May 22, 2025

Welcome to The Varsity, our thrice-weekly private email on the money, power, and influence that rule the sports business. I’m sending tonight’s email from the Acela, following a busy couple of days in Gotham. The overall mood of the sports business felt exceedingly optimistic in New York this week, even after the Knicks’ devastating Game 1 loss to the Pacers. Condolences to longtime fan David Zaslav, who was broadcast incessantly courtside last night wearing his trademark jean jacket next to Maryland alum Larry David. (To the half-dozen people who routinely send me screengrabs every time Zaz appears on the TNT telecast… thank you, and keep ’em coming.) At deadline: First, YouTube’s chief business officer, Mary Ellen Coe, puts out a memo announcing the hiring of longtime Disney and ESPN exec Justin Connolly as the company’s global head of media and sports (as I first previewed last week). Now, Disney has sued YouTube for alleged breach of contract and wants an injunction to block the move. Connolly was in the middle of negotiating some of Disney’s largest distribution deals, per the filing, which continued: “It would be extremely prejudicial to Disney for Connolly to breach the contract, which he negotiated just a few months ago, and switch teams when Disney is working on a new licensing deal with the company that is trying to poach him.” Many more chapters to be written on this one… Pod alert!: Paris Saint-Germain and Inter Milan meet in the Champions League final next Saturday, so I invited Pete Radovich to come on the Varsity podcast this weekend. Pete is a CBS Sports producer who developed the critically acclaimed shoulder programming around the European soccer tournament. Also, make sure you listen to my Puck partner Bill Cohan’s appearance on The Varsity yesterday, where he shared Wall Street’s surprising view of the sports business. In tonight’s issue, I have a readout on the various ongoing negotiations for the current class of media rights deals on the market: UFC, MLB, USGA, WWE. Also, a quick note that The Varsity will be on hiatus on Monday so that Marchand can carry my bag around Army Navy Country Club. (Andrew, the sancerre at the bev cart better be crisp, and not tart. Or is it tart and not crisp? Dammit, Marchand!) Let’s get started…

Player of the Week: Craig Kessler

The LPGA tapped the 39-year-old Kessler, the current C.O.O. of the PGA, as its next commissioner. His first order of business, of course, will be figuring out how the tour can capitalize on the investment and commercial opportunities that have elevated other women’s leagues. In particular, Kessler’s priority will be to solidify the tour’s sponsorship revenue—his most obvious and immediate growth lever since the tour’s media deals with CBS, NBC, and ESPN run through 2030.

Down to the J.V.: Roger Goodell

The NFL commissioner failed in his attempt to get rid of the tush push this week. Twenty-two owners voted to ban the move popularized by the Philadelphia Eagles, but the NFL needed 24 votes for the ban to take effect. Of course, this doesn’t mean the tush push debate is over. As Mike “Effen” Florio texted me today, “Roger only needs to twist the arms of two teams, and he has a habit of getting what he wants.” Now, he knows exactly which arms need twisting.

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The Starting Five

Iger succession roulette: During a recent discussion on The Grill Room, my Puck partner Dylan Byers’ excellent media podcast, ESPN chairman Jimmy Pitaro elaborated on Bloomberg’s recent reporting that he had pulled out of the race to succeed Bob Iger. Pitaro, who has become quite an elevated public speaker, neither confirmed nor denied the story, thereby adding another layer of intrigue to the drama. “I think folks are making that conclusion based on some comments that I’ve made previously that I am in my dream job. And I really am in my dream job,” Pitaro told Dylan. “This is the job that I’ve wanted for quite some time. Given everything that’s transpired over the past week alone, it’s clear what a transformational time this is for ESPN. So my focus is on this path ahead, and making sure that we get all of this right.” That sounds like he isn’t gunning for the top job, or maybe he is just being careful not to overplay his hand.Pitaro went on to praise Iger, the executive who hired him away from Yahoo 15 years ago. “Whoever gets this job is going to have very big shoes to fill,” he said. “But I am thankful that Bob will be around for another year and a half. I think we’re all grateful for that.”
The women’s sports bump: Everyone likes to suggest that the rise of women’s sports is downstream from Caitlinsanity. That’s not entirely untrue, but the reality is more nuanced: Women’s franchises have become highly investible assets. New streaming entrants and desperate linear players have bid up rights, which has led to larger media packages for the leagues. Meanwhile, there is far more upside in women’s sports than the larger, more established leagues.Today, the WNBA’s New York Liberty sold shares in the team at a valuation of $450 million—a record high for a women’s sports franchise. Recall that Alibaba co-founder Joe Tsai and his wife, Clara Wu Tsai, bought the team just six years ago for less than $20 million. Last year, the owner of the Dallas Wings sold a small stake that valued that team at $208 million. I’m not sure who had this story first, but I saw reports in The Athletic and Sportico.
CFP seeding change: It always seemed like a long shot for the College Football Playoff committee to make any format tweaks this year. After all, any change would have required a unanimous vote among the 10 conference commissioners and Notre Dame. Today, however, the group unanimously voted to move to a seeding system based on rankings rather than the four highest-ranked conference champions. Those top four seeds will get first-round byes.The need for this seeding change was obvious back in January after top-seeded Oregon was forced to play eventual champion Ohio State in the second round. Under the new seeding format, both teams would have received first-round byes, and wouldn’t have played each other until the championship game. Meanwhile, larger CFP shifts are probably coming next year, when the SEC and Big Ten will have more power to force changes. Expect Greg Sankey and Tony Petitti to push through CFP expansion to 14 or 16 teams, a move that will do away with those first-round byes. And expect those added teams to come, mainly, from Sankey’s SEC and Petitti’s Big Ten.
The case for Zaz: My Puck partner Bill Cohan has often been a lonely voice in support of Warner Bros. Discovery, which he’s always viewed as essentially a publicly traded leveraged buyout. According to Bill’s thesis, the company’s stock will pop when the debt reaches a sufficiently manageable level, the company’s credit rating is upgraded, and its debt-to-EBITDA (or adjusted EBITDA) ratio improves. And since Bill spent a quarter-century as an investment banker, I tend to take his perspective seriously. On yesterday’s edition of The Varsity, I asked Bill why he keeps banging the drum for WBD C.E.O. David Zaslav.As Bill pointed out, both Zaz and C.F.O. Gunnar Wiedenfels have been strongly incentivized by the board to prioritize cashflow and debt service. “People are pretty simple: They do what they’re rewarded to do,” he noted. “And they’ve pretty much done that … The problem is that if they had just hit their projected EBITDA numbers, then the combination of the lower debt, and the higher EBITDA that they promised, would have gotten us to a lower debt-to-EBITDA ratio. That would have been music to the ears of the credit rating agencies, and they would have gotten an upgrade. But they have not yet been able to deliver the EBITDA numbers that they promised at the beginning…” Bill continued: “David’s point is that he freed up $25 billion, for over 10 years, that he can use for other purposes. Maybe he’ll invest that $25 billion in making Minecraft 2 or Barbie 2, or change the HBO name again—whatever will result in higher EBITDA and paying down more debt. That’s what it’s all about, from a Wall Street perspective.” (As Bill likes to note, this is not investment advice.)
Memorial Day beach reads: A brief selection of the best journalism to catch up on over the long weekend.

Bundles: Everyone says we’re going to see a great rebundling, but the oversupply of streaming services is causing a ton of consumer confusion. WSJ’s Isabella Simonetti and Nate Rattner walk us through the next era of the streaming revolution. [WSJ]

Belichick: This New York Times deep dive into Bill Belichick’s winsome relationship with his innamorata, Jordon Hudson, was not written by someone from The Athletic, but rather the intrepid NYT reporter Katherine Rosman. [NYT]

Bittersweet: I’ve seen dozens of Around the Horn obits this week. This one from The Washington Post’s Ben Strauss is the best. [WaPo]
Marchand: “Pardon the interruption, but ESPN’s Around the Horn was not some great show. Never was.” [NYT]

And now on to the main event…

MLB’s Sophie’s Choice

The current market for new sports media deals suggests that we’ve entered an era of belt-tightening for everyone besides the NFL. Now Major League Baseball, in particular, will have to choose between awareness and pure cash.

John Ourand

The year 2025, at least for the sports media industrial complex, is sort of like a midterm election. The industry is understandably fixated on 2028-9, the big kahuna, when Major League Baseball’s deals expire with Fox and WBD, and when the NFL has a chance to exercise an out in its own deal, which could spell mortal trouble—well, even more mortal trouble than already exists, if you can believe such a thing—for CBS and Paramount or, really, any of the broadcasters. And yet the current dealmaking market foreshadows what we might expect by the decade’s conclusion. Right now, several significant rights-holders are in the market for new media deals. TKO is shopping its UFC and WWE premium live events business. Executives from F1 and USGA are looking for new deals. And then there’s MLB’s expiring ESPN package of rights, which includes Sunday Night Baseball, the Home Run Derby, and the wildcard playoff series. Meanwhile, a few themes have already emerged from some early negotiations this spring. Alas, despite the afterglow of the NBA’s record deal and the NFL’s manifest destiny to command nine figures per game, the market is tightening—the derivative effect of cord-cutting, sure, but also a more frugal and impoverished cable business and more analytical and disciplined streaming industry. “The market’s just weird right now,” one media executive told me. “We’re seeing a struggle in the—I hate to call it this—middle tier. But it is one.”

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Each of these properties have taken meetings with both traditional mediacos and streamers. And, in most cases, leagues have shown interest in splitting rights between the streamers and linear TV. MLB, as usual, is in the most interesting pickle. As The Wall Street Journal reported last night, NBC has had extensive talks about picking up ESPN’s expiring rights, but NBC’s not the only one hoping to work out a deal. Commissioner Rob Manfred has also held talks with Amazon, Netflix, Google, and Apple. Sources have described MLB’s talks with Apple as the most extensive among the streamers, largely on account of their relationship for Friday Night Baseball. (Manfred and ESPN’s Jimmy Pitaro still have not engaged on these rights since ESPN said, before the season, that it would opt out.) MLB will have to decide whether it wants NBC’s exposure or Apple’s cash. While NBC would like to pick up the MLB rights, the network is not coming close to offering the $550 million that ESPN currently pays per year. In cable’s heyday, networks would value their rights offers through both potential advertising revenue and how much the sport would help the affiliate sales that come from cable and satellite distributors. Now, since the deal would last just three years, NBC is valuing the MLB deal through advertising only. (There’s not enough time to try to work out rate increases from distributors.) The declining number of cable and satellite subscribers also has an effect. With its NFL, NBA, and Olympics deals, NBC’s affiliate revenue is largely spoken for. NBC’s pitch to baseball is focused on the exposure that comes with broadcast television—and, in particular, from its other sports rights packages. MLB could have Sunday Night Baseball exist alongside the NFL, Olympics, and NBA playoffs, all of which overlap with the baseball season. NBC has pitched, in particular, the allure of making Sunday Night Baseball the meat in a Sunday Night Football–Sunday Night Basketball sandwich—though you can be sure there would be an audible in September when NBC carries the NFL. The recent NBA deal, which saw the league nearly triple its average annual value, has changed the way mediacos and leagues have approached the market—but not in the way many expected. League and team executives hoped that the deal was a harbinger of others to come, and yet my sources tell me that networks have since become more reluctant about writing those big checks. Sure, the streamers have made some big bids recently—such as Netflix’s outbidding of Fox Sports for exclusive rights to the 2027 and 2031 FIFA Women’s World Cups—but those are exceptions rather than the rule, which MLB might find out the hard way in 2028.

From the Cheap Seats

On the death of cable: “Death of cable? Not really. The death of content bundles bloated by retrans fees and sports rights ‘taxes’ that fleece all consumers, not just sports fans, is a more accurate representation. You should talk to distributors who built the [expletive deleted] network about how they can help solve Jimmy Pitaro’s problem.” —A cable guy On Main Street Sports’s newest board member: “On Monday, you wrote that Ryan Cunningham is a producer. He’s actually a partner at Hein Park Capital, an investment management firm.” —A media executive On Fox’s IndyCar coverage: “Will Buxton is already proving himself to know more about IndyCar than Danica does for F1. She’s often ridiculous on the F1 broadcast. But Buxton was nearly as farcical with his breathless, eye-roll-inducing oversell of the drama on qualifying for the final spots in the 500 grid. He knows his stuff, but needs to accept there’s enough excitement without the hyperbolic exaggeration of the moment.” —Another cable guy On Matt Belloni’s bestowing the ‘Okay, Grandpa, Let’s Get You to Bed Award’ on Jerry Jones: “If I had a mouthful of soda, it would have ended up all over my keyboard.” —An on-air commentator On reader feedback: “You haven’t used my comments in a while. I need to get back to my standard of delivering Cheap Seats–worthy emails to you.” —A former ‘Around the Horn’ panelist [Ed note: Reply to this email for your chance at “From the Cheap Seats” glory.]

Enjoy the long weekend. I’ll see you next week. John

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