Friday Dump 🥟 - UA struggles, Santa streaming football, WNBA vibin'

Friday Dump 🥟 is bringing sexy back 

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.

Take ‘em to the chorus.

🔴 Under Armour can’t protect this house. Don’t you miss the days when all was right and simple in the world? You know, the days when the price for a carton of eggs wasn’t $7, when we didn’t have to argue which 80-year old president would be able to walk up the stairs to Air Force One, or when Under Armour (UA) made you think you were jacked just from wearing their skin-tight undershirts in preparation for your JV debut? Yeah, we do too. Unfortunately, we’re left only reminiscing on the good times and companies, like UA, aren’t allowed to have nice things anymore 😩. On Thursday, UA’s CEO, Kevin Plank, announced a restructuring that would include a number of layoffs after their North American revenue dropped 10% to $772M this quarter — showing more signs that the sports apparel industry is in distress. For an even further outlook…

• UA expects sales to worsen, anticipating a steeper drop between 15-17% in its fiscal year.

• Profits also fell more than 96% during the Q4 of fiscal 2024 compared to last year’s period.

• And sales dropped to ~$1.3B (-5% from $1.4B in the previous year).

• Why is this happening? Well, Plank gave investors a wonderful, detailed answer as to why 🙄…(customer demand + bad UA performance).

• The news also comes 2 months after UA announced Plank’s return as CEO after Stephanie Linnartz stepped down…this, after Plank initially stepped aside in 2019 due to complaints over workplace culture.

🟡 Kings stay kings. On Wednesday, a major partnership was announced — one that will change the course of TV viewing as we know it. And no, it’s not Tom Brady’s brand deals with Botox and Rogaine…though that should be coming soon (we’re not reporters and we don’t have sources but it’d be silly to think you’d need them just taking a look at that stallion). We’re talking about the partnership between the NFL and Netflix. You got it, the godfather of streaming will air two Christmas Day games in 2024 and one holiday game apiece in 2025 and 2026. According to the Wall Street Journal, Netflix will pay $75M per game, which means $150M total for 2024 🤯. Let’s review how great of a deal this will be for both organizations…

• Netflix: The streaming giant has been tiptoeing towards the live sports realm by partnering with leagues to produce docuseries such as: F1’s Drive to Survive, NFL’s Quarterbacks, and PGA’s Full Swing. They’ve also put on one-off live events like The Netflix Cup, The Netflix Slam, and have the upcoming Jake Paul vs. Mike Tyson fight. And in January they acquired the rights to WWE’s “Raw” for $5B over 10 years. But this is different…

  • Netflix has more than 260M global subscribers (~40M currently on their ad-supported plan).

  • In 2023, the NFL Christmas Day numbers went bonkers (sorry NBA, we know the NFL cucked you):

    • CBS averaged 29.2M viewers for the early-afternoon game.

    • Fox averaged 29M in the late afternoon.

    • ESPN hit 27.1M in prime time.

  • And with the success Peacock and Amazon Prime saw from last season, it’s no wonder Netflix doesn’t mind throwing a bag to Commissioner Roger Goodell.

• NFL: It’s no secret the NFL knows how to make money. But let’s be honest, it’s not like $150M for a couple games on one of the biggest “couch-chillin” days moves the needle for a multi-billion dollar organization. It’s all about using this time to test case…

  • The NFL can opt out of their current media rights deals with ABC/ESPN, CBS, NBC, and FOX in 2029 (🚨 spoiler alert: they will!)…because why won’t they when these networks/streamers will pay an arm and a leg for the rights?

  • So why not use these next 5 years to test what streamers such as Amazon Prime, Netflix, Apple, etc. have to offer? (yes, they have more cash than their traditional media competitors 😉)

    • The NFL can also utilize this time to understand further ad market metrics and demographics by using these streamers.

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🟢 Welcome to the WNBA baller era. This week the WNBA tipped off their most hyped season since the founding of the league (there’s no stats to back that up, we’re just going off on vibes). And in doing so on Tuesday night, the #1 overall pick of the 2024 WNBA draft, Caitlin Clark, made her debut with the Indiana Fever against the Connecticut Sun and drew an average audience of ~2.1M viewers, the league’s most-viewed game in 23 years…all that while being shown live on ESPN2 😱.

• It was the biggest audience since the Los Angeles Sparks and Houston Comets played on Memorial Day back in 2001 on NBC.

• The WNBA viewing record in a single game is 5.04M, during a 1997 game between the Sparks and New York Liberty.

• The game ranked 3rd on Tuesday night behind the NBA Playoffs on TNT as the Pacers-Knicks averaged ~4.9M and Timberwolves-Nuggets at ~4.5M.

  • But…it finished ahead of the Bruins-Panthers NHL Stanley Cup playoff game on ESPN at 1.99M (we’re going to need to have a talk Commissioner Bettman 🙄).

• However, it seems like the majority of viewers either a) just wanted to watch Caitlin Clark or b) wanted to get to bed ASAP because the Phoenix Mercury and Las Vegas Aces, who played directly after the Fever and Liberty, drew only an average of 464K viewers.