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Volume 23 No. 13

Opinion

The two big stories in sports media that I’m watching most closely and why:

DISNEY’S RSN DISTRIBUTION: Keep your eye on Disney’s planned sale of the 22 Fox RSNs as a condition of its acquisition of 21st Century Fox. The sales process comes amid questions about whether digital power players like Facebook, Amazon, Netflix or Google will invest seriously in sports programming. The sale also comes during an unsettled landscape for the future of the traditional RSN model. Who is going to make a run at these networks and what are they going to do with them? How would it shift the landscape if Amazon or another digital player became a strategic investor in a specific network or a set of networks? What would an RSN under their control look like? 

YouTube is already in the local streaming business, doing deals with three MLS teams, including LAFC. Could it build off those deals by actually buying a network? The valuations and dollars behind these networks are big enough that the financial players like Goldman Sachs or Providence Equity have to be considering a deal. But the marketplace and time horizon is different than in 2001, when Goldman invested in YES Network. 

The media market has matured enough — particularly with RSNs — that private equity investors in 2018 do not have as long a runway to get a return on those investments. Other bidders make sense: The new AT&T already controls four RSNs; Fox Sports President Eric Shanks has been open about how much he likes the RSN business and could be at the table to bring them back; Sinclair is flush with cash since its Tribune acquisition hit the skids and could use the RSNs to further its local broadcast strategy. 

Outside of the New York Yankees, who appear likely to take over ownership of YES, I don’t anticipate teams being in interested in buying their channels. Most teams are content with the current rights fee model and don’t have the operational or financial bandwidth to own a network. The most recent deals for the Tampa Bay Rays and Milwaukee Bucks resulted in healthy revenue gains from their previous deals, which suggests that the rights fee model is not going away any time soon. 

But as one very astute source firmly told me: Don’t think of this portfolio as simply a group of “networks.” Rather, it should be seen as exclusive ownership of the rights to 44 major league teams consisting of over 5,000 hours of live sports programming a year. How that programming is distributed and monetized may change over time, but it has enormous value considering the strength of live sports programming. This is the deal all insiders are talking about and it is likely to close in the first quarter of next year.

WILL THE CUBS GO ALL THE WAY? While we’re talking about the big deals of 2019, watch the Chicago Cubs. The team has a big decision to make on whether it will move on from its partnership with NBC Sports Chicago when its rights are up at the end of next year. The team has been part of an equity partnership with the White Sox, Bulls and Blackhawks since 2004, but the allure of forging its own media path must be intoxicating. 

There are so many reasons this is intriguing: The Cubs check all the boxes for any media property looking at sports; they are a major entity in a big market — a successful team with a global fan base; led by Tom Ricketts and Crane Kenney, the Cubs are aggressive and think long term; plus they have several options, including staying with NBC Sports Chicago, as the two sides are still talking. 

The Cubs could follow the NESN and YES model and develop their own media platform. But they don’t have to go the traditional RSN route. The team could follow the path Ted Leonsis is forging with his Monumental Sports Network or the model Steve Ballmer laid out with Prime Ticket by testing a digital delivery. The Cubs could sell a package of games to NBC Sports Chicago and experiment with the others. Remember, they have 45 games on WGN and 25 for WLS-ABC, and were one of the most aggressive teams in testing the viability of Facebook, as they’ve had 10 geo-fenced simulcasts on Facebook of the WLS-ABC games. Or the team could tie its fortunes to one of the bigger OTT providers like ESPN+ or B/R Live. 

Distribution is the issue. If the team spurns NBC Sports Chicago, it will face challenges. Comcast, which is the dominant cable system in the market, is used to big public carriage battles and would be a tough negotiation for any new Cubs network that it is not part of. Many close to this issue believe it’s too soon for the Cubs to go solely for digital distribution. But the Cubs have been very aggressive and progressive under the Ricketts family ownership, and have learned a lot from John Henry, Tom Werner and Fenway Sports Group. So I’m watching just how far the team will be willing to go when it comes to its media strategy.

Abraham Madkour can be reached at amadkour@sportsbusinessjournal.com.

Professional sports are big business in the United States. We love our teams, idolize our athletes and pay top dollar to attend games. So, it may come as a surprise to learn that according to Forbes, Manchester United, Real Madrid and FC Barcelona, each valued at approximately $4.1 billion, are worth more and have greater annual revenue than the New York Yankees (valued at $4 billion), New England Patriots ($3.7 billion), New York Knicks ($3.6 billion) and Los Angeles Lakers ($3.3 billion).

Lionel Messi, whose total annual compensation equals $111 million, and Cristiano Ronaldo ($108 million) each earn more than LeBron James ($85.5 million), Steph Curry ($76.9 million), Matt Ryan ($67.3 million) and Tiger Woods ($43.3 million). 

How can it be that a country that produced “Monday Night Football,” the World Series and the NBA Finals lags behind the rest of the world when it comes to soccer? Why didn’t the U.S. qualify for the 2018 World Cup? How did the American team manage to lose to Trinidad and Tobago, a country one-tenth the size of Los Angeles County? 

While an increase in the popularity of soccer here is unmistakable, soccer in America remains something of a missed opportunity. The problem is that our “pay-to-play” system, whereby players pay to belong to a “club” that provides coaching, uniforms and field space, is over-engineered and has obfuscated “play” in the true sense of the word. Our young players don’t play enough.

How can this be? They typically practice at least twice a week and play at least one weekend game during fall and spring. They attend soccer camps and participate in tournaments. They can incur thousands of dollars in expenditures. 

But they don’t really “play.” Practice can involve a long drive, warmups, skill work and tactical exercises with a 20-minute scrimmage at the end. Actual games also involve car time, warmups, stretching, drills and chalk talks, after which kids are assigned certain positions with restricted movements or roles: 22 players and one ball on a field of 8,000 square feet.

Contrast this with what happens in Costa Rica, a country to which the U.S. lost twice in World Cup qualifying. A youth team in Costa Rica might “train” only one day a week, but on other days, groups of kids gather on the beach, find four sticks to use as goalposts, divide themselves into teams and play until dark. It doesn’t matter that the beach is sloped 10 degrees and the ball might roll into the ocean. There is exuberance — yelling, arguing, teasing and celebrating. With all this play time, the kids get good.

Young athletes in other countries, like those in Costa Rica, often hone their skills outside of organized practices.
Photo: getty images
Young athletes in other countries, like those in Costa Rica, often hone their skills outside of organized practices.
Photo: getty images
Young athletes in other countries, like those in Costa Rica, often hone their skills outside of organized practices.
Photo: getty images

Also, people gather around televisions in houses, stores, cafés and bars to watch pro games. Cab drivers and others have the game on the radio. Kids intermingle with adults and take in the emotion and passionate commentary. They know the players and have heroes. They try out moves seen on television, and when new moves produce a goal, the kids celebrate and shout the name of their favorite player. This environment allows them to learn, lead, negotiate, lose, win, cooperate, take initiative, communicate, think strategically, weigh risks and be diplomatic. Except for perhaps the far-flung dream of playing professional soccer, there is no goal for these kids except to “play” — because it’s fun, it provides belonging, an avenue to flow, meaning and transcendence of daily life.

Magically, this takes place every day without a single adult. One official team practice per week is enough. And with this happening on a thousand makeshift fields across the country, moves first perfected on a beach helped eliminate the U.S. from World Cup competition.

How can this be fixed? While the U.S. never will have Latin village culture, something akin to the emotional appeal of soccer in other countries happens now with basketball. Kids play pickup games on their own — without adults, referees or uniforms — because they love it. They have heroes: They want to be like Mike, Kobe, LeBron and Steph. This helps them develop.

U.S. youth soccer clubs and MLS teams can help replicate this environment by providing open field space to children for pickup games. Some balls, training vests, portable small goals and maybe a few enthusiastic adults would be enough.

What else? The U.S. market is ready for an entertaining and provocative soccer talk show comparable to “Inside the NBA,” with the soccer equivalents of Charles Barkley, Shaquille O’Neal, Kenny Smith and Ernie Johnson: a program composed of humor and fun along with informed insights about soccer. Soccer programming also could address foreign cultures and international issues the way Anthony Bourdain’s “Parts Unknown” did through food.

The end game for soccer in the United States could be huge. Events like the Super Bowl, NBA All-Star Game and the World Series produce hundreds of millions of dollars annually for the host city. Taking soccer to a world-class level in the United States could produce similar results.

Peter Quies is a former professional soccer player and youth coach and is a senior consultant at Micronomics. Joe Hale and Roy Weinstein are Micronomics consultants.

Wonderful coverage on the USTA in your “The Golden Open” issue (Aug. 27-Sept. 2). I was dismayed, however, when reading [the] article starting on Page 28. The large photo features six people. All three white men were featured with bold, colorful names/titles on the photo and yet the three women were listed as “Also Pictured” below the photo in very small font size.

Women should not be overshadowed, overlooked or relegated to second class stature in this way! These women, in particular, are accomplished, powerful, influential women — Jeanne Moutoussamy-Ashe, Billie Jean King and Katrina Adams. I hope the Sports Business Journal does not slight any women like this in the future.

Leslie Groves
Arlington, Va.