Latest / The Favorites Sports Betting Podcast / The Business of the NFL with Joe Pompliano

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The Business of the NFL with Joe Pompliano · The Favorites Sports Betting Podcast

0:08
Speaker 1: Welcome to The Favorites, the podcast presented by bet three
0:11
Speaker 1: sixty five.
0:12
Speaker 2: We are part of the Action Network.
0:14
Speaker 1: I am Chad Millman, Chief Content Officer of the Action Network.
0:17
Speaker 1: We're in the heart of NFL offseason. We are about
0:21
Speaker 1: one hundred days since the last game was played. We
0:25
Speaker 1: are probably a little more than one hundred days till
0:28
Speaker 1: the next game is played. The NFL schedule was released yesterday.
0:34
Speaker 1: As usual, it doesn't matter what is going on, the
0:38
Speaker 1: NFL does something. The rest of the world takes second place.
0:43
Speaker 1: Joining us today to discuss the cultural ubiquity of the NFL,
0:49
Speaker 1: the future of sports betting as a business, how it
0:53
Speaker 1: is all co mingling, how it is affecting us as
0:57
Speaker 1: fans business at spurts social media, Maven Impresario of the
1:03
Speaker 1: very popular Huddle Up newsletter, Joe Pampeliano as always joining
1:10
Speaker 1: me for this conversation is my co host, my companion,
1:12
Speaker 1: Mi Capadre, my BFF professional betters Signmon Hunter. He oh, so, i'mon.
1:17
Speaker 3: How are we doing, Chad brother?
1:21
Speaker 1: I feel like the NFL has perfected this. They've been
1:25
Speaker 1: leaking like for the past month. Here's the Thursday night game,
1:30
Speaker 1: here's the Brazil game. Here's some ideas of where you
1:34
Speaker 1: might get some new platform games. Then the schedule release
1:39
Speaker 1: comes out. It is prime time specials on two different networks.
1:43
Speaker 1: It is all anybody is talking about. It becomes a
1:46
Speaker 1: social media holiday for teams, the Chargers, the Patriots, like,
1:52
Speaker 1: people are going all in on this stuff. And it's
1:55
Speaker 1: the release of the schedule, and yet we are going
1:58
Speaker 1: to succumb to it. We're going to cover it in
2:01
Speaker 1: the coming weeks. We'll be doing extensive deep dives into
2:04
Speaker 1: the schedule, how it should impact futures, bets, how it
2:07
Speaker 1: should impact season win totals. The NFL is so good.
2:13
Speaker 3: Yeah, and scheduled thoughts the best, just because none of
2:16
Speaker 3: it really matters, right, Chad, all of us are right
2:18
Speaker 3: now out of thousand win percentage, we're all winners at
2:20
Speaker 3: this point. So yeah, Bears fans can look at the schedule,
2:24
Speaker 3: say they have eleven wins somehow with a rookie quarterback.
2:27
Speaker 3: Eagles fans look at the schedule, they're like, Wow, we're
2:30
Speaker 3: going to Brazil, coming home to play a Monday night
2:32
Speaker 3: game than a Sunday night game, Like that's that's really
2:35
Speaker 3: what we're looking for, right, The different lineups of games.
2:38
Speaker 3: And you know, even Steeler fans who are close in
2:40
Speaker 3: my life, they have like the worst six weeks I've
2:43
Speaker 3: ever seen, like scheduling wise. So this is why people
2:47
Speaker 3: obsessed about and care about it. But like you said, Chad,
2:50
Speaker 3: it's just if you're a dire fan, there's nothing better
2:52
Speaker 3: like seeing your team, especially if you're a fan of
2:55
Speaker 3: you know, getting primetime games. If you're kill out a
2:59
Speaker 3: Panther fan, I think the NFL tells you all you
3:01
Speaker 3: need to know about organization when you have zero primetime games.
3:04
Speaker 3: So it is fun where it's fun to punch down
3:07
Speaker 3: on these teams where it's like, look at you, guys,
3:09
Speaker 3: zero primetime games. The NFL is really letting you know
3:12
Speaker 3: how they feel about you. So you have always fun
3:15
Speaker 3: talking football and me, I know, we.
3:16
Speaker 1: Talked about this and we're gonna dig into it more
3:18
Speaker 1: and we'll talk about win totals in futures. But the
3:22
Speaker 1: Texans getting all this prime time love, yeah, boy, that's
3:25
Speaker 1: gonna feel like an automatic faid. You just have to
3:31
Speaker 1: As a reminder, the Favorites podcast is presented by Bet
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4:22
Speaker 2: All right, we set it up.
4:26
Speaker 1: NFL is basically a twelve month a year behemoth. Joe,
4:34
Speaker 1: your coverage of the NFL Draft live crowds and bidding
4:39
Speaker 1: wars is a perfect example. Another example Christmas Day, the
4:45
Speaker 1: league announcing yesterday two Marquee games available to stream on
4:51
Speaker 1: Netflix for the first time, and you had a tweet.
4:55
Speaker 1: I want you to summarize the tweet because this is
4:58
Speaker 1: exactly what we're talking about, why covering the business of
5:01
Speaker 1: sports directly impacts fans. Joe, tell people your tweet and
5:07
Speaker 1: how it's going to cost us.
5:09
Speaker 2: All Right, So the tweet was essentially just explaining how
5:11
Speaker 2: many different platforms and services you now need to watch
5:14
Speaker 2: the NFL. And the kind of overview of this is
5:17
Speaker 2: that the NFL, in my opinion at least, has done
5:18
Speaker 2: a better job than any sports league and kind of
5:20
Speaker 2: like intelligently dividing up its inventory to maximize revenue without
5:25
Speaker 2: overdoing it to fans mostly. But I think we're now
5:28
Speaker 2: kind of pushing that line of like what's acceptable and
5:30
Speaker 2: maybe isn't acceptable given what other sports leagues have gone through.
5:34
Speaker 2: But if you look at the schedule for next year,
5:35
Speaker 2: there's games on eleven different channels. You need four different
5:39
Speaker 2: subscription services. You need Netflix, Amazon Prime, Peacock, and ESPN Plus,
5:43
Speaker 2: which will all have exclusive games you can't watch anywhere else.
5:46
Speaker 2: You need cable or YouTube TV or something like that
5:48
Speaker 2: to watch most of the games, and then you need
5:50
Speaker 2: Sunday ticket to be able to watch everything. Right, So
5:52
Speaker 2: if you add all that stuff up, you're looking at
5:56
Speaker 2: what did I say? It was eight hundred or nine
5:58
Speaker 2: hundred and fifty six dollars, right, And look, maybe some
6:04
Speaker 2: people came back and they said, you don't need it
6:05
Speaker 2: all for six months. Okay, get rid of ESPN plus
6:08
Speaker 2: after the month that you needed for the game. Get
6:09
Speaker 2: rid of Netflix if you really want to and don't
6:11
Speaker 2: have it already. Same thing with Peacock. You're still looking
6:14
Speaker 2: at seven eight hundred dollars for the year. Whereas we
6:17
Speaker 2: used to live in a time where all you really
6:19
Speaker 2: needed was a cable package and Sunday ticket, right, you
6:21
Speaker 2: needed two things. And now what the NFL has done
6:24
Speaker 2: is they've seen that they can take individual games, marquee games,
6:27
Speaker 2: create these events out of them like Christmas Day, obviously, Thanksgiving,
6:30
Speaker 2: Black Friday, so forth, sell them to individual networks, get
6:34
Speaker 2: one hundred, one hundred and fifty million dollars per game,
6:36
Speaker 2: depending on where they're selling it and when, and make
6:39
Speaker 2: a tremendously more amount of money than they would have
6:42
Speaker 2: previously by doing that. Defense. Look, people say they're going
6:45
Speaker 2: to get oversaturated, there's going to be subscription fatigue. But
6:48
Speaker 2: they've been saying that for years, right, This has been
6:50
Speaker 2: happening for a number of years now, and the NFL
6:53
Speaker 2: arguably has only gotten stronger over the years, and I
6:56
Speaker 2: don't think that's going to be slowing down anytime soon.
6:59
Speaker 1: Simon. I look at that number, nine hundred and eighty
7:04
Speaker 1: six dollars, that feels like a steal. Think about all
7:11
Speaker 1: the stuff that we spend money on. How much of
7:13
Speaker 1: this stuff do we spend money on for one thousand
7:16
Speaker 1: dollars that we don't love as much as we love
7:20
Speaker 1: the NFL.
7:22
Speaker 3: Yeah, I would say to Joe's point, the pushback are
7:25
Speaker 3: definitely going to be Younger people don't have that kind
7:28
Speaker 3: of money to spend on that kind of stuff, right.
7:30
Speaker 3: It's just like a struggle to get by, especially in
7:32
Speaker 3: your early twenties or the people who remember yesteryear right
7:35
Speaker 3: where it's like they had the Bunny Years on their
7:38
Speaker 3: TV and you got every game unless it was getting
7:41
Speaker 3: blacked out for free on basic cable. So I would
7:45
Speaker 3: say I agree that someone who loves it, I don't
7:49
Speaker 3: really mind it, Like I like that it's become an
7:51
Speaker 3: event like that whole thing that Netflix still and I
7:53
Speaker 3: get why people hate it. I think it's kind of cool,
7:56
Speaker 3: Like it's gonna be kind of crazy to log into
7:58
Speaker 3: Netflix Christmas morning and putting on the games or whatever
8:01
Speaker 3: pregame show they do do. So, yeah, Joe, definitely interesting
8:04
Speaker 3: to hear your view of it of a guy that's
8:05
Speaker 3: in this business. I'm an addict to football. They kind
8:09
Speaker 3: of know they can put it anywhere out I'm going
8:11
Speaker 3: to pay to get it. Is that most people's views
8:13
Speaker 3: that if you're a dire fan, you don't really care.
8:15
Speaker 3: You might bitch about it, but you don't really care.
8:18
Speaker 2: Yeah. So I think there's two ways to look at it, right,
8:20
Speaker 2: is what does it do for Netflix? And what does
8:22
Speaker 2: it do for the NFL. The NFL is more interesting,
8:24
Speaker 2: but let's start with Netflix. Netflix is massive, right, They've
8:28
Speaker 2: reached a scale now where they have basically just as
8:30
Speaker 2: many users or subscribers in the United States and Canada
8:34
Speaker 2: as places like ESPN. Right, they have eighty something million subscribers,
8:37
Speaker 2: which is tremendous scale. That's not even counting the two
8:40
Speaker 2: hundred and seventy million subscribers or whatever it is internationally.
8:42
Speaker 2: So it's a massive platform. Now they're able to go
8:45
Speaker 2: and negotiate these deals because the networks know that they're
8:47
Speaker 2: not losing or the leagues know that they're not losing
8:50
Speaker 2: a tremendous amount of distribution. So I think that makes
8:52
Speaker 2: a lot of sense. The money obviously helps there, but
8:54
Speaker 2: for Netflix, you're basically guaranteed twenty to thirty potentially million
8:58
Speaker 2: viewers for a live event. You're going to do two
9:00
Speaker 2: of them on a Christmas Day. They now have an
9:02
Speaker 2: ad supported tier, but the beautiful thing about football is
9:05
Speaker 2: there's already ads built in, So whether you're on the
9:07
Speaker 2: ad supported tier or not, you're going to be getting
9:09
Speaker 2: served commercials. Those commercials, they're going to be able to
9:12
Speaker 2: charge hundreds of thousands of dollars, probably around I don't know,
9:15
Speaker 2: five hundred thousand dollars per thirty second slot. There's one
9:17
Speaker 2: hundred slots. You do the math. They're going to make
9:19
Speaker 2: close to their money back on just ads alone. Plus
9:22
Speaker 2: it reduces churn for them. They're already at two percent,
9:24
Speaker 2: which is an industry low. It'll get better than that,
9:27
Speaker 2: and they're going to add subscribers. Now. They probably won't
9:29
Speaker 2: add the three million subscribers that Peacock did, mostly because
9:32
Speaker 2: they're already a popular service and a lot of people
9:33
Speaker 2: have them, but it's going to help their business. The
9:36
Speaker 2: interesting part to me, though, is like, why does the
9:38
Speaker 2: NFL do this, right, we just talked about it. Could
9:40
Speaker 2: it lead to fatigue and oversaturation? They probably could have
9:42
Speaker 2: sold it to a network that they're already doing business with.
9:45
Speaker 2: I think mostly though, that they want to be in
9:47
Speaker 2: business with Netflix knowing what's coming down the road. So
9:50
Speaker 2: we all know that they sign these the ten year
9:52
Speaker 2: or eleven year deals whatever it was, for about ten
9:54
Speaker 2: billion dollars a year in TV rights. The interesting part
9:57
Speaker 2: about that, though, is that they're able to opt out
9:59
Speaker 2: of those deals, and I think it's twenty twenty nine
10:02
Speaker 2: or twenty thirty, they can opt out of those deals,
10:04
Speaker 2: and what I think they're going to end up doing
10:06
Speaker 2: is exactly that. I think they're going to end up
10:07
Speaker 2: opting out of them. What we've seen with the NBA
10:09
Speaker 2: specifically who's negotiating their rights right now, is that the
10:12
Speaker 2: public market investors in the public market have essentially said
10:15
Speaker 2: that it's better to overpay for rights than it is
10:18
Speaker 2: to lose rights. Right if you're Warner Brothers, it's the
10:21
Speaker 2: investors want you to overpay for the rights, even if
10:22
Speaker 2: you're not going to make as much money, because it's
10:24
Speaker 2: important to have live sports and you can monetize it
10:26
Speaker 2: in different ways. It would be a disaster if their
10:28
Speaker 2: affiliate fees on cable went down because they don't have NBA. Right. So,
10:33
Speaker 2: I think what with the NFL is looking at is
10:36
Speaker 2: saying that they're going to be able to multiply the
10:38
Speaker 2: amount of money that they get by adding all these
10:40
Speaker 2: distribution partners up in twenty twenty nine or twenty thirty.
10:43
Speaker 2: And the reason for that is because they've continued to
10:45
Speaker 2: create events, right, So think about Thanksgiving Day, Sunday Night Football,
10:49
Speaker 2: Monday Night Football, Thursday Night Football, they do Saturday primetime
10:52
Speaker 2: games during the holiday season. They obviously have the Playoffs,
10:55
Speaker 2: which they've sold exclusively, the Super Bowl rotation Sunday ticket
10:58
Speaker 2: which is also up. And then the biggest thing about
11:01
Speaker 2: all of it is Roger Goodell has publicly said that
11:03
Speaker 2: he wants to add an eighteenth game to the schedule.
11:05
Speaker 2: The CBA is going to be renegotiated in twenty twenty nine,
11:08
Speaker 2: which I don't think is a coincidence lines up with
11:10
Speaker 2: the TV deal, right, So they're going to go to
11:12
Speaker 2: market with this offering that is substantially better than what
11:15
Speaker 2: the networks are buying today. Plus they're probably going to
11:18
Speaker 2: hit the peak perfectly of where broadcast partners are willing
11:21
Speaker 2: to pay maximum wise versus the digital companies kind of
11:24
Speaker 2: equaling out. That's applying demand. So I think it's really
11:27
Speaker 2: kind of like a chess move from the NFL of
11:28
Speaker 2: saying we want to be in business with Netflix. We
11:30
Speaker 2: think they're going to be an important bidder down the road.
11:33
Speaker 2: Let's start with a smaller deal today, We'll see how
11:35
Speaker 2: it goes, and potentially five years from now we could
11:37
Speaker 2: be getting a lot more money from them on the
11:39
Speaker 2: black side.
11:39
Speaker 1: At this five years is tomorrow. It truly is, and
11:44
Speaker 1: the conversations for that will probably start eighteen months at out.
11:48
Speaker 1: So we're looking at let's say three years from now,
11:53
Speaker 1: we're going to start seeing stories from your newsletter and
11:57
Speaker 1: other people covering the business about the expectations for NFL rights.
12:03
Speaker 1: The NBA is going to sign a deal with somebody,
12:06
Speaker 1: some combination of ESPN, Amazon, NBC or Warner that will
12:12
Speaker 1: be for seven billion dollars.
12:16
Speaker 2: Almost three times what they get right now.
12:18
Speaker 1: There's three times what they get right now. The NFL
12:22
Speaker 1: is so far and beyond more valuable than the NBA.
12:27
Speaker 1: You look at the franchises alone, like the value of
12:29
Speaker 1: an NBA franchise is about a billion dollars less than
12:33
Speaker 1: the NFL.
12:34
Speaker 2: Well, just think about ratings, Chaed The ratings in the
12:37
Speaker 2: NBA are essentially flat. They're stagnant over the last few years.
12:40
Speaker 2: Regular season is essentially flat. Now they've tried to do
12:42
Speaker 2: a few things to add things. But if you guys
12:44
Speaker 2: think about maybe you've talked about this on the show before,
12:46
Speaker 2: but Nilsen fundamentally changed the way that viewership is calculated
12:50
Speaker 2: a few years ago, and that's why you've seen everything
12:51
Speaker 2: kind of increasing over the years. It added a substantial
12:54
Speaker 2: amount of out of home viewership data to the totals,
12:56
Speaker 2: and the NFL everyone else has benefited from that, but
12:58
Speaker 2: the NBA really has. So you could kind of make
13:01
Speaker 2: an argument that the viewership is actually down compared to
13:03
Speaker 2: where it was a couple of years ago. Now let's
13:05
Speaker 2: say it's flat. They're going to get a three times
13:07
Speaker 2: increase on a flat number. To your point, what does
13:10
Speaker 2: that mean the NFL is worth? Right? If the NFL's
13:13
Speaker 2: numbers are tremendously up and now they account for basically
13:15
Speaker 2: all of the top one hundred top broadcast in the
13:17
Speaker 2: United States every single year. To me, that seems much
13:20
Speaker 2: more valuable than what the NBA is And if they're
13:23
Speaker 2: getting a three x increase, you know, on a multiple
13:25
Speaker 2: of the number, it won't be as much, but it's
13:26
Speaker 2: going to be a significant more you know, dollar amount
13:29
Speaker 2: than the NBA is going to get.
13:32
Speaker 1: The NFL Draft had more first day viewers than any
13:38
Speaker 1: game in the Stanley Cup Finals, any game in the
13:41
Speaker 1: World Series, any game in the most recent NBA Finals.
13:45
Speaker 1: Simon and I can not stop talking about the NFL.
13:48
Speaker 1: It is we have turned this podcast essentially into an
13:53
Speaker 1: NFL podcast, partially because that's what people are most interested
13:57
Speaker 1: and it's also what Simon and I end up wanting
13:59
Speaker 1: to talk about the most. I don't see any limit
14:04
Speaker 1: to the NFL's ability to sell its product and capture
14:10
Speaker 1: the attention and imagination of sports fans. What is your
14:15
Speaker 1: take on a saturation point, tipping point inability for them
14:19
Speaker 1: to sell more product.
14:21
Speaker 2: Yeah, I really don't see it happening either. I mean,
14:24
Speaker 2: people have been talking about this for decades. There's this
14:26
Speaker 2: famous quote from Mark Cuban, I think it was probably
14:28
Speaker 2: a decade ago at this point where he said the
14:30
Speaker 2: line like pigs get fat, hogs get slaughtered or whatever
14:33
Speaker 2: it was, and he was saying that the NFL was
14:34
Speaker 2: getting hoggy because they were putting all these games on
14:37
Speaker 2: broadcast television, And that was a decade ago, right, And
14:40
Speaker 2: to our point earlier, the NFL is bigger and better
14:42
Speaker 2: than ever before. And I think what we've seen is
14:44
Speaker 2: that there was an appetite for the NFL twenty four
14:46
Speaker 2: to seven, three hundred and sixty five from people in America,
14:49
Speaker 2: and now it's growing internationally too. But there's a few
14:51
Speaker 2: good examples of this. We just talked about the Draft.
14:54
Speaker 2: The funny thing about the Draft is that the NFL
14:57
Speaker 2: didn't really intend for it to become like this. I mean,
14:59
Speaker 2: they certainly obviously wanted it to be big and people
15:02
Speaker 2: to talk about it. But now they've developed this whole
15:04
Speaker 2: thing where they go on the road every year and
15:05
Speaker 2: they go to different cities and people are bidding to
15:08
Speaker 2: host it like they would the super Bowl, which is
15:10
Speaker 2: obviously a great thing for the NFL, but that was
15:13
Speaker 2: really by mistake. I think it was Radio City Music
15:15
Speaker 2: Hall they hosted like a Roquettes concert and told the
15:17
Speaker 2: NFL that they wouldn't be able to do it the
15:19
Speaker 2: weekend that they normally do it, and Roger Goodell in
15:21
Speaker 2: the NFL were like, Okay, well we're just not gonna
15:23
Speaker 2: do it here, then we'll just go somewhere else, which
15:26
Speaker 2: is sort of an amazing story. But there's just so
15:28
Speaker 2: many other examples, Like even yesterday, I'm sure you guys
15:31
Speaker 2: saw the news Hard Knocks is doing the off season
15:34
Speaker 2: now with the New York Giants this upcoming year. So
15:36
Speaker 2: now we have an off season show, we have a
15:38
Speaker 2: training camp show, and we have an in season show.
15:41
Speaker 2: I'm not even really sure anyone was asking for that,
15:43
Speaker 2: but they're certainly going to watch it, and there's a
15:44
Speaker 2: reason why they're doing it. There's content twenty four to
15:47
Speaker 2: seven three sixty five around the NFL, and I think
15:49
Speaker 2: the numbers have proven over the years. I mean, I
15:51
Speaker 2: think there's nine or ten games around Christmas Week this year, right,
15:54
Speaker 2: so they can basically do whatever they want from a
15:57
Speaker 2: saturation standpoint, and they haven't reached boundary yet of where
16:01
Speaker 2: people are either complaining or the numbers are turning down
16:03
Speaker 2: to a degree. Until that happens, I don't think it's
16:06
Speaker 2: going to stop.
16:07
Speaker 3: Yeah, it's a interesting point you make two where you
16:10
Speaker 3: know the not that this sport's perfect. But I have
16:13
Speaker 3: family from England and I go to England a lot,
16:16
Speaker 3: and just seeing how in two thousand and four, if
16:19
Speaker 3: I would try to explain to someone how big of
16:21
Speaker 3: a deal Payton Manning and versus Tom Brady was no
16:23
Speaker 3: one in England. I'm telling you no one at any
16:25
Speaker 3: pub would understand it all, but they would know NBA.
16:28
Speaker 3: If I talked anything Lebron James, people in that pub
16:32
Speaker 3: would know it. Now it's I do think it's a
16:35
Speaker 3: part of the expansion of I mean we talk Netflix.
16:39
Speaker 3: That Netflix QB show also is a big deal because
16:43
Speaker 3: people in other countries got to watch these guys behind
16:46
Speaker 3: the scenes, these lives and what they put into it.
16:48
Speaker 3: But I explain to my cousins over there, they don't
16:50
Speaker 3: really get it. I think Americans get it where it's
16:53
Speaker 3: the perfect sport that every game is a playoff game.
16:56
Speaker 3: There's only sixteen games when we were growing up, now seventeen.
16:59
Speaker 3: It's the export for that that it's once a week
17:02
Speaker 3: and you can be on your phone with it and
17:04
Speaker 3: you're not missing anything. Right, a five second place happens
17:07
Speaker 3: and then you have forty seconds usually until the next play.
17:11
Speaker 3: For my generation, people talk all the time. That was
17:13
Speaker 3: a big deal because Bam, you're on your phone, You're
17:15
Speaker 3: texting your buddy back about the play that just happened. Whatever.
17:19
Speaker 3: You can't do that in hockey. You really can't do
17:20
Speaker 3: that in a lot of other sports, right, they're moving
17:22
Speaker 3: too quick. So your view, I totally agree with where
17:26
Speaker 3: it's like, people always want things to be peaking right,
17:29
Speaker 3: And like I always keep saying this is the Golden
17:31
Speaker 3: Arra of football because it feels that way because we
17:33
Speaker 3: have so many good quarterbacks, the most good quarterbacks in
17:35
Speaker 3: my lifetime playing in the league right now. But like
17:39
Speaker 3: you said, I'm just being naive.
17:41
Speaker 2: Are not like you?
17:41
Speaker 3: It is going to keep getting better, It's going to
17:43
Speaker 3: keep getting bigger. Like like people you talk to, what
17:46
Speaker 3: do they project out internationally? Because it is going to
17:49
Speaker 3: keep spreading, right, And I mean, we're playing football in
17:51
Speaker 3: Brazil this year. It's crazy to wrap her head around
17:53
Speaker 3: that a football game will be played in a city
17:55
Speaker 3: of Brazil.
17:57
Speaker 2: What's your view on all of the Joe there teams
18:01
Speaker 2: and cities across the world. Are intentionally thinking about NFL
18:04
Speaker 2: games when building stadiums. Real Madrid is the perfect example.
18:07
Speaker 2: What they did there with the pitch, which you know
18:09
Speaker 2: is removable and sits underneath the stadium so they can
18:11
Speaker 2: play NFL games is tremendous and transformative, and I think
18:14
Speaker 2: that's going to continue to around other places of the world.
18:16
Speaker 2: But it's not even people I talk to. I mean,
18:18
Speaker 2: Roger Goodell has said this that he thinks there's going
18:20
Speaker 2: to be a sixteen game or an eighteen game international
18:23
Speaker 2: schedule while he's commissioner. Right, so we're talking about, you know,
18:27
Speaker 2: maybe within the next five to at least the next decade,
18:29
Speaker 2: we're going to be having a full slate that essentially
18:31
Speaker 2: means one game every single week someone will be playing international.
18:34
Speaker 2: Now this will be in London, Germany, Brazil, Mexico City, Spain, whatever,
18:39
Speaker 2: but it means that you're going to wake up basically,
18:41
Speaker 2: if it's in Europe, you're going to see a football
18:43
Speaker 2: ga at nine thirty in the morning. Then you're going
18:44
Speaker 2: to go to one, then you're going to go to
18:46
Speaker 2: four thirty, then you're going to go to eight thirty.
18:47
Speaker 2: Then the next day you're going to be at eight
18:48
Speaker 2: thirty again, so it's going to be a full day.
18:50
Speaker 2: They already own Sunday and it's only going to become
18:52
Speaker 2: more popular because of that. And to your point, I
18:54
Speaker 2: think a lot of you know, when I talk to
18:56
Speaker 2: people across in different regions of the world that are
18:59
Speaker 2: primary looking at other sports, they all fawn over the NFL.
19:03
Speaker 2: The NFL is like the most ridiculous concept to them ever, right,
19:06
Speaker 2: because no one else plays it in the world, really,
19:09
Speaker 2: like it's only the United States, and it's commercialized to
19:12
Speaker 2: no end here. I mean, if you think about the NFL,
19:14
Speaker 2: one of the stats I love to use is that
19:16
Speaker 2: the NFL will do about twenty billion dollars in annual
19:19
Speaker 2: revenue last year or this year. That's more than the
19:22
Speaker 2: top five soccer leagues Premier League, La Liga, Bundesliga, Siria
19:25
Speaker 2: League one combined. Right, And if you think about how
19:29
Speaker 2: big soccer is on a global scale, they have hundreds
19:31
Speaker 2: of millions of more fans, billions of more fans than
19:34
Speaker 2: the NFL does. Yet the NFL monetizes their property significantly
19:38
Speaker 2: better than those leagues do. Now, there's some structural advantages,
19:41
Speaker 2: and most importantly it's in the United States, which is
19:43
Speaker 2: the world's biggest economy. But it just speaks to how
19:46
Speaker 2: big of a business the NFL is, and that's something
19:48
Speaker 2: that everyone looks at literally. You know. I've talked to
19:51
Speaker 2: people at Barcelona and Chelsea and ac Milan in places
19:53
Speaker 2: like that, and all of them talk about the NFL
19:55
Speaker 2: and they talk about the MLS in the same instance.
19:57
Speaker 2: Because in America the commercial is of sports is completely
20:01
Speaker 2: different than you would see abroad.
20:04
Speaker 1: You raise a really interesting point. It's something we touched
20:08
Speaker 1: down a little bit before we came on the air.
20:11
Speaker 1: There's a great story in Sportico this morning about Baine Capital.
20:19
Speaker 1: In two thousand and five, the NHL was coming off
20:21
Speaker 1: a lockout. It was a declining league. It was fading
20:26
Speaker 1: to the NBA and the NFL, and Bain Capital put
20:30
Speaker 1: together a presentation that basically said, we will buy the
20:34
Speaker 1: entire NHL for four billion dollars. And every owner in
20:40
Speaker 1: the league stood up and applauded at the presentation, and
20:45
Speaker 1: they understood it to be a financial windfall for them. Ultimately,
20:49
Speaker 1: they decided not to do it, not because it was
20:51
Speaker 1: financially the right thing to do, but because they had
20:55
Speaker 1: such an attachment to their individual franchises. They just didn't
20:58
Speaker 1: want to let them go. Turns out, twenty yars later,
21:00
Speaker 1: our generation later, it was the right call. The average
21:03
Speaker 1: value of a franchise in the NHL is about one
21:05
Speaker 1: point three billion dollars. Clearly the four billion would have
21:08
Speaker 1: been a discount twenty years later, and they would have
21:11
Speaker 1: operated it like MLS does, and sort of there was
21:13
Speaker 1: an economy of scale there for the people buying it.
21:16
Speaker 1: But the point is now private equity is becoming a
21:20
Speaker 1: bigger and bigger part of investment in sports. We see
21:23
Speaker 1: it in the NBA, we see it in the NHL.
21:25
Speaker 1: We don't see it in the NFL, where it's prohibited still.
21:29
Speaker 1: But I feel like private equity in the same way
21:31
Speaker 1: that sort of in a much smaller scale streaming impacts
21:36
Speaker 1: the sports fan experience. Why should fans care, Joe, if
21:41
Speaker 1: private equity is investing in sports at the scale that
21:45
Speaker 1: it's investing in it, because we have the biggest economy
21:48
Speaker 1: world and in the world, and sports as a product
21:52
Speaker 1: seems to have no limit.
21:54
Speaker 2: So there's a few different points to this. I think
21:57
Speaker 2: mainly the NFL is going to prove it at some point.
21:59
Speaker 2: There's reports that it could happen as early as next
22:01
Speaker 2: week when they vote on it, but so definitely within
22:03
Speaker 2: the next couple of years, I would say for sure
22:05
Speaker 2: there's going to be private equity investors within the NFL.
22:08
Speaker 2: And the main reason for this, why the NBA did
22:10
Speaker 2: it and why some other leagues have done it too,
22:12
Speaker 2: is sports teams are just getting too expensive for individuals.
22:15
Speaker 2: Right if you think about the owners, there's certainly enough
22:18
Speaker 2: billionaires in the world that want to buy a sports
22:20
Speaker 2: team where that's not really going to be a problem
22:21
Speaker 2: right now. One of the bigger problems, though specifically with
22:24
Speaker 2: the NFL, is minority investments. The problem with minority investments
22:28
Speaker 2: is if you take a team that's three billion dollars,
22:29
Speaker 2: a ten percent stake would be three hundred million dollars.
22:32
Speaker 2: Maybe you get a little bit of a discount twenty
22:33
Speaker 2: thirty percent that would normally be there for an investor,
22:36
Speaker 2: but you're now paying two hundred and fifty million dollars
22:39
Speaker 2: for season tickets, right like, you don't get to do anything.
22:43
Speaker 2: And I think there's a problem with that where your
22:45
Speaker 2: money's locked up for a long period of time, there's
22:47
Speaker 2: no liquidity, and you get nothing out of it. So
22:49
Speaker 2: there's not a ton of individuals that one have the
22:51
Speaker 2: money to do that and two the willingness to do
22:53
Speaker 2: it as well. So private equity comes in there. And
22:56
Speaker 2: if you think about that divide, it's perfect for private equity,
22:59
Speaker 2: right because what you do. You go and you raise
23:00
Speaker 2: billions of dollars from investors. You put in an asset
23:03
Speaker 2: that's basically guaranteed at this point to increase in value
23:05
Speaker 2: or has at least shown historically to be able to
23:07
Speaker 2: increase in value over a long time horizon, and you're
23:10
Speaker 2: able to charge two and twenty on that, which is
23:12
Speaker 2: amazing because your money's locked up, you know it's going
23:15
Speaker 2: to go up, no one's going to touch it, and
23:16
Speaker 2: you're able to charge a fee. That's like the best
23:18
Speaker 2: business model ever for private equity funds. So it solves
23:20
Speaker 2: both problems with the sports teams, their owners, the leagues,
23:23
Speaker 2: but also the private equity. There's immense interest from there.
23:26
Speaker 2: We've seen that in the NBA, but there's also a
23:28
Speaker 2: bunch of other things when you think about the fans
23:30
Speaker 2: that go into it. One of the good examples I
23:33
Speaker 2: like to use, and this wasn't necessarily private equity funded,
23:35
Speaker 2: but it can be in the future, and I think
23:37
Speaker 2: is what people will do is we've seen this huge
23:39
Speaker 2: shift now where a lot of the owners are thinking
23:41
Speaker 2: about real sports teams as real estate companies. Right. They're
23:44
Speaker 2: just kind of trying to build venues around their stadiums
23:47
Speaker 2: and arenas to maximize revenue and through real estate. And
23:52
Speaker 2: the best example of this, I think is the Battery
23:54
Speaker 2: in Atlanta. So the Atlanta Braves a number of years
23:56
Speaker 2: ago moved from downtown Atlanta out into the suburbs. It's
24:01
Speaker 2: about twenty miles away or twenty minutes away, and they
24:03
Speaker 2: opened up the Battery, which is essentially just a mixed
24:05
Speaker 2: use development around the city and there's hotels, restaurants, conference centers,
24:09
Speaker 2: office buildings, all that stuff. That space right now makes
24:14
Speaker 2: sixty million dollars a year for the team, and that's
24:18
Speaker 2: a lot of money. First and foremost, I think it's
24:19
Speaker 2: their third biggest revenue line item on their expense, on
24:22
Speaker 2: their operating budget. But more importantly, this money doesn't have
24:27
Speaker 2: to be shared with other teams, right, so you have
24:29
Speaker 2: a structural advantage because it's local revenue that you get
24:32
Speaker 2: to keep yourself. So they do a really good job
24:35
Speaker 2: of it. The Warriors have done a good job. The
24:36
Speaker 2: Milwaukee Bucks have done a good job, The Saint Louis
24:38
Speaker 2: Cardinals have done a good job, the Patriots have done
24:40
Speaker 2: a good job. Like all these teams are now doing it,
24:43
Speaker 2: and I think that's going to become more popular. And
24:45
Speaker 2: I also think it's something where private equity could step
24:47
Speaker 2: in and say, hey, we have experience doing this and
24:50
Speaker 2: some real estate deals that we've done in the past,
24:52
Speaker 2: but we can also provide investment capital that you need
24:54
Speaker 2: to go build this out, rather than taking on additional
24:57
Speaker 2: LPs to go do that and raising money or doing
24:59
Speaker 2: capital calls or things like that. So there's a few
25:01
Speaker 2: different things where I think it could benefit the fan,
25:04
Speaker 2: but ultimately I think the most obvious thing is that
25:07
Speaker 2: there's not enough owners. If the prices want to keep
25:09
Speaker 2: going up, you have to add more demand, and the
25:11
Speaker 2: best place to do that is from these deep pocket
25:13
Speaker 2: private equity investors.
25:16
Speaker 1: A buddy of mine used to be a banker and
25:19
Speaker 1: he worked on a deal for someone to buy an
25:22
Speaker 1: NFL team, and I once asked him, it's one of
25:25
Speaker 1: my favorite stories.
25:26
Speaker 2: I once asked him, So.
25:28
Speaker 1: What happens like when someone buys the team, how do
25:33
Speaker 1: they pay for it, and he's like, you get a check.
25:37
Speaker 1: And I'm like, so you just get a check? He goes, yeah,
25:41
Speaker 1: I got a check for a billion dollars. Like, imagine
25:45
Speaker 1: drawing that from your account. You're writing a check for
25:50
Speaker 1: a billion dollars to buy an NFL team and just
25:53
Speaker 1: handing it over someone. By the way, that guy started
25:57
Speaker 1: a private equity fund and is now raising money to
26:01
Speaker 1: invest in teams. Simon, speaking of money, can you name
26:06
Speaker 1: the fastest growing ticketing app in the United States?
26:09
Speaker 3: Game Time?
26:11
Speaker 1: That's right, It's game Time. I love game Time for
26:13
Speaker 1: two reasons. First, they still sponsored their show. Second, I
26:16
Speaker 1: use game Time all the time. They have amazing last
26:19
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26:23
Speaker 1: I'm using game Time right now. I'm opening the app
26:26
Speaker 1: from my house here in Central Connecticut. Guess what. I
26:31
Speaker 1: could go to see the Yankees for seventy bucks, or
26:37
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26:41
Speaker 1: take on the New York Liberty for less than one
26:42
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26:47
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26:50
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26:53
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27:02
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27:10
Speaker 2: Joe.
27:11
Speaker 1: The elephant in the room when you're on a podcast
27:13
Speaker 1: that is focused on betting is the impact all of
27:17
Speaker 1: these betting companies have had on the sports business, the
27:21
Speaker 1: sports media business. It's not discussed as outwardly in terms
27:27
Speaker 1: of the tangible impact that has on rights, the tangible
27:30
Speaker 1: impact that has on the economy of sports. Everyone just
27:34
Speaker 1: sort of says, yeah, people are watching more sports. The
27:37
Speaker 1: sports betting companies and sports betting as a business has
27:39
Speaker 1: made it more valuable. Give me your take on what
27:44
Speaker 1: you think the tangible value of that is in the
27:47
Speaker 1: context of the conversation we're having for rights.
27:50
Speaker 2: I think there is a tangible impact, for sure. The
27:52
Speaker 2: difficulty is measuring what that actually is. Right. The easiest
27:55
Speaker 2: answer is that if you bet on a game, you're
27:58
Speaker 2: probably going to watch that game, and you're more likely
28:00
Speaker 2: to watch that game. So I think that it's certainly
28:02
Speaker 2: impacted the NFL and other things like that. But I
28:04
Speaker 2: also think it's had an impact on smaller sports properties
28:07
Speaker 2: that maybe people didn't go and watch previously that now
28:10
Speaker 2: they're betting on and will go watch. So from like
28:12
Speaker 2: a percentage standpoint, it probably impacts smaller properties to an
28:15
Speaker 2: outsized degree. But to the larger point, people are betting
28:19
Speaker 2: more now than they ever have. It's becoming legal and
28:22
Speaker 2: more and more states every year. It feels like and
28:24
Speaker 2: it's going to be. It is big business, and it's
28:26
Speaker 2: going to become a bigger business. And I think that
28:28
Speaker 2: the leagues are currently trying to figure out how best
28:31
Speaker 2: to maximize that exposure by partnering with betting companies and
28:35
Speaker 2: getting a piece of the pie while also not overdoing
28:38
Speaker 2: it right. And a good example of this is the
28:42
Speaker 2: NBA a few months ago decided that they were going
28:44
Speaker 2: to build out functionality within their app where you can
28:48
Speaker 2: bet live on games, right, so you see the odds
28:51
Speaker 2: right within the broadcast, you click on it, it sends you
28:53
Speaker 2: through to one of the providers with one of those
28:54
Speaker 2: sportsbooks and you place the bet, And like that felt
28:58
Speaker 2: like one of those things to me that was probably
29:00
Speaker 2: like just crossing that line of like no one really
29:02
Speaker 2: asked for this, why are we doing this? And to
29:04
Speaker 2: their credit, right, you had to turn it on, You
29:05
Speaker 2: could turn it off. You didn't have to have it
29:07
Speaker 2: on the screen. But I think those are like the
29:09
Speaker 2: examples that we'll see going forward of how do you
29:11
Speaker 2: partner with some of these sports betting companies and make
29:13
Speaker 2: sure you know, the NFL loves to do this. They
29:15
Speaker 2: want to make sure that if you're working with them,
29:16
Speaker 2: they get a piece of the pot. But how do
29:19
Speaker 2: you do that in a tasteful way? And I think
29:23
Speaker 2: another good example of this is like what all these
29:25
Speaker 2: sports leagues have done with Fanatics. Right, if you think
29:27
Speaker 2: about Fanatics. People love to complain about fanatics online, but
29:31
Speaker 2: none of these leagues are ever going to switch from
29:32
Speaker 2: Fanatics because they all own equity in Fanatics and that
29:35
Speaker 2: money has gone up over the last number of years. Right,
29:37
Speaker 2: So it was like this genius kind of decision and
29:40
Speaker 2: fundraising by Ruben and all those guys at Fanatics. And
29:44
Speaker 2: I think that's what these leagues are now trying to
29:46
Speaker 2: figure out, is like, if you're the NFL, you have
29:48
Speaker 2: equity in data providers, you have equity in the commerce companies,
29:51
Speaker 2: you have equity in Noble who did the uniforms for
29:54
Speaker 2: the NFL combine, Like, those are the agreements that they're
29:57
Speaker 2: really looking for to be able to maximize their share
30:00
Speaker 2: of the value that they're bringing to the table. Right,
30:02
Speaker 2: Why would you just allow one of these sports betting
30:05
Speaker 2: companies to come in and monetize your content without you
30:09
Speaker 2: getting a share of it. And it feels like that's
30:11
Speaker 2: going to be the discussion over the next few years
30:13
Speaker 2: of like how they navigate that space versus more just
30:16
Speaker 2: people are betting on games, the sportsbooks are making a
30:19
Speaker 2: lot of money.
30:20
Speaker 3: Now, are the players and all these leagues benefit from
30:23
Speaker 3: this money yet or is this still just the owners
30:26
Speaker 3: getting all the money where you know, the players aren't.
30:30
Speaker 3: Maybe they don't aren't too keen to what's happening and
30:32
Speaker 3: how much everything's shifted, or maybe they just don't know
30:35
Speaker 3: what to do because, like you just said, this is
30:37
Speaker 3: so much money or into these leagues. It's not overnight, right,
30:41
Speaker 3: this has been a slow burn these last couple of years.
30:43
Speaker 3: So are the players getting any kickback and these different
30:46
Speaker 3: leagues or is that still not really you really can't
30:49
Speaker 3: tell yet.
30:50
Speaker 2: Well, they're definitely getting some kickback because basically all the
30:54
Speaker 2: leagues at this point have signed sports betting sponsorships and
30:56
Speaker 2: get paid money from it. And if you think about
30:58
Speaker 2: the big four sports leagues, they have revenue sharing agreements
31:01
Speaker 2: with the players, so the players get fifty percent, give
31:03
Speaker 2: or take of any dollars that the league makes. So
31:06
Speaker 2: if they go out and they sign a deal for
31:07
Speaker 2: one hundred million dollars, the players get fifty million of that,
31:10
Speaker 2: which is great and I think part of the reason
31:13
Speaker 2: why they're ultimately okay with a lot of this stuff.
31:15
Speaker 2: The thing that watch though is like scandal wise, it
31:18
Speaker 2: feels like there's one every.
31:19
Speaker 3: Week now and that's all trying to get to.
31:21
Speaker 2: Yeah, like it's only going to become more popular though, right,
31:24
Speaker 2: Like you're putting this stuff in people's face. And granted,
31:27
Speaker 2: like I'm pro legalization, I think it's great. I think
31:30
Speaker 2: people should have the ability to pick and choose what
31:31
Speaker 2: they want to do. I always saw it as sort
31:33
Speaker 2: of like a low form of entertainment, right if you're
31:35
Speaker 2: betting a responsible amount of money on a game, you're
31:38
Speaker 2: watching the game with friends, you're talking about it great fun.
31:40
Speaker 2: There's obviously people that take it a little bit too far,
31:42
Speaker 2: in players, specifically who can't control what they're doing and
31:46
Speaker 2: you know, do things that they're not supposed to be doing,
31:48
Speaker 2: so I think that's only going to become more popular.
31:50
Speaker 2: Greed is obviously something that's been around for a long
31:53
Speaker 2: long time. But to your point, like the players, they
31:58
Speaker 2: should be okay with this stuff because they're going to
32:01
Speaker 2: make money on it. And it's the same reason why
32:02
Speaker 2: I talk about the NFL they're going to be okay
32:04
Speaker 2: with an eighteenth game as well, because for every Patrick
32:08
Speaker 2: Mahomes in the league that doesn't need any more money,
32:10
Speaker 2: there's fifty guys that are on practice squad and want
32:13
Speaker 2: to make more money, and the union is responsible for
32:15
Speaker 2: all these guys, so they end up negotiating deals that
32:18
Speaker 2: ultimately bring in the most money in spite of player
32:21
Speaker 2: safety or things that maybe the star players don't want
32:24
Speaker 2: to do. So with gambling, it's the same thing of
32:26
Speaker 2: where these unions are going to negotiate deals where they
32:29
Speaker 2: get a higher percentage of these rights going forward or
32:31
Speaker 2: of these deals going forward, and the leagues are going
32:34
Speaker 2: to continue to monetize it in whatever aspect they can
32:36
Speaker 2: to make the most money.
32:37
Speaker 1: It does feel like a spot where players can use
32:42
Speaker 1: leverage with the betting companies. It's a spot where the
32:46
Speaker 1: players can use their leverage because of betting in ways
32:50
Speaker 1: that are different than they can do with even apparel
32:54
Speaker 1: or with media rights, which is there's a lot of
33:00
Speaker 1: animosity towards the players from amateur betters who don't really
33:06
Speaker 1: know how to manage it right. We hear all the
33:09
Speaker 1: time from the players about the player props. We hear
33:13
Speaker 1: from the players about totals, We hear it about sides.
33:18
Speaker 1: Get They are hearing about it, and they've heard about
33:21
Speaker 1: it for years because of fantasy too. But this all
33:23
Speaker 1: of a sudden feels like a place where players could
33:26
Speaker 1: use leverage to negotiate potentially better terms for themselves, specifically
33:31
Speaker 1: when it comes to betting the NBA wants, if the
33:33
Speaker 1: NFL wants to add an eighteenth game, then the players
33:38
Speaker 1: in twenty twenty nine should be saying, okay, when it
33:40
Speaker 1: comes to betting deals, we want sixty percent, not fifty percent.
33:44
Speaker 2: Yeah. Yeah, And you know, one of the things to
33:46
Speaker 2: keep in mind, I was talking to a very prominent
33:50
Speaker 2: investor out in LA who actually used to own part
33:53
Speaker 2: of an NBA team, and he was saying that the
33:55
Speaker 2: thing that concerns him the most specifically with the NBA,
33:58
Speaker 2: but other sports league as well, is is going forward,
34:01
Speaker 2: you almost have to build out in your models as
34:03
Speaker 2: an owner, the chance that some of these players may
34:05
Speaker 2: get phantom equity enfranchises right and in the league overall. Now,
34:10
Speaker 2: the NBA has taken a step towards this with allowing
34:13
Speaker 2: players to invest through a fund in different teams. So
34:15
Speaker 2: the same way a private equity firm could go in
34:17
Speaker 2: and buy five percent of a team, they're opening a
34:19
Speaker 2: fund where players can invest their own money and you know,
34:22
Speaker 2: appreciate or join the appreciation of the teams. But I
34:25
Speaker 2: think to the larger point, what we've seen is I mean,
34:29
Speaker 2: if you look at Live Golf, that's a good example
34:31
Speaker 2: of an institution that just came in with basically an
34:33
Speaker 2: unlimited budget and offered players something that the outstanding lead
34:36
Speaker 2: or the existing league couldn't compete with. Right the PGA Tour,
34:39
Speaker 2: you don't get paid un lets you show up and
34:41
Speaker 2: you play well, and Live Golf, you get guaranteed money
34:43
Speaker 2: because they're not worried about making a profit. Now, could
34:46
Speaker 2: that happen in the NBA. You know, I doubt it,
34:48
Speaker 2: but it certainly could to some degree but I think
34:50
Speaker 2: the bigger concern is what happens from a CBA perspective
34:55
Speaker 2: if the NFL or the NBA or leagues like that
34:59
Speaker 2: want to play hard ball and the players and their
35:01
Speaker 2: union aren't up for because I think specifically with the NFL,
35:04
Speaker 2: a lot of people have criticized what the union has
35:07
Speaker 2: done over the years, but even just being at fifty
35:10
Speaker 2: to fifty revenue sharing, I think is a tremendous kind
35:13
Speaker 2: of upside. The unfortunate part is that the owners are
35:16
Speaker 2: always going to be on top of this right they
35:18
Speaker 2: own equity in the franchises, and there's a salary cap,
35:20
Speaker 2: so that's going to continue to rise in parody with
35:22
Speaker 2: the overall revenue of the league. But it also places
35:25
Speaker 2: a cap on player earnings. So we're seeing the same
35:28
Speaker 2: thing in the Premier League today of like they're trying
35:29
Speaker 2: to fight the salary cap because there's entities and institutions
35:33
Speaker 2: and people that will spend money if given the chance.
35:36
Speaker 2: And if you look at the NFL, it's a very
35:39
Speaker 2: small percentage of about fifty percent of the money get
35:42
Speaker 2: spent on the players for teams in the Premier League,
35:44
Speaker 2: it's like ninety percent for the top teams, right, they're
35:46
Speaker 2: spending eighty ninety percent of overall income on players every
35:49
Speaker 2: single year. So the US and specifically the NFL, has
35:53
Speaker 2: the best business model in sports where you have this
35:56
Speaker 2: limited inventory, every game is super important. They're all sold
35:59
Speaker 2: at the broadcast level. You have the sports betting and
36:01
Speaker 2: everything else. There's reverse drafts, so there's you know, new
36:03
Speaker 2: competition every single year, and I think sports betting, to
36:07
Speaker 2: your point, is just an extension of that.
36:13
Speaker 1: The NBA recently had the Jonte Porter controversy scandal where
36:20
Speaker 1: he's been banned from the league for betting on his
36:24
Speaker 1: own player props. Now there are conversations about how to
36:28
Speaker 1: manage that, how to manage player props individually. This isn't
36:33
Speaker 1: really a business question, although I feel like it's related
36:37
Speaker 1: to the business in that if you are a business
36:41
Speaker 1: trying to manage the fine line between conflict integrity and
36:49
Speaker 1: maximizing revenue, how do you, as someone who is in
36:53
Speaker 1: this space and very attuned to optics, help them manage
36:59
Speaker 1: this situation.
37:01
Speaker 2: It's zero tolerance, right, and that's why Johntay Porter's ban
37:05
Speaker 2: was the easiest ban of all time. He's a two
37:07
Speaker 2: way player, He's not important to the overall league. He
37:10
Speaker 2: bet on games, he bet on games that he was
37:12
Speaker 2: playing in, and he bet on his team to lose.
37:14
Speaker 2: It's like that's a slam dunk. You're getting banned, but
37:17
Speaker 2: no questions asked. No one's gonna complain, No fans are
37:20
Speaker 2: going to ask questions. Easy done. And I think that's
37:23
Speaker 2: the kind of stuff that hopefully will scare other people
37:25
Speaker 2: into not doing similar things. But look, you know there's
37:29
Speaker 2: no doubting that there is some kind of hypocrisy here
37:33
Speaker 2: where the league is saying. You know, people make jokes
37:35
Speaker 2: every time one of these things comes up, Johontay Porter
37:37
Speaker 2: investigation brought to you by fan Duel or DraftKings or whatever,
37:40
Speaker 2: because that's what the league is doing. And I think
37:43
Speaker 2: what the players need to understand is what we talked
37:45
Speaker 2: about earlier, which is like, you guys are benefiting from
37:48
Speaker 2: this financially. The league isn't just making money and you
37:51
Speaker 2: guys are not getting a share of it. No, this
37:52
Speaker 2: is helping you guys, but there's specific rules that you
37:55
Speaker 2: have to be able to abide by for us to
37:57
Speaker 2: make this money that you're not going to end up
37:58
Speaker 2: getting fifty percent of and part of that is not
38:00
Speaker 2: betting on games. It's keeping the integrity of the game important.
38:03
Speaker 2: So to answer your question, I think it's just having
38:06
Speaker 2: zero tolerance. It's it's lifetime bans, it's multiple year suspensions.
38:10
Speaker 2: The NFL has done a pretty good job of setting guidelines,
38:14
Speaker 2: very strict guidelines of hey, if you do this, this
38:16
Speaker 2: is what the punishment is going to be. It fits
38:18
Speaker 2: within this label, and that's what's going to happen, and
38:21
Speaker 2: they've had to apply that, you know, more than a
38:23
Speaker 2: handful of times at this point. But I think the
38:25
Speaker 2: hope is over time, as more players get educated and
38:28
Speaker 2: they do more kind of learning around this stuff, that
38:30
Speaker 2: hopefully that number goes down. Now, the big concern for
38:33
Speaker 2: the leagues is if there's like a bigger scandal. Right
38:36
Speaker 2: John day Porter, it's like, okay, this, you know this
38:38
Speaker 2: two way players betting on his props under he's come
38:40
Speaker 2: out of a game with injuries. It was obvious what
38:43
Speaker 2: was happening. I forget the exact number that he was betting,
38:45
Speaker 2: but it was like, you know, totally outsized to what
38:46
Speaker 2: you would bet on a normal prop, but specifically on
38:48
Speaker 2: a John day Porter prop. It was outrageous. Those things
38:52
Speaker 2: are easy to catch and not meaningful to the overall game.
38:54
Speaker 2: I would argue the bigger ones are like, are some
38:58
Speaker 2: of these games potentially going to be fit in the future.
39:00
Speaker 2: Are there going to be star players that are important
39:02
Speaker 2: to the league that make a dumb decision and impact
39:05
Speaker 2: ratings or kind of controversy and things like that, And
39:08
Speaker 2: those are the things that the leagues be more concerned
39:10
Speaker 2: about rather than just, you know, the props. I think
39:12
Speaker 2: you guys probably know this better than me. But there
39:14
Speaker 2: was an article a few weeks ago about I think
39:16
Speaker 2: it was the NBA was specifically talking about limiting props
39:20
Speaker 2: or maybe taking them away altogether, which you know, I
39:23
Speaker 2: don't necessarily think that's the best idea. There's plenty of
39:25
Speaker 2: people that like props, and there's businesses that have been
39:27
Speaker 2: built on that that gameplay style. But I would argue,
39:31
Speaker 2: you probably don't need John te Border props right, or again,
39:34
Speaker 2: you can limit them to a number that's not substantial
39:37
Speaker 2: and would make it so no one wants to fix
39:40
Speaker 2: the game or risk their their multimillion dollar career because
39:42
Speaker 2: of it.
39:43
Speaker 3: Yeah, if people want peace of mind, there is no
39:48
Speaker 3: event in America, no sport, an event in America that
39:52
Speaker 3: can be fixed for say seven figures without millions of
39:57
Speaker 3: red flags now exploding everywhere. There's super is the only
40:01
Speaker 3: thing you can maybe get enough money down with enough
40:03
Speaker 3: people that it would be advantageous to these different players
40:07
Speaker 3: to even consider fixing the game. But I mean, we
40:11
Speaker 3: all agree, right, it's it's the the quarterback really is.
40:14
Speaker 3: Unless it's the referees, that's a whole nother story.
40:15
Speaker 2: But I just want people to have a.
40:17
Speaker 3: Piece of mind knowing it's it's impossible. I mean, we
40:20
Speaker 3: just talked about.
40:20
Speaker 2: But I don't I don't know if I agree. I
40:22
Speaker 2: don't know if I don't know if I agree with
40:24
Speaker 2: that though, right, because so Johntay Porter, I don't. I
40:28
Speaker 2: agree in the fact that he probably couldn't have fixed
40:29
Speaker 2: the game. I don't think he was an important enough
40:31
Speaker 2: player and kind of in the grand scheme of the
40:33
Speaker 2: game plan to be able to do that.
40:34
Speaker 3: But even if he tried, he failed.
40:36
Speaker 2: Yeah he did. But he did it. He did it
40:40
Speaker 2: for much less money than you are arguing people would
40:42
Speaker 2: do it for, right, Like he just made a dumb decision.
40:45
Speaker 2: He was essentially going to make like fifteen grand on
40:47
Speaker 2: a game like that's idiotic in the grand scheme of
40:49
Speaker 2: his career and how much money he was making for
40:51
Speaker 2: being on the raptors. So the idea that you have
40:53
Speaker 2: to get seven figures down if you were smart, yes,
40:57
Speaker 2: but the fact that he was doing it for you know,
41:00
Speaker 2: fifteen thousand dollars uh is one idiotic, but two it
41:04
Speaker 2: leaves a little room for interpretation on what what players
41:08
Speaker 2: would be willing to do it for.
41:09
Speaker 3: No, you're definitely right, Like of a backup quarterback somehow
41:13
Speaker 3: knew he was playing that week and no one else knew,
41:15
Speaker 3: and he was like, I am going to shit this bed.
41:18
Speaker 3: I have not studied. I am unprepared. I am terrible.
41:21
Speaker 3: He could go out and tell all of his friends
41:23
Speaker 3: and get maybe a bunch of money down against him.
41:25
Speaker 3: But these books now, like betters, no man, if I'm
41:30
Speaker 3: if I even if I'm trying to get a small
41:31
Speaker 3: bet down midday two thousand dollars, someone's getting called like it,
41:37
Speaker 3: like it's there, and they have face direction, Like I
41:39
Speaker 3: talk to chat all the time. I wear a mask
41:41
Speaker 3: now to sports books because the minute I walk on
41:44
Speaker 3: our sports book, I'm escorted out because the cameras pick
41:46
Speaker 3: up your face and the technology now where they're like, oh,
41:49
Speaker 3: they know exactly who I am. I so security umber
41:51
Speaker 3: pops up the whole nine yard. So I'm agreeing with you. Actually,
41:55
Speaker 3: you made a good point there that that guy with Toronto,
41:58
Speaker 3: that's the definition of having a sick right, he had
42:00
Speaker 3: the disease because there is no logical reason behind it.
42:04
Speaker 3: I was mainly talking about. You know, people are like,
42:07
Speaker 3: what if Patrick mahomes through Super Bowl whatever, like all
42:10
Speaker 3: these crazy speculations. It just wouldn't make sense. The guy
42:13
Speaker 3: gets paid fifty million dollars, Like, there's no unless the
42:17
Speaker 3: mafia has his wife and kids. I just don't there's
42:19
Speaker 3: no scenarios. So I just people all the time say
42:22
Speaker 3: these crazy things. Me and Chad joke about it. Oh
42:24
Speaker 3: the script got leaked, right, the game script. We know
42:26
Speaker 3: what's going to happen. We're just having fun.
42:28
Speaker 2: People.
42:29
Speaker 3: It's it's not people act as if these things are
42:31
Speaker 3: all scripted. It's really not people.
42:34
Speaker 1: You could make the case if we were conspiracy minded
42:41
Speaker 1: that Johantay Porter ended up being a patsy for all
42:48
Speaker 1: of this, that somehow you couldn't find a better example.
42:54
Speaker 1: Ban a two way player for player props that don't
42:57
Speaker 1: really impact the game. You send the message, You make
43:01
Speaker 1: it clear there's a no tolerance policy. Mid level players
43:05
Speaker 1: making two million a year who might be overspending and
43:09
Speaker 1: looking for easy ways out, all of a sudden, they're
43:13
Speaker 1: not looking for that out because they know the league
43:15
Speaker 1: is going to come down on them because they saw
43:17
Speaker 1: what they did to John day Porter.
43:20
Speaker 2: Yeah, that's basically what I was saying. Right. It was
43:22
Speaker 2: like almost helpful for the NBA that had happened, because
43:25
Speaker 2: right out the gate you said an example of what's
43:27
Speaker 2: going to happen if you go do that, and it's
43:29
Speaker 2: not a player that really matters in the grand scheme
43:31
Speaker 2: of the game.
43:32
Speaker 1: No, all right, Joe, thanks for coming on.
43:35
Speaker 2: Brother.
43:36
Speaker 1: Joe Pompliano, author of the Huddle Up newsletter, great follow
43:40
Speaker 1: on social media. When it comes to sports sports business, Look,
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Speaker 1: this is not a beat that's going away. It's going
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Speaker 1: to impact us as fans more and more as the
43:50
Speaker 1: future evolves, whether it's sports betting, streaming rights, ticketing investment,
43:56
Speaker 1: it all trickles down to us folks, every single element.
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