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Volume 25 No. 177

Media

Fox officially pulled out of the running to buy back its RSNs from Disney, saying in an SEC filing that it “does not intend to bid” for any of the 22 channels that Disney is trying to sell. “Fox confirms that it does not intend to bid for any of the Fox regional sports networks that Disney (or any entity operating on its behalf) may sell as required by the consent decree with the U.S. Department of Justice,” the filing said. Fox has been seen as the most likely bidder for the RSN group, but sources cite several reasons that the Rupert Murdoch-owned company is staying out of the bidding process. First, without its 21st Century Fox entertainment assets, the new Fox is more focused on high growth businesses, and Fox execs see the RSN business as a slow-growth one, at best. Plus, Fox execs have been scared away, in part, by the sales process. They believe that Disney has overexposed the RSNs over the past several months by allowing too many entities to see the sales book -- including teams that negotiate rights deals and distributors that negotiate carriage deals, sources said. That means that many of the entities on the other side of the negotiating table will know the margins -- exactly to the dollar -- on the RSN deals in a way that they did not before, sources said. That will make negotiations tougher and increases the likelihood of slower growth than Fox had previously seen with the RSNs.

BLOW TO THE SALE PROCESS: The move to stay out of the bidding process represents another blow to the sales process, from which Disney is hoping to get around $20B. NBC and Charter, two companies that own several RSNs, have said that they will not bid on the RSNs. Sources said Sinclair has made a bid to buy all the RSNs, but it is not clear how high its bid goes. Big3 co-Founder Ice Cube has expressed interest in buying the RSNs and is considered by some as a credible bidder. Additionally, a handful of private equity firms, including Apollo Global Management and Blackstone Group, have showed interest. The second round of bidding is due by the end of the month, sources said. Regulators have said that Disney must sell the 22 RSNs within 90 days of the closing of its $71.3B acquisition of 21st Century Fox’ entertainment assets.

YANKS IN DRIVER'S SEAT FOR YES? A big question revolves around what happens to YES Network. The Yankees are considering buying back the RSN, and the team has been talking with Amazon, Sinclair and Gerry Cardinale’s RedBird Capital Investment firm about a possible deal. Yankees execs are said to be comfortable with Fox as the owner of its RSN. Now that Fox is out, it makes it more likely that the Yankees will buy back YES Network, sources said.

 

CBS is preparing for "what is expected to be a $500 million revenue day" on Feb. 3 when the net hosts Super Bowl LIII, according to Stephen Battaglio of the L.A. TIMES. CBS acting CEO Joe Ianniello believes the net will be "in the ballpark" of the $500M NBC claims it took in last year when it aired the game. Ianniello said that ad sales have been "strong for the game, with more than 90% of the commercials sold." CBS is "not making a projection on the audience for Super Bowl LIII." However, Ianniello said that he is "'quite confident' it will be more than 100 million viewers." Super Bowl LII had an "average audience of 103.4 million viewers on NBC." That was the lowest figure for the game since '09, but there is a "reasonable expectation that the audience number should rebound this year as overall viewing of NFL games was up 6% during the regular season after two straight years of declines" (L.A. TIMES, 1/11).

STREAMING STILL ON THE RISE: CBS said that the live stream of Super Bowl LIII is poised to post another double-digit percentage increase in audience size and once again set a new record for digital viewership of the event. Last year's game on NBC generated an average minute audience of 2.02 million viewers and a peak of 3.1 million concurrent streams, continuing a steady pattern of growth since live Super Bowl digital streams began in '12. Super Bowl LIII extends a significantly widened digital distribution that began last year in which the game will be made available to all connected devices through NFL, Verizon Media Group and CBS platforms, including the CBS All Access OTT service. CBS’ live stream of the game also will be joined by a wide range of ancillary programming on its CBS Sports HQ streaming network. CBS Sports Digital Exec VP & GM Jeff Gerttula said the net has undertaken a wide range of internal preparations to minimize latency in the digital feed from real time play, annually one of the most frequent complaints surrounding the Super Bowl stream (Eric Fisher, THE DAILY).

NO WORD ON TRUMP YET: CBS Sports Chair Sean McManus said that the net has had "talks with the White House about interviewing President Trump during the Super Bowl LIII pregame show ... but that there will be 'no announcement on that right now." In DC, Matt Bonesteel notes Trump "did not do an interview with NBC" last year, though he did sit with Bill O’Reilly for a "prerecorded interview" that aired during Fox' pregame coverage of Super Bowl LI. Super Bowl pregame interviews with U.S. presidents have been a "semi-regular affair ever since George W. Bush sat down with CBS’ Jim Nantz ahead of Super Bowl XXXV" in '01. President Obama did one in "every year of his presidency" (WASHINGTON POST, 1/11). CNN's Brian Lowry writes this "tradition" of presidential interviews should have been "dispensed with some time ago." It has "awkwardly become a venue to discuss serious topics and try to make actual news, which feels out of sorts with the beer-ad-soaked environment in which it airs" (RELIABLE SOURCES, 1/10). Meanwhile, CBS will have "seven hours of pregame shows" leading up to kickoff. A four-hour "Super Bowl Today" will originate "live from a set in The Home Depot Backyard outside Mercedes-Benz Stadium and two sets inside the stadium" (ATLANTA JOURNAL-CONSTITUTION, 1/11).

ODDS AGAINST BETTING REFERENCS: On Long Island, Neil Best notes CBS will "maintain its season-long policy of not having announcers discuss" sports gambling on the air during the Super Bowl broadcast. McManus said, "We just had made the decision that it’s not the right thing to do now. We’re very flexible, and we’re talking to all the different gaming companies out there. We may change. But right now, we’ve decided not to do it." Nantz, who will call the game, added, "I'm totally comfortable with what Sean has mandated. I’ve never really gotten into that, ever. I don’t even think about it" (NEWSDAY, 1/11).

LET'S GET DIGITAL: McManus said that the telecast will "feature several new technological advancements, including multiple 8K cameras for the first time on any U.S. network, as well as 16 cameras with 4K capabilities for 'even more dramatic close-ups of the action.'" CBS, which will deploy 115 cameras in total during Super Bowl LIII, will also "showcase four cameras with live augmented reality graphics." McManus: "The broadcast will look as innovative as any broadcast in history" (ADWEEK.com, 1/11).

Smith over the years has gone after stars such as LeBron James, Kevin Durant and John Wall
Photo: ESPN IMAGES

ESPN's Stephen A. Smith has been involved in a "season-long back-and-forth" with Wizards G John Wall, marking "just the latest feud between Smith and a prominent NBA star," according to Ben Strauss of the WASHINGTON POST. Following Wall announcing he would "miss the rest of the season due to heel surgery, Smith asked whether the pressure on Wall was too much." Wall later responded "without mentioning Smith by name." Warriors F Kevin Durant and Lakers F LeBron James in the past also have become "unpaid co-stars of Smith's programming," and a question exists as to whether Smith "deliberately seeks out these confrontations." ESPN Exec VP/Studio Production & Exec Editor Norby Williamson said it was good for Smith "to be an essential character in the coverage of the NBA." However, he added, "I’m not big on courting controversy. I’m not wild about a Wall and Durant going back and forth with him." Williamson believes the players’ reactions to Smith are "simply a sign of his stature." Williamson: "I want to be careful because I don’t want to say other people’s voices don’t matter. But his voice matters with our audience on a different level" (WASHINGTON POST, 1/11).

Ice Cube and the Big3 have struggled to recruit a deep-pocketed investor to help with a bid for Fox' RSNs
Photo: GETTY IMAGES

The Big3 hopes to have a "new TV home by June, when the league’s third season tips off," after parting with Fox Sports following its first two seasons, according to Meg James of the L.A. TIMES. Big3 co-Founder Ice Cube said it was "time to move on" when the two-year deal it signed with Fox expired last year. Fellow league co-Founder Jeff Kwatinetz added Fox is "going to be a little different" after Disney buys much of 21st Century Fox. Kwatinetz: "It’s going to be very heavy on Fox News -- which is fine." He suggested that Fox "failed to engage in negotiations to renew the Big3’s TV rights deal because Rupert Murdoch’s media conglomerate was miffed that Big3 also was trying to elbow into the auction for the Fox sports channels." Kwatinetz: "We’re both competing for a similar asset, potentially." James notes the Big3 has been "trying to scrape together" as much as $15B to make a "competitive bid" for the RSNs. However, the league has "spent much of the last year locked in a bitter legal dispute with a Qatari investment firm and has struggled to recruit a deep-pocketed investor to help" with its bid for the sports channels. Finding a new TV partner has "become a top priority to keep the nascent Big3 league commercially viable" (L.A. TIMES, 1/11).

MORE CHANGES COMING: The Big3 will expand to 12 teams for the '19 season after fielding eight clubs the last two years. The league also will play in 18 cities, with games to be held twice a week in each city compared to once a week in 10 cities over the first two seasons. Ice Cube said, “It’s time to up the ante a bit.” Basketball HOFer Lisa Leslie will coach one of the new teams this year, while the player age requirement will be lowered from 30 to 27. Players still must have NBA or pro international basketball experience (John Lombardo, THE DAILY).

In Houston, David Barron notes the Texans are "justifiably pleased" that their regular-season ratings this year were up 23% from '17. The Texans averaged a 22.3 Nielsen rating and 804,000 viewers during the '18 campaign, which improved upon an 18.1 rating and 663,000 viewers in 17. However, this year's numbers still "lag behind" '16, when local games "averaged 22.9 and 892,000 viewers." Four noon starts this year "failed to top a 20.0 rating, which is a pretty anemic performance for an NFL home market, and only the two prime-time games topped a 25 rating, which should be the standard for a local telecast" (HOUSTON CHRONICLE, 1/11).

STOOLIES REJOICE: Barstool Sports claims to already have "more than 10,000 paid subscribers to its new membership service, Barstool Gold," with 81% "signing up for the $100 annual subscription." Barstool Gold is a "tiered membership product from the digital publisher that offers everything from exclusive content and merchandise, to early access to events and office tours and meet-ups with Barstool personalities." The lower tier "costs roughly $1 per week," while the higher membership tier "costs roughly $2 per week" (DIGIDAY.com, 1/11).