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Sláinte and Happy All Hallows’ Eve from the Emerald Isle, where the Celts invented Halloween a few thousand years ago! Welcome back to The Varsity, my private email on the machinations of the sports media circus, as seen and overheard in the owners’ boxes and executive suites. I’m in Dingle, helming Puck’s unofficial E.U. HQ. I woke up this morning to a highlight reel of the Yankees’ disastrous fifth inning, which dashed Rob Manfred and Eric Shanks’ dream of a seven-game Yankees-Dodgers series.
Alas, the five-game outcome means that most of your viewership guesses will be way too high. Only a few estimates came in under 18 million, which is where this year’s series will end up. The winner will be announced Monday, and the Marchand jokes will follow.
My conversation with NASCAR president Steve Phelps posts this weekend on the Varsity podcast feed. We hit on a bunch of topics, ranging from his new media deal to Michael Jordan’s lawsuit. I’ll preview Phelps’s remarks later in this email, but be sure to check out the entire conversation when it posts on Sunday morning. Also, make sure you listen to the Wednesday episode with my partner Dylan Byers, where we discussed Amazon’s experiment in live news and the decline of on-air talent salaries.
Okay, let’s get to it…
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| Players of the Week: Chuck and Shaq |
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| I had high expectations for TNT’s Inside the NBA going into this season, given the outsize personalities of its stars combined with the show’s lame duck status. This clip illustrates why the show connects with so many fans. Barkley and O’Neal poke fun at the in-season tournament—officially titled the Emirates NBA Cup—that the league is putting so much weight behind. Then Barkley jokes about how he and his co-hosts will all be looking for work next season. We’re eight months away from the final episode and I already miss the show. |
| Down to the J.V.: Cable TV |
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| Brian Roberts dropped a bombshell on Comcast’s earnings call this morning, floating that the company is considering spinning off its cable networks into a stand-alone company and looking to combine Peacock with another service. It was his version of Bob Iger’s infamous everything’s on the table CNBC interview from Sun Valley. NBCUniversal has already taken most of its sports off its cable networks in favor of Peacock. This move would seem to ensure that NBC’s sports rights would be split between broadcast and streaming. |
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- NFL local ratings: The NFL’s national ratings may be holding steady in an election year, but the local-market TV ratings are down for 25 of the 32 teams through Week 8. Unfortunately, the league’s worst local TV stories can be found in its biggest media markets: The somnolent Giants (down 33 percent) and capsizing Jets (down 32 percent) represent the biggest drops in the league. In L.A., the Chargers are down 25 percent, despite a winning record and excitement generated by new coach Jim Harbaugh, and the 3-4 Rams saw their numbers decline by 7 percent. Other red flags for the league include Boston (Patriots ratings are down 25 percent) and Cleveland (where the Browns are down 20 percent). Conversely, the Texans’ ratings in Houston are up a whopping 36 percent, the highest in the league, thanks to a 6-2 record and the play of star quarterback C.J. Stroud. The 6-1 Lions have posted the league’s second-biggest ratings increase—the numbers in Detroit are up 10 percent.
I don’t mean to be parochial, but my biggest surprise was my hometown of Washington, D.C. The 6-2 Commanders have taken over the town under new ownership. Although the team’s ratings are down 5 percent through Week 8, things seem to be turning around, and viewership reached a season high on Sunday with their miraculous win over the Bears.
- MLB celebrity row: Even though the Super Bowl is a de facto trade show for the sports business every year, events like the World Series, NBA Finals, Stanley Cup Finals, etcetera, generally don’t draw many bold-faced names from the industry. Sure, the rights-holders show up en masse, but you wouldn’t find, say, Fox Sports head Eric Shanks camping out at the NBA Finals.
This World Series was different, maybe because it was staged in the country’s two largest media markets. I know most people get excited about seeing Tom Hanks, Kendrick Lamar, and Billie Eilish in the stands, but I was scanning the front row at Yankee Stadium like one of those old photos of Soviet leaders that the State Department used to scrutinize for clues. There was Fox’s Jordan Bazant sitting next to WBD’s Raphael Poplock and Apple’s Jim DeLorenzo. I also spotted MLB’s Noah Garden and Kenny Gersh holding court with NBC’s Rick Cordella and YouTube’s Lori Conkling and Mary Ellen Coe. A spy tells me that before Game 4, Garden and Gersh took those media execs for dinner at Rao’s. (I would have gone, too, but at that time I was listening to an Irish folk singer butcher a John Denver song…)
Anyway, when Rob Manfred talks about evolving from the regional sports network system to a more nationalized media footprint, these are the people who can help him execute the strategy. It’s noteworthy that so many key execs who don’t hold MLB rights hung with baseball execs at these games. They weren’t the only sports media stars spotted in the crowd. Dodgers superfan Jeff Shell was in the stands for Game 5. There’s a great photo being texted around of DirecTV’s Rob Thun and Spectrum Sports’ Dan Finnerty sitting behind Freddie Freeman when he hit his historic Game 1 grand slam. Others who were spotted during the series: CBS’s David Berson; Netflix’s Bela Bajaria; Amazon’s Mike Hopkins and Jay Marine; Roku’s Joe Franzetta and David Eilenberg; and, of course, Fox’s Shanks, John Nallen, and Mark Silverman.
- MLS ratings intrigue: While checking out a 4,000-year-old beehive fort off Slea Head Drive the other day, I received a stack of text messages mocking this USA Today story reporting that Lionel Messi’s first playoff game, last week, had become Apple’s most watched sporting event ever. The story included this gem from Apple’s Eddy Cue: “I won’t give you the exact number.” Here’s what several highly connected spots media executives told me privately about the story and the window it offered into Apple’s secretive nature:
- “The Apple news on Messi is ridiculous when you don’t release numbers or have any kind of historical benchmark.” —A former Fox Sports executive
- “I know I am borderline obsessed on the topic, but we will now be two years past the MLS-Apple deal with no sub numbers. Now there’s a headline that last Friday’s Messi playoff game was the most watched sports event ever presented by Apple. But Apple does not release any numbers to back it up? C’mon!” —A former league executive
- “The fact that ‘news’ outlets are repeating that rubbish without calling out Apple as abject cowards is a shameful dereliction of anything resembling journalism. … That said, I get it from Apple’s perspective. … If I had spent $2.5 billion for that product (and allowed the final to be carried on Fox), I wouldn’t want anyone to objectively measure that R.O.I., either!” —A media executive
Cosm retribution: I had a feeling I’d get some blowback after expressing skepticism about Cosm, the company that seems to be trying to create miniature versions of the Sphere experience in various markets. The thing about Cosm is that it creates evangelists who fall in love with the space as soon as they see it. Most of the feedback said that I would change my opinion once I experienced it for myself.
“I was compelled to write after reading your comments on Cosm. I couldn’t disagree more. Think of Cosm as The Sphere meets a sports bar. It is a great place to watch a game with friends and family and have a truly unique experience,” one all-in media executive messaged me. “I took my family on a Saturday to watch a college football game, and we all had a great time. Everybody was impressed by the technology—the youngest in the group was 10 years old and the oldest was 54. The reason this works is because the majority of people don’t want to wear a headset or glasses when they watch an event, as the failure of 3D in our industry showed. Sports is tribal, and this is a modern-day extension of that. You need to check it out for yourself!”
A number of others offered similar takes, so allow me to refine my position. I, too, think it sounds cool to engage in such an immersive viewing experience. I just don’t understand how the business model—with its emphasis on capex and all the scheduling limitations—scales in any meaningful way. And I’m not alone. “I’m the asshole who agrees with you about Cosm in the big picture, but not exactly for the reasons you articulate,” one journalist wrote to me. “My bear take on them is simple: There’s so much overhead, and I just don’t think they’ve got a great use case beyond people trying it out [as a novelty]. A few well-placed locations can maybe do okay. But at scale?”
Puck’s Private Conversation: There are so many good nuggets from my partner Baratunde Thurston’s write-up of Puck’s big membership survey, conducted in partnership with Orchestra. Really, you should read the whole piece, but I want to focus on a couple of results relevant to my beat. I was unsurprised that only 42 percent of Puck subscribers still pay for cable. But, Baratunde writes, “As it turns out, those of you working in sports and entertainment were not the highest percentage of cable users (47 percent and 36 percent, respectively), as one might expect, but rather those who work in fashion, art, and culture, at 50 percent. What are you people watching, Dancing With the Stars?” The two main reasons for keeping a cable subscription: People want access to every channel (43.7 percent), and people want access to live sports (43.5 percent).
Subscribers were also asked to identify the streaming services that they feel are worth the money. No surprise, Netflix topped the list at 80 percent, but I was curious to see Max coming in second, at 58 percent, followed closely by Amazon Prime at 54 percent. Fifty-six percent of Puck subscribers pay for between three and five streaming video services, which also makes sense given the extraordinary average household income of our audience. “Only 11 percent subscribed to two or fewer services, while about 33 percent of you subscribe to six or more. That’s a lot!”
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| And now, the main event… |
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| Dude, Where’s My NASCAR |
| How America’s homegrown motorsport is branching out: to new countries, new venues, and most importantly, more broadcast partners. NASCAR president Steve Phelps explains how they plan to grow without pissing off their faithful. (Michael Jordan is another story.) |
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| About a year ago, NASCAR signed media rights deals with Fox Sports, NBC, Warner Bros. Discovery, Amazon, and The CW for about $7.7 billion—a 40 percent increase for the racing circuit, which had been battling soft ratings for several years. NASCAR certainly benefited from the adjacent enthusiasm around F1, but it also widely expanded its number of partners from two to five. This decision has caused some angst among hard-core fans, who worry that the expansion will increase the difficulty of finding races and then having to shell out for new services, like Prime. But, alas, this is life under market capitalism, especially during a tectonic platform shift, as NBA fans are about to find out next year, too.
NASCAR president Steve Phelps joined the Varsity pod to discuss his sport’s approach to those new deals, and share his outlook on the business. Phelps also talked about NASCAR’s expansion plans and offered his first public comments on the antitrust lawsuit that Michael Jordan filed alleging anticompetitive behavior. The full podcast posts Sunday, but here is a portion of the transcript, lightly edited for clarity. |
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| John Ourand: It’s always been easy to watch NASCAR because it’s only been on two outlets. But last year, you signed deals with five TV and streaming partners. Are you concerned about ruffling the feathers of your hard-core fans?
Steve Phelps: I know that’s a concern for a lot of people, but we have a proof point already. Look at the migration of these playoff races over to The CW from USA [Network]. We’re up 15 percent over the USA races. We will have a major promotional effort to make sure fans understand where they can find our races.
You haven’t started the new deal yet, so bear with me when I ask about your next deal, seven years from now. What are the trends you’ll be studying over that time?
Obviously, we’ll be watching what happens to the cable universe. The decline is slowing. Streaming does work for football. Look at the numbers for Thursday Night Football on Amazon, which are up over 30 percent from year one to now. And then there’s been a trend to have some sports that go back to over-the-air network television. We have one job, and that is to grow. We had significant ratings declines from when the last deal was done, a 10-year deal that is concluding now. Yet we were able to get an increased contract of roughly 40 percent. I believe we will grow over the next seven years. If we do that, the sport’s going to continue to be a must-have media property.
I’ve been intrigued by both the race in the LA Coliseum and the new Chicago street race. Is that part of the strategy for getting into some of those bigger media markets?
It’s just not about finding bigger markets. It’s a proof point of being bold and innovative. Building a racetrack inside the LA Coliseum was a bold play that took a lot of people by surprise. And it worked. Seventy-two percent of everyone who bought a ticket that first year had never been to a NASCAR race. That’s important.
In Chicago, Fox was thrilled when they heard about the street race. We know for a fact that Warner Bros. Discovery and Amazon were interested in NASCAR, in part, because they saw a sport that was willing to make important changes to drive growth. A lot of our avid fans are like, What are you doing? That’s not your brand. That’s not what you should be doing. I totally disagree with that. It’s important for us to expose our sport. |
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| It sounds like you are as interested in rolling out different kinds of races as you are in getting into bigger markets.
When the idea of racing in the LA Coliseum first came to me, I wondered if we could actually pull it off. Obviously, we did. There’s a reason why the street race generated such significant ratings—because it’s different, it’s unique, it’s special. We need to keep doing that. Schedule variation is going to continue for us. Next year, we will go to Mexico City for the first time. We’re really excited to race a Cup Series outside of our borders. I would suggest it won’t be the last race we have internationally in our Cup Series.
I have to ask about Michael Jordan’s lawsuit. It’s uncommon for a team owner in any sport to sue a league, and I’m surprised this hasn’t been settled by now. What’s your goal? A court victory? A settlement?
Obviously, we want a court victory. I can’t get into the lawsuit, and I can’t speak to why Michael and Denny Hamlin decided to take this action. We negotiated in good faith for over two years. We had the majority of the teams—13 of 15, representing 32 charters—extend with us.
I love that Michael Jordan is in our sport. I personally like Michael and think he’s good for the sport. Do I like that he’s taking this course of action? I don’t. Would I like to put it behind us? Yes, I would. I’m hopeful it can be somewhat speedy. But for us, it’s going to be business as usual. We’ve got races to run. We’re looking to grow. We’ve got new media partners. There’s lots of momentum. I just want to make sure that this is not a distraction. |
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| On distributors’ ESPN complaints: “I understand some of the fodder. But we’ve done more than anyone to protect the traditional ecosystem. We’ve amassed rights we’ve acquired for linear and been careful.” —An ESPNer
On “Balls” Ballmer: “Steve Ballmer is from Detroit? Does that make four NBA owners from the Motor City? Tom Gores (Detroit Pistons), Mat Ishbia (Phoenix Suns), and Dan Gilbert (Cleveland Cavaliers) are all Michigan State guys.” —A Varsity subscriber
Ed note: Special thanks to Varsity subscribers “Matt, the Texas flag guy” and “An Irishman transplanted to D.C.” who sent me itineraries of things to do in and around Dingle. I followed their suggestions to a T. My favorite, of course: the Guinness at Foxy John’s pub/hardware store. But the Irish Brown Bread ice cream at Murphy’s, where the scooper is a big Packers fan, is a close second. |
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Slán go fóill,
John |
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| FOUR STORIES WE’RE TALKING ABOUT |
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