Inside MLB's big court win; Bay Area's NWSL team takes shape; The FL Panthers' big chance to build its business and CA eyes game-changer in college sport
We talk about season openers all the time on the Morning Buzzcast, and today is no different, as a big opening weekend coming up for the Rabil Brothers and the Premier Lacrosse League as they launch their season with four games over the weekend, Saturday and Sunday, two of them at 1:00 PM on both Saturday and Sunday on ABC as part of the League's media deal with Disney. So, a big opener around lacrosse and the Premier Lacrosse League.
And this is your Morning Buzzcast for Friday, June 2nd. Good morning. I'm Abe Madkour. Let's get right to it.
It was a big win for Major League Baseball in a bankruptcy court in Houston as a judge ruled Thursday night in favor of baseball and four of its teams, and that forces Diamond Sports Group to pay the full contracts in question. Of course, Diamond Sports Group is the regional sports operator that airs the game under the Bally Sports name.
Now Diamond has been arguing that it should not pay the full rights fees to the Twins, the Guardians, the Diamondbacks, and the Rangers because they argue the changing media landscape and cord-cutting has significantly devalued those rights fees and those assets. But a judge did not agree. He said the contract rate of the deals should apply. And this is a blow for Diamond Sports, as they were looking to cut the fees to teams under contract. Now, Diamond Sports must decide whether to make the payments in full or they would have to give back those rights to the Twins, the D-backs, the Guardians, and the Rangers. That's exactly what baseball wants. They want the rights back to distribute as they see fit.
So to put the ruling in perspective, the judge ruled that, for example, in the case of the Twins, Bally Sports North must pay the Twins the full 54.8 million that the sides agreed to more than 10 years ago. So a big early win for baseball and its teams.
And I'll just say the dispute between baseball and Diamond Sports Group may be pretty inside baseball for a lot of us, but here's what you need to know. Commissioner Rob Manfred does not like the leadership at Diamond Sports Group, and it's clear the two sides do not trust each other. Manfred didn't hold back in his testimony. He criticized Diamond's approach. He criticized their communication. He even hinted about their ethics. And so this is not a new thing. Manfred said he had had concerns about Diamond Sports Group for several years.
Rob Manfred is a litigator, and he has a strong point of view, and this was a somewhat contentious testimony in this courtroom. Now, he did say Manfred, that if the judge didn't rule that the rights fees had to be paid in full, baseball was prepared to subsidize teams as much as 80% of what they were supposed to receive. So if a team was supposed to receive a hundred million in a rights fee, not likely, but as an example, baseball would've paid the team 80 million. But that right now doesn't seem to be an issue after the judge's ruling.
Meanwhile, Diamond Sports Group revealed that baseball offered Diamond Sports around $400 million to exit the regional sports baseball business and return all the local rights to baseball, but that was not accepted obviously. Diamond Sports Group also confirmed that its streaming service has just about 200,000 subscribers. That is way off their ambitious goal. Diamond does expect that number to grow to 10 million by 2028. So there's a lot of inside details and touch points here as part of this bankruptcy hearing that are very interesting.
And finally, with words being used like blackmail between the two sides in the courtroom, our SBJ's John Ourand told me it's hard to see how this relationship between baseball and Diamond Sports ever gets repaired. But round one of this dispute clearly goes to Major League baseball.
Let's move on. A sports business executive visited our office yesterday and in talking about storylines they were watching, they said they were keeping an eye very closely on the NWSL'S new Bay Area expansion franchise. They were curious to see how that franchise would perform compared to the success of, say, Angel City FC in Los Angeles or even the NWSL teams in San Diego. They were curious also about Sixth Street's ownership of the franchise.
Now we have more news on the team, as it will be known as Bay Football Club or Bay FC. The team is scheduled to begin play next year in 2024. So they revealed their name along with their identity and their crest. Members of the ownership group were on hand. That includes Sixth Street. It also includes women's national team players like Aly Wagner and Brandi Chastain. The club's primary logo features a B and the Golden Gate Bridge. The club used Goodby Silverstein & Partners to help create the brand's visual identity.
And players stress that the importance of creating a brand that acknowledged the entire Bay Area region. And we know there's been a lot of change in the sports marketplace in the Bay Area. Think of the Raiders. Think of the Warriors. Now think of the A's. Obviously the Bay Football Club trying to really establish roots across the entire region before it launches in 2024.
The NHL Stanley Cup final starts tomorrow night, Saturday night on TNT. We know the storylines about both the Golden Knights and the Florida Panthers. Again, it starts 8:00, Saturday night, TNT. Both franchises looking to capture their first Stanley Cup final.
For the Panthers, I think this is a key, key opportunity for the team to really build on its business. The team's home arena is now called the Florida Live Arena, and it has used that name for more than a year following BB&T's merger with SunTrust. So they stopped using the BB&T name. They've used this other placeholder name, but the team has been reportedly close to a new naming rights deal at the arena. They are consulting or using Endeavor to advise them on a new naming rights deal. And it would not surprise me if they announce it during the Stanley Cup final while there is maximum exposure.
I'm sure that the Panthers are also actively using this time in the spotlight to build out its season ticket base, its sales pipeline and its corporate sponsorship base. It's a really great opportunity on the business side for the Florida Panthers.
Meanwhile, the NHL goes into the Stanley Cup final averaging its best playoff viewership since 2018. Our Austin Karp expects the numbers to take a dip with the final moving from ABC to TNT this season. But so far, playoff games have averaged 1.13 million viewers. That's up slightly from 1.12 million viewers at the same point last year. But again, a pretty good storyline around the NHL.
A very interesting piece of college legislation is taking shape in California, and you'll want to keep your eye on it. The California Assembly on Thursday, approved legislation that would create the opportunity for college athletes in the state of California to receive money from their schools based on their respective team revenue. Now it's a complicated format because you would say, well, football and basketball would receive the most. True. That's why there's an algorithm and a formula here in terms of some forms of revenue sharing. So it's a pretty interesting piece of legislation to get into.
The measure still must pass the California state and get the signing of Governor Gavin Newsom, but this is getting attention at the NCAA level. Of course, every college athletic department is watching this legislation. It also comes as Congress is studying a national framework for name, image, and likeness. There is still a little bit of ways to go with this legislation in California, but I'll just say it; this could be a major game changer in college sports. So you're going to want to keep your eye on this piece of legislation coming out of the state of California.
And we'll end with this; one of the most talked about private equity firms in sports right now is Arctos Partners. It's led by Doc O'Connor, formerly of CAA and MSG. There's also Ian Charles and Jordan Solomon and others. It's a very well-respected private equity firm, all very well-respected names in the business. Well, they have brought on another big name in former Twitter executive, TJ Adeshola, who is being brought on as an operating partner where he will advise Arctos Partners on their digital content strategy and council.
Adeshola has been an operating advisor for Arctos over the last three years, but this new role means that he will devote more time to Arctos and their deal flow. Adeshola becomes only the second operating partner for Arctos Partners. Remember the other one? Well, the first one is Theo Epstein, and he's advised Arctos Sports Partners since the firm started three years ago. And remember, Arctos is making minority investments in teams and other organizations, including the like of Elevate Sports. Now, they will be able to lean on TJ Adeshola's expertise in the digital space going forward as that is such a huge component of deals today.
And Adeshola recently stepped down as Twitter's top sports executive. After a 10 year career at that company, he stepped down in April. So TJ Adeshola joining Arctos Sports Partners as an operating partner.
And that is your morning Buzzcast for Friday, June 2nd. I'm Abe Madkour. Have a great weekend. Stay healthy. Be good to each other. I'll speak to you on Monday.