Sports-Centric Streaming Service Raises $75 million From TV Programmers

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Fubo TV has announced it has closed on a $75 million Series D round, increasing the total amount that the company has raised to $150 million; including a $55 million Series C round in June ’17. The sports-centric digital TV service will use the newly raised capital to expand its engineering and product teams (plans to double staff, open 2nd office by end of ’18), increase its marketing budget and acquire additional content rights. Launched in 2015, the live TV streaming platform has found a niche targeting sports fans (offering 30,000 sporting events/year); surpassing 100,000 subscribers in September 2017. While impressive, the company still lags far behind Sling TV (2.2 million) and DirecTV Now (1.2 million) in terms of market share.

Howie Long-Short: Existing shareholders (and TV programmers) 21st Century Fox (FOXA), Sky (SKYAY) and Scripps Networks Interactive (DISCA) all exercised their pro-rata rights, participating in the latest round; while AMC Networks (AMCX) invested in the company for the first time. While it appears to be an ill fit on the surface, Fubo TV isn’t the only web TV provider that TV programmers have invested in. The Walt Disney Co., pending final approval of its 21st Century Fox acquisition, controls 60% of Hulu; Comcast owns 30% and Time Warner owns 10%. It’s also worth pointing out that A&E, Discovery Communications, AMC and Viacom are invested in Philo.

Fubo TV’s business model is predicated on both recurring monthly subscription fees and ad sales. Despite having just launched “server side ad insertion” in January, ad sales represent a “low single-digit percentage” of total revenue. The company is expecting an overall revenue run rate of $100 million within 12 months.

Fan Marino: Fubo TV’s $45/mo. package, marketed as “a real sports package, for the real sports fan”, contains 85 channels; a collection of local TV networks (think: ABC, CBS, FOX), national cable networks (think: FS1, NFL Network), RSNs (think: MSG, YES, NESN) and difficult to find conference networks (think: Big 10 Network, Pac-12 Network). The bundle includes more sports channels than any other competitor, but lacks the most valuable (to a sports fan) national cable network; ESPN. Is ESPN (and ESPN2) worth the additional +/- $55/mo. required to retain your cable bundle? Probably not, but I’m not signing up for an OTT service without it.

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Discovery Communications to Launch “Netflix for Sports” For ’18 Winter Games

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Discovery Communications (DISCA) controls the exclusive rights to broadcast the 2018 Winter Olympics (+ the ’20, ’22 and ’24 Games in Paris) across Europe (excluding Russia) and will use the Pyeongchang Games to introduce a new interactive streaming platform that has been described as Europe’s “Netflix for sports”. Eurosport Player will offer fans of the Olympics the ability to watch “every minute, every athlete and every sport, live and on-demand”; enabling the company to aggregate a wide variety of viewing data (across all platforms, both live and catch-up), as it works towards the launch of a DTC subscription service for “superfans” of niche sports. DISCA will air the ’18 Games on linear television, across the continent (50 countries), on its Eurosport (think ESPN) channel.

Howie Long-Short: In 2015, DISCA paid $1.6 billion for the next 4 Olympic Games (including $180 million for the ’18 Games), but company CFO Gunnar Wiedenfels says the games won’t impact full-year profits; lucrative content licensing agreements (i.e. BBC, Amazon in select countries) have already helped the company recoup much of its commitment. Of course, DISCA is on the hook for just a fraction of the $7.65 billion NBC agreed to pay for U.S. TV and online rights through ’32.

Fan Marino: Alibaba (BABA) has launched its first “major branding effort” with the Olympic games (part of a 10-year partnership), a 3-ad story-telling campaign meant to showcase the company globally. While one ad focuses on the company’s values and history championing small businesses, the other 2 convey true Olympic tales; one of a rower who stopped in the middle of a race to let ducks pass and another of a Kenyan Ice Hockey team that had previously never experienced ice. Get your tissue boxes ready.

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Facebook Hires Eurosport CEO to Negotiate Sports Streaming Rights Deals, No Interest in TNF

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Facebook (FB) has hired Eurosport Chief Executive Peter Hutton to lead its multi-billion dollar global sports rights initiative. The move is yet another strong indicator (they bid $600 million for rights to Indian cricket, losing to Star India) that the social networking service sees live sports as a key part of its streaming growth strategy. The hiring appears timely as the deadline to submit bids for the rights to stream the EPL in Europe is Feb 9. Hutton isn’t expected to begin his new role until after the completion of the Winter Olympics though, making Facebook appear to be an unlikely destination for the Premier League now.

Howie Long-Short: Discovery Communications (DISCA) owns Eurosport, the home to the next 4 Olympic Games (through ’24) in most European markets. DISCA paid just $1.44 billion for European rights to the games, across all platforms, which is a fraction of the $7.65 billion NBC is paying for television and online rights to the games through ’32. The company reported Q3 earnings in early November; revenue was up 6% YOY (to $1.65 billion) led by its international portfolio, but net earnings remained flat as U.S. subscriptions continued to decline. CEO David Zaslav said at the time, that the company was looking forward to leveraging the Scripps Networks Interactive portfolio upon the closing of the $14.6 billion acquisition (to occur in early ’18). The company will report Q4 and full-year 2017 financials on February 27th.

Fan Marino: Facebook has decided against bidding on the NFL’s Thursday night package. Noteworthy, as the company has bid on the package in past years and the league’s Sunday (through ’22) and Monday night (through ’21) packages are tied up for the next several years. As for TNF television rights, Fox and Disney (would put games on ABC) are both likely to bid; while CBS & NBC, who shared the rights this year, are looking to pay less (paid $450 million in ’17).

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EUROSPORT TO LAUNCH SNAP CHANNEL FOR ’18 OLYMPIC GAMES

Eurosport, the Discovery Communications (DISCA) owned sports network, has signed a strategic advertising and content partnership with SNAP Inc. (SNAP) for the ’18 South Korean Winter Olympics. Announcement of the agreement marks the first-time SNAP has publicly committed to a European, multi-language Olympics deal; though the company is experienced putting out content for the Olympics, having partnered with NBC (in the U.S.) for the ’16 Games (will again in ’18). The partnership will bring Snapchat users across Europe professionally curated (i.e. Our Stories, Publisher Stories) mobile video content; including behind-the-scenes action from Olympic events and user-generated video from the athletes and influencers.

Howie Long-Short: DISCA paid $1.44 billion for European rights to the games, across all platforms, through ’24; just a fraction of the $7.65 billion NBC (CMCSA) is paying for television and online rights to the games through ’32. Partnering with SNAP gives DISCA an opportunity to sell potential advertisers on a different demographic; one that is younger and more digitally minded. It also brings the games to viewers who may not otherwise watch on linear television; with 25% of U.K. smartphone users now using Snapchat daily. Eurosport should turn a healthy profit on the ’18 Winter Games.

Fan Marino: Softball, karate, skateboarding, sport climbing and baseball are sports that will be debuting at/returning to the Olympics in 2020. While one can certainly debate the merits of sport climbing; it’s talk of poker, foosball and pole dancing coming to the Olympic games, that have me all worked up. Can we all agree that “sports” using a casino, bar or strip club as a primary venue, are not worthy of competing in the Olympic Games?

Discovery’s Eurosport Pacts With Snapchat for 2018 Winter Olympics

APP ENABLES USERS TO MAKE FREE WAGERS ON SPORTS GAMES IN REAL TIME

Television programmers, operators and sports leagues have reportedly expressed interest in working with WinView; seeing the company as a potential new revenue stream in a changing sports media landscape that includes second screen viewing. The free ad-supported mobile application syncs with the live TV broadcasts and enables fans to make “prop” bets on sporting events; with the most successful players winning small cash prizes. The company plans to add an entry-fee option that will give users the opportunity to win larger payouts and intends on integrating with smart TVs so its service to run alongside game broadcasts.

Howie Long-Short: WinView owns a significant amount of intellectual property, securing 41 patents on its second screen live sports prediction platform. The company, which boasts of 130,000 users, raised a $12 million Series B round in May. Both Graham Holdings (GHC) and Discovery Communications (DISCA) participated in that round. The financing is being used to add sports to the platform (currently MLB, NBA & NFL are offered) and to expand beyond American sports through collaboration with DISCA’s Eurosport network.

Fan Marino: A prop bet is a novelty bet on an occurrence (or non-occurrence) within a sporting event (i.e. player X will run for more/less than 100 yards). Not confident in your ability to pick a winner? Tony Romo, who has been calling out plays before they occur, is doing color on the Bears/Packers game tonight. That’s your chance to win some money. Just follow his lead.

WinView pitches new proposition