The Dan Le Batard Show with Stugotz - Skipper & Samson: Are We Still Calling It the Pac-12? Get Ready to Be Slimed!

Episode Date: August 4, 2023

Are We Still Calling It the Pac-12? Get Ready to Be Slimed! Meadowlark Media CEO John Skipper and Nothing Personal's David Samson are back with another episode and we’ve got Pablo Torre to host! What is happening with the Pac-12? Will they get a TV deal? Will the conference collapse? Is Apple the savior? Then, the CW is here. It started with LIV Golf. Now what? Are they a real dance partner? Plus, Nickelodeon is ready for Slime! CBS will air the first ever alternate broadcast of the Super Bowl. Will this work? Why is CBS trying to make it work? Also, the future of ESPN is here. Could Disney be getting ready to sell? What are the problems that selling a stake of ESPN could “fix”? Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to Giraffe King's Network. This is the Dunlabel Tarshall with the Stugat's Podcast. So this is always an almost perverse pleasure for me, getting to pick the brains of John Skipper, head of metal- metal arc media former president of ESPN And David Samson former president of the Marlins you know and hate and love Potentially by now for all of the insights and the shamelessness he has when it comes to his insights into how it really works And so thank you both for being here as per usual. That was really thanks for that intro Pablo It's hard not to feel a little like Dan, when I introduce David

Samson. But I want to start with John David, because we have a topic at the top of a rundown here. It's a loaded rundown, but the topic makes me think of John immediately because John Skipper is the man who helped redraw by hand. It felt like the map of college football, all of these conferences when he was adiospia and so now we're dealing with the Pact 12. And the Pact 12 is not the Pact 12. It is the Pact 9, I believe. They are the one party left at this dance, right? The nightclub lights have come up.

Everyone's looking for a meteorite's partner. And everyone is pointing at how lonely the Pact 12 is. John. And so the big 12 has taken Colorado. There are domino effects to come reportedly. And now there's news that Apple might be the solution to the Pac-12's problem. So when you see this story and you get that headline,

Apple might save the Pac-12, give us your version of their state of view. I actually think they have a different potential savior. I will preface that by saying, I am a North Carolina, I went to the University of North Carolina. I did do the deal that the ACC currently has to do their network and to be a DSPN. If I was looking at that dance floor and saw the pack eight across the dance floor, I think the ACC should walk across that dance floor and ask the pack 12, pack eight to dance. And that is to create the first 24 team super conference, the Atlantic Pacific conference would allow the eight teams that are left. Stanford, Cal, Washington, Washington State, Oregon, Oregon State, Arizona, Arizona,

state to stay together as a unit. They could also play in their region, but you could create some great rivalries from East Coast to West Coast in football and basketball. They've become part of the ACC network. So the distributors, and I understand that their pay television model is declining, but there still is billions of dollars in that model. those states, California, Washington, Argonne, and Arizona would become part of the footprint of the ACC network. You could also, at that point, I think it'd be great for ESPN. They would basically have the 16 teams from the SEC, the 2014 from the Atlantic Pacific Conference in their Bayleywick for the next 15 years. That would be 40 teams

who would have the greatest impact on how the power five conferences are going to act perform, play, whether they're going to play, et cetera, et cetera. Who would be in charge of that combined conference in your mind? When you're asking them to dance, are they dancing for free? Are they getting a seat at the table? Is this like the live PGA tour where live loses its power? How's that working in your mind? The commissioner of the ACC currently would be in charge of the Atlantic Pacific Conference.

Now, by the way, this is not an anybody's mind right now that I know of other than nine. No, but I don't think that's a't think I don't think that solves their problem. It may be a good solution for them, and they're going to jump and follow the MLS model and say, oh, we have all the same benefits they do. It's, um, it's a last riff. It's the last refuge of a dancer with no partner. Well, David, on the Apple thing, right,

let's drill into that for a second because lay out for us what the economics of being the Pac-12 look like right now. Why everyone's laughing, why Apple is both an indictment and in some ways a compliment. When MLS did the deal with Apple for streaming, the way the big leagues looked at that is, oh, they had no other choice.

And MLS looked at it as saying, no, this is now our ticket to the big boys table. We're gonna start with this Apple deal and we are gonna show our might. So my problem with the Apple deal from the PAC 9 standpoint, are we calling it PAC 9? I don't even know, like the big 10 has what, 40 teams or 10 teams or eight teams.

I don't know what to call the conferences anymore, but I'm going to call it the PAC 12. Needed to why? Just because that's how I remember it. So the, you're pointing out a problem, which is all they're doing is making a muddle in a mess here, right? At this point, somebody should take out a white sheet of paper, pick 64 teams, put them into four conferences of 16 teams apiece and go and quit calling in the pack.

12, the big 10, big 12, the ACC is the only one that's named without having to figure out any teams right. But at the same time, David, they are neither Pacific nor Atlantic anymore either. So there are all these. And it sounds like John's politics in a way that he just wants to do 64 divided by four and everyone lives happily ever after. When we tried that within our league, actually, with re-alignment in baseball, the problem you have with what you're saying and why I don't think it's going to happen so quickly is you're asking the PAC-12 to give up its power

and to basically get eaten. It's not even a merger. It would be get bought almost by the by the ACC. And so then what you're going to have Jim Phillips run both as becoming the most important and powerful commissioner in all of college sports. I don't think any of the other conferences have that in mind or have that in mind. So what the pack 12 is doing is they're using Apple as a training wheel media right steel because that's all that's available to them right now And what they're hoping is that over the course of the next I would say 18 to 24 or even 36 months When the consolidation has happened when the landscape is more clear as to how to monetize streaming to how to monetize streaming. Hopefully when that happens, then that conference, the

Pact 12 will be in a position like in theory, MLS will be to capitalize on this new found revenue stream. But a conference is just a collection of schools that play competitions against each other. So, who cares if there are four or five or six or seven or eight of these? What matters is what is the collection of teams you're with? What leverages that collection of teams have? And what is it, what's the reason for that to exist?

The only reason for the pack eight to exist is because it's traditionally existed. And they're gonna go get some teams that not, and I'll be careful here, they're gonna go think they have to get two more teams, four more teams, and you're gonna be going further down into teams that matter less and less since I didn't name me names, I didn't offend anybody. But what's the point of that?

I mean, why not create the most powerful conference in the country? Well, I think there is this element that I am internalizing here, that there is no Afro-Digiaque on this dance floor, quite like sheer desperation. And I wanna now understand though, why Apple, John, why is Apple assessing the dance floor

and saying the Pac-12, that's for us. What's your sense of why the tech giant is in on this? Well, what I can tell Apple wants to get into sports, but they don't want really to produce games. So I'm assuming they're going to kind of do the same deal they did with MLS. They're also, they're getting good economic deals, right? They are the MLS deal. I think the MLS deal was a very good deal for the MLS, but Apple didn't pay a lot of money out of pocket. They're going to pay more money if it works.

Everybody's always wanted to do that. Yeah, we'll pay you based on ratings, we'll pay you based on how well the game's performed. Apple kind of got that deal, and they're looking at the same thing here. I think you're, I think you're point about the greatest effort easy act on the dance floor is accurate. Right now, the pack eight, nine, 10, 11, 12 doesn't really have a lot of other choices. And George Clevkoff is doing the best he can

to create a choice. I cannot believe how scary it is to think about the possible correlation between broadcast revenue and actual people who would pay for it. Yes. No, David, that's the headline that John just snuck in there is that way to minute. Now we're doing deals based on performance as opposed to some guarantee on that. That is going to impact player salaries.

That's going to impact the entire economic model of sports, the value of sports teams. I don't think we're giving that enough shrift here when we're talking about the way that streaming could end up being and you talk about what Apple's doing. If they're actually gonna pay prices that are only related to revenue, that's a problem, I believe, John. That's not a model that you love that model, wouldn't you?

I hate that model. I would, I think that Apple is smartly pivoting a slightly different way than everybody else now and how they're going to pay them. And they do hold the promise of, oh, it's the future, streaming, oh, we're international, we can do subscriptions, we can geotarget, I mean they can do a lot of things, but they're doing that to take advantage of some some associations that need to find a partner. When you were doing ACC, you said that you don't care what what do you need conferences for. When you were putting that deal together,

you were dealing with people who represented aced that conference, right? dealing with people who represented that conference, right? Yeah, no. And I didn't make the point that conferences didn't matter. I made the point there are associations of schools that play athletic competitions against each other. And you have to make the smartest decision for what your collection of schools can do. And the packet, I think, is just stubbornly trying to stick to we need to exist because we've always existed. I don't think they're capitulating by joining a larger coalition of teams. I thought you said you'd rip up the entire current conference model, put 64 teams in four conferences and have it at 16 teams for conference. Well, that's what I would do is start from a white

sheet of paper and didn't have these former associations, didn't have the current mess they're having. They're getting further away from that rather than closer. The point of that, David, is really to suggest that the big schools don't want to be with the little schools. They don't want to be governed by the NCAA anymore. And they're making it harder and harder for them to have that future as opposed to this sort of sort of this

Scrum of different schools and different conferences traveling across the country Nobody has yet rationalized the national conference model, right? It is ridiculous or schools to have to for now. You're gonna have USC and UCLA traveling You know up in Wisconsin, up to Minnesota, out to Nebraska, out to Iowa. I don't know how that works or their volleyball team or their women's soccer team or their or their golf team. It's really a revenue sharing issue is all that you're saying.

And this again happens in all the leagues, especially baseball football, not as much when most revenue was shared. But with the big schools, it's not that they don't like the little schools. They don't like the way that the revenue is divided. They don't want equality. That's really the only point. So if a model were worked out,

which is what was actually being negotiated at one point, which is those teams that generate the most revenue should get the most revenue, when you were negotiating the ACC deal, you actually didn't care, did you? Which schools got what of what you were paying? Well, only because of my experience with the big 12 for Texas got more money and Oklahoma got more money,

it creates so much tension, so much enmity between the schools. I actually like the equal share model. Well, how much of this then is about the politics and the ego, right? Again, I'm torturing this dance club metaphor, but everything you guys are saying reminds me of it that there's a pride. John, there's a pride in the big 12, poaching a power five school like Colorado. They get to say, we got, we just, we're going out with another power five, you know, romantic partner. And I feel like this is as much about sense of self as it is about some sort of long term vision for a macroeconomic sustainability.

Exactly. Accurate is that Samuel Jackson said, I think in pulp fiction, it's pride fucking with your mind. Uh, I mean, they think that that they have to have their own associations. They don't. And in fact, I actually think they're, again, if I could do it, just make it up. I would take 64 schools. I would create a separate association that ran itself.

I don't understand the point of the NCAA at this point. If I'm at Alabama or USC or Ohio State or Florida State or Clemson, I don't understand what the NCAA is doing for me right now. Do you see a world where the NCAA disappears? I see a world where the largest schools in a small number of conferences decide to govern themselves. So now you're talking PGA and live. I'm not talking PGA and live.

As far as I know, nobody in the Middle East is involved. Well, I'm not talking about the Middle East piece. We've covered that before. But what you're talking, or the soup, let's put it in an EPL, it's the super league. Yeah. By the way, that's a model that works pretty well. It's terrible model.

No, no, I'm positive. I missed up. I was thinking of the English Premier League and all the lower divisions and relegation. All works pretty well. I don't think we'll ever get relegation in this country, but I don't think it's, Liv is a takeover.

Nobody's taking over here. They're trying to figure out how to create an association to play sports together, have something in common and with these other schools. It doesn't matter anymore. It's just sports. But if the NCAA disappears, they're the governing body. If there's no rules, and that will create a bigger divide between the haves and the

have-nots, and I would assume that that would bother you because you want equality. If you take the NCAA away, you can kiss goodbye. It will be relegation for the smaller schools, which you've already said on this show that you actually can see why no one would care about it. I don't, I like the English football model, right? I got about five divisions. There are people in the top and there are people at the bottom and they get paid differently and that's not inappropriate. I'm not suggesting everybody should get paid the same thing.

And you do and it leads to one other inevitability that will cause some, some probably will be provocative, which is the end of the current NCAA basketball tournament. It'll be the end of everything that the NCAA related. The NCAA is there to protect sports that we don't talk much about that I thought that you would have great respect for. What a job they have done. I've not seen an alternative that actually works. They'll govern themselves. Oh, well, that always works.

Doesn't baseball govern itself? No, absolutely not. We are under the cloak of an antitrust exemption. English, mother of f***er, do you speak it, as they say? But look, but I want to bring in the other aspect of this story, which is that there's a new dance partner potentially sort of creeping into the room. And I talk about the CW, of course, which I knew growing up as the WWE, the WB, excuse me, and UPN and the acronyms

are all confusing to me. But now we're talking about the CW becoming a place, a channel with a sports catalog that they are building from scratch. And they started with Liv Golf. They're now gonna air, I believe, 50 of the ACC football and basketball games that were previously on Valley's, a story you guys covered extensively, the regional sports saga. John, what do you make of the CW as a new entrant at a time when chaos seems to be the lay of the land? I think it's just more confirmation that the most liable content or any party right now trying to maintain their positions, traditional webcast or in PayTV or a new technology company

looking to get in sports. Sports is the most valuable content and CW is trying to get a little piece of that. I don't know that it's going to make any difference and I would assume that all they're doing at some point is setting themselves up for a sale and that these four sets will be valued by whoever buys them. You agree with that, David? I'm disappointed if that's the case because what what I really was hoping CW would be would be an actual competitor for leagues to use to try to extract more rights fees. But if they're just lining up to do what Apple is doing, which is, which are deals that make sense for Apple, that is a negative for leagues and valuations of teams.

Well, they did a big deal with NASCAR. I mean, that's real money. I think it was 115 million for the Xfinity. Xfinity. Xfinity. I would play into what you were hoping for, David, another competitor, another party at the table. It's it would.

I think isn't the Exfinity Pablo the, is that the minor league series? Yeah, that's the, I think it's the Friday night, right? Or no Saturday. Well, it's a, it's a secondary race, right? Yes, it's a secondary team. Yep. So I'm more focused on the major league side

of what the, of where the payments are and what CW is doing and where my hope is and they're not there now, I find the deals they're doing now is not even dipping their toe. It's sort of looking at the water before they dip their toe in and before too long what I would want CW to do in order to be an actual another competitor in this space is to do what Apple was doing because once you do a deal with baseball the way Apple did or do a deal with MLS the way Apple did, now you're in the game. It's not live golf. It's not the Xfinity Series. No disrespect to that. But until then,

I can't view them any other way. Yeah, but you can't. David MLS would not have done the exact same deal they did with Apple with CW. The perception of who CW is Apple, you're making a deal with the most valuable company in the world, the future technology. You're making a deal with CW. You're making it, it brings you nothing, a no-vac, no brand value, no, you know, how many people watch the live golf tournament on CW? I think that they're bigger issues there. I don't have the CW as the one when the lights get on at the end of the dance floor. The people look and say, oh, I'd rather just go home. I'm not sure that that's the position that CW has. Well, the CW for the record is paying $115 million per year for seven years. That's not nothing in this framework that we've described.

It's not, it's not nothing. I think said it wasn't nothing. I made a different point, which was Apple has the status to get people to say yes to a very different kind of deal. The CWA does not have the status to say, we'll pay you based on performance. So, and so Apple takes advantage of its status and makes below market deals. It's sounding sort of like what you did with the SPM then. You take advantage of the position you have

to make deals that are more profitable for you and better for you than for the leaks. Isn't it your job as the head of a company to take advantage of your position to make advantageous deals? Every single day. But isn't there another giant distinction, though, that we're kind of alighting,

which is that the CW is a television channel? Apple is a streaming service, right? And so when we talk about metrics, and you talk about performance-based payments and all of this, like it feels like we're also talking about a difference in kind, not just in leverage. I have to assume that streaming is part of their deals. And you're right, I've not seen that,

but it has to be. There has to be an app that is being contemplated by CW having just linear over the air television anywhere. That doesn't seem like the future in any way. No, and it's not, not in, by the way, most of the major paid television channels have had a streaming app, which will allow

people to watch on their phones and their computers for 15 to 20 years. So I'm sure CW has the same thing. Well, I think the question of us knowing for sure whether CW has the same thing or just presuming it because it's logical is sort of what I'm speaking to, which is the primacy of being a tech for a streaming company versus somebody that's backdouring their way into the future. And so one, one larger question, though, as I'm trying to like sort all of this in my mind, right, when it comes to what fans are going to watch and how that's going to be different, we talked about is the NCAA tournament going to go away? Like, is that a function? What's, how do we get to that point?

What dominoes need to happen for the actual games to be appreciably different as opposed to just a different place where we're watching? We did a show early Pablo where John said something that got great attention, which is he could see a world where the Super Bowl would be behind a paid TV wall. And people thought at the time, that's un-American. You must not like hot dogs or apple pie.

And well, John and I disagree on a lot. I couldn't agree more with that fact. And that is certainly the future. And the future is happening way faster than we expected it to. But we haven't yet seen the consolidation. But what we have also not seen on a side note is how to properly monetize and have that monetization reflected in share price. And that's why

you're seeing so many things happen in this space because it's one thing to talk about. It's another thing to actually have it in your financials. So it's fascinating to me what these networks are doing that are combining. And as John pointed out, he said 15 to 20 years, I have no recollection of a streaming app in 2003. But did you, was there a streaming app in 2003? Sure. ESPN 3.

How dare you, David? How dare you forget your stuff? And I wasn't aware that was a streaming app. I thought that was a place where I, it was on my cable guide. It was on your cable guide, but it was an archive streaming service where we could do an infinite number of games. And we did that in order because we couldn't warehouse games and we wanted to buy all the inventory that a conference had.

So no, it was a streaming app. So is the SPN three, the great grandson of ESPN Plus? Yes. Great grandfather. The great grandfather. Yes. Damn it. I wanted to get that right.

And I thought Pablo, you might have been headed a different place about talking about the actual production of the games and how they look and feel changing. Which to me is really interesting because we always talked about it. And I remember being on whatever that street is in Palo Alto has all these these tech firms tech investment firms on and seeing somebody show me. A virtual reality and saying this you're going to be able to watch a basketball game and it's going to look like the bronze running through your living room.

And I remember thinking you know one thing that really works and has worked for a long time is the actual production of games. The actual production of games is great. You don't miss any plays. You've got all the angles of when you need to see something, whether it happened, slow mo, the game, production of the games is great. I haven't seen that many things that need fixing in the production of an event. They're tweaking production all the time and putting more money and more money every year into production with there was a game was it the NBA finals or there was a recent game I'm blanking here at Coca and Pablo where there was a drone camera over the field of play in a major game and it became it. It became an issue and there was of play in a major game.

And it became an issue. And there was a play in the NFL playoffs where there was a thought that a punt may have hit the wire over the field of play. And that's all production based. I agree, but those are just incremental steps in what is still a two-dimensional high definition, uh, 30 cameras at a big NFL game, probably 60 cameras out of Super Bowl, uh, but it still is fundamentally the same thing.

It's been interesting to note that Apple is seemingly using the production crews of established broadcasting companies, like they're not going into John's point and saying we're going to redo the entire production truck from, from, you know, tire to satellite dish. They are currently at the very least in ways that are both encouraging for the existing incumbents of production, but also kind of, disquieting in the sense of like, how long is it going to take for them to want to do it differently? Because right now they're wearing the skin, you're totally right, John, of current fan sensibility. Well, and for years people have talked about interactivity, being what streaming will bring to the production that you can't get. And I don't think we're very close to that. Other than placing a few bets on your second screen, or there's no interactivity. There's no personalization

of any profound consequence. Don Lebertard. Oh, I like firing people. So I take the opportunity to fire whenever I possibly can because I can use it as a learning experience for them and try to help them out and try to point out what they did wrong. But in this case, the employee was enough levels below where I was that I did not do the firing, but I had it done within moments of discovery. I'm just like firing people. It's absurd.

It's absurd. Still gots. I'm talking about people who I fire, who deserve it, who have done something that actively requires me to fire them, it is my unadulterated pleasure to do so. This is the Don Lebathe Show with Estoult Gats! I feel like this is a pretty good segue to a topic that you and I have been amused by, which is that.

Speaking of the Super Bowl, speaking of ways to innovate around a game broadcast, CBS and the Galodian are going to air their first ever alternate broadcast of the Super Bowl. But it will be a slime cast, which will mean it's kids focused. This is a thing they've done for NFL games in the past, playoff games even, but never at the highest level of American life, which is what the Super Bowl is. And so David, just tell me what you think of them going in on sliming players in whatever way that can bother on myriad levels. Doing work at CBS, I know that when they've got a Super Bowl, they're years, they spend years preparing for

the Super Bowl that they're going to broadcast. They're looking at ways to better monetize it. They're looking obviously to get the most revenue they can for the 15, 30s and the 60s. But on top of that, they're using it to try to build their other brands. All the networks do this, all the RAN, Celery brands. So I understand why CVS would do this.

I don't understand monetarily that why it will benefit them and I don't think it will. I don't think there's an ROI. But if I'm as a consumer, the Super Bowl is a sacred day. It's almost religious. You're with your family. You're at a party or you're with your kids.

I'm not watching the Slimecast. I'm not allocating any TVs where there's any shrimp cocktail to anything that is slime cast related. And for CBS to think, there can be a reasonable discussion. Do you want to see the manning side cast or whatever word you use for what the manning to do?

What's it, a simul cast or a? The manning cast. Versus the actual, I can see that or the data driven. There's some channels where it's a where and for baseball, they'll do a data-driven production. I get all that. But for a Super Bowl, I don't want to secret the kids away to the den while I'm in the party room. And I'm not getting any benefit for a slime cast. You're going to secret the kids with the secretions. Exactly.

Thanks for getting that. But will this be a creedding to some bottom line? No, I don't think so. Look, if you're watching the Super Bowl as a family, you want your six year old in the room with you. What are you going to do? Put the kids upstairs and they're watching the slime cast. They're going to watch another channel. Now I'm saying all this, assuming that they're not actually going to do? Put the kids upstairs and they're watching the slime cast. They're going to watch another channel. Now I'm saying all this,

assuming that they're not actually going to get to slime the players on the field. Now that is a case. I'm all in. I'd like to see a third and 10, you know, one of the $35 million your guys in the booth and suddenly, wham. They're slime all over Aaron Rogers of the New York Jets in the Super Bowl, finally. That out, that I'm for, but if they're not going to actually slime the players, I'm out. Bob Babakis, who is, uh, and for the work I do at CBS, he's the boss, President CEO of Paramount. His quote on this is interesting and spot on when it was announced, he was

talking about really what they're trying to do. He said, quote, to unlock the value of the league through the demonstrated power of our multi-platform portfolio, CBS Paramount and Nickelodeon. He basically said the quiet part out loud. This is not about adding value or making more kids watch or having families make a difficult decision. This is explaining to shareholders What you are bit is when you want to be the right-holder to the NFL when you are paying billions and billions of dollars Getting the Super Bowl not every year, but only occasionally

Where do you possibly measure ROI and what they're to argue to their board and to their shareholders is what Bob said. Look at the attention that we're getting Nickelodeon. There's going to be a conversion rate. And my argument to Bob, where he to be on this show is show me that conversion rate. Where are you monetizing Nickelodeon by promoting it as a slime cast during the Super Bowl? And he has to have an answer or else he wouldn't be doing this. Unlocking the demonstrated power of anything is I believe what you say when you're about to fire the Death Star

into an unwitting plan. And you're desperate because using those adjectives, you're doing that in a statement when you're saying yourself, wow, we really spent a lot of money on this and we're putting a lot of resources into the Super Bowl. We have to come out with so many bells and whistles that all the clamoring and all the

noise will take the focus away from the reality. Well, let me pose a question that I have thought about that I think has tracked with just what worries me about sports consumption as I am now 37 years old and no longer a kid closer to David Samson, grandparent that he wants to be. I am curious about whether kids, David, you said you want to be a grandpa. I feel like this because I'm watching I am watching trend lines emerge in youth that say that they're not as into sports, right? In a macro way as my generation is. And so we've talked about the cynicism we have

around the media aspect of this. What do you really get from an ROI perspective? But is there actually a sensitivity and anxiety about selling sports to kids? John, I'll just give you two minutes and I'd like you to answer that from your perspective. Because from my perspective, that's all we do is figure out how to lower the demographic of our fans.

That's that, that you just sit around and talk about that because every business does, because otherwise your customers die and then so does your business. So this isn't just unique to sports. Everybody's trying to figure out how to get young kids. And the theory I guess, John, is if people watch the slime broadcast, they'll all of a sudden graduate to watching the actual broadcast and become buyers and engages with the NFL and with CBS and their other networks and platforms.

I just don't think that's the way it works. I think you said it better before, which is, if I want to get a six year old to start getting interested in watching football, they want to be in the big boy room, the big girl room with the other people having fun and eating guacamole and chips and hopefully not drinking too much beer. But I don't think this is going to convert people. They'll be converted by being with their cool, the cool older people watching the game. Yeah. So there's a little bit of the pink hat phenomenon here,

where it's we're trying to cater to a demographic by doing the signals of what we think that demographic likes. They might just want to just sit with the, with the adults at the adult table. I saw at least 25 presentations when I was at ESPN for sports center for kids. And my answer always was the sports center we make works for kids. They want to watch the big show. They don't want to have a little, you know, it's why sports center for kids never work. Right, kids didn't want to read a dumb down,

simplified version of basketball and baseball and football and hockey and soccer, they didn't want to, they never worked. I was given a sports illustrator for kids subscription for my bar Misfa, and I wanted to want it. That never worked. I was given a sports illustrator for kids subscription for my bar Misfa, and I wanted to trade it in for the regular sports illustrator subscription, except the sports illustrator for kids

would come with cut out cards that were perforated, that you could unperforate and keep them. So what I would do is I would take those, but then I would read and engage with the sports illustrator that my father had. It is completely unsurprising to know that David Samson, child, try to figure out how do I monetize this issue of sports illustrated for kids before moving on to the real thing. I actually wrote for sports illustrated for kids when I was an intern at sports illustrated

and I wish I had a more optimistic case for the content that I was making at that point. But I'd like to use that as a segue to the content I used to make for John at ESPN. Because John, the headlines around ESPN now are seemingly existential. And there is talk of a minority stake in the company being sold whether it leagues themselves or in that this dubtails completely with you and David's running conversation long predating me about ESPN being spun off ESPN selling a subscription to an on-demand streaming service which would come with prices that are quite different from the way that the monetization of ESPN goes now. different from the way that the monetization of ESPN goes. Now, what is your sense of ESPN, specifically in the lens of selling a minority stake?

I think my selling a minority stake is just a tactic to try to increase your evaluation and solve some of the problems you have right now. And Walt Disney Company has a lot of debt. ESPN still generates a lot of cash. And I still believe the entirety of ESPN will not be spun off and sold because I think it's still a valuable asset. And in a subscription world, sports is going to ultimately end up being very important. So I don't know why you would get rid of those powerful sports brand. So I think they want to keep it probably get some cash in house to, to drive the stock up and drive the debt down. But David understands some of this better, much of this better than I did.

David, what do you think about that? Well, think about what Disney did. They started when Bob, Bob started Iger with the silos. He created the, the three different silos. And then we got into a discussion about what could be the future of any of those individual silos. Could they be spun off the museum parks? And then ESPN is as the big silo. What Bob Eiger did by announcing this is he started the ball rolling and that becomes an avalanche because when you're meeting with strategic partners

and he said it in a way that was interesting It's a strategic partnership like it's a limited partnership. We're not looking to give up control all negotiations with LPs None of them are about control until you start raising the price and asking for more money and Giving away a greater percentage then control comes in the conversation and what often happens money and giving away a greater percentage, then control comes in the conversation. And what often happens is there's a pathway to control. I don't see a deal anywhere where Walt Disney will be able to sell a limited partnership share to anybody for ESPN to say nothing of the leaks. I do see a path through control deal,

where there is money that's put in that pays down Disney debt that boasters and buttresses their stock price, that gives them, and you've done these deals, John, you did this with BAM tech, and you did this, so you did this with MLB, where it's almost a put call situation. And that, to me, is the only way that you'll get that.

Explain that, explain the put call, David. Explain the put call as a term of art in this conversation. Put calls when you do a deal with somebody that I will buy 50% of your company at $10. Then in two years, I have the option to buy the second 50% of your company, but for $20. And I have the right. I can call that 50% of the company and I own for $20. And I have the right. I can call that 50% of the company and I own for $20. And I'm only going to do it if the company that part is worth $30. But then there's something called the put and they're related. A put means that when we make a deal that I can buy the second half of your company for $20, if it's only worth

$10, I'm not gonna exercise that call. But a put means that the owner of that 50% can give you that 50% at the $20 marker. So put calls are where you're making a future bet on valuation and paths to control. Some of them involve a reappraisal, but most of them involve a number that you choose in the beginning, where ESPN would be worth blank billions, and John Dan is tried to get you to give us that number and you never have. I'm guessing you won't now, but you put a value on it today,

and then the person who's buying in has the right to buy the entirety. That's the only way I see this ever happening. It's interesting. You mentioned the Bam Tech deal, Dave. That was, of course, the opposite, right? That was ESPN buying a minority share. There was not a put or a call here. Yes.

Kevin Mayer and I went to one, count them one, a Bam board meeting. And at the end of that meeting, we sat and said, I don't think we're gonna go to many of these. I think we need to buy the rest of Bam Tech. That's a very different situation. We wanted that technology, and that is a technology that's driving Disney Plus, CSPN Plus, et cetera, et cetera. And I have no idea, you know better than I do.

If I was a DSPN, I would not want to have a put call situation. I would want somebody to come in and have to renegotiate if they wanted to buy more, which is what we had to do with, with, uh, a band check. Are you saying that that deal was not a step transaction? No. So let me tell you what was going on in the owner's room. Uh, Because what was going on is that it was presented to us when it was voted on, that it was absolutely that there was a path to a complete sale that was at our option. And what you did is you then manipulated the situation because we all needed money. And so we ended up then agreeing to the rest of the company at a valuation that was below

market. But it was always contemplated that it would be a complete turnover because when it was first approved, what would be the other reason that you'd be interested in joining us, if not to take over the whole thing? Well, that was our reason. And by the way, you may be right that there was a put call that I don't remember. I remember having to negotiate again of what we would pay, probably because we went so quick, right? I mean, there may have well been something that we never got to trigger in the future.

And I'll remember what happened. Well, the tech aspect of this for people who don't remember, like, BAM tech was way, was an industry leader in terms of streaming at a time when streaming was not nearly as developed. And so that's how, as John alluded to, ESPN and Disney ended up using that technology internally. But on the level of who you want your strategic partner to be, give me your hierarchies, because we've mentioned leagues, we've mentioned tech giants. I assume there's just, you know, financial institutions out there who might want a piece of the investment. Who do you want if you're Disney to be a strategic

partner if you had the choice? Me top of my list is Apple. Why? Because ultimately, and this maybe what's part of what's going on, David, is that ESPN is not being spun off, but they may be taking a minority investor who will then take the rest of ESPN later. And if there is somebody who could do that, it would be Apple. One, they can afford to. Two, Apple is now moving into sports. Why would Apple not want to be the leader in sports?

So I can see a world where Disney wants to sell ESPN but retain some sort of position because it is a pretty sexy asset to have in their portfolio. And as you know, it's a high-performing asset in the portfolio and to the extent that it can help in any way make the other assets that are more, quote unquote, Disney oriented, make them look financially stronger. I think there's a benefit to that. But in terms of strategic partners, when you're selling a company like ESPN, you can go into it saying we're good, we're we like the idea of Apple as being our partner and then we'll see where it goes. Or we like the idea of a venture capital or a sovereign investment

fund. Let's look for that to potentially happen as a source of funding for Disney, because that's not off the table. I would imagine. But the real thing that interested me in this regard is leagues. Can you imagine then going to MLB, which they did and said, hey, do you want to own ESPN or a part of it? It's MLB wanted to buy from ballies, the regional sports networks.

The difference was in the valuation where MLB had the networks value and where ballies had the networks valued. With ESPN, MLB is building its own network. As opposed to NFL where I think NFL network is nothing compared to MLB network at MLB.com And I think the same thing about the NBA having nothing to do with my past So I don't see MLB as a partner here because they they're comfortable where they are in this space But for the NFL who's so worried about image and So interested in controlling their destiny having them own the biggest distributor of their content, it fascinates me.

And they've got the financial might where they can pull off a deal like that. I do know that the, there was sentiment in the NFL that they made a mistake early on when they did the deal with ESPN and not get some equity in the company. It's the belief of the NFL that they drove the value

of ESPN and didn't get any of that. Now, the problem now is, I don't know that it's going to drive great upward value, right? They're making, if the NFL was to do it, they're making the deals the wrong time. They're making the deal and ESPN, right? Well, what is the wrong time? Are you, you just but there's a franchise that just sold the Washington commanders for $6.05 billion. Is that a bad investment because is that the top of the market or do you believe that the franchise valuations will continue to go up? I believe franchise valuations will continue to go up. Then there's no bad time. Well, this is a question that I have. My casual layman's question is, John, I've heard you refer quite persuasively to the business model of ESPN during your tenure as the greatest business model in the history of media.

And I don't have a good number two. I buy it. So my question is whether the leagues on some level by putting money into ESPN, are hoping to prop up said business model, because the alternative, we've talked about performance-based live rights deals, right, with tech companies. I just wonder, is there any of that here wanting to keep alive the buyer that they have enjoyed because of the business model that that buyer had until recently. I don't think so. I don't think that's their motivation here, but I could, I just don't think it's the motivation here. That's funny, John. Well, I can't let you go with that. Then what is the motivation?

I don't know. For us, I know there's only been potentially a meeting. I don't know what the motivation. My suggestion was that when the NFL had, had, had, had, had, wish they had gotten some piece of ESPN, that was when it was worth $1 billion. That's what it was worth when a Disney bought ABC cap cities for 19 billion. ABC was worth 18 and ESPN was worth when a Disney about ABC cap cities for 19 billion ABC was worth 18 and ESPN was worth one at that moment

And you said never getting you a number. I've always said ESPN was worth between 50 and a hundred billion dollars I think that's a big broad range But when it went from one billion to 50 billion that was the appropriate moment to have some equity You have some equity now at what's it worth now, probably 50 billion dollars. Is it going to go to 100? I don't see it. No, I see it being being very valuable. I think it's an important part of the portfolio.

I think people would like the brand value. They'd like to be the most important sports company in the world, but I don't see there being the kind of appreciation there would have been in the late 80s or early 90s. As long as they've got live sports, and as long as they also have a production arm that does the unscripted that they do, I see their value continuing to rise, but I don't see at the end of the day any of the sports leagues

stepping up at a valuation number that Disney board would be comfortable in doing a deal. So I don't think the leagues are going to end up being buyers, but it will not stop them from kicking the tires. So I'm a leop, John, I'm left with questions, though. And I don't think we're going to have time to answer these questions, but I have noticed that you two are both extremely bullish on, I mean, David, you're extremely bullish on franchise valuations.

Yes, we believe that these things bullish on franchise valuations. Yes. We believe that these things are going to go up and up. And this is despite the fact that the biggest buyer, the business model that we caled as the greatest in the history of media is changing radically. And tech companies are not quite so eager to spend in the ways that that model did. And so the bet on franchise valuations going up is premise scarcity. What? Briefly.

Yeah. Supply demand. Exactly. That's what I'm scarcity. I don't think they're tied to the business model of the distributors or their partners. I think the team values go up because it's like paintings. There's a scarcity and there's an increasing number of very, very well to do people who want to own one of them.

Yeah, yeah. Anytime someone tells me, we're not at the peak yet. Only green arrows from here. I am a little bit worried for myself and for my daughter's tuition, but I suppose for now. You can leave it there. To get a team for six billion, you should go for it. It will be an appreciation will pay for your dollars education.

Have a flock of children to play for all of them. Anyway, thank you, Pablo. Yes. The Pablo Tory Investment Fund, not quite as robust, but until next time. Thank you very much. Thank you, David. Thank you, everybody.

Thank you.