UP393 The Bundle - Overthinking the sports media market

Our regular deep dive in to the latest happenings in sports media, with regular co-hosts Murray Barnett and Yannick Ramcke. 
The episode covers a variety of topics starting with the NFL's strategic move to stream Christmas Day games on Netflix and the broader implications for live sports streaming. They delve into Sky Sports Plus' new streaming options for the EFL and how it impacts individual sports leagues and traditional linear broadcasting. The conversation further touches on Serie A's ongoing negotiations for U.S. media rights and broader trends in international sports rights valuation. Quick takes include a discussion on declining golf ratings in the U.S., the Miami F1 race ratings, and Caitlin Clark's anticipated impact on WNBA's streaming debut on Disney Plus. A blend of market insights, business strategies, and the shifting landscape of sports media rights makes this episode a must-listen for sports business enthusiasts.

06:21 Deep Dive into NFL and Netflix's Christmas Day Strategy
23:24 Sky Sports Plus: Revolutionizing Sports Streaming?
31:34 Convergence of Linear and Digital Media
32:40 Exploring the EFL and Sports Inventory Dynamics
35:48 The Marketing and Promotion Challenge in Streaming
37:22 Navigating the Complex World of Sports Rights and Piracy
40:12 The Future of Serie A in the U.S. Media Market
47:24 The Role of Agencies and Private Equity in Sports Media
54:38 Brief Insights on Golf Ratings, Formula 1, and Caitlin Clark, the WNBA's New Star

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Transcript

UP: 0:00

Hello welcome. This is Richard Gillis and you're listening to another episode of unofficial partner. The sports business podcast. This is an episode of the bundle our deep dive into the sports media and streaming marketplace with my regular co-hosts. Yannick Ramco and. Marie bonnet.

Richard Gillis UP: 0:21

I was just wondering if you had any, if you'd recorded other stuff, because I see you're very, very promiscuous these days. it's like I've created a monster.

Yannick Ramcke: 0:29

And now I have, no, the headphones don't work, but I'm also actually on the move. To Rome tomorrow morning

Richard Gillis UP: 0:36

Oh, very nice.

Yannick Ramcke: 0:37

On invitation from the leagues

Richard Gillis UP: 0:39

Who's that? Surya R? Oh,

Yannick Ramcke: 0:40

So yeah, that's Coppa Italia. Finale, Finale, Finale. Now, speaking

Murray Barnett: 0:46

I love it. You're off to, you're off to Rome, I'm off to Dublin. Are you going to be in Dublin for the Europa League?

Richard Gillis UP: 0:52

I am.

Murray Barnett: 0:53

Oh, cool. We're on the same, I think we're on the same junket,

Richard Gillis UP: 0:55

We are. Are we allowed to call it Junkie? What I'm looking forward to, are we walking to the stadium with Mickey O'Rourke? This is what I heard.

Murray Barnett: 1:02

That'd be interesting if we make it to the stadium.

Richard Gillis UP: 1:04

it'd be a long route as well.

Murray Barnett: 1:06

So what are we going to talk about? So we had some sort of differences of opinion, I think, about what warranted feature time and what warranted hot takes.

Richard Gillis UP: 1:16

my only thing was I quite like to bring the SkyPlus. I know to your point, There might not be much in it, but I think that's quite interesting. I And I've got a question about what iFollow is now and what that new deal is and where the SkySport Plus Meets, I follow, because it feels like there's a load of sort of stuff has been done cause it looks like it's almost like a red button type thing, does it? Anyway, but that's, I think there was some quite interesting questions about it and it's not American. So I think we're sort of a bit overloaded on US stuff.

Yannick Ramcke: 1:51

It's a quick question. Is iFollow, is it available domestically?

Richard Gillis UP: 1:55

Yes.

Yannick Ramcke: 1:56

Okay. I mean, this is an absolutely fair question because it's carving out much of the inventory that has previously lived on iFollow. no moving it over to I mean, as part of the acquisition from Sky, they bought all the, again, tonnage, of, the EFL. Okay. Now, this really reminded me of like the four P's in the marketing mix, because for me it's like a marketing exercise. With how you just price package and promote this because it's actually a nothing burger for me, but it sets a stage or it gives the customer the feel. Okay. You are getting more, you're getting new stuff. And then down the line, it's just another standard on package that they will charge for. But anyway, it's about framing and packaging. We can.

Murray Barnett: 2:45

I thought I had a slightly different angle, Yannick. I thought it was actually a lot more about traditional linear sports companies becoming much more like streamers. If you look at whether it's a league specific service like an iFollow or like a F1 TV or something like that, they're now recognizing that If you have access to all this content, you've got to make it all available. And so that's number one which probably ultimately is the death of a lot of single league or single sports OTT services. If that's if they go down that route, but it's much more about how they think about content in a different way. And as we've talked about previously, we think we're probably at the top end of the market when it comes to how much content is being sold for. And so the only way to keep the price up is the volume. And so it's a little bit of an answer to the volume question, which is, arguably maybe there's not such a great desire to have that. That level of volume, but at the same time, if you get that volume, you want to exploit it as a broadcaster. And if you're EFL or somebody else, you're able to sort of tout that you've kept the price up, albeit when you look at it in reality, the per gain prices has reduced.

Yannick Ramcke: 4:07

No, it's a good angle. I mean, we have this traditional limitation of shell space in the linear world, which is now removed in OTT.

Richard Gillis UP: 4:15

Then we've got a question of what the third story is. Is it US golf ratings down? Is it Seria art sales in the Americas in US? I think the F1 Miami ratings is quite an interesting little story. So let's start with NFL Christmas Day.

Yannick Ramcke: 4:28

I mean, let's start NFL, then Sky Sports Plus, then Serie A, and then we do the rest more quick tech. I mean, I think a bit of uh, NBA then Ratings Formula One. I don't know if you want to touch on this reported Apple interest in the new FIFA World Cup tournament. Or Club World Cup Tournament,

Richard Gillis UP: 4:50

Yeah, I

Yannick Ramcke: 4:51

but we can keep all of these super, super short if you focus on Netflix, NFL, Sky Sports Plus and Serie A, which is like for me, just a moniker for every mid to long tail what's going on in the U. S. because ultimately it's like a zero sum game and all the companies say content spend is flat. And then they give guidance and so on by at the same time, we have this skyrocketing of NFL and NBA rights. I mean, if it's Eurosum, then it must be taken from somewhere. And I think Serie A is now one good example for the kind of properties that made good money in before. And European football in particular, I think, will suffer.

Murray Barnett: 5:34

Just on that, Yannick, the thing I thought, I didn't know if we wanted to make a connection between the talk of private equity in Syria and the international, the desire for international rights to grow, because to me, there's something in that about how The failure of being able to secure or reach an agreement with private equity and international rights for Syriac has also led to them in this suboptimal situation of telling themselves,

Yannick Ramcke: 6:03

no, and I think this is we can tie this into it because for me, private equity has one and one function only, bridge financing, bridging revenue gaps that might be there in the short term. There's no other added value that I see.

Richard Gillis UP: 6:20

Okay. So right. I'm going to start off with the American Christmas Day story. The NFL is going to be live on Christmas Day on Netflix. So this was a story that I think sort of first came out. Puck was the one that broke it. I think it's a very good media organization, Puck. It's got some really good writers on it, but they, and they cover occasionally sort of sport related media stuff. And said, it looks like. Netflix will wind up carrying two NFL games. The deal will mark a further escalation of the league's strategy around the holiday which began in earnest in 2022 and grew much more serious last year with a high profile triple header that crushed the NBA's rival slate of games in viewership. Fueled by that success, the NFL earlier this spring put these games up for auction and said with bidding starting in the 50 million. Dollar range. So we've got this, I seem to remember Amazon's Thursday, was it? Or Friday? Can't

Murray Barnett: 7:22

that Friday, that Friday,

Richard Gillis UP: 7:25

we had that and we had a sort of thing on that. Murray, there's two things here. One is. It's obviously about money, but are they doing? And do you think there's something that the others will look at and steal or try to steal and buy others? I mean, other major leagues and otherwise, but we'll park that story from part that bit for a minute, but just explain what's happening.

Murray Barnett: 7:45

traditionally, Christmas Day had always been the day for the NBA. So the NBA would have a few high quality matchups on those days, and I think some of it is that NFL has looked and seen that and have decided that actually there's an opportunity for them to to get to get on there. But the wider story is it's a very deliberate courting of the streamers. So if you look at how, well, the most interesting thing about this, which is a little bit unusual is that they've delayed the publishing of their schedule for next season. But you know, in the past, They've worked with Amazon around Black Friday sort of YouTube around Sunday tickets and so on. So definitely there's this idea, I think that they are looking at this very small package of two games as a way to get Netflix into the, nFL game, so to speak. Netflix is already in it to a certain degree with shoulder programming, such as the quarterback. And so there's a natural sort of fit there and it fits into their current sort of sports strategy of being a little bit stunty. So with the exception of WWE, it's tended to be one offs like the F1 golf event or the boxing Tournaments that are coming off. So, it's perhaps a good way for NFL to test out Netflix and Netflix to also test out how everything works. The other key part to this is that it starts, or sorry, the first Christmas would be just before the start of the new WWE deal. So maybe there's an eye to them also testing out how they can manage the technology side of, high volume high volume viewership during a peak window to see how that might play out for WWE. But then that's quite a

Richard Gillis UP: 9:35

Well, it's quite, it's, there's a load in there. So there's, first of all, it's a bit weird. I find that a bit weird that. America has always had, because America is obviously quite a deeply religious country and playing stuff on Christmas day feels strange. I found that surprising. That's interesting that I didn't know they, the NBA had. Games on Christmas Day. But anyway, parking that. Netflix seems to me to be approaching sport, as we've said before, it, the shoulder programming thing. A lot of it is really crap, isn't it? It's the sort of, it's not very good sports, but under the banner of sport and entertainment it's a, it's pretty weak stuff. And I don't know whether it's just because they, Want to go in on entertainment and, do it differently or whether they haven't got the confidence in the core product of sport to say, right, okay, we're just going to buy this and, go and do it properly.

Murray Barnett: 10:30

Well, I think you're tiring everything with the same brush. I mean, for starters, some of the shoulder programming is actually quite good. But also it's all, it's very different to do live sports events than something that's effectively a catalog. And there are a lot more challenges that, that, that revolve around doing that. So, I don't think that they're. You can say that they're doing one because they're not doing the other or that they're cautious about the other. I think that there are, they should be rightly cautious around some of the technology challenges and also some of the revenue challenges. And I think if you look at the price of these games, they're fairly keenly priced for somebody to get into the NFL game because it's not a very large package. I mean, a couple of games are relatively short

Richard Gillis UP: 11:16

But why do it if,

Murray Barnett: 11:17

Sorry, it's just one more point that it's, and it's also additional. This isn't taking revenue away from any of their existing deals. This is something which they're able to shoehorn into all of their other in and amongst all of their other

Richard Gillis UP: 11:30

but I'm just wondering, cause Amazon I got because it's about shopping and, it's the Black Friday thing. I don't quite know why Netflix this because it's not going to be a lead into, it's not like when the Premier League were trying to entice Amazon in and they bought a small. Sort of package, and then they've gone off again and said, no, we, okay, we've got the customer now. We don't need to buy rights. That was sort of one of the lessons or seeming lessons of the last five years and the streamers. I find it weird that why Netflix would do this. It's still a lot of money. That's where they got a lot of money. But

Yannick Ramcke: 12:07

I mean, we touched on Netflix and Netflix intention in sports before we also Discuss the idea of this inverted sports programming strategy that they have coming first from shoulder programming, then moving into life, which exactly upside down how a normal sports broadcaster would approach its programming strategy. I think the biggest story is NFL, but before we go there. Just one point or my perspective on on Netflix. Yes, it is one thing to nurture and engage a previously established audience with all the shorter programming that they had, including around American football. And yes, there is a bunch of crap in there in all the sports documentary and we discussed the hype around it, which resulted in. Lead to a huge output quantity wise. And if you just churn out much, much content, there's a lot of not so good content in there, but also a good and a fair share of really yeah. Off the field content that is cutting through. But more importantly, I think in addition to engaging and nurturing and established. Audience on Netflix, the American football fan, which I guess in the US chances are that you are an American football fan, is the challenge of an increasingly saturated market like the US is for Netflix. Incremental subscriber acquisition is like a tremendous challenge. like, how can you realize and show further growth? And I assume since this probably is like top of the pyramid uh, content on Christmas, Exclusive NFL games will be one of the bigger subscriber acquisition events that Netflix will have this year. So I think it's a combination of many things, but looking at it from the rights owner perspective, looking at that strategy, they don't need a bunch of live sports programming. They will pick and choose. And if they don't get it on their terms, they will move on. So it's not a solution for all the sports. But for the very few, but it won't result in the fact of a huge spending spree on sports because they don't need the tonnage that a normal sports broadcaster needs.

Richard Gillis UP: 14:27

if it's a customer acquisition play, what do you think the churn on this would be? Because if I'm thinking, okay, I am not a Netflix, it's two enormous groups of people, what a Netflix subscriber and an NFL fan who wants to watch another NFL game who doesn't already have, so I'm just trying to think if it's one or the other, it feels like it's going to be a very short term. thing. If the hope is that they're going to stick around on Netflix, I think NFL fans will have made the Netflix decision already, wouldn't they?

Murray Barnett: 14:55

Well, I think that it's not necessarily just about acquisition. It's also about customer retention. It's a good slot for it to remind everybody that they've got Netflix and how useful it is for them. It's also. They're launching an ad sales business, so it's a useful a useful tool for them in that. It's also good for the NFL in the sense that it's an opportunity to see what consumer patterns are like, while still keeping their, core NFL fans on linear TV. And it probably won't be a marquee matchup, because it won't, they won't need to do that in order to well, they'll want to keep the marquee matchups for their big linear partners, but it perhaps whets the appetite for NFL and Netflix to do agreements going forward. The one person that's really annoying for us, as always, is the fans, because that'll add yet another network that they have to either acquire or remind themselves where their login is to be able to watch to watch the games.

Yannick Ramcke: 15:53

I mean, I really liked your point on this re engagement consideration or the fact that you remind your active subscriber base that they actually have Netflix. I think it was a similar point we made. When NFL got into Thursday Night Football many people have access for whatever reason to prime video. It's just this halo effect to make people aware that there is actually something must see going on. So I like this angle. And regarding your point on ability to retain acquired subscribers Richard, The one player in the video entertainment marketplace who does not have to worry about their lack of ability to retain subscribers is Netflix. They are by far market leading if you look at all the studies around monthly shown rates, etc. I think they are around 2%. If you compound 2 percent for 12 months, it's still a significant turnover of the subscriber base but far from the churn rate and turnover rates that all the other streamers have. And this was the main point also for Peacock when they acquired the streaming exclusive playoff match. It doesn't really matter how many subscribers you acquire, it's all about the retention of those. And I think in the meantime, ever since this game was going on early, earlier in the year, there were a bunch of reports that actually retention was above expectations. And then the numbers again, work out. So, on the retention side, I think Netflix is confident that they're, Algorithms, they are huge library and everything will do the job if they have acquired and converted the subscriber once

Richard Gillis UP: 17:38

love to see some research about fans views of, Minority packages, because it's, to Murray's point, just the level of irritation is just so high. If you are a fan and you're paying subs, lots of different places to just to watch your thing and the NFL and the Premier League are the two things that, you know. In domestic leagues that I can think of that drive that, obviously in other countries, it's different, but that it's so annoying that they start to do small little deals here and there for strategic reasons. It looks so exploitative. I just think there'll be a backlash on, I'm not going to thank Netflix if I'm an NFL fan from, for showing, buying a deal, buying a couple of games for Christmas day.

Yannick Ramcke: 18:21

Noted, but at the same time you can make the argument that Netflix is actually the most accessible video service in the US above and beyond Traditional linear cable or satellite pay TV. And if you compare 80 million domestic Netflix subscribers in the US to 30 million, for example, for Peacock, which exclusively streamed a playoff game, not a random. Mid week game in December, so I think it's not ideal, but in terms of accessibility, it couldn't get better than Netflix, just from a consumer perspective, regardless of the fact that it is one additional player. But if you add one, this might have been the most quote unquote fair solution or bearable solution for the end consumer.

Richard Gillis UP: 19:12

Okay. Right.

Yannick Ramcke: 19:13

And as I said, for me, it's less about Netflix actually, and I'm just again and again surprised or even admire the media rights wizardry that is going on with the NFL. Because as Murray, as you said many months ago, they closed the 10 to 11 year agreement with their main rights holders. And ever since then, they come up with different ways. To carve out another slice of the pie and set it to an incremental party. We have this streaming exclusive playoff game, which went to Peacock last time, is now going to Amazon, if I remember correctly. They are running an annual media rights auction. And this might be the most, most interesting thing now with the Christmas games and Netflix because as far as I understand, they only can offer this game if Christmas falls on a midweek day. Tuesday, Wednesday, Thursday. Do they now run? I think in the next ten years it's like three times the

Richard Gillis UP: 20:12

It came up with that

Yannick Ramcke: 20:13

Each year like an auction to the highest bidder, because I don't expect this to be a multi year thing, but just always admire, like, they are squeezing more and more out of it, even though everybody thought, like, the rights are awarded for the next decade, and that's what it is. Not for the NFL, they keep making money.

Murray Barnett: 20:34

Just to your point Richard, Broadcasters have exclusivity around specific days.

Richard Gillis UP: 20:40

Okay. So that's what's driven that. That window. So the, and the last point, just before we finish on this one is the sort of what's interesting about the NFL is that people will copy them or look at what they're doing and try and copy them. Do you think this is just the sort of thing that the NFL can do is it just about their market power? And they're sort of showing off their market power here by just picking out these dates and branding certain holidays and bits of the year. They're then able to carve out in a very clever way, some new rights, inventory. Is this something that's doable for others, or is it just purely, you've got to be a massive, powerful beast to be able to get away with it?

Yannick Ramcke: 21:18

I mean, the general concept of future proving your media right strategy by like nurturing the future rights buyer to give them a small slice of the pie to like get into business, this is a concept that everybody should try to do. But I think it's clear that the NFL is in a unique position to actually execute. On all of that.

Richard Gillis UP: 21:40

So, if I'm going in to buy, These rights again, for the NFL, the NBA, am I going through the calendar trying to just work out, okay, I don't want you to sell Shrove Tuesday's game or what, whatever the details of that, is that something that you're going to be able to mitigate against? I'm wondering how long term this is as a strategy, because if I'm coming in with a large check, I don't want you then going off and carving out loads of stuff and making more money from someone else.

Murray Barnett: 22:06

Well, we could spend a whole program just talking about this, but as we've discussed previously, the way that rights are carved up in the U. S. is very different to how rights are carved up internationally. And the NFL has just become the master at working out how to drive the most value out of their games. And simply put, in any, Contract discussion, you only get what you pay for and in theory it means that the league can go and do what it likes with whatever else they haven't sold to you. So, the NFL is just being very smart about what they've got left on their portfolio.

Richard Gillis UP: 22:40

Very good answer.

Yannick Ramcke: 22:41

The one thing that is suffering from all the slicing and dicing that the NFL is doing is actually the in house network with NFL network which I think we can count the times and days. That the NFA networks will carry material and significant life match inventory. So I think this is the one part that they are fully willing to to suffer or to like have a slow death by maximizing B2B licensing revenues. I think NFA network, which was only there to create competitive tension and pressure, I think has served its purpose. And there will be more and more craft out going forward.

Richard Gillis UP: 23:22

Okay. Right. Story two. And I'm, we're taking this from sports pro. Sky Sports Plus promises up to 100 simultaneous live streams ahead of the August launch for EFL season. New streaming platform will offer every game on opening day. The tech infrastructure can handle up to 100 events at the same time. Super League, F1, WTA and ATP tennis all bundled into Sky Sports Plus. We've got a quote from Jonathan Licht. Of Sky Sports Sky Sports Plus will be transformational in the amount of choice that customers will have at their fingertips, says Licht. Is it Licht or Licked?

Murray Barnett: 24:04

Licht.

Richard Gillis UP: 24:05

In 2024, Sky Sports customers will be able to watch 50 percent more live sport. Okay, so there's two things. There's front end and we'll have a little chat about the back end in terms of how they're doing this and what the pipes are. Because when I saw this story, as ill informed as I am, I wondered whether or not this was. Skysports plus in a Disney plus sort of stylee would be quite a, a big story, whereas this felt less like that and more actually a sort of marketing conceit to try and wrap something around a load of brand Rights that they've got. There's a football league bit to this, which I'm really interested in because I don't know how it impacts I follow, for example, and whether it's the same thing or the same games or I don't know how this new deal, and this is all about the. The deal from this season. So the 2024 25 campaign is first to be covered by the new 935 million pound, 1. 2 billion five year deal that Sky have done with the EFL, see more than a thousand matches from all three divisions in the EFL broad cup broadcast each year. So there's that. That's the sort of right side of it. Murray very interested in your take on this. What do you think? What's happening?

Murray Barnett: 25:24

There's a number of things from Sky's perspective. Firstly, I think it's increasingly showing the reliance on OTT or streaming, as opposed to, what Sky was traditionally, which is satellite channels, and increasingly those are becoming sort of less and less relevant. Also, it's just offering more consumer choice. They've acquired all of this extra programming. In order to keep the price up. So if you like the price per game goes down, but you're offering more choice whether that is something which results in higher audiences, I don't know, I suspect it probably leads to more audience fragmentation because, a Middlesbrough fan. might watch some other matches because they can't see the middle of games have not all been selected to be on Sky Sports. But now that they can watch all of them, then maybe they take a different perspective and, don't watch some of the other matches that they previously watched. What else? I think, it also has sort of fundamental implications on WTA TV iFollow, and any of the sort of single sport or league direct consumer services which probably puts Sky in a much better position for future negotiations as

Richard Gillis UP: 26:40

So it's it's a hedge against, so the old threat of a single sport, so a T PT television or WTA or the F1, is that come to our price expectations and we'll, or, we'll, we'll show it ourselves that this is sort of. Nobbling that one, isn't it?

Murray Barnett: 26:58

Well, yeah, I wouldn't see that as being sort of front and center. I think that's more like a nice byproduct for Sky of this is that, It takes out that next best alternative.

Yannick Ramcke: 27:08

Yeah, for me, this is really like, or these are like then inadvertible downstream implications of the initial, new media rights agreement with the EFL, where the whole topic of visibility, reach, more matches, more inventory was like a big theme of this entire, uh, deal. deal. And now for me, there are two things to it. One is, it shows, the linear to streaming transition, the sense of. On Linear we always had the limitation in shelf space, we only had so many programming minutes to fill, only the best of the best content made the airways, and then there was a purpose to those leaks operated. streaming services for any residual inventory that didn't make the main channels. And, they need to put the extra programming somewhere. So they spin up a new channel and then it's for me really like, a marketing playbook that they, are running here. I mean, this reminded me almost back to, university with the four P's in marketing. price, product slash packaging, place and promotion,

Richard Gillis UP: 28:13

five P's.

Yannick Ramcke: 28:15

product and

Richard Gillis UP: 28:16

How many P's are you going to have for God's sake?

Yannick Ramcke: 28:18

because ultimately it's, it's about in the first place make their subscribers feel good about the money that they pay because they get more for the same money. second, it provides a pathway to, further monetization down the line. Because at some point this channel, it's, won't be for free anymore and, they may, charge for it. So for me, it's more about really a PR slash commercialization exercise, how to best utilize the big fat media rights package that they acquired from, the EFL and that it's, free, to begin with. It's like, win, customers get something for free, feel better about it in terms of the subjective value that I get for my money. DFL is happy about the increased visibility and reach and not, not an additional, paywall, in between. And I guess, Sky, gets some goodwill from both,

Richard Gillis UP: 29:13

isn't, but this isn't free. I mean, you've got to be a Sky subscriber to get it. So you're paying the, it's additional to, for a Sky subscriber, isn't it? So it's not a,

Murray Barnett: 29:20

Well, not just a Sky Sports subscriber, but you also need to have a package. You need to be able to access it via Now TV or the mobile app. So if you're a satellite only Sky Sports subscriber, you will not be able to receive

Richard Gillis UP: 29:34

so Murray, I remember this being, this deal. I remember the, at the time people said, Oh, they're going to package the deal. This is a DAZN focused deal. They were, it was a streaming deal. That was the point. And then Sky got it. And that was a bit of a surprise. I remember DAZN was sort of in the box seat for a while, at least in the public sort of quoting of the negotiations. But is this. Part of that. So this is the new deal that's starting that came about from those negotiations. So this is how they've looking packaging their rights in the new streaming environment.

Murray Barnett: 30:11

I think it's the money talks. I think they just, in order to get the kind of check, you have to offer as much content, much inventory as you can.

Richard Gillis UP: 30:20

Is that not the same thing though? In terms of, cause obviously there's the streamers ability to Put stuff out to Yannick's point, they're not, it's not like sort of the editorial choice of what's the big game that we're going to choose this weekend is not the same with streamers because they've got just more capacity to put things out. There's also what's happening at the back end of this. They're making a big point in the press release that they put out that tech infrastructure can handle up to a hundred live events at the same time. Is this new territory?

Murray Barnett: 30:47

We'll just, I think to your earlier point, this is kind of a confluence of circumstances and I touched upon it earlier that increasingly. Sky is becoming the same Netflix or something else in terms of the way that it delivers content. And even the way it packages its various bouquets, if you like. So I think it's come at the right time for them to perhaps push even more in that direction. And the technology is nothing particularly new. It's what other people have got, albeit that Sky is always, very much on the edge Of technology and certainly to deliver a hundred concurrent streams is not an easy thing. But it's more just a, a bandwidth and a manpower.

Yannick Ramcke: 31:29

And you are actually touching on, and maybe it's a bit zooming out of all of this. for me, we always talk about linear versus, streaming and the transition going on, but I mean, ultimately we are working in a, we are living in a world that is converging, right? It's like convergent television, ultimately. Yes, you have your streaming only players. And these are indeed, different, like in a prime video. But like all the traditional quote unquote legacy media companies, they are device and platform agnostic as of today. I mean, Sky you can subscribe via satellite cable television. You can subscribe D2C via, I think it's NowTV, in, in the UK. So this whole distinction between linear and digital doesn't really make sense. and also like that inventory is, well, rights are moving from linear to streaming. I think, it's not really, applicable if you really think about it, unless there comes the streaming only player in there, like in a prime video who is not distributed on satellite or cable, television. So, just that as a, as an additional point, more a bit, zoomed out to this particular video,

Richard Gillis UP: 32:40

And just one other point, it's quite interesting and we focused on the football league here, EFL. Within it, you've got things like rugby league, super league, which is, I mean, part of IMG's re imagining big long deal that they've done super league was to, well, re imagine, but essentially what the outcome is going to be, it's going to, they've put it onto Sky Sports Plus. There's a lot in there. So ATP, WTA tennis, bits of Formula One, it always comes back to whenever I have. People on from sports governing bodies sometimes a red flag is they mentioned grandstand. So that's, so they have this sort of idea that the world going back to, as long as we get free to air, or at least we're on television, we get a spot, everything will be okay, which I don't really think is true. But it's quite interesting, sheer amount of inventory there. I wonder what is going to happen to those Sports and those games that appear on the streaming channels, because again, the assumption is that, okay, you get a window and you can then promote and you'll get the numbers and you'll become relevant again. I just don't see it. I think they're going to be. That's a lot of sport that is just going to be out there on a, on skyports sports plus it's like the red button. I never, I, I never watched the red button stuff, but I think it might be snobbery on my part. I might be thinking it's not worthy of my attention. If it's on the red button, I'm not going to watch it.

Murray Barnett: 34:04

I think just in the same way that sports channels pay for positioning in a linear world, you're going to see a lot of bargaining around how much certain sports get promotion and where they're simulcast on linear channels. And arguably, there could even be a return to magazine programming which highlights those. So, I don't know if as part of the EFL deal there was some commitment to also produce an EFL show, which would in turn be, something that was heavily promoted on Sky Sports News or whatever it is. And, I, back to my ESPN days, one of the things we always used to sort of throw out. to various, um, people that we were in negotiations with was this idea that if you're on ESPN, you get promotion on ESPN radio, on ESPN sports center, on all these other shows. And I wonder if there'll be a move back to that kind of thing where, you know, yes, you take all this massive tonnage and, even in the case of tennis, you've got thousands and thousands of tennis matchups every, every year and multiple every tournament. The ability to then have those promoted in a news show and or magazine programming and or compelling shoulder programming is probably going to become even more

Richard Gillis UP: 35:24

If I was, if I'm Adam Kelly or if I'm an IMG, I'm bringing back trans world sport. Get that out. That was the, or create Gogglebox for sport. Just get some, something that, again, we need some way of directing my attention. And I'm very important

Murray Barnett: 35:42

Well I think Gillette sports, well that sport is still out there isn't

Richard Gillis UP: 35:44

Yeah, I never watch it. Must be on the red button.

Yannick Ramcke: 35:48

And this is, I think, referring to one challenge that has been solved as part of transitioning from linear to streaming, which is the whole challenge or bottleneck of availability. Nowadays, everything is available. It's somewhere out there in the ether on streaming, but accessibility, which was really, a strength of the, linear programming system. Given that. Yes, the choice was limited, but it was highly curated, marketed, and promoted. This is now the challenge in OTT that Discovery, awareness, like really the whole marketing funnel is a challenge in streaming because it's just an abundance

Richard Gillis UP: 36:28

It feels like it feels a lot like, I mean, when, Murray mentioned there about you'll go back to as part of the negotiation or the deal about, prominence, it feels a lot like a supermarket, it's those old things about where you are, where you're going to appear, so just the, Buying of rights and, just cause you're on Sky or just cause you're on BBC or just cause you're on NBC, actually, I need the whole function of marketing and, obviously Yannick's on top of this cause he mentioned the four P's earlier cause he's absolutely on the sharp end of marketing, but there is, people have forgotten that marketing is important is really, That's part of it. And again, I think when you go back to something like the Olympics has always played with this idea that, you need the broadcaster to do a lot of the work for you. And the broadcaster is sort of turned around and said, yeah, but you know, that's costing.

Murray Barnett: 37:22

There's one more P that we haven't mentioned as well which is piracy. So I think there'll be a, an also, there's also a nod to saying actually, this is also a great way to, to reduce the prevalence of piracy.

Yannick Ramcke: 37:35

And you will always have those diehard fans who will overcome all the consumption barriers, whether it's a technological barrier, a cost barrier, a discovery barrier. They will jump through all the hoops necessary to find the content that they are seeking. The little but relevant problem is that there are so Especially for, non premium, sports or not top tier sport, there is a limited number of diehard

Richard Gillis UP: 38:03

I think most sports are finding that they had less avid sport, people, fans, and they, they thought they had, that's the story of the last 30 years. And they've gone from, because you were on television, you assumed you were popular and, that ain't true. it's just, we were watching stuff that people have thought, Oh shit. I thought they were really avid fans when actually no, it was just on.

Murray Barnett: 38:27

We'll also, I mean, it'll also be really interesting to see what happens. If indeed there is an impact on something like tennis, where you could argue that we've gone through a golden age, if you look at the men's tennis, certainly, of, three or four absolute superstars of the game, and the fact that you had a limited amount of focus, or sorry, a limited amount of inventory, which meant that you were focused around those key matches generated. Exponential interest in those matches because you want to watch the best tennis and you knew the only match on was, Djokovic Nadal, so you watched that and that made you a tennis fan. And will the fragmentation lead to a loss in avidity?

Yannick Ramcke: 39:09

And it's not only fragmentation of content, it's also fragmentation of audiences. Because on linear television, you tapped into this built in traffic and audience that was there. And you captured a bunch of them. In streaming, not only content is all over the place, you And there is actually an information challenge where to find what, but it's also wherever the content is, the audience is spread as well and a few audiences do not move unless it's must have content and must have content is limited in the amount

Richard Gillis UP: 39:45

also the other bit to it is that it's important that other people are watching. So I'm watching because I know other people are watching. That's what makes a big sports event, a big sports event. I can go and watch on TikTok. I can watch county cricket. I can watch bits of golf. I can do what I like, but psychologically, that's different than I'm watching. The big game, because I know everyone else is going to be watching it and commentating it. So again, it's the bigger argument. Right. We're going to move on. Last story. Last major story is Syria uh, American sales in Stasis. I like the word Stasis. So I think we should use that more often. This is it? Stasis or Stasis? You're saying Stasis.

Murray Barnett: 40:28

well,

Richard Gillis UP: 40:28

How do you say it? How do you pronounce it in German, Yannick?

Yannick Ramcke: 40:30

Is it a German word?

Richard Gillis UP: 40:32

No, I don't think it is. Is it? Is it? What is it? Is it a French word? Where does stasis?

Murray Barnett: 40:39

I think it's Latin, isn't it?

Richard Gillis UP: 40:41

It's probably Latin.

Murray Barnett: 40:42

I made it up. It means You know, is kind of not

Richard Gillis UP: 40:47

Yeah, no, I know what stasis means, or stasis. I think it's Anyway, yeah, you're right. It probably is stasis. Anyway.

Yannick Ramcke: 40:53

I would have said, at an impasse, but just if you ask me.

Richard Gillis UP: 40:57

Now that is French, surely. Or Italian. Italy's Serie A season wraps up on May the 26th, and it will also mark the end of three year U. S. media rights deal with CBS Sports and Paramount Plus. Normally, this is World Soccer Talk I'm reading. Normally, that wouldn't be an issue because leagues often announce the renewal of rights or a new broadcaster several months before a new season begins. However, sources have told World Soccer Talk, That Seria R hasn't agreed to a new U. S. rights deal for the 24 25 season, which is only 101 days away. They're desperately building jeopardy into this opening paragraph. The future of Seria R on U. S. TV is up in the air. Okay,

Murray Barnett: 41:42

Well, I think the first thing to say is that Serial R is slightly different in perception in the US because it has a number of US national team players playing in it, I think probably more than in most other European leagues. And you've also had this rush of American ownership into Serie A, which has perhaps generated some more interest in it. And, I hear from my US friends that CBS and Paramount have also done a very good job with the coverage, which has helped sort of create perhaps a slightly more of a market for Serie A than perhaps some of the other international leagues in the US.

Yannick Ramcke: 42:22

For me, it's really complimenting, like, the story that we had on top, of the conversation regarding, okay, how, and to which extent, do we observe this appreciation and value for top tier properties in the U. S.? But ultimately, and, if you listen to, earning calls and the guidance that all the big companies are giving, they are saying content spend rather flat than increasing. So implicitly there is somewhat of a zero sum game to it. And all the, resources that are allocated, to the top of the sports rights pyramid must come from somewhere. And I expect Serie A to not be the last one that, will come to terms with, decline. I mean, let's not, even think about, sluttish, media rights revenues in the biggest sports rights market in the world, in the US, but actually decreasing media rights, incomes. And, if I'm correct, top of my head, I think Serie A has around 75 million US dollars per year. I mean, this is a big chunk of their entire revenue. International media rights, income, and I don't think they will come, close to that as they and when they, extend. So I wouldn't say and wouldn't dramatize it to the extent that, their future on U. S. television is at risk because they will be on airwaves. But, might not be to the price tag that, they had before. And this, I think, is part of the whole rationalization, effort that all the media companies are undergoing in the U. S. Three years ago, the CBS, to get Paramount Plus up and running, they paid a big fat premium for, Serie A. Just, to generate instant, consumer take up to have a critical mass of including live sports content, on Paramount Plus. But I don't think that this premium will be available whether it's the Serie A, whether it's a German Bundesliga or other European football properties that might be up for renewal in the US. I don't think it will be available for them to that extent that it was three, four, five years ago.

Murray Barnett: 44:32

I thought the other interesting point about this, which seemed a bit, So counterintuitive to me was that they didn't want to go for a renewal, or at least according to the article, they didn't want to go for a renewal when discussions were fairly advanced with CBS because of the drop in or the unsatisfactory outcome of the domestic Syria, our agreement and to assume that you can fill that gap with, increasing international rights just seemed a bit flawed to me.

Richard Gillis UP: 45:04

So they want double, essentially, this is what this story is saying. They want 150 million CBS and currently paying 75. And that's way below what the Premier League gets from the US market. Basically that's the summary, isn't it?

Yannick Ramcke: 45:18

And I don't think they are in the same universe when it comes to expectations here, like Syria, also driven by what you mentioned, Mary, by the fact that the domestic market, is under pressure, they have to make up the money somewhere, would be good to make it in the most variable international media rights market, but I think they are in different universes.

Richard Gillis UP: 45:39

And this is this not, I mean, I remember a while ago, were they not farming these rights out to, hoping for private equity, there was a big private equity auction or supposedly interest in these Serie R rights? Is that, am I, Linking the right story there.

Murray Barnett: 45:54

It was about the same time last year that they were floating selling the international rights, either to an agency or involving private equity to build out a separate serial media type organization. But it's a good case to point of how sometimes de risking yourself by farming the rights out to a third party agency is actually not such a bad idea. Obviously they didn't quite get there. Numbers that they were hoping to last year and therefore they thought that they were, they could manage it on their own.

Yannick Ramcke: 46:29

and this is, I think a big change, right? They have actually in house. So they will always like. It was mainly an agency business, so they sold on to a middleman who then went market by market. They could have gotten or doubled down on actually pulling forward future revenues by doing some commercial vehicle and private equity deal. But they have actually ended up at the complete opposite of the spectrum by having in housed those activities. They still work together. In select territories with select middlemen, but the ambition is to close, especially the high value agreements directly with the international broadcasters. And I think it can go bad or well, and that might be an example where they are not living up to their expectations.

Richard Gillis UP: 47:24

How many, you mentioned middlemen there. Who are we talking about? Are we talking about sort of IMG in front? How many of them are there that say a size of middleman now in terms of sort of lost touch with that marketplace, but are there loads more of loads of boutiques? I mean, how big do you need to be to have the Serie A rights internationally, if you're an agency? Do you have to be a, I'm assuming you're going to be of a substantial size to be able to. To make a guarantee back one way and sell it the other. How many, are we talking about five companies or?

Murray Barnett: 47:56

been like half a dozen at most, but it's increasingly become a fragmented market with either specialists in certain markets, well, generally specialists in certain markets, be they big or small, as opposed to somebody owning, all the rights and increasingly where you own all the international media rights tend to be on the slightly smaller properties,

Yannick Ramcke: 48:20

mean, remember, like, media rights selling is also driven by connections and networks. So a global agency who buys out a property globally, they can't be the best in every single market. So as Maurice said, there are specialists and specialists can be small. So I think having more than one seller. actually reduces the, entry barriers for such middlemen to come in because there might be a specialist for the Balkans, for the Asian market, for different, territories. And they have mandated already some specialized agencies for one territory or the other, but especially those like MENA region. The United States, those really high value markets where they expect to make the big bucks, they want to close directly because the criticism or like what they were annoyed by, every rights owners, is the margin that, the haircut that the agencies are taking off the top. And if you can make the same money without, on a higher margin basis, it's your preference. but now it, seems like you see that not that simple and straightforward.

Murray Barnett: 49:26

But it also works the other way around in that if you take out all of the opportunities for agencies to make profit by only leaving the second tier markets, you make it a much less attractive for them. And you also lose some of the agencies, specialist ability to transform some of those larger markets because obviously that an agency is highly focused on the areas where they can generate significant profits and therefore. They have that higher degree of expertise and I would argue that, an agency in a situation like the U. S. for somebody like Syria is probably the way to go because you'll have agencies, specialists who know that market inside out that could actually come up with a better outcome for Syria than they might be able to

Richard Gillis UP: 50:21

How hard is it to go in house if you're, if you say, right, okay, we're going to make that decision. I can see the sort of economics of it as Yannick's laid out there. It's about margins and haircuts, et cetera. What is, do you just say, right, okay, I'm going to have to go and buy five people from IMG in front, sport five. Is that how it

Yannick Ramcke: 50:41

upfront, it's an upfront investment that you take, right? You need to build up both capacity and knowledge in order to run those, processes. And then you still may like those success factors that did, generate the right fees that the agencies are doing, whether it's a local network, whether it's ability to steer up competition, or, one thing that I think we should not underestimate is. Speaking of bundling, the ability for agencies to bundle across properties from different rights owners is also, probably increasing the value and the price tags for all of that. So, I think it's not that easy as you think by just saying, okay, we spare the haircut from the agencies by going direct to client. I think reality looks differently.

Murray Barnett: 51:27

Well, also, when I think back to sort of when I was at World Rugby, one of the attractions of using IMG for sales of Rugby World Cup was that at least theoretically, and you take a market like the US, that IMG were in and out of All of the main players in the market because they were selling a variety of other content. And so, their knowledge and their relationships, deep relationships with those broadcast partners were allowed them to leverage the best outcome for you because they had. intimate knowledge of what each of those broadcasters was looking for, both in times, in terms of when to go to market, available budget, desirable audience targets, all of that kind of stuff. So, the theory is that if you're an agency with a multiple number of properties, your understanding of the marketplace is that much greater because you have that much more interconnectedness

Richard Gillis UP: 52:22

And presumably if you're a private equity group, you're just going to buy the same people. You're going to hire the same people that. Cause you can't do this without them, presumably that's still, it's the job has to get done and there's going to be a limited number of very good experts in this world. It's quite it's always, it's quite a small. Gene Paul, isn't it? Of people. So, I mean, if, again, I don't know what the difference between giving it to private equity or giving it to in front, I don't know what the line is with the difference between those two things,

Yannick Ramcke: 52:53

I don't think the difference would be in the go to market, strategy, how to sell things. and that goes back to what is actually the added value and benefit that is brought to the table by private equity. And for me, it's more often than not comes down to, bridge financing and serving, as a bank function,

Richard Gillis UP: 53:11

but That's the sort of post COVID positioning of private equity. I mean, private equity would sell itself. I mean, I'm not a great, I'm no great advocate of private equity, but they would sell as operational expertise being the, the. And it's quite difficult to see how that applies in such a specialist area as this. No,

Yannick Ramcke: 53:30

mean, there is a reason why COVID, open up the doors for at least, leaks being open minded towards having conversation to explore private equity involvement or not. That's not a coincidence, because it is about putting forward future revenues to make close short term revenue gaps, because the one thing that a leak. has a challenge to communicate to its constituency. Meaning it clubs is decreasing revenue. Flat revenue is one thing, but decrease in revenues, where budget needs to be right sized and everything. This is a real challenge and this might be the one and maybe only use case that I see for private equity for now in the foreseeable future.

Richard Gillis UP: 54:15

Murray, you were going to say something, but I interrupted you. But

Murray Barnett: 54:18

No, I mean, I'm not sure that private, it's expertise that comes with. Private equity. I think expertise comes from sports marketing specialists, but I would say that as one, wouldn't I?

Richard Gillis UP: 54:30

right. I didn't mean to laugh at that, but I was that was quite nicely timed. But the Let's finish off. We've got a couple of very quick snippets. Then again, we'll rush through these cause I think we'll and we might revisit a couple of them, but US golf ratings down. This is something we've, I've got Ian Carter from the BBC who's coming on a future podcast we've recorded recently. And we mentioned this, so we don't need to go into too much detail about it, but there is a sort of story that's developing around golf ratings. The masters and the players championship, two big events of the spring, the big the major and the sort of wannabe major numbers were disappointing and then people jump to, or I can see the commentary has jumped to a few things. One is it's. Scottie Scheffler's fault for being boring and a sort of winning machine, but not being Tiger Woods. It's chaos with Liv versus the PGA tour that in the background and, or this is a sort of part of a long term problem for sports that aren't the NFL in the States and Premier League in the UK. So what do you think? Just very quickly.

Murray Barnett: 55:37

I loved Colin Cowherd's comment about whether it's Mickelson, DeChambeau, or Reid, most of the golfers with outsized personalities have decamped to the flashier, live, love them or hate them, that you feel something a vanilla personality like Scheffler doesn't. So I definitely think that's an angle, and as I'm no sort of golf expert, but certainly the live aspect is hurting them. And

Richard Gillis UP: 56:00

It also might just be that, that golf has, it's the Tiger Woods effect, not having Tiger Woods, it might just be as simple as that. It might be that there's so many people that just came to watch Tiger Woods. That's another bit of it. No one's watching Liv either. So this argument that Liv have got all the great sort of jazz hands, superstars, the YouTube figures are really poor and no one's rushing. Liv isn't set in the world of light either. Cause it's really. Dull. So, it's a tricky one to,

Murray Barnett: 56:32

No, I agree with that. I agree with that, but you're still taking great characters out of the old competition. So even if you are an amazing PGA fan the fact that none of your favorite stars are there anymore makes it less interesting.

Yannick Ramcke: 56:46

And I wouldn't read too much into it. I think there's a bunch of noise in this one data point. I mean, also like very obvious ones, like, weather delays and so on. I think actually that the, majors can benefit from this whole saga going on around, PGA and live, but I also think that each individual rating it's a subject and depend on so many inputs, okay. Whether we just mentioned, but also just the leaderboard. If like the big names are on top of the board heading into day three, day four, it'll impact significantly and materially the audience. So, I don't see this as a trend I can see live as an stimulating force, including for viewership around, the majors when they all, con convene, in one tournament. But I wouldn't read too much into, this rating.

Richard Gillis UP: 57:40

okay. So on a similar vein, should we read too much into Formula 1 Miami US ratings? Ratings always, tricky to build a story around, but what'd you think? What Murray, you must have seen those and had a view.

Murray Barnett: 57:53

Yeah, so, on the one hand, I don't want to seem like a curmudgeon, because certainly the ratings for the Miami race were pretty impressive, but there was a lot of shouting that was going on about how great it was and, how they managed to beat NASCAR and so on. But it's very difficult to compare like for like, when you look at last year just for context, this year's race was on ABC. It came off the back of a seven game NBA first round playoff series. It was against a rain, there was a rain delay on the NASCAR, which contributed to the audience. So I think, it's, it should be rightly touted by everybody with a F1 that things are going well, especially against the backdrop of somewhat dipping ratings for last season, but I think it will take a while for us to work out whether it's really had an impact and I keep coming back to the same thing that you only have a few races in a good time zone for the U. S. And so it will be a real, something we can't really look at until we get to the end of the season and are able to look at everything in the round.

Yannick Ramcke: 59:00

Yeah, I think the only conclusive data is if you look at, season long averages, as again, I think there's a lot of, noise, in there. However, I think formula one and I see it at least like the sample of one myself. I see it with my own watching behavior, the lack of suspense. Has negatively impacted how engaged I am with the Formula One product and also circling back to what we discussed with Serie A, that there is a bifurcation of the market have and have nots, that, I'm not saying that revenues are declining, but I think the upside potential is limited and the risk is to the downside once, the Formula One rights are up, with ESPN, which, I think it's actually the same number as for Serie A, 75 million per year. I think the risk is to the downside, even for the, Formula One.

Richard Gillis UP: 59:53

Okay. Final story. We've got Caitlin Clarke has been compared in To Tiger Woods herself. Caitlin Clark's WNBA debut to stream live on Disney plus coverage of two opening night games marks streaming services. First move into us live sports. There's echoes of the sort of earlier conversation we had about streaming back of announcing a bundle, which includes Disney plus max and Hulu. ESPN plus will remain separate but have some content on Disney plus ESPN 2 and ESPN plus will also show. It's quite tricky to get a view on this but from here because it's obviously we see a lot of the social media stuff around Caitlin Clark but what just give you a one liner from both of you.

Murray Barnett: 1:00:37

Well, it shows how super huge she is. And already there's been, ticket sales through the roof, shirt sales. There was an article, I think today saying that people have been caught that the WNBA has been caught off guard by the number of the amount of media interest in broadcasting preseason games. So I think she is definitely going to be the Tiger Woods, the Michael Jordan for WNBA. But the interesting part here I thought was actually more that Disney plus is showing more sports because they have dipped their toe in other areas as well in sports in the past, but it's also against the context of, the much talked about rebundling of all of these streaming services. by the big three in the U. S. So that was the bit that caught my eye was some, well, so eye catching content going towards a new bundled streaming service.

Yannick Ramcke: 1:01:33

Yes, so from my point of view, two things. First, individuals can make a difference and beyond the increased, commitment from broadcasters into production, into distribution, everything. I think also now all of a sudden and out of nowhere, something they fought for years, like charter flights, approved for WNBA. so not saying that's directly related to Clark, but, I think, at least. correlated. And the other thing is, with all the dominoes now have fallen and the media rights market in the US more or less cemented for the next decade. Yes, the NBA auction is ongoing, UFC is coming up, but the big things are, cemented. I think the movement and innovation, quite honestly. will be in the sports programming market. So how you package, bundle, distribute, discriminate, that is, I think, where really the news, but also the, interesting developments will be going on, for the foreseeable future, because rights are more or less allocated now.

Richard Gillis UP: 1:02:37

Okay excellent we've come to the end of another bundle and we will see you next time. Thanks Yannick for your time and thanks Murray.

Murray Barnett: 1:02:45

Thanks, Richard. Thanks, Yanni.

Yannick Ramcke: 1:02:47

Thanks guys.