The Dan Le Batard Show with Stugotz - The Sporting Class: Amazon Primed to Enter NBA Rights World, Leaves TNT vs NBC Battle

Episode Date: May 3, 2024

Meadowlark Media CEO John Skipper and Nothing Personal's David Samson are back with another episode of The Sporting Class with host of Pablo Torre Finds Out ... Pablo Torre! It’s all about the NBA and its media rights. Amazon has entered the ring. ESPN is staying in the ring. What about TNT? Are they going to be passed up by NBC? This is a major, major deal! Could it be the last? Plus, Paramount is out of a CEO as Bob Bakish has "stepped down". What happened here? Is a merger with Skydance coming? What does this mean for the power brokers of the TV & Movie world? Let’s get to the final thoughts of the show. Here’s what’s left over that was on our minds. Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to Giraffe King's Network. This is the Dan Leventor Show with the StuGuts Podcast. David's system for life involves bracelets, involves tapping this table in a way that picks up sound. I was trying, I thought that John had mess here. No, it's not me. It's already, it's a capital expenditure that we need. If you're not watching on YouTube or the DraftKings Network,

John Skipper has his sheaf of papers. As always, David Sampson has his array of bracelets and other secret things in pockets that make him feel like he can do the show and exist in the world. And I'm here to ask them questions about a world that is increasingly chaotic and now fast moving when it comes to the NBA. And so I want to get to this immediately, John, because the NBA has been your account at ESPN and now the NBA has a new partner in Amazon.

And we've been talking about this dancing around the possibility of what is in this marketplace for the NBA as they renew these long-term deals. And so what has happened that has caught your eye as Amazon is now a partner of the National Basketball Association? Well, caution us. We don't know if they're a partner yet and deals do fall apart. Do you know? No, I don't know. I think it is the likely outcome and I think it's a logical outcome. And I think doing a deal with Amazon is really smart. But do I know that it's done? No. And I don't think we know it's done.

It is likely done. Expected, yes. It's expected, but we should just, we're gonna discuss it. We need to discuss it. It's good hosting by you, thank you. Yeah. No, no, I don't know how to host. Anyway, look, I need to discuss it. It's good hosting by you. Thank you. Yeah. Uh, no, no, you're, I don't know how to host.

Uh, anyway, look, I think Amazon makes sense to me. The most puzzling thing here is why Warner Brothers discovery has gotten themselves in the, in the position of potentially losing the NBA. I think it's pretty close to must have for them. Um, they did have an exclusive negotiating window. I think it, if maybe it wasn't possible, but I don't understand why they let it come out of that exclusive negotiating window. It's almost like no one's been paying attention since they've been flagging the fact that

they were not going to overpay for sports. This has been going on over a year, that when we say Warner Brothers Discovery, we're talking TNT, we're talking Barclay, Shaq, they all got renewed, they all got extended. Big deals. And everyone assumed that meant, oh, they've got an NBA deal ready to go

because they're gonna continue broadcasting the NBA. And what we talked about, maybe just on nothing personal, but I know we've talked about this John and we'll do it again. Warner Brothers Discovery answers to more than just Adam Silver in the NBA. They are a large public company. They have a lot of different sides to them.

They're not gonna overpay and Adam Silver wants an overpay right now. Well, I'm not even sure what overpay means. Well, cause you never had an overpay cause your view was that when you wanted something you would pay whatever it took to get it plus one plus one Yes, so and I do believe this is fairly existential for Warner Bros. Discovery, I think to lose Probably the crown jewel there's maybe two right there is

the college basketball tournament March March of Madness. And there is, there's the NBA. They got a couple of days of the masters. They may have some other golf, some different things. No, I'm wrong. That's CBS. I got my company's wrong, but, but that team- They have March of Madness, True.

Yeah, True TV, Turner. Yes, they do. And they have some soccer. They have some soccer. But a crown jewel, if it's not a profitable crown jewel, my view is that's not a crown jewel. And the question is at what number does the NBA no longer become profitable? And they have to be profitable,

because otherwise it holds down their earnings per share, it holds down their share price. I do not believe their share price will be rewarded when it's revealed that they have lost, if it's revealed. I would assume this is still in play, but if it's revealed that they have lost the NBA, I've never seen, every time we did a deal, we had at least three parties who didn't get the deal, who said, we would not do a financially unfeasible deal. And I'm like, what does that mean? I'll give you the best, I'll give you an example

because you're speaking in tongues. The Dodgers, when they did the huge deal, the $8 billion rights deal, the incumbent at that time was Fox. And Fox was celebrating that they were not forced to and did not cut that deal because there was no way to make the economics work. The Dodgers are not subject to the issues

of our Senate bankruptcy, which we may talk about today, because the Dodgers deal is guaranteed by the parent company, which is never gonna go bankrupt, whereas the rest of us paupers could only get the guarantee at the network level, and if you put those into bankruptcy, the deal can go away. But Fox said to themselves, we can't make money on a deal like this, so while it's got great cache,

what's the difference if we're not making money? So Turner, I believe, is in the same position right now. Though I do not believe that what NBC might pay for the NBA makes that of the same magnitude as that deal for the Dodgers. That's maybe the craziest deal I've ever seen in sports is the amount of money that was paid for the local rights for the Dodgers.

I don't think that at two and a half billion dollars, would they make money year one? No, they would not. But it's a 10 year horizon. These deals always look very, very expensive at the beginning and very, very profitable at the end. And by the way, what is TNT going to tell the distributors when they, if they lose TNT,

they will have a tough time getting increases in their distribution fees. TNT is gonna say we got hockey. How about that? I'm trying to picture going into in front of a board as the CEO of a large public company and going with John's plan which is this may not look good now to our investors but let me tell you by the end of this deal, you're gonna be loving me. Can I have a contract extension? That is exactly what is wrong

with a lot of American capitalism, is your shareholders won't like it now. This is a good deal for the long-term viability of this company, and everybody worries about the quarterly earnings and whether their stock's gonna go down. I got it. Heaven forbid that that's their biggest concern. We have an entire thing I want to talk about.

But if you could say, I know you can't, I guarantee you this will look bad, but in the long run this is good for the company. It's gonna be a rocky two or three years with shareholders. You wouldn't do that deal? No. Yeah. The reason I can't do that deal because I have to I'm a prisoner of now Turner they're they're a prisoner of what they have what's in front of them now is a decreasing stock price not increasing at the percentage and speed that other companies are trying to figure out how to keep Institutional investors at bay and not have any sort of problems

So esters and sponsors love themselves some all star weekend and they just, if they lose that, I don't think it's good for their business. You could be right. I am sure if they do a strict P&L and don't count the promotional value of it, don't count the brand halo, just count we're going to pay two and a half and how much money we can get back. It probably loses money. So I end this on the thought of what Amazon did and I want to revisit that a little bit if you don't mind. We're not at the end yet though. Okay, good. Because even this part I have questions about it.

I just want to do a little cleanup, right? So the Dodgers local TV contract, which is one of the most insane things that John has ever seen, 25 years, 8.35 billion. That was the scale of that, right? Now with- By the way, not even for national games. That's their scale of that, right? Now with- By the way, not even for national games. That's their local deal and there's more to it. When that, does this interest you at all

to hear about how that deal got approved? Cause I was in baseball when we approved. That was part of the transaction. Keep going and I'll let you know if I lose interest. All right, let me, when the McCorts, I don't know if you remember the McCorts or the Dodgers. Of course, Franklin Court, parking lot magnate.

Yes, they were forced to sell the team and it was supposed to be an auction, but Bud Selig manufactured it so that it was gonna go to Guggenheim and Mark Walter. Then they wanted a record price for it. And in order to do that, they had to get him a guaranteed TV deal in order to justify paying over two billion for the franchise. But then they had to make it that all of that money

that they got for TV, not all of it was subject to revenue sharing. So they don't have to pay into the revenue sharing for getting 300 million a year was a total give. And we got railroaded as team owners. I was gonna say, and this is where David enters the story. We got railroaded into voting for it. And even though it was a big market,

doing something that would make them even bigger and would cause exactly what we feared is today with the Dodgers and their payroll short of Steve Cohn, they've been insane since that TV deal was signed. And that created by bending the rules for the Dodgers, it created what they are today. So all of that though, makes that deal sort of like sweet, generous in its own way. Right. I want to bring it back to the NBA context because we're sort of talking

and I think understandably talking as if. Warner Brothers Discovery, whose, by the way, CEO David Zaslav, was sitting at the Knicks game, by the way, very conspicuously on the broadcast, showing up as if to say, I still like this. We're sort of anticipating that they're gonna lose it. And that's not quite happened yet. They are still competing. And so we have to get to the Amazon part of this,

the NBC part of this, NBC, which has ostensibly replaced Warner Brothers Discovery. So on the NBC part, before we get to the Amazon thing, I wanna see about what John sticks out to you about this report that NBC, NBC universal is planning to bid $2.5 billion a year for rights to the games. NBC of course had famously lost the NBA in 02.

When I was growing up, the NBA on NBC, Don Tash, Roundball Rock, Bob Costas, Marv Albert, all of that, that was my childhood. And now they want back in. And that says what to you amid all of it? Says that they have the same calculator I have. Warner Bros. Discovery has the same calculator David has. But it's-

Right, which is, and by the way, because of their distribution company and broadband internet services, they have the cash. David is right, Warner Bros. Discovery has another problem, which is debt. And so profitable or not, NBC can afford to do this. They pretty clearly, if this is true, and I agree with you, all this is not done, if this is true, they are deciding

that that hefty price is worth it and that it will help enhance the value of their NBC sports and enhance the value. And they'll get promotional value, and they'll take sponsors to the All-Star game. If that's all true, it may not all be true. But I do believe NBC is anxious to get back in here. I have no idea if these things are true.

The other question to ask is, if you were the commissioner of the NBA, would you rather have NBC as a partner rather than Warner Brothers Discovery? And maybe because they are more stable, they are more likely to flourish as a company in the next few years. Maybe they think that's a better partner. And by the way, maybe moving from a cable channel, which is what TNT is, which is declining to a broadcast channel, which is still ubiquitously distributed,

which you can still get if you want to within an antenna about the size of a dime. Maybe it's a, maybe that's better for them. Maybe it'll make create more NBA fans. I would say that what fans are more interested in is making sure that Barkley Shaq and Kenny Smith are somewhere. It is jarring from a fan perspective. Just imagine that. Are you throwing Ernie under the bus? Well, I love Ernie.

Okay, I know you do. But I don't view Ernie the same way. I think that if there's a different host along with those three... Okay, we don't have to get into a referendum on... Nah, it's not a referendum on Ernie. I'm now sensitive on behalf of Ernie as the host of this show, how important Ernie is, but proceed. He got an extension. No, no, Ernie's important.

Are we correct that Ernie is paid fourth best at that table? I would assume he is, though I would assume the show would not be necessarily be as good without him. He's great at what he does. My view is fans don't care if it's TNT or NBC or ESPN or Peacock or Amazon. They're gonna find Barkley and Shaq and Kenny.

And the question that I'd be asking is, are those contracts they signed, the extensions they signed with Warner, are those, is there an out for the NBA? Barkley, they tried to basically spread out his contract by having him do other shows. Didn't work, I think it got canceled. It was a short run show that did not get picked up.

It was about a week longer than CNN Plus, and what they're trying to do is maybe amortize his expense, trying to see whether or not there's a way to have him do something, if not basketball. But we don't have those contracts. If I'm Barkley, I'm not signing a contract that doesn't give me an out if the network doesn't have the NBA.

Well, to go back, and we're way in the land of speculation now, but going back to your profitable, why would Warner Brothers Discovery not let them out of their contracts if they don't have the NBA? They would just lose money. Only if they are good at bringing in audience with something other than NBA. No, well, that show is a great show.

It's the best NBA show. It's by far the best NBA show. Well, of all time. Yes. It's the studio group, including NFL, I could easily argue. It's the model. It is the model for all sports, that show.

I don't think, and I did a lot of them, and I never thought that I created a studio show Better than inside the NBA the bar is so high with that. It's a barber shop They do segments where literally Charles has to figure out if he knows Which team a player plays for and when he gets it wrong, it's great. No one else gets away with this Yeah, he's still got but to got to wishes. Yeah, you got's wishes. Stu Gott's wishes. But again, no. Do I think people will go to TNT and watch an NBA show if they have no live NBA games?

Somebody will, but will it be half as many people? Quarter of many people? At those rates, no. I'm not going- Oh, I think those guys are gonna leave. If TNT doesn't have the NBA, those guys are leaving TNT. It's to everybody's benefit. The NBAs, whoever gets them, fans,

it's to everybody's benefit that that show moves somewhere else if Warner Bros. Discovery, and I'm gonna say it again, we're way in the land of speculation here. Oh yeah. That show is beloved, and I would, if I were at ESPN or Amazon or NBC and were, were getting, um, getting an NBA package, I would be looking to make that my NBA show.

Now that's great for NBC, great for Amazon, probably not great for ESPN. Internally, there must be 48 people who are lobbying to be in the studio show. Foremost among them, my friend, and somebody I admire very much, Stephen A. Smith, is not going to sit still. Well, I like a lot of the people on those shows, and it is kind of like, oh, guess who's a free agent now?

LeBron James. Guess whose job is now LeBron's, yours. Well, we've seen a lot of change with right on CBS. They changed out Boomer, Syson, and Phil Sims. They moved them out and they were basically told not the best demographic, great run, thank you very much. Jason Kelsey just got a job at ESPN and got paid tremendously to move to the media side.

It's these networks are looking for former athletes and they're looking for newer, younger, more diverse former athletes, but no one's hit it the way Barkley. It's interesting. A very old man at this point. Let's think about Barkley and the number of people. I love talking with young people about that.

They may not know how good Barkley was as a player. They don't. about Barclay and the number of people, I love talking with young people about that. They may not know how good Barclay was as a player. They don't. By the way, he signed a 10 year deal in 2022, Barclay did, and he is now known as the guy who struggles to lift his leg up when he's trying to karate kick Shaq during a segment, as opposed to one of the most athletic players in the history of sports. The round mound of rebound. Even that though undercuts how bouncy he was, how effective and crazy an athlete he was.

He is probably not much taller than 6'4", even when he played and he out rebounded guys with significantly, credit Jay Billis here, much broader wingspans. He was Zion Williamson before Zion Williamson. Sure. Zion Williamson 6'8son. Sure. Zion Williamson's 6'8". A shorter, yes.

Just around the basket, he just has a way. But my point is he's recreated a career for himself. As the greatest, arguably, sports talking head of all time. Former athlete talking head of all time. What's the value, if I'm sitting there trying to value the NBA and what it means to my network, I know I've got a great pre and post game show,

but what are we actually talking about? The actual audience for their pre and post game show, if you had to, it's under the draft, under the NFL draft, it's under the games, what do you think the percentage you wanted as your lead in into a game? Look, their rating is very close to the game rating, right? The audience comes from inside the NBA, they get them at halftime,

they get them at the end of the game, and what it does is extends a significant rating. It's a seven figure rating. It's not 12 million people who watch the NFL draft, but it's a big and that's worth a lot of money. I don't know how to make the numbers work because I agree with you, but the numbers are not NFL numbers

and Adam Silver is trying to be, and I know about this because we always tried to be, you wanna be the NFL. The NBA is not the NFL. It may be the second most popular, but they're just not the NFL. And for them to get the kind of numbers that they want, at some point you have to be willing to know

that a company is gonna walk away. And I think that Turner has been flagging that they're gonna walk away. And I think that Adam Silver didn't want them to until he saw that he could get deals with Amazon till he knew that NBC would pony up. But once you start adding up all the deals that Adam can get, I

think he can see a life without TNT. I think he can as well. I disagree with one point. I don't think TNT has been setting us up for, we're going to lose the, get ready because we're not going to pay enough money to keep TNT. I think that was a sop to investors. Uh, Oh, we'll not overpay. Don't worry about our stock price.

We won't overpay. I think David Zasloff was at the game last night. I think he's got Adam on speed dial and I think he's frantically working to try to keep it. That's such an old expression. Our audience may not even know what that speed dial is. Speed dial isn't a thing anymore. To have someone on speed dial,

I want to be younger. I'm happy to be connected with anachronistic language, but I don't, I don't believe David's eyes. Lof has decided he's okay losing. It doesn't seem that way. It'll get us to another one to a game. No, because it's also reports whether that I don't understand them, but there's also reports that he has a matching right So I think it's possible that he gambled and thought

gee My shareholders once I have a matching right I'll go and match it because they'll tell me they don't want to lose it Now you get into another set of problems, which is a matching right of what? It's not just the money. They can't say, oh, whatever you're getting, it's about the word that's being distributed, what the promotion you're agreeing to, what your studio show is.

Now there TNT has an advantage. It's a whole bunch of different matters. I wanna explain what matching right is in case you were once trying to find out. When you sign a deal, often a media deal. Do the kids call it something different? No, it's still called, it's the right to match. Right to match.

They do that with dating. I have the right to match. You have a deal, you go out and negotiate a deal. Jokes about incel behavior, having the right to match but proceed. If you, Lars, when you have a deal that you cut with one of your, with a different company, you're a free agent, and you go out, let's say you're a player, and you go out

and you sign a four year deal, $40 million with Team X, but the team you were on has a right to match that, like a restricted free agent in the NBA. You take that deal to the incumbent, and you say, if you'll match match this we're good to go. So the NBA gave a right to match to its incumbent television partners, one of whom is Turner. So if they go to NBC and get an entire deal, they have to under contract bring that whole deal to Turner and say here it is, we don't need to negotiate anymore.

This is a fully baked deal, ready to sign. Will you match it? The fight that Skipper's talking about that happens every time is what happens when you put together a deal, Adam Silver conspires with NBC to put together a deal that TNT cannot match. There are provisions in there that you know going in.

TNT will, it's prohibitively expensive or they don't even have the platform to do it. Yeah. I don't believe they would manipulate the deal. They'll do the best deal they can. Look, I don't know. I don't even remember having a matching right. I did that deal.

I don't even remember. And I don't think I ever asked for it. We've already had smart lawyers who asked for it. I did a matching right. I did that deal. I don't even remember. And I don't think I ever asked for it. We've probably had smart lawyers who asked for it. I did a hundred deals. I never evoked a matching clause because I never wanted to be in that situation because I never believed unless it was completely similar that a matching right would work.

Right, it does work for employees. If we had talent and we could get a matching right, easy. And nobody disputed that. But we never triggered a single time that I remember a matching right. Do you not believe a matching right has an impact on the value of the underlying asset? It's very much business school 101 to me.

When you imagine it. Explain that to me. So a matching right, it's very hard to school 101 to me. When you imagine it. Explain that to me. So a matching right, it's very hard to go to a third party because NBC would say to themselves, I don't want to spend the legal dollars. I don't want to give you an offer that you're just going to take right back to the incumbent and we're going to lose it anyway.

So that has an impact in getting partners. The other side of that is when you have a friendship or a relationship and you say to the NBC, listen, could you go ahead, you don't want this, but make a huge offer, TNT is gonna match it. I've never, I've known situations where we pretended that we were gonna spend more money, even leaked numbers. So that's why you should be careful

taking all this as gospel. Um, but no, we never, I never wanted to get to a position to where we had to match. I either wanted it or didn't want it. And I do believe a matching right. If I'm a rights holder, I would not give a matching right. Agreed. As soon as, so I do take your point, which is we always understood intrinsically that the matching right depresses the value.

Yes. It's an advantage to the rights holder who gets it. To use that device in whatever way they see fit. I mean, John saying he never used it is fun, is I didn't know we had it. It seems slightly disingenuous for you to say that in all your deals, you didn't know they existed. Well, you know, I negotiated the general terms of a deal and then I let somebody else finish the contract

and I never read the contracts in their entirety. I meddled way too much. I'm getting the sense of this. Wow, I must have been a meddler because things like the right to match. You're only realizing this now. It's funny you say that you're the guy who's concerned about this little notch in the table here I was it just this is some professional. This is the contract there may be a notch in the table somewhere. I didn't care And to me that ruins the table Skipper and the perfect metaphor has just moved his papers over the notch on the

table. So no longer exists? As though it goes away. That's right. As though it goes away. That's the sound of fried chicken with a spicy history. Thornton Prince was a ladies' man. To get revenge, his girlfriend hid spices in his fried chicken. He loved it so much,

he opened Prince's Hot Chicken. This is one of many sounds in Tennessee with a story to tell. To hear them in person, plan your trip at TNVacation.com. Tennessee sounds perfect. Don LeBretard. We love you, we've got you, we've all got each other. Let's go right now. Stugats. One, two, three, Brett. One, two, three, Brett. This is the Don Lebatard show with the Stugats.

["The New York Times"] Speaking of ESPN though, they have, according to Puck, the framework of a deal to keep the NBA for an expected another decade at least, which is on par with Amazon. So to come back around to how we started this ESPN, unsurprising, I think as an interested party here, John. As an interested party, we'll be right back to where we were before. It's essential content. They have to renew their deal. So Amazon, Amazon in this context then. Almost at any price. Yes. So, okay, David has perked up like a meerkat

at hearing the concept of any price. By the way, what I'll also tell you that I believe, but don't have any firsthand knowledge of, Bob Iger would never let it come up past the negotiating window. So when they say they have a framework of a deal, it means almost certainly they have a handshake. They had it sometime before 12 a.m., 12 a.m. on Monday, because they wouldn't let it get to where- That's the expiration of the exclusive negotiating period, which is another thing you have to

give it a deal which you hate to give when you give anyone an exclusive right. By definition, that has a quashian impact on the value. But the incumbents had this right exclusive period. And John's referenced the fact that Turner let it expire, but so did ESPN. And ESPN, he's saying- I'm not sure they did. There's nothing been announced that it's a done deal, but the rumor is that the ESPN deal is done,

but we don't get that feeling with Turner. No, I don't think at all. I think that they made the mistake of either believing the match would help them or that they could figure it out later. In my opinion, I would have tried to get something done before that matching period ended. So ESPN, I don't ever believe in saying

that a company has to do something because you lose all leverage when you say that. Because you're hypothetically negotiating as if you are the seller in every scenario we discuss. And so you're presenting ESPN cannot lose the NBA. Well, I'm not doing it anymore, so I can sit here. That's the benefit of being here instead of in that office. David is still in that office, John.

I'm trying for this show to be in that office because I want that, that is not the way to view it. ESPN as an example, doesn't view baseball that way because there's a thought that they will exercise their opt out clause at the end of this year. David is still negotiating with John by the way. You haven't noticed that's something that's in his entire show for years.

That happens to be true. I can't quite get over. I wanna win one thing with him. But that's an interesting point because we're not using, we're not, do the kids still say opt out. Thanks. Okay. Just want to make sure I'm not. You won't get canceled for that one. Okay. It's a good one. So nobody's asked whether there's an opt out in this 10-year deal. I personally was not aware there was an opt out in

the baseball deal, but that I think was done. Just had a little notch on the table too. No, no, I think that's after I was gone. We did not have one, I don't think before. And that's actually a great thing for a company to get. Right, I like having that. I would like, I wish I'd been smart enough to have that. It's player opt-outs, it gives all the power to the player because if you feel as though you're overpaying,

you opt out and adjust it or get more for your money. I don't actually know why baseball would give that. And I don't know why Adam would give that here, the NBA would give that here, and I assume they won't. So let me bring you inside an owners meeting and tell you why we would give it and why we did give it. The answer was that owners had a desire for an immediate infusion of cash

and for a guaranteed tail of what that annual distribution would be. So it came with ESPN is now guaranteed, let's say it was eight years. We promise you as the commissioner's office that we will distribute X millions of dollars to you as a team every single year from this deal. You can then take that and use it as your budget

to sign players or to do the things that you want to do. Then when baseball says, by the way, to get this, we have to put an opt out in. Like what owners do with a player who demands an opt out, you say, all right, fine, we don't like it, but we want you so badly. That was the view. We didn't have enough competition to ESPN that if we didn't grant what they wanted, so what I'm blown away is John saying all the things he didn't know he wanted, where what's told to us is these were deal breakers. And it turns out-

You're the spec. It turns out you had no idea of any of it. No, but to be fair, I had smart people who did. We always thought it was skipper related, is what we were all told. Often was. So the old- I as a league, man, We always thought it was skipper related is what we were all told often often was so But the old is a leaguer as a league man I would never give an opt-out and baseball as you know David has got enough problems already if ESPN ops out

They've got real problems I think the they will opt out but it will be in there will be another deal in place when they do opt out And that's often what players do they exercise and not out because they've already pre negotiated the retention with the incumbent team, right? So I think ESPN isn't gonna walk away from baseball because there's no one think so where the NBA is over Can we can we hit him? I'll take back The NBA is never over the NFL is never over and ESPN needs baseball, right? All of the highlights and ESPN has lots and lots of very significant baseball fans. I do not believe they will walk away from baseball.

But the idea of the sun never setting on certain empires brings us back around to how I tried to start this, which was Amazon. And I wanna hit that before we move on here because Amazon entering this formally after having, of course, a foot into Thursday Night Football and seeing all of the data that that gave them. What does this tell you about Amazon's decision? Is this an obvious read?

Like, of course, sports matters to even the tech companies. Like this is the way it's all going to go. What opened your eyes? Uh, John, start with you here, um, with that. Uh, it seems consistent with what they've been doing, so it must be working for them. John, start with you here with that. It seems consistent with what they've been doing. So it must be working for them. And they appear among the sort of troika of Netflix, Apple and Amazon.

They are by far the most invested in live sports. And I do think long-term, that's gonna be a significant advantage to them. What was the deal, Coca, I'm trying to think of this. Amazon did a playoff game, and they signed up, what did they do where they got three million subscribers and 80% of them didn't cancel?

With the NFL. That's NBC, that was Peacock. That was Peacock for a playoff game. Amazon's view here is they want to get all sports. They've got a local deal with the Yankees for baseball. Then you add the Thursday night NFL game. Now we're going to add NBA. We're all things to all people.

Make sure you buy packages and have them deliver prime overnight. I think this is just part of their continued strategy. I don't think that they necessarily care about the NBA. I think it's just what acquirers do is they want to make sure they acquire. It's like a monopoly buying Connecticut Avenue. It's really not going to be that helpful to me, but I'd rather have it versus not. And I don't think you mean that they don't care about what the NBA it's good business. It's's retention of subscribers.

The most, the most important content to sports fans is sports and Amazon prime wants you not to cancel your quit your sub or not to be part of Amazon prime. And you will be cause you got to get your Thursday night football and now potentially you're going to have to get your. So we disagree here. So you say Connecticut Avenue, John says a railroad. So yes, he's saying it's a bit more important than I am. You're saying that that's an anchor tenant. Yeah, I think it is. Football and basketball.

And Amazon has also just paid $120 million for the exclusive playoff game for this upcoming season. So I view those as just a bit as rebar, not as the keystone. And the reason I do is that I don't think their business model is sports and people who want their NBA or NFL. I think their business model is people who want their packages. Well, I don't disagree with that,

but I don't think they're disconnected, right? I think that the sports- No, they're totally connected. You want people to come on Amazon and just stay. And if they like sports, great. If you don't like sports, they're gonna offer you other sort of content. What David is saying is that it's not existential

to Amazon. This is- But it is useful enough to the point where they will, in fact, outbid the traditional media companies, so to speak. This is the dream come true for leagues, that there is a bidder who is willing to be as irrational as John was when he was bidding,

where he just wants to have it. And that has gone away. And I don't, to tie this up, I don't view Turner that way, the way I do view Amazon that way. So I wanna get to another traditional, so to speak, media company in Paramount. As we're deep into the show now,

but it's just notable that their CEO, Bob Bakish, is out. And Paramount, for the kids out there who I don't think know what's even in Paramount, speaking of what the young people know and are aware of, David, how would you explain Paramount and what it is now and what this says when your CEO steps down? Do you watch CBS? I wake up sometimes realizing that I've been watching CBS.

That's owned by Paramount. The likelihood is if you're watching movies, the Mission Impossible type movies, you watch Showtime, if you ever do Viacom, if you know what Viacom is and all of their different holdings. The kids love MTV, at least they did. MTV's a good one.

Nickelodeon, that's the real kids. Nickelodeon, that's real kids. Nickelodeon's another one. They have a ton of networks, they have a ton of assets, and they have a ton of, wait for it, debt. A ton of debt paramount through all these mergers where you're supposed to get economies of scale. You have to shed people and you have to shed expenses. And Paramount, and I should say that I do work

as an MLB analyst for CBS Sports, which is part of Paramount. But I- You're also, David Sampson is a crown jewel in the portfolio. I wouldn't say that, but I would say that, like you won't even talk about ESPN on this show for your fear of upsetting Tony.

I am not scared to discuss what happened with Bob Bakish, which is you can't fight with the chair and lose. And Bakish had a different view of his boss, who was Sherry Redstone, Sumner's daughter. Some of you may know the name, Sumner, the founder and the papa of really- The opposite of a kid. Well, he's quite dead.

He's still dead. Still dead? Still dead. The most opposite you could be. Yes, and she wants to liquidate. She wants to get money out for her shares. She has control of Paramount, control of the board, control of all the committees, control of everything.

Hired Backish. Backish then sort of went against her and said the deal that you're doing with Skydance may not be good for the common shareholder. So we should explain Skydance as a player here, right? Because Skydance, the idea that they are going to take control of Paramount, feels opposite as well to how you'd understand this company that we don't really know and this giant conglomerate that you've just described.

Well, they CBS Showtime Paramount, that's an entertainment conglomerate, right? But they have nothing, pretty much nothing that matters but old media assets. And that's under siege right now. You're going to argue that Sherri Redstone, who I don't know, is doing the logical thing, which is I'm getting the hell out of here while my stock is still worth billions of dollars because this company is inevitably going to decline. Now, will they decline combined with Scott Antz? I don't know, because they have some new media assets.

They are a company. I don't know it closely, but I would assume they have a pretty clean balance sheet. I don't think they have significant- It's funded by Allison. Yeah, I don't think they have- By this side of the Alisson. So they don't have significant debt and they are making a move

to make themselves a bigger player, which makes sense. I would argue that it's possible, and I don't know enough about it, that Bob Bakish didn't did the right thing. He basically said, this is an unfair deal. You are enriching yourself and not thinking about the Class B shareholders. And whether it's actual true, like true or not, there is a report that Skydance

and Redbird had to put in more cash and more value for the Class B shareholders. So you could argue that Bob Backish did the honorable thing. He had done very well by Sherry Redstone. He disagreed with her. He is going to, by the way, walk away with $50 million. So why not do the ethical thing? Redbird, by the way, you're being a private equity firm that is partnered with Skydance.

Right, he was fired. Let's make sure that we're not mincing words here. He didn't wake up today or the other day and say, you know what? I'm tired. I don't want to be the chairman of Paramount anymore. Of course he didn't. I'm suggesting a different thing. So you said he took the high road.

What does that? No, he took the high road. He took the high road and said to his boss, this is not a good deal. Or many of your shareholders. I am the CEO. I shouldn't get it in a fight with you because I'm going to lose what you did. But he did what I regard as an appropriate thing. I think I don't actually know whether he did or not.

And of course, of course he didn't resign. By the way, anytime you hear anybody say the words, I am resigning to explore other options, they're probably not telling the truth. Because they don't have other options currently. Or they open a consulting firm. The other thing is, if anybody says it's not about the money, it's almost certainly not true. Mike, you listen to nothing personal.

Thank you for listening to your first show. That was nice of you. No, no, I've heard other shows. Have you listen to nothing personal. Thank you for listening to your first show. That was nice of you. No, no, I've heard other shows. Have you really? Oh yeah. Why are you so busy? I'm negotiating with John David. Why?

You only have 11 months to go. So it starts now. Very good. David Ellison. No up-down. No matching. David Ellison. David Samson is existential. That's right. To the future of this company.

So we have to have it. Be very careful. Yes. This is binding in a. And would you tell me it's on tape? I said, I don't care. Here's the final offer. If you don't like it, go find, go get, find somebody else. David, other David, David Ellison, CEO of Skydance, his father, Larry Ellison is the guy who ran Oracle, of course, like $146 billion. Yes, founder of Oracle. And I just want to get to the idea of like how this affects actual consumers like the listeners out there who are not billionaires or former chairman or former presidents of teams.

What does this mean for sports fans? The best part about these sort of power plays that happen in the C-suite is that in the current term it doesn't impact any of the viewing habits or any of the addictions that you may have that are fed by Paramount or its assets. What should concern a listener and concerns me about what's happening with Paramount is that all of these deals for consolidation were meant to help the industry.

And in fact, none of them have worked. They've created, Warner Brothers is another example, created way too much debt and the profitability from streaming has been slower than anyone anticipated. And Fox, as it turns out, who didn't spend a penny on it, ends up being the winner here, waiting for all the crap to shake out. Paramount tried to get ahead of it with Paramount Plus and the fast channel CBS Sports Network, CBS Sports HQ, all the things that they were trying to do

that now fast channels are a real thing, but still not at the level of profitability that was anticipated. Paramount's been forced into this position to look for its white knight, which they found in a non-traditional buyer, which is Skydance. And what will happen, Skydance,

they want to be and swallow Paramount. They could become Paramount. And all of a sudden, they will be saddled with this level of debt, and then they're gonna need to be acquired. So something's gotta give here, and that's the only thing that I'd be concerned about moving forward, but current day I'm not worried about anything. There is and I think it's accurate that there is not room for all the traditional media

companies to continue to exist as standalone entities competing with Amazon, Apple, Google, Google YouTube. It's a simple math question. Yeah, and so yeah, they're under pressure. By the way, they're under short-term pressure from shareholders to do something about it. And they do something about it, and the stock generally goes up a little bit. And then they realize they're the dog that caught the car,

right, and they don't really know what to do with it. Now, the kids may not know that the dog. I never heard that. Even I'm not a kid. I never heard that. You've never heard that as someone who's terrified of dogs, David, I feel like you would have known about that. A dog who catches a car, I assume, doesn't know what to do once he catches the car.

That's why. At least when I was a kid, we had dogs. We lived in kind of, you know, small town south, and your dogs would run and bark and chase the car. And of course the car eventually sped away. And so it's an expression that says, if they catch the car, what are they gonna actually do to the car? If the dog achieves his dream. Bite the headlight?

Yeah, if it's dream is achieved. Bite the headlight. What do you do now? Yeah. I really don't know what that has to do with what we were saying, but in terms of Skydance, Bind Paramount, all these companies with their consolidation,

we all agree from a business standpoint, the consolidation is going to continue to happen. There are gonna be companies that are acquired. As an end user, I've had a different view than many people who complain about not knowing where to find games and don't know that they're angry that MLB is on all these different networks

or that the Yankees have five different platforms. I've never been upset about that because I've got a list of channels where I'll always know to check when I'm looking for a game. And there's ways to Google very quickly where your game is on. So I don't think that the consolidation

that we all thought was coming as quickly as we thought it was coming, I think it's gonna be slowed now because the consolidation that has come has come with debt and failure. I could make a, I'm holding a piece of paper. I could make a piece of paper with the channels on it for you to put next to the television.

But, and by the way, I mean this seriously. You can have that attitude. A lot of baseball fans cannot because they cannot afford to spend two, three, $400 million a month to make sure they have. Definitely not that amount. Two, three, $400 million a month would be more than most, but you mean two, three, $400, which is what their cable bill was, which people are now discovering as we did on this show. It feels like $200 million.

It's the same, there's been no great savings to customers for cutting the cord. No, there's been no, in fact, it's more expensive to get even close to the same amount of content. And it has forced some people, remember it's unthinkable to me and you, Pablo often refers to this as the rich man show. It's unthinkable for us that we would pay $2 less a month

and watch commercials. Would you do that? I do not do that. Lots of Americans make that choice because that $2 matters. And I don't think they're making that choice because they love commercials. Though I'm sure somebody at a marketing company

would tell you that. No, I'm just haunted by that Shay Gilder's Alexander Chet Holmgren commercial, the What a Pro Wants thing, which is marketing as a concept back, I think, 50 years. Because of the number of times you've seen it or because of the quality of the actual ad? Both.

I thought it was because the frequency is what people are upset about. Um, it's both. So you ask about $2 and I've done an exercise with students, can we spend one minute on this because I'm tired of the old adage that only rich people cannot watch commercials. Do you know how much waste even people who make, have a household income of $70,000 per year, $50,000 per year.

You can get $2 a month, and I don't say to get streaming without commercials. I always, from Wall Street, for savings. There are people who say they can't save money, they can't save for their retirement. You can, everybody can save a dollar a week or $2 a week. Are you going Suzy Orman on us right now?

I am merely trying to fight the constant, constant narrative from John about how rich people act and how you can't assume to understand. We can't actually be the show that is on a crusade to defend rich people. We just can't. I wasn't, I wasn't. I know that John isn't, I know that job is it I know that David I hear you and and but you do know half of American households Do not have $400 in savings do not now you can argue that it's because they spend their money foolishly

I was simply suggesting that if you don't only have $400 in the bank that if you only have $400 in the bank, then you won't that $2 and you might waste it on potato chips, but you still won't that $2 and you're willing to watch commercials. So as a side note here related, Peacock raising prices ahead of the Summer Olympics. Ad support and subscriptions will increase by $2

to 7.99 a month. In fact, ad free customers will see prices rise by the same amount to 1313.99 a month. That's the difference. And I'll tell you how I would do it, and I've always disagreed with the step increases. I would like, we would always increase our most expensive tickets

by way more than our least expensive tickets. I don't think it should be linear, $2 for the no ads and $2 for the ads, because there's still more money on the table for those people who don't want ads. So I would rather pay, I would even pay more money, and there's plenty of people who would to get no ads in order to make the people who get ads

not have to pay more. We tried to do that calculation, because we didn't like to raise the prices of the cheapest tickets, we liked to raise the prices of the most expensive tickets. There's a metaphor for the American tax system in there somewhere, I believe. We have like three minutes left, two and a half minutes,

in fact. There are a couple of other notes here that we can hit. Let's just do the thing where you guys get to say what you want to talk about each individually the most, because there are some potpourri items here at the end. I'd like to talk about, back to the NBA, we didn't mention the WNBA, and I've been on a crusade about this,

and I would like to take this opportunity to say it is going to be very telling. All of these NBA deals that have been rumored, there's been no mention of where the WNBA fits in and their broadcast deals expire. And I can't wait to see whether it's a pegged value, how big the increase is from what their $60 million was, or whether the rights have been bifurcated and Adam Silver's not negotiating on behalf of the WNBA, which I don't believe is true, but we're going to find out and that is what interests me very much right now. Interesting.

I'm interested in why Comcast is the only holdout for doing a deal with Diamond. I'm not puzzled by their behavior because I don't, they, I believe Diamond went dark on Comcast systems last night. I do not believe there are very many people calling their cable company today to switch their service. And- Does anyone actually do that?

Yes. When we launched the SEC network and the only place you could get it was Dish Tens of thousands of people canceled their subscriptions to other distributors and got Dish. Dish saw a Demonstrable increase think about the fan base if you're in Georgia rabid in Alabama are you going to switch your cable strip? You are. If you are, where's the diamond? Where's diamond? What's a local?

Well, Comcast is anywhere. Call it Florida. By Florida, South Florida. They lost the Marlins, but they're happy, I guess, about that. No one would be happy about it, but you think anybody's calling Comcast today to say cancel my sub and then turning around and calling DirecTV to say, because I gotta get the Marlins tonight. Comcast knows that. That's why they don't give in to Diamond.

I'm only musing as to why they're the only holdout, other than the negotiating skills of David Preslack and his lovingly titled, which is brilliant, Glide Path. Oh, love a Glide Path. Glide Path is- Knee whiner, else you crash. Glide Path is, don't kill me immediately. Just take an arm. That is a perfect way to end the show.

We are on our own glide path out of here. David Sampson, John Skipper will be negotiating off microphone for eternity until we come back on for the next one. Thank you both. Thank you. Thank you, David.