Welcome back to The Varsity, my twice-weekly private email on the money, power, and influence percolating through the sports media business. Happy Veterans Day.

Everyone is trying to game out the implications of the incoming Trump administration. In sports and media, of course, the largest players are hoping regulators will become more permissive in greenlighting megamergers and acquisitions—or even modest deal opportunities. But Rich Greenfield, the managing director at LightShed, actually expects we won’t see any significant merger movement in 2025. Rich and I discussed the topic on Sunday’s episode of The Varsity (subscribe here). I’ve shared some of our conversation below, too. Meanwhile, NBC Sports’ Mike Florio joins the Varsity podcast on Wednesday.

P.S.A.: Since it’s a national holiday, I’m going to refrain from making any sort of Marchand jokes out of civic obligation. (Andrew, please let in the delivery guy after you finish polishing my lucky 3-iron. I’d like to play tomorrow. Thanks!)

The most common review of Brady these days is that he’s improving as a TV analyst each week. And he does, certainly, feel more comfortable in the analyst chair than he did in Week 1. But he has a long way to go to be Super Bowl ready.

1. NFL’s international expansion: Roger Goodell confirmed over the weekend that the NFL is going to add three more international games next season, for a grand total of eight altogether. But that does not mean that the league will be in the market with a new package of international games—at least not in the short term. CBS, ESPN, Fox, and NBC control most of that international inventory. The NFL only has a handful of games to play with, which the league almost certainly will use to entice new bidders into the market.

   That dynamic isn’t going to change until 2030, at the earliest, when the league can exercise an out clause in its TV contracts and negotiate new deals—thereby also perhaps creating a new package of international games. This timeframe coincides with the league’s new labor negotiations, which will likely spur the creation of an 18th game. Goodell has previously talked about having as many as 16 international games in this new extended-season scenario—and that’s likely a big enough slate to entice Netflix, Google, or Amazon, all of which boast large global audiences.

2. Early NBA ratings: Despite an extraordinary generation of players and relative parity at the top of the standings, the NBA has experienced some significant audience slippage this season. ESPN viewership is down more than 27 percent, and TNT’s is down 16 percent. Shaq discussed the poor ratings on his podcast, saying that teams’ reliance on three-point shooting has made the game boring. In reality, the election may have had something to do with it, too.

   None of the several media executives I contacted is concerned about these numbers after only two weeks. There will be more hand-wringing if both TNT and ESPN are still down double digits at Christmas. As with all ratings stories, people can come up with dozens of psychological reasons for the downturn. This year, execs say the NBA is facing stiffer competition on TV, particularly from the World Series, which averaged 6 million more viewers than last year. They also point to last year’s unusually strong start—ESPN’s opener, featuring generational Spurs rookie Victor Wembanyama, was its most watched season opener in over a decade.

   Media executives also privately griped about some of the NBA’s biggest stars sitting out games. For ESPN’s first game this year, the 76ers played without Joel Embiid or Paul George, and viewership was down more than 40 percent.

3. A new-look CBS: Network executives spend pretty much the entire offseason lobbying the NFL on the games they want to carry—usually contests featuring major rivalries—or the Chiefs or Cowboys (or, recently and regrettably, the Jets…). This year, CBS executives made clear that they wanted the Chiefs-Bills game above all, and this week they’re going to lean hard into the contest between the contenders. David Berson, the still new-ish CBS Sports president, has decided to produce The NFL Today on site from Buffalo’s Highmark Stadium. (I can’t recall the last time CBS took its pregame show on the road for a regular season game.) CBS also will air the game, featuring the undefeated Chiefs and Taylor and Josh Allen, in the entire country—the network has no regional games scheduled against it.
4. Reading the Zaz tea leaves: In his great private email Dry Powder, my partner Bill Cohan dove into Warner Bros. Discovery’s third-quarter results and asked if WBD’s long-awaited turnaround has finally arrived. “There certainly were some encouraging signs,” Bill writes. “The stock finished the week up around 12 percent, trading above $9 a share for the first time in a long while. Other bright spots for the quarter included the all-important and ongoing reduction of WBD’s net debt, to around $37 billion.” He also highlighted WBD’s streaming strategy, which includes building out Max while selling content to others.

   This sort of diversification is necessary, obviously, as legacy media players seek to build out their D.T.C. offerings while milking what’s left of the cable cash cow. Alas, as Bill noted, “the decline of WBD’s cable channel business is expected to only accelerate after next year, when its NBA rights expire. Zaz was right to say, ‘This is still an extraordinarily important part of our business,’ given how much cash it still generates. The question is what can be done, if anything, to synchronously stem the bleeding and make streaming more profitable. That’s the big kahuna of a problem facing the entire industry, including Paramount Global, Disney, and Comcast, too.”

5. A lifeline for LeBron and Mav?: Last Thursday, my partner Matt Belloni analyzed the news that the production company fronted by LeBron James and Maverick Carter is joining forces with a London outfit. “Fulwell73, the U.K.-based production company behind reality hits (The Kardashians), specials (Adele: One Night Only, the Friends reunion), and live events (the Grammys), is merging with SpringHill Entertainment, the decidedly less successful production company of LeBron James and Maverick Carter,” Matt wrote. “Fulwell is a leader in the unscripted space, and its co-founder Ben Winston has a great reputation as a producer. SpringHill consistently loses millions of dollars, per two sources familiar with its financials, and despite carrying about 200 employees, its slate in film and TV doesn’t include much more than the stuff LeBron is in, a Fat Joe talk show on Starz, and the 2023 House Party remake you forgot happened.”

   Matt continued: “But Winston and Carter are friends, and they’ve been plotting this team-up for a while with Paul Wachter, the financial wizard behind the curtain of the LeBron business (among others). SpringHill also has decent commercials and branded-content divisions that Fulwell finds synergistic, and a merger will allow both companies to cut costs for leaner times. Remember, back in the heyday of 2021, SpringHill was valued at a crazy-sounding $725 million after an investment from Nike and RedBird Capital. It’s safe to say that valuation is lower today, given how the contraction is impacting independent producers. Maybe, after he retires from basketball, LeBron becomes Peyton Manning, whose Omaha Productions is now a legit player in sports media. Maybe… but for now, this feels more like a lifeline.”

Varsity subscribers don’t need to be reminded about the state of the linear TV business. For the past decade, legacy media executives have been caught between the future and the past, stuck in the unfortunate position of managing linear TV’s decline while competing against much larger streaming companies. And Zaslav isn’t alone in believing that the best way to compete in this new world is to get bigger. Media company C.E.O. generally viewed the Biden administration as inimical to M&A activity, even as it blessed a number of big-time deals, including Zaz’s very own WarnerMedia–Discovery configuration.

And yet, despite all the corporate wish-casting on the new administration, LightShed Partners analyst Rich Greenfield is preaching patience. Speaking on this week’s Varsity podcast, Greenfield expressed skepticism about any large merger and/or acquisition being consummated in the media and/or sports business over the next 12 months. The following points are distilled from our conversation, which has been edited for the sake of brevity and clarity.

Back in 2017, we wrote about the idea of merging NBCUniversal with WBD. Does that transaction make sense? Of course, but regulators would have to allow it. That certainly hasn’t seemed possible in the current administration. I don’t know if it would be allowed in the new administration, either, but let’s just say it could happen. The question then is: Does Brian Roberts want to give up control? Would Zaslav be willing to walk away and just have Roberts control [the new company]? Once you get into the personalities, that is where this becomes very hard. I can dream up some amazing transactions, that being one of them. But Brian’s got to be willing, probably, to give up his super voting control. And Zaslav’s got to agree to basically walk away.

Well, it would have been worse for some. Viacom would have been worse off. Discovery would have been worse on its own. But would WarnerMedia have been worse without Discovery? Did adding the Discovery cable networks help it in any way? Would CBS have been better off, given the state of broadcasting and how well football has continued to hold up? I think you can make an argument. I don’t think adding the Fox assets has meaningfully helped Disney in any way. The mergers certainly have protected assets that would have been brutalized in this environment, but I don’t think it really has created a lot of incremental value in any way.

Now that Trump is president, you’re going to get new heads for all of these agencies. Does it change the calculus? That’s the unknown. When Comcast says that it’s considering spinning off its cable networks, and thinking of mergers or some form of bundling of its streaming services, it certainly opens the door. But if Brian’s only willing to spin off his cable networks, those are not the type of transactions that are exciting and interesting. It really will depend on a change of mindset.

Think about how smart Rupert Murdoch was to unload his entertainment assets to Disney. The business was already starting to get worse. But before it really got bad, Rupert hit the eject button. That’s the type of person that’s going to be viewed as brilliant—one who got out early and recognized that this fundamental change in consumer behavior from the shift to streaming was not fixable.

On the possibility of TikTok getting into sports: “While YouTube has been the successful example of a short-form video platform distributing live sports, we can’t forget Yahoo and Twitter as the temporary home of Thursday Night Football in 2015 and 2016, respectively, in addition to Facebook’s brief experiment with MLB, MLS, and Liga MX rights in 2017.” —A Varsity subscriber who had a very fast internet connection in 2015