SBJ Morning Buzzcast

SBJ Morning Buzzcast: November 7, 2023

Episode Summary

What to make of Diamond Sports/NBA news; One brand bets big on pickleball and Underdog & Co. link with Casey Schwab and Altius Sports

Episode Transcription

The Golden State Warriors will host the NBA All-Star game in February 2025. This will be the third time the Warriors have hosted the All-Star game. Next February will be Indianapolis and then February of '25 in the Bay Area. And this is your Morning Buzzcast for Tuesday, November 7th. Good morning, I'm Abe Madkour. Hope you're all doing well. News broke late Monday and well covered by SBJ's John Ourand. The news is that if you love your NBA local broadcast, you should be good for this year. You will be good for this year. The NBA and Diamond Sports Group reached a deal that guarantees Diamond's regional sports networks will operate for all 15 teams it has contracts for through this entire season. This is exactly what the NBA wanted, it's a big win for the league and its teams, as it ends any questions about whether those 15 teams would be able to make it through the season? And this guarantees the regional sports networks would be able to meet their contractual obligations.

Ourand did report that sources said the deal has the NBA teams agreeing to a 16% reduction in their rights fees for this year to get the flexibility of all aligning end dates for their contracts this coming April. So a 16% cut in their rights fees. Diamond Sports has also been in talks with the NHL on a similar agreement. So what does this all mean? It means this season is secure and after this season, the NBA will likely reclaim the rights to the 15 teams that have deals with Bally Sports.

Now, the teams could work out new deals with Bally Sports at that time, but the NBA will take back the local rights to the 15 teams at a time when the league will be in the middle of negotiations on a national rights deal. And the NBA wants to consolidate as many of its rights as it can and these local rights could be a lucrative piece of programming and inventory and part of a larger national deal. So this is how things stand now. It looks secure for the full NBA season and then we'll see what the league and the teams do from there.

Let's move on. T-Mobile is making an aggressive sponsorship push for its business side, signing a four-year sponsorship with the PGA of America, T-Mobile becomes the PGA's official 5G innovation partner. So with T-Mobile, the PGA of America lands its first telecom sponsor and the deal makes T-Mobile, one of its largest corporate sponsors. Several sources told SBJ's Terry Lefton, the deal is for about $10 million per year and that includes the value of the technology and installation along with the rights fees. So you're going to see a lot of activation around 5G enabled data in and around the golf, the driving range, the practice facilities, all at PGA events.

The PGA will also get a number of 5G powered capabilities that T-Mobile will install at the PGA of America's headquarters in Frisco, Texas. The deal also includes hospitality and media and of course high-end experiences. And T-Mobile continues to make major investments in sports, has a big deal with MLB and a number of its teams, the SEC and SEC Network, it is a sponsor of the Las Vegas F1 race, has naming rights at the Golden Knights Arena in Las Vegas and of course for the Mariners ballpark in Seattle. So now you can add PGA of America to the list of T-Mobile's partnerships.

Let's stay with deals because a notable deal in the name, image and likeness space as the agency Underdog & Company that is led by Dan Mannix has acquired Altius Sports Partners. That is a three-year-old firm with deep connections in the college space, particularly among name, image and likeness efforts. Much of Altius' value stems from its consulting agreements with nearly 40 universities, most of which are in the Power 5. They include Clemson and Duke and Notre Dame and Texas among others. Now this deal speaks to a few things we've talked about on the Buzzcast. First, the massive changes within collegiate sports, name, image and likeness is for real and a lot of agencies want to get in this business. Secondly, you're seeing more and more consolidation of sports agencies and private equity is driving much of this consolidation.

So it's noteworthy that this acquisition is Underdog's first since it was acquired by private equity firm, NewSpring Capital in June. So they're using their new capital to make investments and investments in Altius Sports Partners. Now, Altius will keep its name and leadership in place, the company has 40 employees across the country. And Casey Schwab, Altius' co-founder and a former 40 Under 40 honoree will stay on in his leadership position as CEO. Altius will be wholly owned by Underdog, but Casey Schwab will receive equity as part of this deal. Schwab, of course, came from the NFLPA and founded Altius as he saw the trend in player name, image and likeness valuations and the business growing and now he's part of Underdog & Company.

Let's move on because one of the biggest corporate investments in pickleball has come in the form of healthcare giant Humana, which has signed on as the official healthcare sponsor for four pickleball groups. The Association of Pickleball Players, the Professional Pickleball Association, US Senior Pickleball and the DC team that plays in Major League Pickleball. So four different entities that Humana will sponsor. This basically gives the brand massive, wide exposure across nearly the entire pro pickleball space. Now, Humana said that deals are strategic and central to the company's efforts to engage with seniors who comprise the majority of avid pickleball players, as over 80% of Humana's customer base is over the age of 64 and they think that is the perfect target for their sponsorship here. Financial terms were not disclosed, but Humana is clearly making one of the largest corporate brand investments across pickleball. You get a lot of questions about the viability of pickleball as a sports business, but obviously Humana feels strongly about it and its ability to reach the audience of seniors that it covets.

Shifting to baseball, you've seen a few baseball teams move up the start time of their home games as a fan enhancement and now the Nationals are following suit. The team will begin evening home games next season at 06:45 PM, which is 20 minutes earlier than the 07:05 start, which has been the team's start time in the past and over the last few years. Why the move? Well, the Nationals believe it will boost attendance and make it easier for fans to get home at a more reasonable hour, specifically with the shorter length of games.

And speaking of the length of games, let's stay with that, as this year's World Series games were 21 minutes shorter than last year and 35 minutes shorter than two years ago. So three World Series games this year played in less than three hours and every nine inning World Series game this year was played in less than three hours and 20 minutes. That's the first time it's happened this century. So this was a big win for baseball to show that the new rules could transfer fine to the tense postseason environment and atmosphere. Baseball has to feel really good about that.

We spoke on the Buzzcast on Monday about the unrest in the WTA. And that unrest continued as influential voice Martina Navratilova said that she thinks WTA CEO, Steve Simon, is unlikely to survive in his role as chief executive after this year's controversial WTA Finals in Mexico. We have covered all the issues around their marquee end of year event, which ended Monday. Navratilova said she believes it's time to have a woman in charge of the WTA Tour. Steve Simon has been in his role for eight years, but we know the criticism he has faced and now players are being very vocal about the management and leadership of the tour. And it's fair to wonder if Steve Simon survives this controversy and whether his future as the CEO of the WTA is in jeopardy.

Remember years ago you couldn't get a beer at a college football game? Well, how quickly things have changed. An interesting study by The AP shows that selling beer and wine inside college football stadiums has now become the norm as nearly 80% or 55 of the 69 Power 5 schools now sell alcohol in the public areas of their stadium on game days. That's a dramatic change from just a few years ago. And of course, schools did this to bring in more revenue and also to appeal to fan wishes. Remember, the SEC only allowed schools to sell alcohol starting in 2019 and before 2019, only 20 schools across college sports sold beer and wine. So it's been accelerated, it will only continue as it's a revenue play and a fan enhancement play.

And so that is your Morning Buzzcast for Tuesday, November 7th. I'm Abe Madkour. Have a great day, stay healthy, be good to each other. I'll speak to you on Wednesday.