Endeavor has acquired the digital video streaming provider NeuLion, Inc. (NLN) for $250 million ($.84/share) in an all-cash deal; a 112% premium on the share price at last Friday’s close. NLN, which specializes in digital video broadcasting, distribution and monetization, will become a privately held subsidiary of Endeavor (formerly WME-IMG) upon the Q2 ’18 close of the sale. The announcement comes just months after NeuLion announced “it was selling some non-core assets to an affiliate of Fortress Investment group for $41.5 million”. NLN has struggled to replace the revenue lost following its loss of the NHL as a client to competitor MLBAM in August ‘15; revenue declined 8% YOY in Q4 ’17.
Howie Long-Short: You can’t invest in Endeavor (despite a long-rumored IPO), but with publicly traded rights holders valuing the technology that enables them to reach their consumers directly; there are several other was to invest in OTT service providers. Disney (DIS) owns 75% of BAMTech, NBCUniversal (CMCSA) developed PlayMaker Media and Turner Broadcasting System (TWX) owns “a majority stake” in iStreamPlanet. Don’t forget, you can also play Delatre via WPP; an investor in Bruin Sports Capital.
Fan Marino: Endeavor (which owns the UFC) worked with NLN on the dissemination of last summer’s McGregor/Mayweather mega-fight and while the fight had the 2nd most buys in PPV history (4.3 million), it was also marred by widespread technical difficulties. While that experience may not have gone perfectly for some viewers, it gave Endeavor the opportunity to see the platform’s upside; and with the UFC struggling to find the $450 million/year annually it seeks in TV money, retaining their own rights and going DTC may be the company’s best option.
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NeuLion (NLN), a company that specializes in the broadcasting, distribution and monetization of video content to mobile devices, has announced the launch of Virtual Announcer; a new feature for their digital platform. Virtual Announcer provides OTT sports rights holders the ability to easily add, package and distribute broadcast commentary, to live video feeds, from anywhere in the world. The cloud-based technology enables the viewer to select from various audio options; including the language used and PBP/color teams. The English Football League is among the first broadcast partners to take advantage of the technology, with EFL teams broadcasting “team streams” (commentary slanted towards one team) of their games.
Howie Long-Short: Broadcasting from a remote location is far less expensive than the traditional in-venue model and the truth is, there is little advantage to being on site. The networks figured this out in ’15. As cord cutting continues and niche OTT programming gains popularity, this trend becomes the norm. As for NeuLion, the share price is at a 12-month low ($.53 Canadian).
Fan Marino: NLN is selling the technology as a method to “spark longer fan engagement, attract more subscribers and reduce subscriber churn”, but who’s buying that? No one watches a game for the announcers. For those who have an appreciation for the art of play-by-play, Richard Deitsch of Sports Illustrated recently put out his list of the top 25 PBP broadcasters. Fan’s favorites? Ian Eagle, Joe Tessitore and Dave Pasch.
NeuLion Launches New Cloud-Based Virtual Announcer™ Technology
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UFC president Dana White has claimed that the Mayweather/McGregor fight did 6.5 million buys, which would destroy the existing worldwide PPV record set by the 2015 Mayweather/Pacquio (5.5 million) fight. That figure may be inflated though, as technical issues with UFC.tv forced some viewers to purchase the event twice. After initially deflecting the blame and refund requests to video technology provider NeuLion (NLN), White has since announced that the UFC will be issuing refunds to fans who had issues streaming or logging in to their account.
Howie Long-Short: They say that any publicity is good publicity. Perhaps not when dealing with a mega-fight. NLN shares are down 10% since fight night.
Fan Marino: ESPN is claiming 1 in 6 Americans watched the fight (50 million people). My informal poll (i.e. guessing) says that 5/6 people on the east coast were sleeping by the time the fight started. How come every other sport airs games during the east coast’s primetime, but PPV boxing & MMA start at 12:30a?
Dana White: Refunds in works for UFC.tv customers who missed Mayweather-McGregor fight
NeuLion (TSE: NLN), the digital streaming service who streamed Saturday night’s Showtime (CBS) PPV event on behalf of the UFC, SKY Sports (LON: SKY) and Eleven Sports Network to over 180 countries around the world; experienced significant technical difficulties during its most watched event ever. Transaction volume overwhelmed servers in Florida and California causing widespread outages, a 20-minute delay to the main event and some very disappointed fans to miss the fight. Fans who ordered the PPV event through UFC.tv powered by NLN software, paid $100 for the Mayweather McGregor headliner, but were unable to log-in. Those individuals have since been directed by UFC.tv to email NeuLion for a refund.
Struggled to stream ‘The Money Fight’? UFC.tv customers directed to contact NeuLion
Howie Long-Short: Not sure NLN is long for the streaming business with BAMTech coming on strong, but the company has a growing business licensing technology to consumer electronics companies. Samsung (KRX: 005930), Sony (SNE), LG (KRX: 066570), Panasonic (TYO: 6752), Sharp (TYO: 6753), Philips (PHG) and Toshiba (TYO: 6502) all use NLN video players within their TVs to ensure up to 4K clarity.
Fan Marino: Amateur move to wait until right before the main event to test the stream. You need to leave yourself time to get to the bar, in the event you encounter any issues.