With Grant of Rights Expiring, Investment in Pac-12 Unlikely; Future of Conference in Air


When the Pac-12 Conference announced it was seeking a $750 million investment in exchange for a 15% stake in “Pac-12 NewCo” (a holding company that would control all Pac-12 media and sponsorship rights come ‘24), few expected there to be interest in the offering; there were serious questions about both the valuation ($5 billion) and exit strategy. But Sports Business Journal reported that the conference has received heavy interest from potential stakeholders and is in possession of “multiple bids based on a valuation of $5 billion or more.” That doesn’t mean Pac-12 schools should start spending their cut of a $700 million ($50 million will be allocated to operate NewCo.) capital infusion just yet, though. Commissioner Larry Scott has stated that the conference will move slowly on a decision and could opt to stay the current course (i.e. retain 100% control of their future media rights) with a windfall expected in ’24 (when their existing deals expire).

Howie Long-Short: JohnWallStreet heard from several sources that prospective investors were telling the conference that “$750 million is too much money to invest without having control” and that they viewed the offering as nothing more than a “bridge loan until the conference’s next round of media rights negotiations”, so we were surprised to hear from insiders at The Raine Group (working on behalf of the conference) that there are “4 or 5 formal bids valuing NewCo. between $4.5 billion and $5 billion.” Those bidders are betting that the value of digital/streaming rights will continue to increase and that live sports content will be “even more valuable in the non-linear world, than it was in the linear world.

Even if one of the bids received were on the conference’s terms, with the financial needs of the member institutions varied (remember, 2 are private), there’s no guarantee Larry Scott will have the support needed to proceed; a history of promising deals (think: broadcast distribution with DirecTV) and potentially lucrative opportunities (think: investing in eSports) being struck down by university presidents with different agendas exists. Before the conference can decide on how to address the short-term revenue short-fall, the schools need to decide if they’re willing to make a long-term commitment to each other – certainly, no guarantee with USC intent on retaining optionality (including its potential independence) and UCLA receiving advice to follow them out the door. As it currently stands, the Pac-12 grant of rights agreement expires at the end of 2023. Without a re-commitment, there is no Pac-12 conference come 2024.

The Raine Group projects media rights revenues will increase +200-240% in ’24 (giving investors a 10-12% IRR on a $5 billion valuation), but for the conference to realize that large of an increase digital entities will need to find value in Pac-12 sporting events beyond football and men’s basketball. If you believe that they will, the conference should hold off on selling a stake in NewCo (would be just 8 or 9x ’24 cash flow), but if think revenues grow nominally (because the market for tier 3/4 sports will be limited) taking investment capital at +/- 20x today’s cash flow is a non-brainer. Of course, if the conference believes revenues will climb at least 4x, borrowing money is also an option. Ultimately, with USC flush with cash and hesitant to commit to the Pac-12 long-term (need at least 10 years on a debt deal, longer for equity), I don’t believe the conference ends up taking short-term capital.

Fan Marino: Assuming the schools decide to remain together (which I expect), the conference should withstand the temptation to take on investors. Sure, $60 million might help a program or two keep a high-profile coach, but it’s foolish to believe that the Pac-12 is underperforming in football and basketball because of a revenue short-fall. The conference isn’t winning in those sports because its flagship programs have struggled. USC and Oregon football have missed on head coaching hires several times since Pete Carroll and Chip Kelly took off for the NFL and Arizona basketball has been decimated by a series of false media reports. Secular issues also plague the conference (think: more talent in East). None of those problems are going to be solved with capital (not to mention $60 million doesn’t buy you much in college sports these days), so why not retain all future media rights revenues and hope to cash in – as Larry Scott has been promising – come ’24.

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“Deal To Be Made” Between NFL, NFLPA, But September 1st Deadline Optimistic

NFL 200x200

The NFL and NFLPA have initiated “preliminary talks” on a new Collective Bargaining Agreement (CBA). While the existing CBA doesn’t expire until after the 2020 season, Pro Football Talk has reported that the league “genuinely wants” a deal in place before the start of the 2019 season. Meeting a self-imposed September 1st deadline would ensure that the league’s 100th anniversary season is celebrated without the distraction of labor negotiations and guaranteed long-term labor peace would give the league the opportunity to begin negotiating their next round of broadcast rights deals. But the NFLPA doesn’t seem to be on the same timeline – union leaders have been working to financially prepare their constituents for a work stoppage.

Howie Long-Short: It’s unclear just how serious the NFL owners are about having a deal in place before the season starts. Their motivation is logical, but forcing themselves to abide by a self-imposed deadline would give the player’s association leverage in negotiations. Scott Rosner (academic director of the sports management program at Columbia University) believes Sept. 1st is a soft deadline – that “the owners are not going to do a sub-optimal deal just to get it done when there is so much time remaining on the current CBA.” Similarly, while broadcast companies appreciate the certainty that a signed CBA guarantees, the league isn’t doing a bad deal just to placate potential media partners.

An extension may not happen before the end of summer, but Rosner believes that there’s “definitely a deal to be made. The league is so healthy financially, it seems unlikely that either side would be inclined to shut the sport down.” He’s got a point. The NFL generates upwards of $15 billion/year in revenue (+/- 50% more than the next big four sports league – MLB) and the salary cap has risen +40% since ’14. Sure, there’s “always things that can be negotiated in an agreement” (think: an extra point of revenue), but unless the players are willing to strike over guaranteed money there wouldn’t seem to be anything within the current CBA that would be worth stopping the gravy train over.

There are several concerns that the players would like to address in the next CBA including limits on Goodell’s authority (particularly for cases concerning of off-the-field conduct), increased roster sizes, improved medical benefits and the elimination of marijuana from the league’s banned substances list. While technically the NFL and NFLPA could modify the drug policy outside of CBA negotiations, authorizing its use is an easy carrot for the league to dangle in negotiations (since it has no impact on the game or the bottom line).

Roger Goodell has publicly acknowledged that he’d like to cut down on the number of pre-season games played (from 4 to 2) and has suggested that the league replace them with two additional regular season contests, but the players oppose the idea because of the enhanced risk of injury (remember, starters play limited reps in the pre-season). The league isn’t going to get the players to bend on 18 games without significant concessions, so it’s believed that the two sides will settle on a compromise – likely the elimination of two pre-season games, a 16-game regular season schedule and a 14 team playoff pool (up from 12). Adding a 7th playoff spot within each conference would give the league two additional post-season games and the incremental revenue growth it desires and Rosner believes that adding just two games would be “more palatable to the NFLPA than 2 extra games for every team.

Fan Marino: The NFLPA is collectively saving 4 years’ worth of “Madden [royalty] checks” in preparation for a potential work stoppage. The belief is that the larger the “war chest”, the longer the union could hold out for a better deal. Yahoo! reported that the players plan to have more than $600 million in “rainy day union money” saved before the end of the 2020 season. $600 million sounds like a large number, but remember it’s a battle between millionaires and billionaires and it’s the owners – not the players – who have the financial wherewithal to withstand a lengthy work stoppage. As Rosner said, “it doesn’t matter if the players are squirreling away a few additional nickels and dimes, that will never change.”

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Moving NBA Game Times to Accommodate the East Coast Viewer is a Mistake


The 2019 NBA Playoffs experienced a pronounced viewership decline (-13% YoY) through the Conference Finals (NBA Finals ratings are also down). Underwhelming post-season ratings followed a regular season that saw the league’s four national networks (ABC, ESPN, TNT NBA TV) lose -5% of their collective audience YoY. There’s no obvious solution to reversing the trend – leagues across the sporting landscape are struggling with the issue as consumer habits change – but Dallas Mavericks owner Mark Cuban has suggested that the NBA begin to base the start times of games on when they would be most attractive to television viewers. The Shark Tank star reasoned that because the league generates “far more revenue” from its broadcast agreements than it does at the gate, maximizing the television audience should be its top priority. Cuban isn’t concerned that attendance would suffer if games were to start at unconventional times adding, “we don’t have to worry about people showing up for the games – whatever time we make it, they’re going to show up.”

Howie Long-Short: Terry Lyons, a 26-year veteran of the NBA league office (and a renegade voice during David Stern’s tenure), doesn’t dispute that broadcast rights offer the greatest opportunity for revenue growth or that the most fanatical of fans watch more games on television than they do at the arena, so he understands why Cuban would suggest the league use analytics to determine game times. But he feels strongly that television can’t be the sole driver of the decision – the league must adopt “a hybrid model that allows teams to still do right by their season ticket holders.”

While Lyons understands Cuban’s thought process, he’s quick to point out that the billionaire owner is using some faulty logic. “If the league used analytics to identify its largest potential television audience, it would be optimizing the schedule for time zones in China, Japan and Australia – not in North America. Assuming you can play games at times inconvenient for the season-ticket holder and expecting them to show up is also a very scary and arrogant position to take.” It’s hard for me to argue with Lyons. Television times need to account for the domestic market and with attendance already a problem across just about every league (it was flat YoY for the NBA), it’s unclear how anyone could believe that moving games to less optimal times wouldn’t result in fewer fans showing up?

Lyons also isn’t on board with altering the start times of games played in the Pacific Time Zone to appease the league’s east coast fan and media contingent (as Adam Silver suggested it might do). “Teams playing in the Western Conference have a commitment to their local markets. Playing games in the middle of the afternoon – when most people are at work – simply isn’t the way to develop or maintain a fan base.” There’s also a case to be made that the 10:30p EST window provides the league with a time slot that it can dominate with little else in the way of live sports programming on the air at that time.

The NBA starts Finals games as late as 9:00p EST for the simple fact that they draw more viewers at that time than it would if the games started at 7:00p EST and the goal is to put the games on when the greatest number of people (within the U.S.) are watching. Curmudgeons like Phil Mushnick will whine that the late starts prevent the next generation of fans from watching, but that assumes Gen-Zs want to watch 48 minutes of basketball – and the research indicates that’s not the case. There’s really is no simple solution. As Terry said, “Time zones are a relentless problem that aren’t going away.

Fan Marino: I’m certainly not on board with any changes to the schedule that result in teams playing games in front of fewer fans. As Lyons said, “there is a huge advantage to having a packed stadium. That energy has a direct effect on the game itself and the way that the players perform.” It also has an impact on the fan experience, both in stadium and on TV. I’ll find myself watching Duke home games, that I would flip right past if the team was playing on the road, simply because the energy in Cameron Indoor is captivating.

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Publishers Generating More Ad Revenue from Women’s World Cup than Men’s Tournament


Sports media publishers have found advertiser interest to be significantly greater – within the U.S. – for this summer’s Women’s World Cup (WWC) than it was for the men’s tournament last summer. B/R Football told Digiday that ad revenues were up +10% tournament over tournament, while the soccer-centric platform 90Min has experienced an even larger increase (+20%) over its Russia 2018 totals. The absence of the U.S. national team certainly tempered advertiser interest last year, but it’s been the rising popularity of the USWNT amongst sports fans and a social landscape emphasizing equality that have driven increased brand participation this time around (see: pressure exists on both brands and publishers to activate as they would for a World Cup).

Howie Long-Short: B/R Football was first introduced in July ’18 – post completion of the World Cup – so it’s unclear how much of Bleacher Report’s tournament over tournament revenue increase should be attributed to the 12 months of runway that they had with an established soccer brand ahead of the WWC. According to comScore (April ‘19), 90Min is the top soccer specific site in the United States with 3.85 million views/month, which explains why we opted to focus on their efforts.

It’s surprising that publishers have booked more in ad revenues for the WWC considering that the men’s tournament generates significantly more traffic and engagement, but the combination of big brands (think: Beats by Dre, Coca-Cola, Wells Fargo, Powerade) cutting back on their domestic spend once the USMNT failed to qualify in ’18 and their lack of credibility with fans of the women’s game (thus requiring partnerships with media outlets who play in the space year-round) explain the phenomenon. Brands also value the opportunity to compete for a “share of voice” amongst soccer fans and the WWC offers a point of entry with significantly less competition.

As mentioned, a strong bond has been developed between the U.S. sports fan and the USWNT since the team won the World Cup 20 years ago – which is ultimately why there’s a desire to activate during the tournament. Everyone likes a winner and Minute Media’s (owns 90Min) Global Head of Football Andres Cárdenas explained that “like Brazil on the men’s side, the U.S. women are always the favorite going in [to the tournament]That’s appealing to brands. They want to associate themselves with that kind of success.”

To be clear, 90Min received “heavy investment from U.S. brands” last summer – their spends were simply focused on international markets. Much of the advertising done domestically was targeted at the Spanish speaking consumer (the publication runs in both languages). The demographics’ soccer-first mentality guaranteed their interest despite the USMNT missing the tournament.

There’s no reason to believe that the USWNT will fall off from a performance standpoint, so it’s safe to assume brands will continue to invest in the sport. Cárdenas said he would “expect advertising revenues to be +200% greater [than they were this year] in 2023” (the next WWC).

Fan Marino: Cárdenas said that brands looking to capitalize on the WWC have focused on telling the stories of the individual athletes. While historically “coverage of the women’s game focused on inequality or the team as a collective and its on-field results, fans now want to know about the player’s lives; who they are as people.” Women’s teams are traditionally far more accessible than the men’s clubs making it possible to collaborate on the authentic content that fans can relate to – a goal for all advertisers. 90Min currently has several WWC participants writing stories, filming “home video” or managing social accounts for their various platforms.

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James’ First Taste of Pro Sports Ownership a Success. Is NBA Ownership Next?

LeBron Liverpool

Back in 2011, LeBron James spent $6.5 million to acquire a 2% stake in Liverpool F.C. – his first foray into team ownership. Liverpool’s return to prominence on the pitch and a significant increase in the value of domestic English Premier League (EPL) media rights (+70% from the deal that expired in ‘15) have driven the value of the soccer club upwards since. By 2018, it was being reported that the James’ shares were worth $32 million and The Action Network’s Darren Rovell reported that he “could easily sell that piece for $45 million” now that The Reds have claimed the ’19 Champions League title.

Minority interest in the EPL club has given James a taste of pro sports ownership and according to business partner Maverick Carter, LeBron envisions a day when “he’ll be owning a [NBA] basketball team and running it.” James was a bit more reserved on his future plans (at least during all-star weekend) saying “I believe if I wanted to, I could own a team or be part of a basketball team [ownership group]”; before throwing out the contingency, “it’s not like it’s a dream of mine. It’s more of an aspiration. We’ll see what happens.”

Howie Long-Short: Elite athletes (see: Shaq, Magic, Serena) have been acquiring minority interests in big four pro sports teams for years, but few have publicly expressed (nevermind pursued) James’ ambition to serve as the controlling owner. Should LBJ pull it off, he would become only the 3rd pro athlete turned controlling owner across all 123 NBA, NFL, MLB & NHL teams (see: Michael Jordan and Mario Lemieux).

The valuations of big four sports teams have gotten so high that it’s difficult to envision any current athlete becoming the next M.J. Jordan received a particularly favorable deal at a time when the NBA was going through “one of its most bleak economic periods” (i.e. following his 2nd retirement). The Bobcats (now Hornets) were valued at just $275 million and Jordan was only required to put up $30 million in cash (the rest was an assumption of debt). There’s little chance the league would approve a transaction of that nature today.

Forbes claims that the average NBA franchise is worth $1.9 billion and with NBA bylaws requiring a controlling owner to maintain at least a 15% stake ($285 million) in the franchise, James is going to have to write a sizable check if he wants to lead an ownership group. Stuart Goldfarb (a corporate attorney who has worked with both groups/individuals interested in acquiring and selling teams) suggests that it’s unlikely James would ever have enough capital to buy a team outright (his net worth is estimated at $450 million), but believes he is among a handful of athletes that could find sufficient backing to front an investment group. An international star like LeBron brings intangibles (think: notoriety, relationships and introductions) that can further a group’s interests – and bid for the franchise – beyond just cash.

While it’s difficult to envision a current athlete acquiring a big four sports team without some additional financial backing, MLS clubs could be a possibility. The teams currently sell for between $200 million and $250 million and with a handful of players in Europe and South America earning more than that on their current contracts, it seems feasible that they could one day follow in David Beckham’s steps and own an American pro sports franchise. Goldfarb believes there’s tremendous value in investing in the sport of soccer – particularly if you look abroad. “There are first division teams in Europe (see: French, Spanish, Italian and Portuguese Leagues) where the teams are a fraction of the cost and the media rights deals are exponentially larger.” He also cited minor league baseball as another attractive investment option for retired athletes.

Fan Marino: If James wants to own an NBA club, he may have to settle for one outside of Cleveland – there’s no indication the Cavs will be up for sale anytime soon. James claims that “it’d have to be the right city” [for him to pursue ownership], but Goldfarb can’t imagine he passes on an opportunity if he really wants to own a team. With just 30 NBA franchises, chances to join “the club” don’t come along often. He added “James is bigger than any one jurisdiction, anyway. He would develop ties in a new community.

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Grassroots Membership Program the Key to AVP Turnaround


The Association of Volleyball Professionals (AVP) is a 36-year old brand with a storied history, but one that had fallen on tough times (particularly after the 2008 economic downturn). Donald Sun (a lifelong fan of the sport) acquired the company in 2012 with the intention of “building it back to what it was” – a profitable business endeavor. Sun explained that under previous ownership “the AVP turned into a big roadshow. It was sponsorship based – if you build it, hope and pray they will come – and of course that didn’t work. To build a sustainable sports league you need to build a fan base and to do that you need to provide opportunities for those fans to be associated with the brandOver the last seven years we’ve worked to grow the sport at the grassroots level (there are now over 2,000+ outdoor volleyball events nationwide flying under the AVP flag) and have begun to develop that cult following.

Howie Long-Short: When Sun bought the AVP back in ’12 (for $2 million), the brand hadn’t turned a profit in 14 years (it did manage to file bankruptcy twice). Sun explained that the last ownership group was always “chasing dollars”, so he wanted to build a business around recurring revenue streams – like memberships – that would provide long-term stability. They’re off to a good start, there are currently “hundreds of thousands” of participants and supporters alike paying a $20 annual fee to be a member of the organization.

Ticket sales, sponsorships and licensing (think: ball deal with Wilson) are the other key revenue streams for the AVP. Ticketing revenues are up +15%-20% YoY since 2012. Sun attributes the growth to consistency in the schedule and the efforts the organization has made to improve the game-day experience (think: kid zone, food trucks, beer gardens). The AVP managing director said he hopes to be able to build up the brand’s merchandising and content arms “over the next few years”, but acknowledges they’ll “have to increase the size of the fan base first” to draw interest. The tour has broadcast deals in place with both NBC and Amazon, but it’s difficult to believe that either is impacting the top line.

Amateur events are not a revenue play for the AVP (i.e. they’re not collecting registration fees). In fact, the AVP isn’t even putting on most of the 2,000+ tournaments referenced – they’re often done in partnership with a local promoter looking to leverage an affiliation with the brand. Instead, the AVP sees these tournaments as a member benefit. Players participating in AVP branded tournaments are required to be members of the association.

Fan Marino: The AVP Pro Beach Volleyball Tour will make its annual stop in Manhattan this weekend (at Pier 52 in Hudson River Park) for the 2019 New York City Open. The tour has a few recognizable names within volleyball circles (think: Phil Dalhausser & April Ross), but the most familiar face in sand will be that of former basketball player Chase Budinger. Budinger (who spent 3 years at the University of Arizona before playing 8 seasons in the NBA) led La Costa Canyon to 3 state volleyball championships and was named Volleyball Magazine’s National Player of the Year as a high school senior – so he can play, but Sun made it clear that the AVP would welcome any elite athlete that wants to try their hand at the sport; even ones without a volleyball background. He half-joked that if Kevin Durant were to sign with the Knicks and wanted to play in 2020 NYC Open “we’ll issue him a wildcard [entry] and see what happens.” As much as casual fans may want to see an athlete of Durant’s stature give the sport a try, one must believe the terms of his NBA contract will prevent his participation.

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Top Female Hockey Players to Sit Out Season, Looking for NHL to Backstop League


Back in early May, 200+ of North America’s top female ice hockey players announced that they would collectively sit-out the 2019-2020 N.W.H.L. (NWHL) season as a means of demonstrating their displeasure with the current working conditions (think: pay, benefits, facilities). Monique Lamoureux-Morando (one of the faces of the boycott) cites the W.N.B.A. (WNBA) “as a great example of what could be” if the National Hockey League were to make a comparable investment in women’s hockey. The players have since formed the Professional Women’s Hockey Players Association – a trade organization that will “work with companies, business leaders and sports professionals worldwide who already have voiced support” for the sport – to increase the public pressure on the NHL to backstop the league. There has been no indication to date that the NHL wants a sister organization.

Howie Long-Short: Despite its name, the National Women’s Hockey League has no formal affiliation with the National Hockey League beyond the nominal annual donations made by the men’s league to the women’s game (was $50K as recently as ’18-’19, the figure reportedly doubled when the C.W.H.L. folded).

I found it odd that Lamoureux-Morando cited the WNBA as a beacon of success considering the league is 23 years in and many of its teams still lose money, NBA commissioner Adam Silver readily admits that the league still lacks “a winning [business] formula” and its players are vocal about their disdain for everything from compensation to travel accommodations and broadcast coverage. Then again, the WNBA’s median annual player salary is $71,500 – or $61,500 more than the WNHL’s highest paid players.

NHL participation would likely open the door to some sponsorship opportunities and help the women’s league off-set a large portion of its expenses – which in theory would help its long-term viability – but professional women’s hockey is a “non-profitable” endeavor; there simply isn’t a large enough audience for the product (one team drew just 423 fans/game last season). Team owners in cities like Brooklyn, Florida, Arizona, Carolina, Ottawa and New Jersey have a difficult enough time filling their buildings 41 nights/year (all averaged under 15,000 fans/game last season), one can understand why they would be hesitant to invest in product that’s significantly more difficult sell.

There is a case to be made that despite limited financial upside, the NHL should invest in the NWHL because a successful pro women’s hockey league would offer a boost to the long-term sustainability of the sport. Lindsay Sarah Krasnoff – a sports historian and consultant – points out that “if you look at soccer on a global basis, the opportunity for growth is in the women’s gameIt would seem more logical for the NHL to invest in existing fan and player support bases than opening outlets in the desert” (see: league expansion).

Krasnoff also makes the argument that the NWHL’s struggles to date have had more to do with a lack of support from the NHL and its teams than it does fan interest. “The most successful women’s pro sports teams globally are ones that are either part of a larger sports organization (think: F.C. Barcelona) or tied to a professional men’s league” (like the WNBA). The reason those models work is because the women’s club(s) can leverage the infrastructure (think: marketing, training facilities) already in place to support the men’s side, which reduces overhead and makes them that much more feasible as long-term businesses.

It’s important to point out that most women’s soccer teams in Europe – even the ones associated with a men’s club – are not profitable, but that statement comes with a caveat; “the majority of the women’s clubs are less than a decade old. Olympique Lyonnais (OL), which has been around since 2006 (in its present form), is an example of a team that has begun to generate significant revenue” ($7 million – $8 million/year).

OL’s women’s soccer team generates more money than most female pro sports organizations because ownership invested significant resources into the club. The players are paid well and receive the same elite level training and medical support as the men’s side. As a result, Olympique Lyonnais has won the French league championship 16 years running. That on-field success has brought “sponsors and television contracts”, the revenue streams a pro sports team needs to survive – particularly if they’re not selling tickets.

Fan Marino: If the omni-channel model works at the team level, it’s worth wondering if a few NHL owners would be willing to play the long-game and invest in NWHL clubs without the league’s formal participation. Krasnoff believes that it would make sense to focus on “established hockey markets that are much stronger and more supportive of the local club than some of the newer markets where the men’s team is still trying to gain a foothold. Sections of the Midwest and Northeast – where hockey culture has long been ingrained – are much more viable markets for the league.” It would also seem logical that owners in the NHL’s most successful markets would be the ones best suited (and most willing) to absorb early losses.

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No Need for DAZN, Matchroom Boxing to Panic as “Careers are Defined by the Comeback”


Andy Ruiz, Jr. knocked out IBF, WBA & WBO title holder Anthony Joshua in a stunning upset Saturday night at Madison Square Garden. The loss ends Joshua’s reign as an undefeated champion and the hope of a unification bout with Deontay Wilder in 2020, but little else. Former HBO Sports President Ross Greenburg explained that heavyweight boxing is unpredictable – even the great ones (think: Ali, Louis) have been knocked out – and “careers are defined by the comeback. A.J. will have the chance to comeback bigger than he was and become a champion again.

Howie Long-Short: Saturday night’s historic result is definitive proof that a single punch (occurred in 3rd round) can alter the best of plans. Even with the loss, DAZN’s decision to build their fight sports lineup around A.J. was the right one. The English boxer was already a mega-star in the U.K. (selling out 90,000 seat venues) and at the age of 29, in the prime of his career. The 3-fight deal (one remains) guaranteed the upstart streaming service tent pole cards for their U.S. expansion, credibility with other fighters and a compelling reason for fans to sign-up – the annual price point is less than a pair of PPV events (and Joshua fights 2x/year).

On the surface, Ruiz’s 7th round stoppage of Joshua would appear to be a crushing blow to both DAZN and Matchroom Boxing (his promotion), but a single defeat doesn’t destroy a fighter’s value – Tyson, Lewis, Holyfield, Pacquiao and McGregor all earned record paydays with blemishes on their record – and the shocking result has given the upstart platform significantly more domestic exposure than they would have received had A.J. disposed of Ruiz in an orderly fashion as anticipated.

Joshua’s loss also gives DAZN/Matchroom a big date for the fall calendar. Boxing fans south of the border are going to adopt Ruiz as a favorite son – he’s the first Mexican heavyweight champion – and the heavyweight division usually “works its way into ratings or in this case subscription buys”, so the rematch should prove to be fruitful.

That doesn’t mean DAZN execs were celebrating on Sunday morning. Boxing is different than other sports in the sense that “a loss can not only derail a year, but a career.” Greenburg says there’s no reason for the streaming service to panic right now, but “a second loss [in the rematch] will hurt – losing the heavyweight champion would be a body blow” (assumes if he wins, he re-signs).

A.J. banked upwards of $25 million for the Ruiz fight, so it’s tough to say the night was a total wash, but the June 1st showdown was supposed to be little more than a “brand-building exercise” to introduce the U.K. champion to the U.S. boxing fan and while the fight made headlines, it failed to serve as the showcase needed to force the Wilder fight. In fact, Greenburg doesn’t even believe U.S. fans would buy a Joshua-Wilder showdown “unless he comes back and destroys Ruiz – he has to win that fight.

Even if Joshua had won, a fight with Wilder remained in the distance. The WBC champion is scheduled to fight Luis Ortiz next and announced – within hours of A.J.’s North American debut – a 2020 rematch with Tyson Fury (though I’m not convinced that fight is a done deal, it has been suggested Wilder’s camp may have floated the story to upstage the Joshua fight); there is also a bout scheduled with fellow PBC heavyweight Adam Kownacki. Then of course, there are network relationships that prevent fights from being made. Stephen Espinoza needs to retain Showtime’s relationship with Wilder and Haymon, while the same goes for DAZN with Joshua and Eddie Hearn. It’s a very difficult fight to negotiate regardless of how they split the money.

Fan Marino: Haymon has a potential “golden goose” on his hands with a Mexican heavyweight champion, but Greenburg warns “just because you knock out a star, doesn’t mean you’ll become one. There have been many flashes in the plan – guys like Oliver McCall and Buster Douglas – who failed to make a dent once they held the title. Now, if he beats Joshua a 2nd time and he loses a bit of weight he’ll begin to achieve that star power.

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Early Entrants: Vol. X – 4-Team Mid-Season Tournament to Serve as Trial Balloon for Change in Schedule


Editor Note: Early Entrants is a bi-weekly series of sports business “rumblings” before the news breaks.

4-Team Mid-Season Tournament to Serve as Trial Balloon for Change in Schedule 

N.B.A. Commissioner Adam Silver has publicly expressed a willingness to explore potential changes to the league schedule – an in-season cup tournament (think: European soccer) or post-season play-in tournament (giving teams that would otherwise be headed to the draft lottery another chance at a playoff berth) are the ideas most frequently discussed. While it’s unlikely the wholesale changes referenced will occur before the end of the ’22-’23 season (the next time one side can opt out of the current CBA), JohnWallStreet has heard that the league could float a trial balloon (pending players’ association approval) in the form of a 4-team mid-season tournament (3 games over 48 hours) that would replace the annual all-star game. The tournament, which could take place as soon as ’21-’22 (the league’s 75th anniversary season), would consist of the Eastern Conference All-Stars, the Western Conference All-Stars and two international clubs.

Sports Illustrated Branded Restaurants Coming

Authentic Brands Group spent $110 million to acquire the intellectual property and licensing rights to Sports Illustrated. CEO Jamie Salter has publicly cited opportunities in consumer goods (think: apparel), events (think: conferences), sports gambling, media (think: video), coaching (think: sports-skills classes) and even physical therapy locations – but one concept that has not been discussed to date are themed restaurants. Sources tell JohnWallStreet to expect S.I. branded eateries sooner than later.

Marquee Sports Network Destined for Basic Cable Packages

Charter Communications’/Time Warner’s inability to gain widespread carriage (across Los Angeles) for Spectrum SportsNet LA has baseball fans on the north side of Chicago concerned that their local cable or satellite operator will be unable or unwilling to come to terms with Sinclair Broadcast Group (the Cubs partner) on Marquee Sports Network. But sources tell JohnWallStreet that Cubs fans can rest easy – Marquee has a path to carriage should be far easier to navigate. Sinclair maintains leverage with distributors as the owner of 22 other regional sports networks (including YES) and the team’s standing in the pantheon of Chicago sports franchises is higher than that of the Dodgers in L.A. Cubs games are such a must have for carriers in the Chicago market that it’s believed the RSN will ultimately land on distributors’ basic cable packages, as opposed to a paid tier.

FTC Ticketing Workshop Likely to Be Blood Bath for Industry’s Biggest Players

The FTC is hosting a workshop to explore consumer protection issues within the online ticket marketplace for sporting events (and concerts) on June 11th, but insiders believe what is supposed to be a constructive gathering meant to push the industry forward will turn into little more than a finger pointing exhibition between the business’ biggest players. Ticketmaster is going to blame StubHub and Vivid Seats for allowing sellers to “short-sell” and for deceptive practices (think: marking down pricing on tickets only to increase fees on the back-end). StubHub and Vivid Seats are going to allege Ticketmaster has (at times) restricted mobile ticketing, co-mingled primary and secondary market inventory and scalped an abundance of tickets via their “Platinum Seats” program. Ultimately, the consumer (both buyers and sellers) will benefit from these issues coming to the forefront, but next week’s event is bound to be a blood bath for ticket marketplaces.

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Wilder Ducks Joshua, Takes Ortiz Rematch – No Unification Bout in 2019


IBF, WBA & WBO heavyweight champion Anthony Joshua (22-0, 21 KOs) is making his North American debut tomorrow night at Madison Square Garden against challenger Andy Ruiz, Jr. (32-1, 21 KOs) exclusively on DAZN. Joshua is expected to defend his 3 belts (he’s a 40/1 favorite), but his next fight won’t be to unify the division against WBC champion Deontay Wilder; it was announced on Wednesday that the American will instead turn his focus towards a rematch with Luis Ortiz. While not unexpected – Ortiz appeared in the ring following Wilder’s 1st round KO of Dominic Breazeale on May 18th – recent denials from Wilder’s co-manager Shelly Finkel about the deal being completed and public comments acknowledging a meeting with John Skipper about “the Joshua fight” had fight fans hoping the two sides would come to terms. Instead, it appears as if boxing loyalists will wait until at least 2020 for “The Fight of the Century” to occur.

Howie Long-Short: JohnWallStreet reported that Wilder-Ortiz II was a done deal back on May 17th, so Finkel’s comments were a bit disingenuous (if technically true). Matchroom Boxing promoter Eddie Hearn confirmed as much saying that there “weren’t really any” substantial conversations with Wilder’s camp following the Breazeale fight and certainly none where Wilder’s side expressed “their intentions to get a deal done.” Hearn noted that less than two hours after Joshua went on ESPN and declared that he wanted Wilder as his next opponent (and would be willing to sit down for a face-to-face meeting to make it happen) “Deontay announced a fight with Ortiz that probably isn’t even signed, yet. It’s his way of avoiding questions about a potential unification bout.”

It’s hard to argue that the Wilder camp isn’t ducking Joshua. DAZN presented the American champion with a “huge offer” – 3 or 4 fights for $100 million or $120 million that would have included a pair of bouts against A.J. – but were rebuffed. The decision to risk “generational money” coupled with questions about who invested in the Wilder-Breazeale fight (Showtime alone couldn’t have funded it) and why (the belief is that Al Haymon did it to retain Wilder with PBC for sale or raising capital), have had boxing insiders wondering whose interests Al Haymon had been representing in the meeting Finkel referenced with John Skipper – Premier Boxing Champions (as president) or Deontay (as co-manager). Hearn believes that “the decision made [to pass on a DAZN deal] and the advice given [to take the Ortiz fight next] were done with a network or PBC hat on; obviously, it wouldn’t be good news for PBC to lose Wilder to another network or for him to lose (presumably to Joshua).”

To be clear, with potentially lucrative fights against Joshua and lineal champion Tyson Fury on the horizon there’s value in remaining a network free agent (exclusive deals between fighters and broadcast platforms often get in the way of big fights being made); PPV fights against competition of that caliber could net the Wilder more than he would have earned under the terms of the DAZN deal. But those fights (and the dollars that come with them) only remain possible if he beats Ortiz – no sure thing considering “King Kong” had him on the ropes the first time around. Wilder should earn at least $20 million for the rematch (the figure he took home against Breazeale), but Hearn says that he’s “not making what DAZN offered [him] for fights with Ortiz and Kownacki” (an anticipated H1 ’20 opponent). For reference purposes, A.J. is set to take home +/- $25 million on Saturday night.

Much of the disappointment surrounding Wilder’s decision to push a potential unification bout into 2020 is that he’s turning 34 (6 years older than Joshua). The feeling is that he’s closing in on an age where as Chris Mannix said, “the outcome of the fight will be accompanied by a ‘well what would have happened’ comment”; and that’s a best case scenario. For a unification bout to happen, Wilder needs to continue winning and Joshua says that’s far from a certainty. “It’s impossible for Wilder to remain champion for the rest of his career. He’s had close fights with Molina, Fury and Ortiz. It feels like we’re getting close to a time where that belt changes hands.” If it does before a Joshua-Wilder mega-fight, boxing fans will have lost.

Fan Marino: With Wilder no longer a possibility as the next fight, undefeated lineal heavyweight champion Tyson Fury – a fellow Brit – would seem like an intriguing possibility for Joshua. A.J. has said he’s willing to fight Fury, but it’s Wilder that has what he seeks – the WBC championship belt. Hearn said “Wilder is the bigger fight, but it’s really not about who it is; it’s about what is – the undisputed heavyweight championship of the world. The biggest prize in the sport.

If Fury isn’t next up, Oleksandr Usyk, Michael Hunter, Kubrat Pulev, Dillian Whyte, Joe Joyce and Filip Hrgović will be among the names under consideration.

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