Moag & Company Sports Notes (04 Nov 2022)

Date: Nov 2022

Trivia

What team owns the longest winning streak in NBA history?

Last Week’s Answer: Brazil is the only country to have played in each and every World Cup.

Football:

The Washington Commanders owners Dan and Tanya Snyder have hired a bank to consider "potential transactions." Snyder and his bankers are "exploring all options and a transaction could be for the entire NFL team or a minority stake." A source said that Snyder "already has at least four calls from groups interested in buying the team." In March 2021, Snyder and his family "got 100% control of the Commanders when he bought out his minority partners". This move comes just two weeks after Colts owner Jim Irsay "said he believes there is 'merit' to remove Snyder from the NFL in wake of the team’s workplace misconduct scandal". Snyder headed a group of investors that bought the team in 1999 for $800M. The team since then "has struggled to remain competitive, and its stadium, FedEx Field, is often voted the worst in the NFL." However, the value of the franchise "has grown immensely, and a sale would likely bring" more than $5B. The franchise is "particularly attractive because it is pursuing a new stadium project, allowing a new owner to put his stamp on the team right away".

Baseball:

The Liberty Media-owned Atlanta Braves reported $252M in revenue for Q3, an 8% increase over the same period last year, on the heels of a division-winning season that included 42 game sellouts and 3.2 million tickets sold, the club’s highest ticket sales since 2000. Baseball revenue increased in the quarter due to more home games played (38 in Q3 2022, compared to 34 in the prior year period) and increased ticket demand at regular-season games, as well as additional special events including concerts held at the ballpark compared to the prior year period. Development revenue increased due to a reduction in deferred payment arrangements and increases in rental income from various new lease commencements. Operating income saw a 63% year-over-year period decrease (from $35M to $13M) and adjusted OIBDA dropped 29% (from $58M to $41M). Revenue growth was offset by higher player salaries, higher levels of facility and game-day expenses driven by more home games and higher attendance, plus increased expenses under MLB’s revenue sharing plan. Selling, general and administrative expenses increased primarily due to increased special event expenses, marketing initiatives and personnel costs.

MLB has "inserted itself into the negotiations" of a sale of the Washington Nationals to "resolve an issue that has hampered the franchise since it relocated to the nation’s capital: the Mid-Atlantic Sports Network," according to the Washington Post. MLB is "aware that any new owner would want to know how much money it would receive from MASN for the team’s regional media rights." Sources believe Monumental Sports & Entertainment Chair & CEO Ted Leonsis to be the "leading candidate to purchase the Nationals." An MLB official said that it is "engaged in negotiating certainty about that revenue going forward." That could "give Leonsis’s group confidence to move forward with its bid." The Orioles "control MASN," which owns the Nationals’ local media rights. MLB’s current effort is to "make sure a potential buyer knows what it would receive in what is an important revenue stream for any professional sports franchise." Since they bought the team from MLB in 2006, the Lerners "haven’t had that certainty." Sources said that Leonsis "would want that." Though Nationals Managing Partner Mark Lerner "has told associates in recent months that he would like his club to fetch something in the range" of the New York Mets’ sale price of $2.4B, some have "cautioned Lerner that the MASN situation could affect a potential sale price." MLB has a "high interest in having the Nationals sell for a premium price," and resolving the MASN rights fee issue would be a "significant step toward solidifying the club’s value." Regardless of how the MASN situation affects the eventual price, sources believe that it is "affecting the timeline".

Hockey:

The Ottawa Senators confirmed that the team “will be sold in the coming months,” although one condition of any potential sale “is that the team remain in Ottawa,” according to the Ottawa Citizen. The Senators “have the support of the NHL in the decision to put the club up for sale.” There is "no shortage of interested parties in purchasing the Senators, especially with the club winning preferred bidder status from the National Capital Commission to build a new rink 10 minutes from downtown at LeBreton Flats." Sources said that the phone "at the NHL offices has been 'ringing off the hook'”.  Actor Ryan Reynolds is “serious about his interest” in owning the Senators, and the indications are Reynolds' representatives “may have already reached out” to NHL officials. The belief is Reynolds “feels like there’s a good opportunity to have success” with the Senators. Even if he is not the majority owner, it would “make sense for Reynolds to be involved with whoever purchases the majority share of the franchise.” Reynolds, who wants to keep the team in town, “has ties to the area” and even lived in Ottawa for a short time. Meanwhile, the expectation is that the final sale price “will be somewhere between" US$700M-1B. The belief is team Anna and Olivia Melnyk, the daughters of late Senators owner Eugene Melnyk, would “like to hold onto a legacy piece of the franchise.” However, that will be “up to whoever buys the team”. Reynolds’ net worth is estimated around $150M, while the team could “sell for well over a billion. Would he need to have a team (of investors) to buy the team? That makes the most sense. But look, having Ryan Reynolds involved in Ottawa Senators ownership certainly spices the process up a little bit.” However, Reynolds "hasn't reached out to the National Hockey League just yet".

Soccer:

In his State of the League address in L.A., MLS commissioner Don Garber said the league has no plans to enact further punishment on Portland Timbers and NWSL Portland Thorns owner Merritt Paulson, who was alleged by the Sally Yates report to have suppressed accusations of sexual abuse against former coach Paul Riley and attempted to impede the recent investigation. “We at this time don’t see any reason at all for Merritt to sell the Timbers,” said Garber. “Obviously, Merritt has very publicly acknowledged the mistakes he and his organization have made, and he’s taken responsibility for those decisions.” Local fan groups have publicly called for Paulson to sell. Garber added that recent personnel moves, including Paulson stepping down as CEO and the team terminating longtime President of Business Mike Golub and President of Soccer Gavin Wilkinson, were “steps in the right direction.” Garber added that he is confident NYCFC will soon conclude its years-long efforts to construct a home stadium, and he noted that there may be no need for Charlotte FC to construct a soccer-specific home grounds given the team’s strong fan support to date. This year, the MLS newcomer set a league attendance record when nearly 75,000 fans attended the home debut at Charlotte’s Bank of America Stadium. Charlotte concluded the season ranked second in home game attendance, averaging over 35,000 fans per game.

Sources: SportsBusiness Daily; ESPN.com; Washington Times; USA Today; ProFootballTalk; Washington Post; Ottawa Citizen

 
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