The Dan Le Batard Show with Stugotz - Sporting Class: The Great Streaming Lie - It Was Never Going to Be Cheaper Than the Cable Bundle

Episode Date: November 17, 2023

Meadowlark Media CEO John Skipper and Nothing Personal's David Samson are back with another episode with Pablo Torre Finds Out host... Pablo Torre to host! Welcome to the Sporting Class! We start today off with streaming! We’re going streaming! Remember when everyone thought that streaming would cost less than cable? Who lied to us!? Then, the last of the streamers to get into the sports world… Netflix. Are they ready for live sports? Where will this conversation go — who knows? Plus, ESPN Bet has launched. This is the new world we live in. Where do we draw the line? Also, what are we thinking about this week... Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to Giraffe King's Network. This is the Dunlabor Tars Show with the Stugat's Podcast. I love talking to you guys about topics that no one else talks about at the level that you guys have lived them. David Samson, John Skipper. John, of course, is smiling, grinning. He loves doing this. David is tense as if he's a coiled panther. Well, he is a kind of co cold panther, isn't he?

I just were three minutes past when we should have started. And I prefer to just stay on schedule as much as possible, but it's like hurting cats around here. Well, we were, we were, we were hurting panther. We were prepared. We were ready and you were, you're off topic, John. You're all over the place. I just need you focused.

Okay. I just want to, I like Lucy Lucy goose. I'm honing in All right, we're all honed in this is me honing in the goose is less loose John has been scolded do not Move away from your microphone, but that is impossible physically as you'll find out on YouTube or the drafting's that work Which is amazing that you bought a microphone for him where he cannot move and you know that he always moves That is not taking care of your CEO. I mean that you bought a microphone for him where he cannot move and you know that he always moves. That is not taking care of your CEO. I mean, I'm not good at managing up, David.

That's a difference between you and me. I want to get, though, to what the people who are managing the world of streaming have promised us. And John, I'll start with you because here's a quote from the Globe and Mail. And it begins like this, quote, streaming was supposed to make things cheaper and easier for sports fans, but for many, the opposite is turning out to be true. And you're already chuckling, but to make the point, it's about how fans are confused.

They don't know where to find their games, they're paying more than they ever have in totality. We don't know how to cancel our streaming services where to watch games. It's all very bewildering. So what part of this, John? guy who presided over ESPN, the greatest business in the history of media and certainly linear cable television,

what do you object to there? What I object to is it's a supposition that is completely and utterly inaccurate. No serious business person ever said, oh, the great news about streaming is we'll be able to deliver two people cheaper and easier than we're currently doing. I said 8,000 times and it may be the only thing that I'm going to assert that I was right about, which is, gee, you're all going to regret the decline of the cable bundle,

because it was the greatest entertainment value in the history of entertainment. For about $100 a month, I know that we all experienced $300 and $400 cable bills, but most people did not. The average cable bill was about $100. Everybody said that's too much. They believed that if you extracted the nine things you were watching out of the 500,

that you would pay nine, 500s of what you were paying. That was absurd on the face of it. You were getting the equivalent of a great buffet dinner where you got to get cheaper than you could buy shrimp by itself in a restaurant. But you also risk stomach food poisoning. So I think that where we disagree significantly is that I'm more than happy.

The all you can eat, 399 buffet, that you are describing, the famous all you can eat pre-COVID, that was frequented by Randy Quaid in vacation. That is not frequented by fine diners, or even middle fine diners, not even the McDonald's crowd. And the whole point of streaming was supposed to be, and that's why I'm fine with this article because the real issue is, where do I find my games? That's what people are more complaining about. They're on every channel. They're on some this week, some last week. Yankees fans have a big problem with this every day different My view has been streaming has been terrific for people who have pointed interests

You the old school guy wants to keep appealing to people who are I'm neither here nor there I want the whole buffet But those people are being squawed and out But those people are being squawed and out. Yeah, maybe my analogy was slightly miscalculated. You may be right, because I actually believe it was the buffet of fined dining. You were getting everything you needed and the best of it for $100. And your belief that you could extract only the sports from the bundle and only pay $35. I don't know how anybody ever made that supposition.

There's a lot of people who don't watch sports. They don't. I think it's very important that if we're gonna talk about why teams are struggling and why leagues are concerned, is when teams start telling you, and this is what executives are saying all the time, our reach is so much greater now that the cable bundles disappeared

and the regional networks are bankrupt. We're showing it for free. Where's the money coming from? You said maybe 10% of the revenue will ever come back and in the next five years agents are saying it's all back already. Team presidents are lying saying this is great. Everyone can watch it.

Where's the money? The money comes from the people who were paying for what they didn't want. That may be true. Of course, I'm going to comment on the other thing, which is the notion that the number of people who could get your games ever mattered, everybody who ever let ESPN pay them more money to put it on a cable channel that was less distributed than free over there television puts the lie to the idea and I believe you agree with me on this that the front offices of most sports companies are sports sports associations are overwhelmingly focused on making the

content available to the most people possible they're focused on getting the most money possible for the content, and of course, you get more money for content that is more difficult to acquire inexpensively. Why do you think clubs close more than, it calls more to go to a club that's a restaurant that a restaurant's not a club? If you let everybody in.

The same concept as scripted versus unscripted in Hollywood. Why are we seeing so much more unscripted television, not just because of the strike. This was happening well before all the strikes. It's way cheaper. You don't do first look deals. You don't need to have developments.

You don't need to pitch 10 ideas that cost money to write and to figure out you come up with another ridiculous game show. And I love reality shows was on one. It's cheaper and you're getting the same revenue for it if you're the network. Why would you not do it? So for sports teams, if you're getting more money to show it to fewer people, no problem.

We'll show it to fewer people. Well, you're maximizing for the variable of cash, of money, shockingly, in all of this. But I wanna point out that when it comes to the money spent by sports fans, let's hone in on them specifically as our target demo here. If the concern is how am I spending more now

than I was before, is any of that eye opening to you? John is indicating that he saw this coming, right? The idea that in fact the buffet, the steak tips that you get there are college football games, the high end steak tips, right? You're gonna pay more for that without the package that I have negotiated, that will of course force the other non-sports fans at this diner, at this restaurant, excuse me, to actually pay for the stuff they're never gonna eat. It's brilliant because that's how everybody buffet actually works where there is a base amount. You get this food for your 29.99.

And if you'd like to upgrade to Wagoo, it's plus $48. Or if you want to upgrade to this type of shrimp, why can't sports and our viewing habits be the same thing? And finish my thought, that's the cable bundle. It's exactly what the cable bundle was. Yes. And all I would say, I'll make a future prediction.

It's going to get worse and it's going to get more expensive. There was lots of derision. When I suggested that the Super Bowl will ultimately be pay-per-view event, you're going to see more of that. You're going to see it cost more and more because sports is the most passionate interest most viewers have and they will pay the most money to get their sports. They will love to complain about it, but they're going to pay the money to get the sports

and it is going to remain hard to figure out where to go. It's going to remain hard to lose their use. He's a problem right now. Who's getting the money? You're saying that there'll be more money because the leagues aren't necessarily the teams, the players, the extra money that people are paying over the cable bundle to get their individual streams, streaming networks plus sports games. Where do you think that money is going?

Well, the way the money always works is it's paid by the consumer. It goes to the distributor slash broadcaster and then they send it to the leagues. And that's what's going to continue. The content providers will end up with the money. That's the way it works.

So will the content providers? Money will end up with the leagues. It starts with the consumers, goes to the distributors broadcasters and they end up paying it to the league. Now that money, la, lags, meaning they pay more money to get the same rights than the league, and then they try to fair out more ways to make money from consumers. Consumers went up paying more money. That money eventually will end up in the league.

So then what I'm trying to come to grips with is my belief that going to streaming and having no RSN, I believe that will be fewer dollars for me from a team standpoint. Our broadcast revenue will go down. You will run office executive. As someone running a team, we're the content provider. We provide the live content and we wanna get paid for that. So this is, okay, this speaks to the larger question maybe,

right? The macro question here is whether sports itself, the teams, the leagues will regret the revolution that they've ushered in. I'm not sure they will regret it. I think the group that's going to suffer the most here, the fans are going to suffer some sense of displacement, it's going to cost more money. This is going to be most disruptive to the broadcast distributors. They are going to be the ones who make less money. And I think that's being proved right now in the fact that ESPN, and they did release their revenues

for the first time, their revenues are down over historical highs. And I think the traditional broadcasters and the people who relied upon the previous distribution system are going to suffer the most in this. But my hypothesis is that ESPN is losing money because they counted on so many dollars from the old sort of cable way,

forget that advertising revenue may be up or down, but just because the number of subscribers is down and their revenue was often a multiple of subscribers. To be fair, they're not losing money. They are making less. Their profits are declining. But those are that. Thank you.

But it's true that they are still making considerable amounts of money. Yes, they are. But the trend line is suggesting that when you remove the, and I suppose it's almost a beautifully desperate co-dependence in the way that we're suggesting, right? Like, oh, these distributors, the broadcasters, they need sports in a way that we're suggesting, right? Like, oh, these distributors, the broadcasters, they need sports in a way that the streamers do not. And once you remove that level of desperation, the question then, well,

can you possibly be making us much money from a less desperate buyer? So this is where my head is, do you remember back in the day, an unfortunate levitar expression, when what made Fox, what jump started Fox? I always have thought that what jump started Fox was getting the NFL rights, that they use that

as a lost leader to try to buttress the rest of their scripted programming and to bring attention to Sunday night shows, et cetera. Do you recall, do you feel the same way about what they did with rights? That is the traditional narrative of what happened with Frokka. Is that not correct? Yes, I think it is correct. So is it not true that streamers acting like traditional networks would be willing to use sports in the same way?

I do not know because sports is not and content is not their core business. I don't know whether Apple is going to believe it makes sense to deficit spend on sports for what? This is exactly where my head is. Well, this is the question of desperation. This is it because we're looking at Adam Silver specifically is looking for Amazon to do its own package. Adam Silver is looking to triple his rights fees in a bubble that will never burst.

And he's doing it by adding competition, except the competition is not jonesing for sports content. Look at what Netflix is willing to do for its quote unquote sports content. They're willing to do live crap. That's not even crap. It's literally crap. Oh, he's not literally people crapping.

It might as well be that would do better and sound better. That's a different netfetch program. Yeah, yeah, yeah. That make it enough right? So what happens when the streamers say, not, you call it deficit spending, that's a great word for raising money. Term of art.

That just means that it's a waste of money. Well, I don't know, I would agree with that. There are things. Yeah, it's different political views. Deficit spending is difficult to prove. Okay. I'll accept that. It's difficult to prove to you and not attempt to do it in the short time we have. I will go back though. I believe that the fans are going to find it somewhat bewildering and more expensive. I believe that the traditional distributors in broadcasters are going to find that the new business model is not as good as the old business model.

I believe that the sports rights holders themselves will suffer the least. Well, let me ask a forward thinking question based off of thatling, recreating, chasing the buffet style strategy that they ruined to the point that we are now sitting here talking about all of it. You will have some of the traditional distributors and some of the new streamers will serve as aggregators. This will get less confusing because you'll be able to go on to Apple or Netflix or Comcastics, Fennity or Charter Spectrum and say,

here's, I wanna get all the Yankees games. I wanna get all of the Ranger games. How do I do that? And they will say, here's how you do it. You click here, here, here, and here, and you'll get every sports event you wanna get. And here's what will cost you. And click here, here, here, and here, and you'll get every sports event you want to get. And here's what will cost you, and the person will go, well damn,

I should have just stuck with the cable bundle. It's less expensive. And when you need multi-level authentication for that, which was a huge issue. You'll just issue in baseball with people wanting, like ESPN, wanting their own level of authentication, and not letting MLB and MLB wanted authentication.

Authentication means how many times do I have to re-enter my username and password? No, because you'll be getting it from that aggregator distributor as opposed to I bought it over here, but I want to watch it on my current system. So I need to authenticate that my current system know that I bought it over here. You'll just buy it in one place and you'll get it all. So you think that now I'm thinking about fans, because this solves the issue. So what Skipper I think is saying

is you don't need to worry about where you're gonna find your games anymore because everywhere you look, once everything settles, whether you go to Apple or Amazon or Netflix or Max or whatever, you'll be able to access any content you want from any of the other services. Depending on whether and you can enter the paywall so to speak, you can walk through it if you've paid. Issue over. Well, you pay to one person. The problem was before you were paying for somebody who had exclusively on one medium and you wanted to watch it on another medium.

I want to watch it on my phone, but you Fox own it for your television linear station right? That's not gonna matter anymore You're somebody has to be working right now on the ability to go to Exfinity with Comcast and say gee, I want to watch all the Yankee games I know that I can buy all the services that have Yankee games own I know that I can buy all the services that have Yankee games, own Xfinity you can, and they'll say check and buy all these services, and you'll get it. By the way, the charter spectrum deal with Walt Disney Company ended when Spectrum Reggae agreed to pay the increases they wanted, or something approximating it, and the Walt

Disney Company agreed to let Spectrum sell Disney Plus, Hulu, ESPN Plus. That's the beginning of that. Spectrum is going to want to say, okay, great. You want the Yankee games, you've got to buy Yes Network, you've got to buy ESPN, you've got to buy Apple, you've got to buy Amazon. You've got to go to the buffet. So I'm going to take the under on that because on what? So what John is hypothesizing here, I believe, and again, I may be confused. One place I can go and get whatever I want.

No, you won't get what you want. You'll be able to subscribe to everybody through a distributor. But that exists now on Hulu. I can subscribe to HBO, I can subscribe. To show time and max, I can do everything under Hulu. So, but let me refocus it a little bit, right? Because that's about ease of use.

And I think what we're really talking about though is whether there is a world in which on A la carte is ever going to be cheaper for the average sports face. No. Yes, we have to get to that world. That is the whole purpose of what streamers are trying to do is to have people pay for only what they want, which is the biggest concern that leagues have because more people will pay for the Yankees than for the royals. Well, why does anybody believe the streamers won't

to only sell you what you want? They want to sell you. Yes, that is what I'm thinking of. What I'm really extract the most money from your wallet. And they're not going to say yes. I'll just, you will not have to subscribe to the yes network. You just get the Yankees games that are on the yes network for less than the yes network. That's exactly where we're trying to go. That's what the yes app is, where you can just get the yes app and buy Yankees games.

Well, you can, but you have to buy it from the yes app. Correct, okay. And what we're saying is that that is getting pain for what you want. That's all I can. And what kind of And what we're saying is that that is getting paying for what you want. That's all I can. And what kind of example of a card is that? And you will find out that if you want six Yankee games, you might as well buy the whole year.

They do that. That's just pricing. Where you incentivize people. That's the thing where you're leading people to the false hope that, oh, I'm now spending $300 on sports, but I only want to watch these 38 games. It's a trick. Those 38 games are going to cost $10 a piece and it's only want to watch these 38 games. It's a train. Those 38 games are going to cost $10 a piece, and it's going to cost you $380. And it never is.

The world of consumers, their job is to figure that out now, and it's being figured out, and that's the problem, is that what's happening is that consumers are saying, wait a minute, we were promised cheaper. Who promised them cheaper? By the world. By God. It doesn't matter. Once it's perception, it's reality.

But it's not. I love that people say perception is reality. It's not reality. The fact that a bunch of people perceive that there was not an insurrection on January 6th does not mean that there was not. There was. And it does not mean that anybody promised them

that we're gonna get sports for for free so that's the reality. The reality is that analysts who wanted to disrupt the old system made a promise that they weren't responsible for keeping for other people and nobody is going to keep that promise. Sports fans are going to pay more to get less consistently over the next years. We're in the media business. Perception is reality. And we could argue this 20 minutes if you want. I get the epistemological perspective that David is bringing to this conflict.

But I think it's also worth pointing out in David's defense that whether or not it's a promise there is a logic, right? It's a John's position which is persuasive to me now as I am bewildered as a consumer, a sports fan, as to how I'm paying so much more, I'm getting a worse experience watching games, right? Despite having all this better technology, the promise is in the logic of, if you don't pay for the stuff you don't watch,

therefore you will pay less. And what John is saying, the cartel of the buffet has always treated you better than you appreciated. And that's a, it's a confusing thing that only now at this table really do I appreciate the persuasiveness of it because on paper it doesn't make any fucking sense.

And I'm taking the other side because I want you to realize that that will only last so long. The cartel of the buffet is a beautifully put concept because it is a cartel. And the reason it's a cartel is that you can't go anywhere else. That's the purpose of a cartel. It becomes a monopoly.

If you want this and you want it because you're addicted to it and we're gonna make you addicted to it, you have to get it from us and pay us. And then we're gonna kill the middleman sometimes literally, but generally figuratively. In the metaphor. And and in the metaphor that's what the cartel does but it's funny for if I'm I'm taking your analogy I dealt with lots of people at leagues who for years told me streaming is going to lead to our taking our own

rights back and we're going to get rid of a middleman, middleperson. They've never been able to do that because you know what I mean right now. Right now. Yes, they are doing it right now. The NBA is getting back all of their rights. All the teams, the deal that just got done with Diamond in bankruptcy court, part of their reorganization is that the NBA has a one-year deal with all the RSN teams. Regional Sports Networks.

Regional Sports Networks, all the RSN teams, regional sports networks, all the diamond teams, but after the years over, all the rights revert back to the NBA and they will own all those rights to monetize as they wish. As opposed to deciding to sell those rights to somebody who will pay them more money than they can monetize. They are then going to put those rights together exactly as you predicted by the way where they where the local part may disappear and adam will have more adam silver will have a bigger bundle to sell to all of the people buying content agree but he will still get more money

from somebody paying him for the rights and he will by keeping those rights and producing a distributed or she's collecting a resellum but the middle man from somebody paying him for the rights and he will by keeping those rights and producing and distributing those. Of course he's collecting it to resell them, but the middle man there must remain alive still a middle person a middle person now whoever buys the rights No, because the person buying the rights is the one distributing the content and where you go That's the platform in which you watch the content When Amazon does a deal. How about this one in my my head, when Amazon does a deal with Roger Godel for Thursday night football, who is the middle person? Amazon.

If they do the same thing, ESPN did. They've produced and distributed the games to fans in the ESPN games. Wait, so are the fans always the under person? We're always the low person. We're always the addicts. If that's your question, add it. Yeah, yeah.

All right. Don Lebatard. Pablo leads all of podcasting in reading while smiling. If you listen ESPN daily, he sounds like he's having the time of his life. Stu gots. Coming up next, I'm gonna tell you that this is better bananas.

I've changed my face. How do you know I'm smiling? That bananas. How do you know I'm gonna tell you that the Savannah bananas change How do you know I'm smiling that's how I find my vocal range sometimes I just say Savannah bananas This is the down lebertar show with this to got I want to keep this moving because we're we've teased some of the stuff that I'm also fascinated by when we talk about the word bundle has come up, right? And so again, the question of like, are now all these streamers acting like cable companies well already seeing, for instance, scripted to David's earlier reference, HBO Max, Max now, is leasing shows out to Netflix, right?

And so what does Netflix up to? Well, let's ask the question, what is Netflix up out to Netflix, right? And so what does Netflix up to? Well, let's ask the question, what is Netflix up to in sports, right? They've sent signals up that say, we are serious and you guys have seen these signals. I would like you to assess the seriousness of what they are doing in the world of sports. They are being very responsible

as they get into the business of producing sports content of disseminating sports content of purchasing sports content They are figuring out what is the best way to do it so that they don't do what the other networks have done Which is spend too much money on rights and then lose money They're trying to figure out can this be profitable from the start because that's what my shareholders require So they're trying John they're trying these one-off golf things, right? These events. Are we talking about the Netflix cup?

I grant you. Are we sitting tiny little toe in the water? Are we sitting there? Look, Netflix has a serious sports business, right? If you look on Netflix, they have a ton of sports content. Documentaries scripted. So they have sports. That's not live.

Talking live sports. I'm just making the distinction. Sorry. Because you didn't make the distinction. You said they're serious about sports. I'll turn my mic off for a second. 10 second penalty. A shamed David Samsung is a rare David Samsung.

They are serious about sports. The question is whether within their model, live sports can make sense. And they have been very disciplined, very open about the fact that live sports feels hard to them. And they have been under, were under a ton of pressure from Wall Street to show they could make money. Street to show they could make money.

They've shown they could make money and they've done it without live sports. So they're gonna be quite careful. They're very well positioned right now to be the winner of streaming. Yes. And the question is to be the ultimate winner do they need live sports?

I have always believed, but they have made it further than I thought they would without live sports. I've always believed, but they have made it further than I thought they would without life sports. I've always believed that ultimately you will need the content that the most people are the most passionate about to be the winner in aggregating the most subscribers. Is that NFL football? Is that NFL football? Well, it certainly isn't a NFL football, right?

Well, John, before we get into that though, because I think there's another rabbit hole that we're about to plunge into on the NFL there, as the person who was running live sports, more profitably and prolifically than anybody else in human history, what is so hard for Netflix to figure out about live sports? It's expensive, all right.

And they're in the business of aggregating subscribers, retaining those subscribers, sports in this country, they're at a place where they have almost complete penetration of the US market. They do not have a lot of upward growth. So they cannot add a lot of subscribers by adding last sports. David, checking is,

because where did you get your money from? Yes, PN got all the money that it used. He's saying it's expensive and I respectfully agree, but the money wasn't being pulled off a tree, the money wasn't funded by anyone other than all the people who bought cable subscriptions. That's correct. That's where you got all your money from.

That is no load. What are we call the low person? The addicts. No, they're the fans who want the content, but are in no position to buy that content directly from the leagues, and I don't think they ever will. So they get that content by first 10, 15 years ago, buying a pay TV subscription, they get it now,

by now their problem is they got to buy multiple things to get it, rather than a cable subscription. Now their problem is they got about multiple things to get it, rather than a cable subscription. What's happening here is that Mr. Skipper is bemoaning the changes that have taken place because his entire foundation of success was based on a model that no longer works as evidenced by the dip in subscribers by the lessening of the SPN's profitability. If you were still the SPN, or if I were the president that's been today, I wouldn't be able to hold on to past thoughts of profitability and past mathematical equations of spending hand over fist.

I'm not doing that. They have to adapt. I don't have to, because I'm not there now. Oh, okay, sorry. He has to adapt to you now, David. It's not my job. This has to adapt to you now, David. It's not my job. This is almost as hard, almost. And I'm making a lot less money.

But no, you just gave up your point so fast. No, but John, it's an analysis of what's happening. Less of a... They have no possibility how ever smart how at usb and of figuring of Returning to a different model now. I don't think you're Pretending that they're simply going to leave the old model

It is still where the majority of their money comes from is the declining pay TV universe that universe is not dead It still generates over a hundred billion dollars in subscriber fees. But it's on its way to death. No, it's not. It's on its way to decline and stagnation. When you own a business where your average customer is getting older, eventually they die. And so you have to get younger customers. I believe that the pay TV universe would decline to somewhere between 50 and 55 million households and stay there for a very, very long time. I don't, because those people are going to die. All the 50 to 55 million who still have cable, who aren't cutting cords, are your age. And we're going to die soon. And once we do, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you, do you're gonna die soon. And once we do, do you, do you have your kids have cable?

You're in the business of cable. Just one of your kids have a eye in the way? Are we all almost gonna, well we're all gonna die, she's a man of, when not if. You just said we're gonna die soon. Do you know something I don't? Have you been in touch with my doctor

and found out something I don't know? Cause I don't know if I wanna finish the show. If I'm dealing with with my doctor and found out something I don't know because I don't know if I want to finish the show. If I'm dealing with my last moments here and doing the show with you, I may choose to go do something else. I respect that and I'm happy and as early as you want, but I would like you to answer the question. None of my kids have cable. I have a 37 year old and a 34 year old both with whom cable and we'll have cable for the rest of their lives And do you feel that is related to the fact that you're their father? Potentially

Just throwing it out there. I would like to put it on the pole How many 37 year olds 27 year olds have cable and I would argue that what he's talking about in stagnation Doesn't exist in a market. Markets don't get stagnant. They're either increasing or decreasing. Stagnation is a temporary moment if you take a snapshot of a market. And this market is declining, and it's not half-life-ing, it's declining to zero.

Yeah, I don't believe that. I do believe it's declining. I'm not pretending it's going to go back up. I do believe it's going to find its level. I think some number of people are actually going to go, wait a minute, I could just get a pay TV sub and get most of this content that I'm now trying to figure out how to buy all a cart because I was trying to save money. I'm not saving money. The the incentive that I'm going to save money by doing this should be gone. You're not

saving money, but you're right, David. I run into many, many people who say, I've never had a cable television subscription, I'm never going to. And I do not think it's gonna return to anything near those levels, but I do not think it's going to zero. And I'm not suggesting in 2156, it won't be zero, but in our life since we're dying very quickly here.

And our life won't be zero. Wait a minute, you didn't say that. I agree, in our lifetime, it won't be zero. Well, this is an important clarification. In my grand here. And our life will be zero. Wait a minute, you didn't say that. I agree in our lifetime, it will not be safe. Well, this is an important clarification in my grandkids lifetime. It will be. Well, let's put some numbers on this

because soon is a very vague and scary proposition. So COVID, do we all agree that COVID advanced the decline, it changed the curve. It was declining at a certain percentage and then COVID made it decline at a greater percentage. Because people were at home assessing what they were spending their money on. And you're like, this is ridiculous.

I don't watch any of this stuff, and I don't leave the house. If I'm not watching it now, I'm never gonna watch it. That was the theory. And the crunch of the economy, simultaneous, made. Yeah, I thought it was slightly different meaning. It doesn't mean it is. My perception was people at home,

and with no sports during COVID, went, I need Netflix, because I got to get some stuff. I need Hulu, I need Amazon Prime. But it went away like that. What's the name of the thing, the Tiger Guy? Tiger King. Everybody watched Tiger King, I did.

Everyone watched it. Did you watch the second one? No. Neither did I, did you? No, why not? Well, I just I got enough in the first one because I didn't watch the first one. Oh, you didn't watch the first one. Oh, I thought everybody watched the first one during COVID. I wonder if Netflix could actually call the Tiger King lab sports. Killing someone. I mean watching a live tiger. I think we're within 50 years is my general guess. If you sit 50 years, it won't allow you to.

It won't be at zero. No, but it's funny. People used to ask me in 2012 and I would say in the near term, no, I'm not worried in the next right to deal about Apple. It's not going to zero in five years. Near term, it's not going. Medium term, I don't think it is. I think of near term as three years,

medium is five to 10, long term is 20 plus. Branted. 20 plus, it's gonna go down, but it's not going to zero. I just love that we just did an inkblot test for both of your perspectives on the meaning of existence. John is like, I'm thinking about the world around me and in front of me the one I inhabit, David is like, I'm worried about the market in 50.

I'm worried about the market in 2156. I'm merely predicting what I think it'll be like on the hope that I'll still be alive as I examine all possible freezing techniques. Who do you think's going first, you or me? I think that that is clear as day. We should put it, that's a live sport. Let's bet on that.

We'll take the part of the squid game. I wonder if anybody will take the parlayo. Who's going for it? Throw me in there. Yeah, yeah, yeah. Well, okay, but okay. So we're actually in quite a bit of surprising agreement on how much time.

My mortality. On all of our less armortality than the mortality of the cable television business What I am thinking about next though is is how and maybe this is mine the most naive thing you'll hear on the show today is this thought It is a bummer when a hundred billion dollars is essentially Like you're a giant loser Like it which speaks to the david samson school of capitalistic perspective right if you're not if you're a giant loser. Like, which speaks to the David Samson School of Capitalistic Perspective, right?

If you're not growing, you're basically dead. And that seems like a... You're shrinking. But it seems like a plague upon the thinking of how we consider business and products and how consumers actually exist in relation to the things that they spend money on. That seems like a bummer.

Pablo, you, I'm sorry, you feel that way. And I understand why you feel that way. in relation to the things that they spend money on. That seems like a bummer. Pablo, you, I'm sorry, you feel that way. And I understand why you feel that. I just like a hundred billion dollar business to be a thing that doesn't just have to die and might actually be considered something that is... But that's the same concept as the dinosaurs. I mean, the dinosaurs are the equivalent of the $100 billion business, aren't they?

Yeah, it's a man that happened in a hurry, right? The fragment hit the earth, and it blew up and everything was dead in like 48 hours. I don't think that's the only knowing that that is true. I was around. That's why that's why you think I'm going to die before you. I remember it. I always try to give you an equivalency to think about it. And then said you became a dinosaur truth or you were having a lot not trying to be that because I don't know truth or false on that

But I think that is reasonable to want think that the business of streaming It's it hasn't settled yet. I think the way that I've been looking at this business the consolidation that I've expected has not totally happened yet The settling that I know has to happen in any business like this has not happened yet But it's coming and that is not a long term the settling and consolidation Maybe is not even midterm. I'm thinking it's short term because there's such a stress on the economics of these companies and Netflix has figured out but the others Including Disney have not at all. Yeah, I think the consolidation is medium term I don't think it's the next year or two a lot of the companies that including Disney, have not at all. Yeah, I think the consolidation is medium term. I don't think it's the next year or two,

a lot of the companies that could be consolidate tours, have a lot of debt, which is gonna prevent that from some period of time. So I think that's gonna be a, I would have assumed it would have been happening now, and 24 and 25. I think now it's gonna be a little longer. We've never, we haven't, we didn't expect to talk about this,

but I'll raise one other interesting thing. Which is the real promise of streaming was not, in my opinion, you're gonna save a bunch of money and only buy what you want. It was that you're gonna have an interactive experience. That was the promise of streaming. It's no longer gonna be a dumb box. You're gonna be able to interact.

You're gonna be able to place bets. You're to be able to look at your own camera angles. You're going to be able to get a personalized production. All that is also, in my opinion, mostly a false promise. I don't think we're anywhere near personalized advertising, going out on the stream, getting, nobody cares about camera angles, nobody really cares about mega casts, where you do a whole bunch of stuff, and for 10 people are watching those over channels, it's mostly just about the replacement cost

of programming on those other networks that they're putting in on. That's not the promise that I felt I got. What promise did you get? The promise I felt I got is I don't have to worry about thunderstorms. I lived in Florida, I started with direct TV. Well, that's the problems of cable television.

So streaming. So no, no, but I'm going through my promises of what happened. So first it was the thunderstorms and that direct TV can't deal with in the middle of watching a game, that's it. Like direct TV is not a suitable technology. Then you get OK cables and we're gonna bury them. We're to get it in from the curb and everything's going to be fine. But the problem with cable happened is that the bill you lose track of your bill and that what was on the basic

tier versus the advanced and the paid tier kept changing thanks to Titans like you and so that no longer was satisfactory to me. Then streaming came where I was able and there was a period of time where people had both cable and streams. Then people said, well wait a minute, I am fully satiated by the streaming apps. I can get everything I want. Then cable, of course. No, no, it is exactly true. There is nothing that I can't get on Hulu that I could have gotten on my cable package. Well, the whole sports thing. But I get, but no, but I had a pay extra on cable for those.

You don't just get sports on cable. Oh, basic cable, you got sports. It depends which ones. It depends which ones. It depends which ones. So that's not how my recollection of my cable bill was. I had all of these different tiers where I had access to different content. I now feel like what it must have been like to be the cable company phone operator, feeling a call from David Samson.

Never. Never once, and I call the cable guy. So fielding a call from David Samson. Never. Never once, and I call the cable guy. So you have that wrong. Sir, I'm sorry I cannot fix your general abstract sense of dread that is informing all of your consumer media. It's just math. It was math. It is the case of David that they're really,

for the average American consumer, there was the basic cable bundle. You could choose to only get broadcast channels, so you could get the thing that just got connected to a few things. Almost nobody about that. You could get basic cable, and that was what I think 89% of people got. You could add on HBO, that was an add-on get an add on showtime. That was an add on But you didn't have to add on really any sport. Why are people canceling cableman? Because they thought it was too expensive and because somebody not named John Skipper

Promise them to think we cancel cable and get to buy everything they wanted streaming cheaper I don't know who promised them that that that that that, that, that we're back to the beginning. Pablo, take us somewhere else. We have, we have, we have driven around an increasingly depressing cul-de-sac, but I wanna get to the idea that the mansion in whatever condition it exists now, thanks to these financial reports of ESPN,

their solution to all of this chaos is to say, there is another business that we are now interested in, and this is the business of gambling. And so ESPN bet launched this week, and there are complications when the biggest news gathering operation in all of sports and all of sports history overseen by John Skipper once upon a time.

I was a part of it when I was full-time at ESPN, now a part-time gas bag over there. But the point being, this is a tricky scenario. Is it not? The idea that your newsbreakers can move the line that you then profit of as from, as the operator now of this sports betting whole operation. For as long as I've lived, there's been conflict of interest in industries across the board.

And all what's happening now is more consumers are interested in this conflict of interest because they feel there is some elinable right that when they are betting that they are in the same position as everybody else. Here's the thing, where else does that exist? And I would argue, nowhere. Do you think the people who are buying stocks, day trading, are in the same position to make money as the people who really know how to do it and are market

movers on Wall Street? Do you think the ordinary guy sitting in his underwear on Main Street has the same right to make money as the people who do it for a living who are market makers and movers. If you think that, then you're going to have a problem with potential issues with the SPN bet where the market could be moved by someone who would have more information and profit on that versus the guy in his undies on Main Street. Yeah, I don't personally believe it's an unmanageable conflict for ESPN. I think they have to make it clear, which they will, to their journalists, that they have

to have a wall between this and what they do. Yep, they're guidelines that have been set forth already on that. I think that will happen overwhelmingly. I'm also not surprised to see ESPN do this in the face of the declining pay TV universe. They have to look for ways to cut expenses. They have to look for other ways to make money, and they're exploring here whether they can make money this way. Seems like good business to me,

and we'll see what happens. I think the more interesting question is, and we have to be, we are, I need to disclose, sponsored by DraftKings, so if I relay any point of view here, I need to express that conflict. I don't think I have a conflict on it. I do think ESPN faces an uphill battle.

They are aligned now with PennBet, which I believe is, and also ran in this. That doesn't mean Penn has a very profitable business, but right now in the sports business, compared to the scale of draft, I think they're a 2% shareholder. I think it's important to point out that ESPN has made money already on this deal.

It was, it's like a sponsorship deal. If you really want to get down to the definition of ESPN bet, they're not launching a fledgling gambling app today, or yesterday, or whatever day this week, they're getting paid by Penn Gaming. That was the divorce with Barstool,

and then it was the re-up with ESPN, where there actually ESPN has a revenue stream, a guaranteed revenue stream from this. It's basically a licensing deal, right, to use their brand. So this was good business for them, assuming that they can manage that, the conflict and the conflict that they also derive

a lot of advertising revenue from the other competitors. And that conflict is based on them not wanting to piss off Penn because Penn needs people on the app betting. And so that is all part of learning how ESPN is going to do this. But one more thing I mentioned, the idea of being like the phone operator taking angry

calls from customers, right? I want to do the consumer point of view here because if I'm a better, if I'm a retail better, a retail investor, so to speak, and I'm saying, I bet on this game because of this report. That report turned out to be not true. And now I'm losing money to the place that is making money off of this report. That report turned out to be not true. And now I'm losing money to the place that is making money off of my loss. And I just wanna address John,

the idea that this is a thing that in a bottom line financial incentive way, ESPN might be tempted to engage in the moving of a line to profit off of the line. I think it's absurd. It doesn't mean that some knuckleheads somewhere someday might not do something absurd, but the idea that ESPN would engage in, oh, let's put out that somebody might be injured, will benefit from the line on that through our association with Penn.

It just, ridiculous. Is the elephant in the room the way it's always worked in the non gambling world where people would have CNBC on their monitor and they would hear Jim Kramer yell about a stock and they say well I've got an idea I'll buy that stock and then they wonder why they lost money have we not been aware of all the networks who spend their entire time CBS Sports HQ I do business with them as an MLB analyst I'm happy to say it because I don't care as much as you do They have people on the air who say here's what I'm betting. Here's a great bet

Here's what I'm doing and if people lose it if we're wrong I do a pick of the day and nothing personal. I'm pissed off when I'm wrong because I don't want to be wrong But if you're making bets because I tell you to make bets or anybody tells you to make bets It's like buying a stock because someone tells you to buy a stock. A fool and his money are separate. Indeed they are. Particularly a sports fan without cable TV. What at the end here?

Do we want to? Do we want to get to? He's going to hold on for the rest of his life on. I love it. I love that we finally. It's been it's been a hold on for the rest of his life on that. I love it. I love that we finally, it's been a long time coming the episode in which we air all of the grievances about cable television. I just want to find out.

Finally. I'm not suggesting that cable television is coming back or that I long for it. I don't care. Of course, I don't like you care. I don't care. I'm simply suggesting that the false premise that streaming was going to end up

providing you with more than less. Tell me the next time, that a big disruption in the world of business creates an opportunity for a consumer to get more for less money. The disruption in the music business, it did. What John is saying in the context of sports, though, is that he is not he is not offering

He's not Noah offering you relief from the floods He is the guy off to the side on a hill being like I told you guys was gonna be a flood and you just didn't believe me That's consent while watching the water of rise. That's right. That's right. I'm Cassandra Better get to higher ground. That's a great Netflix spin-off Cassandra a reboot in which an older white male happens to be the ignored profit. David Samson, what is your thing that you want to get to this week that we have not touched? I wanted to just say what I'm thinking about. What I've been thinking about for the last few weeks is I've watched the Marlins higher

new presidential operations, and I'm thinking about Kim Aang who was brought in as the general manager, the first female general manager of in Major League Baseball and how her reign ended the way it ended. And wondering whether as an owner the juice was worth the squeeze, the pain that they had did it outweigh the pleasure, the pleasure when they hired. She was on the cover of Time Magazine. She was doing all of these different news. Asian American woman was brilliant. A top of baseball check, check, check, check. Then when they had to let it go because of job performance,

which is why the owner said we're bringing in someone because we want to do it this way, not that way. Which was controversial because, of course, this was a team that by some measures overperformed but did not perform as well. And so they wanted to hire a president over Kim and she said no I don't want to do that but what I've been thinking about is when you're making hiring decisions and you want to bring back legends or you want to you want to actually be a trailblazer is it worth it to be a trailblazer

when the leader of the pack so often gets his head cut off and that is what happened to Bruce Sherman and I feel badly for him because he got eviscerated for firing her. And it was worse than the credit he got which was outstanding for hiring her. Yeah, I think the credit for hiring her was appropriate. I think it's a sign of progress actually that we're debating a woman being hired. And I wish there was no discussion about it because it wasn't odd for there to be lots of women in the executive ranks of team ownerships.

And so I do ultimately think that that will be seen as a brave move and a good move and won't be considered unusual, and we won't think that we have to come in on a woman being fired because there's so many of them in the front office that of course they're getting fired. and won't we consider it unusual and we won't think that we have to come in on a woman being fired because there's so many of them in the front office that of course they're getting fired because lots of people get fired. Also, as a quick side note, I also don't begrudge her for thinking to herself, how dare you?

I am somebody equipped to do the job of President-of-Based-Wal operations, and for you to hire someone over me means that you never believed in my talents in the first place and I have been cut loose without enough time to prove as much. And I'm going to quickly because we're going to run out of time, going to suggest what I'm thinking of is whether the Super Bowl will go on pay-per-view first or go to London. Roger Gedale this week said that he would not rule out going to London. I would neither I wouldn't

rule out going to Istanbul or to Hanna's Burg or Sydney or Taipei either. Why rule it out? But I would suggest that it is going to go pay-per-view before it goes to London. Wow. I'll again take the under on that. It will go to London before it goes pay-per-view. What are we charging for the Super Bowl on pay-per-view? Did we ever establish that? What are we sending the line on there? 99, 99, over. Yeah, maybe.

But if you're a book, we won't belabor this. But if you're an owner, you're going to say, am I getting more value out of going to London than I'm getting out of charging 25 million households? And the answer is, when you have four expansion teams and you're getting expansion fees for an entire division that's in Europe and the condition is that there's a Super Bowl in London, the owners are lining up the jets at Titorboro

to get over to London for the Super Bowl. I would take the under in that case as well. Yeah. I'm hungry. I'm hungry for some shrimp, is where I am at the end of this episode. David, Cassandra, thank you for another episode of the sporting class.

Thank you, Bob. See you later. some shrimp is where I am at the end of this episode. David Cassandro, thank you for another episode of the sporting class. Thank you, Bob. See you later.