SBJ Morning Buzzcast

SBJ Morning Buzzcast: July 14, 2023

Episode Summary

Iger's insight and what it means; Can Major League Cricket find an audience? WNBA metrics all up as All Star Game hits Vegas

Episode Transcription

A big weekend coming up. We have some great tennis from Wimbledon. Inter Miami will officially introduce the Messi era and the WNBA All-Stars in Las Vegas, more on that later. And this is your Morning Buzzcast for Friday, July 14th, a Friday in July. I'm Abe Madkour. Hope everybody is doing well, and thank you for listening to the Buzzcast.

Well, Bob Iger sure can give an interview, and I watched his CNBC discussion yesterday with David Faber three times looking for nuance and other messages, it was that good. And Iger certainly can make news. He admitted that Disney is looking to sell its linear TV assets including ABC because their business models are broken, and they are not core to Disney anymore. But that is not the case with ESPN. Iger instead said that Disney is open to potentially selling an equity stake in ESPN and is looking for a strategic partner as its business transitions from linear to streaming.

Iger acknowledged that Disney has had conversations with partners, potential partners, focused on increasing ESPN Plus's distribution and adding content, but he didn't name any of the specific partners they have spoken with. What struck me is when Iger admitted the challenges of the legacy or traditional media business are greater than even he had anticipated, and that he has a timeline in mind when ESPN will launch its complete direct-to-consumer offering, meaning all of its content, but didn't say when.

So as you think about it, who could be these partners that Iger is referring to? Well, I always believe it was private equity. They could infuse major capital but would want to move very quickly and they wouldn't want to be a long-term player. But there could be partnerships with Amazon, Apple, Netflix, could be a partnership with DraftKings or FanDuel or Fanatics. So there are plenty of options. Well, not plenty, but there are options. And the bottom line is Disney and Bob Iger are still bullish on sports and want to very much stay in the sports business.

Meanwhile, NFL Commissioner Roger Goodell certainly did not make as much news during his interview from Sun Valley at the Allen & Company Conference, but he did acknowledge the NFL will contemplate potential investments from sovereign wealth funds at some point. He said the NFL likes its current model on private ownership. But let's be honest, as the price continues to increase for NFL franchises, there are only so many people that could afford a team in the future. So that's why Goodell has left his options open in terms of potentially bringing on sovereign wealth funds at some point.

Let's move on. Major League Cricket got its star turn as the new league began play on Thursday. Yesterday, the opening match was sold out. Over 6,000 fans creating a very celebratory atmosphere for opening night in Grand Prairie, Texas. Matches on Saturday and Monday of this weekend are already sold out as well. So what is Major League Cricket? Well, it's six teams, which will play 18 matches. The final is July 30th. Most of the matches will be played at that Grand Prairie Stadium that is near Dallas. It's been converted into a cricket stadium, like I said, just over 6,000 seats. It's on a grass pitch. This is a quicker version of cricket. Games will last roughly three hours.

Major League Cricket will also set up its headquarters at Grand Prairie Stadium. Other matches will be played in Morrisville, North Carolina, near the Raleigh-Durham area. Four of the six teams in Major League Cricket are owned and will be run by Indian Premier League franchises, the IPL, an incredibly successful league. But Major League Cricket has some serious investment behind it. It has $120 million in investment coming from multiple entities, including some of the biggest business executives in the US. It's the CEO of Adobe, you also have Microsoft's Satya Nadella, and like I said, they have invested at least $120 million to make this cricket effort work.

So their bet is as the United States becomes more and more diverse and more global, and international sports like F1 and Global Soccer and others become more and more popular, that cricket will have room on that stage as well and that cricket can eventually find an audience. So this will be a fun story to watch. Matches continue this weekend.

We hit on it at the top of the Buzzcast. Let's talk about it again. More changes in the media world as The CW continues to ramp up its sports strategy. Now, we know The CW has a deal with LIV Golf. And now this fall, the ACC will be on CW. CW will air football and basketball games on The CW Network. The CW has landed 50 of the ACC games including 13 football games that will air on Saturdays. You'll also see men's and women's basketball games in December and January and February on The CW on Saturday and Sundays.

So how did The CW get these games? Well, Raycom Sports, which sub-licenses ACC events from ESPN, sold its rights to The CW. Raycom Sports will continue to produce the games, but The CW will distribute them. The CW has never aired any college sports before. So again, with all this media disruption, this national carrier The CW saw an opening and is taking advantage. We're seeing more and more. ION did this with the WNBA games as well. And I'm expecting more of these type of deals with national over-the-air broadcasters going forward because they see the value in sports and right now, they see an opportunity.

Speaking of opportunities, the WNBA has a great one in Las Vegas this weekend. This is big time. It's going to be a fun weekend. You have the three-point shooting contest and the skills competitions today on Friday. And then the game, the All-Star game at Michelob ULTRA Arena, that's been declared a sellout. That is Saturday night All-Star game in primetime on ABC. Now during that game, the WNBA will try a bunch of things. They're going to try a four-point shot, a 22nd shot clock. They're going to eliminate foul shots in the final two minutes. So they are obviously using this game as an incubator for other ideas and new ideas, and there'll be plenty of player star power around Vegas over the weekend. I think it's going to be a fun weekend. I'm interested to see the viewership.

Meanwhile, numbers continue to be strong for the W. Attendance is up 27% over last year at this time. League revenue is also at an all-time high, an all-time 27-year high. Merchandise sales are up nearly 80% at the NBA store in New York, and subscriptions for the WNBA League pass, they're up nearly 20%. So as a business leader, someone will look at that and say, "Wow, all our metrics are pointing in the right direction," and that is certainly the case for the W. So keep an eye on the news coming out of Las Vegas this weekend, and the energy continues around the WNBA, which will look to land a new media rights deal in 2025. And they certainly have a lot of wind at their back.

I always find it noteworthy when Fanatics enters a new line of business and they are entering a new line of business, they're getting into the event business. And as SBJ is in the event business, I know how hard it is to do events well and to do events right. But Fanatics is launching a new company called Fanatics Events that will build out a number of live event and experiences around collectibles, around trading cards, around sports betting and fashion and music. All the areas that Fanatics wants to get in, it's going to build events around that.

IMG is joining Fanatics by investing in this company as a minority owner and offering its own event operation capabilities. So Fanatics Events will feature athletes, brand activation, music, merchandise and apparel, celebrity guest. It's all about bringing like-minded people together and the goal is to get Fanatics Events up and running by the third or fourth quarter of this year, so very soon. With the first events to be held in early '24. So early next year, you'll see some Fanatics Events being held. I could see this in the vein of Comic-Con or even what the NBA did with the NBA con, NBA convention in Vegas around the Summer League. So more and more efforts to bring like-minded sports fans together in a communal environment around commerce and around events. And you're seeing that with Fanatics Events.

So let's end on a couple of quick hitters. If you haven't seen the renderings of the changes at Gillette Stadium, you have to check them out. This is a $250 million privately financed overhaul of Gillette Stadium's north end. It will fully enclose that open part of the stadium. They've added a massive new scoreboard. It is the largest outdoor stadium video board in the country. It's more than five times the size of the old previous board. At Gillette Stadium, you know that lighthouse there? Well, that is being built as a year-round tourist attraction. It will be open, of course, on game days but non-game days. If you go to the top of the lighthouse on a clear day, you can see up to Boston, you can see as far southwest as Providence. It's very interesting if you're in the team or venue business, you want to check this out because it has a lot of interesting touches.

For top season ticket holders, many premium offerings that are very interesting. Gillette Stadium is 20 years old and now they think with this renovation, it will be a viable strong venue for another 20 years. The Kraft's paid $325 million to build Gillette Stadium in the early 2000s, and now they are putting in $250 million for these renovations. All of these changes are scheduled to be completed by the start of this NFL season, but you're going to want to check out the new look Gillette Stadium.

Finally, a name in the news as the Nashville Predators have named Dionna Widder as chief revenue officer. She is well known in the sports business. She was most recently CRO for the Houston Dynamo. She had previous experience at the Cleveland Cavaliers, the MBA League office, and the Indiana Pacers, Dionna Widder becoming CRO of the Nashville Predators. And that is your Morning Buzzcast for Friday, July 14th. I'm Abe Madkour, have a great weekend, stay healthy, be good to each other. I'll speak to you on Monday.