Sports Finance Report: High Schools Sports – The Next Frontier

by 1 year ago

LOS ANGELES, CA - FEBRUARY 24: Mater Dei Boys Basketball team celebrates after beating Chino Hills High School at the Galen Center on February 24, 2017 in Los Angeles, California. (Photo by Josh Lefkowitz/Getty Images)


Editor’s Note: Welcome to a daily column we run here at BroBible breaking down the day’s biggest stories in sports finance with commentary from the sports money and sports fanatic perspectives. It comes to us via our friends at JohnWallStreet, publisher of a free e-mail newsletter focused on sports related public equities and their subsidiaries. You can sign up here.

High Schools Sports – The Next Frontier

While JohnWallStreet typically focuses on publicly traded companies, several noteworthy transactions (P.E. investments and strategic partnerships) within the high school sports space were recently announced. Below is a summary of each transaction:

Keemotion has partnered with Monumental Sports Network (MSN), the first direct to fan regional sports platform, to produce and livestream youth and high school hockey games played at Kettler Capitals Iceplex. Keemotion’s cloud-based technology and proprietary motion detecting camera system drastically reduces the production work required to broadcast a high-quality live stream. The automated video production technology also offers coaches, teams and leagues with real-time analytic capabilities. Monumental plans on extending the partnership to youth basketball, as well.

Overtime, a company that dubs itself “a sports network for the next generation of fans”, has raised a $9.5 million Series A round; led by Andreessen Horowitz (Kevin Durant’s Durant Co. also participated in the round). The company, which produces short-form video content (highlights and behind-the-scenes coverage focused on high school star athletes), designed for Instagram, Snapchat, YouTube; has received nearly 1 billion views to date. SportsNet New York and NBC Sports Philadelphia have both signed content sharing partnerships with the digital media startup.

SIDEARM Sports, a software and technology provider that powers the websites, live stats and video streaming for athletic programs across the country has announced a partnership with CBS Interactive Advanced Media (CBS). Together, the two companies will livestream 14,000 sporting events and manage 1,100 high school and collegiate athletic websites (that will stream games). Shared clients (include 85% of P5 schools) will have access to SIDEARM’s content management & delivery systems, mobile platform and creative design solutions; as well as CBS’ video streaming and distribution technology.

Howie Long-Short: Keemotion has raised $5.5 million to date, including a $3.6 million Series A round that counts David Stern, Mike Dunleavy Jr. and the New Jersey Devils as investors.

Overtime’s $9.5 million Series A round brings the total amount it has raised to $12 million; they previously closed on a $2.5 million seed round in February 2017. David Stern was among the 9 investors who participated in that round.

SIDEARM Sports was acquired by Learfield Sports back in 2014. In 2016, Learfield Sports (which represented 123 collegiate programs at the time) was acquired by Atairos Management for an estimated $1.2 billion.

Fan Marino: Kevin Durant has been investing in technology companies since 2015, when he participated in Postmates $80 million Series D round. The Warriors star has since invested in Acorns, Zenreach, Rubrik, Mirror Emoji Keyboard, Mars Reel, and Skydio. It’s interesting to note that as KD has gotten more experience investing, he’s participating in earlier rounds. His first couple of investments were in Series C and D rounds. His most recent investments have been in Series A, B or Seed rounds.

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Amazon Closes Event Ticketing Operation, May Relaunch with New Platform in 2019  

Amazon (AMZN) has announced it will be closing its U.K. event ticketing operation (Amazon Tickets), less than 3 months after abandoning plans to launch in the United States; though, the company may be planning to relaunch in 2019 with new technology. Amazon’s open distribution model had some initial success in Europe (signed a partnership with AEG, launched a concert series), but the company’s inability to work out a partnership with Ticketmaster (in the U.S.) was its downfall. Speculation exists that AMZN is working on a new platform that would sync with both Echo and Firestick devices and use AI-powered Alexa to locate tickets.

Howie Long-Short: If you’re looking for “underdogs” that could potentially take on Ticketmaster (LYV), look at Alibaba subsidiaries Tao Piao Piao and Damai.cn. Tao Piao Piao, an online ticketer, was formed out of a partnership between Alibaba (BABA) and Damai.cn in May 2016; BABA has since increased its stake in Tao Piao Piao to 96.7%. In March 2017, Jack Ma’s e-commerce giant acquired the ticketing agency Damai.cn for an undisclosed sum (BABA a minority investor since ‘14). The Alibaba Pictures Group (the entertainment sector of BABA) reported in September, that H1 ‘17 revenue increased 313% YOY (to $165 million); attributing the growth to increased contributions from Tao Piao Piao.

Fan Marino: Here’s to hoping AMZN re-enters the ticketing space; they intended on cutting the service and processing fees for Prime members, a change that would have resulted in a savings of +/- $15 for every $100 ticket purchased.

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Twitter, Amazon, YouTube and Verizon Bid for TNF Streaming Rights

Twitter (TWTR), Amazon (AMZN), YouTube (GOOGL) and Verizon (VZ) are all interested in acquiring Thursday Night Football streaming rights; with the NFL reportedly seeking a multi-year deal, for the first time (since the package was introduced in ’16). Among the remaining companies, only YouTube has yet to broadcast a league game; though, CEO Susan Wojcicki has stated she would “love to stream the NFL” and her platform may be able to offer the league, the greatest potential for viewership (AMZN drew 370K for 1st ’17 game, TWTR 240K drew for 1st ’16 game, YouTube drew 1.5 million for a recent SpaceX launch). It’s unclear if its status as an existing league partner, with some TNF mobile streaming rights, will give VZ a leg-up in the competition.

Howie Long-Short: The NFL received a 47% YOY increase in the value of their newly signed TNF contract, worth $3.3 billion over 5 years; though, Fox will also get rights to broadcast the NFL draft and may receive another playoff game. If the league receives a comparable return on mobile rights (expect the percentage increase to be higher, they increased 400% from ’16 to ‘17), the new deal will be worth more than $72.5 million/year.

Fan Marino: Fox’s TNF deal touts the potential addition of a playoff game as a benefit, but the game they would likely get (Wild Card, early slot, Saturday) has been a loser for its existing rights holder (ESPN). The game has consistently drawn the lowest ratings of Wild Card Weekend since ESPN started carrying playoff games in ’15 and the network has yet to turn a profit on those broadcasts.

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What is JohnWallStreet?

JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.

While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.

We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLFELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA).  If it trades on Wall Street, and has a sports angle, it’s in our wheel house.

Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.

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