June 2, 2025

Welcome back to The Varsity, a thrice-weekly private email on the comings and goings of the sports business. I am writing today from the Hamptons, where I’m in town for Jessica Reif Ehrlich’s great annual Media in Montauk event. If you see Marchand at his ceramics show in East Hampton, say hi for me. 🚨 Pod alert: After a quarter-century-ish drought, American men’s tennis may finally have some hope in Ben Shelton, Taylor Fritz, Frances Tiafoe, and Chris Eubanks, who joined me on the Varsity podcast over the weekend. Eubanks talked about his unique role straddling both the court and broadcast booth—he’s been a bright spot on TNT Sports’s coverage of the French Open. This Wednesday, I ask ESPN’s Don Van Natta Jr. to explain exactly why the F.B.I. is looking into OneTeam Partners—the group started by RedBird Capital, the NFL Players Association, and the MLB Players Association. Before we begin: Earlier today, Disney completed mass layoffs in TV, film, entertainment, and finance. ESPN, which has suffered through rounds of layoffs over the past couple of years, appears to have been spared this time. I also want to give a shout-out to Ross Greenburg, who built boxing into a sizable and lucrative business for HBO Sports, where he spent 33 years. Ross is getting inducted into the International Boxing Hall of Fame this weekend in Canastota, New York, a well-deserved tribute. Okay, let’s get to it…

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The Starting Five

UFC rights contenders: The UFC is still a month and a half away from finalizing its next media rights deals, according to a bunch of sources. At least four big companies are in negotiations with TKO, its parentco, for what will most likely end up as two packages.Renewal talks with ESPN appear to be the furthest along. (Any ESPN deal would include linear TV rights, of course.) If completed, this arrangement would almost certainly allow ESPN’s planned direct-to-consumer service to carry UFC content, which currently resides on the ESPN+ streaming service. Indeed, one of the reasons why ESPN isn’t immediately folding ESPN+ into its new app pertains to contractual nits over the media rights to leagues like UFC, Bundesliga, and La Liga, all of which specify being carried on ESPN+. Eventually, however, ESPN is going to want fewer S.K.U.s.Amazon Prime and Netflix are also in the room. Netflix already has a relationship with TKO through WWE Raw, and regular UFC fight cards would gel with its strategy of pursuing big live-sports events, like Christmas NFL games or Mike Tyson fights. Amazon, I’m told, is most interested in UFC’s pay-per-view business. The wildcard in the negotiations is Warner Bros. Discovery, which has been picking up sports rights since losing out on the NBA last year. WBD would put UFC fights across its linear channels and HBO Max.It’s not clear yet how many packages UFC will create. Most sources tell me it will be one or two. Three packages, the logic goes, will seem like too many. And a single package would inevitably go to a pure play streamer, with its endless pockets, but potentially leave the sport underexposed.
“Inside the NBA” franchise moves: We know that Charles, Shaq, Kenny, and E.J. will stick together next season as Inside the NBA shuffles over to ESPN. And we know that TNT will continue to produce the show out of Atlanta, and maintain editorial control. But what about TNT’s well-liked game announcers and reporters? It turns out that some are moving to Amazon, some are headed to NBC, and a few others are sticking around.There’s been no official announcement, but as Marchand reported, Amazon Prime will have Kevin Harlan and Ian Eagle on play-by-play, and Stan Van Gundy as a game analyst for its 66 regular-season contests next year. Candace Parker is joining them as game analyst, though she is expected to stay with TNT Sports for non-NBA work. Taylor Rooks, who was a reporter on some TNT games and part of Amazon’s NFL coverage during the past couple of years, is becoming a host on Amazon. Reggie Miller has been scooped up by NBC as its lead game analyst, where he’ll be paired most frequently with Mike Tirico. TNT Sports, aware that the loss of the NBA requires some talent caretaking, has made sure to extend Grant Hill with a multiyear deal as an analyst. He’ll continue to handle the rock for the NCAA men’s basketball tournament while picking up some Big 12 and Big East games.
Zaz’s downgrade: In his must-read private email Dry Powder, Puck’s Bill Cohan explains why Jawad Hussain, a research analyst at S&P Global, downgraded Warner Bros. Discovery’s debt from BBB– to BB+, right on the borderline of a dreaded junk bond rating. Alas, while WBD’s net debt has been steadily declining, its adjusted EBITDA will be stuck at $9 billion for the next three years.It turns out, however, that the credit rating downgrade could actually make WBD more attractive to buyers. I’ll let Bill explain: “In truth, a credit rating downgrade is only really relevant if a company plans to issue new debt, which I seriously doubt WBD is looking to do anytime soon. The credit rating downgrade could also affect the value of WBD’s existing debt stack—although, since the cost of WBD’s debt is slightly below what the U.S. government can borrow at these days on a long-term basis, the downgrade should have minimal impact on the value of WBD’s debt. In fact, as I’ve written before, WBD’s cheap debt is actually an asset of the company, all things considered.” Bill continued: “In fact, there’s a subtle benefit to the downgrade: It may make WBD easier to sell. The unexpected downgrade of the Paramount Global debt, in March 2024, made that company easier to sell, too—still pending, as we all know—because its $11 billion-ish of net debt did not have to be repaid immediately upon a change of control. The downgrade, ironically, relieved a buyer of that burden. I suspect the S&P downgrade of the WBD debt last week can serve the same purpose, if anyone out there is looking to make a deal with Zaz.”
The U.S. men’s tennis vacuum: Even weekend tennis fans know that an American hasn’t won a major men’s tournament since Andy Roddick picked up the U.S. Open title way back in 2003. The drought has accumulated pressure on the current crop of U.S. players—although Chris Eubanks, a current pro and TNT’s French Open analyst, told me on the Varsity podcast that the depth on the men’s side is actually stronger now than it was in Roddick’s era. Eubanks said that TV and streaming companies need to build stories around players like Taylor Fritz, Ben Shelton, Frances Tiafoe, and Tommy Paul. “The more various media outlets can get involved in the sport, and have a love of the sport, that can be a megaphone for casual fans,” he told me. “Once that happens, people will start to get more invested in it. Tennis is a confusing sport if you don’t know the rules, or the schedules, or the draws. That can be intimidating. The more we have bigger media outlets covering this sport, it’s going to do wonders for the continued growth.”
3 Arts picks up A&A: News of an interesting deal popped into my inbox this afternoon: 3 Arts Entertainment, the Hollywood management and production firm, is getting into the sports space by acquiring A&A Management Group, which represents Travis Kelce. As part of the deal, A&A’s Aaron and André Eanes will become partners at 3 Arts, and oversee the new sports division. While sports have been a wildly profitable contributor to the P&Ls of Hollywood’s big talent agencies for years, the 3 Arts deal marks a significant move into sports from one of Hollywood’s management firms.

The Connolly War

News, notes, and the latest court filings on the Disney–YouTube–Justin Connolly battle royale.

John Ourand

Back in January, the headhunting firm Spencer Stuart approached Justin Connolly, Disney’s affable president of platform distribution, with a job that seemed right up his alley. Google was looking to hire a vice president for YouTube—someone who would oversee all media and sports content acquisition and relationships. Connolly, who spent more than 20 years hammering out platform deals at ESPN, would have a bigger seat at a bigger table, “cultivating direct relationships with other global media companies” and “working directly with sports leagues and conferences to license rights to build YouTube’s profile in the sports space,” per a legal filing. There was, of course, one problem. Five months earlier, Connolly had signed a contract that would keep him at Disney until March 2027 at the earliest. On Wednesday, an L.A. County Superior Court will hear Disney’s motion to slap a temporary restraining order on Connolly, who stunned his colleagues and the broader sports media industry by abruptly announcing last month that he’d be leaving to take that job at YouTube. Yes, top executives come and go, but this one prompted Disney to hit the mattresses. After all, the company is in the process of acquiring Fubo, taking ownership of Hulu, rolling out ESPN’s new streaming service, and negotiating a distribution deal… with YouTube TV. Meanwhile, YouTube is currently pursuing an increasingly aggressive posture in its pursuit of media rights, just as the executives at Spencer Stuart stipulated. At issue in this legal squabble is whether Connolly’s contract was “fixed-term” (as Disney contends) or “at-will” (per Connolly). Judges typically rule on these types of motions quickly, and we should know this week whether Connolly can keep his new gig. In the meantime, court filings have opened a window into how all of this went down—including those early details of YouTube’s courtship. Disney claims that Connolly’s move during the distribution negotiations would, as ESPN’s chief Jimmy Pitaro said in a separate court filing, “give [YouTube] a critical and unfair advantage.” According to a Connolly filing, Disney is using him as a “bargaining chip in ongoing YouTube-Disney contract negotiations.”

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Before he signed the deal, according to the court filings, Connolly said that he met with various Disney executives to evaluate his departure options. Several Disney employees, including one from human resources whom Connolly named, Jim Lygopoulos, assured him that he would be allowed to pursue opportunities that arose.

Executive Tug of War

After months of interviews with YouTube, on April 10, Connolly made up his mind that he would accept the job and told his three bosses, Jimmy Pitaro, Dana Walden, and Alan Bergman, according to a court filing. “The results of those conversations were mixed: Some people were supportive, while others were not,” Connolly said in the filing. Bob Iger, however, was not supportive. Pitaro’s deposition noted that he was “shocked” to learn that Connolly wanted to leave, especially for YouTube. Pitaro said that in negotiating Connolly’s employment contract, he made sure there was a clause that kept Connolly committed to Disney until March 2027—knowing all the deals Connolly would have to oversee, including renewals with both YouTube TV and Comcast. “I was surprised that Mr. Connolly would leave, not only because Mr. Connolly had just agreed to a new contract, but because he said he was going to YouTube,” Pitaro said. Still, Pitaro hoped that Connolly would have a change of mind. “I hoped that he would be persuaded to stay,” he said. At the same time, Disney explored a compromise that would allow Connolly to leave after Disney finalized a YouTube TV deal. (That deal is up this fall.) Lawyers went back and forth on the proposal with a volley of letters in late April and early May. Amid all this, YouTube also grew agitated. YouTube assured Disney that Connolly would not be involved in the negotiations, and had Connolly sign a written commitment not to share Disney-related information with YouTube’s negotiating team. To YouTube, it felt like Disney was using their longtime executive as a bargaining chip. With the process dragging out, Connolly sent Pitaro, Bergman, and Walden a resignation email on May 16. Disney responded to Connolly’s resignation letter with an email telling him that he was not legally allowed to leave Disney, and asking for his start date at YouTube. “He did not reply,” Pitaro said. Obviously, this skirmish is just the prelude to a longer battle as Disney and YouTube increasingly recognize each other as both partners and competitors in the ossifying streaming industry. And while there are a million complexities here, all of which are sitting with the court, one truth remains self-evident: Someone needs to teach these long-tenured media guys and their companies how to divorce amicably.

From the Cheap Seats

On sending Cathy Engelbert down to the J.V.: “Why is Engelbert down to J.V.? There’s been conversation online, and in the national media (e.g., Christine Brennan), that somehow the WNBA has egg on its face because [Caitlin Clark] is hurt, and their thesis that other athletes also draw fans is disproven. Engelbert has said she’s the most popular athlete in America on The Bill Simmons Podcast, among other complimentary things. What else is she supposed to say? Why can’t she say there are other draws? There are! Certainly not as big as C.C., but she’s the commissioner to the entire WNBA, not just the Caitlin cult (non-pejorative!).” —A Varsity subscriber On Bill Belichick’s love life: “Bill Belichick and Jordon Hudson were the biggest story in college football for about three weeks. Then the SEC and Big Ten weighed in, again, on CFP expansion, and the Tar Heels are yesterday’s news. So please, no more deep dives on the UNC P.R. strategy.” —A Varsity subscriber On Mellencamp vs. McAfee: “Did you really call Indiana residents Indianans? Indiana people are referred to as Hoosiers.” —A Varsity subscriber

See you tomorrow, John

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