Motley Fool Hidden Gems Investing - The Business Side of Super Bowl 56

Episode Date: February 12, 2022

Want to sound even smarter before, during, and after the big game? Then listen in as Dylan Lewis explores the big-money implications of the Super Bowl, including: - How broadcasters and streaming companies approach live sports - The challenge of getting subscribers to stick with a streaming service - Why some consumer goods companies are aiming for more than just brand recognition - Sports betting's evolution and growth - Prop bets! Stocks discussed: PEP, TMUS, COKE, FCAU, CMCSA, NFLX, DIS, CZR, PENN, DKNG, WYNN Host: Dylan Lewis Guests: Maria Gallagher, Asit Sharma, Nick Sciple Producer: Ricky Mulvey Engineers: Dan Boyd, Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill. When I think about mobile sports betting operators, I think of them in a similar bucket to how you think about maybe insurance companies or car manufacturers in the sense that the service they're selling is relatively commoditized, but what really makes the difference is brand and mindshare among the populace. I'm Chris Hill, and that was Motley Fool Canada analyst Nick Seipel. Normally, our Saturday shows take on a classroom feel. this episode is going to be a bit more of a cheat sheet. It's Super Bowl weekend. Some of you are probably watching the game with family and friends. On Monday, you'll be at work or maybe on a Zoom call talking with people about the game, the ads, and all the prop bets. Today on Motley

Fool Money, Dylan Lewis is going to give you three different angles on the big game and the big money around it, so you can sound even smarter when you're sitting on the couch or Monday morning quarterbacking with your colleagues. The Super Bowl will air on NBC this year, but the network wasn't originally slated to air this year's big game. Motley Fool analyst Maria Gallagher joins me to explain the strategy behind the switch and what gets subscribers to stick around in a crowded streaming landscape. Maria, let's start with the most obvious question for our listeners. If you don't already know how you're watching the Super Bowl, let's go through some of the options. So NBC is really where you got to go. You have NBC for cable,

you have Peacock, or you can see the game through Hulu and live TV. Subscribers can watch the Super Bowl live via their NBC live stream. You can also catch the game on Fubo TV, Sling TV, DirecTV stream, these types of over-the-top services that offer NBC. So it's all NBC either way. It's just a matter of how you're getting access to the content. NBC is in a unique spot here because they are home to both this year's Super Bowl, but also the Winter Olympics that are happening in Beijing. This is very intentional on their part. Yeah. Back in 2019, CBS and NBC swapped the Super Bowl rights for 2021 and 2022. This was actually before Peacock launched. I have to think that they made this move with Peacock in mind, though. They had originally planned the

Peacock launch to coincide with the coverage of the Tokyo Olympics, which were originally slated for 2020 and later moved to 2021. They seem to be using major sporting events as a big hook for acquiring subscribers. And they have so many hours of content. They have over 11 hours of content each day this weekend. Yeah. And the idea of live sports and major sporting events being a hook for streaming shouldn't be all that new for people that have followed the cable landscape for a really long time. The live sports element was seen as kind of one of the major holdouts for cord cutters originally. It was something that was going to keep people with their cable subscriptions. Increasingly, we're seeing live sports being worked into streaming

offerings. Does it seem to make sense as a content hook to you? I think it makes sense for a lot of people. A lot of people are, especially sports viewers, are very loyal. And so freemium models are models we talk about a lot. It's about a company convincing the viewer that their product is worth paying up for. So they bring you in with something free that you like, but then you say, oh, these ads are kind of annoying. Let me pay up for this. Or I can't watch it live. Let me pay up for that. So for example, I always pay up for Spotify premium so I can download all of my songs and I don't like listening to ads while I'm on walks and runs. So sports are considered to be one of the better hooks. You have very loyal viewers. American TV companies paid more than

$21 billion for sports rates in 2020. Even though there are actually downward trends for most major sporting events, they continue to have a very loyal following, and they continue to have a lot of sway in mainstream media. The current Winter Olympics are still underway, so we don't know what the final numbers are going to look like. It seems like streaming has created some silos in pop culture. We don't have the big networks with a top-down approach to what people are watching. People are able to, on their own, discover on demand what they want to be watching. I wonder if these big events aren't as much of a hook for networks, whether it be cable or in the streaming space as maybe they used to be. Yeah, I think that that's really

interesting. I think we've seen it change over time. So in 2020, the Summer Olympics had a total audience of 17 million. And so far in 2022, these Winter Olympics, the opening ceremonies had about 8.7 million people who tuned in. It is kind of weird hours in the U.S. to watch it. So their total audience delivery was about 16 million when factoring in replays, but that's still down from last summer. The Super Bowl viewership peaked in 2015 with 115 million viewers. In 2020, it was down to 91.6 million. Other sports, like I said, a lot of these major sporting events have seen consistent, steady declines in viewership. You have the World Series averaged 12 million viewers a day, the NBA Championship about 12 million views,

the Oscars, which is not sports, but another big name, about 9 million viewers. So I think you see with streaming, you have so many more options. People are so much more interested in so many different things. It's hard to have, you know, when we were growing up, it was, you only had one option and it was, everyone was watching it. Everyone was talking about it. You had maybe some things DVR'd, but you were really watching much more live TV than people are now. In comparison, I think we're going to see more and more streaming shows really blow these numbers out of the water. So Squid Game, as an example, was viewed by 142 million accounts, which is rare. It was a big deal for Netflix. It was about two out of three users looked at it for at least

two minutes. But I think that's going to be kind of the trend moving forward is I think we're going to still see those city declines in those live events and increase in people really joining streaming more and more and getting more excited about TV shows that everyone's watching like Tiger King and Squid Game and things like that. Yeah. So I like picking up on the idea of the kind of broader streaming space here, because as streaming has started to resemble cable more and more, where you are paying for multiple services and the costs are starting to look a lot more like a cable package when you start adding Netflix, HBO, Paramount, whatever you might have in your basket together. Even when there are those breakthrough hits like a Squid Game

or in the case of an NBC, these huge moments where a lot of people are paying attention to an individual streaming service, it seems like churn has stayed pretty high, particularly once you get three and six months out from the release of those tentpole moments for these streaming companies. Exactly. And it's going to be interesting to see how these streaming companies in the future work to try and get people to stay, right? So they're okay at getting people to come on, but now their job is to keep people staying and paying. So you saw Disney Plus saw daily signups of five to 10 times the standard numbers around the Hamilton release, same with HBO Max for Wonder Woman, Apple TV with Greyhound. But based on data, about six months out, only half of the

subs joined around the release are still paying for the service. So I mean, like I said, the Summer Olympics peaked at reaching 17 million people, but yet by the end of the year, Comcast recorded their active accounts for Peacock at 24.5 million. So it doesn't sound like those people really stayed in overwhelming numbers. So I think that it'll be interesting to see. They talk a lot about how it's going to be a big retention driver, but it's really easy to switch between providers. There's not a ton of loyalty to a specific streaming service. And there are, like you said, so many out there that now those costs started to add up. So it's about seeing what the dominant players are and how they kind of retain those viewers. Yeah, I think you can almost split

content out into two different groups. You have content that helps a service acquire subscribers and then maybe content that helps services retain those subscribers long-term or tactics that help them retain those subscribers long-term. Obviously, acquiring a customer and then having them no longer with you three or six months out is not going to be super sustainable. When you look at the space, Maria, what are the companies that are doing it well doing that's different than the ones that are experiencing particularly high churn? I think what they're seeing is they're all kind of using the same strategies and then it's just about who is the most effective at them, right?

So it's seeing who is creating a lot of people, a lot of these streaming companies are investing in their own IP, investing in their own TV shows. So you see Apple TV with Ted Lasso and The Morning Show, you have Succession on HBO Max, You have Squid Game on Netflix. You have Dollface on Hulu. So you have all of these companies really investing in their own IP, but then you also see, I mean, with Netflix, you see them losing a lot of their big retention, which is those shows people watch over and over again, like The Office, like Parks and Rec, like Friends, like New Girl. You have Seinfeld coming onto Netflix. But I think that that's really interesting is what are the shows people watch?

And then they say, okay, well, I'm here for this one thing versus what are the shows people are so loyal to. They'll say, I'll pay $5 a month to watch Peacock because I want to watch Parks and Rec over and over again. And I think that they're really trying to create those shows that have that lasting power. And it's just going to be about who's the most effective at it. And that, I think, boils down to money and who can pay up for the most exciting shows. So it'll be all eyes on NBC and Peacock Sunday. But six months from now, it will only be all eyes on NBC and Peacock if they continue to bring good content into the streaming service and continuing to delight users. Exactly.

Some of you are tuning in for the big game, but we also know some of you are tuning in for the ads. A 30-second spot on this year's Super Bowl will cost roughly $6.5 million, up a million dollars from last year. Those are big bucks, and they tend to be spent by companies with big marketing budgets. To dive into the types of businesses that pay up for Super Bowl ads and what it says about those companies, I'm joined by Asit Sharma. The Hustle put together a list of the biggest Super Bowl advertisers since 2000,

and taking the broad view, you start to see a trend with the biggest advertisers. They're pretty much all household names and big brands. We have Budweiser, Coca-Cola, Toyota, and the spend is deep in the hundreds of millions if you aggregate all of these advertisers together. Yeah, Dylan. Part of this is about maintaining brand presence and staying top of mind. Coca-Cola, which is on this list, for example, it's got a brand that's estimated to be worth nearly $87 billion. It doesn't need the exposure, but Coca-Cola does need that subliminal, warm, fuzzy presence in the consumer's mind that keeps them placing Coke products in the shopping cart. I think for some of these, it's like this never-ending slog

to remind consumers of certain values that are part and parcel of the brand. Jeep, for example, it's often tugging at our heartstrings while stirring feelings of patriotism, even as the company is highlighting how rugged its vehicles are, slogging through mud, bumping around the the mountains. Then you've got companies like PepsiCo, which is on this list. PepsiCo is on twice, as its own brand, and for Doritos, which actually has a bigger spend than the Pepsi brand over the past few years. I think this is just the magic of how you can present one of your revenue streams to the public. Doritos is always persuading customers that it's this hip, irreverent product, which is fun at heart, even though it's part of this

big PepsiCo juggernaut. PepsiCo itself has a brand value of about $11 billion. I love Doritos' message, especially in Super Bowl commercials. The message is, I am a chip, I am a shapeshifter, I am whatever your imagination wants me to be. I go well with Mountain Dew, I can be found in Taco Bell products. There are many types of competing needs that a company is speaking to when it decides to spend that big money on a Super Bowl ad. But I think you're right, the biggest part of that is about first maintaining that brand presence in consumers' minds. Yeah. Really, it's this idea of maintaining space in people's minds and living there, quote-unquote, rent-free. You could argue that maybe this advertising spend is rent

in a way, it's paying to continue to be a part of people's minds. In the case of a Pepsi or in the case of a Coca-Cola or a Budweiser, names that we regularly see being advertised, even at Doritos, those are relatively frequent purchases. You're often buying soda or chips daily or weekly if you're going to the grocery store. It's particularly important for companies like that to stay in people's minds, because that's a decision people are making often. True. These ads are crafted for marketing and promotion value, as well as advertising. You have to stay in the company's mind. You're also trying to make sure that whatever you hit the Super Bowl with has this afterlife in an ecosystem that now is flooding through social media. That's

part of the economics of these spends. That potential return on investment gets bigger and bigger every year. So, while it seems like this is an exercise of awareness, it's also an exercise, in many cases, to be edgier, funnier, and more memorable, so you can spread onto these other channels. And I will say, Dylan, to this point about creating some real estate, earning that rent-freeze slice in a customer's brain. Advertisers are increasingly doing this in tune with the rhythms of the way we consume social media. You're going to see this year, outside of those heartstring-tugging values-based ads like Jeep usually has, we're going to see more TikTok than long-form narrative in this year's Super Bowl spots. Yeah. Doritos very famously allowed

for creators to be a part of the process in some of their past Super Bowl ads. They had user-generated ads and wound up kind of being able to stoke a lot of consumer interest and also a lot of buzz in the industry. I like your point there, Asit, about how these live another life. And we see often that we get a look at the ads before the Super Bowl. Often they leak or there are details about them. And I think all of that speaks to, while the Super Bowl is in some ways the main stage for these creative efforts from these companies, there is this life both before and after the game for them. And if a company does a good job in crafting an ad, crafting a message, it has a much longer life than just in that game. Yeah. I'm always curious about those leaks,

Dylan. I was curious, in your opinion, when a Super Bowl ad is leaked early on purpose, do you think that this actually detracts from the buzz or it helps? I think it helps. I think one consumer goods company, they're not on this list, but I think that they've really mastered the idea of staying in people's brains in a way that makes their advertising so effective is Domino's. They've done this masterful job of doing these small little spends, a couple of $100,000 here for an initiative like buying gift cards for local restaurants during the pandemic and having this hyper-local message, this heartwarming message that then gets picked up, we're talking about it right now,

by people in the news media that dramatically extends the ROI on the spend for that specific ad spot. I think the same is true when we look at these Super Bowl ads. If you can create these social media conversations or those water cooler conversations around the office, that's really where an effective ad comes in. It's not in whatever the costs were to make it and the spend just to feature it for hundreds of millions of viewers for the Super Bowl. Yeah. You mentioning Domino's and these other repeat purchase consumer goods reminds me that not all of these purchases are repeat. Some of these are for some big-ticket items. We've mentioned Jeep. Kia is a big spender in Super Bowl ads. I find this so interesting. As long

you're visible in the consumer's mind, you don't have to rent a mansion, you can rent an apartment, it could be a studio apartment. When it's time for me to buy a new vehicle, even though I'm a Mazda guy, that little sliver of memory of the Kia commercial is enough for me to look up a similar competing model to the Mazda I want. I promise you, Dylan, I'm not going to remember that a year earlier, I saw the Kia ad during the Super Bowl, but this is what decades of advertising refinement has taught the industry. It works. It does. I think it's going to be interesting to watch how this develops over the years because we've traditionally seen a lot of big brands making advertisements and making advertising splashes at the Super Bowl.

Budweiser spending about $450 million over 20 years for Super Bowl ads seems like a lot of money. It's basically a rounding error if you look at even a single year of their marketing spend, let alone 20 years of their marketing spend. But we also see that there are some newer players that are going to be hopping into the Super Bowl advertising space. I would not be surprised if we saw some more performance-based marketing coming from some of those people because a lot of these businesses that take that five-second swing rather than getting a 30-second spot are betting quite a bit on that placement and are probably using it for a slightly different customer acquisition purpose than the average big brand advertiser asset.

Yeah, for sure. I mean, this year, we're going to see some crypto advertising during the Super Bowl. And if you are a crypto.com, you're advertising in that Super Bowl spot, yes, to build this awareness, to try to up your intake of new customers. But you're also just trying to educate people about the industry. This is what players in nascent industries do. They take these asymmetric bets where they know that the total spend could be lost, but that payoff can be huge, especially if the ad is memorable, funny, witty, leaves a deep impression in people's minds. And, of course, there's so much interest around cryptocurrency and investing in digital assets, the probabilities increase a little bit if you're trying to make that decision, should I spend on this ad or not. You've got an environment that's conducive. It's open to hearing the message.

So, these can be exciting bets for smaller companies where it's not a rounding error. It is a significant part of the yearly marketing spend. And I also wanted to bring up just one more thing in this line. What about the companies in between? They're neither sort of repeat purchase businesses or upstarts or big-ticket one-time companies, but subscription businesses like T-Mobile. I feel like these are in a better position than all the other types of advertisers we've talked about because they've already got the customers. And yeah, they're trying to get some new customers

with their latest ad, but they're also reminding you of how much you like the company. And these ads for subscription-based businesses tend to be warm and fuzzy. They tend to kindle up those feelings of goodwill that you have towards that brand. And oftentimes, I find those are the funniest ads in the Super Bowl. Yeah, it's almost surprising that we don't see more of those. Once you acquire a customer, you basically have them on a billing cycle type businesses in the Super Bowl because there's so much attention there. T-Mobile, if you look at the top 10, really one of the only ones that you could argue is truly a subscription business. And we talk about this a lot, particularly on shows that I do, because I tend to be tech-focused

and tend to be looking at a lot of subscription businesses. I like to see companies that have a relatively easy path towards engaging with their customers and collecting customer money, making that an easy decision, almost one that customers don't have to think too hard about. It's in stark contrast to what we actually see. These are active decisions for a Budweiser, for a Coca-Cola, even a Universal Pictures coming in about halfway on this list, promoting movies that are coming up. Someone has to go out and say, you know what, I want to buy that thing every single time they make that decision. A lot of those companies haven't cracked a subscription offering quite yet. Yeah, very true. And if you have cracked that

code and have a subscription business, the way that most subscriptions these days are set up, it's an opt-out. So all you have to do is maybe kindle that goodwill with a Super Bowl ad. And let's face it, you have to deliver your product. The product has to be good. It has to create that feeling of goodwill and happiness in the first place. But then your customer is not going to opt out, right? It's just going to automatically renew. Asit, before we wrap, I have to ask you, I was doing some homework for the show. You mentioned some of these mid-market players and smaller players. I did some homework on some of the tactics they use. Do you know the shortest Super Bowl ad ever aired? No. And if I answered, I would totally whiff.

but can I give you the time that I think it would have taken? I don't know the ad, but I can guess. 11 seconds? No. And you know what? It's not even close. The shortest ad ever was a regional ad. It was a half second ad for Evars. I hope I'm saying that correctly. A Seattle-based seafood chain. So we see even small players getting creative when it comes to the Super Bowl and trying to get in front of consumers. Half a second. Wow. It's hard to imagine capturing less attention there, but here we are, a decade after the ad ran, still talking about it. So awesome. The big brands are sure to dominate the ad game again, but you're also probably going to see some spots from companies you haven't heard from in the past, namely sports betting operators.

This year, the American Gaming Association is expecting bettors in the U.S. to wager close to $8 billion on the Super Bowl, nearly double the current record from last year's game. That growth and new advertisers on your TV are a reflection of a huge shift in how the NFL approaches gambling. Joining me to explain what's going on is Motley Fool Canada analyst Nick Seipel. Nick, I think it's fair to say that a football fan from 2010 or 2015 would be pretty surprised to see ads for sports betting in the Super Bowl in 2022.

Absolutely. Traditionally, the NFL was one of the most resistant sports leagues to betting. Part of that is reputational risk, concerns that we're going to have folks fixing games, this black market industry. What's changed in the past couple of years is things have become legalized. The big change was 2018, the Supreme Court overturned PASPA, which was the federal restriction on sports gambling, which opened up the opportunity for states across the country to legalize sports gambling within their own jurisdictions. We've seen over half of the states in the United States legalize sports betting just since 2018 to today. You've seen the market go from being a black market to now what really is a very highly regulated state-approved market

all across the country. And there's lots of money to be made there. Famously, Mark Cuban said in 2018, right after that Supreme Court case passed, that he said he thought everyone who owns a top four professional sports team just saw the value of their team double. And part of that is you see really incredible engagement with sports as the result of sports betting. Just to give you some figures on what we're seeing on the amount of money being bet on sports, in 2020, we saw over $20 billion bet on sports betting. That tripled in 2021 to over $60 billion. We've still got lots of room left to grow. New York just legalized in January of 2022. Without even a full month of being open, they set a new state record for monthly handle, which is the amount bet

during the course of the month of $1.65 billion. We've still got Florida and California left to open up, still lots of money left to be made. The NFL has been embracing that over the past several years. Famously, we've seen the Raiders move to Las Vegas. We just had the Pro Bowl last week in Las Vegas. The NFL signed deals earlier in 2021 to approve certain sports betting partners, give them the opportunity to pay money for the right to pay money to advertise on NFL properties. Those are companies like Caesars, DraftKings, FanDuel, PointsBet, WinBet. These are all companies trying to capture the NFL's huge audience for engaged sports fans. If you look at the NFL audience, that is a very target-rich environment for gamblers, something

like four out of 10 NFL fans, or at least casual bettors. Certainly lots of money to be made in the space, and the NFL wants their piece of it. Over the last decade, NFL Commissioner Roger Goodell had spoken publicly several times about how they were worried about the elements that sports betting and legalizing it, making it more accessible, might have on the appearance of the game, because they are highly concerned with the on-field product. Is this just a matter of the dollars being too big? Well, I think it's a couple of things. One, Pandora's box is open. Again, over half states have legalized sports betting now. So, you're kind of fighting the culture, right? We're increasingly seeing this collision between gambling and sports content. The other

thing is to remember that the NFL isn't a monolith. The NFL is 30-plus different businesses with different owners that have different interests. So, if you look at somebody like Robert Kraft, I mean, he had an early stake in DraftKings. He was probably pro-expanding sports betting. But then you have some other franchises that are much more risk-averse, where this is the family's entire asset. And so, they're much more worried about potential risks that sports betting brings. But I think when we have this flood of money coming into the space, when we have more and more states legalizing every year, I think it's just hard to pass up this huge revenue opportunity. And it was, I guess, the point at which those pro gambling owners really took the

I guess. These partnerships that the NFL struck with Caesars Entertainment, DraftKings, FanDuel, and then later some other names that are going to be very familiar to NFL game watchers, FoxBet, BetMGM, PointsBet, and WinBet. These open the door to all of the ads that we see for sports betting on NFL games. You get a lot of different companies that are operating in this space, but doing it differently. Sports betting, particularly the mobile element of sports betting, plays a very different role for all these businesses, Nick. Yeah. When I look at these mobile sportsbook operators, I really think of them in two buckets. You really have the startups, the mobile-first operators. These are the companies

that came from the daily fantasy realm. Think about DraftKings, FanDuel, the parent company of FanDuel is Flutter. That's one bucket of companies, and those companies really jumped out to a significant early lead because, number one, being mobile first, about four out of every $5 bet in the U.S. today is bet on a mobile basis. Also, those companies had a captive audience from their existing daily fantasy operations. Those folks really jumped out to a significant lead and have been one of the largest spenders when it comes to advertising, which is no surprise, if you remember a number of years ago when those folks were battling it out for market share in Daily Fantasy, we saw a lot of these same trends. Today, however, in addition to these Daily Fantasy

operators, we also have traditional gambling folks, folks like MGM, Caesars Entertainment, that are not only pushing into mobile sports betting with their apps, but also have a robust portfolio of regional casinos, and that really gives them an advantage relative to some of these mobile operators because they have some profits to fall back on. Today, when you look at mobile sports betting with this market continuing to grow, more and more states being open to legalization, it's really a land grab mode when it comes to mobile sports betting, which means lots and lots of money spent on advertising, trying to acquire customers, and that costs a big chunk. We're going to see, particularly for these mobile folks, losses for the foreseeable

future as they try to make that land grab. There's a question as to whether customers will be sticky enough to make those advertising dollars generate profits over the long-term, but that's really the thesis that those companies are investing advertising dollars on today. The value prop on the mobile side seems pretty obvious for users. You don't have to travel to be able to place bets on a game. It lowers customer acquisition for these operators, which I'm sure is really appealing too. It can probably increase the amount of activity. I have to imagine that it also means they're all competing on very similar things here, Nick. Yeah. When you see a business spend this amount of money on marketing, it really is a signal

that there's not a lot of differentiation among the operators. When I think about mobile sports betting operators. I think of them in a similar bucket to how you think about maybe insurance companies or car manufacturers, in the sense that the service they're selling is relatively commoditized. It's not that different from company to company, but what really makes the difference is brand and mindshare among the populace. That's why you're seeing folks spend significant dollars on advertising. Part of that advertising dollars is spending money on incentives and promotion. Things like, we'll give you a free bet if you deposit X amount of money. We'll boost the odds on certain types of vets in order to lure people

onto a platform. But over the long-term, what these companies are going to need to depend on is being able to keep the customers they acquire, keep them spending money on the platform rather than jumping from platform to platform, promotion to promotion. It's still a question when we'll reach that point where customers will be sticky, but that's what these advertising dollars are being bet on today, that these companies can gain enough scale to generate profits over the long-term and retain enough customers to really maintain those profits going forward. That's the big question. Yeah. I think this market is probably going to be somewhat similar to what folks have come to see with investing in brokerage

accounts, where if you have this highly efficient market where costs have come down, access has increased, you're competing on things like convenience, you're competing on things like ability to get your money quickly. You're not competing on the odds or the spreads that are being offered because these are pretty highly efficient markets. Absolutely. One thing I just keep thinking about too, as we talk about this market getting bigger and bigger, maybe an investing parallel, is as you add more and more derivatives to a market, a market gets bigger and bigger. I think you can think of betting as a derivative on the outcome of the game. By the end of the game, will Joe Burrow have 300 passing

yards or more? It's similar to buying a call option. By May, will X stock be over $20 a share or what have you? Not only are you seeing traditional bets come into the market, which is growing the market, but also, mobile enables things like live betting, things like, will this next pitch be a ball or strike? Will this next pass be complete or incomplete? the things that mobile allows is just the market to get bigger and bigger and bigger, more and more derivatives, if you will, on each individual game to open up. There's a dynamism that mobile betting allows that you just can't replicate with on-premise. I think the market has lots of room to grow just from continued legalization, but I think just adding more and more types and varieties

of bets, which we're seeing companies do, will grow the market even more. The NFL expects to generate roughly $270 million in revenue from sports betting and gambling deals this year. Some think the space could be worth more than a billion in the next decade. Nick, this is a mutually beneficial relationship. It's good for the NFL, it's extra revenue coming in for them, but the NFL plays a key part in the strategy for these businesses. Yeah. I think that $270 million revenue bump probably underestimates the impact to the NFL. If you look at what DraftKings CEO Jason Robbins has said in the past, that sports gambling content and sports content really are a flywheel. The more you watch NFL games or whatever your sport

of choice is, the more likely you are to bet on that particular sport, and the more you bet on a particular sport, the more likely you are to consume content related to that sport. You're really seeing that with investments that these sports gambling companies have made, whether that's DraftKings making significant investments in folks like Dan Levitard, or it's Penn National going out and buying Barstool Sports. You really see in these investments, these companies are making the synergies between content and gambling. I've seen estimates that it's expected for over 30 million people to bet on the Super Bowl this year. I'm guessing there may be some Fools among them. Nick, you did a lot of prep for this show, you know this space pretty well.

I'm guessing you have taken a look at some of the prop bets out there and some of the core lines for the game. Hypothetically, if you were going to be paying attention to one of the lines or one of the bets, which one would it be? Sure. Yeah. The Super Bowl is always a fun time to take a look at the novelty prop bets out there. Will the coin toss be heads or tails? What color is the Gatorade going to be? Put it on the head coach. I scoured through some of the sportsbook operators here in Virginia. Not as many novelty lines as you would like, but I do have a couple props that I think are interesting. One prop that I'll give to you is, will Aaron Donald record a sack? Aaron Donald, one of the premier pass rushers in the league, going up against the Bengals' offensive

line that has some questions. I'll take yes, minus 190. I think he's going to come out and have a big day. Then on the actual game itself, I like the Bengals plus four. If you look on paper, the Rams they've got a bunch of dudes right you've got uh you've got Matt Stafford you've got the previously mentioned Aaron Donald Vaughn Miller Jalen Ramsey Cooper Cup Odell Beckham Jr but you're giving Joe Burrow four points this is uh you know the guy has ice water in his veins won the national championship at LSU a couple years ago I think four points is too many um and I think the Bengals win it for you they may not win the game outright but I think they'll cover the spread so those are my two picks Aaron Donald's gonna gonna record a sack and the Bengals are gonna

cover the four points. That's all for today, but coming up tomorrow, a conversation on designing your new work life. As always, people on the program may have interests in the stocks they talk about. The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill, for listening. We'll see you tomorrow.