1 00:00:00,400 --> 00:00:03,640 Speaker 1: Hello, I'm Evan Noby Williams and I'm Michael bar We're 2 00:00:03,680 --> 00:00:06,920 Speaker 1: missing Scott Sashnik. This is the Bloomberg Business of Sports 3 00:00:06,920 --> 00:00:09,080 Speaker 1: podcast where we explored a big many issues in the 4 00:00:09,080 --> 00:00:13,080 Speaker 1: world of sports, and today we begin with an earth 5 00:00:13,119 --> 00:00:16,479 Speaker 1: shattering story in the NBA. The league is trying to 6 00:00:16,520 --> 00:00:19,840 Speaker 1: defuse a political firestorm in China. The league is apologizing 7 00:00:20,120 --> 00:00:22,959 Speaker 1: after the general manager of the Houston Rockets tweeted his 8 00:00:23,000 --> 00:00:26,759 Speaker 1: support for protesters in Hong Kong. Yeah, let's catch listeners 9 00:00:26,840 --> 00:00:28,400 Speaker 1: up on where we are right now, and then we'll 10 00:00:28,440 --> 00:00:31,360 Speaker 1: talk about kind of what's behind it. Darryl Moury, very 11 00:00:31,400 --> 00:00:34,720 Speaker 1: popular GM of the Houston Rockets, a team that is 12 00:00:34,840 --> 00:00:38,839 Speaker 1: probably the most popular team in China right now from 13 00:00:38,840 --> 00:00:42,000 Speaker 1: an NBA perspective, largely because of Yao Ming and his 14 00:00:42,000 --> 00:00:47,080 Speaker 1: history with the franchise. He tweeted uh very briefly and 15 00:00:47,080 --> 00:00:49,960 Speaker 1: then deleted it fight for Freedom, Stand with Hong Kong 16 00:00:50,600 --> 00:00:54,680 Speaker 1: over the weekend. It was very quickly refuted by his 17 00:00:54,760 --> 00:00:58,280 Speaker 1: owner Tilman for Tita, who owns the Rockets. He said, 18 00:00:58,360 --> 00:01:00,480 Speaker 1: you know, this is not an opinion that everyone at 19 00:01:00,480 --> 00:01:02,120 Speaker 1: the Rockets has. This is not an opinion that the 20 00:01:02,200 --> 00:01:07,720 Speaker 1: NBA has uh and then everything went bananas. James Harden apologized, 21 00:01:08,880 --> 00:01:14,080 Speaker 1: The Rockets apologized. The Rockets are losing business interest in 22 00:01:14,200 --> 00:01:17,720 Speaker 1: China from a pair of sponsors. C CCTV, which is 23 00:01:17,760 --> 00:01:20,600 Speaker 1: the state sponsored television network, has said it won't air 24 00:01:20,680 --> 00:01:24,360 Speaker 1: Rockets games. Ten Cent, which is the publishing the digital 25 00:01:24,680 --> 00:01:28,200 Speaker 1: broadcaster partner for the NBA. They're saying that they may 26 00:01:28,200 --> 00:01:30,720 Speaker 1: not show Rockets games. A lot of things are falling 27 00:01:30,720 --> 00:01:33,319 Speaker 1: apart very quickly, and the NBA seems to be trying 28 00:01:33,360 --> 00:01:36,319 Speaker 1: to put the pieces together in a very specific way 29 00:01:36,360 --> 00:01:39,840 Speaker 1: to keep everybody happy. The NBA cannot win this. This 30 00:01:39,880 --> 00:01:43,160 Speaker 1: is a no win situation. Form doesn't make a difference 31 00:01:43,520 --> 00:01:48,880 Speaker 1: what they do, because if they side with the with China, 32 00:01:49,040 --> 00:01:52,240 Speaker 1: then you're gonna get people like Senator to Ted Cruz. 33 00:01:52,520 --> 00:01:54,880 Speaker 1: He's saying, well, why in the world are we doing this. 34 00:01:55,200 --> 00:01:59,800 Speaker 1: China is holding us hostage for democracy. If the NBA 35 00:02:00,320 --> 00:02:04,440 Speaker 1: sides with Hong Kong, you lose even more than ten Cent, 36 00:02:04,840 --> 00:02:07,880 Speaker 1: you lose a lot of sponsorship. There's no win for 37 00:02:07,920 --> 00:02:10,360 Speaker 1: the NBA. Yeah, you're right. The NBA is in the 38 00:02:10,360 --> 00:02:14,320 Speaker 1: impossible position of wanting neutrality and the only way to 39 00:02:14,360 --> 00:02:17,720 Speaker 1: achieve that is to be totally silent, and unfortunately Darryl 40 00:02:17,800 --> 00:02:20,280 Speaker 1: Morey was not silent. And as a result, you know, 41 00:02:21,120 --> 00:02:25,040 Speaker 1: NBA commissioner and other people within the league have taken, 42 00:02:25,400 --> 00:02:27,440 Speaker 1: you know, the the other position in some ways, and 43 00:02:27,680 --> 00:02:30,480 Speaker 1: now you know it's you're right, it's becoming what side 44 00:02:30,520 --> 00:02:33,400 Speaker 1: is the NBA on? And Joe Ty, who owns the 45 00:02:33,400 --> 00:02:36,320 Speaker 1: Brooklyn Nets, he bought a controlling stake about a month ago. 46 00:02:36,960 --> 00:02:40,120 Speaker 1: He is Chinese. He is the co founder of e 47 00:02:40,240 --> 00:02:43,200 Speaker 1: commerce giant over in China, ten Cent. He put out, 48 00:02:43,240 --> 00:02:44,639 Speaker 1: I don't know if you've read it, a seven and 49 00:02:44,680 --> 00:02:49,240 Speaker 1: fifty word open letter to NBA fans, essentially detailing the 50 00:02:49,360 --> 00:02:51,360 Speaker 1: history that I think a lot of Chinese people feel 51 00:02:51,680 --> 00:02:57,040 Speaker 1: about foreign oppression and territory net their territory um kind 52 00:02:57,040 --> 00:03:00,560 Speaker 1: of details, Opium War, Boxer rebellion, the rape of Nan King, 53 00:03:00,639 --> 00:03:03,359 Speaker 1: kind of goes through all the ways in which Chinese 54 00:03:03,400 --> 00:03:08,040 Speaker 1: people feel as though their territory and their their sovereignty 55 00:03:08,560 --> 00:03:10,280 Speaker 1: is a very sensitive issue. So he kind of laid 56 00:03:10,280 --> 00:03:13,280 Speaker 1: out that the reason why NBA fans in China might 57 00:03:13,280 --> 00:03:16,680 Speaker 1: be offended, upset, hurt, livid, all those things with what 58 00:03:16,760 --> 00:03:19,840 Speaker 1: Daryl Morey tweeted I'm not making fun of all what's 59 00:03:19,840 --> 00:03:23,560 Speaker 1: going down. But Josi probably had the best comment where 60 00:03:23,600 --> 00:03:27,040 Speaker 1: he said Morey stepped on a third rail issue in 61 00:03:27,120 --> 00:03:31,200 Speaker 1: this involved because now, uh, as you said, I mean 62 00:03:31,240 --> 00:03:34,639 Speaker 1: this is very sensitive here in China and obviously sensitive 63 00:03:34,639 --> 00:03:36,560 Speaker 1: in Hong Kong also, and we can we can talk 64 00:03:36,600 --> 00:03:39,920 Speaker 1: about some of the money here. Right. So the NBA 65 00:03:40,120 --> 00:03:43,760 Speaker 1: says that over five hundred million fans in China watched 66 00:03:43,800 --> 00:03:46,000 Speaker 1: at least one game last year. Right, that is a 67 00:03:46,080 --> 00:03:48,600 Speaker 1: huge to put that in perspective, there's three hundred million 68 00:03:48,640 --> 00:03:52,000 Speaker 1: people in the US people total. Right, So the opportunity, 69 00:03:52,040 --> 00:03:55,760 Speaker 1: business opportunity for the NBA in China is enormous. Right. 70 00:03:55,840 --> 00:03:58,960 Speaker 1: The the ten Cent deal, that is the that is 71 00:03:59,480 --> 00:04:01,800 Speaker 1: the streaming deal alone, it's at one point five billion 72 00:04:01,840 --> 00:04:06,400 Speaker 1: dollar deal over five years. Right. All these teams are 73 00:04:06,520 --> 00:04:09,000 Speaker 1: you know, they have people that you know, focus on 74 00:04:09,040 --> 00:04:12,320 Speaker 1: social media and China. The players Steph Curry, you know, 75 00:04:12,440 --> 00:04:16,320 Speaker 1: Kobe Bryant, Lebron James, they go to China consistently. It's 76 00:04:16,320 --> 00:04:19,599 Speaker 1: a huge market for them, all of the there's so much, 77 00:04:19,640 --> 00:04:23,640 Speaker 1: there's billions probably of dollars of interest, especially looking forward 78 00:04:23,880 --> 00:04:26,279 Speaker 1: for the NBA in China. Right, so so so finding 79 00:04:26,400 --> 00:04:29,799 Speaker 1: some kind of medium that doesn't alienate those fans appears 80 00:04:29,800 --> 00:04:33,000 Speaker 1: to be a one the top level issue right now 81 00:04:33,040 --> 00:04:35,440 Speaker 1: for Adam Silver. I think the problem that they're running 82 00:04:35,440 --> 00:04:38,680 Speaker 1: into is that the NBA, at least domestically has been 83 00:04:38,760 --> 00:04:41,159 Speaker 1: so is very progressive right, and I think it prides 84 00:04:41,200 --> 00:04:45,080 Speaker 1: itself on being progressive right. Players are allowed to speak out. 85 00:04:45,160 --> 00:04:47,400 Speaker 1: It's encouraged in a way that other sports have not 86 00:04:47,520 --> 00:04:50,760 Speaker 1: really encouraged it. Um But you know, I think a 87 00:04:50,800 --> 00:04:53,400 Speaker 1: lot of the people that appreciate the way that you know, 88 00:04:53,440 --> 00:04:56,039 Speaker 1: when when and the Miami Heat take the floor and 89 00:04:56,080 --> 00:04:58,680 Speaker 1: I can't breathe, shirt's the people that appreciate that the 90 00:04:58,760 --> 00:05:01,000 Speaker 1: NBA allows them to make that statement. I think are 91 00:05:01,040 --> 00:05:05,159 Speaker 1: now upset perhaps that when somebody makes a comment that 92 00:05:05,160 --> 00:05:08,440 Speaker 1: that could be a similar political line somewhere else, the 93 00:05:08,520 --> 00:05:10,240 Speaker 1: NBA is willing to crack down on it so much. 94 00:05:10,360 --> 00:05:12,240 Speaker 1: We could go on another three hours on this, but 95 00:05:12,279 --> 00:05:14,760 Speaker 1: we got to move on up next. After a ten 96 00:05:14,839 --> 00:05:20,039 Speaker 1: day service stalemate prevented thousands of subscribers from watching Thursday 97 00:05:20,160 --> 00:05:23,880 Speaker 1: night football, the dispute between Fox and Dish Network has 98 00:05:23,880 --> 00:05:27,120 Speaker 1: officially come to a close. Nothing like a Cowboys Packers 99 00:05:27,120 --> 00:05:30,320 Speaker 1: game to get to get everybody in line, right. Yeah, 100 00:05:30,440 --> 00:05:32,360 Speaker 1: we talked a little bit about this when when when 101 00:05:32,360 --> 00:05:35,720 Speaker 1: it first started about two weeks ago. For a while, 102 00:05:35,880 --> 00:05:38,679 Speaker 1: you know, millions of subscribers across the country on Dish 103 00:05:38,760 --> 00:05:42,320 Speaker 1: and their digital partner Sling didn't have access to any 104 00:05:42,360 --> 00:05:45,320 Speaker 1: of the local Fox channels or you know Foxes Sports 105 00:05:45,360 --> 00:05:49,440 Speaker 1: broadcast right so FS one, FS two, Big ten network. Um, 106 00:05:49,480 --> 00:05:52,039 Speaker 1: as these things often happened, it was played out in 107 00:05:52,400 --> 00:05:55,080 Speaker 1: the press, right. There were press releases from both sides 108 00:05:55,120 --> 00:05:57,800 Speaker 1: bashing the other. There were commercials about you know the 109 00:05:57,839 --> 00:06:01,359 Speaker 1: reason why Foxes preventing you from watching your NFL games 110 00:06:01,360 --> 00:06:03,320 Speaker 1: this week. But in the end, as we see with 111 00:06:03,360 --> 00:06:05,960 Speaker 1: a lot of these disputes, you know, maybe most famously 112 00:06:05,960 --> 00:06:08,479 Speaker 1: when when Jeremy Lynn went went crazy for the Knicks 113 00:06:08,480 --> 00:06:11,120 Speaker 1: and number of years ago. Um, people want to watch 114 00:06:11,160 --> 00:06:14,440 Speaker 1: their sports and if there are big games on the horizon, 115 00:06:14,760 --> 00:06:18,440 Speaker 1: the pressure from fans who can't watch from their couch 116 00:06:18,560 --> 00:06:21,719 Speaker 1: is pretty large, and sadly this is not going to stop. 117 00:06:21,720 --> 00:06:24,440 Speaker 1: How many times do we see this over and over 118 00:06:24,600 --> 00:06:27,880 Speaker 1: and over again, where you get the blackout? I mean, 119 00:06:27,880 --> 00:06:30,720 Speaker 1: we've gone through this with the Dodgers. We've gone. There's 120 00:06:30,760 --> 00:06:34,120 Speaker 1: so many places where there have been broadcast rights issues. 121 00:06:34,800 --> 00:06:38,320 Speaker 1: It seems like there is no end in sight for Okay, 122 00:06:38,360 --> 00:06:41,200 Speaker 1: this is the ultimate settlement. Yeah, it's it's it's kind 123 00:06:41,200 --> 00:06:44,880 Speaker 1: of the function of the new media landscape, right, the 124 00:06:45,160 --> 00:06:47,440 Speaker 1: fact that so many people are cutting the cord. They're 125 00:06:47,440 --> 00:06:50,720 Speaker 1: not subscribing to cable as much anymore, but cable companies 126 00:06:50,760 --> 00:06:52,360 Speaker 1: that one of the main ways they make money are 127 00:06:52,360 --> 00:06:55,120 Speaker 1: these carriage fees, the deals that you know they get 128 00:06:55,160 --> 00:06:58,320 Speaker 1: from you know, broadcasters to air their channels. Uh. So 129 00:06:58,560 --> 00:07:02,040 Speaker 1: you know, it's becoming much more sensitive. And sports, as 130 00:07:02,040 --> 00:07:03,920 Speaker 1: we talk about all the time, right, is one of 131 00:07:03,960 --> 00:07:06,760 Speaker 1: those things that is you know, DVR proof in some ways. Right, 132 00:07:06,760 --> 00:07:09,280 Speaker 1: So as much as people are going to Netflix for 133 00:07:09,320 --> 00:07:11,440 Speaker 1: their TV shows or their movies, you know, they're not 134 00:07:11,480 --> 00:07:13,240 Speaker 1: going to Netflix for their sports, right. A lot of 135 00:07:13,240 --> 00:07:16,160 Speaker 1: people still need that on live TV, so they become 136 00:07:16,240 --> 00:07:20,160 Speaker 1: kind of the catalyst, uh, inside these deals. The one 137 00:07:20,160 --> 00:07:22,040 Speaker 1: thing about it before we move on, is that one 138 00:07:22,080 --> 00:07:25,880 Speaker 1: thing about sports, compared to any other event, maybe except 139 00:07:25,960 --> 00:07:29,400 Speaker 1: like watching an award show like the Emmys or the Oscars, 140 00:07:30,040 --> 00:07:34,520 Speaker 1: it's something that everybody shares at the same time, and 141 00:07:34,680 --> 00:07:38,840 Speaker 1: that's something that's very important because you don't want That's 142 00:07:38,880 --> 00:07:41,280 Speaker 1: the one thing about DVR something and I can't do 143 00:07:41,320 --> 00:07:43,800 Speaker 1: it anymore because I'll try to DVR or something and 144 00:07:43,800 --> 00:07:46,000 Speaker 1: then someone will slip and tell me who won then, 145 00:07:47,080 --> 00:07:49,520 Speaker 1: and it's hard to do. So that that's something that 146 00:07:49,520 --> 00:07:52,400 Speaker 1: everybody wants to share at the same time. And no 147 00:07:52,480 --> 00:07:54,640 Speaker 1: coincidence that, you know, one of the biggest matchups the 148 00:07:54,720 --> 00:07:58,800 Speaker 1: NFL can put on the field Packers Cowboys was the game, 149 00:07:59,040 --> 00:08:01,240 Speaker 1: you know, the the national game that led to this thing, 150 00:08:01,760 --> 00:08:04,240 Speaker 1: uh not being uh this thing, you know, reaching an 151 00:08:04,240 --> 00:08:06,600 Speaker 1: agreement and letting that be broadcast to all the people 152 00:08:06,600 --> 00:08:09,720 Speaker 1: around the country. And finally, let's talk about Sports Illustrated 153 00:08:09,840 --> 00:08:13,040 Speaker 1: laying off many of its long time writers and journalists 154 00:08:13,040 --> 00:08:14,880 Speaker 1: and a move that makes the future of the story 155 00:08:15,000 --> 00:08:19,000 Speaker 1: magazine look pretty bleaking Oh yeah, it's um. Unfortunately, we 156 00:08:19,000 --> 00:08:21,200 Speaker 1: don't have enough time to really dive into all of it. 157 00:08:21,240 --> 00:08:23,160 Speaker 1: I recommend people who are curious. Dead has been did 158 00:08:23,200 --> 00:08:25,160 Speaker 1: a did a really well reported piece on kind of 159 00:08:25,160 --> 00:08:28,000 Speaker 1: what the future of Sports Illustrated looks like. But you know, 160 00:08:28,040 --> 00:08:30,480 Speaker 1: we've talked a little bit on this show before. You know, 161 00:08:30,560 --> 00:08:32,920 Speaker 1: the property has been sold a number of times Meredith 162 00:08:32,920 --> 00:08:35,640 Speaker 1: had it for a while publishing company. They sold part 163 00:08:35,679 --> 00:08:38,679 Speaker 1: of it to Authentic Brands, which is a company that 164 00:08:38,760 --> 00:08:42,800 Speaker 1: licenses brands for other things. Right, and so they're gonna 165 00:08:42,800 --> 00:08:44,920 Speaker 1: do what I believe are going to be, you know, 166 00:08:44,960 --> 00:08:48,880 Speaker 1: maybe Sports Illustrated basketball camps or you know, Sports Illustrated 167 00:08:48,960 --> 00:08:51,560 Speaker 1: line of sports equipment, things like that, branding the name 168 00:08:51,920 --> 00:08:54,480 Speaker 1: for things that are not journalism. And then this group, 169 00:08:54,520 --> 00:08:58,480 Speaker 1: the Maven, which is very controversial within media circles. They're 170 00:08:58,520 --> 00:09:02,040 Speaker 1: handling the actual publishing side of Sports Illustrated. And it 171 00:09:02,120 --> 00:09:05,320 Speaker 1: seems like part one of the plan happened last week, 172 00:09:05,320 --> 00:09:08,000 Speaker 1: which you said, which was a pretty hefty round of 173 00:09:08,080 --> 00:09:12,000 Speaker 1: layoffs for a number of their writers, UM reports. According 174 00:09:12,040 --> 00:09:13,960 Speaker 1: to dead Spin, it seems as though the next plan 175 00:09:14,160 --> 00:09:18,800 Speaker 1: is to build out a massive content network essentially across 176 00:09:18,880 --> 00:09:22,840 Speaker 1: the country, UM, where people are you know, creating content 177 00:09:23,360 --> 00:09:25,880 Speaker 1: very much like and and this is again controversial, but 178 00:09:25,960 --> 00:09:28,920 Speaker 1: like SB Nation was a number of years ago, right, um, 179 00:09:29,120 --> 00:09:31,800 Speaker 1: where people were not paid particularly much. There was a 180 00:09:31,840 --> 00:09:33,880 Speaker 1: lot of requirements for how much they needed to post. 181 00:09:34,080 --> 00:09:36,560 Speaker 1: The quality was not very good as a result of 182 00:09:36,600 --> 00:09:38,480 Speaker 1: just the pressure to get things out. And there are 183 00:09:38,520 --> 00:09:42,120 Speaker 1: now a number of class action lawsuits against that model. Um, 184 00:09:42,280 --> 00:09:45,960 Speaker 1: so you know, certainly the the Sports Illustrated of you know, 185 00:09:46,600 --> 00:09:49,760 Speaker 1: ten twent thirty years ago, I think it's fair to 186 00:09:49,800 --> 00:09:52,480 Speaker 1: say essentially it doesn't exist anymore in its current and 187 00:09:52,480 --> 00:09:55,360 Speaker 1: that's what you've made a very good point years ago. 188 00:09:55,440 --> 00:09:57,160 Speaker 1: And I guess the best way I can compare it 189 00:09:57,679 --> 00:10:01,360 Speaker 1: back in the day here I go. Uh, you've got 190 00:10:01,400 --> 00:10:05,400 Speaker 1: a lot of your sports content even before ESPN with 191 00:10:05,520 --> 00:10:07,400 Speaker 1: Wide World of Sports. I mean, it was a very 192 00:10:07,480 --> 00:10:10,520 Speaker 1: high rated show at the time. Everything was consolidated in 193 00:10:10,559 --> 00:10:15,040 Speaker 1: those two hours Sports Illustrated. It's where everybody wanted to 194 00:10:15,080 --> 00:10:17,679 Speaker 1: read about it. You've got this magazine where I can 195 00:10:17,760 --> 00:10:20,280 Speaker 1: check up on all my sports. But now we have 196 00:10:20,480 --> 00:10:23,880 Speaker 1: things that we've got blogs, we've got different other sites 197 00:10:24,000 --> 00:10:26,640 Speaker 1: as well, and maybe it just hit that time. Yeah, 198 00:10:26,640 --> 00:10:28,679 Speaker 1: and the new cycle has changed, right, I mean, there 199 00:10:28,720 --> 00:10:30,680 Speaker 1: was a time when you know, every Thursday you could 200 00:10:30,679 --> 00:10:33,000 Speaker 1: open Sports Illustrated and catch up on the sports. And 201 00:10:33,040 --> 00:10:36,280 Speaker 1: the truth is that, you know, right now, every hour 202 00:10:36,400 --> 00:10:39,160 Speaker 1: there's something new happening. The story develops over time. This 203 00:10:39,280 --> 00:10:42,160 Speaker 1: NBA China story that we just discussed in twenty four 204 00:10:42,160 --> 00:10:44,240 Speaker 1: hours is probably going to be a very different story right, 205 00:10:44,280 --> 00:10:47,640 Speaker 1: and having to do that in weekly increments is not easy, right, 206 00:10:47,679 --> 00:10:51,280 Speaker 1: So so the magazine model obviously has to change, um, 207 00:10:51,440 --> 00:10:53,840 Speaker 1: But the question kind of remains, was there a way 208 00:10:53,880 --> 00:10:56,800 Speaker 1: to do this Undersports Illustrated in a way that didn't 209 00:10:56,880 --> 00:10:58,640 Speaker 1: you know, gut it in the way that it's been gutted. 210 00:10:58,840 --> 00:11:00,760 Speaker 1: What were the mistakes made in the past that kind 211 00:11:00,760 --> 00:11:02,800 Speaker 1: of led us to this point? All that, but you know, 212 00:11:02,920 --> 00:11:05,400 Speaker 1: certainly kind of sad to see Sports Illustrated, which was 213 00:11:05,400 --> 00:11:08,400 Speaker 1: such a giant of behemoth in the sports media world 214 00:11:08,440 --> 00:11:10,960 Speaker 1: for so long, kind of heading into this next phase 215 00:11:11,000 --> 00:11:13,880 Speaker 1: of its of its lifestyle. Agreed. This is the Bloomberg 216 00:11:13,920 --> 00:11:16,560 Speaker 1: Business of Sports podcast on Michael Barr along with Evan 217 00:11:16,600 --> 00:11:19,199 Speaker 1: Novie Williams. We're here each and every Monday, Wednesday and 218 00:11:19,240 --> 00:11:21,319 Speaker 1: Thursday exploring the world of money in sports, and you 219 00:11:21,360 --> 00:11:22,719 Speaker 1: can join us at the end of the week when 220 00:11:22,720 --> 00:11:24,680 Speaker 1: we speak with the biggest and brightest in the sports 221 00:11:24,679 --> 00:11:27,240 Speaker 1: business world. You're listening to Bloomberg Business of Sports on 222 00:11:27,240 --> 00:11:30,240 Speaker 1: Bloomberg Radio around the world and online wherever you get 223 00:11:30,280 --> 00:11:30,960 Speaker 1: your podcast.