ESPN has announced their upcoming direct-to-consumer subscription streaming service ESPN+ will debut on April 12th. Integrated into a “completely redesigned and reimagined ESPN App”, the $4.99/mo. OTT offering will include “hundreds” of MLB, NHL and MLS games, “thousands” of college sports events, Top Rank Boxing, PGA Tour Golf and Grand Slam Tennis; original content (scripted shows, films, studio shows) and an “unmatched library” of on-demand sports programming are also included. The service will be powered by BAMTech, a unit of Disney (DIS) Direct to Consumer and International. DIS acquired 75% of the MLB Advanced Media spinoff, for $2.58 billion.
Howie Long-Short: On Sunday, ESPN opened its new NYC home, a 21,000 SF facility called ESPN Seaport District Studios. The network’s new morning show “Get Up!” (hosted by Mike Greenberg, Michelle Beadle and Jalen Rose) debuted from Pier 17 on Monday morning at 7a EST. Among the site’s (at the foot of the Brooklyn Bridge) unique features is a 100,000 SF event deck (controlled by the Howard Hughes Corporation, HHC) to be used for concerts and an outdoor skating rink. The Seaport District Studios are just a small piece of the $5.96 billion (market cap) HHC conglomerate though, as the company develops and operates MPC’s (Master Planned Communities) and mixed-use properties across 14 states. FY17 was a successful one for HHC. The company increased land sales at MPCs for a 3rd consecutive year, reported its highest year of NOI (+13% to $157 million) from operating assets, placed 4 new properties into operation (from its development pipeline) and commenced on 5 others that will add $28.2 million in recurring NOI upon stabilization. Shares are up 11% (to $137.44) since we last wrote about the Seaport District Studio project in October.
Fan Marino: I fail to see who this service appeals to. Sports fans have favorite teams and watch their teams’ games, gamblers pay for services (think: NBA League Pass, NFL Season Ticket) that provide them with access to all the action and anyone willing to cut the cord (and drop ESPN), isn’t adding a package meant to be complimentary. That’s not to say there isn’t an end game here for ESPN, it’s just several years out. DIS is buying 22 21st Century Fox (FOXA) RSNs with the intention of adding 5,500 local broadcasts to ESPN+ (as existing the broadcast deals expire). When a fan in St. Louis can get all the Cardinals and Blues games for $4.99/mo., fans in St. Louis will subscribe to ESPN+.
Oh, and touting “thousands” of college sporting events is a bit misleading, as there won’t be any P5 football or basketball included. ESPN won’t be simulcasting its most watched content on the linear network to prevent the cannibalization of its cable subscription base.
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The Las Vegas Convention and Visitor’s Authority (LVCA) has signed a 20-year, $80 million contract to be the naming sponsor for the 51’s new ballpark. The deal has upset Las Vegas residents, as both the sponsoring organization and the amount agreed upon are atypical. A review of more than 250 professional sporting venues failed to turn up another government agency that sponsors a building. Furthermore, there are at least a dozen MLB teams that bring in less than $4 million/year from their stadium sponsorship deals.
Howie Long-Short: Of course Las Vegas residents are upset. This is a sham of a deal, executed while the city recovers. No other minor-league team has a naming rights deal worth more than $1 million. For $4 million/year, the LVCA could have had their name on nearly all 15 Pacific Coast League (PCL) parks. Heck, HHC bought into the team in 2013 at a $20 million valuation. This is a construction subsidy dressed as a naming rights deal and it’s a tremendous waste of tax payer dollars.
Fan Marino: As it currently stands, the 51s are without MLB affiliation for the 2019 season when the ballpark is scheduled to open. Their current affiliation with the New York Mets expires at the end of the ‘18 season and the NY franchise recently purchased the Syracuse Chiefs (another Triple A team); meaning they won’t be renewing. It is possible the new affiliate will not be announced until as late as September 2018. The Brewers and Nationals have been mentioned as possible replacements.
LVCVA’s $80 million ballpark deal to Las Vegas 51s is a major-league ripoff
The Howard Hughes Corporation (HHC) has announced plans for a new 10,000 seat ballpark in downtown Summerlin, NV, where the company is working on a massive master planned community (MPC) for 160,000 people. The new stadium, to be ready for the 2019 season, will house the Las Vegas 51s; a minor-league baseball team HHC acquired controlling interest in earlier this year. HHC also announced this week that ESPN has signed a multi-year, 19,000 SF lease for a NYC studio at South Street Seaport’s Pier 17; their $731 million waterfront redevelopment project.
Howie Long-Short: HHC owns the land the stadium will be built on, they have an $80 million stadium naming rights deal in place and replacing a 34-year-old park, with a state-of-the-art facility will certainly increase team revenues come 2019. So, I like this project. The 51s are just a small piece of the $5.16 billion (market cap) conglomerate though, as the company develops and operates MPC’s and mixed-use properties across 14 states.
Fan Marino: ESPN (DIS) has said the NYC facility will have 2 studios for television and 1 for radio, though they’ve yet to announce which shows will be broadcast from the pier. As for the network’s often-discussed SC6 show, Michael Smith will be hosting the show solo for the balance of Jamele Hill’s 2-week suspension for her 2nd violation of social media policy.
ESPN to debut glimmering NYC studios next spring
Howard Hughes Corp. to build Summerlin ballpark for 51s