Friday Dump 🥟 - Regional sports rollercoaster, Miami not for sale, NBA media update

What a day to read the Friday Dump 🥟

Each Friday, we’ll breakdown 3 sports business stories that have caught our eye throughout the week. They will be assembled in the following format:

🔴 - Stories that make us stop, think, and question.

🟡 - Stories with a hint of risk and unpredictability.

🟢 - Stories that make us feel good to go and empowered.

Guess who’s back, back again. Yep we’re back, tell a friend.

🔴 Bally Sports can’t tread water. It’s been quite the yucky year for regional sports networks (RSNs). Honestly, if RSNs were people, they’d be on the highest dose of high blood pressure medicine the market has ever seen (sorry, HIPAA). The parent company of Bally Sports, Diamond Sports Group (DSG), filed for Chapter 11 bankruptcy last spring, then agreed to a major investment and content distribution deal with Amazon to help prop up their business, now they’re having problems locking up distribution deals — specifically with Comcast. Why is that a problem? Well, it could ultimately hinder the company’s capability to emerge from bankruptcy. Let’s review…

• DSG wants to do everything it can to work with cable networks to set up distribution deals, since they have a confirmation hearing for their Amazon restructuring plan that could help avoid liquidation in June. One of the keys for that plan to be successful is DSG reaching an agreement with these major distributors 😬.

  • Last month, they agreed to a deal with Charter, the largest distributor in the U.S.

  • They’re in the process in finalizing a deal with DirecTV (No. 3).

  • And this week, they renewed with the smaller, little brother operator Cox Communications.

  • According to DSG, ~81% of their distribution revenue has been tied to the Big 3: Charter, Comcast, and DirecTV.

• However, the second-largest distributor in the nation, Comcast, did not come to terms as their prior deal expired Tuesday night.

  • Ultimately, the issues stem from total dollars and the tier of service Comcast hosts DSG’s channels on (Comcast wants DSG to appear on a premium tier).

• Why is this a big deal? Well, we’re already starting to see the effects take place of this failed deal…especially within baseball.

  • Households with Comcast Xfinity currently can’t watch local coverage of the Atlanta Braves, Florida Marlins, Detroit Tigers, and Minnesota Twins.

  • Coverage was also cut off mid-game during an NHL playoff game between the Nashville Predators & Vancouver Canucks.

🟡 Family comes first. This upcoming Cinco de Mayo weekend is a big one for the city of Miami as Formula One’s Miami Grand Prix is back for it’s 3rd annual race! And just ahead of this spectacle, no one is feeling themselves more (that sounded a tad bit dirty 🤭) than Miami Dolphins owner, Stephen Ross. In fact, he also owns the Miami Grand Prix, the venue that will host the race, Hard Rock Cafe Stadium, and he’s also the guy who’s name is stamped all over the University of Michigan’s Business School. Why is he feeling so good about himself? Well, Ross recently turned down a combined $10B offer for control of the football franchise, Hard Rock Stadium, and the Miami Grand Prix, according to USA Today 😳. That’s right, he turned it down because apparently he wants to keep the assets in his family…

• Apparently the $10B offer was made by billionaire and CEO of Citadel, Ken Griffin. Where it would have nearly match the combined sales of the Denver Broncos ($4.7B in 2022) and Washington Commanders ($6.1B in 2023).

Where does the $10B price tag come from?

• The Dolphins are valued at $5.7B (11th highest in the league).

• Hard Rock Stadium (home of the Dolphins and Miami Grand Prix) has a capacity of more than 65,000, was renovated in 2015 and 2016 while also adding a training facility in 2021.

  • They were also able to transform the parking lot into a racetrack, which has increased value in the stadium, economic value to the Miami area, as well as help grow the sport of F1.

  • All of this amounted to Ross investing over $1B in the property.

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🟢 NBA media drama is just beginning. We definitely sound like broken records at this point — and if we don’t, feel free to catch-up on what’s going on 😉. But it’s hard not to ignore how juicy these rumors are becoming for the NBA. According to The Wall Street Journal, NBC is prepared to pay an average of $2.5B a year to air a package of NBA games. The package would include playoff and regular season games that would appear on NBC and Peacock. NBC has even discussed carrying two prime-time games a week, which Warner Bros. Discovery (with TNT) can’t offer because it doesn’t own a broadcast network.

• Disney and WBD are currently paying the NBA $2.7B combined annually to air games on ESPN and TNT.

• WBD has the right to match any rival offer that comes across the NBA’s table, but CEO David Zaslav has already made it known publicly by saying WBD doesn’t need the NBA to survive 😂.

  • Little does he know, the loss of the NBA would be a massive loss for its TNT cable network while also being hurt by cord-cutting and a shrinking advertising marketplace.

    • Even though this would be a huge blow to the network, TNT still has the NCAA Men’s Basketball Tournament, NHL, and NASCAR.

  • Maybe he only cares about cost-cutting though? (idk we’re not in the room 🤷🏻‍♀️)