Sports Finance Report: Baseball Expansion, Realignment and a Revamped Playoff Format

by 1 year ago

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 equities analyst 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.


Ticketmaster (LYV) has signed a 5-year extension with the NFL to provide the league with the “first open architecture, fully digital ticketing system in sports”. The platform utilizes Ticketmaster’s “Presence” software to track ticket-trading and the identify of attendees; while validating and authenticating seats purchased within other marketplaces. Ticketmaster will remain the NFL’s preferred primary ticketing partner and will continue to operate the league’s resale marketplace (NFL Ticket Exchange). Financial terms of the new deal were not disclosed, but it is expected that Ticketmaster will be paying more than the $200 million it paid on the expiring deal.

Howie Long-Short: As I noted yesterday, increased distribution leads to greater competition and ultimately lower prices. An open market best suits the fans’ interests. The NFL’s new ticketing system, open to other licensed marketplaces, gives fans the “broadest participation possible” from resellers. Great news for those who want to attend NFL games.

Fan Marino: Russia sold 2.6 million tickets to the 2018 World Cup, but not all those seats are within the stadium. FIFA requires World Cup venues hold a minimum of 35,000 people. 60-year-old Ekaterinburg Arena, a 2018 World Cup venues, apparently doesn’t. To maintain the historical façade of the stadium, organizers have decided against reconstruction and instead have chosen to comply by building a temporary seating structure outside the venue. You’ve got to see this to believe it.



MLB is reportedly considering expansion, radical realignment and a revamped playoff format. Portland and Montreal have been mentioned as the cities most likely to receive expansion franchises. Expansion would bring the total number of MLB teams to 32, leading to the creation of 4 8-team divisions (currently 6 5-team divisions) based on geography and the addition of two playoff teams.

Howie Long-Short: Why would a league that struggles to find quality pitching with 30 teams, add 2 franchises? Expansion fees! Arizona and Tampa Bay each paid $150 million to join MLB back in the late 90s. The NFL got $700 million to add a Houston franchise. MLS is taking in $150 million for their expansion franchises. The addition of 2 teams is going bring the league’s existing owners more than $1 billion to divvy up. I’m sure that will help them get over their frustrations with the 5th starter.

Fan Marino: Should the league decide to expand, it is likely the number of games/season would be reduced to 156 (from 162). Each of the 4 division winners would qualify for the division series with the next 8 teams, regardless of division, qualifying for Wild Card games. Playing 156 games (none of which are a one-game series) to determine the 12 best teams and then having 8 of them play in single elimination games, makes no sense. I’m certainly no baseball purist, but the elimination of the American and National Leagues is likely to upset those that are.

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Time Inc. (TIME) is working to sell off some of the smaller entities within their portfolio, as the company focuses on developing its core assets; People and Time magazine. Golf Magazine and are among the TIME properties for sale, despite both experiencing significant growth over the last year. Recent comScore metrics indicate unique monthly visitors at are up 76% YOY (to 3.3 million) with mobile traffic, video consumption and social reach all experiencing a similarly high percentage growth. While the targeted price has not been disclosed, reports indicate a sale could occur by the end of November.

Howie Long-Short: Houlihan Lokey (HLI), a $2.7 billion boutique global investment bank that focuses on corporate finance business, restructuring and financial advisory services, is handling the sale. The company, which has grown revenues from $681 million in ’15 to $872 million in fiscal ’17, seems to have found a niche in the golf industry. HLI successfully negotiated TopGolf’s ‘16 acquisition of the online game World Golf Tour and was hired to steer the sale of The Club Company, a chain of 13 golf clubs in the U.K.

Fan Marino: TIME has announced that effective Jan. 1, it will be decreasing the frequency in which it publishes Sports Illustrated. The company will publish just 27 issues (including the swimsuit edition) in 2018, down from 38 issues this year. I’m disappointed to hear that. While I haven’t been a subscriber for years, SI was a “must read” during the early 90s-mid 00s when I became obsessed with sports. I would flip to the back page to read Rick Reilly’s piece first.

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What is JohnWallStreet?

JohnWallStreet is not a person or location, but 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 finance news, in easily digestible bites, with commentary from both the equities analyst and sports fanatic perspectives.

We’ll cover publicly traded professional teams & stadiums, television networks, apparel & footwear companies, equipment companies, ticketing companies, content and facilities providers. 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 Security & 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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