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Speaker 1: This is the business of sports. Should Major League Baseball

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Speaker 1: shorten up the season? How do we present football to

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Speaker 1: the audience of the future. I don't think that most

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Speaker 1: players understand the power that they have. Michael vaugh The

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Speaker 1: future of IndyCar racing is looking bright. Scott Sashnik very

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Speaker 1: basic math here, more bidders means more money. Evan Nobody Williams.

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Speaker 1: The team value has essentially quadruples. And the leaders in

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Speaker 1: the sports industry time to bring in our guest, al Steinbrunner,

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Speaker 1: National Hockey League Commissioner Gary Betman, Atlanta Braves president Derek Schiller,

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Speaker 1: Patriots President Jonathan Kraft. Bloomberg Business of Sports from Bloomberg Radio. Hello,

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Speaker 1: I'm Scott, I'm Evan, Novie Williams, and I'm Michael barn

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Speaker 1: This is the Bloomberg Business of Sports podcast. There we

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Speaker 1: go where we He was looking at his phone and

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Speaker 1: really we were the huge welcome back. Medina is back

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Speaker 1: in the saddle. Welcome you were missed. Thank you. I

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Speaker 1: feel so love. But it's true, true, it just wasn't

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Speaker 1: the same love you man. It's true. The boys are

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Speaker 1: back into the boys are back into college. Like no, no, no,

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Speaker 1: anything like that. Man, Hey, we're gonna explore the big

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Speaker 1: money issues in the world of sports. But before we

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Speaker 1: begin with the issues, though, can we begin with what

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Speaker 1: we were talking about before we went on there? Because

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Speaker 1: she was just singing and I was like, allow, what

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Speaker 1: a beautiful voice. You know, who else had a really

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Speaker 1: good voice? Adina? Who else? Medina? Who else had had

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Speaker 1: a really good voice? The singer behind Frozen? Because Frozen live,

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Speaker 1: something happened and they weren't live. So we were discussing it,

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Speaker 1: which brought up John Travolta. Oh yeah, we were talking

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Speaker 1: about Rent and then Rent wasn't live, and then that

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Speaker 1: came to Frozen. I did him, Indel and Tay Digs

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Speaker 1: She they came on and performed Seasons of Love. So

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Speaker 1: I mean there was a reason why we got there.

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Speaker 1: But then it all brought us back to John Travolta.

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Speaker 1: Does he even I know a Menzel like? I feel

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Speaker 1: really bad about that because a lot of people gave

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Speaker 1: him like a hard time, but allegedly, I don't know,

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Speaker 1: something happened when he was reading it. I don't know

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Speaker 1: if they say that. I think he has dyslexia, like legit,

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Speaker 1: And I'm not even just saying that to make a joke,

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Speaker 1: but that's what he said happened. I don't know. I

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Speaker 1: just figure if you're giving an award, like you know

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Speaker 1: whose award, you know what you're presenting before you go out,

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Speaker 1: you kind of need to know the winner. And unless

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Speaker 1: it's like a big surprise, he opens it up and says,

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Speaker 1: give me a phonetic. I don't know, but anyways, it

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Speaker 1: was just funny. What was it again? One more time?

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Speaker 1: Does he doesn't? Dina Menzel became a dull? Doesn't? Does

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Speaker 1: is a good name? It is a good name, Like

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Speaker 1: I hope an Adele doesn't does something great one day.

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Speaker 1: We love you, John Travelta, We do an Bob Aina uh.

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Speaker 1: NFL revenue. The question about this is they're saying that

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Speaker 1: they're bullish about the twenty five billion dollar revenue goal,

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Speaker 1: as of course the Super Bowl is kind We had

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Speaker 1: Brian Rolap on the show and he said, yeah, he

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Speaker 1: said it was more aspirational when Roger Goodell said he'd

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Speaker 1: like to have billion revenue by twenty seven. But Edmon

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Speaker 1: and I took a little a little dive into what

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Speaker 1: are the possibilities that the NFL gets there, and led

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Speaker 1: by the revenue streams. Of course, the media that's number

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Speaker 1: one in pro sports leagues and teams these days is

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Speaker 1: always the media. You've got the digital players growing, You've

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Speaker 1: got O. T. T growing, and Mark Gannis, a consultant

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Speaker 1: who has also been on the show, I believe, told

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Speaker 1: us that he sees a billion dollar digital package rights

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Speaker 1: fee increases across the linears of more than fifty. Then

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Speaker 1: you add the legalized sports betting world, which the NFL

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Speaker 1: has only played a little toe in, but when they

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Speaker 1: dive into the deep end, and all that said, Edvan,

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Speaker 1: we're saying it's not just aspirational. There's a real good

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Speaker 1: shot if the NFL gets absolutely yeah. I mean they're

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Speaker 1: a fifteen right now. That's that's ten billion over the

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Speaker 1: next eight years or so. The value gives you that

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Speaker 1: he knew fifteen to twenty five right there, He's ten

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Speaker 1: billion in his head, his head for for for all

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Speaker 1: those reasons you mentioned, Scott, Certainly gambling feels like a

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Speaker 1: massive one once you know, more states come on board,

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Speaker 1: and and once the NFL decides it wants to embrace

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Speaker 1: it a little more than it already has. I think

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Speaker 1: we agree that both those things are going to happen

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Speaker 1: at some point in the next couple of years when

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Speaker 1: the NFL and fully full market and then, you know,

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Speaker 1: we talked about this a lot on the show. The

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Speaker 1: changing media landscape certainly seems as though having more bidders

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Speaker 1: is going to be a positive for premium sports content.

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Speaker 1: Nothing is more premium than the NFL. It is dominant, Uh, Michael,

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Speaker 1: we talked about this a couple of weeks ago. You know,

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Speaker 1: top one TV shows of the year, sixty five of them.

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Speaker 1: I believe even a higher percentage when you get to

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Speaker 1: the top fifty. Um, the super Bowl this week will

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Speaker 1: be the most watched TV show of the year, as

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Speaker 1: it always is. Uh. The NFL is is premium with

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Speaker 1: the capital P content wise, and that's going to mean

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Speaker 1: more money. And I know people say, I'm gonna watch

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Speaker 1: the Super Bowl, sho and the Patriots always in there,

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Speaker 1: and people are gonna watch the super Bowl. Of course

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Speaker 1: they're gonna watch the super Bowl. Yeah, I mean it

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Speaker 1: is as he said, you know, give me the Mash finale,

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Speaker 1: it's it's the number one show of the year. Yeah.

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Speaker 1: Um all said, it's about how do you reach that

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Speaker 1: younger demographic, And Brian roll Up said again the tie

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Speaker 1: in with Fortnite, and it was the game creators that

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Speaker 1: went to the NFL, which which I found interesting that

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Speaker 1: it wasn't the NFL seeking that deal. Is the other

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Speaker 1: way around, which shows you the power. Hey, you know,

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Speaker 1: we know even the kids will like these skins. And

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Speaker 1: I told Brian, I think we led the show up

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Speaker 1: with my son forcing me to buy him the NFL uniforms. Oh,

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Speaker 1: which one did you? Jackson? And this will make E

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Speaker 1: been very happy. He doesn't have an allegiance to a

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Speaker 1: football team, but he thought the Jaguars uniform was pretty cool.

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Speaker 1: Hey look at that. So yeah, and I and once

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Speaker 1: again noticed I said Jaguars, not jag Wires. I don't

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Speaker 1: know how that ever happens, but he yeah, he liked

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Speaker 1: the Jaguars uniform. So I I don't know how much

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Speaker 1: I forked over twenty bucks. I don't know what it was,

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Speaker 1: but I wasn't happy about it. But whatever, he did

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Speaker 1: well on his tests, so he got that was his

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Speaker 1: little reward. That was. Yeah, I'm a nice guy. Okay. Uh. Anyway,

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Speaker 1: even Low said, look, let's face it, the NFL is dominated.

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Speaker 1: Another storyline to watch by the way of the Super

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Speaker 1: Bowl lows NFL sponsor doing business in Atlanta home de

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Speaker 1: post towns. And there's another one right up. Yeah, there's

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Speaker 1: Pepsi is an NFL partner and there you know, they've

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Speaker 1: got signs all over Atlanta and Atlanta is you know,

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Speaker 1: Coke is uh. Coke is one of the biggest, if

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Speaker 1: not the biggest company in Atlanta. So you know, there's

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Speaker 1: a lot of fun little marketing rivalries that are happening

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Speaker 1: around the Super Bowl time. Back to the NFL as

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Speaker 1: a whole loses the eighth, seventh or eighth new partner

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Speaker 1: the NFL has signed in the past in the past

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Speaker 1: eleven twelve months. Um sponsorship is a much smaller part

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Speaker 1: of NFL revenue than TV or ticket sales or anything

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Speaker 1: big like that. But you know, it's just another sign

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Speaker 1: that in the corporate world, despite you know, some kinds

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Speaker 1: of controversy that the NFL has gone through recently, whether

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Speaker 1: it's Anthon Paula See, whether it's you know, the political

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Speaker 1: leaning of its owners, whether it's concussions. Yeah, there there

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Speaker 1: are some there are some headwinds for the league right now.

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Speaker 1: But in spite of all that, the major metrics, your ratings,

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Speaker 1: your your sponsorships, your dollars, et cetera. Those are all

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Speaker 1: all trending in the right direction for Roger Goodell. By

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Speaker 1: the way, I'm gonna put it on my Twitter account

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Speaker 1: at Big Bar Sports, the old Who's gonna win the

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Speaker 1: Super Bowl this Sunday? That's just the question. Was gonna

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Speaker 1: win Patriots? That's the question? Or the Los Angeles you wish?

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Speaker 1: But I give me some prop bets. Give me something.

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Speaker 1: Here's the ring for the anthem, but but I can't

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Speaker 1: put that in. Let's put it this way. Here's a

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Speaker 1: prop bet. Will l A's Todd Gurley go over at

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Speaker 1: least sixty yards? Is that the sixty of the over under?

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Speaker 1: I believe it's around that. I say over you, I

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Speaker 1: have no idea over Maybe he barely got used in

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Speaker 1: the conference championship. Let's se I think he's hurt. But

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Speaker 1: that's anough story. I'm gonna I did two weeks. Well, well,

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Speaker 1: I think that he still hurt because he was hurt earlier. Okay,

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Speaker 1: but I'm gonna put that up there. Okay, so that's

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Speaker 1: I'll put that one up there. Then I look forward

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Speaker 1: to the nine responses. Okay, thank you, I'm sorry I

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Speaker 1: did you know what. I put the one up there

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Speaker 1: about who's going to advance of the Super Bowl, and

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Speaker 1: all five people said five four decision. I'm saying, man,

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Speaker 1: what else we got? Let's move on to Hey, yes,

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Speaker 1: Pack twelve conference. They have hired rain and this was fun.

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Speaker 1: This was fun and just by chance, you know, we

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Speaker 1: we happen to have Colin Neville on the show last week.

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Speaker 1: And ah, he certainly has seen his share of sports

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Speaker 1: business activity. But interesting in the fact that the PAC

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Speaker 1: twelve U S C, U, C l A, Stanford, this

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Speaker 1: is not a small conference Power five, but the way

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Speaker 1: they structured their media deals is that they chose to

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Speaker 1: go it alone and they have a lot of expenses

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Speaker 1: because of the networks, um, staffing, real estate. So due

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Speaker 1: to that, they don't distribute the conference does not distribute

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Speaker 1: as much money to its schools as let's say the

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Speaker 1: Big ten or the SEC or coming soon even the

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Speaker 1: A c C. Because of the money coming from the

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Speaker 1: network there, it's starting to see some results on the field,

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Speaker 1: you know, it's starting to hurt the on field in

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Speaker 1: the revenue sports, the basketball to football. So they're looking

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Speaker 1: ahead when their deals expires and what the what the

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Speaker 1: PAC twelve will tell you is we own everything. We

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Speaker 1: own all of our assets, all of our rights, which

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Speaker 1: is going to be a big advantage come in a

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Speaker 1: world where media is changing. Yeah, and there's an increasing

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Speaker 1: pressure on the PAC twelve as as a conference. If

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Speaker 1: if you're the athletic director at let's say Stanford, you're

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Speaker 1: you're looking at Alabama and Georgia and and SEC schools

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Speaker 1: sharing forty two million dollars uh in shared money every

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Speaker 1: year the Big ten once their new media deals pick

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Speaker 1: kick in this year, they're gonna be sharing over forty

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Speaker 1: well over forty million. Pack twelve schools are sharing thirty

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Speaker 1: million right now, and and the projections are not shooting

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Speaker 1: up at least in the in the near term until

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Speaker 1: the next TV deals are up. Uh. So, you know, schools,

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Speaker 1: as you're trying to compete in football and basketball at

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Speaker 1: Scott said, UH, if you're seeing a significant gap between

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Speaker 1: the money that your conference is sharing versus the money

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Speaker 1: that other big conferences are sharing, uh, that becomes frustrating. Uh.

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Speaker 1: And the Pact twelve has always said that they're playing

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Speaker 1: the long game. You know, they structured their deal, their

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Speaker 1: their media network in a way that they own the

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Speaker 1: whole thing. There's no partner with Fox, there's no partner

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Speaker 1: with the ESPN as we've seen other other other conferences do.

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Speaker 1: And the side the side effect of that is that

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Speaker 1: there's not as much money right now. They're they're spending

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Speaker 1: a lot of money, you know, carriage fees and trying

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Speaker 1: to figure out all the network stuff that that partners

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Speaker 1: could usually kind of handle. And the big question is, yes,

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Speaker 1: when this new deal is up, as we talked about

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Speaker 1: with the NFL, premium rights are going to see an

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Speaker 1: increase um if the PAC twelve can stay premium, which

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Speaker 1: certainly seems like it could. Um, if there is a

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Speaker 1: big pity on the end of it, they will see

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Speaker 1: bigger spoils than other conferences. It's just a question of

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Speaker 1: when that happens and if it happens. Well, I like

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Speaker 1: to ask both of you guys back twelve. Right now,

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Speaker 1: they're the only collegiate sports conference to own and control

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Speaker 1: its own media company. Why is that only in the

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Speaker 1: PAC twelve. Why haven't the other conferences called on too that? Well?

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Speaker 1: The the way that I mean every major conference has

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Speaker 1: or wants to have its own network, um, but the

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Speaker 1: structure for most other conferences has been a partner. So

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Speaker 1: the Big ten network launched almost ten years ago now

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Speaker 1: maybe a little more as a partnership with Fox, you

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Speaker 1: know SEC network a couple of years ago as a

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Speaker 1: partnership with ESPN. A CEC network which is launching later

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Speaker 1: this year, is also a partnership with ESPN. Um and

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Speaker 1: that is you know, that that gives those networks partial

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Speaker 1: rights right that that that that means that those conferences

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Speaker 1: don't have the full control over their rights. That the

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Speaker 1: and there's a reason why Syracuse University hired you know,

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Speaker 1: in the ESPN executive John Wildeck as their a d

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Speaker 1: because that looming network is so important to the conference

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Speaker 1: as a whole that he's sort of spearheading those talks

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Speaker 1: that he comes from the cable TV world. Interestingly, though,

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Speaker 1: there was reported the Oregonian that said the PAC twelve

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Speaker 1: was perhaps thinking about selling a ten percent stake in

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Speaker 1: whatever this media entity will be to a private equity

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Speaker 1: and talking to Larry Scott, my guess is that it's

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Speaker 1: not just gonna be a private equity firm, because the

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Speaker 1: private equity firm brings money, that's it. What they want

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Speaker 1: is a strategic partner. A lot of what the Yankees

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Speaker 1: are doing in their Yes buy back. They're looking at

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Speaker 1: partnering with Amazon. They're looking for a strategic partner that

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Speaker 1: can bring other assets, not only the money, but can

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Speaker 1: bring some sort of expertise in the new world order.

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Speaker 1: And let me tell you, this is a big long

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Speaker 1: bed on O T T. Director consumer whatever you want

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Speaker 1: to talk, that is what this is. It's a bet

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Speaker 1: on O T T. So think of some sort of

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Speaker 1: partner that can give him some cash now which alleviate

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Speaker 1: sort of that stress on the programs because that that

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Speaker 1: cash can be distributed as well as building equity and

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Speaker 1: value in the venture with the strategic partner, like an Amazon.

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Speaker 1: I'm not saying Amazon's involved, but like in Amazon. And

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Speaker 1: this dovetails well with another one of the Pact Twalves

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Speaker 1: big and expensive initiatives, which is Asia. You know, just

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Speaker 1: by by virtue of their geography, the Pact Twalve is

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Speaker 1: on the West coast Um and also the student makeup

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Speaker 1: of most of their schools. Uh. They have seen, you know,

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Speaker 1: pushing their brand in Asia as a significant business opportunity

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Speaker 1: and one that might not pay off in twenty but

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Speaker 1: maybe in UM. And again, obviously Asia is a big

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Speaker 1: digital population, and and you're not going to be signing

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Speaker 1: big cable deals to reach fans in China, but you

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Speaker 1: are going to be signing digital deals in China. So

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Speaker 1: you know, the big digital push also pays off theoretically

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Speaker 1: UH in parts of Asia, where you know, there's tremendous

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Speaker 1: UH numbers, the market size is huge. And a lot

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Speaker 1: of sports you know that that are not as popular

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Speaker 1: in America, but but the Pac twelve schools do well

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Speaker 1: at UM. Those are other sports that that may have

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Speaker 1: bigger viewership in other parts of the world. Speaking of

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Speaker 1: investment funds, another story. You guys are all over the

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Speaker 1: owners of the New York Jets and the San Francisco

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Speaker 1: forty Niners. They are teaming up in a new one

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Speaker 1: hundred fifteen million dollar investment fund by Sapphire Ventures. It

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Speaker 1: really is amazing that we have enough time to come

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Speaker 1: and do this with bar Really, I mean, you guys

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Speaker 1: are on it. You know this is all I'm gonna

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Speaker 1: add on this one, Evan, then you can take it away.

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Speaker 1: If anybody likes chicken, try the chicken. Evan and I

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Speaker 1: shared there in chatting with the partners at Sapphire, Evan

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Speaker 1: and I on their advice and their council chose the

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Speaker 1: chicken for two at the Nomad Hotel. I would strongly

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Speaker 1: suggest one you eat a little something ahead of time

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Speaker 1: because it's really not enough for us. But get the

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Speaker 1: chicken at the Nomad Hotel is very good. Now, Evan

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Speaker 1: talk about the investment opportunity to co sign that, and

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Speaker 1: the Nomad wants to help sponsor the podcast. They can

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Speaker 1: reach out of free advertising right there. Boy. Yeah. So

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Speaker 1: Sapphire Ventures a big VC firm out on the West Coast,

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Speaker 1: two and a half billion dollars under under management. UM.

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Speaker 1: They just launched a new fund, Sapphire Sport. Uh. It's

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Speaker 1: a hundred and fifteen million dollar fund. The investors that

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Speaker 1: are in it already some of the biggest names in sports, Michael.

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Speaker 1: You mentioned a few of them already. The Jets, owners

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Speaker 1: of the forty Niners, A e G is in their

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Speaker 1: Adidas is in their Major League Baseball is in there,

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Speaker 1: a few different NHL teams, the San Jose Sharks, the

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Speaker 1: owner of the Tampa Bay Lightning. It's a it's it's

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Speaker 1: an impressive group of people. Uh. They're looking obviously to

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Speaker 1: to make money, but also kind of looking for tech

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Speaker 1: media businesses like that that that that aren't in sports

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Speaker 1: right now but can be applicable in sports. So they're

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Speaker 1: they're kind of hoping to bridge the gap between uh,

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Speaker 1: sports teams out there, leagues out there that are looking

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Speaker 1: for kind of new ways to reach to reach fans,

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Speaker 1: for new ways to to reach customers, and the tech

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Speaker 1: that might not be in sports yet, um, but but

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Speaker 1: is able to uh to come over and help those companies.

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Speaker 1: Is this a marriage that I see for e sports?

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Speaker 1: So yeah, the as a good example, their first investment

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Speaker 1: was a GameMaker game Phoenix Labs. UM. Kind of at

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Speaker 1: the same time that we saw so many traditional sports

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Speaker 1: ownership groups investing in the sports teams and the sports

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Speaker 1: leagues because the sports is a is a mushrooming business

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Speaker 1: right now. Uh, these guys, you know, they looked around

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Speaker 1: and they said, you know, I think we actually want

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Speaker 1: to invest in a in a publisher, maybe find the

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Speaker 1: company that's going to make the next Fortnite. So that's

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Speaker 1: where they put their money. So that's a good example.

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Speaker 1: It's a they're looking at, you know, companies that that

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Speaker 1: may have a product or an idea that is applicable

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Speaker 1: within the broader Sports World, But but it isn't quite

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Speaker 1: there yet. You guys are on it period. I'm saying, Man,

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Speaker 1: I just wanted to let you know. So, by the way,

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Speaker 1: who do you think will win the Super Bowl? By

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Speaker 1: the way, with more points at the end? Man, solid

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Speaker 1: that kind of like, are you like kind of pleading

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Speaker 1: the fifth with that answer? Who Who's gonna win that?

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Speaker 1: Come on? But when you haven't watched more than two

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Speaker 1: games all year, and you know, I'm in a hockey

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Speaker 1: r my weekend, so it's it's not like nothing against

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Speaker 1: the NFL or the others. I just don't see a

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Speaker 1: lot of it. Like this would be less than an

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Speaker 1: educated guess, it would be a full out guests. So therefore,

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Speaker 1: if I'm guessing, enforced to guess, how do you guess

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Speaker 1: against the Patriots by picking the Rams? No, I don't

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Speaker 1: think they're as Bar says, the Rams probably shouldn't even

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Speaker 1: be there based on merits, So how can I I'm

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Speaker 1: not see. I'm not going to get wrapped up again,

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Speaker 1: but I was hoping or has their coaches young Bar,

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Speaker 1: I've been hating. He's like, I'm so tired of McVeigh

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Speaker 1: and this is the Bloomberg business of Sports Milktokes podcast.

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Speaker 1: It messed it up. Come on, man, just can say it.

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Speaker 1: Say what say you gave them? I said Patriots, I

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Speaker 1: said Patriots, and you took eight minutes to Patriots. Medine

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Speaker 1: is giving me the full times. No she's not really.

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Speaker 1: But I'm like a bar Alonge with Scott Nick and

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Speaker 1: we are here each and every Monday, Wednesday and Thursday

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Speaker 1: exploring the world of money and sports. Join us again

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Speaker 1: at the end of the week when we speak with

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Speaker 1: the CEO of the Super Bowl Bound l A. Rams,

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Speaker 1: Kevin dem Off, only to Bloomberg Business of Sports on

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Speaker 1: Bloomberg Radio around the world. Longline, where you get your podcasts.