Bundle, Unbundle; Disney's plumbing; The _ of _ ; The price of an England ad; The real Fred Perry; Gundeep's Street World Cup; MCC party like its 1899; OTT is 'hard, expensive and really annoying'
Overthinking the sports business, for money
Bundle, Unbundle
The OTT conversation in 2018: 'Build it and they will come’.
The OTT conversation in 2022: ‘Hard, expensive and really annoying’
The Bundle co-host Murray Barnett on one of the themes of the year:
‘Sports rights holders are finding out that direct-to-consumer is really hard and expensive and customers are very demanding; that would be my one line summary of 2022. Everybody's realized that customers, fans, consumers are kind of annoying. You know, if they pay for something directly, they actually expect a service and you've got to reach out to them and you've got to market to them’.
Who knew, right?
Meanwhile, that hero of yesteryear - the multi sport bundle buyer - is left to chase their favourite pastime across multiple paywall subscriptions only to suffer dodgy quality feeds and half arsed production values of under resourced single sport OTT vanity projects.
Turns out Sky Sports was quite good after all.
Build - Disney’s plumbing
BAMTech is one of the underrated stories of the sports business in the digital era.
It’s roots are in the first Dotcom boom of 2000, as one of the very first league based OTT services - MLB’s Baseball Advanced Media.
Today BAMTech isn’t about baseball, it’s the plumbing that sits below Disney+ and ESPN+ streaming services.
That’s why Disney has just paid $900million for the remaining 15% of it that it doesn’t already own. In 2017, the entertainment conglomerate invested an additional $1.58 billion to acquire 42% more stake.
Why?
Control.
If streaming is Disney’s future, which it obviously is, the company wants to own its own tech stack.
The alternative is to white label someone else’s tech, which is the route of many sports rights holders, who are attempting to be the Disney of their own little fiefdoms, with varying success.
See also: Did you see that Disney just hiked its ad-free streaming price by 38%…?
See previous note:
The question we don’t yet know is what Disney’s returning boss Bob Iger will do with ESPN.
Spin it off or keep it in?
Bank of America spent 5000 very expensive analyst words to say they don’t know.
On this week’s episode of The Bundle, Barnett and Ramcke think ESPN is too valuable as a driver of Disney subscriber growth to sell, unless there’s a massive cheque out there (a separate and potentially relevant fact, via Motley Fool: Apple has $110billion in free cash flow as of Sept 2022 - ‘Apple is a screaming buy’).
See also: Rights market lock up.
A feature of the rights market is the paucity of anything to buy.
Across many of the major markets, there’s a mass of expensive content locked up for the rest of the decade.
The NBA is the only major property that has a domestic auction coming up in the next couple of years. They have ambitions to triple media rights fees from $25bn to $75bn.
Which is why Warner Bros Discovery head David Zaslav has started negotiating in public, suggesting that WBD’s TNT sports arm doesn’t need NBA, having carried it for decades.
Convergence update: FuboTV’s shallow pockets
What happened? FuboTV shut down its betting arm.
First bounce: A gold rush is an odd time to get out of betting.
Second bounce: The winner of the convergence race will have deep pockets. Fubo is an independent distributor third party channels. It’s getting out before it’s dragged down by the massive investment required to build a plausible position.
See last week’s podcast with Sam Sadi of LiveScore.
Party like it’s 1899
The MCC membership has done a late U-turn and reinstated the Eton Harrow match at Lord’s along with the Varsity match.
Rule of thumb: In any argument, seek the side that has Phil Smith and Stephen Fry on it.
One to watch: Boat Race sponsor caught in FTX ripple
Gemini is a crypto exchange owned by the Winklevoss twins.
2021: Bitcoin Billionaires button down the Boat Race
What is a CEO under P/E ownership?
This week saw the end of a very long search.
Aaron Radin was announced as CEO of the British Basketball League.
Ten months ago, we talked to 777 Capital’s Lenz Balan about the type of person he wanted for the job and how it works with the very hands-on management approach of p/e ownership. Seems like it took a while to find the right person.
Context: 777 Capital is one of the more prolific private equity firms in sport. It bought 45% of the BBL for $7million, having already bought up the London Lions franchise. This is part of a bigger move in to sports investment. 777 paid US$137 million for a 70 per cent in Vasco da Gama, which values the Brazilian club at US$333m, following on from other investments in La Liga club Sevilla and Serie A side, Genoa. Last month, they bought Hertha Berlin and the month before that it was a stake in Melbourne Victory.
Ten months later, 777 has their man.
See also: Private equity in Australian Soccer.
Clickworthy
Is the party over for hospitality? The rise of ‘premium economy’ in the match day box
The DCMS Select Committee chair just had the Tory whip removed.
The answer is Drive to Survive…now what’s the question?
Iga Swiatek is the world number one women’s tennis player.
Me neither.
Solution: ‘A Drive to Survive for women’s tennis’.
How to get on in the sports biz: In any gathering of two or more sports executives, it is now compulsory to reference the need for an inside the ropes warts n’ all doco series, ‘Sort of, you know, like Drive to Survive’ - usually spoken with an upward inflection, making a statement sound like a question.
Build: All sports strategy can be distilled down to this simple formula: The _ of _
The IPL of Women’s Football. The NFL of Cliff Diving. The Woolworths of Padel. The iPhone of Synchronised Trampolining.
The…Lazy Crock of Shit.
The £200k Ad Punt
What? England’s progress in the World Cup via the medium of ITV ad spot prices.
TL;DR The price of an ad around the France game just doubled.
Where: From The Drum:
For the media buyers that secured a spot in advance (a gamble based on England’s chances of progressing in the tournament), a TVC as part of a larger package would likely have cost just over £200,000.
ITV keeps a portion of ad inventory in its back pocket, however, and brands now looking to snap these up will pay a premium of around £400,000, according to buyers familiar with the process. For that fee, they’ll secure an event likely to be viewed by around 20 million Brits.
The launch of ITVX, the commercial channel’s new digital home, poses a question for the next big tournament.
Whereas linear TV ads are ’broadcast’ to many at once (partially its strength), to logged-in users using streaming apps, programmatic video ads can be targeted to households based on their demographics and interests. It’s unclear how much live inventory is being delivered this way at present, but with addressable advertising, more brands could in the future find their audiences during these games at a more affordable price. The World Cup presents the perfect launch moment for streaming service ITVX on (December 8).
See also: Fox Sport’s commercial inventory at the World Cup is more in yer face:
Player to Watch segment, presented by Coca-Cola
Your first-half moment, sponsored by Verizon
Our player spotlight is hosted by the Volkswagen ID.4
Gundeep Goes Global
A big well done to two time UP guest Gundeep Anand for the launch of this weekend’s Street World Cup.
Winners get Nando’s, losers get Chicken Cottage
Buy tickets for the Street World Cup here.
UP160 - the story of The Last Stand, the first UK street football tournament.
UP204 - the first women’s street tournament, a brainstorm with Gundeep, Ricardo Fort and agent Michaela Gooden.
Trends in Spam: The Alzheimer’s Opener
I collect the opening lines of spam sales emails.
The aim is to present the spammer as professional yet relatable. Someone you can do business with and then go to the WeWork bar and share war stories of photocopying fuck ups and bandwidth bantz.
This bloke is playing on the theme of memory. Twat.
Out and about
To CSM’s Victoria office for the 10th Birthday of the Women’s Sport Trust.
Lovely do. Great speeches. Big energy.
Congratulations to Tammy Parlour, Jo Bostock and the rest of the team.
Coming soon - The Unofficial Partner Review of 2022
Recorded yesterday. Out next week.
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