Drew Brees, Von Miller Participate in $4 Million Fanchest Seed Round, Company Sells Team Themed Gift Boxes

Fanchest has closed on $4 million ($5.4 million total) in seed funding; capital the company will use to expand (25 more teams) its team themed gift box business and to increase customer repurchase rates. Each mystery chest (starting at $59) contains officially-licensed team apparel and other fan collectibles (valued at $80), plus a “golden ticket” giving the recipient a chance to win valuable prizes (like signed memorabilia or game tickets). Youth and baby versions are available, in addition to a premium offering that guarantees a player autograph. Drew Brees, Von Miller and DRL CEO Nick Horbaczewski participated in the investment round.

Howie Long-Short: In addition to the individual investors named, GoAhead Ventures (and Connected VC) participated in the seed round. GoAhead Ventures’ investment is noteworthy, as 2 recent Stanford graduates (both on Forbes’ 2017 30 under 30 list) are managing the $55 million venture capital fund and receiving all of the attention. While those 2 make headlines, it’s their partner TK Mori that brings the experience (and credibility) to this group; he’s 53 years old, has 3 IPOs and 5 M&A exits (from previous investments) under his belt.

Fan Marino: Speaking of autographs, Lou Holtz won 100 games and the ’88 National Title as the Notre Dame HC; but it was the 3 Championships he didn’t win (’89, ’90, ’93) that still stick in his craw. Holtz remains so upset that to this day, he signed an autograph for Steiner Sports with the note “1988 National Champs, Screwed in 89,90+93” inscribed under his name. RESPECT Magazine columnist (and friend of JWS) “Scoop B” Robinson talked to Coach Holtz, and had a chance to ask him about the custom inscription. For those wondering, Steiner Sports no longer offers the Lou Holtz “Screwed” helmet, but you can buy one with the words “Save Jimmy Johnson’s Ass for Me” for $599.99.

Fanchest raises $4M in seed funding to become the best gift for sports fans

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MLB Aware of Sherman/Jeter Plans for Fire Sale, Approved Bid Anyway 

Miami-based radio host Dan LeBatard had a contentious interview with MLB Commissioner Rob Manfred where he accused MLB of accepting the Bruce Sherman/Derek Jeter ownership group bid despite plans to immediately slash team salary (down to $90 million, from $115 million) and trade star Giancarlo Stanton (to the New York Yankees). Manfred essentially denied those allegations, saying on-air, “we don’t approve, dictate or necessarily ask clubs what they’re going to do with respect to their individual operations. Those are local decisions that really are not part of the approval process”. It now appears LeBatard’s accusations were backed by factual data; bids by Jorge Mas and Wayne Rothbaum, while not the highest, would have kept the team competitive.

Howie Long-Short: MLB accepted the Sherman/Jeter group’s $1.2 billion offer, despite knowing the group was paying estimated $400 million more than the franchise is worth; and, $200 million more than the next highest bidder was willing to pay. The group must cut payroll to show a profitable business model and to raise the $200 million they still seek to cover debt and expenses. Jeter says he’s confident revenue will increase, but that appears unlikely. Attendance will remain down with a bad product on the field and broadcast rights are locked-up through 2020. Jorge Mas, the best prospect for ownership, bid just over $1 billion for the team; the local businessman had planned to keep Stanton, maintain a $130 million payroll and hire a new manager.

Fan Marino: Jeter, who only put up $25 million, will be the team’s CEO and be paid a $5 million salary. That would make him the NFL’s highest paid front-office executive (the highest paid make just shy of $4 million/year), but in baseball Derek is going to have to build a championship winner or two to catch Theo Epstein (up to $10 million/year). Inexplicably, he’s earning as much same as 4x World Series winner Brian Cashman.

Other Marlins bidders had plans very different from Jeter’s

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Juventus Building a Global Brand

Juventus Football Club (JVTSF) is looking to build its brand internationally, authorizing the sale of licensed team products in Japan, China and Australia. The Serie A champions are introducing several new product categories as part of the global expansion, including bespoke leisurewear, an exclusive luggage collection and car accessories. All products will be available on e-commerce platforms, like VIP.com, and within select brick and mortar retailers within each region.

Howie Long-Short: VIP.com is a subsidiary of the Chinese corporation Vipshop, which trades on the NYSE under the symbol VIPS. VIPS shares are up 42% since news broke Sunday evening that Tencent Holdings (OTC: TCEHY) and JD.com (JD) are investing $863 million in to the company. TCEHY is putting up $604 million for a 7% stake, while JD spends $259 million for a 5.5% stake. The companies paid a 55% premium for the shares, in what is being perceived as an aggressive attempt to defend against BABA.

Fan Marino: President Andrea Angelli had the one-year ban for his role in a mafia related ticketing scandal lifted, but Italian Football Federation doubled the club’s fine (to $710,000) and will force the team to play its January 22nd match vs. Genoa, with one of the stadium’s main sections closed. Losing the advantage of a rowdy home atmosphere could alter the league’s final standings. The club currently sits one point behind 1st Place Napoli and one point ahead of 3rd Place Inter Milan.

Juventus introduces licensed products in Asia and Australia as part of global expansion

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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

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Baker Mayfield Discusses His Family’s Financial Struggles That Allowed Him To Pursue His Dreams

Baker Mayfield of the University of Oklahoma won the 83rd Heisman Memorial Trophy on Saturday evening; awarded to the Most Outstanding College Football Player during the 2017 season. Mayfield is the 37th QB to win the award, but the first to start his collegiate career as a walk-on. Just prior to winning the award, Baker spoke exclusively with JohnWallStreet about the financial struggles his family incurred so that he could pursue his athletic dreams.

JWS: You become the starter at Texas Tech and then decided to leave to walk-on at Oklahoma. Did TTU award you a scholarship once you became the starter, and if so, was it hard to walk away from that money?   

Mayfield: Oh, I didn’t have a scholarship; I didn’t leave one. Never had one there. It came down to not having one there and following my dreams. I dreamt of playing of playing for OU and quite frankly, my heart wasn’t in it there (TTU).

JWS: Was the cost of college a financial strain on your family?

Mayfield: Just to put in perspective, it’s why I walked on in-state at first; tuition money was pretty expensive. They (his parents) made so many sacrifices for me, just to go to OU; there is a reason why I work so hard. They’ve given a lot to put me in the position I’m in today so I want to give back and do everything I can for them.

JWS: Can you be specific and discuss some of the sacrifices that allowed you to become the Oklahoma starting QB?

Mayfield: We moved 4 or 5 times my senior year just so we could live in the same school district, so that I could finish my senior year at Lake Travis. Then, as soon as I graduated, they moved in with my mom’s parents for almost 2 years. So, that’s pretty hard. I grew up in the same house for 17 years and then all of a sudden, we move that many times and then they left that town and went with my mom’s parents. That just explains how they are, their character and what they would do for our family; and it means a lot.

Howie Long-Short: Stanford RB Bryce Love finished as the runner-up; the 5th time a Cardinal player has placed 2nd since 2009 (Gerhart, Luck, Luck, McCaffery). Love finished high-school with a 4.5 GPA, is majoring in pediatrics and human biology and plans on becoming a pediatrician at the completion of his football career. JWS got the chance to ask him why a future NFL star takes his studies so seriously?

Love: Academics is really the backbone of everything. That’s the beauty of going to Stanford; you have an opportunity to master the specific concentration that you go in to. Obviously, you can’t play football forever; once that comes to an end, you have an ability to really contribute to the world in positive ways.

Fan Marino: Mayfield’s win makes him the 6th Sooner to win the award; joining Sam Bradford, Jason White, Billy Sims, Steve Owens and Billy Vessels. Only Notre Dame and USC, both with 7, have had more. Ohio State also has 6; including Archie Griffin (’74-’75), the only 2x award winner.

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FIFA Struggling to Sell Sponsorships for ’18 World Cup

Despite the astronomical viewership ratings that the World Cup draws, FIFA has been struggling to sell sponsorship packages prior to the 2018 tournament in Russia. The toxic reputation (see 2015 corruption scandal) of soccer’s global governing body has put an end to U.S. and European companies investing in the world’s most watched sporting event. In fact, FIFA hasn’t signed a new U.S. or European sponsor since 2011; when Johnson & Johnson did a one tournament deal. As a result, FIFA is projecting a best-case scenario where advertising revenues remain flat in 2018; after growing $650 million in 2014, from $1 billion in 2010.

Howie Long-Short: 6 months remain before the start of the tournament and just 7 of 8 top-tier sponsorships ($135 million/per) have been sold. Just 4 of the 6 second-tier sponsorships ($67.5 million/per) are accounted for and 19 of 20 local sponsorships ($10.5 million/per) remain available. FIFA has also been unable to find a Russian broadcaster willing to pay the $100 million asking price for domestic rights to the ’18 tournament. The global governing body is on pace to lose more than $540 million this year; it simply can’t afford to leave $470 million in potential revenue on the table.

Fan Marino: Former Chelsea FC star Ashley Cole was in NYC this week as part of the club’s global outreach program. On Tuesday, the NYC Department of Environmental Protection joined FC Harlem and Chelsea FC in announcing plans for a new $3.5 million project that includes a covered soccer field; a first for grassroots soccer in New York. JWS had a chance to get his thoughts on if the U.S. missing the 2018 World Cup would set the sport back in America.

Cole: Hopefully it’s just a phase for this tournament. If you look at the other big countries that didn’t make it, do you say the same about them? I don’t think so. I just think they didn’t play well in the group stages and they got punished. I’ve been on an England team that didn’t make it to a Euro or a World Cup, it’s difficult. They have good young players coming through. MLS is growing. Hopefully they can regroup, get together and don’t think “it’s the end of the world”. Now to push on, improve as players and get ready for the next tournament.

As Sponsors Shy Away, FIFA Faces World Cup Shortfall

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Ashley Cole Discusses Differences Between Premier League and MLS

Former Chelsea FC star Ashley Cole was in NYC this week as part of the club’s global outreach program. The EPL club has made a year-round grassroots commitment to the FC Harlem Lions; assisting with both their school and athlete engagement programs. On Tuesday, the NYC Department of Environmental Protection joined FC Harlem and Chelsea FC in announcing plans for a new $3.5 million project. Plans include a covered soccer field, a first for grassroots soccer in New York, on DEP property; adjacent to the North River Wastewater Treatment Plant. JWS had the exclusive opportunity to talk with English futbol legend.

JWS: The median MLS player salary during the 2017 season was $135,000. Do any of your teammates have second jobs?

Cole: Maybe they do work 2 jobs which I don’t think is right. They need to be fully concentrated on playing soccer. MLS needs to look at that (league median salary) and increase that, because it is not just about the old veteran guys coming over and getting paid a lot of money; I think if they (MLS) want to improve, pay these lower paid guys a little bit more. 

JWS: You left money on the table leaving Europe. Why did you choose to come to play in MLS?

Cole: If you look at my salary compared to others, it’s not as big; but I’m comfortable because I still love to play soccer. It was a time in my career where I was getting older and even though I had other options to stay in Europe, I chose MLS because I wanted to see how it has developed and just to experience it here. I love the fan base here, it’s crazy. It’s getting bigger. It’s something I’ve always kind of had in my plan, to play in the MLS.

JWS: The EPL generates far more money than MLS. Can you discuss some of the disadvantages MLS players have from a resource standpoint?  

Cole: When you are traveling 5 hours for a game, plus sitting in the airport for 2 hours and you don’t go on a charter, which players in Europe are kind of used to. Then getting off the plane and training that night; and then playing the next day is difficult. There have been times where I couldn’t play because I’ve had a bad back because we sat in an airport for 3 hours and had a 5-hour flight. It’s difficult for foreign players, we’re not used to that.

JWS: Do you think the U.S. missing the 2018 World Cup will set the sport back in America?

Cole: Hopefully it’s just a phase for this tournament. If you look at the other big countries that didn’t make it, do you say the same about them? I don’t think so. I just think they didn’t play well in the group stages and they got punished. I’ve been on an England team that didn’t make it to a Euro or a World Cup, it’s difficult. They have good young players coming through. MLS is growing. Hopefully they can regroup, get together and don’t think “it’s the end of the world”. Now to push on, improve as players and get ready for the next tournament.

Howie Long-Short: Ashley wasn’t exaggerating when saying, “If you look at my salary compared to others, it’s not as big.” The L.A. Galaxy player earns just $6,700/week playing in MLS; while Kaka receives $144,875/week from Orlando City, Toronto FC is paying Sebastian Giovinco $143,500/week and NYC FC star Andrea Pirlo gets $118,850/week. Cole may not be making a fortune in MLS, but he amassed one during his 20-year career. It’s estimated that his net worth is north of $22 million.

Fan Marino: The MLS Players Association is going to demand chartered flights in the next round of CBA negotiations, but that isn’t until 2020. Until then, there is a competitive advantage to be head for owners willing to invest in their team; just one MLS team had a road record above .500 last season. It’s been estimated that chartering flights would increase team costs by over $1 million/season.

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NASCAR’s Declining Ratings and Attendance Now Affecting Drivers

NASCAR sponsorship dollars are declining due to declining television ratings and race attendance, and as a result teams are opting for development drivers who command lower salaries over proven veterans. At the peak of NASCAR’s popularity, the top teams would spend $30 million to run a car; with the sport’s most popular drivers earning $10 million/year in salaries. Today’s teams run cars for half of what they did just 15 years ago, and those unable to put together lucrative sponsorship packages are passing on high-priced drivers. Matt Kenseth, a former Champion without a team for 2018, recently explained the environment saying, “I think it’s a very tough time for car owners to find the money that they need to field competitive race cars with competitive personnel.”

Howie Long-Short: NASCAR is in trouble and I don’t see a quick fix here. Any solution relies on increasing viewership, but CEO Brian France refuses to even acknowledge the decline; recently touting “22 or 23” events that experienced a YOY rise in attendance. You can compare the cable television figures for yourself, here. All but one Cup Series race had a YOY ratings decline. How to solve a problem the company refuses to acknowledge?

Fan Marino: Martin Truex Jr. won Sunday’s Championship race at Homestead-Miami Speedway, holding off Kyle Busch to win his first Monster Energy Championship. The race drew a 2.7 overnight rating, down 18% YOY (3.3) and a staggering 39% (4.4) lower than the 2015 finale.

COLUMN: AS SPONSORSHIP DOLLARS DWINDLE, NASCAR’S STARS FADE

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House Tax Bill Could Cost Athletic Departments Hundreds of Millions of Dollars

A new House tax bill passed on Thursday that would prevent wealthy donors from taking tax deductions on charitable contributions associated with athletic tickets; a decision that could lead to fewer donations and cost college athletic departments hundreds of millions of dollars. Under existing law, athletic tickets are not tax deductible, but up to 80% of “donations” made for the right to buy those tickets can be written off. There is a feeling among politicos that the existing deduction should be outlawed as the individual making the “donation” receives something of tangible value (i.e. tickets).

Howie Long-Short: The consensus is that should this provision make the final bill, a significant portion of the “donations” will end. I don’t see it that way. These aren’t donations, they are personal seat license fees required to purchase the best tickets. A tax deduction is nice, but wealthy alumni buy these tickets as a status symbol (and because they’re fanatical about their school). I don’t foresee any loss of revenue.

Fan Marino: LSU A.D. Joe Alleva said his school brings in $50 million to $65 million annually in “donations” related to tickets and that even a 10% decline would mean “at least $5 million to us”; adding that “we have no other place to make that money up.” Cry me a lazy river, Joe. Look at the wasteful spending around college football (Texas, Clemson); if there is a drop in revenue, I’m certain they’ll find some areas where they can save.

Funding for sports programs at question in new tax bill

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Jerry Jones Threatens “Severe Retaliation” Against League Owners, Jones’ Request for Special League Meeting Rejected

NFL owners sent a disciplinary letter to Jerry Jones (and his lawyer) accusing the Cowboys’ owner of “conduct detrimental to the league’s best interests”; stirring up talks that Jones could be removed (through a forced sale of his team) as a league owner. Jones has been trying to void Roger Goodell’s contract extension, which was unanimously agreed upon in May; threatening “severe retaliation” against the league and its owners if they were to pursue his removal. On Thursday, Jones formally requested a special league meeting to discuss the Commissioner’s contract extension negotiations — just one day after his fellow league owners told him to drop the issue. The compensation committee (Blank, Hunt, Kraft, Mara, McNair and Rooney) rejected his request and will meet on December 13 to work “diligently to fulfill its mandate.” (i.e. propose extension)

Howie Long-Short: When Jones bought the Cowboys in 1989, no American sports franchise had ever sold for more than $100 million; Jones paid $140 million for the Dallas football team. The most recent Forbes valuation had the franchise worth $4.8 billion. Forbes tends to undervalue franchises (valued Nets at $1.8 billion, team sold for $2.3 billion; valued Rockets at $1.65 billion, sold for $2.2 billion), so if Jones were to sell, the team would likely fetch $5 billion; an ROI of 3,371%.

Fan Marino: Jones is on an island here and he’s fighting a losing battle. Daniel Snyder is the only other owner who fully supports his efforts. With that said, he’s not being forced out of the league (this isn’t a Frank McCourt situation). They could suspend him (see: George Steinbrenner) and if he goes far enough, perhaps they could justify a lifetime ban (see: Donald Sterling), but no American professional franchise owner has ever been made to part with their team.

Jerry Jones Asks for Sit-Down With Fellow NFL Owners

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