Speaker 1: Bloomberg Audio Studios, podcasts, radio.
Speaker 2: News, sports works, live events work. It's glue, it's sticky,
Speaker 2: it's trash, it's high engagement, it's rooting interest, it's rivalries,
Speaker 2: it's young, it's sports betting as part of the ecosystem.
Speaker 2: So they're multitasking like it's a winner. That's where you
Speaker 2: want to be.
Speaker 3: So Alex, back in September, we talked with Mark Shapiro
Speaker 3: and it was a massive day. I have to say
Speaker 3: it was funny too, because he came in hot, he
Speaker 3: came in buzzing, and you know, understandably he had been
Speaker 3: at the New York Stock Exchange that day ringing the
Speaker 3: bell for TKO, a brand new company. So WWE and
Speaker 3: UFC coming together, these are two of the biggest brands
Speaker 3: in sports and entertainment. And I think that's a notable
Speaker 3: element here because not only is he the president of TKO,
Speaker 3: he's the president of Endeavor. When you think about the
Speaker 3: organizations and the people and the partnerships that have had
Speaker 3: a profound impact on sports, entertainment, culture, media and the
Speaker 3: money that is all around it, no one's bigger than Endeavor.
Speaker 3: I don't think this in a lifetime of deals This
Speaker 3: could have been one of his biggest.
Speaker 4: Maybe the biggest, and as far as impact, I mean,
Speaker 4: think about this is like putting the NBA and NFL together,
Speaker 4: Yeah and calling it TKO or whatever. It was a
Speaker 4: massive day and something that a lot of people didn't
Speaker 4: think could be done the art of the impossible.
Speaker 2: They did.
Speaker 5: So.
Speaker 3: One of the best things Alex about catching Mark on
Speaker 3: this day was this was the first time he could
Speaker 3: really talk about all the nuances and all the inside
Speaker 3: politics of this deal. And the characters are unbelievable. Ari Emmanuel,
Speaker 3: of course, the CEO and found of Endeavor, Mark's partner.
Speaker 3: He talks about how he first met Ari. That's a
Speaker 3: great story, but he also talks about how these and
Speaker 3: you alluded to this seemingly never coming together. People came together,
Speaker 3: Vince McMahon, Dana White combining their companies into this entertainment
Speaker 3: sports behemoth.
Speaker 4: Yeah, Jason, when you think about the personalities that you
Speaker 4: just mentioned, it just tells you a little bit of
Speaker 4: Mark Shapiro's superpower, which is getting a lot of healthy
Speaker 4: egos into a room that have strong views and somehow
Speaker 4: he got them all to play with the same jersey.
Speaker 3: And also Mark Shapiro himself. I mean, this is a
Speaker 3: guy who has his fingerprints all over what we know
Speaker 3: as modern sports media. When it comes to ESPN, he
Speaker 3: headed programming there, and then he has profound influence on
Speaker 3: the media at a time when you know, well, media
Speaker 3: is upside down. It's never been more disrupted, probably since
Speaker 3: the invention of the television. When you think about streamers,
Speaker 3: you think about the broadcast networks, and you think about
Speaker 3: sports and entertainment as part of that.
Speaker 5: He's got some key decisions to make. You know, he's clearly.
Speaker 2: One of the chief architects here.
Speaker 4: I mean what he's done in media landscape. Became a
Speaker 4: to ESPN as a young wonder child, right, Yeah, he
Speaker 4: discovered Stephen A.
Speaker 2: Smith, Right.
Speaker 4: I call him a five tool player in business, and
Speaker 4: what that means is he can do it all and
Speaker 4: then some. On this episode of The Deal Mark Shapiro.
Speaker 5: Since we talked with Mark Shapiro, the private equity firm
Speaker 5: Silver Lake revealed plans to take Endeavor private for thirteen
Speaker 5: billion dollars. Additionally, a former employee sued WWE and Vince
Speaker 5: McMahon alleging abuse, sexual trafficking, actual assault, and negligence McMahon,
Speaker 5: who has since resigned from WWE and TKO, denied the
Speaker 5: allegations in a statement. TKO said the matter predates it's
Speaker 5: executive team's tenure at the company, that it takes the
Speaker 5: lawsuits quote horrific allegations very seriously end quote, and is
Speaker 5: addressing the matter internally.
Speaker 2: All Right, Mark.
Speaker 3: Shapiro, huge day, you're here with us. How are you
Speaker 3: feeling right now? What does it feel like to close
Speaker 3: this deal?
Speaker 5: Blur?
Speaker 2: It's just a blur. I mean, it's you know, a
Speaker 2: long journey to get here. But in the space of
Speaker 2: what two and a half years, we've launched two public companies,
Speaker 2: rang the belt twice the New York Stock Exchange. You know,
Speaker 2: usually you don't do that even once in your life,
Speaker 2: let alone in this short span. So you'd like to
Speaker 2: take a little time to smell the roses and enjoy it.
Speaker 2: But it's been it's been a hectic day, all right,
Speaker 2: So take.
Speaker 5: Us back on this deal.
Speaker 3: I think we can agree the audacity of this deal,
Speaker 3: because I think it's fair to say, like this was
Speaker 3: a marriage that made sense, but the question was could
Speaker 3: you pull it off?
Speaker 2: Take us back? I think there's two seminal moments. A
Speaker 2: couple of years ago, we drove to Stanford the old
Speaker 2: WWE offices. Nick con had just started and Ari and I.
Speaker 2: Ari mostly did the talking, and we basically told Vince
Speaker 2: why we thought we should come together whatever that was
Speaker 2: going to be. That wasn't necessarily a separate public company
Speaker 2: at the time, maybe it was just an acquisition of WWE.
Speaker 2: But everything was on the table. So Ari makes a
Speaker 2: lot of the pitch. I think he's excited about it.
Speaker 2: I'm not sure everything comes out as clearly as he
Speaker 2: wanted it to come out. And we leave there and
Speaker 2: Vince has zero interest. That was it.
Speaker 4: How long was a meeting?
Speaker 2: The meeting was about an hour and it was forty
Speaker 2: eight minutes of us talking and explaining why this marriage
Speaker 2: made sense. And that was it. It was over. Now
Speaker 2: fast forward to somewhere in the last year, we go
Speaker 2: out to dinner of the Mark Hotel restaurant, you know,
Speaker 2: at the hotel, Vince, Stephanie, Nick, We make the pitch
Speaker 2: again in a more casual social setting. Is this private room, Mark,
Speaker 2: private room? Okay, expensive, private room? Worth it? Yeah exactly?
Speaker 2: Ari and I didn't eat much. We were doing all
Speaker 2: the talking.
Speaker 5: Well, Ari never eats much, but we'll get to that later.
Speaker 2: That's a disaster, ye, But the energy is still there,
Speaker 2: so you're good. I thought we have a very good
Speaker 2: presentation all off the cup. I mean, it's planned what
Speaker 2: we're going to talk about, but we're not. It's not
Speaker 2: we're shuffling papers or anything. But can we get to
Speaker 2: a deal. And you know, everybody's excited, and Stephanie asked
Speaker 2: some great questions. Nick asked some great questions. Vince says nothing.
Speaker 2: We leave the meeting now all of a sudden, now
Speaker 2: a couple weeks later, maybe it's a month later. I
Speaker 2: got my dates wrong here somewhere, and now Rain's been
Speaker 2: hired the Merchant Bank to put it up for sale,
Speaker 2: which brings me to seminal moment number two, which is
Speaker 2: our meeting at Rain when I know we're getting this right.
Speaker 2: So a lot of due diligence, a lot of back
Speaker 2: and forth, a lot of questions, a lot of papers, numbers, analysis,
Speaker 2: strategic analysis, et cetera. You name it. We go to
Speaker 2: Rain and we basically tell the Endeavor story, about the
Speaker 2: Endeavor Flywheel, what we did for UFC. Remember we bought
Speaker 2: this call it four plus billion, but it was making
Speaker 2: one hundred and sixty one hundred and seventy million, and
Speaker 2: now you're talking about a division doing six seven hundred
Speaker 2: million dollars. I mean three x in the space of
Speaker 2: you know how many years here.
Speaker 4: You wrote the playboat base through.
Speaker 2: You got it. Now again you're back here. We're with RAIN.
Speaker 2: We're going through the story. Media rights, what we can
Speaker 2: do in analytics, social content, sponsorship and global partnerships, product
Speaker 2: licensing with IMG, what we can do there, expanding international
Speaker 2: direct to consumer. I mean, I'm telling you I walked
Speaker 2: out of the meeting. We're getting it. Mark.
Speaker 4: Was there a moment something you or already said that?
Speaker 4: Vin said, Ahah?
Speaker 2: Mostly events. Remember IMG owns produces stages, licenses eight hundred
Speaker 2: events a year, from food to fashion, to art to golf, tennis.
Speaker 2: I mean all over the globe. There's something going on.
Speaker 2: And when we took him through how we monetize those events.
Speaker 2: No dissimilar by the way to a wrestling match for
Speaker 2: a weekend or wrestle Mania, and how you turn on
Speaker 2: those different levers. This isn't just about media rights and sponsorship.
Speaker 2: I mean that's negotiations, that's relationships, it's what you do
Speaker 2: on the other levels of monetization that really sets you
Speaker 2: apart as a unicorn.
Speaker 5: What's Dana saying about this and how much do you
Speaker 5: bring him into the tent because this is going to
Speaker 5: dramatically affect his life.
Speaker 2: That's right, Dana is the greatest partner ever. I mean,
Speaker 2: he's just a killer in rock ste he is. I mean,
Speaker 2: he just gets it done. I mean I remember being
Speaker 2: his I'll remind you I wouldn't put the UFC on
Speaker 2: the air. I was one of those guys that was like, oh,
Speaker 2: too dangerous, too much of this, too much blood on
Speaker 2: the mat, We're not ready for it. Plus, who's my boss,
Speaker 2: Mickey Mouse? Right, there's no way ESPN was gonna be
Speaker 2: comfortable with me putting on UFC. But I also had
Speaker 2: an issue with it. And now look at it. It's mainstream,
Speaker 2: it's a major, right, we're monetizing it everywhere. Champions are
Speaker 2: household names. We went to Dana saying, we think one
Speaker 2: plus one equals five. Are you on board for this?
Speaker 2: And Dana said, listen, early on, there was no bigger
Speaker 2: guy in my face than Vince McMahon. Yeah, as I
Speaker 2: was trying to build this like he was at every corner,
Speaker 2: stopping me, obstacle roadblock. I've been to WrestleMania and he's
Speaker 2: been to my fights. And you know what, if you
Speaker 2: guys tell me this is going to be all that
Speaker 2: when we put him together, count me in. I trust
Speaker 2: you guys.
Speaker 5: All right, Can we talk about Ari absolutely? All right?
Speaker 2: Oh, one of my favorite subjects.
Speaker 5: Yes.
Speaker 2: Look, we're both from Chicago. He's a little older than me,
Speaker 2: but we really didn't know each other. He went to
Speaker 2: one of my rival high school's Nutrier, and I was
Speaker 2: in Glenn View of Glebrick South, and we were on
Speaker 2: a plane going from New York to LA before he
Speaker 2: flew private. You're in first class, you know, it's two
Speaker 2: one two in first class, and I'm in the one
Speaker 2: and he's in the aisle of the two. So he's
Speaker 2: next to me, but there's an isle in between us.
Speaker 2: And I used to use those cross country trips to
Speaker 2: work on what's called the President's reports. Michael Eisner and
Speaker 2: Bob Bieger would have every area of the company every
Speaker 2: month give him a President's report, you know, which is
Speaker 2: like basically your top ten priorities, your top teen bolts,
Speaker 2: which is hard for all of ESPN and ABC Sports,
Speaker 2: But I used it as a real communications tool for
Speaker 2: the overall company. You want to know what's going on
Speaker 2: with the company. You want to know the focus, you
Speaker 2: want to know the priorities. Read the president's report. And
Speaker 2: so that's what I would do, And I'd spend those
Speaker 2: whole five and a half hours, and I typed like this,
Speaker 2: I'm fair by the way very fast, so it doesn't matter,
Speaker 2: and I don't make a lot of mistakes. Still going
Speaker 2: like that, I peck the entire time. It's like five hours.
Speaker 2: It's dark now, and somewhere like forty five minutes or
Speaker 2: an hour from landing, Ari asks the guy sitting next
Speaker 2: to me. He gets up and I see him now.
Speaker 2: Remember it's very dark, but he's on the other side
Speaker 2: of the Eyeley goes around and he whispers in the
Speaker 2: guy here, guy's here, but I hear, and he says like,
Speaker 2: can you get up? Move over there? Oh my okay,
Speaker 2: And the guy says, excuse me, and all of a
Speaker 2: sudden he backs up all Ari goldish and says, what
Speaker 2: don't you understand, Get the fuck up, get over and
Speaker 2: move into my seat so I can sit there. Okay,
Speaker 2: First of all, be arrested these days, right, Yeah, But
Speaker 2: also the guy actually does it instead of saying the
Speaker 2: guy gets up ari, he sits down, crosses his leg,
Speaker 2: turns through, he goes, what the fuck are you doing?
Speaker 2: And that's how we met. Wow, that's how we met.
Speaker 2: And that's a fast friendship. Oh, we're both from Chicago.
Speaker 2: We know a lot of the same people, have the
Speaker 2: same likes, Cubs bears, you're both Cubs fans, story telling, right,
Speaker 2: similar personalities, and so we got off to a fast start.
Speaker 4: Mark, going back a little bit to TKO, you have
Speaker 4: a company, two companies now inside of TKO. They're both
Speaker 4: juggernauts on their own. One of the things that's really
Speaker 4: interesting about when you combine UFC and WWA. By the way,
Speaker 4: I was a massive WWE fan with you know, going
Speaker 4: back to the whole Coogan days and all Machio Camato
Speaker 4: on Randy Mayow. My question to you is over a
Speaker 4: billion fans right combined. I actually think you guys in
Speaker 4: their early days of how do you serve that consumer?
Speaker 4: Twenty four to seven, three sixty five, there's so much upside.
Speaker 2: That's right, So we know we're still building a lot
Speaker 2: here domestically, but yet there's a lot of international growth
Speaker 2: for the WWE, and using IMG and the Endeavor platform
Speaker 2: is the underpinning to get it out there, to make deals,
Speaker 2: to get you into new territories all the time, in
Speaker 2: good programming windows on the platforms that matter absolutely key
Speaker 2: to that growth.
Speaker 4: Could you ever see integrating both into one mega event,
Speaker 4: like one event? I still remember Wrestlemingia, which is you know,
Speaker 4: that's right, win Hulk Hoogan, that's right, the Giant, and
Speaker 4: I do I.
Speaker 2: See it potentially as a one event. Potentially, although there
Speaker 2: are two different audiences. WW is Middle America. It's the
Speaker 2: show's coming to town, a lot of kids, and it's
Speaker 2: a slice of Americana. The UFC as an international flavor, right,
Speaker 2: it's college age and up. It's a big betting sport.
Speaker 2: Also it's gender neutral because we have a lot of
Speaker 2: female champions round and Rossey is one of the biggest
Speaker 2: stars ever to come out of the UFC. And ultimately Brazil,
Speaker 2: South America. I mean it's you know, it's it's a monster, Canada, Australia.
Speaker 2: I mean, these are good places to be so I
Speaker 2: think that there's an opportunity to bring them out Together's
Speaker 2: opportunity to event, and maybe there's an opportunity to launch
Speaker 2: your channel with them together. Remember, the WW has its
Speaker 2: own network, which Peacock now licenses for two hundred and
Speaker 2: fifty million bucks the Yankees model. Yes, yes, exactly right.
Speaker 2: We at the UFC have done our own proprietary so
Speaker 2: we've got a strong sub base that we sell direct
Speaker 2: to consumer, that could flip flop, that could merge. I
Speaker 2: think it's all up in the air right now. At
Speaker 2: the same time, not all the answers are here. We're
Speaker 2: gonna have to wait till some things play out here,
Speaker 2: and fortunately we have time because the WW deals are
Speaker 2: not up until October.
Speaker 3: Coming up, we discussed how Mark rose from a production
Speaker 3: assistant to become a key executive who brought ESPN into
Speaker 3: an entirely new era, plus media rights, and how sports
Speaker 3: and entertainment have radically changed over the past decade. So
Speaker 3: let's talk media because you know a little something about that.
Speaker 5: That's where you started your career literally as a production assistant.
Speaker 3: If we have that right, like, we don't need to
Speaker 3: go all the way back, let's actually start here. You
Speaker 3: said it very well. The media space is upside down disrupted, all.
Speaker 2: Sorts of.
Speaker 5: A mess.
Speaker 3: How do you describe it right now and how do
Speaker 3: you like not just survive, but thrive in a world
Speaker 3: that looks like this.
Speaker 2: I think when Charter. First of all, yes, I've been
Speaker 2: in the media space for a long time. Let's remember
Speaker 2: I was in the chair when Chrissy Evert turned the
Speaker 2: table on Jim Rome. Wow, I was producing that show.
Speaker 2: Just for the record, so I'm dating myself back to
Speaker 2: ninety three, but that was my literally first gig in
Speaker 2: the producer chair, and so I was there for the
Speaker 2: beginning of ESPN two when they didn't even know it
Speaker 2: was going to work, let alone how many channels there
Speaker 2: are now, which of course led to this big fight
Speaker 2: with Charter. I think when Eiger talked about the new
Speaker 2: deal with CHARTERI hit it on the head, which is,
Speaker 2: first of all, we want to be there for the
Speaker 2: sports fan. That's what matters most, the consumer options choices.
Speaker 2: But you have to toggle it right now. You still
Speaker 2: have everyone loves to beat up Linear. I get it,
Speaker 2: the cords being cut, et cetera, et cetera. Last time
Speaker 2: I checked, it's still in sixty five million homes. That's
Speaker 2: a lot of money. That's a lot of eyeballs. That's
Speaker 2: a lot of traction. Viewership's going up. You saw the
Speaker 2: numbers on the ratings on the NFL and college football
Speaker 2: for week one of the twenty three to twenty four season.
Speaker 2: I mean through the roof sports works, live events work.
Speaker 2: It's glue, it's sticky, it's traction, it's high engagement, it's
Speaker 2: rooting interest, it's rivalries, it's young, it's sports betting as
Speaker 2: part of the ecosystem. So they're multitasking like it's a winner.
Speaker 2: That's where you want to be. And right now, no
Speaker 2: matter where you are, stranger things or sports, you have
Speaker 2: to have enough content and to fill the linear pipes
Speaker 2: while they're still there, while you can still mine them
Speaker 2: and monetize them. But at the same time have enough
Speaker 2: premium content. And it must be premium in order to
Speaker 2: get the pickup on streaming that most of these companies
Speaker 2: are looking for. And that's why UFC has been so
Speaker 2: strong for ESPN Plus. And I don't say that in
Speaker 2: an arrogant way. I love ESPN Plus, I love their library,
Speaker 2: I love a lot of the soccer and some of
Speaker 2: the other properties they play, but they sold it to
Speaker 2: us as you're going to be the anchor tenant. If
Speaker 2: you're willing to put the UFC we're keep in mind
Speaker 2: they were in less than ten million homes. We were
Speaker 2: getting more out of being a pay per view with
Speaker 2: di RECTV than going through there. But if you're willing
Speaker 2: to make that sacrifice, we will market you and cover
Speaker 2: you so strong that you'll grow, and then as we grow,
Speaker 2: it's a win win, and that's exactly what's happened. But
Speaker 2: you have to be willing to put your premium content.
Speaker 2: Not like NHL regular season. Do you think a lot
Speaker 2: of people are tuning in to see the Columbus whatever
Speaker 2: NHL team a regular season man? ESPN plus? No, Maybe
Speaker 2: in Columbus maybe it's playoffs they are, but regular season
Speaker 2: is different. There's just a lot of volume and tonnage.
Speaker 2: That's not a slam on the NHL. There's no urgency.
Speaker 2: If you take your premium and you put it there,
Speaker 2: the audience will follow. And we were willing to do that.
Speaker 2: But let me tell you it was a gamble. And
Speaker 2: when we started, when we made that deal, keep going
Speaker 2: back to that word, right, sponsors were not happy, like
Speaker 2: we're the ratings, Well, ESPN plus doesn't they're not doing ratings, Well,
Speaker 2: we can't pay you what we committed to because we
Speaker 2: don't even know who's seeing your products. We signed up
Speaker 2: to be a sponsor when you were on Fox Fox broadcast,
Speaker 2: and now you're buried on ESPN Plus where you got
Speaker 2: to pay a ransom to have a subscription. We want
Speaker 2: a rebate and we had to manage all those sponsors.
Speaker 3: And so, as someone who's going to have to going
Speaker 3: back to a deal negotiate for media rights over the
Speaker 3: next few years and now in even larger fashion, how
Speaker 3: do you approach that deal making in a in an
Speaker 3: environment that is so uncertain you don't know what buyers
Speaker 3: are going to be. ESPN is I think it's fair
Speaker 3: to say diminished at this point, who knows what its future?
Speaker 5: Is?
Speaker 2: Still the best brand in sports though.
Speaker 3: Right, So what do you do, like, how do you
Speaker 3: approach that? How do you sort of marshal the forces
Speaker 3: inside your shop to take on a landscape that is
Speaker 3: dramatically different.
Speaker 2: Well, let's start with the fact that the streets all
Speaker 2: they care about is the price. Yeah, so you're balancing
Speaker 2: that as a public company, You're balancing that was with
Speaker 2: what's best for your brand, what's best for your product,
Speaker 2: what's your neighborhood look like, what other properties are around
Speaker 2: you are on your channel, your platform? What's the long
Speaker 2: term commitment from the company? Right for how many months
Speaker 2: were we hearing or ESPN is going to be sold off?
Speaker 2: ESPN is going to be spun off under Bob Japik. Oh,
Speaker 2: maybe maybe Igur will do it, maybe you won't do it.
Speaker 2: So you have to think about all of that and
Speaker 2: then how it changes. But obviously, if you're the NBA
Speaker 2: or the UFC, you want the best partner, you want
Speaker 2: the best marketing partner. But you're looking to monetize your
Speaker 2: rights and we're no different.
Speaker 4: So Mark, I want to talk a little bit about
Speaker 4: you and your career. Sometimes we have a lot of
Speaker 4: young listeners, entrepreneurs, viewers as well. I didn't go to college.
Speaker 4: You went to the University of Iowa, right. You have
Speaker 4: a gazillion IVY leaders that work for you. But you started,
Speaker 4: and I think our viewers would really like to hear this.
Speaker 4: You started a production assistant ESPN. In a few years,
Speaker 4: you're running the whole content. How do you do that?
Speaker 4: Why do you do that? What advice can you give
Speaker 4: to our young listeners?
Speaker 2: Look, obviously there's some luck involved there, and I'm not
Speaker 2: saying that to be humble. You can't. You can't script that. Fortunately,
Speaker 2: I had mentors executives that saw something in me, that
Speaker 2: had an eye on me, that said, this is a
Speaker 2: guy we want to bring along, and when I deliver,
Speaker 2: they rewarded me. That's rare. And if you're not at
Speaker 2: a company where people are where the executives, the leaders,
Speaker 2: the managers are investing in their people like that, succession,
Speaker 2: planning for the future, trying to identify the future stars
Speaker 2: of tomorrow, investing in them and then bringing them up
Speaker 2: the ranks, nurturing them, you should get out of there.
Speaker 2: I mean, that's just the bottom line. So I had
Speaker 2: some success with a Sports Century project, which was the
Speaker 2: precursor to thirty to thirty. It to Emmy. It won
Speaker 2: a Peabody, our first Peabody ever at the company. It's
Speaker 2: so interesting. So there's an executive meeting that takes place
Speaker 2: behind the scenes. Sports Century is coming to an end,
Speaker 2: twenty five million dollar profit winner for ESPN WOW End
Speaker 2: of the Century, Big one hundred Hours, chronically the best
Speaker 2: of the best in sports stories, journalism, highlights games. I
Speaker 2: oversaw the whole thing at twenty six years old, and
Speaker 2: they made money and it's it's a critical winner. Now
Speaker 2: what do we do with this guy? We have a
Speaker 2: young star I can say this now, right, yeah, yeah,
Speaker 2: And they have a meeting and one guy who's very
Speaker 2: high up, very high up, says he's going to be
Speaker 2: one of the best game producers ever. Let's let's put
Speaker 2: him on games. His personality I've seen him in the
Speaker 2: truck live, that's where he should be. And another says
Speaker 2: what he's talking about, Like, here's what he just did.
Speaker 2: He sold this whole project. He brought in general motors,
Speaker 2: he was the storyteller, he drove the narrative. It was
Speaker 2: profitable and it was critically acclaimed. We got to grow
Speaker 2: the Classic Sports network, which is now called ESPN Classic.
Speaker 2: Let's put him in charge of the network. President of
Speaker 2: ESPN says, there is no president of networks. I'm the
Speaker 2: president of all of that. We don't have an individual president.
Speaker 2: I don't even know what that means. So the head
Speaker 2: of advertising, the head of affiliate sales are reporting him,
Speaker 2: and they're like, and the guy says, the guy who
Speaker 2: suggested it says, no, they're not. They stayed reporting the
Speaker 2: affiliate adds us and we just tell him to figure
Speaker 2: it out. We'll work across the aisle, make it work.
Speaker 2: Let's just just go for that. And the guy says,
Speaker 2: I'm telling you, you can produce one today football for
Speaker 2: us one day if we ever get that, and the
Speaker 2: guy turns to him. I got to say, whole story
Speaker 2: from George Boden Iron Steve Bornstein, we're running ESPN, and
Speaker 2: he goes, you're gonna stick this kid in Boise, Idaho
Speaker 2: doing the C game when he could be running a
Speaker 2: network and we could be building him as a future
Speaker 2: executive because as a game brought producer, you're not starting
Speaker 2: at an any level. You're gonna go to Boise. I'm
Speaker 2: going back to Iowa City here. So George and Steve
Speaker 2: listened to the old man that wanted me in these hips,
Speaker 2: and they put me in charge of Classic Sports Network.
Speaker 2: We were in twenty four million homes by Hooker, by Crooker.
Speaker 2: I worked with the different groups and the different teams
Speaker 2: without trying to be threatening. I learned I fell on
Speaker 2: my face. I had to submerge my ego, you name it.
Speaker 2: I mean, I didn't have direct they weren't direct reports.
Speaker 2: I was across the aisle. But we sold the story
Speaker 2: and quickly we were in seventy million homes. And now
Speaker 2: with the success and that set me up for the
Speaker 2: rest of the plane at ESPN.
Speaker 5: And so what happens from that? What does that set
Speaker 5: you up to do?
Speaker 2: ESPN was really a challenge time visa VI rating. Keep
Speaker 2: in mind, and you've seen them, just speak with Charter,
Speaker 2: ESPN's getting anywhere from eight to ten dollars a sub
Speaker 2: on your cable bill. Wow, that's how much is thrown up.
Speaker 2: ESPN's makes their whole business. Yes, there's the ad stream,
Speaker 2: but their whole business is the affiliate revenue stream. That's
Speaker 2: the big money. You got to keep that going. And
Speaker 2: there were a lot of cries at that time from
Speaker 2: the MSOs, we can't do this anymore. ESPN has to
Speaker 2: go a la card. How funny is that, because that's
Speaker 2: what streaming is, it's olive art. They have to go
Speaker 2: all the card, and they were trying to get Washington
Speaker 2: to dictate it. And Disney spent a lot of money
Speaker 2: on lobbyists and regularly to help them fight that off.
Speaker 2: Because ESPN and Disney were scared, if we go all
Speaker 2: the card, we're not going to have eighty to one
Speaker 2: hundred million homes. How many people are going to sign up? Exactly?
Speaker 2: By the way, history repeating itself is exactly what they
Speaker 2: are right now. How many people will sign up when
Speaker 2: ESPN actually goes direct to consumer? Right, it's twenty nine
Speaker 2: nine and thirty nine ninety mark just for a viewers,
Speaker 2: just to catch them up.
Speaker 4: You have over one hundred million subscribers and about eight
Speaker 4: to fifty bucks. Right, that's eight hundred and fifty million
Speaker 4: dollars per month, the ultimate cash, that's right, that's right.
Speaker 2: At that time we were about yeah, ninety three million,
Speaker 2: I mean, and maybe they were at six bucks then,
Speaker 2: but it doesn't matter. That's as one million million. It's
Speaker 2: the train that drives. You think you're getting ESPN two
Speaker 2: for fifty cents a sub You're not without ESPN, right,
Speaker 2: you think you're getting ABC. You think you're getting ABC
Speaker 2: Family which is now free Form Disney Junior ex It's
Speaker 2: all on the backs of ESPN. So it drives the
Speaker 2: truck and the engine for everybody. That's the business model.
Speaker 2: It's absolutely brilliant. And by the way, they're so good
Speaker 2: they can do that you can can't afford not to
Speaker 2: have ESPN. They don't want to go all the card,
Speaker 2: but the ratings are in the tank. They had lost
Speaker 2: NASCAR and their ratings were going down. So the President says,
Speaker 2: we got to do something bold. We we got it.
Speaker 2: We got to make a change here. We need original thinking,
Speaker 2: we need original programming, we need we need new leadership.
Speaker 2: And they turned to me to say, we want to
Speaker 2: bring you in to run all of programming.
Speaker 4: And how old are you at this point?
Speaker 2: I was thirty one, wow. And I remember they'd taken
Speaker 2: me out for a walk in Central Park, kind of
Speaker 2: like the father son. Yeah right, father is arm rom me.
Speaker 2: You got it out because basically they were gonna pay
Speaker 2: me nothing and I had no leverage, of course, and
Speaker 2: it would be like, dude, this is a gift, like
Speaker 2: no one does this. And they put me in charge
Speaker 2: of programming. The first things I wanted to do was
Speaker 2: launch a show called Part in the Interruption, Wow, which
Speaker 2: ended up being huge for us. And I wanted the
Speaker 2: NBA in Wimbledon. Wimbledon because it's just summer programming. We
Speaker 2: needed a lift up. It's prestige too, it's skiff any product.
Speaker 2: And the NBA because it's the NBA, and when we
Speaker 2: got those, our fortunes changed. We went on an eight
Speaker 2: quarter run of increase ratings year quarter over quarter, year
Speaker 2: over year. No one could argue with the strategy. It
Speaker 2: was how much can you bring in for We'll see.
Speaker 2: I was just with Adam Silvery yesterday, Ari and I
Speaker 2: were having lunch with him, and are you and I
Speaker 2: I went to dinner last night to celebrate tko int REOs.
Speaker 2: Oh wow, And I said, Adam, guess we're going for dinner.
Speaker 2: That's where I took him and David Stern to sell
Speaker 2: them on the NBA coming to Esbo. I'll never forget
Speaker 2: that city. We don't have a package for you. We're
Speaker 2: on Turner and NBC. Split the Turner package, split the
Speaker 2: Turner package. Whatever scraps you got for us, we'll take it.
Speaker 2: Or if you want to move the finals from NBC ABC,
Speaker 2: we'll do that. That's where that whole thing got hatched.
Speaker 2: And so when you brought that back to the bean Counters, well,
Speaker 2: the NBA all that tonnage, high quality tonnage, right, Kobe Shack,
Speaker 2: big players, big personalities, and what that would mean for
Speaker 2: SportsCenter and other properties were trying to get and that
Speaker 2: was the beginning of a new run, and it silenced
Speaker 2: the cable operators. It wasn't any more. Hey, you know
Speaker 2: this is bs ESPN charging too much.
Speaker 3: We must have Yeah, so Mark, there's some critical decisions
Speaker 3: that get made at ESPN around that time during your tenure.
Speaker 3: Let's talk football. Sunday Night Football, Monday Night Football. We
Speaker 3: feel like we know it now. It is not what
Speaker 3: it always was.
Speaker 2: Yeah, take us back. It's funny, you know, I mean
Speaker 2: obviously Monday Night Football was even bigger than it is today. Yes, right,
Speaker 2: the Howard Cosell days come on and for years and
Speaker 2: years and years it was under there, and then it
Speaker 2: was handed off to Al Michaels and those Jackets. Remember
Speaker 2: you had the Yellow Jackets and the old days with
Speaker 2: Gifford and Cosell and Andy Don Meredith and then Al
Speaker 2: came on and he had different partners and that led
Speaker 2: up to Madden. It was a sad day when ABC.
Speaker 2: I mean, that's an institution, ABC, Monday Night Football, the
Speaker 2: song the Music Institution, halftime highlights with Cosel. It was
Speaker 2: a sad day for the company when they lost Monday
Speaker 2: Night even though it went to ESPN. But this is
Speaker 2: the art of deal making right, Sometimes it is just luck.
Speaker 2: You can be as strategic as all you want, you
Speaker 2: can data analytics and form relationships, and sometimes timing optics,
Speaker 2: it just doesn't fall for you. Here's the situation, Steve Bornstein.
Speaker 2: He comes to us and says, we want to negotiate
Speaker 2: a renewal right now for Sunday and Monday night. I
Speaker 2: talked to Eiger and George Bodenimer and we don't need
Speaker 2: to our windows not up. We're not doing that now.
Speaker 2: I go back to Steve Mark, you should do this now.
Speaker 2: If you don't do this now, you will be the
Speaker 2: last one in and you won't have the control. You
Speaker 2: won't be able to dictate where this goes. You come
Speaker 2: in first, you got first mover advantage. You want to
Speaker 2: hold us to our window. We'll end up negotiating with
Speaker 2: the other guys first, and you take your chances. So
Speaker 2: we kind of have it like we don't open it up,
Speaker 2: but let's at least talk about what it would be,
Speaker 2: and we really want to have continue with Sunday night
Speaker 2: and continue with Monday night. And at one point Bornstein
Speaker 2: throws out a number which is like I don't know
Speaker 2: one four for the two one point four billion to
Speaker 2: keep them, which is a big increase for ABC and ESPN,
Speaker 2: and Iiger says, I can't do that now. Iiger's in
Speaker 2: line to get Eisner's job. Disney is hurting right now.
Speaker 2: Remember there's a whole vote to get eisnern sheryld A
Speaker 2: is a revolting you know, Eisner, who was the fair
Speaker 2: haired prince for so long, could do nothing wrong. Disney's
Speaker 2: in trouble. Iiger potentially is going to succeed him, but
Speaker 2: they're going to look outside. How much is Eiger to
Speaker 2: blame for what's going wrong with Eisner? So he's got
Speaker 2: a lot of optics and politics to play, and I
Speaker 2: don't think it's in his best interest to go to
Speaker 2: the board and say I want to open early. Here's
Speaker 2: the kind of increase which is unprecedented. Now it looks
Speaker 2: like peanuts right right. And so he says no, to
Speaker 2: which I was like, we may not get another swing.
Speaker 2: This is not a bad deal for the combo. Can't
Speaker 2: do it and we turn it down. What happens They
Speaker 2: go renew their deal with Fox and we end up
Speaker 2: losing Monday Night Football. Yes, it moved to ESPN, and
Speaker 2: that was like our saving grace. At least we got
Speaker 2: aver ESPN, which is the cash cow, but we lost
Speaker 2: it for ABC and we end up paying one point
Speaker 2: one billion just for Monday Night. So for a few
Speaker 2: hundred more million a year earlier, we would have had
Speaker 2: both and we would have had been able to dictate
Speaker 2: the path the nights, the network whatever. Instead were left
Speaker 2: with one on Monday Night for one point one billion,
Speaker 2: which is ridiculous. And remember would have been one four
Speaker 2: for the two of them. Yeah, right, okay, and with
Speaker 2: no schedule anything. I mean, they give us the worst
Speaker 2: schedule because we were a cable right. By the way,
Speaker 2: Bob went on to be one of the best deal
Speaker 2: makers of our time in business, Pixar, Marvel, I mean,
Speaker 2: Star Wars, Lucas, the list goes on, right, It's extraordinary
Speaker 2: what he's built at Disney, but for different factors at
Speaker 2: that time, he couldn't endorse that deal.
Speaker 4: Andy Mark, you're so young at this, say, what makes
Speaker 4: you think that one point four billion is a good
Speaker 4: deal or a fair deal for the whole Disney fan family.
Speaker 2: I'm living in breathing sports media rights every day in
Speaker 2: my job. He's not to be fair. It doesn't matter
Speaker 2: how much older he is, or wise or age. I'm
Speaker 2: in it. So this is it's a checkerboard game, right,
Speaker 2: this is chess. I know this is going to happen.
Speaker 2: Whether he couldn't move it, or he didn't want to
Speaker 2: back me, or he didn't believe in the or not,
Speaker 2: whatever it was, you know, it's ultimately a tough play
Speaker 2: and you kind of live and die by that. And
Speaker 2: that was the beginning of the end the ABC Sports
Speaker 2: as you remember, the why world of sports at ABC.
Speaker 4: So Mark, you mentioned Bob Bieger, Jason and I are
Speaker 4: both big fans of biger Icon obviously, absolutely, can you
Speaker 4: share with us maybe one or two lessons that you
Speaker 4: learned because you had a front row seat to his management?
Speaker 4: What an opportunity.
Speaker 2: Yes, and there are some other turns there that could
Speaker 2: have happened, and I'll explain that. Here's just as I
Speaker 2: saw her first of all, I mean central casting, guys,
Speaker 2: we all know even today. I mean it's just like
Speaker 2: invented to be mister CEO. I mean, looks the part charismatic,
Speaker 2: very convince and seeing, very persuasive, very charming, very bright,
Speaker 2: surrounds himself with good people, takes chances, sports, entertainment, personalities, relationships.
Speaker 2: I mean, honestly, he's the model CEO, right, And he
Speaker 2: came up through sports similar to me. He came up
Speaker 2: through the ABC sports ranks, and he moved around and
Speaker 2: TV and film, and he just he has the package.
Speaker 2: And I remember telling him I wanted to do scripted
Speaker 2: programming at ESPN. And what do you mean, we do
Speaker 2: live events, we do studio shows, news and information. We
Speaker 2: want to go original programming, game shows, docs, films, scripted,
Speaker 2: what do you mean scripted?
Speaker 5: Like?
Speaker 2: Ultimately that was Playmakers, right, that was the serious He
Speaker 2: backed that plate. And not only did he back it,
Speaker 2: he looked at every script. We're talking about the COO
Speaker 2: of Disney. I turned in every script and he gave
Speaker 2: script notes for every episode. It was a massive hit.
Speaker 2: By the way, Playmakers was the third highest rated show
Speaker 2: on ESPN after Sunday Night Football on Saturday night College football.
Speaker 2: It was a monster. It was all anyone ever talked about.
Speaker 2: It won the AFI Award. I mean, it was incredible
Speaker 2: and Bob was totally hands on, his fingerprints all over
Speaker 2: so there was no job too small. So I tell you,
Speaker 2: when everybody talks about oh, two hands on or two
Speaker 2: granular or two in the weeds. Who's to say that?
Speaker 2: Who says that Bob Iger gets up at three in
Speaker 2: the morning. Practically he's working out by four, he's in
Speaker 2: the office by five. Maybe I got it wrong by
Speaker 2: an hour, but trust me here and any time I
Speaker 2: would send him an email or a call, it's an instant.
Speaker 2: Are you just sitting by your desk waiting? Like? That's
Speaker 2: who he is. He's on it. He leads by example.
Speaker 2: He inspires people. You want to get behind him. And
Speaker 2: that's the takeaway. And that's one thing about leadership and
Speaker 2: doing deals and running companies, Like you can be a
Speaker 2: great boss, but do people really want to work for you?
Speaker 2: Are they inspired? There's a difference. Are they inspired by you? Yeah,
Speaker 2: they might listen to you, maybe it's out of fear,
Speaker 2: maybe they perform, but will they really follow you into
Speaker 2: battle that loyalty? Do they have your back? Do they
Speaker 2: believe in you? And having that gift to inspire people,
Speaker 2: That's not something you can teach in Harvard Business School
Speaker 2: very rare.
Speaker 3: So when you think about Metea writes across especially the
Speaker 3: major sports and you know you talked about you have
Speaker 3: talked about the NBA, the NFL, MLB. How do you
Speaker 3: parse out the value of rights going forward because these
Speaker 3: are sports that are on different trajectories at this point.
Speaker 2: Look, it's it is about, especially today with streaming. Let's
Speaker 2: just take ESPN for example, right, not picking on them,
Speaker 2: but they, I mean, they're the best when they go
Speaker 2: direct to consumer. When they when they flip the switch,
Speaker 2: they're going to be basically taking the linear feed of
Speaker 2: ESPN as you know it, which will still exist because
Speaker 2: it'll probably keep going, but they're going to put it
Speaker 2: on streaming. So now you can stream the channel, not
Speaker 2: ESPN Plus which is SVOD, the actual channel, and maybe
Speaker 2: ab'll to have stuff there that isn't on the linear feed,
Speaker 2: we'll see or tiers or whatever it might be. In
Speaker 2: order to make that work, the money they're going to
Speaker 2: be foregoing from losing subs and ad revenue on the linear,
Speaker 2: they're gonna have to charge a hefty price. That's what
Speaker 2: this is all about. That's the models that are running.
Speaker 2: What do we have to charge for ESPN as a
Speaker 2: standalone channel on streaming? And there's a lot of articles
Speaker 2: out there and there's a lot of you know, rumor
Speaker 2: and gossip and speculation. Is it twenty nine nine nine?
Speaker 2: Is it thirty nine nine? How many people will actually
Speaker 2: pay thirty nine to ninety nine for a month? Is
Speaker 2: it ten million, twenty million, thirty In order to make right,
Speaker 2: to balance it out, The only way you're gonna get there,
Speaker 2: whatever the price is, is premium content. The only way.
Speaker 2: You have to be so disciplined that you know, we're
Speaker 2: not going to carry that secondary sport. We're not going
Speaker 2: to carry that tertiary sport. We're not going to carry
Speaker 2: that studio show that may be good, but it doesn'tun deliver.
Speaker 2: We have to stick with the tried and true what's
Speaker 2: gonna bring people to table, and NBA is one of them.
Speaker 2: If I'm going to get my games and my playoffs
Speaker 2: on that channel, if I'm gonna get NHL playoffs on
Speaker 2: that channel, if I'm gonna get NFL on that channel,
Speaker 2: if I'm going to get UFC or dare I say,
Speaker 2: wwe first, take pardon the interruption, take the stuff that
Speaker 2: mad that really matters, and invest in that, and you
Speaker 2: have to just cut the rest. And that's hard to do,
Speaker 2: and that affects a lot of lives and livelihoods. That
Speaker 2: that's the only way you're going to get that number.
Speaker 2: So premium content wins. And one of the reasons we
Speaker 2: feel so strong about UFC and WWE, and I'm not
Speaker 2: saying this to be self serving, this works for a
Speaker 2: lot of other sports is because we're the full calendar.
Speaker 2: So if you can get premium content that goes eight months,
Speaker 2: ten months, let alone US twelve months a year, scheduling, flexibility,
Speaker 2: nights hours, two hours, three hours, library programming, that makes
Speaker 2: you invaluable.
Speaker 5: This has been incredible. We could talk to you for
Speaker 5: three hours, four hours forever. We really appreciate it.
Speaker 2: Thank you so much. We really enjoyed it. I'm not
Speaker 2: sure where it starts or stops because I just enjoyed
Speaker 2: talking to you guys, and you're your titans of business yourself,
Speaker 2: so I appreciate the time.
Speaker 4: Thank you, Marigo. It was awesome.
Speaker 1: The Deal is a production from Bloomberg Podcasts and Bloomberg Originals.
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