. Now they have won a billion

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Speaker 1: dollar development bid to build a new eighteen thousand seat

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Speaker 1: arena right where they race the third leg of the

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Speaker 1: Triple Crown, Belmont Park. Well, I was at lunch with

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Speaker 1: John Ladecki not long ago, and the very simple question

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Speaker 1: was if Belmont doesn't happen, what do you do? And

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Speaker 1: he said, I won't even allow my mind to go

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Speaker 1: there because there is no plan. B. They really had

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Speaker 1: no plan. This is it for us, and that perhaps

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Speaker 1: is what might have made the difference for the Empire

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Speaker 1: State Development Corporation in taking their bid over NYC f

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Speaker 1: C of MLS because they're committed to retail. They're committed

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Speaker 1: to this. I mean, this was it. This was the plan,

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Speaker 1: and it does return the Islanders to a spot that

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Speaker 1: is closer, much closer to their traditional fan base in

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Speaker 1: Union down the Nasau Coliseum than Brooklyn and Scott em

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Speaker 1: and you guys were on this before this story even

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Speaker 1: became nationwide. Yeah, it was clear almost from the first

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Speaker 1: game the Islanders played in Brooklyn that the setup they

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Speaker 1: had at the Barclay Center was not good. You know

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Speaker 1: that there were a lot of obstructive seats. The arena

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Speaker 1: was not specifically constructed to do both basketball and hockey. UM.

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Speaker 1: And if you look at attendance, we saw this yesterday, Scott.

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Speaker 1: The Islanders are the worst team in the league in attendance.

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Speaker 1: They're averaging a little over eleventh and the I mean

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Speaker 1: they're an entertaining, highest scoring team in the league. They've

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Speaker 1: got some things to set one of the best players

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Speaker 1: in the league in John traver t varus Um. It

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Speaker 1: is clear that the Brooklyn was not working. Um and

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Speaker 1: what is happening going to happen in Elmont obviously gives

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Speaker 1: them a totally new, a fresh restart, right they have

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Speaker 1: new owners as of a couple of years ago. Uh.

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Speaker 1: If they can keep John Tavaris, that's great. But but

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Speaker 1: Elmont brings them closer to their fan base who are

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Speaker 1: willing to drive to games, which they did in Uniondale

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Speaker 1: for so long. There's a train station. That's what they

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Speaker 1: have now that they never had in Uniondale was access

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Speaker 1: to people in New York City. You can now take

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Speaker 1: public transportation to see an Islanders game. I'm guessing that

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Speaker 1: will help boost attendance. Another hot topic, let's talk about

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Speaker 1: LaVar Ball. Of course, he is the dad of Alonzo Ball,

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Speaker 1: the rookie for the Los Angeles Lakers. He's saying that

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Speaker 1: he has found a long away to solution to an

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Speaker 1: ongoing problem. What is that? Well, I'm not sure he's

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Speaker 1: found a solution, he says. And let me tell you, Michael,

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Speaker 1: and I'm gonna get t for this, but I don't

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Speaker 1: like anything that starts with the words LaVar Ball says. No,

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Speaker 1: I really don't. But let's see if it happens. But

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Speaker 1: to me, the big hurdle with his plan is the

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Speaker 1: promotion and the publicity that players get. Playing in the

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Speaker 1: n c A tournament six games makes you a household name.

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Speaker 1: Carmelo Anthony because of what he did in the n

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Speaker 1: c A tournament for Syracuse University, came into the NBA

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Speaker 1: a ready made brand playing for LaVar Balls League, Big

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Speaker 1: Ball or this that, whatever it may be, We'll get

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Speaker 1: you nothing. And let me explain what he wants to do.

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Speaker 1: He wants to start a pro league for NBA hopefuls

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Speaker 1: who don't want to attend college. Well, even if you

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Speaker 1: don't want to go so what they're talking about the

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Speaker 1: one and done. I still rather go to Kentucky. I

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Speaker 1: understand getting paid a little bit of money, even ten

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Speaker 1: thousand a month to play in this LaVar Ball league,

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Speaker 1: he says, But I'm not playing in the tournament. I'm

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Speaker 1: not on TV May Major TV all the time, and

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Speaker 1: I don't get the n c A turn. I think

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Speaker 1: there's a market for this idea, but I don't know

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Speaker 1: if LaVar Ball is the one to do it. I

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Speaker 1: think there's definitely a future some some kind of jumping

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Speaker 1: off point for high school basketball players who don't want

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Speaker 1: to go to college. Maybe you want to get some

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Speaker 1: money in their pocket, don't want to go overseas because

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Speaker 1: it's a huge culture shock, it's bigger. How about the

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Speaker 1: biggest problem though? They're really how many people were talking

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Speaker 1: about how many legitimate first round picks are there high

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Speaker 1: school two, three, four? I mean I don't want to

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Speaker 1: see that. Yeah, they aren't too many Lebron James Is

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Speaker 1: and that's out there. But anyway, let's see where this goes.

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Speaker 1: Our thanks to Bloomberg Business of Sports reporter Evan no

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Speaker 1: Wi Williams, now we get into our interview with the

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Speaker 1: head of Media Banking and Barclays, Peter Cohen. I have

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Speaker 1: known Peter for a number of years. Got to know

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Speaker 1: him when he was selling the Los Angeles Dodgers Frank

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Speaker 1: mccoort to Googgenheim. That was a distressed asset because of

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Speaker 1: it came out of a bankruptcy. So it's similar to

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Speaker 1: what's going on now the Carolina Panthers. All of a

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Speaker 1: sudden teams on the market that nobody expected. Peter, thank

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Speaker 1: you very much for joining us. Nice to be here.

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Speaker 1: You were involved in the Dodgers, but you certainly see

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Speaker 1: the landscape that goes on. How much of due diligence

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Speaker 1: and any of these transactions is media related because of

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Speaker 1: the amount of revenue we generates more and more um.

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Speaker 1: But the difficulty with being with doing due diligence and

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Speaker 1: media deals for sports teams is that most of the

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Speaker 1: contracts are secret between the principles and only at the

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Speaker 1: very last minute can you ever get a peek at

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Speaker 1: what's going on. So the challenge is uh getting enough

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Speaker 1: comfort with what the current environment is for media rights

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Speaker 1: that you can feel good about the final proposal that

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Speaker 1: you put on the table, but actually getting a detailed

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Speaker 1: analysis and understanding is very difficult. UH. The other thing

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Speaker 1: that's also important is where are you in the media

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Speaker 1: rights cycle, so for the for the franchise. So some

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Speaker 1: of these contracts are ten years long. If you're in

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Speaker 1: your two of a twenty five year UH contract, you

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Speaker 1: can pretty much understand what the stream of payments back

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Speaker 1: to the team is going to be and you can

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Speaker 1: just put that into the model. The interesting thing about

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Speaker 1: the Dodgers and some of the other transactions that have

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Speaker 1: happened in the media world, in the in the in

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Speaker 1: the sports world, is that, uh, they're very close to

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Speaker 1: the end of their contract, and so how do you

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Speaker 1: really figure what that new contract is going to look like?

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Speaker 1: How do you create auction environment for yourself once you

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Speaker 1: own the franchise so that you can maximize the value

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Speaker 1: of those rights. And then I think today you have

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Speaker 1: to think more and more about what exactly are those

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Speaker 1: rights going to be in the future as the media

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Speaker 1: world and the O T T world begins to change.

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Speaker 1: For what I'm hearing from prospective buysing their bankers, now

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Speaker 1: there's less interest in franchise where everything is in place,

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Speaker 1: whether it be an arena, whether it be a TV deal.

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Speaker 1: Everybody wants to be creative. They're searching for opportunities. Like

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Speaker 1: you just said, we're perhaps media is at the end.

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Speaker 1: Steve Bomber loves the fact that his local TV deals

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Speaker 1: coming up. That's right. Um Look, we're in a very

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Speaker 1: frothy environment for sports and sports franchises and the business

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Speaker 1: of sports. I always say that the business itself has

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Speaker 1: gone from beer and tickets and hot dogs to being

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Speaker 1: a much more complicated enterprise where there's real estate, there's

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Speaker 1: media rights, there's merchandise, there's all sorts of things that

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Speaker 1: you can be doing in and around the community, um

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Speaker 1: for a local franchise, and so the short, you know,

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Speaker 1: the more more optionality you have to drive value across

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Speaker 1: all those different elements, the more money you can make

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Speaker 1: for your team. And that's more and more important because

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Speaker 1: people are paying more and more for these franchises and

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Speaker 1: they've got to figure out a way to get some

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Speaker 1: kind of payback. Well, that's my point. These teams today,

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Speaker 1: it's like bitcoin, it keeps going up. How do you

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Speaker 1: set the valuations for these teams? Well, I don't know

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Speaker 1: anything about bitcoin, nor do I think most people do.

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Speaker 1: But um our guest today is not wink. I'm not

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Speaker 1: a bitcoin guy. Um, although maybe I should have been

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Speaker 1: two years ago like everybody else, but I should have

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Speaker 1: also bought Apple too. Um. I think that the thing

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Speaker 1: that benefits media, or that benefits sports is the scarcity

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Speaker 1: value of sports and the passion that teams uh you know,

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Speaker 1: put into people and so uh there's always going to

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Speaker 1: be that demand for the local team. And there's only

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Speaker 1: one New York Knicks, and there's only one you know,

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Speaker 1: l A Lakers, and so the opportunity to get your

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Speaker 1: hands on something like that just creates, you know, incredible excitement.

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Speaker 1: People want to be part of that. Plus, I think

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Speaker 1: now you know, sports is just the tippy top of

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Speaker 1: the value chain in the media ecosystem. It is the

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Speaker 1: one thing and this has been you know, well reported,

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Speaker 1: So it's the one thing that people want to watch

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Speaker 1: at the appointed time and place. It's the one thing

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Speaker 1: that gathers an audience, aggregates a huge audience. Um that

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Speaker 1: you can monetize through you know, advertising and other and

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Speaker 1: other stuff, and so um uh you know, if you're

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Speaker 1: gonna pay a lot of money for something, you still

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Speaker 1: feel pretty good about the demand for your product. Peter

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Speaker 1: Derek Jeter, he was obviously a legend on the field

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Speaker 1: and now part owner of the Miami Marlins. How do

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Speaker 1: you think he's doing. He just held a town hall

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Speaker 1: with ticket holders who have concerns about the team. Look,

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Speaker 1: I think as much as teams individual teams are businesses,

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Speaker 1: they're also very much community assets. And Uh, I think

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Speaker 1: one of the balances that any owner has to strike

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Speaker 1: is the balance between being a good business person and

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Speaker 1: maximizing the profits of the franchise so that you can

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Speaker 1: create a great experience for your fans and pay your

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Speaker 1: players a lot of money so you can have a

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Speaker 1: competitive team on the yield um. But it it creates

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Speaker 1: a lot of passion for UH in the community, and

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Speaker 1: people think, I hate the owner. It's my team, it's

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Speaker 1: not his team. Um, I'm the guy who pays all

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Speaker 1: the high ticket prices. And UH, you know, there's gotta

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Speaker 1: be a bounce. It's hard and I think he's probably

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Speaker 1: finding that out right now. We are chatting with Peter

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Speaker 1: coe in the global head of Media Investment Banking at Barkley's. Peter,

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Speaker 1: you talked about number of people watching it aggregates the

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Speaker 1: live audience, should the NFL be worried. Should ESPN be worried?

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Speaker 1: If the number is coming down? But it's still the

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Speaker 1: king of the hill. It still wins the night and

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Speaker 1: aggregates the most, but it's not what it once was.

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Speaker 1: Who should be most concerned? I think the businesses in

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Speaker 1: a little bit of a transition right now, as is

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Speaker 1: the entire media business model. So uh, you know, how

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Speaker 1: people consume information and video is really changing um as

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Speaker 1: more and more devices and tablets give you access to

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Speaker 1: any type of content at any time, at any place.

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Speaker 1: Do you believe everything will be mobile in ten twenty years,

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Speaker 1: that everybody wants this content on the go? Or is it,

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Speaker 1: as Mark Cuban says, they're not doing a good enough

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Speaker 1: job of really promoting the fact that TV is still

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Speaker 1: the best way to watch. Look, I think I think

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Speaker 1: people will expect flexibility depending on where they are. I

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Speaker 1: don't think it's an all or nothing game. I don't

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Speaker 1: think it really can be an all or nothing game because,

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Speaker 1: as we talked about some especially in sports, some of

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Speaker 1: these rights last ten and twenty years and it's tough

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Speaker 1: to unwind these contracts. And that just doesn't apply to sports,

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Speaker 1: it applies to everything. In the media ecosystem. But I

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Speaker 1: do think people will have the expectation that if they

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Speaker 1: are a fan and they are away, they want to

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Speaker 1: watch on their phone, if they're at their kids soccer game,

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Speaker 1: or they want to watch on a tablet, if they're

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Speaker 1: online in an office place, or they want to you know,

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Speaker 1: sit at home and watch TV. I think they're there's

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Speaker 1: going to have to be some mechanism that allows you

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Speaker 1: to sort of watch all of these things, because I

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Speaker 1: think at the end of the day, the franchises and

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Speaker 1: the leagues have to think about their customer and the

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Speaker 1: customers the fan, and they've got to maximize that audience,

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Speaker 1: and they shouldn't really care how to maximum where that

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Speaker 1: audience gets aggregated, as long as they're watching that game

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Speaker 1: and they can sell that ad um. But that's going

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Speaker 1: to take some time because a lot of these rights

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Speaker 1: are uh spoken for for several years um. The technology

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Speaker 1: is certainly evolving, but there's a lot of strain between

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Speaker 1: in the ecosystem about you know, I make a lot

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Speaker 1: of money doing things the old way. I don't make

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Speaker 1: as much money doing things the new way yet, and

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Speaker 1: I've got to find that balance. But I think that's yeah,

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Speaker 1: I got to be there, and I think I think

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Speaker 1: everybody acknowledges they need to be there. And I think

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Speaker 1: some of the league's and teams, you know, some are

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Speaker 1: more advanced in their thinking, some are not. But I

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Speaker 1: think we're in this period of transition and it's got

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Speaker 1: to play itself out. Peter, I wonder about the cable

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Speaker 1: companies and internet providers selling subscriptions. Do you think that

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Speaker 1: they're doing a good job. Well, I think you touch

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Speaker 1: on something that's very important, which is that online or

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Speaker 1: over the top video has proven to be very tough.

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Speaker 1: It's proven very tough to make money uh it online UM,

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Speaker 1: the advertising prices are much lower, there's huge competition, and

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Speaker 1: there's a little bit of a race for the to

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Speaker 1: the bottom um in terms of pricing, and so a

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Speaker 1: lot of the content companies, whether they're sports or non sports, UM,

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Speaker 1: have a real difficult time driving profitability and the way

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Speaker 1: they're trying to create profitabilities to create these subscription services.

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Speaker 1: How many subscription services are we all going to sign

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Speaker 1: up for? Um? You know, what if if you think

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Speaker 1: that the median income in the United States is something

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Speaker 1: like fifty dollars and you're already paying for you know,

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Speaker 1: rent and food and healthcare, air and taxes and schooling

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Speaker 1: and the one that everybody had. And I'm gonna say

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Speaker 1: read Hastings and Netflix and Netflix and Netflix. But look,

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Speaker 1: Netflix wants you to pay. HBO wants you to play,

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Speaker 1: Hulu wants you to pay. MLB dot Com wants you

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Speaker 1: to pay. You know, it just starts and everybody wants

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Speaker 1: to pay a lot of heart almost comes out more

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Speaker 1: expensive than the fall, and I think that's sort of

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Speaker 1: got to play itself out as an economic prospect. I

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Speaker 1: will never forget my father when I first introduced cable

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Speaker 1: in the house years ago, and he thought that was

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Speaker 1: the dumbest thing I've ever done in my life. You're

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Speaker 1: actually going to pay for TV. Well, two or three

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Speaker 1: satellite dishes later and subscriptions later, he bought into it.

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Speaker 1: And he is older than I am. I was just

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Speaker 1: wondering how long this trend will continue. Well, I don't know,

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Speaker 1: but I think people want choice and they're going to

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Speaker 1: figure out how to get the most bang for their buck. Um.

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Speaker 1: I think I personally think there has to be a

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Speaker 1: little bit of a shakeout all the O T T

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Speaker 1: offerings that are out there, but we'll see. Right now,

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Speaker 1: I don't know that any of them outside of Netflix

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Speaker 1: really has massive scale, and I don't know if the

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Speaker 1: pricing is right. I think what Disney is about to

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Speaker 1: embark on is going to be one of the very

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Speaker 1: most interesting things that happens over the next five or

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Speaker 1: ten years in media, because they're trying to create a real, legitimate,

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Speaker 1: scaled competitor to Netflix and um and we'll see it's

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Speaker 1: not easy creating a global audience of a hundred million subscribers.

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Speaker 1: We are chatting with Peter Cohen, the global head of

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Speaker 1: Media Investment Banking at Barkley's and it beat me too.

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Speaker 1: A great mind beats mediocre mind. But I wanted to

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Speaker 1: touch on part of that deal fifty some odd billion

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Speaker 1: dollars and you said Disney is embarking on something difficult here,

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Speaker 1: But twenty billion of that valuation is the regional sports networks.

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Speaker 1: We've talked about rights fees, and we've talked about contracts.

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Speaker 1: We mostly was the national deals. These are different though.

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Speaker 1: These are hyperlocal profitable. If you argue that perhaps there's

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Speaker 1: pressure on pricing, is the local sports fan most immune

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Speaker 1: to it? I mean, we've seen they got to have

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Speaker 1: their sports right. I mean New York Yankee fans. While

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Speaker 1: it can be off for a little while in a dispute,

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Speaker 1: they want to see their teams. I think it's a

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Speaker 1: tale of two cities. Um, best of times, worst of times.

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Speaker 1: I three, you know, a couple of years ago, no

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Speaker 1: one was watching Houston Astros games, and the Houston Astros

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Speaker 1: were actually off of television because the regional sports network

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Speaker 1: that they had it wasn't working us between the Rockets

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Speaker 1: and went bankrupt and went bankrupt, um, you know, and

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Speaker 1: not that many people cared because they weren't winning. The Dodgers,

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Speaker 1: another really important team that's playing lights out baseball and

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Speaker 1: has been for years at this point, is an offer

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Speaker 1: to half the city of Los Angeles roughly, you know

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Speaker 1: the deal is. I mean, obviously you were there, the

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Speaker 1: team's getting paid regardless of that difference that that that is.

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Speaker 1: That's a really important point. But you know, it goes

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Speaker 1: back to the comment I made about these businesses being

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Speaker 1: community assets. You know, over time, I think it hurts

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Speaker 1: to not have the Dodgers in your home, bringing up

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Speaker 1: New Dodger fans uh and and uh and not having

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Speaker 1: access you know, to them on television. Now they're going

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Speaker 1: to try to innovate and do other things to create

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Speaker 1: the brand. They're playing great baseball, so a lot of

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Speaker 1: people are coming to the stadium, you know, but if

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Speaker 1: you if your franchises in last place in twenty six

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Speaker 1: games out of first place, not a lot of people

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Speaker 1: are watching, and not a lot of people are advertising

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Speaker 1: on those regional sports networks. So you know, sometimes it works,

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Speaker 1: sometimes it doesn't. Having a portfolio of them, you know,

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Speaker 1: helps balance out the winners and the losers. The real

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Speaker 1: question in my mind is going back to one of

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Speaker 1: your other questions, you know, does this business uh survive

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Speaker 1: over ten or fifteen years if no one's really watching

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Speaker 1: television anymore? Um. The local owner may may own a

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Speaker 1: piece or all of the regional sports network think of

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Speaker 1: you know, Nesson or Masson, you know, where the owners

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Speaker 1: have a piece of the action. Um, but if their

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Speaker 1: customer isn't actually watching television or is watching television and

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Speaker 1: greatly diminished state because they have access to something online.

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Speaker 1: You know, what's the value and what's the terminal multiple?

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Speaker 1: You know, what is the ultimate value of these businesses?

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Speaker 1: I think is I think I think there's a lot

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Speaker 1: of pressure on those businesses, and I'm not sure you

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Speaker 1: know over time that I think there's I don't want

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Speaker 1: to make any real prognostigations, but I don't I think

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Speaker 1: that's one of the big questions in sports is what

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Speaker 1: what is going to be the value of regional sports

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Speaker 1: networks over over the longer term. I think in the

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Speaker 1: short medium term it's fine because of all these contracts. Peter,

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Speaker 1: you have an eleven year old, I have an eight

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Speaker 1: year old. When they watched and they're on the phone

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Speaker 1: or the tablet, whatever it is. Sports is usually the

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Speaker 1: second screen. Maybe it's social first or something else, but

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Speaker 1: the game isn't on that first screen. Does this devalue

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Speaker 1: the sports property? I think it's hard to say. Look,

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Speaker 1: social is becoming much more important, you know, putting things

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Speaker 1: on Facebook, on Instagram, Twitter, Uh, it's it's part of

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Speaker 1: the fabric of life now. So it has to be

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Speaker 1: sort of you know, you have to find some sort

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Speaker 1: of integrated experience. I think that a lot of team

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Speaker 1: owners and even event owners forget about sports. You know,

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Speaker 1: the Grammys, some some big community wide event. You know

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Speaker 1: what what they're able to uh do in terms of

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Speaker 1: complementing the broadcast with social media during the broadcast, um

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Speaker 1: is just growing and growing and growing. Alification, that's the word,

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Speaker 1: it's amplification. It also creates attention, you know, what makes

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Speaker 1: you keep watching so that you can participate in the discussion.

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Speaker 1: So I think it's you know, very powerful complementary UH

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Speaker 1: platforms in baseball, basketball, football, hockey. You can name the

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Speaker 1: major players involved, you know the names. NASCAR is now

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Speaker 1: going through a phase. Will name me a star in

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Speaker 1: the upper echelon of the sport, and that brings me

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Speaker 1: to this. It comes down to the product. Do all

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Speaker 1: the sports have to worry about the product itself in

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Speaker 1: selling it for the valuation of their business? Absolutely? I

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Speaker 1: mean I think the stars are actually going to be

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Speaker 1: the future of media. I think that the most powerful

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Speaker 1: connectivity that a sport has to its fans is not

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Speaker 1: through the league or the television channel, it's through the

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Speaker 1: star themselves. Taking the commercial on Lebron's Twitter feed, Look

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Speaker 1: you are because you want something that's super authentic, that's

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Speaker 1: you know, stamped with his approval. You're you know, you're

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Speaker 1: crazy about Lebron or you're crazy about Neymar, you're crazy

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Speaker 1: about Ronaldo. You know, these are global personalities who have

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Speaker 1: global audiences that are massive, bigger than you know, the

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Speaker 1: Wednesday night Games audience, and advertisers want to get there.

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Speaker 1: I think it's actually the least monetized part of the

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Speaker 1: whole new sports ecosystem that's trying to leverage social media.

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Speaker 1: The stars are creating their own platforms, their challenges creating

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Speaker 1: the media to sort of monetize that platform because they're

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Speaker 1: really busy being stars. You know, they've got to go

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Speaker 1: to practice, they've got to do this, and they don't

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Speaker 1: have the machinery to create content that really allows them

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Speaker 1: to leverage this platform in a big way. But if

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Speaker 1: you think about Lebron or Kobe or Tiger Woods, I mean,

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Speaker 1: all of these great stars have an incredible opportunity. Um,

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Speaker 1: look what's going on in the rest of golf, for example,

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Speaker 1: you know with Rory McElroy and Ricky Fowler and Justin

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Speaker 1: uh Thomas um Jordan's speed, they have you know, massive

429
00:24:22,040 --> 00:24:26,320
Speaker 1: social media followings and uh, you know that's going to

430
00:24:26,400 --> 00:24:28,639
Speaker 1: be as powerful a moneymaker for them, I think in

431
00:24:28,680 --> 00:24:31,200
Speaker 1: the future as anything. We are chatting with Peter Coe

432
00:24:31,240 --> 00:24:33,680
Speaker 1: in the global head of Media Investment Banking at Barclay's

433
00:24:33,880 --> 00:24:37,840
Speaker 1: and let me get to the pound gorilla ESPN. What

434
00:24:37,920 --> 00:24:41,720
Speaker 1: am I to make of that company right now? Lots

435
00:24:41,760 --> 00:24:45,520
Speaker 1: of turmoil. John Skipper steps aside. Doesn't seem like the

436
00:24:45,520 --> 00:24:49,560
Speaker 1: best time to be losing your captain at a time

437
00:24:49,600 --> 00:24:54,080
Speaker 1: when rights fees are going up, the audience is going down.

438
00:24:54,640 --> 00:24:57,600
Speaker 1: They're looking at ot T. But you've already talked about

439
00:24:57,640 --> 00:24:59,879
Speaker 1: the dangers of OTT and they and the return on

440
00:25:00,000 --> 00:25:04,080
Speaker 1: investment there. What am I to make of ESPN as

441
00:25:04,200 --> 00:25:07,959
Speaker 1: a business now and as a cash cow for Disney

442
00:25:08,160 --> 00:25:11,600
Speaker 1: moving forward? I'll say a couple of things, what one is,

443
00:25:12,040 --> 00:25:14,800
Speaker 1: and you know, we can spend the entire Yeah, that's

444
00:25:14,800 --> 00:25:18,320
Speaker 1: why I didn't want to do the whole thing on ESPN. Look, first,

445
00:25:18,840 --> 00:25:20,680
Speaker 1: I've only met John Skipper a couple of times. I

446
00:25:20,720 --> 00:25:23,359
Speaker 1: think he's an incredibly wonderful guy and I wish him

447
00:25:23,359 --> 00:25:26,480
Speaker 1: all the best. Two is uh, yeah, timing is not

448
00:25:26,600 --> 00:25:29,399
Speaker 1: perfect for somebody of that caliber to be leaving as

449
00:25:29,440 --> 00:25:32,680
Speaker 1: the captain of the ship. But you know, ESPN is

450
00:25:32,720 --> 00:25:38,080
Speaker 1: an octopus. It's in every facet of the sports business.

451
00:25:38,800 --> 00:25:43,320
Speaker 1: Um It's underpinned by long term contracts for very important

452
00:25:43,359 --> 00:25:48,080
Speaker 1: sports rights, and you know, over the near and medium term,

453
00:25:48,119 --> 00:25:51,399
Speaker 1: you know, while they are having, you know, some trouble

454
00:25:51,480 --> 00:25:56,520
Speaker 1: retaining audience. They're still really big, really important, and really influential,

455
00:25:56,520 --> 00:25:59,959
Speaker 1: and I would imagine that they'll stay that way two

456
00:26:00,040 --> 00:26:03,359
Speaker 1: and those important rights deals. That's not that far with that,

457
00:26:03,480 --> 00:26:05,960
Speaker 1: that's not and I think it's as important also for

458
00:26:06,040 --> 00:26:11,000
Speaker 1: CBS and Fox. Frankly, when you begin to talk about, um,

459
00:26:11,040 --> 00:26:14,520
Speaker 1: you know, who are these incredibly well funded technology companies

460
00:26:14,560 --> 00:26:17,880
Speaker 1: that would also like to move that audience onto their

461
00:26:17,920 --> 00:26:20,840
Speaker 1: platforms in a more regular way. Who have you know,

462
00:26:21,359 --> 00:26:23,240
Speaker 1: lots and lots and lots of money, who can compete

463
00:26:23,280 --> 00:26:25,040
Speaker 1: for these rights? What's going to happen? I think that's

464
00:26:25,040 --> 00:26:29,639
Speaker 1: one of the great unknowns um And I think, you know,

465
00:26:29,840 --> 00:26:34,120
Speaker 1: you'll start seeing more and more of the rights go online,

466
00:26:34,160 --> 00:26:36,439
Speaker 1: but it's not all going to go online, because people

467
00:26:36,960 --> 00:26:39,320
Speaker 1: will still want to have access to it on television,

468
00:26:40,080 --> 00:26:44,239
Speaker 1: um uh. And I think the league's want to have

469
00:26:44,520 --> 00:26:48,760
Speaker 1: a customer experience that's still very very high quality and

470
00:26:48,960 --> 00:26:52,520
Speaker 1: um so they'll continue to find a balance. But for ESPN,

471
00:26:53,560 --> 00:26:57,480
Speaker 1: you know, I think they've at Disney now acknowledged that

472
00:26:57,840 --> 00:27:02,600
Speaker 1: they need to disrupt themselves in order to play for

473
00:27:02,640 --> 00:27:06,320
Speaker 1: the longer term future. That's what they're doing. I think

474
00:27:06,320 --> 00:27:08,240
Speaker 1: they're one of the few companies in the world that

475
00:27:08,280 --> 00:27:12,560
Speaker 1: can actually not not only do it because of their

476
00:27:12,600 --> 00:27:16,000
Speaker 1: presence and their size, but also because of their financial resources.

477
00:27:16,400 --> 00:27:17,720
Speaker 1: Then if you have to take a little bit of

478
00:27:17,720 --> 00:27:20,760
Speaker 1: a short term hit to really make it over the

479
00:27:20,800 --> 00:27:23,720
Speaker 1: long term. Um, they're going for it, and we're gonna

480
00:27:23,760 --> 00:27:26,520
Speaker 1: find out what happens. So news this week, Jerry Richardson

481
00:27:26,600 --> 00:27:31,120
Speaker 1: is selling the Carolina Panthers, sort of that frothy feeling

482
00:27:31,240 --> 00:27:33,879
Speaker 1: that the Dodgers had. Who expected this asset and the

483
00:27:33,920 --> 00:27:36,320
Speaker 1: Clippers nobody expected the asset to come on the market.

484
00:27:36,520 --> 00:27:38,119
Speaker 1: You know, did he raise his hand right away? But

485
00:27:38,400 --> 00:27:40,840
Speaker 1: I suspect that once he finds out it's a seven

486
00:27:40,880 --> 00:27:44,840
Speaker 1: hundred million dollar check as the GP, that perhaps he'll

487
00:27:44,840 --> 00:27:48,000
Speaker 1: be happy in a limited position. But again, it is

488
00:27:48,040 --> 00:27:52,560
Speaker 1: a seven hundred million dollar check. How many people or

489
00:27:52,560 --> 00:27:54,960
Speaker 1: more or more? I mean, that's like a two point

490
00:27:55,640 --> 00:28:00,360
Speaker 1: three billion dollar valuation right on the global basis. How

491
00:28:00,359 --> 00:28:03,320
Speaker 1: many folks are out there who are rushing into you

492
00:28:03,359 --> 00:28:07,320
Speaker 1: know what, I want an NFL franchise? Now? Are they

493
00:28:07,359 --> 00:28:10,480
Speaker 1: looking at other league opportunities? Like Joe si wanted the

494
00:28:10,560 --> 00:28:14,480
Speaker 1: Nets because of the international possibilities. What do you think

495
00:28:15,040 --> 00:28:17,919
Speaker 1: the number or or or the fervor is going to

496
00:28:18,040 --> 00:28:22,600
Speaker 1: be for an NFL team in a midsize market. Really,

497
00:28:22,840 --> 00:28:25,080
Speaker 1: everything's in place. You've got a stadium, you know, the

498
00:28:25,119 --> 00:28:29,119
Speaker 1: TV deal. You're just buying a team. Well, technically you

499
00:28:29,119 --> 00:28:30,679
Speaker 1: can move the stadium in a couple of years, or

500
00:28:30,680 --> 00:28:32,080
Speaker 1: you can move the team in a couple of years.

501
00:28:32,080 --> 00:28:34,720
Speaker 1: The lease is over, uh in a couple of years.

502
00:28:34,760 --> 00:28:37,800
Speaker 1: So I think that opens up the number of people

503
00:28:37,880 --> 00:28:40,800
Speaker 1: who may take a look at that and UH and

504
00:28:40,840 --> 00:28:45,080
Speaker 1: see whether they keep it in in the in Carolina

505
00:28:45,200 --> 00:28:48,720
Speaker 1: or they move it someplace else. UM. I still think

506
00:28:49,400 --> 00:28:52,680
Speaker 1: it's gonna be a very strong there would be a

507
00:28:52,760 --> 00:28:55,360
Speaker 1: very strong bid for this business. You know, football still

508
00:28:55,400 --> 00:28:57,640
Speaker 1: gets the most audience. It has had a couple of

509
00:28:57,720 --> 00:29:01,600
Speaker 1: knocks over the past year, as we've all seen. UM.

510
00:29:01,640 --> 00:29:04,920
Speaker 1: There are some longer term questions that I think the

511
00:29:05,000 --> 00:29:10,240
Speaker 1: league is addressing. UM, But there is, and there's been

512
00:29:10,240 --> 00:29:13,239
Speaker 1: so much wealth creation over the past decade that I

513
00:29:13,280 --> 00:29:15,720
Speaker 1: do think there are you know, more than just a

514
00:29:15,800 --> 00:29:20,680
Speaker 1: handful of individuals who incredibly have you know, that kind

515
00:29:20,720 --> 00:29:24,640
Speaker 1: of liquidity to pay for a team if they want to,

516
00:29:24,880 --> 00:29:28,280
Speaker 1: if they want it and um, you know, but it'll

517
00:29:28,320 --> 00:29:31,280
Speaker 1: get it'll it'll all depend on sort of price and

518
00:29:31,480 --> 00:29:35,120
Speaker 1: whether they can whether the league demands that they keep

519
00:29:35,120 --> 00:29:39,120
Speaker 1: it in place, or if they can move it someplace

520
00:29:39,200 --> 00:29:41,600
Speaker 1: that doesn't have an NFL team right now. Um, I

521
00:29:41,600 --> 00:29:44,680
Speaker 1: think it's gonna be really interesting. But some somebody's gonna

522
00:29:44,680 --> 00:29:46,800
Speaker 1: buy it, and somebody's gonna pay a big price. All right.

523
00:29:46,840 --> 00:29:49,880
Speaker 1: That's Peter Cohen, Global head of Media Investment Banking at Barkley's.

524
00:29:49,920 --> 00:29:53,320
Speaker 1: Thank you, my friend, Thanks Peter, thank you. Takeaways from

525
00:29:53,360 --> 00:29:57,520
Speaker 1: Peter Cohen. I'm just amazed, quite frankly, how you find

526
00:29:57,960 --> 00:30:01,800
Speaker 1: some sort of valuation for today's sports team. And when

527
00:30:01,760 --> 00:30:06,280
Speaker 1: we went into the information about that, it's rather complex,

528
00:30:06,320 --> 00:30:11,120
Speaker 1: and from a man who advised so many major sports

529
00:30:11,160 --> 00:30:14,320
Speaker 1: business deals, it's it really is amazing that he represented

530
00:30:14,360 --> 00:30:16,720
Speaker 1: Tribune in the cell of the Cubs. And what I'm

531
00:30:16,760 --> 00:30:19,760
Speaker 1: amazed is that simply if and you're gonna get this

532
00:30:20,160 --> 00:30:24,320
Speaker 1: that Peter Cohen, head of Global Media Investment Banking at Barclay's,

533
00:30:24,400 --> 00:30:27,160
Speaker 1: is on our show, like these are the types of

534
00:30:27,200 --> 00:30:30,360
Speaker 1: folks that are involved in sports these days. This is

535
00:30:30,400 --> 00:30:33,680
Speaker 1: not just buying a team and and having that as

536
00:30:33,720 --> 00:30:36,840
Speaker 1: an asset. This is not the old days. People now

537
00:30:36,920 --> 00:30:39,640
Speaker 1: by these teams, they're spending billions of dollars and cutting

538
00:30:39,680 --> 00:30:43,640
Speaker 1: big time checks. They want media, they want real estate,

539
00:30:44,080 --> 00:30:48,560
Speaker 1: they want something else. The sports property. The team is

540
00:30:48,680 --> 00:30:51,520
Speaker 1: just one of the tent poles holding it all up.

541
00:30:51,680 --> 00:30:53,400
Speaker 1: And you know what it's I'm not trying to blow

542
00:30:53,480 --> 00:30:57,240
Speaker 1: smoke either. A nice guy, and I started thinking, Oh

543
00:30:57,280 --> 00:31:01,040
Speaker 1: my goodness, this guy was in on a two billion

544
00:31:01,120 --> 00:31:06,120
Speaker 1: plus the dollar deal for the Los Angeles Dodgers and

545
00:31:06,240 --> 00:31:10,280
Speaker 1: just a regular guy. One of those cornerstone, hallmark, definitive

546
00:31:10,360 --> 00:31:12,920
Speaker 1: moments in sports business that you have to talk about

547
00:31:13,120 --> 00:31:17,760
Speaker 1: when you're talking about big things that happen. Wen't want

548
00:31:16,400 --> 00:31:20,000
Speaker 1: to feels better to be a number one than number five.

549
00:31:20,040 --> 00:31:21,640
Speaker 1: I'll wear a number because of Mike. We have a

550
00:31:21,720 --> 00:31:23,560
Speaker 1: chance to go for three in a row. Kid numbers

551
00:31:23,560 --> 00:31:25,680
Speaker 1: in a good time. When I first started wearing the number,

552
00:31:25,800 --> 00:31:29,240
Speaker 1: I would just happy and floomberg business of sports, the

553
00:31:29,440 --> 00:31:33,640
Speaker 1: number of the week. And now the number. I'm so

554
00:31:33,760 --> 00:31:36,360
Speaker 1: happy we're doing this. This is this is great, this

555
00:31:36,400 --> 00:31:41,120
Speaker 1: is great. The number is thirteen. Gee, I wonder if

556
00:31:41,160 --> 00:31:44,080
Speaker 1: you can guess this well? I couldn't have ahead of time,

557
00:31:44,080 --> 00:31:47,280
Speaker 1: but I could guess because we have been talking about it.

558
00:31:47,440 --> 00:31:50,520
Speaker 1: For anyone who has a son or daughter in the

559
00:31:50,560 --> 00:31:53,120
Speaker 1: New York area, I'm guessing, who has a son or

560
00:31:53,200 --> 00:31:57,720
Speaker 1: daughter coming up on a bot or bar mitzvah? Why

561
00:31:57,840 --> 00:32:01,120
Speaker 1: just have a DJ? Why just to have balloons and

562
00:32:01,240 --> 00:32:03,720
Speaker 1: games when you can have your very own NBA players

563
00:32:03,840 --> 00:32:07,120
Speaker 1: show up. I love this. This is excellent. In case

564
00:32:07,160 --> 00:32:11,360
Speaker 1: you guys don't know Kyla quinn Uh, he is obviously

565
00:32:11,400 --> 00:32:14,560
Speaker 1: with the New York Knicks and now he is showing

566
00:32:14,680 --> 00:32:18,960
Speaker 1: up at the bar Mitzvah's and he's now known as

567
00:32:19,160 --> 00:32:21,120
Speaker 1: and I love his teammates like they have no idea

568
00:32:21,160 --> 00:32:23,840
Speaker 1: what he's talking about. I'm kind of the bar Mitzvah guy.

569
00:32:23,880 --> 00:32:27,520
Speaker 1: If you're looking to supplement income as a professional athlete,

570
00:32:27,760 --> 00:32:30,160
Speaker 1: you could do worse than showing up at parties. The

571
00:32:30,200 --> 00:32:31,680
Speaker 1: one thing we don't know is what is his his

572
00:32:31,720 --> 00:32:33,840
Speaker 1: appearance fee is. I don't know what he gets to shop?

573
00:32:34,080 --> 00:32:37,000
Speaker 1: What is that half hour hour? Take some pictures, throws

574
00:32:37,040 --> 00:32:41,000
Speaker 1: some basketballs around. But he has become known, as you said,

575
00:32:41,560 --> 00:32:44,040
Speaker 1: the bar Mitzvah guy. Great, one of the New York

576
00:32:44,120 --> 00:32:47,680
Speaker 1: Knicks can show up at your bar mitzvah and have

577
00:32:47,800 --> 00:32:49,400
Speaker 1: some fun. That's something to talk about, and take some

578
00:32:49,440 --> 00:32:52,720
Speaker 1: great pictures. Yeah, speaking of that, he said about about

579
00:32:52,720 --> 00:32:56,000
Speaker 1: a hundred kids come up and shout at him selfie. Selfie, selfie,

580
00:32:56,040 --> 00:32:58,600
Speaker 1: what's your snapchat? This is great and I'm not sure

581
00:32:58,600 --> 00:33:00,680
Speaker 1: it's for everybody, Michael, but he's like the energy guy

582
00:33:00,680 --> 00:33:03,960
Speaker 1: for the Knicks. He seems to have the personality that

583
00:33:04,040 --> 00:33:07,440
Speaker 1: really makes this work. Well. This we need to do

584
00:33:07,480 --> 00:33:10,719
Speaker 1: more stories like this. This is a happy story. The

585
00:33:10,760 --> 00:33:12,720
Speaker 1: more athletes of bar Mitzvahs, I'm happy to do it.

586
00:33:13,000 --> 00:33:15,560
Speaker 1: You've been listening to Bloomberg Business of Sports. We are

587
00:33:15,640 --> 00:33:18,120
Speaker 1: here each and every week at the same time, exploring

588
00:33:18,160 --> 00:33:20,480
Speaker 1: the world of money and sports on Michael barn and

589
00:33:20,600 --> 00:33:22,720
Speaker 1: I'm Scott Sashnik. Thank you for joining us, and please

590
00:33:22,760 --> 00:33:24,720
Speaker 1: tune in next week when we speak with the biggest

591
00:33:24,720 --> 00:33:27,720
Speaker 1: and brightest in the sports industry. You're listening to Bloomberg

592
00:33:27,720 --> 00:33:30,640
Speaker 1: Business of Sports on Bloomberg Radio around the world and

593
00:33:30,720 --> 00:33:33,320
Speaker 1: online as an Apple podcast on Night series