The Dan Le Batard Show with Stugotz - Sporting Class: Should an ESPN & NFL deal be allowed to happen? Was the NFL on Peacock just the beginning?

Episode Date: January 19, 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! The NFL could invest into ESPN... what exactly does that mean? What would the NFL get out of this? What would ESPN get out of this? Then, the NFL exclusive playoff game on Peacock was the most streamed event in US history. Was this a win? Is the future now? Hope you've got a strong internet connection! Plus, Regional Sports Networks are on life support. Is Amazon its Dr. Frankenstein? Let’s discuss. Also, ESPN had a problem with the Emmys. Real Emmys for fake people. It led to some firings, but was it really a big deal? Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to Giraffe King's Network. This is the Don't Labator Show with the Stugat's Podcast. So the vibes are back. And I mean that in the way that I've heard you say it, David Samson John because Swishing around in my hand and in front of you are some potent hemp CBD cannabinoids

I don't think that's what they are But it's nice that you have those not psychoactive. I did not get any news is there any sort of water sponsorship yet because I am still Labeless with my water waiting. I think we'll take bids during the year. Correct. During the conversation. Fantastic. Send us a note if you're willing to pay $10 a day, but for having a hold of that empty water bottle.

No, it's fun. It's 10 dollars. That's what I'm saying. I should say label this water bottle. We are here to talk about how to monetize things that previously had not been quite so monetized. And there's a lot. There's a whole lot as we kick off 2024 in the world of sports business with John Skipper

and David Sampson. And I want to start with the NFL, hypothetically, reportedly investing in ESPN. And John, this is a story that speaks directly to your purview, to your old job, and also to the logic of why and how and what does this get everybody involved. And so just the broad strokes are per the New York Post. I should cite them that Disney owned ESPN would as part of this deal take control of NFL media. That's the NFL's media arm. NFL network is in there. NFL.com, red zone, NFL films, NFL plus,

they're streaming thing. And in return, there's an undisclosed size of a share that the NFL would get in ESPN. And so your response, John, to this story would be what? Well, first I just wanna establish what we actually know, right? Bob Iger did announce that they would explore whether there were interested parties who might want to invest or hold an equity stake in the end, a minority equity stake. And it has been cited multiple times in reports, whether accurate or not, that among the parties

that were approached were the NBA and the NFL. And MLB. And MLB. And we now have a report from New York Post that, indeed, there may be actual discussions going on. It's a long way from a deal. I'm quite skeptical that a deal will get done here, though it doesn't surprise me because I think we also know that the NFL would like to shed some of their media assets. You know,

like to shed some media assets, Disney might like a minority investor, they said it might be the NFL, so it doesn't sound completely implausible. I think it ignores an astonishing conflict on both sides of the deal. I don't understand, though I know what the press release would say, I don't know in practical terms how you have reporters reporting the news on your minority shareholder without some dramatic tension and conflict. On the other side, I find that the NFL would also have a conflict. That they want to go have rights negotiations with all interested parties, but don't worry, we will not be giving an advantage to our, to our, the company that we own, X% in. It even, it's even more complicated

because let's assume that ESPN not getting an NFL deal would depress their value. Right. They might get less fees from distributors, so less advertising. So the NFL have to calculate that as they look at, oh, I got a bid for me, ESPN here. I've got a higher bid from Party B, and that's ostens at, oh, I got a bid for me as PN here. I've got a higher bid from Party B

and that's ostensibly more money. But in fact, if my stake in ESPN goes down, it's less money. I don't think I want to be the executive at Fox or CBS or NBC or gets to call, yes, you had the high bid, but because of our stake, now, of course, these conversations wouldn't happen this way. They would all be assured that it was all state, at USPN, they'll put out in the press release that there is a separation between church and state. And at the NFL, they'll say somehow, we're gonna have a third party monitor,

we'll assure that our auction process for our rights conforms to every appropriate standard and of competition and everybody's treated fairly. But I don't see how you do it, David, do you? You're... I do, because these conflicts have been going on forever. They happen to invest in banks when you cover a company, you cover an industry from an

investment standpoint with the people who are in your wealth management, you know, investing money with you. Hey, buy Amazon, don't buy Amazon, but then the investment bank on the other side is doing a deal with Amazon. So we don't want you to say anything bad about it because we're about to take your company public. And what they did is they put in a wall

which does not work, and the wall is meant to keep research and investment advice away from investment banking practices. Journalistic integrity. When the Red Sox, John Henry bought the New York Times, the Washington Post, what are you gonna say about his properties? And what they always say is, oh, we don't have editorial control. That's the line they always use.

We're the publisher. We don't know what goes on. We don't sit in the meetings. And of course, it's whoresocky. With ESPN, the conflict has existed long before this NFL possible investment. And you oversaw a part of that in my view where you are saying something about MLB.

You're a rights holder for MLB. You say something about an owner. We're gonna call you and we're gonna say, don't do that again. And you're going to respect it because you don't want us. This is the theory, maybe SPN never did this, but other partners would where you would say, and you probably did acquiesce to the NFL way more than MLB. I was going to say, which makes me better, but seems possibly true. But we call, and we would say, please don't do that. Sometimes the SPN would say yes, sometimes they'd say no. But then MLB got its own network, MLB network. If MLB network said anything

about an owner, you'd call MLB network and say don't ever do that again, you're fired and people would get fired. The difference is MLB owned the network, MLB network, they didn't own ESPN, it was a rights holder. If the NFL ends up as a controlling owner of ESPN, that's the end of ESPN as any sort of news organization with journalists because they can't say anything about Jerry Jones or anybody else. Well, first of all, I would suggest we had a single policy and we treated Majority Baseball

exactly the same. You know you didn't. It's not true. We never acquiesced. I often looked into things once or twice, discovered that we could have been sharper on our reporting, but I'd never had anybody call me and say, gee, you can't cover a concussions. I had people call and say, gee, I can understand why a good partner is busy running down the

league that you want to do well on television and I said, we're not trying to do that. We only have the other hand have a journalistic responsibility. We are a news organization, So we're going to have to cover whatever it was. If there was a scandal in baseball football, basketball or hockey, we covered them all. They all registered their concerns. But, see, they called me all the time. I was going to ask. He called me all the time. Because the good news was he faithfully, you know this, I think, David, he faithfully you know this I think dude he faithfully watched Mike and Mike every morning and he would count highlights he would jeez I don't talk much

about baseball what are you gonna do he would keep track yeah not where baseball was in sports center yes and then owners would keep track of where there are highlights were within the baseball highlights and call bud. Yeah. Bud would then call you. Yes. And how often would you have to deal with incoming like that from across all of the sports that you had right now?

Look, but but actually was quite pleasant about it. And sometimes it'd be mad. You know, buddy, a little temper, he could be mad, but he would get top down pretty quickly. And but with all of you guys. I love the show. Love Sunday night baseball. I'm just keeping track. Please keep us in mind. And by the way, I am wrong, David, if I'm suggesting that we didn't pay attention to it, we did. And I would say, guys, you know, if there's a place to get some more baseball highlights in, get them in. The NFL wanted highlights wanted highlights, and we wanted to have highlights year round.

The NFL, when you get to matters that are more difficult, a scandal and a score. Conflicts of incentives. Yeah, but this seems to me, and I'm not quite as definitive as you as if this deal happened, there'd be no journalism in the SPN, but it would strain it,

and it might break it to a point where it is not credible. That's credible. Credibility is everything. Yeah, because for me, that's why MLB Network, no one goes to MLB Network for breaking news or MLB.com, the beatwriters at MLB.com would get beaten because no one thought that they had any separation from the teams. And they're right.

We had an MLB.com reporter following our team. We would make sure, and I love Joe, and the people he worked with. But guess what? You're not saying anything bad about the owner because then you're going to lose your job. Right. But we did, and I think we had credibility. We were doing better news journalism in sports than anybody else on the planet. Yes. And had more reporters. I mean, I could think it as well on this, but yes, this was a real thing. But you think you wouldn't get called if you were doing a big take down of Jerry Jones.

Well, those were published. And so the back room bedside manner of John Skipper having to take a call from an NFL owner or a commissioner, who recognizes that John personally is a true believer in wanting the media and the journalism arm of ESPN to be legitimate. Is it different pop, is it different proposition once now you have sold a minority stake? Yeah.

I felt that given ESPN's prominent place in the landscape and the extent at which we benefited from sports and from sports fans, then we had an obligation to sports fans to sort of hold power to account, right? And that we did that. It's quite news. And it's quite complicated when you're in business with the people that you're holding truth to power to. Oh, well, that was always complicated.

But this, I guess my point being here, John. This takes it to a different level and this bridge is it a bridge to far david says yes john is is is no I personally I think it's a conflict that you'd be better off not to put the reporters in journalist it is pn in which is and and david's, the first time somebody gets fired and not fired because they made a mistake. You could fire somebody because they made a mistake or they misreported something

or their sources weren't good enough. But if none of that existed to simply fire somebody or the first time someone quits because a journalist for ESPN could quit saying I'm no longer allowed to do the stories that I wanna do. I'm not allowed to dig the way I want to dig. Let me ask the question from the NFL's perspective though, because the NFL, I think the popular understanding has all the money in the world and they could easily afford a network.

They could afford NFL media, but they want out. And why is it that they're like, I'd rather have ESPN handle this for us. They just don't know how to do it well. Leagues are not very good at running their networks, so really it's just ESPN. It's not that they want out, they want it a buyer. They like the fact that they have the alternate. It's nice to have NFL network in that way.

I do think they like the fact they have it. They, I do believe that the, one of the most important original purposes for having it was to always have an alternative in the event that there were more packages of games and there were buyers. The NFL, I think, now rightly sees, they will never be in that position. So they don't need a network. The network costs them money, probably. I don't know what they make money. It's one of the more expensive networks in the Pay Television Universe. And my guess is, the NFL now knows they don't need it. They don't want the expense because anything that Yisfin pays to produce that they don't pay goes to their bottom line. And they probably are having trouble getting the increases they want to get from the distributors as they stand alone network, throwing them with the NFL, even with their package, even with the

regular season package and a playoff game, no playoff games are on NFL network, but regular season they did some international games trying to justify the charge that they charge the cable companies. But what's interesting though about it is, you say never NFL doesn't need it. They've got deals for the next, I assume, I think 10 years is the right deal. 23, so it's nine more years.

It's more annual this current, right? It comes fast. It does come fast. So I wouldn't, to me if I'm the NFL, I don't want to get rid of NFL in that work. I'm more than happy to put off the expensive it for the next decade. I wonder

if it's part of this transaction would be a permanent change of ownership or just like a license to run it for them for the period of time with the reversion. Because Bob Eiger has to be desperate in my mind to do a deal with NFL. Is that really their best strategic partner in terms of an investor? One of the leagues, I think it creates issues, journalistically, it creates issues from a rights fee standpoint, when they do their next deal with the NFL. So they must have a small plate of possible investors, which surprises me.

Well, and all we're doing is coming in on a hypothetical deal. As reported, I'm not suggesting that it doesn't have some level of credibility. I'm just suggesting it's a long way from a deal. All this may mean is it some folks from ESPN walked into an office in Park Avenue and had some discussions, or that's maybe all it means. But the active contemplation of the possibility,

just to clarify for people who don't know this intuitively, what does ESPN get? What is the upside for Just to clarify for people who don't know this intuitively, what does ESPN get? What is the upside for them in return for, I presume it's money. But how much should they get to pay down that at the corporate level, at the parent level? It's like a kid giving money by his mommy a house when he gets

his first professional contract. The money that ESPN is getting from a partial sale is going toward Disney and reducing debt. The question of course is, and it's not in this report, is this a partial sale or is this a barter deal? Are they trading their media for a piece of ESPN? That would be kind of incomprehensible. Why would you do that? I don't think they would. I don't think they would. I was thinking, is there a path to control?

Where the NFL has taken a minority investment, but there's a path to increasing the investment over a period of five, 10, 15 years, where they could become the controlling owner of ESPN. And it would then break away from Disney and its other two silos. I'd probably suggest that the NFL was a controlling entity. They would not be interested in entering the news business in a very significant way.

By the way, I'm not suggesting they're trying to, that it's a scandal or anything. Why would they want to be in the news business? But that would surely mean the end of ESPN news. Can you imagine that though, John? The idea that ESPN's ultimate buyer, we've talked about Apple buying everything, but can you imagine the richest league being the answer to that question? I actually can't, that's why I started.

Cannot. I am skeptical, I started my, me 10 remarks with, actually this is a report, it has credibility, but I don't think ultimately than that happening, because there are too many conflicting, too many conflict that work here. Right, okay. So we have a couple of walls that we've established, the wall between journalism and business, but also the wall that I want to just dig into a little bit more, which is, okay, there's an auction now.

Practically speaking, how would this go? Who's auctioning what? Sorry. Your loss, my son. The NFL is auctioning off its rights fees 10 years from now. It's 2033. Picture FIFA, if you've ever had any experience with FIFA. Yeah, I'm setting up a little bit here. I have a little... I have a little bit.

Sorry. I have a little bit. No, no, you heard me say it's fraught with conflict. I cannot imagine them going taking their rights out. I guess what they would have to do is They go to ESPN get that deal done and then do all the other deals And by the way, they do Mostly renewed deals and add new packages to other people, but they do move things around

So no, I can't imagine the NFL to me the conflict the benefits not that great with them They get rid of these assets that they want to get rid of them. They probably find somebody else who would take them for some some price. And I think they're mostly just trying to get rid of the work. And MLB is no longer a candidate. They were rumored. No longer a candidate. They're too worried about their local broadcast revenue. NHL obviously not. NBA, an interesting possible candidate. That's been rumored as well. But they need to get their rights still done.

And there could be a maneuver of packages. There could be NBC coming back in. There could be a full streaming night. TNT, we don't know. Are they gonna come back or they not? So I don't think the timing is right for NBA. So the big piece that I didn't see in any report is I want to

know what Iger has told his board about timing. What the debt holders think in terms of when are we bringing down some debt? What the big institutional holders of their stock of Disney? There's obviously pressure from institutional investors. There's pressure to the board, to the chairman. Hey, too much debt service here, too much debt. What's the timing? We don't know. Can I add another wrinkle though to the hypothetical auction here in 2033?

Because my question would be, the NFL has an interest in keeping ESPN alive and even flourishing. And we've talked all of this time, and we'll get to it in a second here about streaming and the disruption of linear pay television. And here is ESPN, the last forked stronghold against the erosion by digital media. And so the NFL having an interest in ESPN being healthy

as a bitter in an auction. I just wonder if that's part of this game too explicitly in their minds. Like we want actually 10 years ago, I would agree. Now I don't agree. Right. Because there's too many other bitters. There's too much other money out there.

I clearly heard from ESPN, I'm from team owners and from people of the NFL. And they may have been partly kidding. Some of the owners were not, which was, gee, I can't believe we gave you guys a full season of the NFL and we didn't get some equity. So that's floated around the atmosphere there. And this may be that Roger is reacting to that and is going to export, but Roger understands all this too. He may get, I actually don't think they'll ever be a deal.

I somewhere along the line, too many people will decide there's too many things, including, what am I trading value for equity in ESPN right now for? That's why it's the question exactly. Because I wanted to do it, what 20 years ago, when ESPN, you know, went from being a billion dollar company to a 60 billion dollar company, I could see riding that up and wanting to get 20% of that.

And I don't do a lot of funny things here because team owners have wanted equity in things and they actually ended up getting equity of these regional sports networks, which ended up only having the assets of the contract with the team, which was worth toilet paper. So we turn now as David Hawks, all sorts of things into

plane hurt. I'm like, John got me sick early December. You still sick from that? Nothing some vibe. I've got to be captured. I was. I was. Oh, good. But I wanted to turn to the streaming exclusive playoff game. It has been termed on peacock, which was an enormous moment It seems in the

progression of this show honestly because it was it was announced as not just an audience of 23 million who watched the Chiefs in the Dolphins play on Saturday night in the snow. It was also the most streamed event in US history across all of these topics now. And so what are we, what are we seeing in this? How big of a win was this? What does this do for our conversation around the eternal subject of streaming's rise to power? I think it's a win for NBC. There's two things that happened here, right? And they are different. The first one is, it was streamed. So what? Streamy just means a different technology.

Keep all of the reminds me of. No, no, I'm not. I guess. But they lost their minds not because it was being streamed. They lost their minds because it was behind a paywall. Those are two different things, right? And so look, this is a major win for the ability to stream a huge audience, a live event that they're all watching concurrently. That is a very hard technological problem.

The fact that NBC got this right, they've had trouble before. When I was at DeZone, we had lots of trouble. Amazon had some trouble with Thursday night football early on, but it's clearly just as a delivery methodology. Streaming is coming, it's going to take over and pretty soon you're going to watch almost everything over broadband internet, so that's one. The more controversial one, and the reason people are jumping up and down

is you have to pay $5.99 a month to get peacock, and if you didn't have it, you had to figure out how to99 a month to get peacock. And if you didn't have it, you had to figure out how to sign up. It's not hard. And get it in time to get the game. Yeah, there's a QR code and everything. You just scan it with your phone and...

This to me was a red herring the entire time. It was infuriating and this is not coming from a place of privilege. I want to separate the fact that we've had conversations in here where yes, I do subscribe to streaming services. I admit it. I've got Netflix. I have who you're coming out of the streaming closet. Right. I'm out of the closet. That said, what people were complaining about is their view and what they think they're entitled to. And you can attack me and I know you will. I'm entitled as a human being with a heart rate that I get to watch something. I'm entitled to it.

It's my God-given right. Says who? Where is that written that you have the right to watch a playoff game between the chiefs and the dolphins? Step one, to me it's not. I don't, this is what I have. I will.

I know it's you at all. Well, I would imagine that the people who disagree are the people who buy into this notion that the NFL is in fact a civic institution, please. That we've come to rely on. Well, as a country. So let's go to step two, I buy cable. I pay for cable.

They say I pay for cable. These games should at least be on my cable package. Says who? Where is that written? That because you buy a certain tier of cable that you have access, we already know. If you buy a basic tier, you don't get the add-ons. And I don't mean bleach the report sports add-on.

I mean, the old days of cinematics or HBO. So where was that written? What the media did is they took this streaming and they got on the shoulders of all the screaming masses. And it caused what people thought would be an issue where people were going to revolt against peacock. They didn't watch it in record numbers. People were going to say never again. Course hockey. It's going to happen next year more than one playoff game. I believe that completely, you know, I'm already on record is suggesting that the

Super Bowl will be pay-per-view. Yeah, you're going to get that one right. That's going to happen. And I guess a deal got done for the National College Football Playoff championship. There's nowhere written that that has to be for either. If it's behind a paywall, does that count as pay-per-view? Did you count the PCOT game as pay-per-view? No because you get the other TV shows Correct and you can cancel it and only pay the 5.99 so it becomes pay-per-view if you're smart enough to cancel peacock After the chiefscape that it was paper was not just that it said if it's pay-per-view it's a one-time transaction for a single viewing experience.

And that's gonna happen as well, right? That's what ESPN already does on ESPN Plus. You can watch the weekly UFC matches, but if you want to watch the big blockbuster, they have the app you're in in Disney Plus, ESPN Plus, has a pay-per-view option, and you have to pay for that. UFC Saturday night event.

On top of, in addition to. So I think Super Bowl behind the pay-wall comes before Super Bowl is pay-per-view. So we'll agree those are two different steps. So a streaming service you're saying would buy the rights of the Super Bowl. Before it becomes a pay-per-view event. Now if I'm the NFL, I'm doing a little math.

What's the deal that I get in 2033 with my broadcasters when I'm not offering a chance in a Super Bowl every four years, or I'm not offering an NFC or AFC championship? What sort of haircut am I taking? Then I add on what revenue I'm going to make if I did it myself. I think you would take your time at a haircut off the increase, because I believe if they removed the Super Bowl from those packages and said you're going up 10% in whatever year they come up,

they would get that amount of money. And they- That's no question that the Super Bowl could become a pay per view, it could become behind a pay wall, because the only leverage that ESPN would have is to say or NBC or whoever has the rights to say, or NBC or whoever has the rights to say, we're not taking the regular season the way you do with baseball by the way. You don't want regular season baseball without October baseball, but in the NFL,

you'd take regular season NFL without postseason NFL. Well, we had for many years regular season baseball, which we did a such a job of public. I mean, Bud Sealey would call me and tell me, you guys are unbelievable. It looks great. The announcers are great. Love us for center highlights. Mike and Mike. That could not have been a better recap. The baseball tonight show couldn't be better. So that's how much we love baseball. But no, I agree with you. I mean, the only reason the distinction between pay-per-view and behind-a-pay paywall is that right now

peacock is more focused on growing their subscriber base. At a moment in time, they will be more focused on generating more revenue from the people who already subscribe and it'll flip from right behind a paywall to... That's why I'm not emotional about it because the 23 million everyone jumping up and down, NBC, I'm waiting for the press release and then it'll never come

But I'm waiting to see what the number of subscribers who canceled after the chief stalfon's game Because then you'll know how many people actually got it versus how many keep peacock. Yeah, but what that to me The thing that they can high five about the most is they delivered it They delivered it it worked nobody's complaining's complaining. You talk about complaints. If people had missed the last five minutes because their service went out, you'd really have some complaints and some problems. I'm out of that game because the last five minutes

stunk, but if the game had actually been good, then maybe even more so. Heidi, were you there for Heidi? Did you do Heidi? No, no. I was for Heidi. I'm pretty sure I was still a civilian when Heidi and for those who don't remember

and I've never heard of that word. It was, I was not a conscious being. So you've never heard of that word? Of course I know. Of course I know of it. The Raiders, right? It was a Raider game, wasn't it? And they cut right to Heidi.

They cut, they cut the game. I believe it was ABC. Somebody made it's decision. It was just Raiders and it was. What year? 1968. And it was ABC. Somebody made it just. It was just radars and it was. What year? 1968. And it was NBC. NBC.

NBC. So I was still a civilian. I was in the sixth grade. And I was I was pissed. I still live in North Carolina. So I didn't give a hoot about the jets at the time. It should have been a warning to me not to become a jet spam when I moved to New York. Those were the days when people were actually,

they had the button, people laugh about the button. There was a button where you cut some transmission and you add another transmission. I think streaming will not work. I don't believe the media is. They're mourning the loss of a big red button. No, I feel good about the fact that we never will have a Heidi again.

We've made great progress. Until we get hacked. Well, now that is something that no one talks about No, I feel good about the fact that we never will have a Heidi again. We've made great progress. Until we get hacked. Well, now that is something that no one talks about when you're putting games behind streamers, behind paywalls, when it's all broadband. It just seems like I've seen enough movies to imagine that being a thing. If the Heidi game can happen, white cat someone, some Russian teenager have a hostile take over over broadcast with 23 million, or a broadcast as it was,

Browns Texans that afternoon with 29 million, that's about the gap of loss between network television and a streaming event, a difference of six million viewers, which is, it's a reminder, I guess, like the hardest thing to do in media, it seems, to get someone to start with one platform and migrate over to another one, right?

I don't wanna, I'm on this thing. But it just feels like another reminder that the NFL is the strongest bit of bait you can put underneath and grab a board. Any cardboard box with a stick holding it up, people actually go and migrate over to do that. 93 of the top 100 shows whatever that means were NFL games.

Yes. 19 of 20 I believe in terms of football for the year in the United States of America. And so, okay. Can this be a lesson for anyone but the NFL? If you're baseball, John, and you see this, does this make you feel any particular sort of optimism about streaming about streaming and what this does. It's been a dream.

It's what it's the whole fight that's going on with the regional sports networks. And people are reading a lot about that this week. They've been worried about how they're going to catch games. It's all about digital rights. It's all about streaming. Yet, who other than Netflix is profitable at this? Quite yet. Peacock certainly is not. ESPN Plus, I would argue, is not. Amazon is not. I'm talking about Amazon Prime, not Amazon

delivery of my toilet paper. So, it's a race to profitability. Once they get the technology right. And so what sports teams are trying to do is figure out if everyone is going towards streaming and everyone's cutting cords, how do I replace my revenue, which is really how do I keep paying players at the level they think they want to get paid? Because the truth is when you have a salary cap league and not enough people ever talk about this, the NFL, what do they actually care if their revenue increases? If their revenue decreases, player payroll decreases in lockstep.

The reason they care is asset valuation. Right. That's it. It's not about players, it's not about salaries. It's not even about revenue. It's about how much these teams are worth. Right. But get ready for more extra charges. I mean, they're going to be just like the airlines,

right? You're going to have to pay to go in the getter beer as a refrigerator for these things. Can we talk about that? Did you, I mean, the news this week with JetBlue and Spirit and the federal judge who said this is a violation of antitrust. We're not allowing JetBlue and Spirit to combine, you know why? This is a victory for the consumer and for the people who want low-cost airlines. Meanwhile, you buy a ticket on Spirit,

which I will not do. I am shocked to hear that. No, no, but by the way, you think it's so much cheaper, you pay to go to the bathroom, you pay for a carry-on, you pay for everything when you add up the charges, it's not all that cheaper than Delta or American. It just looks cheaper because of all the different costs. And like the conversation we had with streamers versus cable, there's a lot of hidden expenses.

But this judge said, oh, I'm saving all of the people in this country. Well, it was just like a security guard who kicked a docks and out of the way to protect the house, right? It's somebody, it's the Justice Department could beat spirit in front of you. They can't beat America and then United and dealt us. Try as they may. They kicked a little docks and airline. It was the, by the way, it was your government. It was the government, our government, our government.

Thank you. Thank you. I just was getting excited. It was my government. I got some changes. I got some specialists. We need to do. This was a very left-leaning government who was flexing its Justice Department muscle trying to say, hey, we've let this go unchecked long enough for all these high airline ticket fees. So we are going to stop jet blue in spirit as an example in an election year of how good we're doing. I just, I just like to alert our sponsorship sales people to forget that spirit airlines.

Correct, direct. Direct. Love, Dave. I love doxies. Great dogs. Yeah, just cover us up. Cover me and David up so we don't, but I don't run off all the dogs and owners of America.

The DOAs. That's great. I was worked up with that. I don't know if you just, did you focus on that? No, but I'm sorry. So, Stugats here for my friends over at SimplySafe

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96 calories and 3.2 carbs per 12 ounces. 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. Stugats. 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 Lebatarsar Show with its two cats. [♪ OUTRO MUSIC PLAYING [♪

Another thing that was once proclaimed DOA is the Regional Sports Network. Dead on arrival. Instead, though, we get a headline taking this segue to its tortured extent that Amazon has stepped in. And so, David, I don't know a human being on on this planet cares more about regional sports networks and their nuances than you what is the what is the exact current current

current owners of baseball to care more than david does i used to be he's short-linked sorry sorry the phantom limb that is david samson still an executive in major league baseball how are they and you feeling about this i i believe that what amazon is doing is fascinating because mlb did not want amazon and that was last week when they did not want the judge to allow amazon to take any streaming rights going forward away from teams and amazon is in it for the streaming rights all of these headlines are reading this week about Amazon's investment.

They're doing it to be able to have people log on to prime and have more and more sports content because then they'll get prime and then they'll buy toilet paper. I've maintained this, John, and I don't know where you stand on this. Every investment Amazon makes in the sports world is all about toilet paper. Well, I wouldn't be quite that specific, but it is about goods that they would like to ship to your house. In my case, you know, it's a variety of products, but but also help me understand when you say streaming rights there the digital rights and that

Distinction is that Amazon would not have the exclusive rights of these games They would simply be able to stream them and somebody else would be Broadcasting them that is exactly correct and you'd be able to stream them in network Which is a huge all the blackout issues all the people upset when you can stream your games. This is the beginning of the end of blackouts, which is outstanding for the consumer. So a couple of updates, John, I just want to set the table with here because I'm getting this live from coca's, we're taping. It happens to be the case that the bankruptcy hearing for diamond has happened.

Diamond and MLB, that hearing, the Friday hearing has been pushed back. Diamond and MLB, the Friday hearing, has been pushed back indefinitely, and MLB lawyers says they're digesting an enormous amount of information. They are reckoning with what all of this means and the way that I am trying to, and the update from the athletic seemingly, is that the exact potential impact on diamonds,

partner sports leagues, that's 11 teams in MLB, 15 in the NBA, 11 in the NHL, not immediately clear, but Amazon has agreed to invest $115 million in diamond. And if the deal goes into effect, Amazon will have a 15% stake in this new company, diamond sports has now said. I don't understand the whole thing. This doesn't change my opinion that these regional sports networks are not long I grow the world. They're trying. This is about direct to consumer.

That is what the Yankees are trying to do. It's what all these teams are trying to do with their own apps who own their digital rights. We sold our digital rights to Sinclair, Balley's at the time. It was Cable Vision and then Fox, but they've morphed over over the years. But deals. Direct to consumers when you have the ability to monetize Alacard Pay-Per-View. It's buying games, it's buying months or seasons.

Problem from a league standpoint. How do you calculate people when your team stinks and come August, September, they no longer want to pay the 5.99 game. The RSN model, you're paying that money, whether your team wins 100 games or loses 100 games, whether there's 3,000 people in the stands or 50,000 people in the stands. This direct to consumer strategy that Amazon is now

trying to monetize that the judge is gonna to have to evaluate if this is good enough for the creditors of diamond. It's all about changing the way fans engage with sports. Well, you're saying is that you don't want the Florida Marlins to be treated like people treated quibi. You can't because then you're going to create a bigger divide between the haves and the have-nots. And what the purpose is and what you've heard teams talk about is competitive balance.

That is revenue balance. That is revenue sharing. It's getting more national revenue, which is your favorite topic with your friend Adam Silver, where we're going to get the scoop on this show when before NBA does its deals. We're going to know who the deals are with. One of the big things. I will not, and you will not. But you will.

Come on. You speak to me every week. Actually, I'm just, I'm going to interrupt just like you did, because we'll talk about this more maybe later. But I love now we've introduced direct to consumer. I've read all this week in reports that ESP is going direct to consumer in 2024. They're not going direct to consumer in 2024. They're not going direct to consumer. Direct consumer is not behind the paywall

and in the recent spectrum negotiation, they gave spectrum the right to bundle Disney Plus and ESPN Plus in with their broadband, their telephone service, whatever they have. And do we really believe that consumers, consumers won't less bills and less hassle. They're going to buy most of their streaming services from a aggregator. Whether it be Apple, whether the Amazon, whether it be Comcast, whether it be... That means you're not in the direct to consumer business. If you don't control the transaction, have the credit card, have some information,

you're not in the direct to consumer business. Why is it that there can't be a game that is on your television the way pay per view used to work when you had to actually call the company when you wanted to buy pay per view movie 30 years ago, you called your cable company said I want to order this movie with QR codes. No movies specifically, just a movie. Not a late night movie, not a movie that anyone would need to hide on their bill.

That's right. Right, exactly, the old hotel bills. Why can't there be a QR code where people have their phone and people will learn how to do this? The generation who doesn't, they're all dying. So they'll be done. And everybody else will know

how to use it. You cue our code of game. That's on your screen. Oh no, I think that will happen. But who are you? How is that not direct to consumer them? Well, the direct consumer is coming from Comcast. So it's not coming.

So John's making the distinction between a team or a league even selling to the consumer versus going through the middleman being a network or a streamer service. If you're talking about the league selling a single game, they're not gonna get that right because when they sell the media rights, they're not gonna retain that right.

But the entire fight's about. So this is like, what's Jankruptcy is about? That was the exact fact. So I wanna make this very plain English for people, John, because this is about can teams themselves sell games that rights of their own game i want that's what the yankees are doing with the yes app they are selling games that's because they hold the rights exactly for those that's what mlb wants is to collect all

the digital rights back in amazon has now done a deal where they're going to take the rights that mlb thought we're going to be reverted to them, they're taking over the rights that Diamond had as part of the TV deals with the teams. Right. We're all talking about the same thing, but certain different parts of the same thing. I'm making the distinction that when the rights are sold, that party will get the right to distribute them on their platform. So, you just people get the right to distribute them on their platform. So, you just feel that they will get the right to distribute a base phone on their platform.

The question then is, how does somebody secure their ESPN's platform service? And I think everybody has always talked about, and Wall Street is always long for, you're going to get it directly from the media entity. They're going to get your credit card. They're going to know more about what you do because they have the technology and they stream it to you. You're going to know exactly how long they're watching. You're going to be able to deliver personalized ads. You're not. If Comcast is actually, you have 50 million subscribers to some service. And 30 million, I'm coming from a pay television subscription,

10 million of them come from aggregators and 10 million of them come from your soda directly to the consumer. You're picking all of the expense of customer service, marketing, serving the stream, I'm not sure they'll be better off, not just letting somebody else. It was always a great feature of the PayTv universe

with the 30, 60 second branded commercial. And somebody else paying to market an acquisition, paying to market and acquire the subscriber, handling the customer service. If somebody didn't like their game and the streaming went down, you called Comcast. You didn't call the SPM. Are you willing to admit that that point of view is based on you as a media executive not as a team owner? Yes. Okay. Well, since I don't own the team. Now, if you've got any floating around,

I could pick up for a little pocket. I'd like to know you. Now, if you got any floating around, I could pick up for a little pocket. I'd like to know if Adam Silver agrees with you on behalf of all the NBA owners. Well, only thing I know is that the owners always melt into puddle of water as soon as somebody waves a big check and says, I'll pay for that. I'll pay you more money.

We did that with your friends at baseball. I said on behalf of the SPN, we'll pay you X amount of money for the rights. However, there are no streaming rights separate from the rights. We're going to buy those. And I also said, and I'm not going to pay you separately for MLB. Remember, we had to negotiate with Tim Brosnan to get the TV rights, and you had to negotiate with Bob Motelman. That was just a lot of politics. To get the digital rights.

I did not like each other very well. And I said, I'm not doing two negotiations. I'm going to do one, and you guys figured out internally. But you actually were one of the reasons why there were executive changes inside baseball because the John Skipper effect. The John Skipper effect was basically Your politics at MLB where these two departments properties was run by Tim Rosin and then the digital was run by Bob Oman

Right, and they did not the advanced well together MLB advanced media One day we get a call skippers had enough you were always skipper and It was not always said lovely so you were a man. It was Exactly skippers had enough. He's not doing too super deal that handsome devil skipper is mad Yeah, that's a personal Damn, you know, he's came with that that handsome devil is I would always started But that is what led owners to bring up to then Commissioner Sealig. Hey, we've got to stop these two departments.

We're going to the same client ESPN and we're going at it from two different parts of our company. And we look like idiots. And that was the beginning of combining the departments. Well, I never knew that. Yes. You unified. You're a unified. You broke down a wall. Yeah. I'm trying to break down walls. I never knew that. Yes. You unified. You unified. You broke down a wall job. Yeah, I'm trying to break down walls.

I'm a unifier. Mr. Sealing teared down that wall. He just had a busy schedule. He did not want to take two meetings. He's working with the boss and put them on the phone. But actually, you really... It is an ass and I, isn't it? You would...

And, by the way, these negotiations are complicated and lots of lawyers... Clearly. And I did not want to finish a deal with one person, but I would deal with you one of them. I actually got along with both of them, which I may be in a minority position. And that may be in a small number of people in that,

not a minority position. I think I may have some of my audience. I mean that. I mean you're a minority. I'm at the position of getting along with both. Not many people got along with both. It was very much a side-jewzing thing, including within baseball.

I'm a lover and not a fighter. A unit fire, not a separator. Cardinals team president Bill DeWitt, amid all of this coalition we've described, is saying this, quote, is MLB's goal to move toward a more level playing field through the media route? Question mark, I would say yes,

but that is an industry goal. Is it doable and practical? That remains to be seen. But I think the disruption gives the industry an opportunity to try and move in that direction. Well, think about what the Dodgers did this off season. And that's made news for people who are not baseball fans. You know, they're signing over a billion dollars worth

of deals, they got Otani, they got Yamamoto, then they got Hernandez, and they're just, they are flaunting their money. And what they're flaunting is actually their right steel, which is out of this world. You think that that qualifies a diversity inclusion program, and could they do that in Florida? Yeah. Could they buy those non-American players? The Marlins could not,

even with the deferrals. But what the owners are doing, and this is part of what we may have talked about in this show or another show, which is what the commissioners of any league don't want is owners fighting. You can you have to have you unified owners if you possibly can.

And in baseball, teams like the Cardinals were used to winning, used to being sort of mid to large revenue teams. They're realizing there's a lot of space now with teams like the Cardinals were used to winning, used to being sort of mid to large revenue teams. They're realizing there's a lot of space now with teams like the Dodgers. And they view the collapse of the regional sports network business, the collapse of the local revenue, keep it separate business. If we can bring it all together, Don Garber style, that will be a benefit to fans around the country because your team will have a shot

That's what DeWitt is saying the president the car. Yes, and you as a small market or As in baseball terms a small market team Miami You all right, and it was what we call it. Hello The rare euphemism that's even more insulting and honest, which I respect actually it's by the way It's totally true. Most people say large market and small market. I couldn't say that in my hemi. My hemi's not a small market.

How could I have any credibility on ESPN? So I always just said we're a low revenue team. We're economically challenged. Yes. That's the politically correct way to say it. So I want to get at the end here to another thing we've all been laughing about because the scandal, the biggest scandal in this year of scandals for ESPN 2024 is this thing about the Emmys.

And so for people who don't know, the sports Emmys are a thing, we should actually say quite clearly it's the sports Emmys. It is. I remember a story. People like winning those. Oh, because it's a trophy. And because everybody turns into golem when a trophy, their precious, their ring is on the line.

And so I get it. I want these things to. But the point being that the sports Emmys had a rule that if a show won an award in Emmy, that the hosts could not get that trophy because there's a separate category for hosts and talent and they didn't want people to double dip and so Here was this thing that the athletic reported how under John Skipper's reign. I think it preceded my reign What what exactly was your reign what years?

2012 to 17. Oh, you're right smack in there, baby 12 to 17. Oh, you're right smackin' there, baby. Under the jobs. No, no, it's pre-seed. It's hard, and you have to start it before it. It's starting before it, and you have to go in. By the way, I can be accused of nothing here because I'm completely innocent.

You know how many sports, Emmy, trophies I have? I mean, you could have all of them if you wanted, I presume. You know how many I have. You're gonna say zero. Zero, because they charged you for them. This is a silly scandal. You mean for the trophy or for the nomination? Both.

Well, application fee is the way I was. You had to pay all the application fee. And then if you won trophies, you had, you wrote down that there are seven producers for this show. Seven trophies were delivered. You had to actually tell them the names and they would engrave the names on those trophies. When I was actually knocked the president, I went to the then president George Bowdenheimer and said, I have a way to cut some expense. Let's just quit participating in this fourth semis. It just cost us money. It's a very, very painful night because

every time you lose, it hurts. And every time you win, it's great, I guess, for a minute, but I really didn't care. I wasn't in this to win sports Emmys. I never went into any other executive's office who didn't have a wall full of them. And you could have a wall full of them if you were at ESPN.

Correct. And wanted, so who cares? I don't, I mean, I just don't care about this. I don't think it's particularly scandalous. I don't think it's a big deal. It's kind of, you know, it's kind of keystone copies. It really what it is.

And to that point, I want to explain to people who aren't familiar with the inner most sanctum of sports and media gossip, what happened here, that they, ESPN, in order to give the talent the host trophies for the shows that won, they would submit a list of names that were fake. And the names were very minimally changed from the real name, such that Aaron Andrews would be Eric Andrews. And we have a difference of people who worked for you, John. That's the best thing to come up with.

Was Eric Andrews? Well, I will fool them. Well, first of all, ESPN didn't do this. A few producers apparently did it. Now, that's your right. It's still in my watch. I'm responsible. It's absolutely me. I'm not suggesting that. I'm just laughing at it. But you still participate. So Metal Arc participates in awards. Pablo's show, as you may know, because you pointed it out to the entire staff award.

You won a very prestigious award already this year. They're on the reward. I'm excited about that. Did you know I'm an a word and nothing personal? Are you happy about that? Absolutely. I don't believe there's any price tag for that award or any commemoration of that award, is there?

Other than metal arc being on the judging panel, there was no involvement at all. Okay, I'm not aware of anybody on the panel, but that's okay. The larger idea though is right. That awards are constructs that are all ridiculous in various ways. And yet we want them and love them and will jeopardize our careers. Because you can monetize them. When you're an Academy

Award winner or an Emmy winner, you get to be forever known as an Emmy winner. It's part of your it's part of your elevator speech. It's part of your obituary when you win awards like that. Adelaa. I do. I do. When Academy Award winners die, it is line number two of their obituary. And when you win an Emmy, it's Emmy. It's not sports Emmy, it is Emmy. Emmy Award winning reporter Blank.

Now it may have been a local Emmy, but you still say Emmy Award winning. So the Academy takes it seriously. And what ESPN did, clearly is fake names. They did fake names. And they did it so that they could reapply a new plaque on top of it. A new name tag and give it to the actual air in Andrews. And the point being the repo man, the Emmy Academy repo man actually went and reclaimed these trophies from houses Which they should have do you know cast members don't get the best picture Academy award the producers do That's why everybody wants to be a producer, but as a related matter

These shows that won these awards that couldn't honor their talent the Emmys have changed the rule now because they were like, you know what, as much as this was a Keystone, a Keystone cop Scooby Doo, if it wasn't for those, you know, those damn kids out there would've gotten away with it. They decided to say actually now the actual talent, Kim Witt. Just submit a list. Just submit a list. What they actually said is submit whatever list you want just make it in. Of course, because they're going to get paid. Since somebody in the Emmy's office,

but wait a minute, they're gonna return these trophies. Do we have to give them a refund? And why wouldn't we want to sell more trophies? Yeah, now we're gonna reuse those trophies actually. They're gonna take that name plate off and hand it to an actual authorized- They actually went to their homes like so. Yeah, they had a lot of stories pretty wild in this regard.

Well, I think one of the factors was that one of the sports interancers who I shall not name actually sort of tweeted yes her or his four Emmys in high iPhone resolution and the Academy was able to say wait a. That's not name with one letter different from this person's real name, that person. Now we have a difference of opinion. It is still my opinion that the name was Eric Andrews rather than Aaron Andrews, because it's one letter and somebody took that in

and did what you do like we're trying to do a fake ID You can make a K into an in because the other name is like for Jean Wojza Wojza They made it Jean Wilson for Lee Corso was not changeable Eric Andrews was just the funniest one for Lee Corso was Lee Course set or something that there needed to be major changes Speaking of major changes. I think we're done now. You mean with this show or the TV show? Potentially, or done.

Certainly. Certainly. Certainly with our chances to win a sports Emmy in the future, those feel definitively done, but we will just proclaim ourselves to be award winning nonetheless. I assume you're gonna add at that part out because metal arc winning Emmys

is something that I would like to see happen. And then I know John works hard in the projects. And I'm actually being serious for 60 seconds. You worked damn hard on unscripted scripted. Metal arc has been having an nominated already, for a lot of- Having those win awards? Good neighbors.

That is a positive thing because it is a reflection of the work that you do. David greatness of the world. I appreciate you saying that and clarifying our boss's um political position here, but this man spins around in a chair and drinks vibes and has zero trophies in his house. I feel like his his personal calculus is a bit different than ours. His personal calculus is a bit different than ours. Okay. All right.

Could I call upon the moderator to see if we can call these? Could I get a motion? Get a motion to end the show here. Motion motion granted. Could I get a second? Okay. Carried. Thank you. There it is.

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