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Start your morning with Buzzcast: Some positive signs for NASCAR's future, and CBS revs up for a new NFL deal.

IMG-Learfield Merger Survives Despite Antitrust Allegations

By Michael Smith

The Department of Justice uncovered several examples of alleged unlawful and anti-competitive business practices by Learfield and IMG College, but their $2B merger will survive. The new Learfield IMG College settled an antitrust lawsuit brought by the DOJ yesterday by agreeing not to impede competition in the future. The lawsuit did not name specific executives who were involved in the anti-competitive behavior, nor did it name the schools, but the DOJ concluded that the unlawful restraint of trade restricted the amount of revenue they could have received for their multimedia rights. The DOJ spent 15 months investigating the multimedia rights practices at Learfield and IMG College as the companies were trying to merge.

Antitrust Division Assistant Attorney General Makan Delrahim: “The illegal agreements not to compete allowed Learfield IMG College to benefit at the expense of the nation’s universities, students, and fans. Public and private universities rely on competition among multimedia rights providers to provide critical resources to athletic programs, but these agreements lessened that competition and thereby harmed the universities and, ultimately, American students and taxpayers.” Learfield IMG College, a company of 2,300 employees, now owns the multimedia rights to 54 of the 65 schools in the Power Five, and more than 200 total. Its combined revenue in '17 was $808M, according to the lawsuit.

Among the findings alleged in the suit:

  • Learfield and IMG College secretly coordinated to limit competition with each other and with smaller competitors, often through the use of joint ventures. Learfield and IMG College entered into these JVs so they could work together and not compete. The DOJ cited one case where Learfield and IMG College at first prepared to bid separately, but used a joint bid to lower the price.
  • In an effort to “co-opt” a smaller competitor, IMG College formed a JV and in exchange the smaller provider agreed not to bid on any of IMG’s schools for a year.
  • When Learfield and IMG College decided to unwind a JV, they often crafted noncompete agreements that would continue to limit competition. The DOJ cited an example where IMG asked for permission to bid on a Learfield school and Learfield refused. The school ended up staying with Learfield.
  • In another instance, Learfield bid on an IMG College school without getting IMG’s permission. Learfield withdrew its bid, and the school re-upped with IMG.
  • The DOJ’s lawsuit summarized that Learfield and IMG College unreasonably restrained competition for multimedia rights, reduced the amount of rights fees that went to the schools and harmed the quality of multimedia management. A statement from Learfield IMG College disputed that conclusion: “The agreement includes no finding of wrongdoing by Learfield or IMG College, nor have any penalties been assessed. We are very confident in the integrity of our business practices, and categorically deny any allegations that either Learfield or IMG College has ever taken any action with the intent of hindering competition.”

Learfield IMG College settled the lawsuit essentially by agreeing not to engage in anti-competitive practices in the future. Specifically, the defendants may not share or benefit from bid information or agree with a competitor not to bid. The newly merged company cannot engage in a joint venture for multimedia rights or renew a JV. Learfield IMG College also must designate an antitrust compliance officer who will institute an antitrust program. The company released a statement yesterday: “We are satisfied with the amicable resolution of this matter and are confident that the combined company will continue to provide our partners with top quality services and invest to develop additional services and products to help them grow.” With regard to the JVs, Learfield IMG College said: “The primary focus of the DOJ’s review and the complaint is on the historical practice of joint venture bids. These joint ventures were created many years ago when the participants in the industry were very small and had limited resources and were always open and transparent to the universities. Given that the DOJ has now raised an issue with the idea of multimedia rights joint ventures, we have agreed to limit the practice going forward.”

NBA's Annual Tech Summit Features "Game Day" Theme

By John Lombardo

The NBA this morning will hold its Technology Summit -- an annual All-Star Weekend event -- at The Westin Charlotte. The theme of this year’s event is "Game Day." After opening comments from NBA Commissioner Adam Silver, panels will include "Modern Media in the 21st Century,” featuring AT&T CEO Randall Stephenson, “Betting on the Future,” “Chasing Gen Z,” “Evolution of Disruption,” “The Connected Athlete” and a featured one-on-one interview with Hornets Owner Michael Jordan, moderated by ESPN's Michael Wilbon.

Meanwhile, the Kings are partnering with Swish Analytics to demo the NBA's first space for a free-to-play, in-arena predictive gaming experience dubbed, "Sacramento Kings Skyloft Predictive Gaming Lounge." The new area will open March 17 at Golden 1 Center.

OWL Begins Season Two With Raucous Atmosphere In Burbank

The Overwatch League's second season kicked off last night at Blizzard Arena in Burbank before a "youthful, diverse, boisterous crowd." The four matches reportedly "hit a peak viewership of 1.55 million overall" for online coverage via Twitch and the ESPN app, "1.25 million of whom were in China." Players on OWL's current rosters "hail from 22 countries," and South Koreans "account for more than half the league." In the opening game, the Philadelphia Fusion defeated the London Spitfire after being led on stage by Flyers mascot Gritty (WASHINGTON POST, 2/15).

CBS Falls Short Of Wall Street Expectations In Q4 Earnings

CBS "missed Wall Street's projections" for Q4 as "revenues derived from content licensing and distribution fell 11%, even as its results were buoyed by advertising" tied to the '18 midterm elections. Reporting after markets closed yesterday, CBS reported net income from continuing operations of $561M, compared with $4M in the year-ago period (VARIETY.com, 2/14). CBS fell short of expectations "largely due to a dip in its Entertainment unit caused by timing of international licensing deals and tough comparisons with domestic sales in the year-ago quarter." Meanwhile, CBS All Access and Showtime combined have "reached 8 million direct-to-consumer subscribers" (DEADLINE.com, 2/14).

NBC Confirming Mike Tirico As Host Of Indianapolis 500

By Adam Stern

NBC Sports this morning will confirm that Mike Tirico will host the Indianapolis 500, which is in 100 days. THE DAILY first reported Tirico was slated to be the host last year, but NBC is making the move official today to start drumming up hype toward the broadcast, which will be on NBC's broadcast channel. This will be the first time covering the Indy 500 in any capacity for Tirico, whose usual duties include Olympics, NFL, golf and Notre Dame football. He is also preparing to do play-by-play for an NHL game for the first time later this month. This year's iteration on May 26 marks the first time NBC airs the race after 54 years on ABC.

Source: AAF Spoke To Kaepernick, But He Wanted $20M To Play

Alliance of American Football officials "spoke with Colin Kaepernick" during the AAF's development about "joining the league," according to a source. However, Kaepernick wanted $20M or more to "consider playing with the league." AAF co-Founder Bill Polian said that league CEO Charlie Ebersol and Kaepernick's reps "talked last summer." Polian: "I don't know what transpired, but he's obviously not playing" (AP, 2/14).

U.S. Leagues Say Saudi Arabia Allows Pirating Of Their Content

U.S. sports leagues and European TV provider Sky have "accused Saudi Arabia of allowing a streaming service to pirate their content." The NBA, USTA and a group representing the NFL, MLB and NHL "have filed complaints with the U.S. government over the alleged violations." They have asked that Saudi Arabia be "placed on a 'Priority Watch List' of countries that do not protect intellectual property rights." They contend that Saudi-based BeoutQ "frequently pirates their live sporting events." Qatar-based beIN Media Group "holds the regional broadcast rights for many of the events" (CNN.com, 2/14).

Quebec Political Party Says No To Public Money For Ballpark

Political party Quebec solidaire has "come out swinging against any taxpayer money being poured into professional baseball in Montreal." Quebec Assembly member Vincent Marissal said, "It’s a non starter as far as I and my party are concerned. ... I don’t see why, under any circumstances, the government of Quebec should put one dollar of public money in this project." This comes amid news that a "group of Montreal business people pursuing the idea of bringing a baseball team to Montreal has chosen a site in Pointe-St-Charles" (MONTREAL GAZETTE, 2/15).

Esports TSM To Promote New Fortnite-Licensed Nerf Toys

By Ben Fischer

Hasbro’s Nerf brand will launch a series of toy blasters licensed by the hit video game Fortnite, and esports organization TSM will lead the promotional effort globally. TSM’s three-person Fortnite team of Myth, Daequan and Hamlinz will appear in a linear ad for the toys, with TSM’s non-competitive influencers also supporting the push. TSM CRO Brad Sive: “It’s always important to connect with the younger fan base.” The players will not be wearing TSM jerseys in the campaign. TSM negotiated directly with Hasbro, which paid a sponsorship fee for TSM’s involvement separate from its licensing deal with Fortnite publisher Epic Games. The toys will be in retail stores March 22.

For more coverage of the business of esports, visit our partners, esportsobserver.com.

Speed Reads....

NASCAR drivers Kevin Harvick and Joey Logano "led Ford sweeps" in last night’s 150-mile Daytona 500 qualifying races -- the Gander RV Duel -- "before an estimated 40,000 fans" at Daytona Int'l Speedway (Daytona Beach NEWS-JOURNAL, 2/15).

The Rockets and BBVA Compass will roll out their annual small business contest on Feb. 19 (BBVA Compass).

eBay launched a series of 23 limited-time sneaker releases in celebration of NBA All-Star Weekend in Charlotte (eBay).

Quick Hits....

"To tell you the truth, this whole thing has been a dumpster fire" -- Pelicans coach Alvin Gentry, on the "cloud hanging over the team" since Anthony Davis made a trade request on Jan. 28. Davis last night was hurt in the Pelicans' 131-122 victory over the Thunder (New Orleans TIMES-PICAYUNE, 2/15). 

"As we were digging out of a terrible hole for us -- in the late ’70s and ’80s, when there was a fair amount of racism exhibited about players -- we felt as a matter of policy we had to promote our players and show that they were real people" -- NBA Commissioner Emeritus David Stern, speaking on the Bloomberg "Business of Sports" podcast, on his belief that Colin Kaepernick "would still be working today if he were a basketball player" (USA TODAY, 2/15).

"Dwelling on the past doesn't do me any good. I've just decided to take that tack" -- Former FS Detroit Tigers play-by-play man Mario Impemba, on moving forward after his scuffle with longtime broadcast partner Rod Allen. Impemba will call select Red Sox games on WEEI this season (DETROIT NEWS, 2/15).

"They’re getting it, and there’s a reason for that. They don’t necessarily have to care what’s under the hood. It’s an extreme sport. These drivers are daring and brave and skilled, and they drive crazy speeds wheel to wheel. We’re beginning to grow our younger fan base" -- IndyCar CEO Mark Miles, on the sport "branching out and appealing to millennials" (AUSTIN AMERICAN-STATESMAN, 2/15).

Morning Hot Reads: Nothing But Net

The WALL STREET JOURNAL writes under the header, "College Basketball Says Goodbye To The RPI, Hello NET." The NCAA’s new-look ranking system "aims to bring the March Madness selection process into the modern age," and was developed in partnership with data scientists from Google during the '17-18 season. 

Also

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Today's Back Pages....

The Morning Buzz offers today's back page sports covers from some of North America's major metropolitan tabloids:


N.Y. Post

N.Y. Daily News
 Newsday Boston Herald Chicago Sun-Times Philadelphia
Daily News

Laugh Track: The Brady Bunch

Actor Ben Affleck appeared on ABC’s “Jimmy Kimmel Live” last night, with host Jimmy Kimmel asking the longtime Patriots and Red Sox fan if he sent Tom Brady a gift for Valentine's Day. Affleck: “When you're close with somebody like that, you don't talk about it publicly. You just send little love notes.” Affleck then thanked Kimmel for his offer of World Series tickets last fall, but said he “did not want to go with you.” Kimmel noted Affleck’s “plus one” to the WS ended up being fellow actor Matt Damon. Kimmel: “Maybe next time, don't bring him. He ruins everything" (“Jimmy Kimmel Live,” ABC, 2/14).

CBS’ James Corden noted President Trump “praised the latest design of his border wall,” saying it would easier to climb Mount Everest then to get over it. Corden: “They would be able to climb Mount Everest easier because if there is one thing this guy knows about it's extreme sports. He was out of breath just saying Mount Everest” (“The Late Show,” CBS, 2/14).