Welcome back to The Varsity, my twice-weekly private email about everyone who sits in the owner’s box, and everyone else who wishes that they did. Happy End of NBA Exclusive Negotiating Window Day to all who celebrate.

My Puck colleagues are descending on D.C. to host a party on Thursday evening in celebration of White House Correspondents’ Dinner week. One highlight: My partners Matt Belloni and Peter Hamby will interview Aaron Sorkin about what’s going on in Hollywood and politics. I’ll be there to plant some Norby Williamson questions; after all, Sorkin is best known in my house for his late ’90s series Sports Night, which is partly based on the Olbermann and Patrick version of SportsCenter, where Norby cut his teeth. I told Marchand I’d slip Sorkin his spec script on the final days of the Byzantine Empire.

Everyone knows that Puck makes people smarter, more sophisticated, and better looking. But you have to sign up here if you want to know who’s going to replace Norby, how the NBA rights auction will shake out, and what will happen to player salaries when R.S.N.s finally go belly up. If you’re one of those people who keeps on forwarding this private email, rest assured, I’ll send you Marchand’s spec script, too.

Let’s get to it…

1. Another Disney defection: Disney’s well-regarded C.T.O. Aaron LaBerge is leaving, following a nearly quarter-century run with the company. In a note to colleagues, LaBerge called it “a personal decision, driven by the needs of my family.” He’ll remain at Disney through June, then move over to become C.T.O. of Penn Entertainment, which operationalizes ESPN Bet via a recent partnership.

   For years, as Burbank has expanded its streaming remit with Hulu, Disney+, and ESPN+, LaBerge has been perhaps one of the more underappreciated executives in the company’s corporate suite. And while he’s saying all the right things about ensuring a graceful departure—yada, yada—this news must have provided a bit of a jolt to ESPN, in particular. Next year, after all, Bristol is planning to both take its linear networks direct-to-consumer and launch this Spulu thing. While Disney looks for LaBerge’s replacement, E.V.P. of content operations Chris Lawson will step in as interim boss.

   All reports suggest that LaBerge is indeed leaving on his own terms. “Disney is more than just a company to me; it’s been my home, my inspiration, and a part of the most rewarding chapters of my life, both personally and professionally,” he wrote. In a corporate memo sent from Jimmy Pitaro, Dana Walden, and Alan Bergman, the trio wrote: “It is a silver lining that he will continue to help Disney and ESPN win, as he transitions to a role at PENN Entertainment—where he will be a key partner in the continued growth and success of ESPN BET (and the rest of their Interactive business).”

2. Norby update: I didn’t hear any pushback from the list of possible Norby replacements that I published last week. But I did hear from one ESPNer who pointed out that Burke Magnus is not looking to hire someone to replicate the exact job that Norby performed. Indeed, Norby was an ESPN lifer who amassed power and org chart divisions over a multi-decade stint. No outsider could or should re-create that remit.

   One Bristol insider reminded me that any job search that goes outside of ESPN is fraught with red flags. Historically, and across various departments, those new hires have gotten overwhelmed, eaten alive, and pecked to death by the vengeful internal candidates who were passed over. Nevertheless, look for ESPN to customize a new senior position around the talents of an executive with commensurate leadership experience, whether that’s a big-event producer or in-studio executive. Unsurprisingly, as I noted last week, ESPN is a quirky, insular place where people work their asses off. Magnus wants to bring in someone who can enmesh themselves in this culture.

3. This week in Diamond: As I’ve been reporting for weeks, we’re nearing the April 30 deadline for Diamond Sports Group to come to terms with Comcast as part of the former’s bankruptcy restructuring effort—a critical moment in its debt journey and attempt at resurrection. As loyal readers of The Varsity also know well, this negotiation has been characterized by a disagreement in fundamental structure. Diamond C.E.O. Dave Preschlack has been begging for the “glide path” approach that would migrate his R.S.N.s to a business-euthanizing higher tier over several years, while the good folks at Comcast have been advocating the “cliff path”—a more draconian option that would move the networks there all at once, potentially cutting their revenue by a third or more. Now we’re running out of time.

   The good news: Everyone is still talking. The bad news: Both Diamond and Comcast have dug their trenches and are no closer to resolving their stalemate today than when I wrote about this tête-à-tête last week. Diamond is closer to working something out with DirecTV, I’m told, but that’s all relative. Don’t expect any kind of announcement this week, either.

   Last week, I wrote that Sinclair held a 50 percent stake in Marquee Network, the Cubs’ regional sports network. But a financial analyst emailed to clarify that it’s Diamond, not Sinclair, which holds that stake: “Sinclair may have a buyout option, but I doubt they exercise it. Diamond Sports also holds a stake in YES Network. Interestingly, it is pledged to MLB during the bankruptcy. And then if it emerges from bankruptcy, it is pledged to Amazon.” This person continued: “It is worth about the amount that Amazon will invest in the convertible, so they aren’t taking that much risk that the whole business turnaround actually works. That being said, they have an additional ‘investment option’ to use if the business does work.”

4. In defense of R.S.N.s: Zach Leonsis, the president of media and new enterprises for his dad’s Monumental Sports & Entertainment, bristled recently when I questioned why he was investing so much into his R.S.N. at this precarious moment. (Monumental owns majority stakes in the Wizards, Capitals, and Mystics.) “Bally’s has such a big debt load,” he told me last month during a tour of the company’s new studio, right next to Capital One Arena. “We don’t have debt.”

   It’s a valid counterpoint. While Diamond is in bankruptcy and Warner Bros. Discovery got out of the business entirely, other R.S.N.s (YES, NESN, SportsNet LA, etcetera) are profitable. “Listen, the linear world is changing. Everyone knows it,” Leonsis told me. “We need to be more self-reliant in terms of driving our own distribution in the future. Linear is always going to be an important element, but we’re going to find additional distribution through different partnerships. It’s going to make a lot of sense to invest in the quality of our programming. The big streaming players don’t want to be in the production world.”

5. R.I.P. Schwab: Way back in 2004, while still an E.V.P. at ESPN, Mark Shapiro created a TV show based on Howie Schwab, a beloved employee who blew everyone away with his knowledge of sports trivia. Outsiders knew Schwab, who died over the weekend at the way too young age of 63, as the star of Stump the Schwab, which ran for three years on ESPN2 and ESPN Classic.

   ESPNers saw a different side of him. A producer by trade, Schwab worked at ESPN from 1987 until 2013, and those who worked with him described him as the heart of the network. Former communications executive Mike Soltys, who spent more than 40 years in Bristol, said that a couple of years ago, when his wife was diagnosed with cancer, Schwab would make a point to call every 10 days or so to check on her. “He did that with a lot of people,” Soltys said. “The thing is that Howie was on a dialysis machine while he was calling all these people to see how they’re doing. In a nutshell, that’s why you saw the outpouring that you did the last couple days from the people that knew him well. He truly just cared about everybody and had time for everybody.”

Handshake agreements, obviously, are not signed deals or agreements in principle or even M.O.U.s. Nevertheless, talks are taking place as we publish this, and it has become increasingly clear that ESPN and WBD are in good positions to claim two of the NBA’s packages.

As it turns out, this exclusive negotiating window was more active than we have been led to believe, and both ESPN and WBD provided the required loyalty oaths indicating that they want to stay in business with the league. Now, the NBA can begin to determine whether it wants to create a third or fourth package, which certainly would include meaningful playoff games.

All along, my best league sources predicted that ESPN would renew its NBA deal, albeit with fewer regular season and playoff games as a nod to ESPN’s fiscal responsibility and the NBA’s desire to create packages to attract other suitors. ESPN has pushed to keep the NBA Finals exclusively, but the NBA is considering having another media company carry it every other year as a way to get those third-party suitors to up their bids. My sources have also predicted that WBD, with its $40 billion in debt, was more likely to face competition from Amazon and NBC for its package of games, which currently includes conference finals. The optimism coming from WBD this week suggests that it is prepared to pay up.

Regardless of whether or not the handshake deals actually materialize tonight, the NBA will now hit the open market with up to four packages. NBC executives have publicly stated that they are interested in cutting a deal. Apple, YouTube, Amazon, and Netflix all are expected to commence talks with the NBA. YouTube, for its part, has expressed interest in picking up the rights to NBA League Pass. Apple TV+ has the money, obviously, but its reach is not significant enough to be considered a serious player.

Netflix and Amazon, however, offer a tantalizing opportunity for commissioner Adam Silver, who has repeatedly expressed excitement about the benefits of streaming—dropping hints in talking points and prepared remarks about resetting success metrics beyond traditional ratings, etcetera. In some respects, Silver is taking a page from his mentor and predecessor, the late David Stern, whose steadfast efforts to internationalize the game came to extraordinary fruition from the Dream Team era to the Yao Ming days to the current milieu. Silver is so enamored by these big streaming companies, among other reasons, on account of their international reach. Instead of selling rights packages country by country, the NBA could use Amazon Prime or Netflix to go international in an instant.

In particular, Netflix presents a wildcard. The streamer, whose stock has rebounded from its whipsaw two years ago, has been dabbling in live sports and recently demonstrated some interest in the In-Season Tournament and postseason play-in games. In a report published last week, financial analyst Michael Nathanson wrote, “Netflix seems poised to further invest into the world of sports. We aren’t overly concerned about the potential of high sports rights costs weighing on margins, as long as Netflix stays away from acquiring a major sports package. We also believe that, despite its higher upfront costs, sports could actually be a better use of money for Netflix than some of its current original programming thanks to the dependability of the eyeballs sports delivers.”

On the upcoming UFC media rights negotiations: “I consider UFC rights to be one of the more interesting stories in sports right now. Similar to WWE, we are talking about a mainstream sport with global appeal. And while the overall fan base may not be as large as America’s Big Four on a pound-for-pound basis, they are highly monetizable and its fans have now been trained (and accepted) paying a base subscription fee as well as high PPV fees. Imagine the uproar if Peacock had tried to get you to subscribe and fork over $80 to watch that playoff game. UFC obviously doesn’t have as high of a ceiling as the Big Four sports right now, but it absolutely has an impressive floor. As ESPN goes for O.T.T. next year, they need to pony up to lock in that floor because UFC makes a concerning amount of sense on Netflix.” —A media executive

On the NBA media rights negotiations: “There’s an angle with the NBA rights deal that I haven’t seen written about much. WBD handles a ton of NBA TV’s coverage; I mean, most of the TNT people are on NBA TV, so it seems like it’s in the NBA’s best interest to have some level of continued relationship with WBD. They won’t want to find a new broadcasting partner, and their NBA TV studios are in Atlanta along with TNT’s. Also, Inside the NBA is the best show and the NBA needs it, especially with Countdown changing every year.” —A Puck subscriber

On the NBA banning Jontay Porter for life: “Remember, Ohtani’s interpreter bet 19,000 times in basically three years—$183 million bet in losses, $142 million bet in wins, net loss of $41 million—all illegally, and was only caught because his bookie was being tapped by the feds. What’s better, legal framework or illegal?” —A sports business executive

On reasons for The Masters’ viewership drop: “In his newsletter, Ourand said that he has had ‘several conversations’ with ‘executives wringing their hands over the Masters’ drop in viewership,’ which is a bit surprising to me. This is the easiest 20 percent drop to write off as it was (almost) entirely due to Easter.” —Jon Lewis via X

On Netflix’s Gabe Spitzer being named Player of the Week: “I believe Gabe Spitzer got 1,000 texts on Thursday night.” —A sports media executive

And finally… who knew the word “grinfuck” would spawn so much feedback? Here’s a small sampling.

On grinfuck, part 1: “‘Defenestration’ and ‘grinfuck’ in the same column—my, how the Puck editors have stretched your vocabulary. It looks good on you. But did you steal ‘grinfuck’ from me?” —A sports business executive

On grinfuck, part 2: “It’s certainly a new world when you get to use ‘grinfuck’ in an article. What the Puck?” —A network executive
On grinfuck, part 3: “Guessing John got more texts about working ‘grinfuck’ into the newsletters than about the golf executives who are bad ratings analysts!”—@sportsTVratings’ X feed

Correction: Jared Stacy is Mike Muriano’s boss, not the other way around. Mike does have the E.P. title, but he’s focused on U.S. sports, and he reports in to Jared. Jared’s role is global, and he reports directly to Jay Marine.

Until Thursday,
John