Sports Finance Report: Short-Form SportsCenter Coming To Snapchat, Trey Wingo On NFL Headlines
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.
Trey Wingo Opines on NFL Headlines
ESPN’s long-running morning drive radio show Mike & Mike, is coming to an end; with the last show scheduled for Friday. Beginning Monday November 27th, Mike Golic will be joined in studio by new co-host Trey Wingo. Golic & Wingo will air weekdays from 6-10a EST, with simulcast on ESPN2 (moving to ESPNU in January). JohnWallStreet had the opportunity to catch up with the guys to discuss finance, the NFL and their new show. In part 2 of a 3-part series, Trey discuss his thoughts on some recent NFL finance-related headlines.
JWS: Reports have indicated that the Tennesse Titans are having difficulty selling a 33% share of their franchise at $2.05 billion valuation. Is it possible “there are no buyers” (as stated in the report)?
Trey: Buffalo has the longest playoff drought in the league (17 years) and they sold for $1.1 billion dollars, so you can’t tell me there isn’t interest in buying a team. The question is what are you selling? If you are going to put that kind of money in and have no say, I can understand why there wouldn’t be a lot of interest there.
JWS: Mark Cuban predicts that NBA broadcast rights will continue to skyrocket, do you foresee similar growth with future NFL media rights?
Trey: The NFL’s (media rights) will skyrocket too and I’ll tell you why, they still have not sold one of their biggest bargaining chips; streaming rights. Those will be available to somebody in the next round. The NFL is keeping television alive. Thursday night football exists because people will pay a significant amount of money to put it on television. If somebody were to walk away from that contract, 3 other networks would happily pick up that package. They may not make as much money as they would have 10 years ago, they’ll still make money on it; hand over fist.
JWS: Several leagues have started to broadcast games in virtual reality. Is it a gimmick or the future?
Trey: The best way to watch a sporting event is still in front of a big TV, with other people around (Golic chimed in “with some beverages”). It’s a communal event. The 3D thing isn’t going to work because you put on those glasses and suddenly you aren’t having the interaction. If you can find a way to do 3D without the glasses, money; until that happens, VR takes away from the communal spirit of watching the game.
Does ESPN need the NFL?
Trey: That’s a question for people above my pay grade. People will tell you though, that the most significant day in ESPN history was in 1986 when they got Sunday night rights.
Howie Long-Short: “There are no buyers” for Susie Adams Smith’s stake in the Titans franchise, because they’re asking for more than $665 million for minority interest with no path to control. Complicating matters, the buyer must also be willing to purchase the other assets within the KSA Industries conglomerate (which Smith owns); oil & energy businesses, a ranch and auto dealerships. The article insinuates that the 33% stake could be sold for less than the $2.05 billion Forbes valuation. No chance. There isn’t a single scenario in which an NFL franchise sells for at less than a $2 billion valuation. The Nets just sold for $2.3 billion, without the building!
Fan Marino: Did you know that the NFLPA has a startup accelerator? One Team Collective, which launched last December, invests in data analytics, wearables, consumer products and content that improve the lives of professional athletes, their fans and athletes everywhere. The company has invested in 2 start-ups to date; WHOOP (fitness wearing trackable) and StatMuse (Siri-like app with player voices).
Short-Form SportsCenter Now on Snapchat
ESPN (DIS) launched a new short-form version of its flagship show SportsCenter on Snapchat (SNAP) Monday evening. The 3-5 minute show has been “re-imagined” for a younger, mobile demographic and the new platform; though it will still be comprised of sports news, highlights and commentary. SportsCenter on Snapchat will air weekdays at 5a and 5p (just 5a on weekends) on Snapchat Discover. While terms of the deal were not disclosed, the companies will share the revenue generated.
Howie Long-Short: This partnership looks to be mutually beneficial. 47% of teenagers list Snapchat as their favorite social media platform, so ESPN was wise to bring their flagship show to where their future audience is hanging out. SNAP has been actively working to expand its sports programming and while it has deals in place with the NFL, F1, Turner Sports and the NBC for the Olympics; it never had a daily sports show. Unfortunately, SNAP’s Q3 ’17 earnings report wasn’t as promising. The company reported a quarterly net loss of $443 million and grew its user base QOQ just 2.9% (4.5 million new users), its lowest ever growth rate.
Fan Marino: At 35 years old, I’ve never downloaded the Snapchat application; but this partnership may change that. Short-form SportsCenter has me intrigued. The hosts named thus far are Katie Nolan, Elle Duncan, Cassidy Hubbarth, Jason Fitz and Cy Amundson. While Nolan is a household name, the other 4 are relatively unknown entities. With upcoming layoffs expected to hit the SC franchise hard, I’m not surprised to see the names of anchors that likely command lower salaries (Nolan being the exception).
Note: The summary for this story was co-written by our friends at The Water Coolest. Check out TheWaterCoolest.com for the latest market news and professional advice.
Rapid Consolidation Within the Ski Industry
Vail Resorts (MTN) and Aspen Skiing Co. have led an industry wide consolidation that has dawned an era of multi-resort seasonal passes; providing skiers discounts on lift tickets, a hedge against warm winters and incentives to visit different mountains. Within the last 12 months, Vail Resorts bought Vermont’s Stowe mountain and acquired Whistler-Blackcomb Holdings for a record $1.3 billion; while Aspen Skiing Co. (in partnership with KSL Capital Partners) bought 6 resorts from Intrawest Resort Holdings for $1.5 billion and 4 additional properties from Mammoth Resorts. Independent mountains, feeling the pressure to remain competitive, are also banding together to provide comparable offerings.
Howie Long-Short: MTN and Aspen Skiing have used acquisitions to take market share within the ski industry. There isn’t much of an alternative. No new ski resorts have been built in North America in nearly 40 years as environmental regulations and enormous infrastructure costs prevent new destinations from being developed. As of September 24th, MTN North American 2017-2018 pass sales were up 17% YOY. The company will next report earnings in December.
Fan Marino: Vail Resort Inc.’s top of the line multi-mountain seasonal pass includes unlimited access to all 15 MTN owned resorts plus bonus days at 30 partner resorts in Europe. The RFID-enabled Epic Pass costs $899. Looking to get in some runs before Thanksgiving? Vail Mountain will open as scheduled on Friday November 17th. Breckenridge and Keystone, 2 other MTN resorts opened last Friday.
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 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.