USMNT Absence Benefiting Telemundo, WC Ad Inventory Nearing Sell Out

Telemundo

Telemundo, which controls U.S. Spanish-language broadcast rights to the 2018 FIFA World Cup, has announced Coca-Cola, Sprint and Volkswagen will be premier sponsors of their tournament coverage. Coca-Cola will be the presenting sponsor of the Telemundo Deportes Post-Game show and in-game match clock, Sprint has signed on as the official halftime sponsor for all 64 matches and Volkswagen will serve as the presenting sponsor of the network’s World Cup primetime show (7p EST). In total, 20 advertisers have signed on for Telemundo’s coverage of the quadrennial tournament; NBCUniversal is claiming network ad inventory is “approaching 75% sold out.”

Howie Long-Short: The absence of the USMNT from the 2018 World Cup has been a boon for Telemundo, as advertisers have chosen to forego spending with Fox Sports (own U.S. English-broadcast rights) in favor of the NBCUniversal subsidiary (note: VLKAY, VZ are not among them, they will be advertising on both networks).

While the U.S. team’s failure to qualify has helped Telemundo ad sales, it’s expected to hurt viewership. In ’14, matches featuring the USMNT on Univision (held U.S. Spanish-language rights) drew an audience 44% larger than other group stage matches. With no USMNT to build programming around, Fox has also increased their focus on the Mexican national team; coverage likely to pull viewers from Telemundo’s target audience, the 21 million bilingual viewers in U.S.

Telemundo is owned by NBCUniversal, a Comcast (CMCSA) company. NBCUniversal tabbed February it’s “best Feb ever” after generating $1.6 billion in incremental revenue from the Super Bowl and Olympics, so significant fiscal growth was expected when CMCSA reported Q1 earnings in late April. The company reported net income increased +21.2% YoY (to $3.1 billion), a figure that would have been higher had Universal Pictures not experienced a -16% YoY decline in revenue.

For those wondering, Telemundo is paying $600 million for Spanish-speaking broadcast rights to the 2018 & 2022 World Cups, while Fox pays $400 million for U.S. English-speaking rights to the same 2 tournaments.

Fan Marino: The U.S. isn’t the only high-profile country to have failed to qualify for this summer’s World Cup, as Italy (4x winner), The Netherlands (finished 3rd in ’14), Chile (No. 9 in world) and Cameroon (just 2nd missed WC since ’86) will all be watching from home as well.

Looking for a team to root for? Iceland is in the tournament for the 1st time and their Viking chant is among the best traditions in all of sports.

Interested in Sports Business? Sports Finance? Sign-up for our free daily email newsletter list, here!

FanDuel Confirms Plans to “Get into Sports Betting”, Verizon Flying Under Radar

FanDuel

FanDuel CEO Matt King confirmed in an interview with Fortune that should SCOTUS strike down PAPSA, the company would “get into sports betting.” The announcement comes just two weeks after the NBA said it would look to divest equity interest in the DFS operator and 2 months after news broke that the company was in “advanced talks” to partake a reverse merger. It was suspected at the time, that the company would use a capital infusion to position itself to capitalize on legalized sports betting. No updates have been released as it relates to negotiations.

Howie Long-Short: We told you on April 23rd, that the NBA divesting its interest in FanDuel was the latest sign of the company’s intention to pursue legalized sports betting. The NBA has been outspoken about its desire for an “integrity fee”; they can’t sell an increased role in regulation and serve as the book, with an interest in winners/losers.

While not too late (a decision may not occur until the end of June), FanDuel has some catching up to do. As we’ve noted over the last several months, rival DraftKings has been aggressively positioning itself (increased staff by 75%, hired Head of Sportsbook, seeking casino partners) for a similar pivot; and DRAFT, owned by Paddy Power Betfair (PDYPY), is also expected to chase a share of the U.S. sports gambling market. Those 3 new entrants will face strong competition from established gaming operators like William Hill (WIMHY), Caesars Entertainment (CZR), MGM Resorts International (MGM), Penn National (PENN), Boyd Gaming (BYD), etc.

Fan Marino: There’s another potential new entrant to the sports betting space, well positioned and flying quietly below the radar; Verizon Communications (VZ). The company owns Yahoo! (AABA) and its popular season-long fantasy sports business (they also have DFS, though less users than DraftKings and FanDuel) and like those companies (and Draft), could convert tens of millions of players into gamblers. VZ also owns both NFL and NBA streaming rights, giving them the ability to broadcast games and offer in-game betting within the same application; a significant advantage over the competition.

Interested in Sports Business? Sports Finance? Sign-up for our free daily email newsletter list, here!

Comcast Drops Big Ten Network from All But 9 “Home Markets”

Big10

Comcast Corporation (CMCSA) has dropped Big Ten Network from its cable offerings in all but 9 “home markets”, explaining several factors played into the decision; “ranging from the costs programmers charge us to carry their channels and the amount of viewership, to available alternatives.” Subscribers in Illinois (IU, ILL, NW) Indiana (IU, PUR), Maryland (UM), Michigan (UM, MSU) Minnesota (UM), New Jersey (RU), Ohio (OSU), Pennsylvania (PSU) and Wisconsin (UW) will continue to receive the conference network. Iowa (IU) & Nebraska (NU) are the only “home markets” excluded from the list, as Comcast does not provide services to residents of those states. CMCSA has stated there are no plans to cut the network from the remaining “home markets.”

Howie Long-Short: The timing of this decision is likely related to a recent report indicating the Pac 12 Network average subscriber fee declined 63% over the last 5 years (to $.11), while the Big Ten Network (B10) fee increased 30% over the same time (to $.48). Rising carriage fees are directly correlated to the “(rising) costs programmers charge us to carry their channel”; and with basketball season over and football season not starting for another 4 months, CMCSA sees the opportunity to lower the amount it pays the conference to carry the channel.

If in fact the decision is final, their loss would be a gain for Time Warner (TWX), DirecTV (T), DISH and Verizon (VZ); carriers that offer the network nationwide, as passionate Big Ten football fans will switch providers before missing a big game. For those interested in owning a piece of the Big Ten Network, you can invest in Fox Entertainment Group (FOXA); they control 51%, with the 14 member Universities owning the balance.

Fan Marino: College football programs utilize different accounting methods, with some schools allocating a larger percentage of their conference payouts to the sport (in FY16 it ranged between 45%-85% at Big 10 schools); making it tough to compare apples to apples. If you remove the conference payout ($16.1 million) from the ledger, the picture becomes clearer.

In 2016-2017, Michigan ($40.3 million), Ohio State ($24 million) and Penn State ($16.3 million) had the football programs within the conference, that generated the largest surplus (discounting the payout); while Purdue ($11.97 million), Minnesota ($13.4 million) and Indiana ($14.6 million) operated at the biggest losses. Of course, it’s not a coincidence that Michigan, OSU and PSU finished 1st, 3rd and 2nd, respectively; while Purdue, Minnesota and Indiana ended that season that season 10th, 5th and 11th out of 13 teams. The more a program wins, the more revenue it generates. Northwestern, a private institution, does not release its football program’s financials.

Interested in Sports Business? Sports Finance? Sign-up for our free daily email newsletter list, here!

Twitter, Amazon, YouTube and Verizon Bid for TNF Streaming Rights

thursday-night-football-logo-050620141

Twitter (TWTR), Amazon (AMZN), YouTube (GOOGL) and Verizon (VZ) are all interested in acquiring Thursday Night Football streaming rights; with the NFL reportedly seeking a multi-year deal, for the first time (since the package was introduced in ’16). Among the remaining companies, only YouTube has yet to broadcast a league game; though, CEO Susan Wojcicki has stated she would “love to stream the NFL” and her platform may be able to offer the league, the greatest potential for viewership (AMZN drew 370K for 1st ’17 game, TWTR 240K drew for 1st ’16 game, YouTube drew 1.5 million for a recent SpaceX launch). It’s unclear if its status as an existing league partner, with some TNF mobile streaming rights, will give VZ a leg-up in the competition.

Howie Long-Short: The NFL received a 47% YOY increase in the value of their newly signed TNF contract, worth $3.3 billion over 5 years; though, Fox will also get rights to broadcast the NFL draft and may receive another playoff game. If the league receives a comparable return on mobile rights (expect the percentage increase to be higher, they increased 400% from ’16 to ‘17), the new deal will be worth more than $72.5 million/year.

Fan Marino: Fox’s TNF deal touts the potential addition of a playoff game as a benefit, but the game they would likely get (Wild Card, early slot, Saturday) has been a loser for its existing rights holder (ESPN). The game has consistently drawn the lowest ratings of Wild Card Weekend since ESPN started carrying playoff games in ’15 and the network has yet to turn a profit on those broadcasts.

Interested in Sports? Sports Business? Sports Finance? Sign-up for our free daily email newsletter list, here!

Verizon Aims to Be the 1st Screen Consumers Go to Find Live Sports

Verizon

Verizon (VZ) and the NBA have announced a 2-year extension that will enable NBA “League Pass” subscribers to live-stream games on Yahoo (AABA) platforms and mobile devices. The new deal enables VZ to produce original NBA content (and distribute across Oath properties), gives VZ users (around the world) access to Yahoo’s NBA fantasy sports game and requires VZ to establish a technology fund that will experiment with new formats (i.e. augmented reality, virtual reality). The move comes just a month after VZ agreed to pay $2.25 billion (for 5 years) for non-exclusive rights to stream NFL games on Yahoo Sports, AOL and go90 (among Oath assets); following prior deals that give them rights to broadcast Liga MX and National Women’s Soccer League games across Yahoo platforms. VZ Chief Content Officer Brian Angiolet has said the company intends on being “the first screen consumers go to find live sports”.

Howie Long-Short: VZ acquired Yahoo last year with the intention of building its programming around sports. Why? “Sports is the best aggregator of an audience”; among the last television programs that viewers watch live. On the NBA side, this deal gives them access to a younger demographic (the mobile audience) and should help to drive engagement (if not viewership); VZ users spend 30 billion minutes on fantasy games/annually and theoretically would want to see how their roster performs. If DraftKings is making the pivot from DFS to sports betting, could other outlets with large fantasy player databases (see: Yahoo, ESPN) be far behind?

Fan Marino: “League Pass” offers NBA fans the ability to watch 1,100+ live out-of-market games for $99/season. You can try it out for free, as VZ is giving registered users 8 complimentary “League Pass” games; tremendous news for those of us outside of Houston and L.A. that don’t want to miss the next Clippers/Rockets game (Feb. 28). The one Monday night ended with several Rockets players (Paul, Ariza, Harden) storming the Clippers locker room in search of a fight with Blake Griffin and Austin Rivers; a welcomed change from the superstar kumbaya (or banana boat rides) that we’ve grown accustomed to in the age of super-teams.

To join our free daily email newsletter list, sign-up here!

Winter Olympic Sponsors Require Winning and Compelling Storyline

The Pyeongchang Games start on February 9th, but winter Olympians are finding corporate sponsorship opportunities difficult to come by; particularly for those that compete in smaller sports, that don’t have a U.S. following. Athletes that win and have a compelling story are the ones landing corporate sponsorship deals. Slopestyle skier Gus Kenworthy, who won silver in Sochi and is publicly gay, has signed deals with Toyota (TM), United (UAL), Visa (V), Procter & Gamble (PG) and Deloitte. His sexuality is worth noting because human rights groups say that sexual minorities’ rights are not always protected in South Korea; a country where having homosexual relations is punishable by up to 2 years in prison.

Howie Long-Short: Becoming an Olympian is an expensive endeavor. Richard Parsons estimates that it has cost more than $500,000 to get his children (Rachel and Michael, an ice dance team) to cusp of the ‘22 Olympics. It’s unlikely he’ll ever recoup the money. Gold medals are worth just $25,000 in the U.S. and even the USOC acknowledges that most athletes cannot earn enough from their sports to make a living. That’s not the case everywhere though, gold medals are worth $952,000 in Taiwan and $746,000 in Singapore.

Fan Marino: Frigid weather is likely to affect both athletes and fans at the Pyeongchang Games, with the average February temperatures (with wind chill) there in the single digits. The newly built 35,000-seat stadium that will host the opening and closing ceremonies (up to 5 hours long) doesn’t include a roof and it’s too late and expensive to build one now. For those attending, fear not; organizers have promised portable heaters in the isles, blankets and heating pads.

Medals are nice, but sometimes not enough for Olympic athletes seeking sponsors

To join our free daily email newsletter list, sign-up here!

NBCU to Stream Sunday Night Football to Mobile Phones, Broadcasts to Include Local Ads

NBCUniversal (CMCSA), which has been streaming Sunday Night Football to desktops, tablets and connected TVs since 2008, has acquired the rights to stream SNF to all mobile devices, including mobile phones for the first time. The deal also provides NBCU’s cable, satellite, traditional and virtual MVPD partners with authenticated streaming rights. The NBCU mobile stream will contain both national and local affiliate ads (for 1st time). SNF is primetime television’s #1 show; NBCU also owns the rights to the #2 rated show, TNF.

Howie Long-Short: NBCU had the ability to add rights to stream games to mobile phones after Verizon gave up exclusivity as part of its recent 5-year $2.5 billion deal with the NFL. In exchange for conceding exclusivity, the telecom giant picked up the rights to stream in-market and nationally-televised league games (and access to on-demand content) to any mobile device, Oath owned web property (i.e. Yahoo (AABA), Yahoo Sports, AOL, Go90) or connected TV nationwide regardless of carrier. Verizon won’t have the rights to sell national ads though, as NBCU maintains exclusive control over the inventory; now offering advertisers expanded reach through VZ (and NFL mobile) platforms.

Fan Marino: Speaking of football on NBC, there are rumors that the XFL (a WWE/NBC collaboration) could be making a return. The WWE didn’t exactly deny the rumors, saying Vince McMahon “has established and is personally funding a separate entity from WWE, Alpha Entertainment, to explore investment opportunities across the sports and entertainment landscapes, including professional football.” If the league does get a reboot, don’t expect NBC to be a part of it this time around; the network, hungry for football, didn’t own any NFL rights back in 2001.

Twitter Envisions Future Where Fans Might Pay A Dollar To See A Buzzer Beater

For the balance of today’s newsletter, sign-up here!

NFL, Verizon Strike $2.5 Billion Deal, In-Market Games Now Available on All Carriers 

The NFL has signed a 5-year deal with Verizon (VZ), valued at $500 million/year, that enables the telecom giant to stream in-market and nationally televised league games (and access to on-demand content) to any mobile device, Oath owned web property (i.e. Yahoo (AABA), Yahoo Sports, AOL, Go90) or connected TV nationwide; regardless of carrier, beginning in January. The new deal provides VZ with the ability to sell select in-game ad spots, but does not include the exclusivity it enjoys under the terms of the expiring contract (4 years, $250 million/year). DirecTV (T) owns the rights to stream out-of-market games through the 2022 season.

Howie Long-Short: Verizon acquired Yahoo! earlier this year for $4.5 billion, combining its media and technology assets with AOL’s (which it acquired for $4.4 billion in 2015) to form Oath; a company with 50+ brands (which also include the Huffington Post, TechCrunch and others) and a reach of over 200 million monthly unique users in the U.S. VZ sees the NFL as valuable content it can spread across Oath platforms (more valuable than the exclusivity), with Brian Angiolet, Global Chief Media and Content Officer calling football “the marquee sport” to drive an audience. He’s right and that by a mile. The NFL is averaging 15.1 million viewers/game this season; the ’17 NBA playoffs on ESPN/ABC (1st Round – Conference Finals) averaged just 4.26 million.

Fan Marino: Verizon customers have had the ability to stream NFL games on smartphones since 2010, but the remainder of the league’s fans have been blacked-out while on-the-go. Revoking Verizon’s exclusivity will result in broader availability and ultimately increased viewership for the league; but it’s the fans who win biggest with this deal. Fanatics will never again miss a minute of game action, while the casual cord-cutting fan can continue to follow the league and his/her home team.

Verizon to pay NFL $500 million a year to stream games

For the balance of today’s newsletter, sign-up here!

A Streaming Service for the Sports Fan

Sports fans that are considering cutting the cord may want to look at the channel lineup for FuboTV; a sports-centric, OTT, live TV streaming service that offers fans the “most sports for the least money”. Originally introduced as a skinny bundle for soccer fans, the service now carries a variety of sports on 37 (of 65) channels (both regional and national) including; FS1, FS2 and NBCSN. The $40/mo. niche bundle is looking to stand out in a crowded streaming TV market that includes; Hulu (TWX), YouTube TV (GOOGL), DirecTV Now (T), Playstation Vue (SNE) and Sling TV (DISH). Amazon (AMZN) and Verizon (VZ) will also be introducing streaming bundles soon.

Howie Long-Short: FuboTV has raised $75.6 million to date, with several publicly traded companies investing in the streaming provider. 21st Century Fox (FOXA), Sky (SKYAY) and Scripps Networks Interactive (SSP) all participated the $55 million Series C round that closed in June; so there are no shortage of ways to play the OTT streaming service.

Fan Marino: FuboTV has 100,000 soccer-loving subscribers, but is counting on their next 100,000 subscribers to be fans of traditional American sports. The carriage deals they’ve signed to date have given them some valuable programming (like the World Series), but you can’t convince the American sports fan to cut the cord without ESPN’s network of channels. ESPN (DIS) holds the rights to the College Football Playoffs (and NBA) through 2025 and MNF through 2021. If your key differentiator as an OTT streaming service is your sports programming, you must carry those games. The success of the service, at least as it is currently marketed, depends on it.

The next 100,000 subscribers: FuboTV’s skinny bundle moves beyond live soccer

For the balance of today’s newsletter, sign-up here!

NFL INTENDS ON TERMINATING VERIZON’S EXCLUSIVE MOBILE BROADCAST RIGHTS DEAL

There are indications that the NFL intends on terminating Verizon Communications’ (VZ) exclusive rights to broadcast games on mobile devices, at the completion of this season. Under the terms of the expiring 4-year $1 billion agreement, only Verizon cellular subscribers can stream live game broadcasts; regardless of cable provider. It is still possible that Verizon could retain the title of “official wireless service provider” of the NFL and continue to stream games, while the NFL grants some of its other partners’ permission to broadcast games on mobile devices.

Howie Long Short: The NFL must end mobile exclusivity because their broadcast partners (ESPN, CBS, FOX and NBC) pay a fortune for the rights to carry games and want to make those games available on as many platforms as possible. Some have expressed concern that additional mobile distribution will further contribute to the decline of the league’s television ratings, but no one prefers to watch a game on a small computing device. An increase in mobile distribution will correspond with an increase in “Digital in TV Ratings” (method to account for all viewers across devices with program content and commercials that match the linear TV airing); which is good news for the league, its broadcast partners and their advertisers.

Fan Marino: While NFL television ratings are down 5% from 2016, the decline has yet to influence ad sales. In fact, ad sales were up 2% for the month of September; increasing from $504 million to $513 million. It should be noted that the NFL’s total ad inventory increased by 2% for the ’17 season, as did the cost of an ad (7% to $515K).

Verizon’s NFL Partnership Could End

For the balance of today’s newsletter, sign-up here!