Welcome back to The Varsity, my twice-weekly private email on the players who sit in the owners’ boxes. Now that the NCAA brackets are out, I know your attention is focused on the men’s and women’s tournaments. (Marchand, please put the bracket on my bone china inbox tray—this isn’t a Holiday Inn!) But this is a big week for baseball, too: The Cubs and Dodgers open the season tomorrow in Tokyo. Pay close attention to the attendance and viewership numbers in Japan. I expect we’ll see huge numbers, particularly with hometown heroes Shota Imanaga and Yoshinobu Yamamoto starting on the mound in Game 1, and, of course, Shohei Ohtani in the Dodgers line-up. MLB will be highlighting these international numbers as the league tries to get streamers like Netflix and Amazon to bid on rights. 🚨Pod alert: Former Villanova coach Jay Wright will join me on The Varsity podcast on Wednesday. Wright guided four teams to the Final Four, and won two national titles—and, alas, his hand-picked successor got defenestrated last week, perhaps the latest victim in the N.I.L. era. I can’t think of a better guest to make sense of the upheaval in college basketball. Also, be sure to check out my conversation on yesterday’s pod with TNT Sports chairman and C.E.O. Luis Silberwasser, who offered extensive clarity about what went down during the company’s exclusive NBA negotiating window last spring. He also explained Warner Bros. Discovery’s post-NBA strategy and, to his credit, he didn’t come off like he was spinning too hard.

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Let’s get to it…

The Starting Five

Pitaro bows out (of the Disney succession race): I always thought Jimmy Pitaro had a good chance of succeeding Bob Iger after the Disney C.E.O. and executive chairman steps down next year. After all, he’s arguably running a more complex business than his colleagues/competitors; ESPN could easily be a public company on its own. But Jimmy has never been considered as a frontrunner for the job—an imprecise honor/burden hypothetically bestowed on studio executive Dana Walden and parks lead Josh D’Amaro—and I also doubted that he’d go through the motions if he thought it was too much of a long shot. (Pitaro, in the end, is nothing if not practical.) So I wasn’t surprised to hear, according to a fresh Lucas Shaw report, that Pitaro had taken himself out of the running. “Pitaro has communicated to both friends and the board that he’s not interested in the role,” Lucas wrote. I double-checked with ESPN today, and they aren’t commenting. But Pitaro has always described ESPN as a dream job, and appears likely to stay with the company regardless of who replaces Iger 18 months from now.
TNT Sports is open for business: In the wake of losing NBA rights, TNT Sports chairman and C.E.O. Luis Silberwasser has been on a buying spree, picking up the rights to NASCAR, early round CFP contests, Big East, Big 12, Mountain West, FIFA Club World Cup, and the French Open—not to mention launching Unrivaled, the 3-on-3 women’s basketball league. So far these moves have aided the future survival of parentco Warner Bros. Discovery’s linear TV assets—at least for now: WBD has cut overall distribution deals with companies like Comcast and Charter at NBA-level rates. During an appearance on The Varsity yesterday, Silberwasser told me he’s not done making moves. In fact, he expressed interest in UFC and Formula One rights, which are on the market this year. “We like both,” he said. “UFC is a fantastic property and has piqued our interest. Formula One, as well. Given our experience with sports internationally, we know the passion for Formula One. And we know that in this market, it has grown and it has great potential as well.” Silberwasser was more evasive when it came to MLB’s ESPN package, which is ending after this season. Indeed, WBD already has a highly valuable package of MLB playoff games. “We’ve navigated our distribution deals in a really good way,” he said. “It is hard for us to see that we could acquire those rights and get an immediate monetization on them right now, given the fact that our distribution deals are locked in a pretty good way.”
The NBA rights nightmare, revisited: During our conversation, I asked Silberwasser when he knew that his NBA negotiations were going sideways. “It became really clear at the end of the exclusive period,” he said. “We were always very, very interested in retaining those rights. Those rights are a premium set of rights. And the relationship that we have with the NBA was strong. All the elements were there for us to be aggressive about retaining those rights, and at the same time, we always said that we were going to be thoughtful and non-emotional about it. … We were very disciplined in our modeling and our financials. We knew exactly what we needed to do, and what we could do. … Like ESPN, we knew that we were going to have a lesser quantity in terms of the package, and that we were going to have to pay more. But the question is, how much more, for how [much] less, is that package?” Silbs continued: “There were many times in that exclusive window that I felt that we had a path, only to take a step back at the end. At the end of the process, we felt that that sort of balance, between price and package, was beginning to move the other way around. It became clear to us that this is not something that we should be doing, because even though we were willing to step up, we were not willing to step up to a point where the numbers become completely irrational. … Then, once it was outside the exclusive window, you had other players come in, and it became much more difficult.”

Julia Alexander

Comcast’s $3 billion Olympic bet: NBCUniversal’s new $3 billion deal to extend its Olympics coverage to 2036 seems like a no-brainer for Comcast. After all, NBCU generated more than $1.25 billion in ad revenue from last summer’s Paris Olympics, and ratings were up more than 80 percent over the Covid-delayed (and time-zone-challenged) 2021 Japanese games. But even if ratings for the 2032 and 2034 games are flat with Paris, NBCU will come out ahead: Large, must-see tentpole events have become a reliable hedge against the ongoing wave of viewership fragmentation. During the first week of Paris, Peacock signed up 2.8 million new members, or an average of 400,000 per day—a 5.8x increase over the prior period. And more than 20 percent of all retained subscribers in the quarter—estimated to be around 5.5 million subscribers—spent time with NBC procedurals, dramas, and Peacock reality shows in the months since, according to Parrot Analytics. That’s consequential: It’s a long enough period to drive actual discovery and build viewership habits. Still, those new customers are only as meaningful as Peacock’s ability to keep them. It wouldn’t surprise me to see NBCU and Peacock executives pitch events like the Olympics to advertisers as a chance to appear on limited, premium sports at a fraction of the cost typically associated with major linear sports. Broadcast is still mission critical, but streaming is the future.
Will MLS slice Apple?: Major League Soccer general managers are voicing concerns about the league’s exclusive partnership with Apple, which expires in 2033. “They have to end the Apple deal. It’s bad for the fans,” an anonymous GM recently told The Athletic. With a reported opt-out clause on the horizon, it may be time for commissioner Don Garber and Apple to explore other options. In 2022, the $2.5 billion deal made sense for both sides: It offered the underdog MLS meaningful financial security—a substantial increase in rights revenue and blackout-free access to games—and there was no doubt the Apple imprimatur helped bring Lionel Messi to Miami. Meanwhile, Apple got a low-risk foray into a larger, expensive sports market and brought attention to its TV+ service with a handful of free games for subscribers. Anyway, the exclusive relationship may not be as beneficial as once thought. Since the initial Messi bump, when they signed up 470,000 subscribers in two months in 2023, sub rates have slowed, with 2024 generating half the number of new or returning subs than 2023, according to Antenna. Some people involved in the MLS feel the league is tied to a company that isn’t growing its general audience. While separate from the MLS Season Pass, consider that Apple TV+ doesn’t even appear on Nielsen’s monthly Gauge chart, which monitors the health of services by looking at total engagement in the United States. Apple, a $3.2 trillion market cap company, is obviously still a valuable partner. But MLS may need to open up its media rights in order to find a partner or two to drive top-of-funnel viewers. And this shouldn’t bother Apple, either. The risk of losing a die-hard MLS fan is low, and Apple doesn’t need every game to maintain roughly the same level of subscriptions.

Are You Ready for Some Fox Reunion?

Two years out from broadcasting the Super Bowl, ESPN is yet again shaking up its truck—this time bringing in Fox hired gun Artie Kempner in a happy reunion with Troy and Buck. Coincidence?

John Ourand

For the third time in seven years, ESPN is switching out its Monday Night Football director. The company has hired former Fox Sports production executive Artie Kempner to take over for Derek Mobley—who took over for Jimmy Platt merely three years ago. And three years before that, Platt replaced Chip Dean, who’d been there for 18 years. It’s exceedingly rare, of course, for a top NFL production truck to roll through so many executives in such a short time. To wit: Drew Esocoff has been in the director’s chair for NBC’s Sunday Night Football for 20 years; Rich Russo has occupied the NFL chair at Fox for 16 years; and, Michael Arnold has done the job at CBS for 21 years. But with a Disney-produced Super Bowl approaching in two years, ESPN content president Burke Magnus told me that Kempner, whose Fox Sports deal was expiring, was too good to pass up. (Mobley will remain at ESPN, most likely as a college football director, a role he handled before moving to Monday Night Football in 2023. Steve Ackels will remain an MNF producer.)

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Magnus knew that Kempner, who’s been part of Fox’s NFL coverage since the network started carrying league games in 1994, was one of only 12 people who have directed a Super Bowl—the Pats-Eagles game in Jacksonville in 2005 and the Pats-Giants contest in Arizona in 2008. “A singular talent dropped into our laps,” Magnus told me. “We could not have done this a year from now. We couldn’t go into the season when we have a Super Bowl with a new director. But two years before, with two regular seasons to go and then a Super Bowl? This was the moment, if we were going to do something, to do it.” ESPN has made several moves to position itself to produce its first Super Bowl, starting back in 2022, when the network poached Joe Buck and Troy Aikman from Fox. Then, Scott Van Pelt was installed as host for Monday Night Countdown and Mike Greenberg for NFL Countdown. Then, in January, it named Andy Tennant to the newly created position of vice president of the Super Bowl. “We’re going to use and utilize every second between now and then to make sure that we do something at a scale and with an approach that’s completely different than anything else anybody has done before us,” Magnus said. “We’re different from the NFL’s other partners who always do a stupendous job presenting the game. But the possibilities that exist with the Walt Disney Co. attacking the Super Bowl as a big event are endless. We’re very focused on it even now.” Of course, many in the industry have viewed these tweaks as subtle gestures from Aikman and Buck, who may have been happy to take ESPN’s money but were left wanting when it came to production details. And the Kempner news, at least at first blush, seemed like a move to assuage the stars by reuniting them with their old director. But several Bristol sources said that storyline isn’t accurate.

Joe & Troy & Artie

Magnus met Kempner for the first time in New York back in December while attending SVG’s Sports Broadcasting Hall of Fame. Magnus was on hand to accept the award for basketball analyst Hubie Brown, when Kempner came up and introduced himself. Kempner wanted Magnus to know that his Fox contract was about to expire. Magnus attested to me that he and Mike McQuade, ESPN’s executive vice president of sports production, were not looking to change the production truck. But when they learned that Kempner was available, they pounced. “It didn’t hurt that he’s obviously familiar with our booth as well,” Magnus conceded, doing his best to recognize that this wasn’t quite like the apple falling on Newton’s head. But he was adamant that this was his suggestion rather than some conspiracy—rather than Buck and Aikman pulling the strings, Magnus emphasized, he went to the duo with the plan to hire Kempner. Whenever changes are made to ESPN’s NFL production these days, a spotlight falls on Buck and Aikman, a broadcast crew that has been together since 2002. When word got out that Kempner would be replacing Mobley, naturally, several sources speculated that Buck and Aikman were the ones who were really pulling the strings. The fact that Kempner came from Fox, where Buck and Aikman had worked previously, created more volume around that speculation. “That sounds like the Tinfoil Hat Club at work,” Magnus said.

From the Cheap Seats

On Norby’s Main Street Sports reorg: “Good for Norby trying to make some moves. He’s bringing in accomplished former ESPN execs, but what about some ‘fresh blood.’ Will these guys who worked for him for years (some decades) be able to help move the needle for Main Street? Regional coverage is way different than national coverage. Audiences are different and Main Street will need to inject some fresh ideas, which may be tough for many of those ESPN lifers to ideate and execute this late into their careers. Also: Mark Gross, arguably Norby’s number one disciple at ESPN, is staying at ESPN post-Norby. Gross had to be Norby’s first call. I’m curious about that and the dynamic between them and [ESPN E.V.P. Mike] McQuade, who was able to keep Gross from being plucked…” —A Varsity subscriber On Tubi’s sports ambitions: “God bless you if you really think Tubi is chipping in money to help Fox pay for MLB.” —A sports media veteran

See you Thursday, John

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