SBJ Morning Buzzcast

SBJ Morning Buzzcast: September 5, 2023

Episode Summary

Revenue details emerge as ACC set to expand, Spectrum customers without Disney's cable channels, the Coach Prime effect at Colorado & Messi Mania takes Los Angeles.

Episode Transcription

Well, make your plans now to attend SBJ's DRIVE Conference in St. Louis, September 19th to the 21st. We'll discuss facilities, facility operations, franchise issues, ticketing, ticketing revenue, and business analytics and much more. You will also get site visits of the Enterprise Center, Ballpark Village and Busch Stadium, and City Park, the new soccer home of St. Louis City FC. It's going to be a very valuable week. I hope you'll join me in St. Louis. Register now on our website or let me know if you have any questions.

We all know we had a big college football weekend and we're going right to the start of the NFL. Hard to believe the NFL kicks off Thursday night, 8:20 on NBC, the Lions at the Chiefs. More on that in Buzzcast versions Wednesday and Thursday. But this is your morning Buzzcast for Tuesday, September 5th. I'm Abe Madkour. Hope everybody had a great Labor Day weekend. You know what they say. After Labor Day, it's a sprint to the end of the year. And don't we all know that?

Let's get right to the news in college sports first, because it was a very busy weekend. Welcome to the 18 team ACC, which officially welcomed Stanford, Cal, and SMU to the conference beginning the next school year. This went down on Friday morning and I found the comments from ACC commissioner Jim Phillips quite telling. When he announced the addition of the three schools, he said, quote, "You either get busy or you get left behind." End quote.

Two points there. First, sources close to the ACC were stressing to me for weeks, maybe months, that Jim Phillips had to do something. That they were pushing him to make a move. I'm not saying I agreed that he had to make a move, but that was certainly one of the narratives out there.

In addition, the other narrative is that if you're not adding schools, or growing your conference, or doing something, you're being left behind and falling behind. Again, not saying I agree or disagree with those notions, but those are the sentiments that are out there in college sports.

So here's how it will work. Cal, Stanford, and SMU will not get full disbursements from the ACC, and so the conference will create a revenue pool to be shared among conference members. And of course, that's what the likes of Clemson and Florida State have wanted. Yes, more revenue. SMU will not receive any media revenue for nine years. Stanford and Cal will earn 30% of media revenue for the first seven years, before gradually increasing their percentage from year eight through year 12.

That new pool of money from SMU's share and Stanford and Cal's partial share is expected to be used to reward schools for on-field performance in that new revenue distribution system that the conference has put together. That is designed to help schools such as, yes, Clemson and Florida State, to narrow that financial gap with some of their competitors in the SEC and the Big Ten. But is that enough to keep them in the fold? That's the question. And most don't believe it will be, but more on that later.

The vote on Friday was a key vote switch by North Carolina State, as for weeks, four schools were against adding teams: Clemson, Florida State, North Carolina, and NC State. But late last week, NC State changed its position, allowing for an official 12-3 vote approving the additions to the conference. A number of media leaders over the weekend chimed in that the ACC gained nothing in football by adding these three schools. And perhaps that's true, but the ACC and Jim Phillips went with scale and went for numbers. And now they have 18 schools and they believe they are stronger with more schools.

And some believe it gives the ACC security in case any schools, i.e. Florida State, Clemson, or someone else, possibly leaves the conference. Most reports from those on the ground in the ACC believe that the moves to add the schools and to increase revenue sharing and more revenue distribution will do little to quell the desires of Clemson and Florida State for more revenue. And that they will soon look to see where they can best fit in this ever-changing college landscape. And I'm sure we'll have more on this story in the days and weeks to come.

Let's move on. As many of you know, I live in Charlotte, North Carolina and I am a Charter Spectrum cable subscriber. Yes, I pay for the bundle. And let's just say, Labor Day wasn't the sports weekend I had hoped it would be, as Charter, one of the largest cable companies in the United States, dropped Disney's cable channels, including all of the ESPN feeds, from its package. This was a very significant move. And it seemed to tell the media industry that Charter's had enough of dealing with the traditional cable TV model and the ramifications here could be significant.

This dispute isn't so much about the price tag of Disney's channels, it's about the entire system. The cost of doing business, and what is and what isn't part of the cable bundle. As of Monday afternoon, Disney's ESPN, ESPN2, ESPN News and others were not available to Charter's nearly 15 million pay-TV subscribers. So yes, that means no US Open. That meant no college football. And Charter is in some of the biggest cities in America. SBJ's John Ourand offered his must-read analysis in a special SBJ Media newsletter that was delivered on Monday afternoon. Ourand speculates that the two sides will reach an agreement over the next few days or weeks. The two sides are still talking.

Regardless, he believes that Charter has shown the stomach for dropping these channels is stronger than ever by the cable companies. As Charter CEO Christopher Winfrey said bluntly, quote, "We're either moving forward with a new collaborative video model, or we're moving on." End quote. So very strong statements that could lead to more disruption to the traditional media model. Again, this is a story that impacts everybody in the sports business ecosystem. I can't stress enough, it's one you're going to really want to keep your eye on.

A pretty interesting story broke over the weekend out of London that the ATP and the WTA tours have resurfaced talks about possibly combining the tours. And the first step is by having executives and tournament representatives meet for a two-day summit in London at the end of September. Now, this story is very much in the early stages. It may not happen. And remember, the four Grand Slams would remain separate and run independently. But if progress is made here, this would be significant and change the game of tennis dramatically.

The reports out of London state that leadership of both the ATP and the WTA are concerned about Saudi Arabia's interest in tennis and believe a rival Saudi tour would be a massive threat. So to avoid that, leaders want to begin having formal discussions to bring the men's and women's tours together. You're also going to want to see how this will sit with the players, as the Professional Tennis Players Association, which was founded by Novak Djokovic and led currently by Ahmad Nassar, has begun to expand its role and has begun to show its influence in the game. And yes, there have been calls over the years to have the ATP and WTA unite in a single governing body, and it could be that Saudi Arabia's possible interest in tennis drives this merger.

Remember, we've already talked on the Buzzcast last month that Jeddah will serve as the host of the ATP's Next Gen Finals for under 21 players in future years. So again, this story very early in the process, but a merger of the ATP and WTA tours would have significant implications in professional tennis.

Well, you know who had a good weekend? That was Deion Sanders. And Colorado's impressive season-opening victory is already paying off. The school's athletic department sold nearly $300,000 worth of ticket inventory on Saturday alone, just on Saturday, after the team's upset of number 17 TCU. This continues the massive and successful ticket sales that have transpired since Colorado hired Sanders on December 3rd. They've broken one ticket record after another. The Buffaloes sold out their season ticket allotment in April. They had a record number of season ticket requests. The team had more than 47,000 at their spring game. And the first two home games, September 9th versus Nebraska and October 13th versus Stanford, they've already sold out.

Now, with Saturday's sales, the other four home games are close to being sold out as well. Colorado has never sold out its entire season. In fact, the last time that more than two games were even sold out was in 1996. So you're seeing the impact of Coach Prime and how the move to hire him is paying off financially and in the headlines for this institution.

And it seems, yes, on the Buzzcast every day there's a new Messi update. And the Lionel Messi show hit Los Angeles in a big way over the weekend, and the LA Times called it, "Part circus and part cultural phenomenon." And it is being called the most heavily hyped game in LAFC history. The team issued approximately 350 credentials to media from around the world. That's roughly the same number the team issued for the MLS Cup at the same venue last fall.

Inter Miami won again in front of a BMO Stadium record soccer crowd of almost 23,000 fans as the gate was boosted by LAFC selling several hundred standing-room-only tickets. And the get-in price on the secondary market was nearly $900. Pitch-side seats went for north of $2,300 according to the LA Times. So you're seeing overwhelming demand driving the ticket prices. And of course, you're going to have celebrities in Los Angeles. They came out for the game. You saw the likes of Leonardo DiCaprio, Jason Sudeikis, Mookie Betts. You had Caleb Williams. You even had Prince Harry and Meghan Markle there. So the Messi surge and the Messi phenomenon continues to boost Major League Soccer.

And let's end with this. Chicago Cubs co-owner Laura Ricketts and her investment group officially became the new owners of the NWSL Chicago Red Stars after the league's Board of Governors approved the deal. The Red Stars were purchased for $35.5 million, a record for an existing NWSL club, and ownership plans to invest another $25 million into the team. So this is quite an investment for Laura Ricketts. She's emerging as one of the most influential leaders in team sports in Chicago. She's the control person and lead investor, and she's looking for a clean slate. She didn't bring back anyone from the previous ownership group as part of her investment team.

Remember, the Red Stars were under a cloud of major controversy because the Sally Yates report into the culture of the NWSL found abusive and unprofessional behavior toward Red Star players between 2014 and 2021 that the team's ownership really didn't act on or even acknowledge. So, now with a new ownership group, what will the team do? It's going to first look to hire a new team president, a new general manager, and they want to invest in the game day experience.

Remember, the team plays at SeatGeek Stadium in Bridgeview, has a lease there till about 2025. But Bridgeview is remote and it creates challenges for fans wanting to attend games. The facility opened in 2006. It definitely needs some investments in the facility. And in terms of attendance, the Red Stars are last in the league. They average just over 4,000 fans a game. So Laura Ricketts has put together a very strong ownership group. She's one to watch. She loves sports, she played sports in her youth, and she really wants to change the culture here and bring her own vision to this NWSL team in the nation's number-three largest market. So obviously, a new chapter for the NWSL Chicago Red Stars under Laura Ricketts and her ownership group.

And so that is your morning Buzzcast for a very busy Tuesday, September 5th. I'm Abe Madkour. Thanks for listening to the Buzzcast. Thanks for spreading the word on the Buzzcast. Stay healthy. Be good to each other. I'll speak to you on Wednesday.