American Football Becoming a Global Game

International Series

The NFL is viewed as a domestic sports league, but the popularity of the league’s international series and an increase in the number of international buyers purchasing tickets to games stateside would indicate the league’s efforts to grow its fan base abroad are working. Back in late August, StubHub revealed that ticket demand for the 2019 international series (includes: 4 games in the U.K. and 1 in Mexico) rose +55% YoY, while international buyer sales are up +19% YoY.

Enthusiasm for American football is spreading across the globe. The league determined that the number of avid football fans in the U.K. rose +25% to 4 million in 2018, making it the 3rd most popular sport in the country. There’s serious momentum for the game in Germany with avid fan growth up between +15% and +20% YoY and league EVP, chief strategy and growth officer, Chris Halpin says that Brazil has become a “really strong consumption market” for the league. Australia, Mexico and Canada, where the NFL has become the number two sports league (behind the NHL), are also growth markets. If you’re looking for a common thread between all of these countries, they’ve all sent home-grown players to the NFL – players who then serve to advocate for the sport in their homeland both during their playing careers and in retirement.

Howie Long-Short: The avidity of the English football fan is clear. The two international series games scheduled at Tottenham’s new venue sold out in 45 minutes. It took a bit longer – roughly one hour – to sell the two games at Wembley; of course, the venue holds 18,000 more fans. Halpin says that the league is “about 10x over-subscribed” on ticket waiting lists for games in the country.

There is currently “considerable over-demand” for the NFL product in the U.K., what is not as clear is if that demand would hold should the league expand its international offering; earlier this year it was reported that the league was considering the idea of increasing the slate to eight games. Halpin acknowledges that selling single game tickets to four games is different than selling a ‘London season ticket’.

Did you know? Last season’s Eagles-Jaguars game at Wembley was the “most in-demand regular season game, in terms of secondary market demand, in NFL history.” A prominent Jaguar fan base – remember, the team has regularly played games in England since ‘13 – combined with the rare opportunity to see the defending Super Bowl champions live made the game a particularly tough ticket.

There is constant speculation about the possibility of placing a franchise permanently in London and the league acknowledges it is “always testing the [market’s] ability to [support] a franchise – [evaluating] endemic [interest], corporate support and most importantly fan energy and ticket demand.” But the U.K. isn’t the only international market that the league would consider. Halpin said that “Mexico City and Toronto [also] have the fan bases to support a team.

That doesn’t mean fans in those cities should start saving for personal seat licenses. Once the Rams, Chargers and Raiders move into new buildings next season, Halpin says the league feels as if it’s in “pretty good position with [its] 32 franchises.” There are no immediate threats for relocation and the league is highly unlikely to upset the balance that eight, four-team divisions provides.

Fan Marino: The NFL plays regular season games abroad, while international soccer leagues continue to serve the U.S. sports fan meaningless ‘friendly’ exhibitions. It wasn’t always that way. The league played pre-season games overseas throughout the ‘90s and ‘00s, but decided if it was going to make the trip, it might as well put its best product on the field; the sophisticated sports fans can tell the difference between elite-level competition and glorified practice. To build a following in a new market a pro sports league needs to make a commitment to the local fans. They need to know the league is serious if they’re going to invest their time, money and emotions in the games.

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Loss of Prominent QBs Will Not Impact NFL’s National Television Ratings

Ben Roethlisberger

Week 3 will be the first NFL weekend in 15 years without Drew Brees (hand, 6 weeks), Ben Roethlisberger (elbow, season-ending) or Eli Manning (benched) starting a game at quarterback. Andrew Luck (retired), Nick Foles (clavicle, 10 weeks) and Sam Darnold (mono, 4 weeks) will all be sidelined this week, as well; and Cam Newton’s (foot) status for Sunday is currently deemed questionable.

The rash of early season injuries to players at the league’s most prominent position would seemingly pose a threat to its television ratings – when viewership dropped by – 10% back in 2017, it was a common narrative within the media to blame the decline on injuries to star players (see: Luck, Rodgers and Watt) – but a closer look at the ’17 season indicates that the depressed fan interest was the result of many of the league’s most popular franchises experiencing down years; 6 (Dallas, Green Bay, Denver, Seattle, Chicago and Washington) of the 10 most popular clubs (based on website traffic) missed the post-season. Former CBS president Neal Pilson said that “over the course of a season, the loss of a given quarterback or even a couple of quarterbacks will not have a measurable impact on national ratings.”

Howie Long-Short: Players getting injured is part of the game. While it’s undeniable that star power commands media attention, Pilson explained that viewership behavior is really impacted by “the wins and losses of the league’s most popular teams, the match-ups and the quality of the games. Ratings are going to rise for a game that goes to overtime and decline for a game that ends 40-0, regardless of which quarterbacks are playing.

The NFL’s position as the most watched league – by a mile – all but guarantees that even if the most popular teams falter or a series of nationally televised blowouts were to occur and ratings were to fall off, broadcast rights fees will grow in the upcoming round of negotiations – which is why Pilson hesitates to compare ratings on a week-to-week or even a year-to-year basis. The former network executive says that “in terms of the value delivered, the NFL is an overwhelmingly dominant television property. Networks and sponsors all understand that there are no alterative options. There is no other league in the U.S. that can deliver the audience size and attractive demographics that the NFL can.” For perspective, the NFL pulled down 67.1 ratings points in week 1 (excluding NFL Network). The second ranked television property generated less than 20 ratings points.

NFL ratings are up +5% across the board through 2 weeks. Pilson believes that the increased media attention on off-season events (think: combine, draft, training camps) has positively impacted early-season fan engagement. The league’s renewed focus on “Sunday and Monday night matchups and its ability to move games between networks on Sunday afternoons, which has allowed networks to clear much larger coverage for key games,” have also helped to boost ratings. For reference purposes, in 2017, the NFL and NBC did not swap out a single SNF broadcast and margin of victory was 14+ points in 10 of the 18 games.

Fan Marino: Luck’s retirement just prior to the start of the season lowered expectations in Indianapolis, Newton’s injury has dampened spirits in New Orleans and Darnold’s diagnosis has let the air out of Jets fans’ sails, but the excitement level remains high in New Orleans, Jacksonville and with the New York Giants as Teddy Bridgewater, Gardner Minshew and Daniel Jones are next in line. On a national level, the performance of those clubs moving forward is relatively inconsequential; none are top 5 draws.

The same can’t be said about Pittsburgh. While Steeler’s fans are hopeful Mason Rudolph is the heir-apparent to Roethlisberger, should he struggle it could impact league ratings. Pilson said “Pittsburgh is the one team that is both important to the NFL and could experience a decline in national attention if they start losing.

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WWE Partners with Endeavor Audio, Embraces Audio as a Medium


Back in late August, Endeavor Audio and World Wrestling Entertainment (WWE) announced a partnership that will result in the launch of the WWE Podcast Network. The superstar-focused series will be the wrestling promotion’s first foray into audio programming, though a pair of WWE stars – The Bella Twins – maintain their own pre-existing relationship with audio-first entertainment studio. It won’t be the first time the two companies have worked together. Endeavor Streaming now powers the back-end of the WWE Network platform.

Howie Long-Short: Endeavor Audio creates, produces, develops, markets, monetizes and distributes podcasts, predominantly within the entertainment genre. Sports is a category the company wants to pursue, so partnering with the leader in “sports-entertainment” seems logical. As for WWE, they’re simply the latest sports-centric content producer to embrace digital audio as a medium – following ESPN, The Tennis Channel and The Ringer. While Vince McMahon’s promotion likely could have ventured into the space alone, the company lacks the audio expertise needed to create a truly successful podcast network.

Endeavor sees podcasting “as a way to drive new audiences, to increase revenues and to develop I.P.;” it also happens to be cheaper and faster to produce a podcast than it is to churn out video content. Endeavor audio head of marketing Lisa LaCour cited ‘The Bellas‘ as an example of a podcast that could be monetized beyond “the spots and dots of audio. The girls have a very large rabid fan base, so putting the show on tour, developing merchandise and exploring television and film opportunities are all ways to potentially monetize the I.P.

Podcasting ad revenues are currently just a small fraction of what brands spend on television spots. That’s because “[podcast] listener numbers are not yet comparable to the television viewing audience” and advertiser interest to date has been limited to direct response businesses (like: Casper and ZipRecruiter). LaCour says, “a good podcast might do 500,000 downloads; the standard number [for a successful podcast] is low, it’s probably closer to 150,000 downloads.” Recent interest from “brand marketers” may be a sign that podcasting revenues will soon begin to close the gap.

Analytics – or a lack thereof – is another headwind in the face of the podcasting business. Beyond downloads, there’s currently little insight that can be gained and conveyed to advertisers. Once the consumer downloads the podcast to their phone, there’s no way to tell if the audio was consumed. Apple’s podcast analytics do show how much of each episode was played across all Apple devices.

If you’re looking for some of the advantages that podcasting has over television, start with what LaCour deems “a very engaged consumer. When television goes to commercial, viewers go to the bathroom. Podcast listeners remain tuned in to what is going on.” Podcasting also gives advertisers the ability to reach a younger demographic with +/- 50% of millennials and Gen-Zs now listening to on-demand audio content.

Speaking of Endeavor, according an SEC filing, the company will raise up to $712 million at a valuation between $7.9 billion and $8.3 billion. More to come on the Endeavor IPO later this week.

Fan Marino: WWE podcasts are going to be news and history centric, but LaCour believes there is also an opportunity for the medium to provide WWE fans with “world extension. When the television show ends, we can finish the world in audio. Because we’re working with the people driving the storylines, we hope to be able to push those boundaries.

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Early Entrants: Vol. XIX – Fanatics Expresses Interest in StubHub, May Be Too Late

Editor Note: ‘Early Entrants’ is a series of sports business ‘rumblings’ before the news breaks.


Fanatics Expresses Interest in StubHub, May Be Too Late

Vivid Seats, KKR and have all been reported to be sniffing around a potential StubHub acquisition, but one industry insider tells JohnWallStreet that it appears as if Fanatics “just threw their hat into the ring”, too. Michael Rubin’s e-commerce giant presumably sees an opportunity to leverage the wealth of consumer data that the secondary ticketing marketplace controls. Fanatics’ bid is said to be backed by Silver Lake Partners, who is motivated to “keep [StubHub] away from [competitor] KKR.” Fanatics may have missed the boat, though. Our source believes Vivid Seats is “close to a deal.


NFL Ad Pricing Up in 2019 – Just Not to Level Touted During Upfront

NFL ad pricing has rebounded this season – just not to the level touted during 2019-2020 upfront. AdAge reported that “the average unit cost of a 30-second in-game spot was up between 5 percent and 10 percent compared to the year-ago bazaar”, but the director of media at one prominent buy-side agency suggests the real number is between “three percent and five percent.” He explained that the “networks are bullish during upfronts, but as negotiations go on [brands] get to where they need to be.

Reason for the increase? Brands have realized there’s simply no place else to capture an audience of 25 million people. The influx of non-traditional advertisers buying primetime in-game spots (think: Facebook, Amazon, Netflix, Hulu) and a tempered political climate (as it relates to player protests) have also helped to change the narrative just one year after the networks experienced steep declines.

NFL Network.png

Expect NFLN to Retain Exclusive Live Rights

In week 1, Thursday Night Football on NBC averaged over 22 million viewers. In week 2, NFL Network (NFLN) had the exclusive broadcast rights to TNF and viewership declined -70% to an average of 6.6 million fans. The NFL’s media strategy is predicated on reach and the league’s cable channel is in just 41 million homes (Nielsen counted 119.9 million  for the ’18-’19 season), so it’s worth wondering how NFL Network fits into the upcoming round of media rights negotiations.

EVP of media Brian Rolapp says NFLN will continue to play a prominent role come ’23 and expects that the network will retain exclusive live broadcast rights. “The NFL Network is very important to [the NFL] for a lot of reasons. We still believe the NFL fan is somewhat underserved and NFL Network helps [us to] fill [that] need. NFL Network and the RedZone channel are great properties, but also all of our digital content is produced out of that infrastructure and [the network is] really valuable to us in [terms of] how we engage our fans. The [exclusive] games are an important part of [the NFLN content strategy], so I don’t really see that changing.” Thursday night’s Tennessee – Jacksonville game (9.19) will again be exclusive to NFLN.


MLB Moves to New CMS, NHL May Not Be Far Behind

Major League Baseball has announced that Deltatre’s Content Management System, which powers 25 of the largest sports leagues in the world (including the NFL), is now hosting their +/- 300 digital destinations; MLB had an in-house tool, but the CMS went over to Disney as part of the BAMTech sale in 2017. The decision to settle on Deltatre came after a global search and is not surprising with WWE, PGA TOUR having recently made similar moves. It’s the ability to customize and develop on top of a platform that reached 750 million unique visitors in ’18, that makes ‘Forge’ particularly attractive to MLB.

The NHL is the last of the major leagues (save still running on BAMTech with the Disney entity focused on building out its own well-publicized streaming services. Insiders tell JohnWallStreet that the league will likely make a move when their current rights deal expires in 2021-22 and speculation already exists that the company will look to follow MLB’s lead.

NLL Looking to Raise Profile Through Digital Storytelling    

The National Lacrosse League made headlines in late August when it named NHL executive Jessica Berman as the league’s deputy commissioner. This week the NLL will take another positive step forward when it hosts a business summit for its players. The event, which will take place in Philadelphia on Wednesday (the day after the 2019 NLL Entry Draft), is designed to educate players on best business practices and social media guidelines. The hope is that the digital-first league can continue to raise its profile with captivating storytelling and the support of a media partner (Turner) that has committed to creating more print and video (see: highlights) content around the NLL.

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Real-Time Personalized Virtual Training Fills Hole in Youth Sports Coaching Pipeline

Super Soccer Stars

Super Soccer Stars has announced a partnership with the digital mentoring and coaching platform Famer. Together they will bring real-time personalized virtual training to youth sports for the first time. Super Soccer Stars CEO Adam Geisler says that mobile curriculums – designed to supplement live classes – fill a need in the “coaching pipeline” and will help young athletes to reach their full potential. Geisler acknowledges you can never replicate the “touch, feel and impact of a coach physically being there and developing that camaraderie with a child, [but if] kids have the tools to practice skills and drills on their own or with a parent there will be a compounding effect on long-term participation rates.” It’s worth mentioning that while high school sports participation declined for the first time in 30 years this past academic year, the National Federation of State High School Associations reported that both boys and girls soccer added participants; participation in the sport is up +9% since ’12.

Howie Long-Short: Super Soccer Stars is geared toward young children. While the program goes up to age 12, “the sweet spot is ages 1-7”; there are 100,000 kids in that age group participating in classes nationwide. Because of how young the participants are it’s worth wondering if it’s reasonable to expect virtual lessons to resonate. Famer CEO Rich Abend says that conceptually it’s no different than the technological advancements occurring in education. “Everything is now connected between the teacher and parent, so that mom and dad are clear as to what the child is working on and what they can do to help advance those skills – [virtual training] is meant to be an extension of the classroom. Technology helps to close the communication loop.

The meteoric growth in ‘screen time’ is among the factors contributing to the decline in youth sports participation. Geisler says, “if you can’t beat em, train em; if kids today are going to be consuming media through digital devices, then let’s provide them with media [that can be used in a productive manner].

Supplementing practice with virtual training will enhance an athlete’s skill-set, but Abend says, “when you’re talking about early education it’s really about [working on] executive functioning – teaching kids how to prepare better.” The goal of the digital curriculum is to get kids to take 30 minutes “of the time they’re wasting on devices each day and to use it to make themselves accountable to the organization.

Coaches have been building training regimens for athletes for decades. What makes this partnership innovative is that the video component will “utilize coaches that the parents trust and the kids follow.” Geisler says, “there’s a difference between content and content where the viewer feels a connection.” Peloton has proven that who is teaching the class matters.

Fan Marino: A flurry of deals has had Super Soccer Stars in the news frequently of late. In addition to their partnership with Famer, the nationwide soccer organization announced it will serve as the “Official One-to-Six-Year-Old Youth Soccer Program of the Philadelphia Union” and open its first interactive retail store at the Oxford Valley Mall on 9.20. Parents will be able to drop off kids ages 1-7, giving their tykes a place to “get moving and active” while they shop. The company has plans to expand the concept nationwide.

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Julio Jones’ Contract Extension Not The ‘Tipping Point’ For Guaranteed Deals That Some Believe


Julio Jones signed a three-year fully-guaranteed contract extension with the Falcons that will make him the highest paid wide receiver in football (and the first to earn more than $20 million/season). The $66 million deal, which includes $64 million at signing, will keep the star pass catcher in Atlanta through the ’23 season; he’ll earn $21 million over the next two years before the new pact takes effect.

Fully guaranteed contracts are uncommon by National Football League standards and no non-quarterback has ever received a greater percentage of their money up-front than Jones will (97%), leading some to speculate “this is the first legitimate step to [NFL players receiving] NBA [like] contracts.” ESPN’s Adam Schefter wrote that one league executive told him “Julio might actually be the tipping point for the NFL to follow the NBA [in terms of guaranteeing contracts].” To be clear, guaranteed contracts are not collectively bargained – guarantees are awarded during individual player contract negotiations. There’s nothing in the NBA CBA that entitles players to a guaranteed contract.

Howie Long-Short: Former Packers GM Andrew Brandt disagrees with Schefter’s source. He says that while Jones’ deal may establish a new normal for the elite player, the plug and play nature of the NFL game means that most players lack the leverage necessary to demand ‘guarantee language’ in their contracts. “If [an NFL player is] going to make noise with a contract holdout, he better be special – or he’s going to be replaced. Perhaps Jones’ deal sets a template for other top ten players in the league [but not for the majority].” Case in point is Melvin Gordon. The Chargers RB made the Pro Bowl last season (he also made it in ’16), is currently holding out for a new contract and “the team has basically told him to do what he wants, they’re moving on.” Los Angeles didn’t miss him in Week 1. The RB duo that replaced Gordon (Austin Ekeler and Justin Jackson) combined for 115 yards and a TD.

In addition to being an elite talent, Jones had the leverage in negotiations; the club had vowed to extend his deal after staving him off with a $2.9 million salary bump in 2018. While theoretically the Falcons could have reneged on the promise, Jones reported to camp on time and is considered a model teammate (i.e. he’s not Antonio Brown). Failing to reward a well-respected team captain would have cost the front office – ownership tandem the trust of the players.

There are certainly some who believe “the greasy wheel gets the oil”, but Brandt who spent four years as a certified NFL agent before crossing the street says, “turning the team into an adversary will never work long-term [for a player]; [acting out] may get a reaction and result in some immediate money, but [non-compliant behavior] is going to have a lasting effect [on the relationship].” ‘The Monday Morning Quarterback’ columnist believes that doing things the right way – as Jones has – is the most effective way for a player “hoping, requesting, demanding” a new contract to receive one.

Fan Marino: Speaking of Brown, he’ll make his New England debut this weekend, but Brandt isn’t expecting the troubled wide receiver to impact the Patriots offense the way Randy Moss (another WR who forced his way out of Oakland) did back in ’07. Aside from his belief that “the best predictor of future performance is past performance” (i.e. Brown will quickly wear out his welcome in N.E.), he simply doesn’t see the former Steeler as the all-time great talent Moss was.

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Amazon’s Investment in YES Network Indication MLB Plans to Reassign Local DTC Streaming Rights


Yankee Global Enterprises, along with strategic partners Sinclair Broadcast Group and Amazon, has closed on the 80% of YES Network not already owned by the club (bought from The Walt Disney Company). The group, which also counts RedBird Capital, Blackstone and Mubadala Capital as investors, bought the country’s most valuable regional sports network at a $3.47 billion valuation. It has been reported that Sinclair will work with YES team management to manage traditional and virtual distribution relationships. The press release issued by Yankee Global Enterprises (dated 8.29.19) did not address how Amazon fits into the fold, but it’s believed the company invested in the RSN with the belief that it would be receiving the rights to stream Yankees games; as it currently stands MLB controls each teams’ local digital rights.

Howie Long-Short: The Yankees involvement in the deal indicates that the organization is bullish on content monetization and that it sees value in establishing a more direct relationship with its fan base (think: ability to sell tickets, merchandise). The iconic franchise reclaimed controlling interest in YES Network at a valuation $500 million less than Fox invested at 2014, while hand selecting strategic partners to close the transaction; partners that will assume most of the financial risk as the club grows non-sharable revenues. It’s hard to argue that the team isn’t among the deal’s winners.

The deal also puts Sinclair in a position of strength. One media industry insider explained that the company “has a pretty good handle on retrans, they now control all of these valuable RSN rights [which provide leverage in carriage negotiations] and they’re looking to take advantage of opportunities that sports betting has created; particularly in-play betting.” The volume of discreet in-game bet-able opportunities in baseball is tremendous relative to most other sports and remember, New Jersey (which is generating sports betting revenues comparable to Nevada) is part of the Yankees home broadcast territory. That doesn’t mean the company intends on serving as a gaming operator. It’s far more likely Sinclair partners with a 3rd party (think: Fox and BetStars NJ) to avoid concerns relating to the games’ integrity.

As for Amazon, it’s difficult to imagine that they would have participated in this deal “without a wink and a nod” that MLB was going to reassign local direct-to-consumer standalone broadcast rights to the clubs. Our source wondered, “why else would they be doing it?” The e-commerce giant certainly isn’t looking to operate a media business – it uses content to sell products. Yankees President Randy Levine hinted that change is coming saying, “you should just stay tuned because I think the [MLB] commissioner will be speaking about that in the near future.”

Fan Marino: While on the topic of OTT, it’s the pressure on the paid television ecosystem from digital/mobile platforms that has driven content and distribution consolidation across the legacy media business. While the vast majority of consumption still occurs inside of the traditional cable bundle, substantial viewership now occurs outside of it as well. The challenge that OTT service providers face is that the monetization of sports content in digital only platforms remains substantially behind the level of consumption and it is going to take some time for that to catch up. The insider we spoke to said to “look for the next set of NHL, PGA, NFL and P5 college broadcast agreements (those coming up within the next 5 years) to address this dynamic by moving certain rights to non-traditional platforms.” We were also told to “expect those deals to reflect the enormous value of key live sports rights in the rapidly changing distribution landscape” – promising news for teams and leagues.

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McAfee Show a ‘Marketing Play’ for DAZN


The Pat McAfee Show – hosted by the former Indianapolis Colts punter turned podcaster – will debut on DAZN later this morning (10a EST). At face value, news of content syndication lacks sizzle, but when viewed through a marketing lens (and when one considers DAZN’s current place in the domestic OTT marketplace) it warrants further attention. The insurgent streaming service is using the daily program – and its nationwide distribution – as a PR play, estimating it would cost upwards of $30 million in traditional advertising to gain comparable awareness; any subscribers that come as a result of the show will be considered a bonus.  

Howie Long-Short: Venturing into the daily studio show space seems like an unconventional move for a company that to date has focused on gobbling up live sports rights across nine countries, but when you consider the lack of U.S. rights currently available and the exposure the McAfee show will provide – both in terms of listeners and headlines – it makes sense.

Remember, DAZN is at a distinct disadvantage when compared to its domestic competitors. While ESPN+, BR Live and NBC Gold all benefit from the reach and amplification of associated linear channels (think: promotion of UFC PPV during College GameDay), DAZN has no choice but to spend endless resources promoting its marquee events (think: Canelo, Joshua and GGG fights). McAfee – who is broadcast in more than 40 markets and boasts of 1.6 million loyal followers across social – won’t ever capture an audience the size of GameDay, but he will serve as a much more effective (and fiscally responsible) promotional vehicle to tout the streaming service’s wares. The show is expected to drive 5x the value of a traditional advertising spend for DAZN.

The addition of the McAfee show solves another challenge for the upstart streaming service. As it currently stands, DAZN has a series of tent pole events but little in the way of regular content. As a result, the company enters the sports conversation for a week or two and then disappears for several months at a time. McAfee gives subscribers a reason to log-in to the service daily which should help to keep the programming the company does have top-of-mind.

DAZN is syndicating the Westwood One radio broadcast, so the company is adding valuable content without having to break the bank. The OTT service is sharing in the costs of the program, but a source familiar with the terms of the partnership said that “radio is paying very high percentage [of that money].” Unfortunately, the strategy is not particularly replicable; there’s only a handful of singular talents – not already tied to ESPN or Fox – with the reach and audience to create the widespread awareness sought.

For those not familiar with McAfee, it’s likely because he’s become more recognizable in his post-NFL career than he was in uniform. A good player (selected to the ’14 and ’16 Pro Bowls), McAfee unexpectedly retired prior to the ’17 season to pursue a broadcasting career. A quick stop at Barstool and routine appearances at WWE and on ESPN – along with his knack for generating headlines – have helped to quickly raise his profile as a broadcaster. His podcast is currently listed as Spotify’s #5 ranked sports and entertainment podcast.

Fan Marino: While not exactly an apple to apples comparison, NASCAR’s plan to fund a Netflix sitcom (set in a garage at the race track) – starring Kevin James – is similar to DAZN’s unique strategy; using cut through talent to drive awareness of a platform (or in their case a sport).

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Soaring Team Valuations Have NFL, NBA Looking to Expand Prospective Investor Pools


Bloomberg published a pair of stories this week indicating that with team valuations soaring, U.S. pro sports leagues have become concerned about the dearth of prospective investors wealthy enough to buy in. Scott Soshnick reported on Tuesday that the National Basketball Association was considering the formation of “a new capital vehicle that could purchase passive, minority interests across multiple NBA teams”, before writing on Thursday that the National Football League “sought input on possible changes [to bylaws that would make it easier for a billionaire to acquire principal ownership interest in a team] from a quartet of firms that have in various capacities participated in its franchise sales; Allen & Co., Inner Circle Sports, PJT Partners and Proskauer Rose LLP.” Last off-season, the league revoked a rule that had previously precluded the cross-ownership of NBA, MLB or NHL teams in markets home to an NFL club.

Howie Long-Short: The NFL is considering revamping its guidelines to ensure team valuations continue to rise. While the last few clubs to have sold have been “bottom quartile franchises” (see: Buffalo, Carolina) – which explains how the Nets managed to command a higher valuation than the Panthers – a source familiar with the details of recent team sales suggested that if one of the league’s marquee franchises were to hit the open market it would sell for upwards of “$5 billion and how many people can write the check necessary to buy that team?” Raising the debt limits (currently $350 million), reducing the amount of equity one needs to buy in (currently 30%) and sweetening inducements for limited partners are all ways for the league to grow the prospective investor pool.

Speaking of the Panthers sale, Soshnick noted that when the team was on the market back in ‘18, billionaires Ben Navarro and Alan Kestenbaum were both unsuccessful in their bids to acquire the franchise, but it remains worth wondering why just a handful of investors pursued the club. Our source attributed the tempered interest in the Panthers franchise to the Carolina market and the team’s existing stadium situation, which required a lot of work.

Some have suggested that while the list of Americans with the capital to buy a pro sports team with a $5 billion valuation is relatively short, on global basis there are no shortage of uber-wealthy individuals. While true, there’s certainly doubt as to how motivated someone with little interest in American football would be to buy an NFL team. Pro sports ownership remains a bit of a passion play.

As for the NBA, skepticism remains about its plans to develop an investment vehicle for the purpose of acquiring minority shares of individual teams. On the surface, the premise of providing team owners with more liquidity makes sense, but there would seem to be an inherent conflict of interest; if the league pays a premium for a limited stake in a franchise, it becomes less attractive as an investment and if the league buys in at a bargain rate, they’re failing to serve the L.P. The plan is to flush out the vehicles’ structure and terms at the league’s owners meeting on 9.20.

Speculation exists that the NBA is creating this ownership investment pool out of necessity – that there simply aren’t enough people willing to pay hundreds of millions of dollars for equity interest with no control. Our source says that’s not the case – that there’s no shortage of people who want to own a piece of a team, but if it were it’s unclear how the league’s involvement changes that dynamic.

It’s possible that the league believes institutional money will fill the limited partnership opportunities in its clubs and keep valuations rising. What’s less apparent is “why an institutional investor would want common equity in a team – they’re not going to experience double digit growth forever. Earning 7% on illiquid common stock is a tough hurdle for P.E. to get over.” Of course, the league doesn’t need to create a new investment vehicle to take public money; both MSG and Comcast currently have stakes in teams.

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NFL Sees Flag Football as Way to Widen Top of the Funnel, Working to Add Sport to ‘20 Olympics

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Andrew Luck’s sudden retirement from the National Football League (just months after Rob Gronkowski announced he was hanging them up) sparked a round of hot takes surrounding the future of the game (see: USA Today’s story entitled ‘The Andrew Luck effect: More NFL players are going to retire young’). A new report from the National Federation of State High School Associations (on sports participation) indicating that nearly 71% of the 43,375 athletes that stopped competing between 2017 and 2018 were football players, has only served to fan the flames.

Despite the negative trends, NFL COO Maryann Turcke is confident that “the future [of the game] is friendly” and that “there’s going to [continue to] be a lot of people who want to play professional football.” To ensure that remains the case she’s actively working to grow flag football participation. The idea is that the barrier for entry is much lower for flag than it is for tackle (because no equipment is needed) and that playing will “help people to understand and love the game” – some of whom who will inevitably go on to play professionally.

Howie Long-Short: There’s no doubt that NFL players have become more conscious of the risks that the game poses, four times as many players under the age of 30 retired in ’16 as they did in ’11. But that still only represents +/- 20 guys. The fact remains that most players don’t play long enough to go out on their own terms and the list of those that would be willing to pass up millions of dollars to walk away early is even shorter. There’s no reason to believe the NFL has an existential crisis on its hands.

Promoting flag football to widen the top of the prospective player pool funnel is a wise strategy and one with little downside. While most kids aren’t destined to be professional football players, the data shows that “there’s a way higher probability of a fan becoming an avid fan if [he/she] participates in the game” and as Turcke reminds “avid fans are valuable” – they are the ones who buy tickets, jerseys etc.

Turcke’s goal is to see flag football recognized as an Olympic sport in time for the 2020 Tokyo Games. She believes that “winning medals at the Olympic Games is a huge source of national pride” and that “these countries with monstrous populations would figure out a way to mount a team” if there were a reason to start playing. There is a group within the league office currently working to make it happen.

Of course, bringing football to the world stage is not solely a charitable endeavor for the league. Turcke says that “making flag football a global sport will generate fandom for [the NFL] around the world” and help the league to drive “revenue growth in the global markets” – revenue growth that will help the league reach its goal of doing $25 billion/year by ’27.

Fan Marino: Joe Tsai’s recent purchase of the Brooklyn Nets came at a $2.35 valuation. By comparison, the Carolina Panthers sold for $2.275 last year. Those with $2.5 billion burning a hole in their pocket may be wondering whether an NBA or NFL franchise is the better long-term investment. Revenue projections aside (FYI: NFL did $15 billion last season, NBA did $7.4 billion), Turcke suggests that having “more equitable revenue distribution” (remember, NBA teams negotiate their local broadcast deals) and the ability to sell “hope” on an annual basis (see: competitive balance) provides NFL team owners with stability not found in other sports.

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