Feb 17, 2025

Welcome back to The Varsity, my twice-weekly private email about the money, power, egos, and egomaniacs fueling the sports media industrial complex. I’m back in D.C. and celebrating Presidents’ Day the way that George and Abe would have wanted: by unscrambling the top stories in sports and yelling at Marchand to drive the carriage faster. 🚨🚨 Pod alert: Thanks for the great feedback about Grant Hill’s appearance on the Varsity podcast yesterday. Hill, the legendary NCAA and NBA hooper, has accumulated positions in four professional teams, led USA Basketball, and joined the board of the Empire State Realty Trust, in the process creating a new paradigm for post-playing career business success. He’s on the Mount Rushmore of former NBA players alongside Shaq, Magic, Junior Bridgeman, and Michael Jordan. I was particularly interested in Grant’s commentary about how his failed bid for the Clippers—Steve Ballmer blew everyone out of the water, as you’ll recall—informed his successful engagement with the Hawks one year later. And I was particularly interested in how he tied so much of his successful ownership pursuit to the lessons learned from his legendary father’s erstwhile bid for the Washington Bullets. Look out for Wednesday’s pod. I’ll go deep with CNBC’s Alex Sherman on the current media rights environment.

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Let’s get to it…

The Starting Five

Bela sends an NFL smoke signal: Netflix chief content officer Bela Bajaria disrupted the sports media status quo over the weekend when, in conversation with my partner Matt Belloni, she expressed interest in bidding on the NFL’s slate of Sunday afternoon games when the rights come to market at the end of the decade. On an incredible, two-part episode of The Town, Bajaria said that she is “definitely” interested in the Sunday afternoon games, which currently air on CBS and Fox. Bajaria’s comments were the most significant signal of the streamer’s intention to get deeper into sports. Not surprisingly, the pod came up during every meeting I had over the NBA All-Star Weekend.Bajaria was much more guarded about Netflix’s interest in other sports rights and the optics of it all. On UFC, she said, “You know, every time we meet with somebody, or we even have a conversation, or somebody may have gone to a UFC fight because her son likes it, people start writing about it. … Our jobs are to understand what is out there in every single way.” Bajaria struck a similar chord regarding F1. “We’re going to meet with leagues, we’re going to understand what the marketplace is, we’re going to look at what’s opportunistic for us,” she told Matt. “By the way, if you imagine how many things people think we’re buying, that’d be out of my content budget.” Listen to Matt’s excellent, no-holds-barred interview with Bela here and here.
The streamers’ sports focus: Have the folks over at MoffettNathanson declared an end to the streaming wars? Well, not quite, but senior research analyst Robert Fishman’s latest note argues that we’ve reached the end of this phase of the battle. “The streaming paradigm has been established,” Fishman wrote, declaring Netflix the champion, followed by Amazon and Disney… and everyone else well behind. “The case for consolidation among the subscale platforms is clear, and such an outcome increasingly seems like an inevitability.” Fishman singled out Peacock and Paramount+ as the most subscale and in need of a revitalizing combination of some form or other. “They just might work if the two came together or in combination with Max,” he admitted.The silver lining for sports rights holders is that streamers will increasingly look to sports rights to grow their business. Fishman predicted an 11 percent increase in the amount streamers spend on sports over the next three years, “from $32 billion to nearly $36 billion, … boosted by the new NBA contracts.”
NASCAR’s new deal: With a bunch of crashes in the final laps, an unlikely back-to-back winner in William Byron, and a highly competitive race throughout, yesterday’s chaotic Daytona 500 was a TV executive’s dream. It also marked the official start of the racing circuit’s new seven-year, $7.7 billion media rights deals, which will see races spread across five media companies: Fox, NBC, Warner Bros. Discovery, Amazon Prime, and Nexstar’s The CW. NASCAR discovered that the best way to ensure a rights fee bump was to increase the number of media companies carrying races from two to five. In strict financial terms, the move paid off, leading to a 40 percent increase over the old rights agreements, to $1.1 billion per year. Consumers have complained about the difficulty inherent in finding the sports they want to watch in our multiplatform world. But NASCAR president Steve Phelps has expressed confidence that his league’s fans will find the races no matter where they are. As evidence, he has pointed to the 15 percent ratings jumps for the playoff races last season when they moved from USA Network to The CW. And if you can find The CW these days, you can find anything…
Grant Hill’s ownership path: Two years after Grant Hill retired from the NBA, he bought an ownership stake in the Atlanta Hawks. He’s since grown his portfolio to include stakes in the Baltimore Orioles, Orlando City SC, and Orlando Pride. On this week’s Varsity podcast, I asked about his path to ownership. Hill referenced his father, NFL great Calvin Hill, a Super Bowl champion running back and successful sports business executive who tried unsuccessfully to buy stakes in various teams over the years. “At an early age, being aware of that pursuit, and being aware of that possibility, it just planted a seed,” Hill told me. “I thought, I’d like to do that one day. I don’t want to run a team. I want to own a team. I was not exactly sure how it would happen, but I spent time cultivating relationships and spent time with the numerous owners that I played with.”Hill was part of a group that bid on the Los Angeles Clippers in 2014 but lost out to Steve Ballmer by about $500 million. A year later, Hill was part of the group, led by Apollo co-founder Tony Ressler, that bought the Hawks. “That wasn’t something where I retired and decided to pursue it,” Hill said. “I started pursuing that in 1996.”
LIV vs. PGA Tour: Even with its new multiyear rights deal with Fox, LIV Golf has failed to make it out of the rough. To wit: The PGA Tour’s Phoenix Open drew more than 2 million viewers on February 9, per Nielsen research. The same day, the LIV tournament from Riyadh attracted just 54,000 Nielsen viewers. Still, keep an eye on April 6, the last day of the PGA Tour’s Valero Texas Open in San Antonio, which will be carried on NBC. The same day, Fox will carry a LIV Golf tournament from Trump National Doral in Miami. With many PGA Tour players expected to sit out the Valero Open to prepare for the Masters, which starts April 7 in Augusta, this may be the Saudi-backed LIV’s best chance to post TV ratings on par with the PGA Tour.

And now, all the news that’s fit to print on ASG weekend…

The NBA’s All-Star Hangover

Okay, so everyone hated on the gimmicky round-robin tournament—including Draymond Green on live television—but the stink around the game obscured other successes for the league.

John Ourand

“I’m not one of those people who said I don’t read criticism,” NBA commissioner Adam Silver, an historically thoughtful guy, said during his customary All-Star Weekend press conference. “I try to read it all, frankly, and we try to absorb it at the league office.” Indeed, the league has attracted plenty of criticism during the first half of the season: It suffered some meaningful early-season ratings declines, which led some observers to wonder if its media partners were second-guessing their just-closed $76 billion, decade-plus rights package. These anxieties were only compounded by criticisms that the on-court product has declined—too many three pointers, too much load management, not enough defense, etcetera. The most topical gripe about the NBA during All-Star Weekend in San Francisco was, fittingly, the league’s perennial inability to revive viewership of the contest. In 2023, the game posted a record-low 4.59 million viewers on TNT and TBS. Last year, the audience grew to 5.4 million viewers, still the second-lowest total ever. And while last night’s numbers haven’t emerged quite yet, the goofy round-robin format—first to 40 points, no clock, the introduction of a team of next-gen talent—didn’t seem to win many hearts or minds. Warriors forward Draymond Green, who was moonlighting as an in-game studio analyst for TNT, openly harangued the concept on live TV while his colleagues visibly squirmed. “Those guys did not make the All-Star team,” he said, referring to the next-gen team. “To be playing in the All-Star Game, when you did not make the All-Star team, is absurd.” Alas, conceiving and executing successful all-star formats has never been a light lift. Back in the old days, amid the dawn of cable, all-star contests allowed top players from backwater markets to show off their stuff on national television, often to their own benefit. As Adrian Wojnarowski perspicaciously discussed on Impolitic, my partner John Heilemann’s excellent podcast, how else could a star like Dominique Wilkins break into the cultural and commercial zeitgeist? Bo Jackson’s legendary endorsement career was buttressed, at least in part, by his absolute monster of a leadoff homer in the 1989 All-Star Game.

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Of course, dear reader, these were quainter times. Today’s star athletes, with their taxing schedules (as not just players but C.E.O.s of their own “brands”), exorbitant wealth, and legitimate injury concerns, are no longer incentivized to take these games seriously, despite the week’s worth of criticism that comes with phoning it in. Major League Baseball was only able to revive its game by significantly increasing the stakes and offering the winning league home-field advantage in the World Series. (This too-cute-by half concept was rolled back nearly a decade ago.) The NFL Pro Bowl cycled through a number of concepts before reverting to a mix of American Gladiators and Punt, Pass, and Kick that seems destined for another spin in the blender. In this context, the NBA’s attempt to have Shaq, Kenny Smith, Candace Parker, and Charles Barkley divvy up the players for a three-game tournament with a cash purse was at least novel, even if Draymond scored it a 0 out of 10.

Off the Court

From a business standpoint, however, the weekend was a rousing success. The recent ratings nadir didn’t negatively impact Warner Bros. Discovery’s ability to sell out every conceivable parcel of advertising across all of its windows. WBD’s Jon Diament, who oversees revenue for TNT Sports, said that many advertisers looked to the NBA All-Star Game to continue campaigns that started a week earlier during the Super Bowl. (All those ad sales certainly contributed to the multiple stops in play on Sunday…) The weekend’s business success goes way beyond the host broadcaster. San Francisco was crawling with executives from nearly every mediaco, corporate sponsor, and the biggest of Big Tech companies. Sports’ biggest brands, including Jordan and DraftKings, hosted parties, the latter of which featured a performance by Shaq’s alter ego, “DJ Diesel.” But it wasn’t all superficial, either. ASW has become second only to the Super Bowl as a convening hub of league professionals, media partners, and Fortune 500 C.M.O.s. The NBA doesn’t attract this kind of attention during the NBA Finals or, really, at any other time. Similarly, MLB and the NHL position their midseason breaks to foster these sorts of marketing opportunities, as well. For the past 25 years, of course, the NBA has hosted a Technology Summit on the Friday before the game. Billed as an off-the-record event, the league uses it as a platform for current and future partners—Jimmy Pitaro, Eddy Cue, Bela Bajaria, and Neal Mohan were in attendance—to speak under the soft lights. But while the conference is happening, the lobby just outside the summit is one of the best networking events in the sports business. So yes, the NBA has an All-Star Game problem, but it’s not a business problem. Indeed, the NBA’s ratings have rebounded from those early-season doldrums, and the league is openly discussing making some rules changes to address criticisms about the flow of the game. As Grant Hill wisely noted on my podcast, The Varsity, the league has never shied away from changing the rules to improve the game—from adding the three-point line, to the advent of zone defense, getting rid of hand-checking in the mid-aughts, and so forth. After all, basketball is played the way it is today because of rules changes made a generation ago. Along those lines, the NBA does have some other ideas for tweaking the All-Star Game format, including a U.S. versus the world showdown. The NHL has received praise for its current 4 Nations Face-Off tournament, based in part on the belief that the teams are actually trying to win it! (Also, ABC’s coverage of the U.S.-Canada game on Saturday night drew 4.4 million viewers—the biggest non-Stanley Cup Final audience in five years.) Foreign-born NBA superstars like Victor Wembanyama (France) and Giannis Antetokounmpo (Greece) have voiced their support for the idea, and the league certainly has the personnel to make it work: Last night, Barkley’s team featured players from Canada (SGA), Serbia (Dončić), and, well… New Jersey (KAT). The NBA is also considering bringing back the format that pitted the Eastern Conference All-Stars against their Western Conference counterparts. Even though that arrangement eventually devolved into defense-free, 200-198–style contests that lampooned the actual game, well, it may just seem retro enough to be cool these days.

From the Cheap Seats

On MLB’s ESPN negotiations: “It seems like MLB is playing chicken with ESPN, signaling that there’s another bidder waiting should ESPN opt out. I don’t see Netflix chasing baseball if they weren’t serious about the NBA. But I would keep an eye on NBC. With Sunday Night Football and Sunday Night Basketball, a Sunday Night Baseball package on NBC would give them Sunday night sports continuity throughout the year. They’d have to figure out the scheduling conflicts during the NBA playoffs and NFL season, but at the right price, I could see MLB migrating.” —A Varsity subscriber More on MLB and ESPN: “ESPN is bluffing. Without MLB rights, all ESPN products will be worthless from April until mid-August. ESPN needs MLB now more than ever because of its Flagship launch this fall.” —A sports business veteran On Duke basketball: “It pains me to say this as a die-hard Tar Heel fan, but it’s unfortunate to find myself liking Grant Hill more as a human after his appearance on The Varsity. What a great guy to be leading USA Basketball.” —A Varsity subscriber

See you Thursday, John

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