Friday Dump 🥟 - Skinny sports bundle, SpongeBob Super Bowl, NBA airline sponsor

Author

Michael Sheinfeld
February 09, 2024

And we’re back for the Friday Dump 🥟

Each Friday, we’ll breakdown 3 sports business stories that have caught our eye throughout the week and 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.

This way my liege…

🔴 And that’s a wrap, back to cable we go. On Tuesday, news broke that ESPN, FOX, and Warner Bros. Discovery are set to form a new joint venture to launch a sports streaming service starting in the fall of 2024 (alright cordlovers, go ahead and point and laugh at the cordcutters now. you deserve this 🤭).

Even though there has been very little information leaked at this point, it’s been made aware that each media conglomerate will own one-third of the “To-Be-Named” digital platform. The fees that each company will receive are based on what they earn in their cable/YouTube TV deals. For example, ESPN, which receives the highest fees, will receive a higher percentage from each subscriber to the new venture.

What do we know about this new streaming service?

  • Subscribers will have access to linear sports networks including:

    • ESPN, ESPN2, ESPNU, SEC Network, ACC Network, ESPNEWS, ABC, FOX, FS1, FS2, Big Ten Network, TNT, TBS, and truTV.

    • They will also have access to ESPN+, Hulu, and Max.

  • A price point as not been released, but there have been initial rumblings that the service will come in between $40-50 per month.

  • Unfortunately, subscribers won’t be able to completely corner the sports market as CBS and NBC (and their streaming services, Paramount+ and Peacock), will not be apart of this “skinnier bundle” (so don’t go crying to us if you can’t watch Sunday Night Football or the PGA Championship).

Why are these media companies now deciding to play nice?

  • It’s an interesting question and one we obviously don’t know the true answer to. But one thing to consider is these networks know league media rights deals are ending for the NBA (2025) and NFL (2029). And for them to compete with CA$H 🐄s like Apple, Amazon, and Netflix — the next best thing might be to team up.

    • Ultimately, it reduces costs and maximizes profits for the networks — which can be a game-changer when competing against these other streaming services.

    • Simplicity for the consumer cannot be overlooked as well! Being able to flip between multiple different sports channels all in one app can create a lot of leverage for the networks since it will be easier on the consumers. And guess what? Leagues like when consumers are happy 😉.

  • These media companies are also now starting to understand the value sports bring to their networks. Despite an 18% drop-off in overall TV usage since 2022, sports ratings have increased during the same period…which we’d venture to guess, that sports is probably the only thing that’s keeping cable alive.

In a dumpshell…this is the type of news that could potentially move the market. And it’s all based on consumer behavior 😎.

Price is extremely important to the consumer when it comes to subscription services (I know, mind-blowing analysis right?!). But seriously, if YouTube TV (includes all channels) right now costs $72/month and this skinny-sports bundle costs between $40-50/month (with rights to only ESPN, FOX, WBD), where will the consumer decide to put their money?

Separately, is this just the beginning? Could our friends at ESPN, FOX, and WBD end up cornering the sports market and end up diminishing subscribers for CBS and NBC? Would CBS and NBC, at that point, have to hop on the skinny-sports bundle train? (Oooo this is gonna get good!)   

🟡 SpongeBob on the call to teach your kid about football. If you’re looking to fully distract your kids on Super Bowl Sunday while you kick back with a bowl of chips & guac in one hand and a Bud Light (you think they’re still cancelled?) in the other, look no further than turning on the same thing as you…in Nickelodeon form. SpongeBob Squarepants and Patrick Star will be on the call to announce the Super Bowl in its first alternate telecast. This will be an entirely separate production and broadcast crew on another network as CBS and Nickelodeon are delivering a kid-focused, augmented-reality-filled production for the big game (think slime explosions mid-game, Nickelodeon characters running along the sideline, etc.). But the NFL isn’t doing this just to be cute…

  • This will be the NFL’s fifth alt-cast, as the most recent one occurred during Christmas Day between the Kansas City Chiefs and Las Vegas Raiders.

    • ESPN has also dipped their toes into alt-casts with a Toy Story game between the Jacksonville Jaguars and Atlanta Falcons.

    • Who’s to say they won’t do this for their other Disney related products? What about Marvel? Or Star Wars? Or other Pixar movies? (yep you guessed it, all owned by Walt D. himself).

  • The NFL knows what it’s doing as they’ve seen during the 2023 regular season viewership grow 4% among 2- to 11-year-olds and 5% for 12- to 17-year-olds.

    • They also recognize not all people will watch the Nickelodeon telecast, but that won’t stop them from seeing what’s going on via social media.

    • In January 2021, a normal playoff game between the Chicago Bears and New Orleans Saints, generated 2 billion social media impressions 🤯.

In a dumpshell…the NFL has been tapping into an audience for pure distracting and entertainment purposes so you can watch the real game. And, let’s be real, it’s genius. It’s a fun and easy way for kids to watch the game while also getting mesmerized with SpongBob’s insane laugh mid-broadcast.

Even though this has been going on for a couple years now, expect this to emerge from other sports (like NBA or NHL playoffs) to increase viewership.

Although it might sound great in theory, there are still issues that could arise: mainly technical glitches need to be at zero for those younger viewers to feel fully immersed. It’s a huge lift on the production side, but if that falls through, don’t expect those viewers to come back anytime soon.

Enjoying this really awesome newsletter? Share with your friends & family!

🟢 IST wants to fly like a bougie airliner, to the sea. (That might’ve been a little graphic but shoutout to Seal and Space Jam for the inspiration 😂). The NBA has officially agreed to (thank god) replace the name of the In-Season Tournament (IST) with the Emirates NBA Cup, after striking a multiyear sponsorship deal with Dubai-based, Emirates airline. Financial details have not been disclosed, but we can safely say this was a highly-coveted sponsorship gap for the newly put together NBA tournament.

  • Along with the naming rights, Emirates will also appear on the league’s first referee jersey patches for NBA and WNBA games. Look for those ads to debut at next week’s NBA All-Star Game too.

  • Emirates is not new to the sports sponsorship game. They sponsor upwards of 24 international sports properties including:

    • Stadium naming and jersey rights with Arsenal FC.

    • Jersey rights with Real Madrid, Ligue 1’s Olympique Lyonnais, AC Milan, and Portugal’s S.L. Benfica.

    • And sponsorship pacts with three tennis Grand Slams and other events in golf, sailing, cycling, and rugby.

  • The NBA has also been quietly opening the doors to the Middle East which includes:

    • Qatar Investment Authority purchasing a 5% equity stake last year in the Washington Wizards parent organization Monumental Sports and Entertainment for $200 million.

    • And also playing preseason games the last two years and set for more in the future in Abu Dhabi.

In a dumpshell…the NBA has always been about growing the game in a global way. Even if we’re just talking money and sponsorships, there’s a strategy behind this as any corporation would love to have their logo attached to this tournament.

Overall, it’s a great way to expand the popularity of the game while also leaving the door open for the potential to grow the prize money pot for the winning team, which was originally around $18 million total in 2023.

Reply

or to participate.