Playoff Fantasy Football Contest Paying Out in Bitcoin

FanDuel

The NFL Playoffs start tomorrow (Tennessee at Kansas City, 4:35p EST) and FanDuel is giving daily fantasy football players the chance to win Bitcoins (BTC); the first time a sports-tech company has awarded cryptocurrency as a consumer promotion. FanDuel will host a free single-entry contest (aka the Bitcoin Bowl) that will award the winner a single Bitcoin; and a second multi-entry contest, that costs $3 to enter and offers a multi-tiered payout (winner receives 2 Bitcoins). The deadline to enter and select a lineup is kickoff of the Tennessee/Kansas City game.

Howie Long-Short: FanDuel has raised capital from the following public companies (or subsidiaries of public companies) KKR & Co. (KKR), Google Capital (GOOGL), Time Warner/Turner Sports (TWX), NBC Sports Ventures (CMCSA) and Comcast Ventures (CMCSA); so, there are no shortage of ways to play the fantasy sports outfit. As for the popular cryptocurrency, the WSJ reported that Peter Thiel’s venture capital fund bet $15 million to $20 million on Bitcoin; upon release of that report, BTC prices shot up 14% to $15,447. The digital coins were trading at +/- $15,150 on the evening of January 4, 2018.

Fan Marino: Facebook (FB) has entered the DFS space, launching TheScore Fantasy on Facebook Instant Games; accessible only through their Messenger application. The mobile game currently enables you to play NFL, NBA, NHL, MLB & Premier League contests, but only against your friends and there is no monetary incentive to win. It’s not a game for the hardcore DFS player, but the simplistic interface and small roster sizes (just 5 players) could make it attractive to the next generation of football fans; those not yet of age (18) to play DFS.

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Facebook Watch Adds WWE and NLL, Social Interactive Components Worth Watching

Facebook Watch (FB) has announced partnerships with both the WWE and National League Lacrosse (NLL), giving the burgeoning video platform additional sports content. Beginning on January 16th (10p EST), a new weekly in-ring wrestling series entitled “Mixed Match Challenge” will debut; wrestlers from both Raw and SmackDown rosters will compete in a single elimination mixed tag-team tournament that spans 12 weeks. Watch will also begin airing a new weekly show from NLL productions entitled ReLax that offers fans insight and analysis on the weekend’s games. The show, airing exclusively on the Watch platform Mondays at 6p EST, will give fans a chance to interact and ask questions during the first hour of the show.

Howie Long-Short: The WWE experienced their “all-time best quarter” in Q3 ‘17, as the company grew revenue 14% to $186.4 million, set a company quarterly record for adjusted OIBDA ($40.4 million) and saw net income rise to $21.8 million (from $11.1 million YOY). The company will release its Q4 ’17 (and full year ’17) earnings report on Feb. 8th. 2018 projects to be a banner year for the WWE, with the company anticipating setting another record for revenue generation and targeting adjusted OIBDA of at least $115 million; which would also set a record.

Fan Marino: Mixed Match Challenge episodes will run 20 minutes in length and be optimized for mobile consumption. The social interaction elements included will be worth watching, as fans will have the opportunity to select match-ups and match stipulations. Teams will be announced beginning tomorrow night. You can find a list of participants, here.

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Amazon Takes on The Sports World; 25 Companies That Will Be Affected

Amazon has been credited with killing everything from book stores to electronics retailers since its 1994 launch. Now, with a market cap +/- $570 billion and $16 billion in annual operating cash flow, the company is taking aim at the sports world. In our final newsletter of 2017, we look at 4 of AMZN’s recent initiatives and the 25 companies most likely to be affected in 2018.

Amazon Expands Brand Registry Program, Now Includes Nike

In June, Nike (NKE) agreed to join Amazon’s brand registry program; seeking to curb counterfeiting and non-licensed selling within the e-commerce marketplace. The partnership also supports the athletic apparel and sneaker brand’s initiative to boost revenue through a shift to digital and DTC sales, relying less on struggling retailers. Competitors Adidas (ADDYY) and Under Armour (UAA) already have direct-sales deals in place with AMZN.

Names to Watch: FINL, DKS, FL, HIBB, BGFV; LON: SPD, LON: JD

Howie Long-Short: Athletic apparel and sneaker retailers count on NKE (70% of FL business comes from NKE); but NKE launched its “Consumer Direct Offense” strategy in fiscal Q1 ’18, increasing e-commerce business 19% YOY. Mediocre retailers beware, the company is maintaining just a few dozen wholesale relationships as it looks to increase its e-commerce business (from 15% of revenue to 30% over the next 5 years).

Amazon Entering Private-Label Sportswear Business

In October, Amazon (AMZN) announced it was entering the private-label sportswear business and working with the same Taiwanese suppliers, Makalot Industrial Co. (TPE: 1477) and Eclat Textile Co. (TPE: 1476), that some of the world’s biggest athletic brands use. Elcat’s involvement is particularly noteworthy as the company manufactures high-performance sportswear for Nike (NKE), Lululemon Athletica (LULU) and Under Armour (UAA).

Names to Watch: NKE, UAA, ADDYY, LULU; TPE: 1476, TPE: 1477

Howie Long-ShortAMZN wants to be in the private-label clothing business because it pushes retailers to sell inventory on the e-commerce site. Should a retailer choose not to, AMZN will simply produce the item themselves and compete directly against the brand.

The Pursuit of Exclusive Broadcast Rights

In September, the company hired Brian Potter to lead its sports video business. In November, Jim DeLorenzo, head of sports, Amazon Video, said the company was pleased with viewership numbers, engagement and the reliability/quality of the cloud-based streaming service during its season long experiment streaming Thursday Night Football (10 games, $50 million); though it is too early to say if the company will pursue future exclusive sports broadcasting rights. The company has since done deals that will deliver Prime subscribers 37 ATP tour events (previously owned by SKYAY), the AVP Beach Volleyball tour each of the next 3 summers and docu-series on Michigan Football.

Names to Watch: CBS, DIS, FOXA, CMCSA, FB, GOOGL, NFLX, AAPL, SKYAY

Howie Long-Short: NFL Senior VP, Digital Media, Vishal Shah recently said “we continue to think some of the best days are ahead [for traditional TV partners] despite some shifts in the media landscape.” That doesn’t sound like linear television will be excluded in the next round of negotiations, but the NFL is encouraging interested media companies to bid on both television and streaming rights for the leagues TNF package; leaving the door ajar for the tech giants to receive exclusivity for the first time.

Twitch: The Future of Game Broadcasts?

Twitch, the live-streaming platform most often associated with video games, has agreed to stream up to 6 live G-League (Gatorade sponsored NBA minor league) games. Broadcasts will include interactive overlays (viewers can click a team name/logo for player, team, game and season stats), a loyalty program to reward viewer engagement during broadcasts (i.e. custom emotes for group chat) and the ability for users to provide their own live commentary (over the game feed) via the Twitch co-streaming feature.

Names to Watch: CBS, DIS, FOXA, CMCSA, TWX, RCI, MSGN

Fan Marino: NBA Commissioner Adam Silver has gone on record stating he’d like to see changes in the way sports broadcasts are presented; pointing out the lack of live stats and chatter surrounding the broadcast, that gamers have become accustomed to. I’m not ready to give up Mike Breen, Marv Albert and Ian Eagle for Towelliee; but it’s worth watching to see if anyone else is.

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Sports Media Start-Up Using Niche Sports (and Facebook) to Build Audience

FANTOM, a Facebook (FB) based platform, is delivering live sports (20+ games including JUCO playoffs) and sports personalities to a social audience. Having partnered with 30+ rights holders and 20+ personalities, the sports media startup generates authentic (see: passion) content that brings “fans closer to the field” while their signature Catapult product (for brands and rights holders, FANTOM is free for viewers) ties custom content to a transaction (i.e. ROI). In their first year, the company broadcast from the NBA Finals, World Series and partnered with 10 sports leagues; including Ultimate Frisbee (AUDL) and Indoor Football League.

Howie Long-Short: FANTOM is taking a wise approach, embracing FB as opposed to trying to drive traffic away from it. The company understands that the “one show for one million people model is dead”. Facebook has 2 billion visitors/day and advanced targeting technology that gives niche sports a chance to find their audience; FANTOM is the place where fans can find those sports. The company is privately held and there are no ways to play it, for now.

Fan Marino: FANTOM isn’t bringing fans “closer to the field”, it’s bringing fans on the field; as San Antonio Spurs fans got to experience last night with ESPN Radio talent and FANTOM co-founder Ari Tempkin live from AT&T Center. You aren’t going to find NFL and NBA games on FANTOM, but if you have a taste (no pun intended) for Major League Eating it might be for you.

Joe Favorito (@joefav) recently did a Q&A with FANTOM co-founder Zack Rosenberg. You can check it out here.

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Facebook Hiring “Head of Sports Programming” To Bid on Rights

Facebook has announced it is looking to hire a “top level executive” to oversee sports rights acquisitions. The “head of sports programming”, will have a budget of “a few billion dollars” to buy broadcast rights on a global basis. The social network does not intend to produce sports broadcasts; it would like to stream events, partnering with leagues or broadcasters that have linear television distribution in place.

Howie Long-Short: Back in May, Zuckerberg said “the long-term goal is actually not to be paying for specific content like that” and that he would prefer to pursue a “revenue share model”; but those comments were made under the presumption FB would be producing the broadcasts. If the plan is simply to stream events and FB isn’t pursuing exclusivity, the up-front cash outlay becomes significantly more palpable (AMZN paid $5 million per NFL game, CBS/NBC (CMCSA) paid $45 million/game for TNF). EPL rights expire in ’18, with MLB and the NFL coming up shortly thereafter (’21 and ’22, respectively). Look for linear distribution rights to increase (again) with total broadcast rights skyrocketing, as the tech giants bid on streaming rights. I do not expect FAANG to receive any exclusivity in the next round of negotiations.

Fan Marino: Whistle Sports recently announced that it was creating its first exclusive show for FB Watch, the “Next Trickshot Superstar”; a 10-episode series, hosted by Chad Johnson that features trickshot artists competing for $25,000. As a video content creator, with a following of 375 million followers/subscribers (and growing 2.5 million/week), Whistle Sports has raised $80.5 million to date; TGNA, NBC Sports and CBS Sports all participated in the company’s $29 million Series C round, announced in January 2017.

Facebook reportedly seeking an executive whose job will be negotiating sports rights

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Study Reveals Why Digital Growth is Crucial to the Future of European Soccer

KPMG published an interesting study on what would happen to English Premier League clubs, if the money generated from league broadcast rights (the most lucrative in Europe) were to be subtracted from the teams’ bottom lines; a viable concern when you consider that broadcast revenues can be worth up to 45% of an EPL team’s gross revenue. KPMG bases the study on the premise that revenue from broadcast rights is precarious; that consumer behaviors change and there are no guarantees that humans will watch television, stream video etc. in the future. What KPMG found, was that the most fiscally sound clubs were the ones that maintained the largest social presences. Those clubs are most successful in closing commercial partnerships and selling out their stadiums; factors that would help to reduce the impact, that a total loss of broadcast revenue would bring.

Howie Long-Short: The EPL’s overseas rights expire in 2019 and are expected increase in value during the next round of negotiations; so, while a fascinating study, not one that should cause immediate concern. Overseas rights for the current 3-year period, total roughly $3 billion Euros (domestic rights for the same period equal $5.1 billion Euros). There seems to be a consensus that while domestic rights may be close to capping out in value, interest from international players like Facebook (FB), Google (GOOGL) and Amazon (AMZN) is likely to send overseas rights soaring. Those rights fees will be split evenly amongst EPL teams, as the “Big 6” conceded their effort to secure a greater percentage of overseas TV money.

Fan Marino: La Liga clubs FC Barcelona (206 million) and Real Madrid (204 million) maintain the largest social followings in Europe, and it isn’t close. 3 EPL clubs; Manchester United (MANU) (111 million), Chelsea FC (76 million) and Arsenal (63 million) round out the Top 5. Bayern Munich (61 million), Juventus (JVTSF) (45 million) and Paris St. Germain (45 million) have the largest digital followings within their respective leagues and all place within Europe’s Top 10.

Data shows why digital growth is more important for football clubs than precarious broadcast revenues

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SeatGeek and Facebook Announce Partnership

SeatGeek has announced that Facebook (FB) will become an official ticketing distribution partner; enabling leagues and teams to sell tickets to games, via SeatGeek, on the social network. Best known as a resale aggregator, SeatGeek will provide FB with a 3rd party API (SeatGeek Open) that will integrate directly with their ticketing interface; giving fans the ability to purchase tickets without ever leaving FB. MLS’ Sporting Kansas City is the first professional team to take advantage of the partnership, adding a “get tickets” icon for each game on their Facebook Events page.

Howie Long-Short: Facebook has similar distribution deals in place with Ticketmaster (LYV) and Eventbrite, so while this partnership isn’t exactly revolutionary, it is significant for SeatGeek. It means that SeatGeek can now sell event organizers on Facebook’s reach and their ability to “put tickets where fans are already spending their time online”. Sporting KC is the first, but they won’t be the last to take advantage of this sensible partnership.

Fan Marino: The average price of tickets to Game 6 of the World Series dropped 21% (to $1,044) after the Dodgers lost Sunday night’s Game 5, putting the team on the brink of elimination. Fans could get in to the building last night for as little as $394. That won’t be the case for tonight’s Game 7. The lowest priced ticket available on SeatGeek, as of midnight, was $1,215.

SeatGeek signs up Facebook as primary ticketing distributor

Editor Note: The summary for this story was written by our friends at The Water Coolest. Check out TheWaterCoolest.com for the latest market news and professional advice.

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