The Dan Le Batard Show with Stugotz - Sporting Class: Game Changer or Game Over: Is the new ESPN, Fox, Warner Bros. Discovery sports streaming bundle endgame?

Episode Date: February 9, 2024

Meadowlark Media CEO John Skipper and Nothing Personal's David Samson are back with another episode with host of Pablo Torre Finds Out ... Pablo Torre! Welcome to the Sporting Class! A new streaming service is coming! ESPN! Fox! Warner Bros. Discovery! What does it all mean? Is this a game changer? Is this the future? The Big Ten and the SEC have come out and decided they are joining forces… kind of! They have started an advisory board because they are not happy with how college athletics is currently operating. Are they going to break away from the NCAA? Is that the final step? What else are we thinking about this week? Vegas! Caitlin Clark! And did Roger Goodell respond to Skipper? Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to Giraffe Kings Network. 1-800-Flowers.com. Right now, at 1-800-Flowers, you can get up to 40% off a beautiful, gorgeous bouquet of one-of-a-kind arrangements that are guaranteed to wow your significant other. Please do not be like me. Don't put it off. Delivery dates are limited. Get up to 40% off today at 1-800-Flowers.com slash Dan. That's 1-800-Flowers.com slash Dan. This is the Dan Labrador Show with the Stugatz Podcast. John Skipper has written stuff on the back of a piece of paper that looks like a diagram. There are boxes, there are arrows. David Sampson, we have been summoned here by the people to this desk to unpack what has been framed as enormous industry changing sports changing news.

And I will simply read the headline from the Associated Press ESPN Fox Warner Brothers to launch sports streaming platform. John. And there's a lot more in the presentation of this and the press release of this. But the premise here is that three channels, three networks, three corporations really are Three competitors. Three competitors under which there are many networks, many content offerings are coming together in an unprecedented way, allegedly, to say this is the future of streaming and of sports.

And to you, that sounds like what? Well, it's quite confusing to read the quotes, the releases, and it requires some amount of speculation because it's not particularly clear. My speculation is that this is nothing but a light package of channels, much like YouTube TV was a few years, and that what this will consist of is all of the networks listed in their entirety, and these networks have been picked because all these networks have sports on them.

But a lot of the language around this is quite confusing. The end of the sentence you read was that they're creating a joint streaming platform to share sports assets. As far as I can tell, they're not going to share them in any way beyond what gets shared right now on a pay TV subscription. It's like saying, well, right now, all these networks are sharing their sports assets by being in the cable bundle. These guys aren't sharing sports assets. There's no indication they're going to be buying sports together. This is just a light bundle. It happens to be delivered

by streaming technology, but this is not a sports streaming service. This is a light bundle of sports rich channels. Now maybe that's semantic, but I think there's also an intent to slightly confuse things by the three companies. But let's go inside the meeting. So there's a meeting, it was Lachlan Murdoch, maybe representing Fox, I doubt it, was Bob Iger in these meetings. He thanked Jimmy Potars,

why as soon as it was Jimmy in the meetings. And so they're sitting there, although Bob Iger was quoted and they went right to David Zasloff. So it was the top of the top quoted, because this was announced as though they had gone up to the mountain, and they had met and come down with the 10 commandments.

So it was presented as though it was a brand new day. So I thought that they sat at a table, and they said, hey, what can you contribute? Let's put everything we have in the middle of the table. What do you got? What do you, oh, IVS-P and IVS-P and two. Oh, I've got NBN, TNT, I put that in, put everything in. Now, how about if we just go a third, a third, a third?

And I thought to myself, that's when the whole announcement lost credibility, that they're each gonna own a third of this with no reporting structure, who has control of the board, who appoints the CEO, because any time you have a tie, it leads to inaction. So is it whoever contributes the most? Is it whoever gets the most fees for its other networks on other platforms? And what app, even though it's nameless and it's not priced yet, how, when they do the price, why can't Disney

say, well, we're 41% of this price. So we ought to get 41% representation. Well, I think that they are going to get the prices that they charge other distributors. So Disney will get more money from the subscription price. I'm assuming the third, third, third is the governance. And while like you, I find that to be quite difficult governance, third is the governance. And while like you, I find that to be quite difficult governance,

it was the governance of Hulu. They, nobody had control. And I think they've set up the same thing here where nobody- They didn't last. Well, this hasn't even started yet. So it has every opportunity in the future not to last. But we, I don't think for consumers, everyone's all excited.

Wondering how much is this gonna be? This is my alternative. Yes. Why are they excited? I'm not excited for them. Well, part of the premise here is that it feels like a crossover event to serve sports fans what they really want. It goes back to this conversation

we've been having forever on this show, which is how is the age of streaming going to change the consumption of sports? How is it going to make it better for consumers of sports? And so here is the premise. You will get offerings from 15 linear networks from all of the ESPNs to TNT, True TV, Big Ten Network, etc., etc. And what John is saying is that this actually isn't some killer app, technologically, or even in concept, it is closer to what? It's like YouTube TV.

I mean, YouTube TV. Like with a guide? Yeah. So all that we're talking about here is you're gonna get an app on your smart TV, you're gonna click it, and then you'll have a choice of 20 channels, and it may be NCIS New Orleans. I'm out.

Why is anyone in on that? I think what they're trying to address that is an issue in the market are sports fans who are going, gee, the cable bundle was really expensive, but at least I could get all my sports. Now I've got to go aggregate a bunch of different apps and services to get all these sports and these three companies are coming together and going, we'll give you all of our sports, but they're just giving you all their sports by creating a bundle of the channels that carry those sports and some of them carry only sports and some of them carry very little sports.

Right, TBS, TrueTV, TNT are also. TruTV is great during March, but other than that, during March madness, I'm trying to think when there's carryover, because there are too many games on TBS. When do I ever watch TruTV? I'm not sure I ever have. Well, you wouldn't, but all they're trying to say to you

is if you buy this and it's gonna cost, roughly speaking, I would bet $49.95. If for $49.95 you can get the men's basketball tournament, they'll not, they'll not mention in that ad. Maybe down where the guy talks really fast. They'll say, well, this does not include, you might get sick and knowledge. They're saying it does not include the games there on CBS, but you still will get the men's basketball tournament. Get the world cup in 26. You get the world series on Fox.

You get the national college on Fox, you get the National College Football Championship on ESPN. So you get a lot of the sports you want and you get it for $50. I think what they're trying to avoid saying here and Lachlan Murdoch contorts himself semantically by trying to explain that this is only for coordinators. I guess when people call they'll say, now I just want to make sure you've never ordered a cable television sub because this is only for coordinators. I guess when people call, they'll say, now I just want to make sure you've never ordered a cable television sub, because this is not for you. But it is exactly for the people who are hanging on to their cable television package for $125,

but are going to go, oh, for 50, I can get pretty much all the sports I want, other than some things that are on, gee, the MLS on Apple, but you can't cancel cable if you are holding on to cable and you then do this new sports platform You're losing you there's no CBS There's no local none of your local channels the way you get it on cable or Hulu or YouTube live TV So I'm not understanding who their demographic is exactly. They're demographic or sports fans who want to save some money and who want to find it easier to aggregate. What is fairly revolutionary about this is a group of corporations has gotten together and said,

for the first time ever, we're going to take our content, put it together, and we're going to compete to sell you that content. It's called Comcast. They did that. They did do that. And there may be a reason that NBC is not in this mix. Because they may not find this to be... Additive.

Particularly... But what does it say, John? Because, okay, Uranius PN, at no point it sounds like in your tenure, was this a thing that was realistically contemplated So something happened between your tenure and the present that made them consider this really no there was a there wasn't Attempt at one point Apple at one point attempted to create this bundle and they couldn't do it Because they would not accept that they had to pay the same prices that Comcast paid But they did I don't know 2016 or 17 give or take

I mean, it's a good idea to be the person who aggregates sports Remember Bob at one point said not Bob Bob. I think it was Bob Tate picker Jimmy said gee We're gonna try to create a guide where you can use ESPN to find whatever sports you want to find. Now, no, we're not going to sell you those channels, but we'll be the arbiter of where everything is and the guide. Not a bad idea, by the way. This is another version of that.

But again, my favorite quote here is the, where it suggests that they did lots of sensitivity analysis and discovered that this was really only for, for coordinators. That was a lot of Murdoch, yes. Because if this was actually going to compete with the pay, and it's interesting that the guy who's the CEO of the one company that doesn't have a streaming service is now Fox, Fox is now stepping outside of that world. Now, by the way, there are lots of people who have already canceled their cable who never have gotten cable. It's not all wrong. But I think there are, I think there

is a little bit of an effort here to see whether they're how upset the distributors are going to be. In my opinion, they're going to be very upset. But I also found it interesting that ESPN announced the next day that they were going for with ESPN plus, not part of this joint venture. And this is their direct to consumer offering. And it's going to be another price that you have to pay for ESPN plus. And what was interesting is I thought what ESPN wanted to do with its sports was push it to ESPN+. But now, do they have a responsibility when they're sitting at the table saying, what are you putting in the pot? What are you putting in the pot? What do you get to keep for

yourself? Because in theory, we talked about Bleacher Report Sports Add-on. Now, we could argue that's going to cease to exist, or we could argue there'll still be stuff on Bleacher Reports Sports Add-on that'll be different than what's put into this app because it's only TNT as an example or TBS. That remains to be seen but there's gonna be a discussion eventually about what gets put in here. Well, but you know, I don't know what that means. I mean the discussion is the networks that carry sports that are part of Warner Bros. Discovery or the Walt Disney Company or Fox are in this bundle. When you do a contract negotiation, you have to talk to the league about what you're obligated to do.

Where you're obligated. Are you saying that ESPN could go after a new NBA deal and not tell the NBA or guarantee the NBA that a certain number of games are on ESPN, certain are on ESPN too? We're going to put some on the ESPN plus. This doesn't violate that. All they're doing is distributing the ESPN network. The ESPN network has guarantees to the league.

You're going to get X number of games on Saturday in such and such a time spot. They're still here. But in the new deal, ESPN may be motivated. Disney may be motivated to negotiate a deal with the NBA where they get certain games the way Peacock got, a Peacock-only game that comes with a negotiation with the NFL. They're party to that, they're aware of it. Is there not a world where you see that ESPN Plus

wants a game, wants an NBA game? No, they, they, yeah, I can see a world where they say, we're gonna put a Division championship on ESPN plus and you can only get it for ESPN plus So then it won't be in the new company. Yes, no it will it will because this says it includes ESPN plus So everything's so it's so David This is you believe that there's a company that's starting where there will be no ability for the three equal partners Which I still don't think they'll be equal to have anything that's not part of this platform, which you're calling a platform.

You're calling a place where the network's not. They can have anything. They can go to ESPN pay-per-view and put something on that's not in this bundle. But no, they can't go put something on the ESPN that's on Comcast that's not on this. This is what's very funny to me that I'm hearing John articulate with clarity.

I'm excited to see this. What John is saying is that skinny bundle, whatever it is, it's really just kind of like a deal. Hey, do you guys want to get these three things that include all of this stuff? Then we have a one price deal for you. And that's what it, but that's and the distributors have to be pissed off then.

So the question then becomes, okay, so if I'm a consumer who can pay $49.99 to get 15 linear networks, which is really just like my ability to watch all of this stuff, including NCIS, including all the non-sports stuff on those networks and those channels, the question then is who is most threatened by this in this landscape of this new media economy? The distributors. That's what I think too.

Yeah. And because you think- And look- I'm just going to talk about the revenue side. Well, the revenue side, Disney is clearly going to see two thirds of the money here because these networks have to be paid for at the same price that Comcast pays for them or they will violate the MFNs that Comcast has on price.

MFNs meaning? Most favorite nation. So Comcast has a most favorite nation almost certainly with all three of these companies, certainly with Disney. Most favorite nation just to explain that. That means that you're not allowed when you're cutting deals of how much your product costs. If you're selling a tire screw to a company that's paying you a dollar a screw, if there's a most favorite nation's clause, it means that you can't go to another supplier and sell it for 50 cents because if you

do, you have to go back to the first guy and say, hey, I was overcharging you. I'm going to give you 50 cents off and now you're only paying 50 cents. And now this is $49.99 a screw. Exactly. In a different way. Yeah. And, and... Sorry to interrupt. No, no. I was just gonna say, as I look at this even more,

this is overwhelmingly going to be positive for ESPN and Disney. What they're doing is making all of the Disney networks available now, right? They've talked about we're going to launch Direct to Consumer. They've just done that with all of the ESPN networks. I'm assuming it's a bit of a trial balloon, but none of this precludes. This is no different than the YouTube TV effort. But you're saying they have to charge though. They have to charge this new company.

Yes. Disney has to charge. That's why they have to set up a, That's why they have to set up a... Disney doesn't charge them. The Disney receives payments. The new company... The new company will pay Warner Brothers Discovery for TNT, True TV, TBS. They will pay Fox for Fox, FoxWords 1.

They'll pay the Walt Disney Company for ABC, ESPN, all the rest. The new company needs money. The new company, just to explain this, the new company has expenses ESPN needs money. The new company will explain this. The new company has expenses right off the bat. Because if they're getting channels on their platform, they have to go out and buy the channels and they have to buy them at the rate that the other distributors are ready by them because that's what most favored nations. So there there's going to be money that's funded by these three companies.

If if then the money, let's say everyone puts in $100 million, then there's $300 million in a new company with a new CEO, with new governance, and what they're doing is they're going to bind channels. They're going back to each other. So they go back to Disney and say, hey, Disney, I need all these channels. All right, we'll sell to you for $12 free SPN, for $3 free SPN too, et cetera, et cetera. All right, TNT, what do you cost? Oh, like 75 cents, all right. Zasloff, you get 75 cents. Well, they probably can skip the one step.

They probably know these channels are in, they know what they cost, but that's accurate. The new entity will have to be funded. I'm assuming it'll be funded a third, a third, a third. They will buy, they will license those channels. They will go to market to consumers and say, if you just want to get sports, this is your best deal. And NCIS.

They probably will not say that. And family feed. Look at what all the announcements, see all the announcements have made this sound like it's just sports. Because it also- It's not just sports. And in that massaging of the announcement,

it makes it feel like, again, it's some sort of new product. But the newness of this, John, you sort of slipped it in at the end there, is that now you can actually get all of the ESPN family of networks streaming. You can get it in the way that has been long rumored on Wall Street. Yeah. Forget streaming. I mean, streaming is just a technology to distribute.

The thing is you're buying them directly from the companies. That's the difference. And that means they are now in the direct-to-consumer business. Disney has now officially gotten into that. But you can only get it with a device, with a smart TV, or with an iPad, or with some sort of device. You can't just have rabbit ears. A rabbit ear TV would not have access to this. That's why it is a streaming service. So that's the streaming concept. Right, but so you mentioned though, I want to distinguish between, again,

so Disney doing this themselves via this third to third to third governance operation, different from YouTube TV, but YouTube TV feels like another party here that should feel threatened. Well, YouTube TV feels like another party here that should feel threatened. Well, YouTube TV entered the market as a lower-cost bundle that was distributed streaming and that aggregated channels. So in fact, what these three companies have um, gone into competition against YouTube TV,

which has most of these channels. And in one of the great ironies, YouTube TV was launched, uh, as a sort of circa 40, $45 channel. And the reason it's now $70 is they launched without ESPN, which is very difficult for their business. And when they added ESPN and the family of networks, they had to take their price up. And now the Walt Disney Company in league with Fox and Warner Brothers is going to, nothing wrong with it, it's good American capitalism, but they're going to go in and compete. And they're going to, I guarantee you,

it's going to be a lower cost alternative to YouTube TV. And it will be an interesting discussion the next time the YouTube TV guys who have eight million subscribers, they're a real player. They have, I think, about the same, maybe slightly more subscribers than direct TV now. I'm one of them.

I use the product. Would you, okay, but let me ask you this then, because of course you're competing with the thing that you're also enabling if you're Disney. And so does this get to a place where Disney says to themselves, we don't want to give YouTube TV our stuff. Or no, do you see this all coexistence?

I don't think so. I think what they're trying to do at At the peak not the peak of anything just the peak of cable subscription Penetration there were about a hundred million households as cable television has lost households Walt Disney and Warner Bros Discovery and Fox are trying to figure out ways to sell Products that will allow them to get their subscribers back right at one point. It was 100 million dollars times a monthly fee Now it's 60 million. Oh, I'm sorry homes now It's 60 million homes times whatever the monthly fee is so this the economics of this will be Pretty close to the same on revenue on the hand, these three companies will incur the expenses,

as you pointed out, because they now have to take phone calls from people who want order. They have to respond to customers whose product doesn't work. They have to deal with credit card bad debt. They have to deal with marketing and finding these people for people with YouTube TV, the 8 million of you, are you, so you're presented with YouTube TV, the eight million of you, are you, so you're presented with YouTube TV, you know exactly what you pay. I'm presented, I have Hulu Live.

No ads, that's my thing. There's no way that I'm paying an extra $49 for what I have. Are you paying an extra $49 for what you have? There is no added value to me. Zero. So now- I already pay for the- So let's go to the other people.

So it's not us, and it's not the only fans It's not rich white only fans people. We're talking about eight million YouTube Plus add all the Hulu subscribers now the people who have cable already so who's being marketed? This is what I've been racking my brain with who is the market for this service Is there room in the market for another platform of live TV? So David Zaslaw, the Warner Brothers Discovery CEO, has framed it this way. This new sports service exemplifies our ability

as an industry to drive innovation, provide consumers with more choice, enjoyment, and value. And so who's getting that value? It feels like the most casual sports fans who don't want CBS or need CBS or NBC, but kind of want everything else? It's a weird problem. I thought you meant the other side, not the casual sports fans, for the sick sports fan who only wants sports.

No, no, no, but a casual diet, it's a bit of a contradiction, right? I'm casual enough to not need CBS and NBC, but I would like everything else. Well, remember, it wasn't constructed to be perfect. They would like to, I'm sure they would like to have all the sports in here and NBC and CBS aren't in. Well, CBS told them to shove it, right? They were, you think, wait, you think that the three of them

got together and said, you know what, let's not invite Peacock and Paramount Plus to this table. This is a great threesome. Let's not make it a five Pentagon, a five tuple, a fuffle. Pentagram. Thank you. I don't believe that that's how this happened.

I think that CBS and I think that NBC both said that we are gonna continue our investment in Paramount Plus and in Peacock And we do not see any value into funding and being a 20% owner in a company. That is a pretend sports only bundle. I Have no idea actually though. I would assume Certainly that NBC did not get a call they make more money on Comcast and my guess was nobody wanted to tip them off that Hey, we're thinking about doing this. How could they stop it? What's wrong with them being tipped off? Nothing. They were kept secret

That'd be quite a secret Also know that the management teams of NBC and Disney are not particularly friendly. So I'm just, my guess would be they did not get a call. And my guess would be CBS didn't either because it just adds expense to the bundle. By the way, every distributor has to have a very, very basic package of just broadcast networks. That's required by the law. So you can theoretically drop your cable network, cable subscription, get the most basic

one they have to offer, which is broadcast networks, buy this and you would get almost all the support you wanted. So what I'm learning is that there is a cable bundle. I never recall seen that when I was a proud cord lover where I could have just gotten ABC NBC CBS Fox and Channel 13 public television. I don't ever recall that that's below the basic cable. Is that the broadcast? Well, let me tear Let me suggest to you that it might not a bit advantageous for any of the distributors to highlight that package Which would be the lowest price package. Do you note that when you go to a grocery store, they generally are marketing the things they want you to buy and not marketing the things they make the least money on?

I'd like Pavlottor to find out whether or not on cable there is a tier. Whether or not you can buy the generic serial version of cable. The rabbit ear version. It's the rabbit-ear bundle. It may be obsolete at this point. Remember, cable started as a way for rural homes to get television because they could not receive the signal. That was the derivation. There was a literal cable that they had to run out of. Yeah, so literal cable and it was because the country believed, as he did when they And it was because the country believed, as he did when they invested in the internet, that it would be advantageous for our citizens to be able to access news and public service announcements, et cetera, et cetera.

Real America must get Cinemax. Yeah. And I mean, we wouldn't have the enlightened and intellectual voting population we have without that that probably. Oh God, I hear your sarcasm. It's lovely. But one of the big takeaways for many young people here, I think, has been the joke of like,

now they get cable, now we're back. And this is the thing we've talked about on this show and on mine with you guys, about of course how John oversaw within cable the greatest media business in the history of media in terms of money coming in and how the promise of streaming was never a reality, was never delivered to these consumers. And so, of course, John, when you talk about the skinny bundle here, is this a forerunner? Is this just step one of the great rebundling in which we can get back to that?

Or is there no undoing? It feels hard to get back to the great bundle. There's just going to be too many options. I mean, look, already you're going to be able to buy ESPN here. You're going to be able to buy it directly from the Walt Disney Company as a standalone direct to consumer. You're still gonna get it on YouTube TV. You're still gonna get it in Comcast.

I think it's just more complicated. I did an informal poll. And by that, I mean, I spoke to a bunch of people via text and phone about this before the segment on Nothing Personal. And I had a few interesting comments back. Hey, is there a movie one available? Was one? Is there, is there, is somebody gonna start a company

or I'm gonna get all the movie channels so I can watch movies? Is there a news one? Is there a someone asked whether there's a porn one? So is there, are there, the bundle that you're talking about is that we are now going to a consumer with you only like sports, you only like movies, news, et cetera. But what is news to me from our preparation for this show

is the NCIS portion. Because if I have a movie bundle, there's nothing I hate more than going to a movie channel. It's like going to MTV back in the day when they weren't showing videos. And then all of a sudden MTV had no videos And it wasn't I expected videos So when I go to a movie channel I want a movie when I go to the sports app for 50 bucks

Well, that's this might I don't want NC is not a sports app. It's a it's a they call They're one it's a curated bundle of those networks that among their programming show sports It's not the press release But it's not quite what it says in the release networks that among their programming show sports. It feels like press release. No, it's not quite what it says in the release. Which is why I laugh at the possibility that maybe they're just quietly trying to recreate cable. Like, and this is just like the beginning of like.

What John is saying is true, that's what they're doing. And sports is the Trojan horse, right? That's the larger joke of all of this, a joke that we've been seriously analyzing on this show more than anybody else in human history. Look, there are two kinds of consumers I can think of. One is, I'll agree with Mr. Murlock for a moment, which is there are many young people who've never had cable and would like to watch sports. This may be an entry package for those people. However, to suggest it's not also a package for people who are going, you know, the only reason I'm still getting cable,

and I hear this all the time, is sports, and particularly ESPN. So this is for the first time an option that allows you to say, well, if you want, prior to this, you could not get ESPN anywhere other than buying a subscription from one of the major distributors. But that's so they're just trying to be a major distributor because they're getting ESPN according to the release they're throwing the ESP, Disney said we're putting ESPN in. While cutting out the distributor which is they're getting but they're getting the same payment. So I don't know I don't

quite know yet the incremental revenue because all it is is another platform that's going to buy from Disney ESPN. And the existing deals they have with distributors, if there are fewer subscribers to those distributors, they will say, come renegotiation, hey man, we don't have a hundred million people anymore. We have 90 and Disney will say, no problem,

I'll get 90 from you and I've got 10 from this new entity which I own a third. I mean interestingly enough, I'll give you one slight odd thing. The margin on these subscribers from another distributor will be greater because you're not doing the customer service or the marketing. So in an odd way, service or the marketing. So in an odd way, while they'll get, let's just make it up. Say, you spend gets a dollar. That dollar is a dollar when it comes from Comcast. That dollar is a dollar minus the cost of this organization or per sub, which will mean it won't be a dollar, it'll be 72 cents. And they only own a third of it. Yeah, but they'll get it.

But if they end up with a million subscribers It is the same except for the cost of operating the entity It's the same money that did get from YouTube TV or from Comcast We think that but we don't know we don't know what yes What Disney will have to put into the pot of this new company of the revenue that comes to Disney? It just hasn't they haven't formulated that. There's no governance. They at least we've seen.

Nope, but the governance that's been announced is that they'll each be a third, a third, a third. So that would imply, would it not, that they're each funding this venture to a third? I'll bet you a dollar, it's not a third, a third, a third. Mortimer, at the end when it's all said and done. But wait a minute, I wanna ask how this, so the framing of this too, right,

is ahead of the next right-steal negotiation, which is the MBA. Talked about that at length as well. John, how do you think this Voltron, that's not really a Voltron, how does it change the bidding for MBA rights? It only changes anything, right? One of the reasons I believe

that the whole network is in there is the contract with the rights holders usually specifies it must be on such and such a network. So as long as they put the full network in here, they're in compliance with those contracts. If I'm Adam Silver, I am making sure that I'm speaking to the owners of this new entity and making it very clear that if they think they're gonna talk to each other and that they are gonna in any way quash the value of what I expect to make as a multiple of what I'm currently making, then I'm gonna get my little government friends involved

and maybe do a little anti-trust action. But this entity is not gonna buy sports rights. ESPN's gonna buy sports rights. But they're competing entities for the sports rights. I know, but the reason they're doing a separate entity is to provide themselves a distance. This is really important though. This distinction is very important.

I actually don't suspect that they're going to sit in a room and go, did we make sure all the microphones were off? Let's talk about what you're bidding and I'm bidding. You could do that now if you wanted to. David's face could not be more incredulous. Your partners with Turner, your partners with them in a large company, you're both competing for an NBA package. I'm partners with them in an announcement so far.

That's all I'm partners with them for. Agreed. But in theory, if you want... They're too much to lose, right? You always got to have the, yeah, they might cheat and they might try to do something, but there's no reason to. You still go by the NBA right, you put them on ESPN, ABC and TNT, and they're in this service.

That's two separate companies you just mentioned. Disney and Warner Brothers Discovery. They are, and they will negotiate separately in this case. By the way, in the last rights negotiation, we were allowed, long as we were transparent, we were allowed a certain degree of discussion about what our bids were, and we did ultimately make a bid that was equal, right?

In terms of, gee, here's what we pay now, we're gonna go up x percent, you're gonna go up x percent at the same time. That often happens casually as well, just meaning you often, whoever goes first, you have to match it. Right? We did that. Boy, this sounds a lot like what I was saying, which means the microphones were off. You were happy with the discussion. Once again, you're not going to believe me, but I never called a competitor and asked

them what they were bidding or how they were handling something, unless I called the rights holder and said, I want to discuss doing something together with Fox. I want to discuss doing something together with D&D. But you're the one who told FIFA that I'll do $1 more than anyone else bid. I did, but I didn't ask anybody else what they were bidding. Just surprise me.

Give me a sealed envelope and that'll be my bid. No, no, it's illegal. I tend to want to prefer not to do things that are illegal. What John is saying, David, is that the law provides enough cover that he doesn't need to do the illegal thing and can get enough of the benefit from the legal thing. While worrying you, person who is concerned about, are they secretly doing stuff to make me get less money? It just seems as though this new company I think that it's gonna be examined. I think it's we can move on for sure But it raises questions though about like a lot of questions. What does this really mean to cooperation? What does this mean in terms of sharing of resources talent shows it how much cross pollination is there?

It's me for consumers. I Think this is the old Empire strikes back Is there a need for consumers? I think this is the old empire strikes back. It's like, all right, with all that's going on and everything going on, we're gonna enter the direct to consumer game. We're gonna do it together. You wanna get your sports, come get them here.

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Get up to 40% off today at 1800flowers.com slash Dan. That's 1800flowers.com slash Dan. Don Lebatard! David Sampson, weirdo. Because he was not the fun substitute teacher who'd wheel out a TV and play a VHS tape or Armageddon in science class. He was the weird one who would eat an egg salad sandwich while clipping his toenails into the trash can and ranting about Ronald Reagan. Stugatz.

The guy kept talking about how his ass was smooth, smoother than a newborn's cheek. He wouldn't stop bragging about his bare buttocks to me. This is the Don Lebatar Show with the Stugatz. Today's episode is sponsored by DraftKings stay tuned because you'll hear more about DraftKings and all has to offer throughout the show DraftKings the crown is yours the other big change in the world of sports business and the media economy as a result John is this thing that the big 10 in the SEC have announced right and so I want to do the thing here too

where we decode what this press release is really indicating. But the Big Ten and the SEC have announced that they are creating something together. The SEC Commissioner Greg Sankey, Big Ten Commissioner Tony Petiti for the first time publicly expressed doubts in their commitment to the future of CFP, college football playoff. If leaders can't get right a litany of issues, and so they are creating what? What are they doing here? Well, they're certainly flexing their muscles, their leverage muscles, right? They're suggesting nothing is going to happen

that we, the SEC, and we, the Big Ten, aren't on board with. So you better get it right for us, or we'll just go do our own thing. I think this is, we were talking talking last discussion about who is threatened here. The NCAA is threatened here, right? The NCAA is, uh, investigating Tennessee right now and SEC member. Uh, my guess is that somebody somewhere is going, why the hell are we still engaged in years long investigations from the NCAA?

What good is that doing us? We're the big powerful SEC and Big Ten. We're gonna make our own. And of course the Big Ten did investigate one of its own. So it's possible the SEC and they sanctioned Michigan. So it is possible the SEC, what Tennessee ought not think is that by the NCAA disappearing, there'll be no regulatory body

Because the sec will still Somebody there have to be some governance, right? You will not be able to just run free and run free and wow so there will be governance But I think they're gonna suggest they're gonna do their own governance at some point The term of art here is advisory group This is what Dave is already laughing. This is what the big ten the sec have announced is advisory group. This is what, Dave is already laughing. This is what the Big Ten, the SEC have announced. Yahoo Sports, this is their report, but an advisory group. Is that a formal anything? Is that, what is

that? You and I are MetalArcs advisory group. How much power do we have, would you say? A ton, a lot, zero, somewhere between zero and negative ten. Yeah, IOs of power. So it's interesting. They've just publicly indicated that nothing's gonna happen without consulting us. So is this a warning? So this is the part of the show where we talk about what we're sort of like stewing on. And John, this is in many ways your account, right?

Like the SEC was literally your account at ESPN. And your takeaway from this is this is a warning to the NCAA more than anything else. I don't know if they got together and said, let's warn the NCAA, but they got together and said, gee, I'm not really thrilled with a lot of things that are going on here. I think either Greg Sankey or Tony,

I think sort of makes it clear that they got to look at 14 team playoffs and 16 team playoffs. That's right. By the way, 16 playoffs in my opinion is the right number. So I think Tony has this right and they're saying out loud before you make a decision that we are going to disagree with, we're telling you we are big voter number one and big voter number two and you better make sure you've consulted with us or like Mike Johnson, you'll miscount the house and it will not pass. So who do you think they're talking to?

Of course they spoke about when they got together that they were doing a press release, they were doing statements. It was all public posturing for the NCAA to hear. There's no other way. It's not for the normal fan. So they want to hear what you say is logical But they put a button on it though. They want to be most favored nation status. Oh You are a fast learner man. They believe what you already have the power find out and you comprehend That's why I'm on the advisory board. Uh, David. All right. What are you thinking about?

Well, it's hard this week not to think about the Super Bowl. And it's hard for me not to long for the days when I had to call Bud Selig directly and beg him to get a hundred grand from the Mikasukis for an outfield wall sign. The what? Mikasukis are an Indian tribe, Native American tribe in Florida.

And we wanted to get them as a sponsor and gambling casinos were not allowed to be sponsors Not allowed you could not you had a call bud So you bring up your phone and you get an appointment and you say hey bud. Hey, it's a hundred grand We really need it Absolutely not we do not associate with casinos or gambling and now I'm watching the Super Bowl in Vegas. I'm watching the way leagues interact now with DraftKings and Fandolin and how it's working.

And it's a world that I had never dreamt of while operating a team that the, not only would they be in bed together, but they're snuggling in a way that leads normally to children. And what I'm thinking about is, can they get through this initial stage of a Super Bowl in Vegas where people,

Joe Buck said, hey, it's a mess, boomerous size and you don't wanna be near it. People should be staying in Arizona. Can they get through this Vegas week without an implosion or can they continue snuggling? That's what I'm thinking about. Okay. I'm, uh, I'm trying not to think about you snuggling commissioners and better snuggling.

So, but Johnny, the point being though, Vegas was once upon a time. Look, I actually think it has been generally smart business for the embracing of, of a sports wagering has been good business. But yes, it is a remarkable pivot that all of the leagues and the country has made in a very short period of time. 20 years. We're talking 20, 25 years. It's nothing a quarter of a century goes by like that. 25 years ago was 1999.

I'm going to end this on a happy note and say that I'm interested in enjoying the Caitlyn Clark phenomenon, which is just spectacular. The fact that people are lining up in gymnasiums out of state to see her play and that she puts on such a show and she actually seems to thrive in this environment.

Lots of people would not and she survives, she thrives in it humbly as well. So I think it's a, actually a fairly profound thing that's happening here. Do you think that increases the value of WNBA franchises? Yeah. I think people won't even know where she's playing when she's out of Iowa. She'll be forgotten. I do think that colleges are special in a certain way with athletes and you see that here. I do believe she will, it will matter. There are lots of, I see her everywhere she goes surrounded by little girls and those little girls are going to become WNBA fans.

Yeah, I think the Indiana Fever, which has the number one draft pick, it feels like that's a market that is ripe with potential. It's Indiana. Four of our listeners knew that the Indiana Fever had the number one pick in the WNBA draft. But that's before the Caitlin Clark phenomenon changes. That's before we radicalize their host,

their favorite host, their favorite host David Sampson to talk more about the WMBA. The last thing I want to point out what I've been thinking about, I'll add this in as a bonus because you're mentioning Vegas, is that Roger Goodell says that John Skipper's prophecy will not come true. Quote, in his time, in his time there will not be a Super Bowl streaming. John, that's what Roger Goodell has declared. He was looking at you and the camera when he said it I don't believe right that the commissioner mentioned me by name. I have no idea if he's heard any of my suggestions of the show

The Super Bowl one day in the not too distant future will be behind a paywall or pay per view And I know he, um, he said that, but smart, uh, business people over time change. I think at one point he said that, uh, I think he was another one who said he wasn't comfortable betting in the league. Recently, fair characterization of the NFL's position on gambling. By the way, I'm not just saying weird about that. I changed my mind often. You do change your mind in business often

about what the right decision is at the right time. So I don't have any problem with that decision. And I am betting that, betting literally, that in the not too distant future, somebody will decide it's very good business to put the Super Bowl in pay-per-view. The minds got changed when the money became too much. When you're calling Bud Steele for 100 grand

for now Phil Wall sign, or when someone is calling the league and saying how about $100 million? I mean, that's what changed Roger Goodell about gambling and that's what changed Bud Steele and Rob Manfred. It wasn't all of a sudden they said, oh gambling good, the money just became too big. So you're saying that Roger Goodell might stencil

and cable into the end zone when the profits indicate that that might be the right move. All right, that's the sporting class. I feel like we saw all the world's problems as usual. For at least two weeks. David Samson, John Skipper, thank you for your insights and thank you for your advisory. We are the Metal Arc Advisory Board.

Yeah, you guys go have your advisory board meeting at Metal Arc and let me know if anything comes out of it, I need to be aware of it. It's a third of third of third. I feel like it's pretty clear what we're doing here. All right. Thank you, Pablo.