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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. So Scott, let's get right to and

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Speaker 1: joining us as Bloomberg Business of Sports reporter Evan Nobi Williams.

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Speaker 1: Super Bowl it is coming the New England Patriots and

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Speaker 1: the Philadelphia Eagles. By the way, the Eagles fans, okay, yeah,

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Speaker 1: then we need to work on their rough edges. But

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Speaker 1: they're good, strong fans, and the Patriots fans obviously are

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Speaker 1: die hard fans. They're gonna love the fact that there

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Speaker 1: was a new Patriots streaming network coming up. Yeah. If

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Speaker 1: you can't get enough of the Patriots, and we know

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Speaker 1: those folks in New England cannot. This is the trend

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Speaker 1: these days. Give them more, more more, give them closer access.

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Speaker 1: I mean, the players are only available to the media

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Speaker 1: for a certain amount of time super Bowl week, you

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Speaker 1: only get what you get at a podium. Usually it's

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Speaker 1: not that great. Now, if I'm the team, I can say,

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Speaker 1: you know, hey, Tom Brady, why don't you come to

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Speaker 1: our studio that we're building in the Mall of America

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Speaker 1: and we're gonna give some behind the scenes content. We're

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Speaker 1: gonna give our fans more deeper, a little bit of

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Speaker 1: access that they can't get anywhere else. And you know

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Speaker 1: what the Patriots do so well, they're gonna capture fan data.

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Speaker 1: This is gonna help them sell Patriots in the future,

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Speaker 1: right of it. Yeah. This is seven Twitter News organization,

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Speaker 1: available on their website, YouTube channel, on their app. This

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Speaker 1: is the future of how teams are gonna interact with

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Speaker 1: their fans. There's gonna be call in shows for just

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Speaker 1: like you see on local radio. There's gonna be lifestyle shows.

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Speaker 1: They'll have Patriots executives and players probably coming to the set.

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Speaker 1: This is a full on behind the scenes look at

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Speaker 1: what Super Bowl Week looks like for a team that

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Speaker 1: that has obviously been there before and has has the preview. Ready, Michael,

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Speaker 1: here's the behind the scenes special exclusive interview that you

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Speaker 1: get with Bill Belichick. We have to score that field

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Speaker 1: about five seconds. Well, you know, but I did learn something,

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Speaker 1: by the way about this from a business perspective of

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Speaker 1: the Super Bowl. Did you know that under armour has

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Speaker 1: both quarterbacks? I did not know that. I knew that,

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Speaker 1: all right, you go, I mean, but you new obviously

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Speaker 1: Tom Brady, But nick Foles also an underarmer guy. So

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Speaker 1: you know that's a that's a good little get the

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Speaker 1: Super Bowl. How many people have there can recognize Nick

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Speaker 1: Foles without a helmet on? Zero? But about this the

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Speaker 1: network is listen to the Patriots. You talk about one

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Speaker 1: of the most secretive teams in the NFL. How are

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Speaker 1: you going to get deep with this team when they

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Speaker 1: keep everything tightly You're not going to get deep again.

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Speaker 1: And that Patricia isn't coming on talking defensive scheme. Here's

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Speaker 1: all right, here's our defensive playbook. This is how we're

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Speaker 1: going to attack. Bring that on to have that. But

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Speaker 1: you can go surface area and still entertain fans, still

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Speaker 1: keep people kind of engaging on your platforms, keep keep

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Speaker 1: coming back looking for more. I don't think you need

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Speaker 1: to go excess and os as long as you see

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Speaker 1: these players with their guard down, maybe even a little bit.

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Speaker 1: As somebody who has covered I don't know, almost twenty

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Speaker 1: of these things and been to the media day before

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Speaker 1: it became the crazy media day circus, let me tell

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Speaker 1: you you cannot give fans of these teams enough of

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Speaker 1: these teams this week. You can give me the second

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Speaker 1: back up long snapper and have him tell me how

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Speaker 1: he prepares for the week of the Super Bowl, even

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Speaker 1: though there is zero chance this guy is getting in

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Speaker 1: the game and people will watch Tom Brady. If you

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Speaker 1: were a tree, what kind of tree would you be?

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Speaker 1: I mean, those are the kind of questions now that

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Speaker 1: you get and you want to answer. Well, I think

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Speaker 1: he'd be an elm bigger than exactly. Speaking of football,

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Speaker 1: we got some more football coming. Case you didn't understand that,

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Speaker 1: that was Vince McMahon announcing the XFL, and it looks

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Speaker 1: like the resurgence is coming again. I remember going to

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Speaker 1: that press conference in Times Square, and I do remember distinctively.

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Speaker 1: I don't remember the specific numbers. So we're here, but

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Speaker 1: Wall Street didn't love the idea then. I don't know

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Speaker 1: what has changed where Vince McMahon thinks we're ready for

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Speaker 1: more football now at a time when seems people are

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Speaker 1: watching fewer minutes of it of the real deal. What

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Speaker 1: makes him think the world is ready for more football?

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Speaker 1: I'm not sure. Well, as long as we're reminiscing, I

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Speaker 1: was in sixth grade when that announcement came out, and

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Speaker 1: I was thrilled about it. The idea of a more

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Speaker 1: physical like a shiny object distracted sixth grade and Giants.

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Speaker 1: I grew up in North Jersey, just and Giants. Sure

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Speaker 1: they were the local teams, but the idea of a

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Speaker 1: of a new league that was maybe more physical, the

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Speaker 1: kickoff strategy they had where those two guys ran the collision,

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Speaker 1: there's a collision. Exactly when I was young, that was

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Speaker 1: can you do that? Now everything we know about head trauma,

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Speaker 1: the NFL's going the other way. Ken Vince McMahon ramp

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Speaker 1: up a league on physicality, now, that's the question. But

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Speaker 1: this definitely applies to a younger demographic, kind of the

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Speaker 1: same demographic that if you look at NFL ratings, you

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Speaker 1: look at interest in the game may be waiting a

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Speaker 1: little bit. I think there's a chance, and I'm not

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Speaker 1: saying I'm a big proponent of XFL two, but I

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Speaker 1: think there is a chance that he may be able

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Speaker 1: to tap into something that NFL does not anymore. And

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Speaker 1: it only lasted though, for one season in two thousand one.

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Speaker 1: So and you know what what was what had more

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Speaker 1: staying power than anything else coming out of the XFL.

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Speaker 1: Michael Ball, You said you miss him, Oh I miss him,

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Speaker 1: wasn't it? Rod? He hate me, Hate me, hate me,

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Speaker 1: So at least there was some legacy he hate me. Well,

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Speaker 1: good luck Vince McMahon, I hope you do well bringing

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Speaker 1: back the x f L. Let's continue our look at

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Speaker 1: the big business of sports. Stories of the week and

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Speaker 1: the big story of the week, and it is a

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Speaker 1: dark one. The former doctor who used to work at

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Speaker 1: Michigan State University, Larry Nass Here. He has been sentenced

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Speaker 1: up to one D seventy five years for molesting young

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Speaker 1: women and girls. Some of these girls and women were

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Speaker 1: part of the US Olympic Usualis gymnasts. I should say

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Speaker 1: this is just a sickening story. It makes me angry

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Speaker 1: every time I think about it, and the fallout from

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Speaker 1: this is going to be unbelievable. Well, apparently you're not

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Speaker 1: the only one that's angry. We saw the judge that

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Speaker 1: sentencing was very angry. We saw during the victims statements

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Speaker 1: the anger from not only the victims but family members

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Speaker 1: also angry those who have attached their brands to the

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Speaker 1: U s OC and in particular USA Gymnastics, because this

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Speaker 1: is now one of those stories that goes beyond sport

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Speaker 1: and it n absolutely have a devastating effect on a

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Speaker 1: company brand if I'm associated with this story. Yeah, we've

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Speaker 1: already seen at least four companies. A T and T

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Speaker 1: was the most recent, but also Kellogg, Procter and Gamble

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Speaker 1: and under Armoured distanced themselves from USA Gymnastics, either by

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Speaker 1: breaking their partnership or declining to renew it. I can't

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Speaker 1: imagine a brand is going to jump into uh to

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Speaker 1: working with USA Gymnastics anytime soon. Uh. And the thing is,

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Speaker 1: there's so much more that has to play out. Larry

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Speaker 1: Nasser was sentenced this week. Sure there's gonna be a

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Speaker 1: lot more people that are going to be dragged into this.

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Speaker 1: Whether it's at Michigan State University, which employed him for

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Speaker 1: twenty years and there are reports that folks there knew

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Speaker 1: as early as the mid nineties that there were accusations

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Speaker 1: against him. Uh, there's the U s O C level

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Speaker 1: where there are accusations that folks there either knew about

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Speaker 1: it or we're blind to the to the warning signs. UH.

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Speaker 1: USA Gymnastics as an organization has lost it's CEO, it's chairman,

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Speaker 1: it's vice chair, it's treasurer. The U s OC is

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Speaker 1: pressuring more board members to step down. We are just

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Speaker 1: at the beginning, unfortunately, of the wide ranging fallout that

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Speaker 1: is going to be this Larry Nasa scandal. And don't

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Speaker 1: forget the president of Michigan University has stepped down also

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Speaker 1: because of this is this is unbelievable to read the States.

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Speaker 1: When you finally stepped down, it was much like things

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Speaker 1: that become politicized, so tone deaf. Who is advising every

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Speaker 1: step of the way here? I wonder where's the grown

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Speaker 1: up in the room, who is advising, who was making

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Speaker 1: any of these decisions that I know this is hindsight.

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Speaker 1: I know it's Monday morning quarterback, but I'd like to

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Speaker 1: think that at the time you would have said, this

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Speaker 1: makes no sense, this policy makes no sense. Why are

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Speaker 1: we doing this. You had a hundred fifty plus women

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Speaker 1: and girls who came and publicly said in court in

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Speaker 1: front of the judge as Larry nanswer Lenasser was being sentenced,

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Speaker 1: all of the trauma that they went through that supposed

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Speaker 1: to be what politicized this, this is this is unbelievable.

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Speaker 1: I just I just shake my head. And as those

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Speaker 1: a hundred and fifty plus women came forward with their

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Speaker 1: victim statements, the U s O. C barely sent anybody

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Speaker 1: to the trial at all. Michigan State, same thing. But

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Speaker 1: we're gonna bring up the Scott Blackman's statement, the CEO

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Speaker 1: of the U s o C, where he apologized we

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Speaker 1: should have been there. He said, well, no kidding, of

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Speaker 1: course you should have been there. So the question then

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Speaker 1: becomes why were you not there? And as the ripples

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Speaker 1: from this boulder hitting the pond continue to go, if

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Speaker 1: I'm a sponsor, this isn't just limited to USA Gymnastics.

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Speaker 1: Do you not have to wonder if I'm a U

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Speaker 1: s o C sponsor right now when I'm committing tens

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Speaker 1: of millions of dollars to becoming a brand alongside those

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Speaker 1: rings and the colors and the Olympics, if this becomes

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Speaker 1: one of these horror stories, well it already has. But

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Speaker 1: if the U s o C further gets dragged into

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Speaker 1: this like somebody knew, they didn't respond, they didn't have oversight,

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Speaker 1: why in the world would any corporation sign up to

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Speaker 1: be a partner. And that is going to extend. The

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Speaker 1: timing is terrible here. The Winter Olympics start in just

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Speaker 1: a couple of weeks. Um and Scott, as you know,

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Speaker 1: as you've covered Olympics. These things are chock full of

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Speaker 1: sponsors that bring an athlete that they're that they're endorsing

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Speaker 1: over and media chats with them. Those conversations are going

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Speaker 1: to be dominated now, regardless of who the athlete is,

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Speaker 1: regardless of what the sport is, They're going to be

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Speaker 1: dominated by journalists asking have you ever, in the course

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Speaker 1: of your Olympic training felt uncomfortable? Were you ever treated

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Speaker 1: by a doctor that without your parents aware of it?

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Speaker 1: Were you ever told you had to see a specific doctor.

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Speaker 1: This is something that is going to dominate the Winter Olympics.

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Speaker 1: And it's not even a Winter Olympics unlike previous Let's

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Speaker 1: just say, let's say games unlikes previous games. Often times

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Speaker 1: the organizing committee will tell that it's athletes. Don't get

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Speaker 1: into politics, don't let's not talk about this. Just stick

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Speaker 1: to your sport. That ain't flying anymore. With these athletes,

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Speaker 1: that is not going to happen. If these athletes want

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Speaker 1: to address what they see as problems in their sport

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Speaker 1: in the U s o C, you know they're gonna

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Speaker 1: let it fly. And never mind that just the horror

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Speaker 1: of what these women and girls went through. Now they

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Speaker 1: are the victims. Gymnastics in general as a sport, everybody

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Speaker 1: is going to suffer. And they're the victims, and they

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Speaker 1: didn't do anything wrong, and their sport is crumbling because

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Speaker 1: of several fools. One of their sports ramification that could

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Speaker 1: come through this. The n c a A is looking

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Speaker 1: into Michigan State and its involvement in this whole process. Uh,

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Speaker 1: you can laugh and say that the n c a

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Speaker 1: A is toothless, but there is definitely a chance that

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Speaker 1: there is some why ranging ramifications and punishments going down

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Speaker 1: to one of college sports biggest athletic programs. You know,

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Speaker 1: Michigan State Spartans. They're Big ten program, They're one of

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Speaker 1: the richest. It's it's one of the biggest conferences, one

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Speaker 1: of the most high profile. This could certainly affect other

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Speaker 1: athletic endeavors, including football and basketball in the Chigan State.

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Speaker 1: And this has reached the halls of Congress, the Senators.

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Speaker 1: Multiple senators have already said that they will call for

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Speaker 1: an investigation into the U s O C into the

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Speaker 1: USA Gymnastics. Who knew, what did they do? What did

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Speaker 1: they not do? So this is not going away anytime soon.

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Speaker 1: And Scott Blackman has a real problem on his hands

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Speaker 1: because even the games themselves, and in a way it's

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Speaker 1: good and bad Evan. Now, for at least for a

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Speaker 1: little while, the focus will be on the skaters, the skiers,

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Speaker 1: the hockey players. You will get focused on the games,

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Speaker 1: in the literal games. But this is not going away.

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Speaker 1: This is going to be sort of an omnipresent fog

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Speaker 1: over everything these organizations do. And keep in mind, Michigan

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Speaker 1: State University employed Nassair for almost two decades and that's

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Speaker 1: why there is outrage on top of outrage from all

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Speaker 1: of this. And we are continuing with our look at

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Speaker 1: the big business stories of the week, and we are

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Speaker 1: headed down to South Florida Sunshine, famous folks like David Beckham,

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Speaker 1: and and then we've been hearing for a while now,

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Speaker 1: forever that David Beckham was going to own an MLS

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Speaker 1: franchise in Miami. He did, he didn't. It's gonna happen,

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Speaker 1: It's not gonna happen. Well, it seems as if it's

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Speaker 1: back on again. MLS has approved the franchise. It seems

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Speaker 1: it's a go. I will believe it when I see it.

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Speaker 1: Just some some names real quick. David Beckham obviously still in.

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Speaker 1: Marcello Clarade that the Sprint CEO also still in. Todd

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Speaker 1: Bowley out and in his place we have Massa Son,

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Speaker 1: the the chairman of Sprint, one of Japan's richest men,

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Speaker 1: and a man that I know you've dealt with a

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Speaker 1: lot recently, Scott Orrey Moss, who was one of the

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Speaker 1: finalists for the Miami Marlins. So if you look at

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Speaker 1: the investors, uh, that's a pretty powerful list of names

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Speaker 1: right there. Don't know who's going to be the majority investor,

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Speaker 1: who's going to be the one that makes decisions primarily,

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Speaker 1: but but that is a good list and great for

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Speaker 1: the MLS as well. And the getting price. This is

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Speaker 1: the bargain. Now, if you want an MLS team and

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Speaker 1: these other expansion cities, you're paying what about a hundred

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Speaker 1: and fifty million dollars, I mean, that's ballpark. David had

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Speaker 1: it written into his playing contract with the Galaxy back

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Speaker 1: then that he will have the right to a franchise

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Speaker 1: in South Florida at twenty five million bucks. So even

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Speaker 1: if it doesn't work out, even if the investment is

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Speaker 1: far less than what anybody is going to have to

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Speaker 1: take on these days. Is this going to be now

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Speaker 1: with Major League Soccer coming to South Florida and and

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Speaker 1: the other times and and others soccer teams across America?

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Speaker 1: Is it finally going to happen where people embrace Sucker

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Speaker 1: in the United States? And I'm talking on a widespread scale.

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Speaker 1: MLS does not like you, Michael Barr. Finally, I think

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Speaker 1: we've seen embrace of soccer. But but we've had franchises

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Speaker 1: there that did not work. Miami is a difficult market,

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Speaker 1: as you know, there's lots to do, there's lots of

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Speaker 1: reasons to be outside at the beach. You better give

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Speaker 1: people a reason to come to your event. And Derek

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Speaker 1: Jeter is learning that lesson right now that it's not

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Speaker 1: so easy. What Mickey Harrison, the CEO of Carnival Cruise

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Speaker 1: Lines and now he's chairman, what he knew when he

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Speaker 1: bought the Heat is I need to make this an event.

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Speaker 1: I need a reason for people to come and hang

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Speaker 1: out inside my building in downtown Miami. You know what

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Speaker 1: the first reason was he gave him Shaquille O'Neil. You

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Speaker 1: know the second reason he gave him Lebron James by

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Speaker 1: having the biggest stars in the game on his team,

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Speaker 1: that became the place to be. Now does it work

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Speaker 1: for David Beckham, who's not going to be on the field. Yeah,

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Speaker 1: David Beckham's a huge star, a lot of connections, a

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Speaker 1: lot of famous friends. That's great, But do you want

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Speaker 1: to go see a soccer team play. Don Garber, MLS commissioner,

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Speaker 1: has called this Miami franchise quote the strategic gateway to

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Speaker 1: South America. So there's no question that from an MLS perspective,

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Speaker 1: you see the Spanish speaking populations in South Florida, obviously,

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Speaker 1: the tremendous popularity in South America for soccer. Uh, and

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Speaker 1: this is possibly an entree into a growth market if

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Speaker 1: you're MLS. They're trying to grow the league everywhere, obviously,

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Speaker 1: but if they look at Mexico, if they look at

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Speaker 1: Brazil and Argentina, uh, those are countries in the same

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Speaker 1: time zone as MLS games. Um, they're MLS teams that

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Speaker 1: are roughly on par with the best club teams in

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Speaker 1: those countries. Uh. That is a growth area that MLS

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Speaker 1: really wants to get at. UH And putting a team

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Speaker 1: in South Florida is clearly what they think kind of

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Speaker 1: the next step to doing that. Scott's right. The Miami

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Speaker 1: Fusion played in MLS from three years from two thousand

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Speaker 1: and one. Uh, and they folded because the attendance wasn't there.

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Speaker 1: MLS is in a different place now than it was

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Speaker 1: at the turn of the millennium, no question about that. Uh.

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Speaker 1: And we'll see how much that different place leads to

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Speaker 1: a different result here in Miami. Soccer doing very well

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Speaker 1: in Atlanta, where you can buy a two dollar hot dog.

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Speaker 1: How's that for a segue? What I think the prices

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Speaker 1: in Atlanta? We always wondered when they announced it, when

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Speaker 1: Author Blank announced this neighborhood pricing at Mercedes ben Stadium,

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Speaker 1: it's like two bucks for a hot dog, two dollars

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Speaker 1: for a bottom list soda, sort of, you know what

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Speaker 1: you would pay if you were outside the stadium. Was

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Speaker 1: this gonna work How's it gonna work out? I think

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Speaker 1: we now know. But how is it that concession prices

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Speaker 1: can go down and then the revenue goes out? Evan, Yeah,

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Speaker 1: So the Falcons cut prices by about fifty last year

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Speaker 1: and then in their new stadium, So you're talking two

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Speaker 1: dollar hot dogs, two dollar sodas, three dollar pretzels, et cetera. UH,

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Speaker 1: And their theory was that lower prices would just lead

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Speaker 1: people to buy more. They would come to games earlier, UH,

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Speaker 1: they would maybe stay longer, and they would buy more.

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Speaker 1: That's largely played out. They released numbers this week. UH

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Speaker 1: they've sold fifty more food. Fan spending per fan is

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Speaker 1: up sixteen percent. UH. It's unclear if they're making money

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Speaker 1: on this, but there is no question that their fans

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Speaker 1: are happier. The NFL does surveys of fans and every

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Speaker 1: ball every stadium around the country. Atlanta place number one

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Speaker 1: overall in terms of fan satisfaction for food and beverage.

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Speaker 1: They were eighteenth last year. And that's a huge jump.

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Speaker 1: If I could take my kid to a game and

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Speaker 1: only have to whip out a twenty dollar bill and

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Speaker 1: that's it, I'm pretty satisfied. I'll give you one more metric.

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Speaker 1: Merchandise jumped eight percent in terms of sales. So there's

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Speaker 1: certainly an argument there that if Scott can bring a

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Speaker 1: twenty dollar bill and feed his kid, Hey, if the

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Speaker 1: kid wants a hat, Yeah, maybe that's in the budget now.

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Speaker 1: When it when it wouldn't have been when when his

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Speaker 1: chicken tenders were nine dollars. Al right, well, still ahead.

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Speaker 1: If I've got an extra couple of bucks in my pocket,

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Speaker 1: maybe I can gamble on the next NFL game NFL wagering.

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Speaker 1: The NBA had told New York State what it wants

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Speaker 1: with sports betting. You bet see what I did there.

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Speaker 1: Let's continue our at the big business of sports stories

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Speaker 1: of the week, and let's talk about one of my

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Speaker 1: favorite food groups, gambling and sports and gambling. They're going

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Speaker 1: to come together if the U. S. Supreme Court has

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Speaker 1: an agreeable ruling in this. Well, the interesting part about

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Speaker 1: this from where Evan and I sit is that everybody

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Speaker 1: is just getting ready for it. It's watching the ramp

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Speaker 1: up to it. It's not an if. These companies aren't

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Speaker 1: saying if if if, they're saying when, when? When? How

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Speaker 1: will my best position one of those companies? You wonder

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Speaker 1: where does the telco's fit in here? Where does Verizon

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Speaker 1: fit in? Eban knows exactly where they fit. Yeah. We

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Speaker 1: reported this week that Verizon, which had just bought Yahoo

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Speaker 1: and ao L last last year, they are looking into

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Speaker 1: possibly offering a sports gambling product. They are obviously not alone.

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Speaker 1: I would imagine that almost every media and telecom company

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Speaker 1: in addition to to gambling companies are at least looking

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Speaker 1: at this right now. What makes Verizon interesting from this

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Speaker 1: perspective is a few things. On UH since they bought Yahoo,

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Speaker 1: they have a DFS daily fantasy product, and they have

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Speaker 1: decades of client information from their very popular season long

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Speaker 1: fantasy products in the business, we called that data and

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Speaker 1: scale scale number two. They have the largest wireless network

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Speaker 1: in the country. Verizon does UH and and mobile is

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Speaker 1: the future. That is where all this stuff is going

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Speaker 1: to take place in four or five years. And then

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Speaker 1: the third thing, and maybe most importantly, as we've discussed

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Speaker 1: on the podcast before, they have live rights to the

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Speaker 1: NBA and NFL. And if you go to London, if

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Speaker 1: you're met Betting Mobile in London, UH, there is an

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Speaker 1: English Premier League soccer game live sitting next to all

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Speaker 1: the live odds that you see. You know, when will

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Speaker 1: the next goalie scored, will there be a corner in

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Speaker 1: the next five minutes, etcetera. That's the holy grail. That's

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Speaker 1: the way that you really capture an audience is by

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Speaker 1: having a game live that they're watching and let you

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Speaker 1: bet on that game live on the same screen. And

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Speaker 1: Verizon theoretically has that capability. Now, I'm sure some people

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Speaker 1: turned up their nose when I said, hey, I like gambling.

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Speaker 1: But let's face it, folks, a couple of bucks. Who

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Speaker 1: do you like the New England Patriots or the Philadelphia Eagles.

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Speaker 1: You're gonna see those kind of bats all over the place.

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Speaker 1: So now let's just make it legal. I think the

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Speaker 1: noses went up with with the I'm Michael Barr. We

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Speaker 1: don't have to get you don't have to get all

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Speaker 1: the way to the gambling. This is we've had this

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Speaker 1: shift in attitude. That's what the commissioners usually say. David Stern,

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Speaker 1: you say no, no, no, you know we're not ready

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Speaker 1: for gambling. Let's face it, you know when all this changes.

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Speaker 1: This is not about sort of cultural moraise. This is

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Speaker 1: about how much money is in it for us once

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Speaker 1: you get to a certain level. And I think we've

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Speaker 1: talked about this with the Jersey patches in the NBA.

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Speaker 1: It was always, Wow, the Jersey space is sacred. Are

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Speaker 1: our space is sacred? No it's not. That's just what

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Speaker 1: they said publicly. You know why they chose to do it, Michael,

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Speaker 1: because now there was enough money for them to do it,

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Speaker 1: and that's what's going on with sports betting. There's so

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Speaker 1: much money to be made. Let me see, Um, if

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Speaker 1: I'm the NBA, maybe if I do a quick backup napkin,

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Speaker 1: what do you think I mean? That's what they said, right, Yeah.

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Speaker 1: The NBA, in front of the New York States Senate

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Speaker 1: this week announced kind of what their plan for what

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Speaker 1: their ideal gambling law would look like. The NBA wants

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Speaker 1: it to be a federal law, and they want one

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Speaker 1: percent of every bet made on the NBA to be

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Speaker 1: kicked back to them as a quote unquote integrity fee.

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Speaker 1: And there was, as I'm sure you can imagine, some

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Speaker 1: pretty pretty harsh reaction to this among folks in the

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Speaker 1: gambling world. As you know, Michael, margins are not incredibly

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Speaker 1: high for for sports books. These people are not rolling

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Speaker 1: in the cash on Margins, uh and and having to

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Speaker 1: give one percent of all bets that's handled, that's not revenue.

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Speaker 1: That's a huge number that can be as much as

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Speaker 1: of actual revenue. And they will not give that up

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Speaker 1: without a huge fight. And for those who aren't heathens

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Speaker 1: like I am, there's a thing called the vig which

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Speaker 1: is a certain percentage that casinos take when a bet

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Speaker 1: is made. Let's say, for instance, it's a ten percent vg.

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Speaker 1: Ten percent of the money that's taken in is not

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Speaker 1: going to be paid back out because the casino takes that,

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Speaker 1: and so you add that one percent. That's another part

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Speaker 1: of the visa. But for people who don't understand sports betting,

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Speaker 1: maybe it's a good opportunity to let them know. That's

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Speaker 1: why the betting lines go up and down. All the

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00:23:20,160 --> 00:23:24,560
Speaker 1: house wants is for equal amounts to be bet on

428
00:23:24,600 --> 00:23:28,480
Speaker 1: each side. That way, they're guaranteed the profit of the

429
00:23:28,560 --> 00:23:32,040
Speaker 1: vig they'll take the ten percent. That's why the lines

430
00:23:32,080 --> 00:23:34,880
Speaker 1: go up and down, to encourage bets in the direction

431
00:23:34,920 --> 00:23:36,919
Speaker 1: they need. Sure, But the truth is that they're not

432
00:23:37,080 --> 00:23:39,520
Speaker 1: keeping ten percent. You know, the taxes are high. You know,

433
00:23:39,560 --> 00:23:42,440
Speaker 1: there's a nine and a half percent tax on their revenue.

434
00:23:42,680 --> 00:23:46,520
Speaker 1: There's excise taxes that are much smaller but are still prevalent.

435
00:23:46,560 --> 00:23:48,919
Speaker 1: You know, the whole percentage in Vegas right now for

436
00:23:48,960 --> 00:23:51,800
Speaker 1: sports betting is about is between five and six percent.

437
00:23:52,200 --> 00:23:54,600
Speaker 1: That means, for every hundred dollars that's bet in Vegas,

438
00:23:54,880 --> 00:23:58,520
Speaker 1: the casinos are keeping between five and six dollars. If

439
00:23:58,520 --> 00:24:00,760
Speaker 1: the NBA wants to take one percent off the top

440
00:24:00,800 --> 00:24:03,520
Speaker 1: of that. That's at least one dollar that's not going

441
00:24:03,560 --> 00:24:06,320
Speaker 1: to the casinos that would have h That's a huge, huge,

442
00:24:06,359 --> 00:24:09,119
Speaker 1: huge number, um. And what we're seeing right now this

443
00:24:09,160 --> 00:24:12,320
Speaker 1: is kind of the first salvo. But as this conversation

444
00:24:12,359 --> 00:24:15,160
Speaker 1: starts to continue, there's gonna be some head to head

445
00:24:15,520 --> 00:24:19,280
Speaker 1: beadbutting between the leagues and the gambling industry. Right now,

446
00:24:19,280 --> 00:24:22,120
Speaker 1: they're kind of working together to get the thing legalized.

447
00:24:22,440 --> 00:24:24,480
Speaker 1: Now that as Scott said, it's not a matter of if,

448
00:24:24,520 --> 00:24:27,000
Speaker 1: it's a matter of when. Now we're seeing the next

449
00:24:27,040 --> 00:24:29,600
Speaker 1: iteration of that argument, and it's these two sides that

450
00:24:29,640 --> 00:24:31,840
Speaker 1: we're working together are now going to start working against

451
00:24:31,880 --> 00:24:34,320
Speaker 1: each other. And we're also getting those owners who are

452
00:24:34,400 --> 00:24:37,480
Speaker 1: signing up for the ancillary businesses. Let's not forget Mark

453
00:24:37,560 --> 00:24:42,240
Speaker 1: Cuban ted leonsis Michael Jordan's investors in sport Radar. That

454
00:24:42,280 --> 00:24:46,560
Speaker 1: company delivers gambling data and part owned by the NFL,

455
00:24:46,600 --> 00:24:49,320
Speaker 1: by the way, to all the betting houses around the world,

456
00:24:49,720 --> 00:24:52,920
Speaker 1: so they all know there's other ways. There's ancillary ways

457
00:24:53,000 --> 00:24:56,920
Speaker 1: to make money on legalized sports betting in this market.

458
00:24:57,080 --> 00:24:59,240
Speaker 1: It just doesn't have to be how much do we

459
00:24:59,240 --> 00:25:01,920
Speaker 1: get what's bet on our games and they're already there. Yeah,

460
00:25:01,920 --> 00:25:04,119
Speaker 1: and we can talk about I mean, there's three different

461
00:25:04,200 --> 00:25:06,280
Speaker 1: layers really of how leagues are going to make money

462
00:25:06,320 --> 00:25:09,320
Speaker 1: on this. One is that general interest in in league

463
00:25:09,320 --> 00:25:12,119
Speaker 1: games will go up if gambling is legalized. You know,

464
00:25:12,160 --> 00:25:15,199
Speaker 1: you're late March NBA games between two bad teams that

465
00:25:15,240 --> 00:25:16,960
Speaker 1: no one would usually care about. If you have money

466
00:25:16,960 --> 00:25:19,119
Speaker 1: on the game, you might watch it. You might care

467
00:25:19,920 --> 00:25:21,679
Speaker 1: was the spread was five and a half and then

468
00:25:21,680 --> 00:25:24,119
Speaker 1: when they scored the late touchdown it was five. You

469
00:25:24,160 --> 00:25:26,120
Speaker 1: have reason to keep watching. You bet the over the under.

470
00:25:26,160 --> 00:25:29,080
Speaker 1: There's reasons to watch. So you get money by virtue

471
00:25:29,119 --> 00:25:31,400
Speaker 1: of your product being a little more enticing. That that's

472
00:25:31,480 --> 00:25:35,040
Speaker 1: layer one. Layer two. You can sign partnerships with gambling

473
00:25:35,040 --> 00:25:38,399
Speaker 1: houses that can include sponsorships, ads on the side of

474
00:25:38,440 --> 00:25:41,040
Speaker 1: your court, or could just be a the Official William

475
00:25:41,119 --> 00:25:43,399
Speaker 1: Hill of the Official Sports Book of the NBA. You

476
00:25:43,400 --> 00:25:46,399
Speaker 1: know that is tremendously valuable. And gambling companies, as we

477
00:25:46,440 --> 00:25:48,639
Speaker 1: see in European soccer, will pay a lot of money

478
00:25:48,880 --> 00:25:51,920
Speaker 1: to have their brand directly associated with your league or

479
00:25:51,960 --> 00:25:53,919
Speaker 1: your team. And then the third layer is what the

480
00:25:54,000 --> 00:25:56,040
Speaker 1: NBA is going after right now, which is just a

481
00:25:56,160 --> 00:25:59,720
Speaker 1: direct cut of all the action that they garner, and

482
00:25:59,720 --> 00:26:01,360
Speaker 1: that be the hardest one to go and we didn't

483
00:26:01,400 --> 00:26:03,800
Speaker 1: talk about it. By the way, also live betting and mobile,

484
00:26:04,320 --> 00:26:07,680
Speaker 1: but we have that. That's once that happens and everything

485
00:26:07,720 --> 00:26:11,320
Speaker 1: goes now online, you think it's it's big. Now you

486
00:26:11,359 --> 00:26:15,000
Speaker 1: want to, Michael, can you see a bunch of high

487
00:26:15,000 --> 00:26:17,440
Speaker 1: school I'll say kids, because we're of a certain age,

488
00:26:17,720 --> 00:26:19,159
Speaker 1: go into the end, Like they don't want to go

489
00:26:19,200 --> 00:26:22,159
Speaker 1: to golf courses and watch eighteen holes. But imagine if

490
00:26:22,200 --> 00:26:26,639
Speaker 1: you could plant yourself at the turn and with every stroke.

491
00:26:27,400 --> 00:26:29,760
Speaker 1: Of course, the algorithms are spending and they're kicking out

492
00:26:29,760 --> 00:26:32,000
Speaker 1: different odds and whether the guy or the woman is

493
00:26:32,040 --> 00:26:35,320
Speaker 1: going to get a par on the whole or a

494
00:26:35,359 --> 00:26:38,760
Speaker 1: bogey a double, who's going to be the top American finisher.

495
00:26:39,040 --> 00:26:43,359
Speaker 1: You can bet on anything in real time, faster than

496
00:26:43,400 --> 00:26:46,320
Speaker 1: you can order an uber on your phone. That is

497
00:26:46,440 --> 00:26:49,760
Speaker 1: really going to drive engagement. It's gonna make it cool

498
00:26:49,800 --> 00:26:52,320
Speaker 1: to the younger set that's got their mobile phone attached

499
00:26:52,320 --> 00:26:55,600
Speaker 1: to them everywhere they go. This is a real opportunity

500
00:26:55,600 --> 00:26:59,199
Speaker 1: for pro sports. NBA Senior Vice president Dance Plane, he

501
00:26:59,280 --> 00:27:02,280
Speaker 1: said this. He said, without our games and fans, there

502
00:27:02,280 --> 00:27:05,840
Speaker 1: could be no sports betting. Hold on, I'm not buying it.

503
00:27:07,040 --> 00:27:09,120
Speaker 1: You guys do it because I my phone will ring

504
00:27:09,119 --> 00:27:12,600
Speaker 1: in two minutes if if I make the state, I'm sorry. Listen,

505
00:27:12,760 --> 00:27:14,679
Speaker 1: and I want to see the NBA do well, just

506
00:27:14,720 --> 00:27:17,800
Speaker 1: like all the other pro sports gambling has been going

507
00:27:17,840 --> 00:27:22,080
Speaker 1: on for many years, and now is Nowada's going to

508
00:27:22,119 --> 00:27:25,720
Speaker 1: be legalized across the nation or it looks like we

509
00:27:25,760 --> 00:27:28,720
Speaker 1: don't know yet. Now all of a sudden it's like, hey,

510
00:27:28,760 --> 00:27:30,560
Speaker 1: we want a piece of the action. Well, Vegas has

511
00:27:30,600 --> 00:27:33,960
Speaker 1: had this going on for years, so why now all

512
00:27:34,040 --> 00:27:37,280
Speaker 1: of a sudden all the pro sports teams want a

513
00:27:37,280 --> 00:27:39,680
Speaker 1: piece of the action. And the data disputes what Dan

514
00:27:39,800 --> 00:27:42,000
Speaker 1: Spelaine said. I mean, if you two thousand eleven there

515
00:27:42,000 --> 00:27:44,919
Speaker 1: was an NBA lockout, missed thirty games, there was no

516
00:27:45,000 --> 00:27:48,000
Speaker 1: dip in overall gambling in Vegas. The money that was

517
00:27:48,040 --> 00:27:50,239
Speaker 1: probably going to be bet on the NBA was just

518
00:27:50,400 --> 00:27:53,600
Speaker 1: bet elsewhere. You know, maybe it's like an economic study.

519
00:27:53,800 --> 00:27:57,480
Speaker 1: You know, if the games are they'll find something else

520
00:27:57,520 --> 00:27:59,520
Speaker 1: to do, maybe maybe a movie theater of bowling alley.

521
00:27:59,520 --> 00:28:01,000
Speaker 1: They may not go the sports game, but the money

522
00:28:01,040 --> 00:28:03,280
Speaker 1: spent exactly. Also, and you and I, You and I

523
00:28:03,400 --> 00:28:05,720
Speaker 1: talk about this at the desk, Evan. There are things

524
00:28:05,760 --> 00:28:08,000
Speaker 1: and this is not my world, but the people who

525
00:28:08,040 --> 00:28:11,600
Speaker 1: know this tell me there are bets on virtual events now,

526
00:28:12,200 --> 00:28:15,679
Speaker 1: like there is a betting window on virtual tennis. This

527
00:28:15,760 --> 00:28:20,879
Speaker 1: is a computer generated random tennis match, not real people

528
00:28:21,880 --> 00:28:25,240
Speaker 1: that folks bet on. So maybe I don't need your games.

529
00:28:25,280 --> 00:28:27,600
Speaker 1: People will find something to bet on. By the way,

530
00:28:27,640 --> 00:28:31,520
Speaker 1: I gotta bring this up. A super mega celebrity has

531
00:28:31,560 --> 00:28:34,840
Speaker 1: placed a multimillion dollar bet on the Eagles over the

532
00:28:34,840 --> 00:28:37,960
Speaker 1: New England Patriots. This is like the secret square on

533
00:28:38,000 --> 00:28:42,160
Speaker 1: Hollywood Squares. Which star is it? Yeah? I see the guys,

534
00:28:42,320 --> 00:28:44,600
Speaker 1: all the Vegas guys are they have what? They have

535
00:28:44,640 --> 00:28:46,840
Speaker 1: a name for this guy like he's known. It's the

536
00:28:46,880 --> 00:28:51,640
Speaker 1: super secret super Bowl guy. Whatever. I always just default

537
00:28:51,640 --> 00:28:57,720
Speaker 1: await what Floyd maywhere they're doing. Yeah, that sounds that

538
00:28:57,760 --> 00:28:59,760
Speaker 1: sounds like, well, I think Floyd does it where he

539
00:28:59,800 --> 00:29:01,960
Speaker 1: makes a big bet to move the line a half

540
00:29:02,000 --> 00:29:03,920
Speaker 1: a half a point, then he makes the real big

541
00:29:03,920 --> 00:29:05,520
Speaker 1: bet that he wants, and he only tweets the ones

542
00:29:05,560 --> 00:29:07,760
Speaker 1: he wins, only the winning ticket as well. That makes sense.

543
00:29:10,960 --> 00:29:12,880
Speaker 1: It feels better to be number one than number five.

544
00:29:12,920 --> 00:29:14,520
Speaker 1: I'll wear a number because of Mike. We have a

545
00:29:14,600 --> 00:29:16,440
Speaker 1: chance to go for three in a row. Kid numbers

546
00:29:16,440 --> 00:29:18,600
Speaker 1: at a good time, and let's first started wearing the number.

547
00:29:18,680 --> 00:29:21,800
Speaker 1: I would just have the and foul Floomberg Business of sports.

548
00:29:22,040 --> 00:29:25,360
Speaker 1: The number of the week time now for the number

549
00:29:25,400 --> 00:29:30,440
Speaker 1: of the week and gentlemen, the number is sixteen million.

550
00:29:31,720 --> 00:29:38,120
Speaker 1: Sixteen million evan no idea the amount that Florida has

551
00:29:38,200 --> 00:29:42,200
Speaker 1: raised to pay Derek Jeter not to own the probably

552
00:29:42,200 --> 00:29:47,400
Speaker 1: didn't get into that. That is the race that is

553
00:29:47,480 --> 00:29:52,280
Speaker 1: involved for the purse for the Pegasus World Cup Invitational

554
00:29:52,560 --> 00:29:55,840
Speaker 1: at Gulf Stream Park. That is one of the richest

555
00:29:55,920 --> 00:29:59,800
Speaker 1: races around. That's a lot of coin, which makes me

556
00:30:00,280 --> 00:30:03,960
Speaker 1: think about the future of horse racing and where it's going.

557
00:30:04,440 --> 00:30:06,360
Speaker 1: I would have thought if I was if I was

558
00:30:06,400 --> 00:30:10,520
Speaker 1: asking about the richest horse race, I would think Dubai.

559
00:30:10,800 --> 00:30:14,320
Speaker 1: I would think you. I would not think Florida, Well,

560
00:30:14,400 --> 00:30:18,920
Speaker 1: these horses are probably coming in from you. That's only

561
00:30:18,960 --> 00:30:20,840
Speaker 1: they would host it there, like the the event would

562
00:30:20,880 --> 00:30:23,560
Speaker 1: take place there, But I guess not for all the

563
00:30:23,640 --> 00:30:26,640
Speaker 1: sports fans out there. The highest pirst e sports tournament

564
00:30:26,880 --> 00:30:30,240
Speaker 1: is over twenty million, So the sports has eclipsed horse

565
00:30:30,360 --> 00:30:33,600
Speaker 1: racing at the top level in terms of payouts for competitions. Yeah,

566
00:30:33,600 --> 00:30:36,280
Speaker 1: these horses, they don't have any flies running around their heads.

567
00:30:36,320 --> 00:30:39,520
Speaker 1: These these are like some multimillion dollar horses coming in.

568
00:30:39,640 --> 00:30:43,240
Speaker 1: So you've been listening to Bloomberg Business of Sports. I'm

569
00:30:43,280 --> 00:30:45,960
Speaker 1: Michael barn and I'm edmen Novi Williams were here each

570
00:30:46,000 --> 00:30:48,240
Speaker 1: and every week at the same time exploring the world

571
00:30:48,240 --> 00:30:51,480
Speaker 1: of money in sports, and I'm Scott sash Nik. Next week,

572
00:30:51,520 --> 00:30:53,320
Speaker 1: just in time for the Super Bowl, will chat with

573
00:30:53,400 --> 00:30:56,680
Speaker 1: Jessica Gellman, the CEO of the Craft Analytics scop. You've

574
00:30:56,680 --> 00:30:59,560
Speaker 1: been listening to Bloomberg Business of Sports on Bloomberg Radio

575
00:30:59,640 --> 00:31:02,120
Speaker 1: around on the world and online as an Apple podcast

576
00:31:02,200 --> 00:31:09,000
Speaker 1: on iTunes, m