Comcast Preparing to Divest 22 Fox RSNs, To Submit 2nd All-Cash Bid by July 27th  

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Comcast (CMCSA) is reportedly lining up buyers for 21st Century Fox’s (FOXA) regional sports networks to alleviate anti-trust concerns, as it prepares a bid that would be favorable to The Walt Disney Company’s (DIS) $71 billion dollar offer (cash and stock) for FOXA film & TV assets. CMCSA is open to divesting all 22 RSNs, but believes just 8 overlap with the existing Comcast sports footprint. Reuters is reporting that the company has held conversations with publicly-traded buyout firms Apollo Global Management (APO) and Blackstone Group (BX). Just 2 weeks ago, the U.S. Department of Justice approved DIS’ bid after reaching a settlement with the mouse house to rid itself of the regional sports networks.

Howie Long-Short: It’s been assumed that the RSNs will fetch $20 billion+ (Comcast’s first bid placed a $24 billion valuation on them), so selling them off will help Comcast coffers as the company prepares to submit a 2nd all-cash bid (no dollar amounts given). FOXA shareholders are scheduled to vote on the DIS bid on July 27th, Comcast will submit their bid prior.

Rumors of P.E. firms taking down the RSNs is relatively surprising as most of the discussions surrounding potential landing spots having focused on telecom and media companies. Everyone from Amazon (AMZN) and YouTube (GOOGL) to AT&T (T) and Dish Network (DISH) has been mentioned.

I asked T.K. Gore, sports media consultant, advisor and professor, for his thoughts on who lands the RSNs?

T.K.: The RSN world is a tricky business and experience — coupled with deep pockets — matters. Look for groups like Liberty Media and AT&T to get involved given their experiences.

MSG is among the companies that has been associated with having interest in the regional networks. James Dolan has said that he’d be interested in acquiring the assets “at the right price”, noting they’re highly profitable now but a “slow, declining revenue stream.”

Fan Marino: The 22 RSNs collectively control exclusive broadcast rights to 44 NFL, NBA, MLB & NHL franchises, including teams in Detroit, Southern California, Dallas, Cleveland and Miami. The YES Network is the most valuable of the lot, worth an estimated $4 billion; the Yankees are likely to re-acquire that network.

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Disney Agrees to Divest 22 Regional Sports Networks

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The Department of Justice has approved The Walt Disney Company’s (DIS) $71.3 billion ($38/share, increased bid from $52.4 billion, includes +/- 50% in cash) acquisition of 21st Century Fox (FOXA) television and film assets, after reaching a settlement with DIS that calls for the company to divest FOXA’s 22 regional sports networks. U.S. A.G. (Anti-Trust Division) Makan Delrahim, concerned DIS’ control of the RSNs would create a potential monopoly, said that the settlement ensures “sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution.” The settlement, which requires DIS to divest the RSNs within 90 days of closing, requires approval from a judge; but that is a formality. DISintends on pursuing a 3rd party buyer for the RSNs, as opposed to submitting a new offer; FOXA is not thought to be interested in retaining the assets.

Howie Long-Short: DOJ approval gives DIS an advantage over Comcast (CMCSA) in the competition for the Murdoch empire, just two weeks after Comcast submitted an all-cash bid worth $65 billion ($35/share). While the approval alone won’t win DIS the assets (Comcast is expected to submit a counter offer), it won’t hurt considering it’s been thought the FOXA board has long preferred to sell the assets to DIS in the belief the Comcast bid is bound to face anti-trust concerns. That’s debatable. CMCSA would also divest the RSNs and FOXA’s stake in Hulu is really the only asset that might draw anti-trust concerns; and that doesn’t appear to be a major hurdle. It’s been thought FOXA assets could draw upwards of $43/share.

It should be noted that if the DIS deal goes through as is, FOXA shareholders would own 19% of the joint company. FOXA shares are up +11% (to $49.79) since DIS submitted their latest offer on June 20thDIS hasn’t fared as well, the stock is down -1.25% (to $104.77) over that same period.

Fan Marino: While the Yankees are likely to repurchase YES Network, that still leaves 21 RSNs and a lot of regional sports broadcast rights for taking. Sure, it’s possible that FAANG will pursue exclusive broadcast rights, I would bet on an established linear player making a play to acquire the 5th most important channel on a subscriber’s cable package. CBS (think: CBS Sports HQ), Turner Sports (T, B/R Live) and Discovery Communications (DISCA, which has made a significant push for rights in Europe) are all possible landing spots.

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Yankees Seek to Re-Acquire YES Network, Hold Buyback Option

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The New York Yankees have expressed interested in re-acquiring the 80% of the YES Network controlled by 21st Century Fox (FOXA), if FOXA is to proceed with the sale of its film and TV assets (including 22 RSNs). The team reportedly holds a buyback option in the event the network (the most valued/viewed RSN among FOXA lot) goes up for sale. Last week, we wrote that Comcast (CMCSA) had submitted a $65 billion all-cash offer for 21st Century Fox’s (FOXA) assets that trumped the $52.4 billion all-stock offer that The Walt Disney Company (DIS) placed in December; DIS is expected to submit a counter bid. Yankee Global Enterprises, the holding company that owns the baseball club and NYCFC, controls the remaining 20% of YES.

Howie Long-ShortFOXA initially purchased a 49% stake in the YES Network for $1.862 billion in 2012. In 2014, the company acquired an additional 31% at roughly the same $3.8 billion valuation. The 1st place Yankees are drawing the network’s highest ratings since ‘12 and YES also controls the rights to broadcast both Brooklyn Nets and NYCFC games, so it’s certainly not unreasonable to expect FOXA to sell the asset at a valuation north of $4 billion. This means the team would be re-acquiring the network at a loss. That may not be of concern for the franchise though, as they likely value the ability to own/distribute their content with the recent proliferation of direct to consumer platforms/services.

According to Moody’s Investor Service, if Comcast were to acquire FOXA assets the combined entity would carry +/- $170 billion in pro-forma debt; more than every company in the world not named AT&T/Time Warner (which just completed a $85 billion merger).

Fan Marino: Back in April, Forbes released its rankings of the most valuable Major League Baseball teams. The Yankees topped the list with a $4 billion valuation, making them the 2nd most valuable team in all of sports; behind only the Dallas Cowboys ($4.2 billion). The team generated $619 million in revenue last year, 96.5% more than the league average ($315 million). Forbes has the NYY valued at +/- 6.5x revenue, slightly higher than what the Houston Rockets sold for in 2017; for comparison purposes, the Carolina Panthers recently sold for less than 6x revenue. I continue to maintain that David Tepper got a good deal.

The Yankees have signed the PBP voice of the YES Network (for Yankee games) to a 3-year extension (network option for 2 more years) worth more than $1 million/year. The deal makes Michael Kay the highest paid local broadcaster in MLB. Kay takes home a higher annual salary than some of the team’s biggest stars; Luis Severino, Gary Sanchez and Aaron Judge will make $604K, $620K and $622K respectively this season.

Fun Fact: The value of the NYY has compounded 15% annually since George Steinbrenner group bought the team for $8.8 million in 1973.

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Comcast Submits $65 Billion All-Cash Offer for Fox Film/TV Assets, Including 22 RSNs

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Just 24 hours after the announcement that a federal judge had approved AT&T’s $85 billion takeover of Time Warner, it was reported that Comcast (CMCSA) submitted a $65 billion all-cash bid for 21st Century Fox’s (FOXA) film and TV assets (including 22 RSNs); trumping the $52.4 billion all-stock offer that The Walt Disney Company (DIS) had placed in December. Comcast’s interest largely surrounds FOXA’s 30% stake in Hulu, as the acquisition would give CMCSA controlling interest in the OTT service (already own 30%). NBCUniversal CEO Steve Burke stated, “we would be very very interested in growing that business.” In fact, it’s possible that if Comcast’s offer were to be selected, the company wouldn’t even end up controlling the RSNs; language within their bid indicated the company would match any regulatory commitments made by DIS; including to “divest… any of the RSNs.”

Howie Long-Short: FOXA shares rose +7.7% (to $43.66) on Wednesday following report of the Comcast bid. DIS closed up +2% (to $106.30), while CMCSA shares remained flat ($32.32) as investors expressed skepticism about the company increasing their debt level to 4x earnings; necessary to finance both the Fox deal and their purchase of Sky PLC (SKYAY).

It’s certainly worth noting that Comcast’s bid places a +/- $24 billion valuation on the 22 RSNs.

SKYAY is another name to watch. If DIS counters CMCSA’s bid, it’s possible that Fox will up its bid (currently $14.38/share) for the European pay-tv provider. Fox currently owns 39% of the company and was planning to acquire the remaining 61%, with the intention of flipping the asset as part of the proposed $52.4 billion transaction. Should a bidding war arise, John Janedis, an analyst at Jefferies LLC said it wouldn’t be unreasonable for the winning bid to reach $80 billion. For reference purposes, Comcast bid $16.72/share for 61% of Sky. The domestic cable/internet provider wants the asset (and Star – India) to expand its business overseas.

Fan Marino: AT&T’s (T) acquisition of Time Warner (TWX) includes several sports-related properties including Turner Sports, Bleacher Report and the newly launched Bleacher Report Live service; an untethered (i.e. no subscription needed) premium sports streaming service. T also takes controlling interest in the country’s largest pay television distributor, DirectTV. TWX shares rose 2% on Wednesday to $97.95, while T shares declined 6.2% (to $32.22) on the news.

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BT Sport, “New Online Player” Land EPL Broadcast Rights at Discount Rates

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Less than four months after Sky (SKYAY) and BT Sport (BT) agreed to spend a combined $6.194 billion on the English Premier League’s five most valuable domestic broadcast rights packages, BT Sport and a “new online player” have agreed to purchase the rights to the last two available packages (F & G) at a discount rate. EPL clubs have decided to sell the rights bundles at a cut-rate price after each failed to meet their reserve prices in February’s auction and concluding that Executive Chairman Richard Scudamore overestimated the interest from non-traditional broadcasters (think: FAANG). Financial terms of the deals have not been disclosed, but the new broadcaster’s identity will be revealed at a club meeting on Thursday; speculation surrounds both Facebook and Amazon.

Howie Long-Short: Despite the decline in the value of domestic rights, Scudamore is confident overall media rights will increase “by a decent amount” during the next cycle (’19-’20 through ’21- ‘22). Any lost domestic revenue will be offset by skyrocketing international rights. NBC (in U.S. market), ESPN (Brazil) and SuperSport (Sub-Saharan Africa) have all committed to paying a significant increase for the rights to broadcast EPL games.

As we know, NBC is owned by Comcast (CMCSA), while ESPN is property of The Walt Disney Company (DIS). SuperSport is a subsidiary of the South African based internet and media group, NASPERS. The company trades on the Johannesburg Stock Exchange under the symbol NPN or OTC with the symbol NPSNY. Shares rose 71.34% in 2017 on the back of Tencent (TCEHY), as NASPERS owns 31.2% of the Chinese internet giant. NPSNY hasn’t performed as well in 2018 though; the stock is down -7% YTD, despite being +8% (to $52.38) since last Thursday’s close.

Fan Marino: Back in February, the EPL announced BT won package A ($409.3 million/season, which includes 32 games played on Saturdays at 12:30p GMT), while SKYAY took home packages B, C, D & E ($1.655 billion/season). Packages F & G each carry 20 live midweek and bank holiday matches per season. The addition of 20 more games will give BT 52 live broadcasts/season, up from 42 under the expiring agreement.

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College Rugby Sevens Make ESPN Debut, Pac-12 Goes for 6th Straight Title

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Niche college sports, particularly non-varsity club sports, have historically fallen out of the purview of athletics sports rights holders and into a gray area of content replete with official logos and representation, but lacking mainstream coverage. That trend will end this weekend as the fastest growing sport in the country makes its way to ESPN linear and ESPN digital platforms for the first time; College Rugby Sevens. Army, Navy, Air Force and Notre Dame will headline The Penn Mutual CRC field, as 24 teams compete for a National Championship. 30,000 people are expected to attend the two-day event at Talen Energy Stadium (Philadelphia).

Howie Long-Short: Disney (DIS) reported fiscal Q2 ’18 profits increased 23% YoY (to $2.94 billion), with Black Panther ($1.3 billion in box office sales) and theme parks (+13% to $4.88 billion) spearheading revenue growth (+9% to $14.5 billion). Operating income for the company’s cable networks businesses (including ESPN) declined 4% YoY to $1.73 billion. Brook Barnes at the NYT attributed the decline to “higher costs – notably spending on unprofitable streaming services like ESPN+ and hulu – and subscriber declines at ESPN.” ESPN would not disclose the number of subscribers who have signed up for the ESPN+ service, but CEO Bob Iger said “a number of people have signed up for the trial and our conversion rates have been good so far”; adding “basically, I give it a so far, so good.”

21st Century Fox Shareholders (FOXA) have scheduled a date (July 10) to vote on the proposed $52.4 billion asset sale (including regional sports networks) to The Walt Disney Corporation (DIS). Comcast, which said it was preparing a cash offer (as opposed to DIS’ all-stock offer) for the FOXA film studios/cable networks/entertainment businesses, has +/- 6 weeks remaining to submit the bid. Should DIS lose out on the RSNs that are expected to boost the ESPN+ offering, Bob Iger won’t panic; he says the platform is “not reliant at all on the assets”. That’s true right now, as all the local MLB, NBA and NHL broadcast rights are tied up under contract; but, as those deals begin to expire, DIS will want to add the 5,500 games they currently carry to ESPN+. As I’ve previously explained, when a fan in St. Louis can get all the Cardinals and Blues games for $4.99/mo., they’ll subscribe to ESPN+.

Fan Marino: The Pac-12 has dominated the collegiate rugby landscape over the last eight years. The conference has won six of the last eight CRC Championships, with California winning the last five years (Utah won in ’10). This year, Arizona and UCLA are among the tournament’s favorites. Bill Walton would like to remind you that it is, in fact, the “Conference of Champions”.

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League of Legends Experiences “Biggest Setback Ever”, $100 Million Investment in Fortnite

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Riot games has signed a non-exclusive multi-year deal with ESPN to broadcast live League of Legends games on their OTT streaming service, ESPN+. esports reporter Travis Gafford called the development the game’s “biggest setback ever”, because the deal marks the official end of the 7-year $300 million agreement Riot Games signed with BAMTech in 2016. The North American League of Legends Championship Series Summer Split beginning on June 16, will be the first tournament to air on the streaming service; the Summer Finals and World Championships later this year, are also set to appear on ESPN+. It’s worth noting that the 2017 World Championship drew upwards of 80 million unique viewers for a single match.

Howie Long-Short: In a vacuum, there’s nothing wrong with the deal; it should be profitable and expose the game to a new audience. The deal with ESPN+ was the final nail in the coffin, but the BAMTech deal died when The Walt Disney Company (DIS) acquired a 75% of the company back in August ’17. Under the terms of the BAMTech deal, League of Legends would have had an exclusive platform to deliver content (think: Yankees and YES Network) – the 1st exclusive media rights deal in esports history – as opposed to simultaneously broadcasting streams on Twitch, YouTube and ESPN+, as they’ll do now. The deal with ESPN+ will certainly result in fewer dollars, but it’s the validation (appearance of game warranting its own broadcast platform) that the BAMTech deal brought, that they’ll miss the most.

I’m not sure I understand this deal from the ESPN perspective. While it’s logical to diversify the programming offered on ESPN+, they won’t be adding subscribers with non-exclusive content that can be watched elsewhere for free.

Riot Games is a fully-owned subsidiary of Tencent, the world’s biggest video game publisher and Asia’s 2nd most valuable publicly traded company. In addition to owning Riot Games, the company is the majority owner of Supercell (Clash of Clans and Clash Royale), they own +/- 50% of Epic Games (see Fan below) and +/- 25% of Activision Blizzard (ATVI, Call of Duty, World of Warcraft, Overwatch, and Candy Crush).

Shares of TCEHY are down 14.5% (to $50.95) since March 15th, shortly after the company reported rising expenses during its Q4 earnings report. On May 16th, the company reported Q1 ’18 earnings. Profits rose 61% YoY (to $3.6 billion) on revenue that grew 48% YoY (to $11.4 billion). Gaming revenue spurred the growth, with smartphone gaming alone bringing in $3.3 billion (+68% YoY) in revenue. Looking for a reason to believe TCEHY can continue increasing gaming revenue? They own the rights to PlayerUnknown Battlegrounds in China and have yet to begin monetizing it.

Fan Marino: Epic Games has invested $100 million to fund Fortnite tournament prize pools, with the competition set to debut later this year. At $100 million, the prize pool is more than 4x greater than the 2nd largest sum ever offered in a competitive gaming prize pool – $23 million for DotA 2’s 2017 esports tournament. Of course, $100 million is just 1/3 of a single month’s revenue for Fortnite – the game generated $296 million in April, up a staggering 134% since February.

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ESPN to Pay $1.5 Billion for UFC Broadcast Rights

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Just two weeks after ESPN agreed to purchase the rights to broadcast 15 UFC events annually for $750 million, the company acquired exclusive linear broadcast rights to the MMA promotion’s cable television package. The newly signed deal, worth $150 million annually, will give fans 27 additional fight cards each year (consisting of 10 new linear cards, 12 PPV prelims on linear, and five new OTT cards); meaning ESPN will pay a staggering $1.5 billion to carry 210 UFC events over the next five years. Earlier this week, ESPN President Jimmy Pitaro called the UFC an “ascendant property”, while touting its young and diverse fan base. It must be noted that despite the $300 million ESPN will pay UFC annually, UFC will retain the rights to its 12 annual PPV events (i.e. their best content). 

Howie Long-ShortWe told you that once the WWE SmackDown Live deal with FOX was completed, UFC’s linear broadcast offering would be the next set of sports rights to fall. What we didn’t project was ESPN (DIS) acquiring them after spending $150 million per year on digital rights for ESPN+ and hearing that Fox Sports had increased its bid to $175 million/year for the package (up from $165 million). UFC may have left some money on the table to do this deal. Experts projected the linear package to draw $200 million and several networks (i.e. Turner, NBC, Fox Sports) reportedly had interest.

$1.5 billion for UFC cards between fighters no one has ever heard of (yes, that’s a bit of hyperbole) does not sound like a great investment. The UFC lacks mainstream star power to begin with and naturally the promotion places its biggest stars on PPV cards (which they’ll retain); meaning the cards appearing on ESPN & ESPN+ won’t include Connor McGregor (or any other mega star) anytime soon. Did I mention Fox Sports’ ratings for UFC events declined double digits in 2017?

Need reasons to believe ESPN made a wise investment? UFC has the youngest fan base in sports (median age 40). Males aged 18 to 34 are particularly valuable to advertisers and at $150 million annually the package is still cheaper than what NBCUniversal and FOX will pay for RAW and SmackDown Live.

Fan Marino: I’m certainly not surprised that WWE content is valued more than UFC content, as WWE has a far better business model. WWE stars headline tentpole events (like WrestleMania) and more than 500 other shows each year, so fans get to see their favorite Superstars on a weekly basis. UFC’s biggest names might fight twice a year and are always one fight away from never headlining another event, either because they’ve lost their sense of invincibility (see: Rousey) or because they’ve made so much money that getting punched in the face for a living no longer makes sense (see: McGregor). UFC promotion can also be limited by the outcome of fights, as the best fighters aren’t always marketable (see: Stipe Miocic). You’ll never find WWE in that situation, as career arcs are decided before the Superstars get to the ring.

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Top Rank CEO Bob Arum Discuss ESPN+, PPV and Saturday Night’s WBA Title Fight

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On Saturday night, WBA World Champion Jorge “El Niño de Oro” Linares (44-3, 27 KOs) will defend his lightweight title against Vasiliy “Hi-Tech” Lomachenko (10-1, 8 KOs), headlining a night of fights at Madison Square Garden (and on ESPN and ESPN+). Bob Arum, the CEO of Top Rank, is amongst the most storied promoters in boxing history; having represented everyone from Muhammad Ali to Oscar De La Hoya and now Lomachenko. JWS caught up with Bob prior to the Thursday afternoon’s Linares/Lomachenko press conference and asked him about Top Rank’s deal with ESPN+, how he decides if a fight should be on PPV and what makes Lomachenko the “most technically proficient” fighter he’s ever had.    

JWS: The Walt Disney Company and UFC just signed a 5-year media rights deal worth $150 million annually, to bring 15 UFC events/year exclusively to ESPN+. Back in April, Top Rank announced a similar deal to bring 12 cards exclusively to ESPN’s OTT service. Does ESPN/ESPN+ value boxing the same way it values the UFC?

Bob: Somebody once asked me, why do you think horse trainers put blinkers on their horses? The answer was so that they don’t see what the other horses are doing. So, whatever deal ESPN made with UFC, I’m fine with; as long as we believe, which we do, that ESPN and Disney are treating us fairly. I don’t look to what the other guy is doing. 

JWS: Terence Crawford is going to fight Jeff Horn for the Welterweight Title on June 9th. That will be the biggest fight on ESPN+ to date. Are you concerned that a marquee fighter like Crawford won’t receive the requisite exposure fighting on a platform with less eyeballs?     

Bob: The arrangement with ESPN allows us to take a fighter like Crawford and have him fight 3 or 4 times per year, as opposed to the old plan when we were relying on HBO and he fought at best twice per year. So, yes, fewer people will watch him on ESPN+ than on ESPN linear, but he’s going to be on ESPN linear at least twice. By having this tremendous number of dates, we’re able to be flexible; and also, 2 fights (Barrera/Adames and Linares/Lomachenko) are going to be televised on Saturday’s show, everything else goes on ESPN+. So, now guys like Michael Conlan and Teofimo Lopez who are on the undercard, they know that people will be watching them.

JWS: High-profile fights on cable television have become commonplace. Is there a magic number of sales you need to be confident you’ll hit before you decide a show is headed to PPV?

Bob: A lot of it is done by the seat of our pants, but obviously if a show pencils out to do 100,000 homes we’re not going to put it on PPV. If we guess it’s going to do 250,000-300,000 homes, then it’s a question and we very well may go on PPV; and if 500,000-600,000+ it’s clear that you have to go on PPV. The problem in making the prognostication is that we’re not always right, the cable systems aren’t always right and the satellite providers aren’t (always correct). 

Howie Long-Short: Disney (DIS) reported fiscal Q2 ’18 profits increased 23% YoY (to $2.94 billion), with Black Panther ($1.3 billion in box office sales) and theme parks (+13% to $4.88 billion) spearheading revenue growth (+9% to $14.5 billion). Operating income for the company’s cable networks businesses (including ESPN) declined 4% YoY to $1.73 billion. The company did not provide an exact number of subscribers for their ESPN+ service, but CEO Bob Iger said that “a number of people have signed up for the trial and our conversion rates have been good so far”; adding “basically, I give it a so far, so good.”

Fan Marino: For those not familiar with Vasiliy “Hi-Tech” Lomachenko, make sure to tune to ESPN at 8p EST tomorrow night. He’s a two-time Olympic gold medalist, won titles at both featherweight and super featherweight in his first 11 professional bouts and has made his last 4 opponents quit before going the distance. Lomachenko was an accomplished amateur fighter, but relative unknown when Bob provided him with the opportunity to fight for a world title in his 2nd professional bout. I asked if that was a difficult fight to sell, considering his lack of mainstream name recognition? 

Bob: Accomplished fighter is not the right adjective to use. Lomachenko, as I viewed him, was the greatest fighter in the history of amateur boxing. So, it was relatively easy for me to fast track him for world titles as opposed to fooling around with preliminary fights. He didn’t need that type of a build-up.  

Fan: You’ve called Lomachenko the most “technically proficient” fighter you’ve ever had. Explain to the casual boxing fan, watching him for the first-time tomorrow night, what sets him apart?

Bob: Here’s the difference, Lomachenko is the best defensive fighter I’ve ever seen; but, there have been great defensive fighters before, like Floyd Mayweather. Floyd would use his defensive skills to make guys miss, throw enough punches to build up points and win a fight that way. This kid is different, when he is being defensive he is looking for an opening to destroy his opponent. In other words, the difference between Lomachenko and any other defensive fighter that I’ve seen is that he’s defensive so he can be more effective offensively and that’s the beauty of watching him fight. 

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Disney, UFC Sign Multi-Year Media Rights Deal

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The Walt Disney Company (DIS) and UFC have agreed on a multi-year media rights deal that will bring 15 live UFC events exclusively to ESPN+ (ESPN’s DTC streaming service), effective January 2019. The MMA fight cards will be branded as “UFC on ESPN+ Fight Night”, with each event featuring 12 bouts. In addition to the 15 fight cards, ESPN+ subscribers will have exclusive access to a new season of “Dana White’s Contender Series” (begins June ’19), a new all-access series produced by IMG Original Content and pre-fight/post-fight shows. UFC FIGHT PASS (UFC’s DTC streaming service) and UFC PPV events are not included in the subscription, though can be both purchased and viewed in-app.

Howie Long-Short: This partnership didn’t exactly come out of left field, we noted back in April that ESPN was considering in a joint bid with Fox Sports for UFC broadcast rights. It was rumored at the time that ESPN was willing to spend between $120 million – $180 million annually, to add +/- 15 exclusive UFC events to its burgeoning OTT platform. Ultimately, the 2 companies agreed on a deal worth $150 million annually over 5 years.

The deal would seem to make sense for both sides. Disney (DIS) adds valuable content to its growing ESPN+ library and will pull subscribers from a different pool than fans of stick and ball sports, while the UFC lands a lucrative deal for their streaming rights and finds a broadcast partner willing to promote their PPV events (see Fan below); an overlooked but valuable piece of the agreement.

It should be noted that the UFC is still looking to sell a linear broadcast package with 20+ events, their existing deal with FOX (worth an avg. of $165 million/year) expires in December. The new deal is expected to fetch at least $200 million annually.

Fan Marino: Buried within the press release, was the news that the first-ever rights and distribution agreement between DIS & UFC includes exclusive 30-minute specials previewing upcoming PPV events and re-airs of current PPV events (on ESPN’s linear and digital networks); seemingly indicating that fight fans would see more UFC coverage on cable television, but I’m not sure. Sure, ESPN’s talking heads will issue their share of UFC “hot takes” ahead of PPV events, but fans are likely to get less in-cage action assuming the 15 events heading to ESPN+ are the cards that previously aired on Fox or FS1.

Looking for free MMA action? Download the new ONE Championship app. The company just introduced a mobile application that will bring all their fights to consumers around the world for free, including events previously only available to U.S. fans on PPV (online).

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