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Speaker 1: Hello, I'm Scott, I'm Evan Williams, and I'm Michael Barr.

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Speaker 1: And this is the Bloomberg Business of Sports podcast, where

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Speaker 1: we explore the big money issues in the world of

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Speaker 1: sports today. We begin with the Mets, and we're talking

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Speaker 1: about the story that you broke, Scott. Yeah. If you

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Speaker 1: remember about six years ago, when the Mets ownership was

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Speaker 1: in a little bit of financial stress over the Bernie

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Speaker 1: Madoff scheme, they didn't know they were in talks with

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Speaker 1: Irving Picard about clawback money. Uh, they put out a

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Speaker 1: request for investors in the team. They sold twelve twenty

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Speaker 1: million dollar stakes. In essence, it acted as a loan.

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Speaker 1: You got a four percent stake in the team for

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Speaker 1: the twenty million, a guaranteed compounded three percent annual return.

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Speaker 1: After six years. You had to decide do I want

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Speaker 1: to keep this steak or do I want to sell it?

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Speaker 1: And three or four of those folks or people in

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Speaker 1: those ownership groups have put up their hands and notified

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Speaker 1: the Mets ownership of their intent to sell. It's turned

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Speaker 1: out to be a fantastic investment. The team value has

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Speaker 1: essentially quadrupled. If if you trust Forbes, your twenty million

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Speaker 1: dollar steak is now worth eighty million dollars. But as

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Speaker 1: you said, there are some people out there that are

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Speaker 1: willing to cash out. Now obviously evaluations are up. They

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Speaker 1: did not have to participate in cash calls in the past,

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Speaker 1: were now at that point where if they kept the stakes,

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Speaker 1: they would the Mets have an option to buy these back.

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Speaker 1: Uh And and as you reported, sounds like that's not

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Speaker 1: what it's going to current appraised value of the team,

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Speaker 1: and the Mets, from what I understand, will not exercise

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Speaker 1: that option because if they want them and they don't

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Speaker 1: need them, you get no voting rights, you get no

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Speaker 1: control at the time. You know how they induce people

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Speaker 1: to buy these shares, Bar, you know what they got.

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Speaker 1: They got to hang out with Mr Met Well, there

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Speaker 1: you go. They got business cards that said owner. They

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Speaker 1: got to play on the field when the team was

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Speaker 1: away for one day. You know, those kind of little

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Speaker 1: perks for your twenty million dollar investment. So the bottom

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Speaker 1: line is, if we all get to our piggy banks,

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Speaker 1: we can only share the Mets. Yeah, well, if we

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Speaker 1: get your cutting on bar to bring the big substantial

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Speaker 1: chunk here. Realistically, how vibrant the market are we expecting

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Speaker 1: for these things. As you say, there's there's not many perks,

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Speaker 1: you're not no voting rights. This is literally just a

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Speaker 1: chance to say that you own a piece of the

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Speaker 1: two problem. Yeah, that's what it is. The problem is

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Speaker 1: these things used to be very popular and people would

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Speaker 1: buy one percent, two percent, whatever. The problem nowadays is

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Speaker 1: that the valuations have gotten so high that absent any

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Speaker 1: sort of operational say or board seat or representation, there's

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Speaker 1: a whole lot of money for nothing that amounts to

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Speaker 1: pretty much season tickets. Let's go on from a story

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Speaker 1: that Scott broke to a story that Evan has broke

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Speaker 1: about tennis fixing. Yeah, the if you're a tennis fan

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Speaker 1: out there, the two year report into match fixing, probably

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Speaker 1: no surprises in there, but there is uh rampant match

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Speaker 1: fiction and corruption at the lowest levels of tennis. Uh.

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Speaker 1: This is a group of lawyers that are kind of

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Speaker 1: trying to diagnose the problem and the problem they've come to,

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Speaker 1: and this is actually relevant for for for U S

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Speaker 1: sports as well, is that data deals that the companies

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Speaker 1: like sport Radar sign in which they take official data

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Speaker 1: streams and then sell them to bookmakers so they can

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Speaker 1: offer lines on them. This group of lawyers is arguing

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Speaker 1: that those data deals facilitated this rampant spread of corruption.

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Speaker 1: See and this is the problem that people are worried

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Speaker 1: about now with gambling looking to be legally. If the

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Speaker 1: Supreme Court designed to do what it's going to do,

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Speaker 1: this is what people are worried about. The bets are

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Speaker 1: happening anyway. The argument is that if you legalize, if

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Speaker 1: you're following, if you're looking at betting patterns, at least

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Speaker 1: you can know what's happening. This is a two year

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Speaker 1: investigation to say that to sixteen year olds that are

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Speaker 1: playing in Koala lumpour are subject to payoffs because mass

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Speaker 1: of amounts of money are being bet If nobody bet

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Speaker 1: on it, who would pay either one of them? The

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Speaker 1: froll match doesn't make any sense or even to throw

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Speaker 1: a set. That's how these games are better. And the

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Speaker 1: reason this matters in the US is that, as we've

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Speaker 1: talked about on the show many times, we're waiting on

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Speaker 1: the Supreme Court to make a ruling on whether states

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Speaker 1: like New Jersey should be allowed to offer legal sports betting.

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Speaker 1: Leagues like the NBA and Major League Baseball have been

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Speaker 1: going state to state arguing for things like official data

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Speaker 1: to be required by bookmakers. They're arguing for the right

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Speaker 1: to restrict betting on things like minor league baseball. And

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Speaker 1: as Scott said, these minor league levels of tennis are

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Speaker 1: way below even the smallest levels of professional baseball here

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Speaker 1: in the US. But there's no question that when you

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Speaker 1: have a sport in which people are not paid very much,

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Speaker 1: where your referees and umpires are not paid very much,

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Speaker 1: where there's no real official oversight, those are the groups

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Speaker 1: that are most likely to be corrupted by betting syndicates. Well,

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Speaker 1: wouldn't nets set off alarm bells? I mean, there's one

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Speaker 1: thing if you're talking about a big time match, but

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Speaker 1: like you said, when you're talking about my or league

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Speaker 1: tennis and all of a sudden you see big money

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Speaker 1: moving on a match, doesn't that set off an alarm

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Speaker 1: belt exactly? And that's kind of what That's what a

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Speaker 1: lot of these companies are doing. They're monitoring these betting lines.

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Speaker 1: They're seeing if suddenly betting on you know, this woman

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Speaker 1: to to lose the third service game of the second set,

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Speaker 1: if that suddenly spikes, they have they have a good

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Speaker 1: idea that there is there is some corruption going on.

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Speaker 1: Um and yeah, the higher up you get, the more

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Speaker 1: liquidity in the market, the harder those things are to

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Speaker 1: to detect. We learned this years ago, like I didn't

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Speaker 1: know this, and I mean you learn that radar. Sport

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Speaker 1: Radar was willing to pay big money for these rights

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Speaker 1: because there are matches spread out all over the world

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Speaker 1: and these betting companies they need live matches on their

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Speaker 1: platforms to keep people playing, Like, oh, what's at three am?

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Speaker 1: But there's a match being played, you know in this

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Speaker 1: part of the world. Hey, all right, I'll bet on this.

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Speaker 1: That's why it was so valuable. And they paid what

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Speaker 1: was it, seventy million for I t F. And let's

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Speaker 1: not forget who the investors are in a company like

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Speaker 1: sport Radar. Some names you might know, Mark Cuban, Michael

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Speaker 1: Jordan's ted Leons. So they are there already. These are

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Speaker 1: big time US owners. This is an issue and as

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Speaker 1: we get closer and closer to what framework's gonna look

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Speaker 1: like in the US, uh, they're gonna be a major

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Speaker 1: player here as well. Let's talk about the NFL. First

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Speaker 1: of all, I'm gonna start with the ratings. First of all,

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Speaker 1: for the NFL Draft. Now. According to ESPN, the ratings

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Speaker 1: were five million on Thursday for Round one, then it

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Speaker 1: dropped down Friday night to one point six million, then

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Speaker 1: rebounded to two point two million for Day three. In

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Speaker 1: other words, you're gonna see the draft and it's gonna

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Speaker 1: be here to stay. I think those numbers are just

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Speaker 1: for ESPN, right all the others Bloomberg the draft this

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Speaker 1: think it was almost twelve million on Thursday night. I

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Speaker 1: mean that outdrew every NBA playoff game, every NHL playoff game,

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Speaker 1: probably cumulated for all the sports. For be it from

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Speaker 1: me to criticize sports fans that are so engaged in

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Speaker 1: the content that they keep us employed. But I'm going

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Speaker 1: to argue that I'm smarter than all of them, because

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Speaker 1: you know how I take in my draft bar I don't.

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Speaker 1: And then maybe three hours later, I can log onto

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Speaker 1: my telephone sitting on my couch and to the night

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Speaker 1: and say, okay, oh, look at that. Baker Maybield went

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Speaker 1: number one. Okay, god, hey, sick one. Parkley went to

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Speaker 1: the Giants. That's pretty cool. Oh look at that the

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Speaker 1: Jets got a quarterback. Very good. I got what I need? Goodbye,

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Speaker 1: say usually I'm asleep around that time, but I woke

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Speaker 1: up it was I had to see the draft. I'm

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Speaker 1: it's a unique TV property, right. It attracts college football

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Speaker 1: fans because they want to see where guys they went

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Speaker 1: to their school are going. It attracts NFL only fans

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Speaker 1: because they want to see what their team is drafting.

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Speaker 1: And it attracts obviously the people that are that are both.

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Speaker 1: But it is a nice reminder that, yeah, I mean

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Speaker 1: the Jets of Giants went. I mean they had watch

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Speaker 1: parties and like many thousands of people showed up in

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Speaker 1: a stadium to watch this stuff. Speaking of watching TV,

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Speaker 1: well I shouldn't say TV. There's a deal now but

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Speaker 1: Thursday Night Football with Amazon staying with Amazon. Last time

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Speaker 1: it was about fifty million dollars for the one year.

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Speaker 1: Of course, you know how the NFL does business. They

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Speaker 1: never go down. So this is a two year deal

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Speaker 1: about a hundred and thirty million dollars. So can you

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Speaker 1: do the math real FASTT two increase sixty sixty five

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Speaker 1: more than fifty That's the way the NFL does serious. Yeah,

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Speaker 1: But what I'm interested in here is that it also

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Speaker 1: includes the Amazon channel, Twitch and the future of young

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Speaker 1: people watching. This is going to be a different broadcast.

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Speaker 1: It's not going to be like what you're comfortable seeing,

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Speaker 1: you know, you on your big screen TV. This is

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Speaker 1: about graphics and and and information. This is gonna be

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Speaker 1: aimed at experimenting how do we present football to the

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Speaker 1: audience of the future. Were we surprised that Amazon re upped?

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Speaker 1: I mean that the NFL has made it clear that hey,

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Speaker 1: this is just an experiment. You know, none of these

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Speaker 1: games are exclusive. You can still watch these on TV.

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Speaker 1: They are playing around with different digital partners. They've done

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Speaker 1: games with Yahoo, they did games with Twitch, all right,

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Speaker 1: games with Twitter. Sorry last year they did these games

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Speaker 1: with Amazon. Seemed like it might make sense that who knows,

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Speaker 1: this could be Facebook, this could be YouTube, this could

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Speaker 1: be someone else. They went back to YouTube at this time.

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Speaker 1: I was surprised because it's experimentation and they've done the Twitter,

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Speaker 1: They've done Amazon. I was a little surprised that they

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Speaker 1: didn't see how to utilize YouTube, because you're then you're

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Speaker 1: cutting up all kinds of content, highlights and how people

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Speaker 1: are really watching what they're watching. I was a little

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Speaker 1: surprised there, but a little surprised the fact that Amazon

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Speaker 1: is still trying to figure out new ways to separate

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Speaker 1: people from their cash. Not surprised at all, and utilizing

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Speaker 1: sports to do it makes perfect and this gets them.

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Speaker 1: This is a two year deal, as you said, so

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Speaker 1: this this will expire before all the TV deals, So

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Speaker 1: there will be another round of this kind of short

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Speaker 1: term digital intermixing before we get to the mega round

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Speaker 1: where who knows what's gonna happen. I don't think I'm

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Speaker 1: gonna be retired by two but I gotta say, for

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Speaker 1: the sports media folks out there, it's gonna be one

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Speaker 1: of the seven monitoring of who who's getting these rights

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Speaker 1: and how are they sharing them, how they getting caught up.

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Speaker 1: I'm tired just thinking about it. Oh, calm down, I'll

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Speaker 1: play I'll playing the role many. This is the Bloomberg

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Speaker 1: Business of Sports podcast. I'm Michael Barr, along with scottsni

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Speaker 1: and Evan Nolbi Williams. We are here each and every

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Speaker 1: Monday and Friday exploring the world of money in sports.

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Speaker 1: Join us again at the end of the week when

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Speaker 1: we speak with the biggest and brightest in the sports

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Speaker 1: business world. You're listening to Bloomberg Business of Sports from

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Speaker 1: Bloomberg Radio around the world online as an Apple podcast

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Speaker 1: on ITUNESHM