Moag and Company Sports Notes (30 Aug 2019)

Date: Sep 2019

Trivia

Who was the first pick in the first NBA draft?

Last Week’s Answer: A baseball player can earn a golden sombrero by striking out four times in a game. A player who strikes out five times in a game earns “Olympic rings” or a “platinum sombrero”, and a player who strikes out six times earns a “horn” or “titanium sombrero”. 

Football:

The NFL and NFLPA "don't seem to have made much progress on the major financial issues" in their CBA negotiations, according to ESPN. Under the previous CBA, the players' shared revenue was "established at no lower than 47% at any given year," but they would "like that number to come up." So far, the owners "have not indicated a willingness to move off of that number," and from the owners’ side, "they’re interested in discussing the potential expansion of the season." Multiple ideas "have been floated," including a 17-game season, 18-game season or expanding the playoffs "instead of expanding the regular season. That last one is one that players might support, but (there are) no concrete proposals there yet. They’re still dancing around each other and figuring out what the major priorities are and they haven't really got to the nitty gritty of negotiation.” There is a "real disconnect on the expanded season. Players didn't want it in the first place and now, two, three days after the retirement of Andrew Luck, one of the game's brighter stars, at the age of 29 because he felt like a 16-game season was too much, if there was any chance that the players were going to support an idea like this, it definitely dampens that significantly".

Baseball:

Kansas City Royals Owner David Glass is in "discussions about selling his MLB franchise to a group" led by K.C. entrepreneur and Cleveland Indians Vice Chair John Sherman, according to the K.C. Star. Sources "described the talks as advanced," with one saying that a deal "could be finalized by the end of the year." League rules would require Sherman to "relinquish his minority ownership stake in the Indians." Glass is currently in his 20th season as owner and CEO of the Royals. He was appointed CEO "after the death of Ewing Kauffman, the Royals’ first owner," in '93. In April '00, the Glass family "acquired the Royals from Kauffman’s estate" for $96M. The Royals won the '15 World Series under Glass' watch, but this season have averaged 18,955 fans per game at Kauffman Stadium, ahead of only the Baltimore Orioles and Tampa Bay Rays in attendance among AL teams. Glass had "not publicly disclosed any intention to sell the club". ESPN cited sources as saying that the Royals' sale price is "more than" $1B. However, the price of the Royals is "expected to fall short of the most recent sale" of an MLB team, when Bruce Sherman bought the Miami Marlins for $1.2B. A source said that the Royals sale "could happen around the same time the franchise locks into" a new TV deal with FS K.C. That deal "could pay the team" around $50M a year for a decade-plus and would "more than double" its current rights fee with the RSN. Glass paid $96M for the Royals in 2000. Less than two decades later he will sell for $1B. He just made a $904M profit in 19 years.

 Disney has "sold its 80% interest in the YES Network" to an investment group led by the New York Yankees and Sinclair Broadcast Group for $3.47B, according to the N.Y. Post. The new owners of YES also "include Amazon and investment firms including RedBird Capital, Blackstone and Mubadala Capital." The Yankees "already owned a 20% stake in YES". Disney "acquired majority ownership of the YES Network" as part of its $71B takeover of Fox assets earlier this year. But the Yankees’ owners had an "option to buy out that stake and held lengthy talks leading up to the announcement." Sinclair will now own 20% of YES. The Yankees will have the largest piece, with 26%, while Amazon will have 15%, "with the right to buy more." The financial investors will "roughly split the remaining 39%". Sinclair said that it funded YES "through its investment in Diamond Sports Group, the wholly owned subsidiary that bought" the 21 RSNs and was formed with Weather Channel Owner Byron Allen. YES President Jon Litner will "stay on in his current role to ensure continuity" and "signed a new contract with the deal's closure." Sinclair will also "play a role in YES Network's distribution discussions in the future".

Soccer:

Actor Matthew McConaughey said his role with the Austin FC ownership group will be to "align values and bridge relationships," according to the Austin American-Statesman. Austin FC announced four local investors that "will join" Majority Partner & CEO Anthony Precourt in the run-up to the team’s debut season in '21, including McConaughey. The group is led by Pixiu Investments Founder & Managing Partner Eduardo Margain, and also features Dell President & Chief Commercial Officer Marius Haas and Parsley Energy Founder & Chair Bryan Sheffield. McConaughey’s appearance at an LAFC match in May with LAFC Minority Owner Will Ferrell "sparked speculation" that he would join the Austin team. While Precourt "will still retain his governor role" within MLS' BOG as part of his leadership duties, Margain "will be appointed alternate governor". McConaughey is the "one high-profile name" of Austin FC's new investors. McConaughey said, "This is about legacy for me. I’m at a time in my life where I don’t want to spend time and money on things that I don’t look forward to doing on Monday morning." Austin FC is "likely to be a success" out of the gate after taking deposits for a "whopping 30,000 season tickets on the 20,500-seat stadium" that construction will begin on next month.

Minnesota United has sold out all 14 home games at Allianz Field this season and have "spent millions to bring in new players," according to the St. Paul Pioneer Press. Minnesota United Owner Bill McGuire said of the budgets for MLS teams, "It's not the premier league. ... Of course it's not." He added, "Basketball in Greece is not the NBA. We are going to have more input from media rights and additional increases in sponsorship and fan support and those things to bring it up to the level where you can spend significantly more money the way people want. I think there is going to be more and more spending, but when you don't have a lot of TV stuff or media ... where is that money going to come from?" When asked about breaking even, McGuire said it is "important that we be financially prudent in developing this" team. He added, "There has been a tremendous amount of capital put into the team and you can't expect people have unlimited capacity to fund that." McGuire: "It is important, but just like anything else it is important to be disciplined".

Sources: SportsBusiness Daily; The Athletic; ESPN.com; K.C. Star; N.Y. Post; Austin American-Statesman; St. Paul Pioneer Press   

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