Moag and Company Sports Notes (10 May 2019)

Date: May 2019


When did the New York Yankees win their first World Series Championship?  

Last Week’s Answer: The three races that make up the Triple Crown of Thoroughbred Racing are: 1) The Kentucky Derby at Churchill Downs in Louisville, Kentucky. 2) The Preakness Stakes at Pimlico Race Course in Baltimore, Maryland. 3) The Belmont Stakes at Belmont Park in Elmont, New York.  


More than half of the XFL's games will be on broadcast TV as part of deals the league announced with Fox and ESPN. The broadcast component is important as league execs believe their best chance for success is having games in front of the biggest possible TV audience. Spring football efforts in recent years, including the AAF, which shut down last month, did not have the majority of their games on broadcast TV. “Spring football is going to work,” said ESPN Exec VP/Programming & Scheduling Burke Magnus. "The combination of Vince McMahon, WWE, Fox and Disney is an incredible one to take a really hard run at this and see if that’s not the combination that finally makes it work.” The multiyear deal calls for 24 of the XFL's 43 games to be on broadcast TV (13 on ABC; 11 on Fox) in ‘20, including two Thursday primetime games on Fox next April. The networks are not paying a rights fee, but ESPN and Fox are picking up production costs, which generally amount to around $400,000 per game, sources said. As part of the deal, the nets will sell ads around the game, with the XFL handling sponsorships at the venue. ESPN and Fox will hold streaming rights to XFL games. The two nets will also cross-promote games during game broadcasts. “One of the key drivers of a successful professional league is broad exposure and appointment television, and we’ve got that,” said CAA’s Alan Gold, who along with agency's Nick Khan brokered the deal for the league.


Sinclair Broadcasting Group has "made a big bet on the future of live sports to pair with its new offerings" in buying the 21 Disney RSNs for a reported $10.6B, according to the Washington Post. Sinclair President & CEO Chris Ripley said, "We will become the preeminent local news and sports provider in the country. And those two genres, in terms of live viewership, are head and shoulders above any other genre." Ripley said that he expects to "package the RSNs and broadcast channels to cable distributors, which pay fees to broadcast stations even though they are available over the air free." Ripley suggested that there would be "some business operations streamlining involved in sales and back-end management as well." Ripley added that Sinclair also "sees opportunity in legalized sports betting and building out content for the RSNs." Strauss notes when the RSNs were owned by Fox before the Disney acquisition, "most of the channels offered little beyond live games and pre-and-postgame coverage". Ripley "expressed confidence in the sustainable value of sports broadcast rights despite increased resistance from some cable subscribers to paying high fees for sports networks." He said, "We asked ourselves sort of a simple question: Ten years from now, would the local MLB, NBA and NHL teams' rights be important to people? And the answer to that was pretty easy -- they will be".


The Carolina Hurricanes' "dream season" has had an impact on the team's financials, as they have already sold $3.6M in new ticket business for next season, according to TSN. A year ago, the Hurricanes had only sold $500,000 in "new ticket business for the following season.” It "probably shouldn't be a surprise that the Hurricanes are managing to fill more seats in advance." Public interest "sags when smaller-market teams fail to make the postseason for prolonged stretches -- and in the case of the Hurricanes, this was a drought that lasted an entire decade." The "only real remedy" for that is the "real tangible success the franchise is once again having".


The Chicago Fire after this season "will no longer play" home games in SeatGeek Stadium, and the club will pay the village of Bridgeview, Ill., $60.5M to "escape its lease," according to the Desplaines Valley News. Sources said that the team in '20 is "expected to play home games in Soldier Field." After playing in Bridgeview since '06, the Fire "will likely complete" the '19 season at SeatGeek Stadium. The exit "became official" when the village board "unanimously approved a Memo Of Understanding between the Fire and Bridgeview." The next step is "formally amending the lease." Bridgeview financial advisor Dan Denys said that the $60.5M cost to end the lease includes a $10M payment upfront, with the "balance paid over the next 15 years." Denys added that the Fire would pay the village $5M for the "next five years of using the Bridgeview facilities for practice," and if there is a "new soccer specific facility built within 35 miles of Bridgeview 'there would be additional compensation' from the Fire." Officials said that there are "no plans" for the NWSL Chicago Red Stars to leave Bridgeview.


In the boldest step taken by a U.S. media company in the sports gambling space, Fox Sports will unveil an app this fall that will allow some domestic consumers to place wagers on sporting events. The move to launch Fox Bet comes as part of a wide-ranging deal Fox signed with The Stars Group. The plan is to launch two betting products under the Fox Bet umbrella. One is a nationwide free-to-play game that awards cash prizes to people who correctly predict the outcomes of games. The other gives an opportunity to place real money wagers on sporting events in states with legalized gambling. Deal terms have Fox paying $236M for a 4.99% stake in Stars Group. Fox holds the right to take a 50% equity stake in the company within the next 10 years. Fox will get a brand license, integration and affiliate fees and a minimum advertising commitment from Stars Group as part of the deal. In exchange, Stars Group will use Fox Sports trademarks to launch the service as part of a 25-year commercial license. Stars Group also picked up advertising and editorial integration rights on some Fox Sports broadcast media and digital assets, the company said.

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