Sports Finance Brief: Ticketmaster Trying To Stop The Use Of Bots, Harley-Davidson On Bucks Jerseys
Editor’s Note: Welcome to Sports Finance Brief, a new daily column we’re running here at BroBible breaking down the day’s biggest stories in sports finance. It comes to us via our friends at JohnWallStreet, a new sports business e-mail newsletter worth subscribing to. Here’s what you need to know today…
TECH GIANTS HESITANT TO PAY OUT LUCRATIVE LONG-TERM DEALS TO LEAGUES; SPORTS BROADCASTING MODEL MAY GO FROM RIGHTS DEALS TO REVENUE-SHARE MODEL
Exclusive television network broadcast rights deals have been the growing source of income for pro sports leagues for the last several decades. TV networks have tripped over themselves to pay out lucrative, long-term contracts to sports leagues, in order to lock up valuable content it can resell to advertisers. League execs have long assumed that tech giants like Amazon (AMZN), Facebook (FB) and YouTube (GOOGL) would be eager to bid on future contracts in an effort to stream content. While that may still be the case, it likely won’t be in the same form of the existing TV contracts and as a result, a decline in revenues may be coming. Mark Zuckerberg has indicated that Facebook could be interested in streaming select pro sports, but the long-term goal would not be to pay for content, but to engage in a revenue-share model.
Howie Long-Short: Sports leagues will follow the money. It could be a while before tech firms can outbid traditional media for top sports rights, other than carving out digital rights.
Fan Marino: If Zuckerberg can get off paying Bieber on a rev-share model, he can certainly get pro sports leagues, with no other options, to sign off.
TICKETMASTER LOOKING TO CURB USE OF BOTS, INTRODUCES “VERIFIED FAN” TO KEEP TICKETS OFF OF SECONDARY MARKET
Ticketmaster (LYV) has rolled out some new technology, known as Verified Fan, to help eliminate the use of automated software or “bots”, to acquire tickets for sale on the resale market. In the past, when tickets for high profile events went on sale, “bots” would acquire a large number of tickets within seconds of their posting for sale, resulting in immediate sell outs. Simultaneously, these same tickets would be listed by the “bots” owners on resale sites, at markups up to 1,000%. The new technology looks for buyers to register prior to the seats going on sale and looks to verify the buyer’s identity using their purchase history and social media activity. Ticketmaster has stated that 90% of tickets sold using Verified Fan have been kept off the secondary market.
Howie Long-Short: This is good for fans, but the roll-out is likely to be only for limited events.
Fan Marino: I’m certainly supportive of any technology that benefits the “real fan”. While this technology won’t keep Amazon from eventually taking over the ticketing space, it is a start in terms of generating goodwill with its customer base.
MANCHESTER UNITED ROLLS OUT STREAMING SERVICE FOR 24/7 CLUB NETWORK; NO SATELLITE SUBSCRIPTIONS REQUIRED FOR ACCESS
Manchester United’s 24/7 club television network; MUTV, is now available for streaming within the UK and Ireland via mutv.com. The network, which will not require a satellite subscription, is charging roughly $6.40/month for subscriber access on desktop, mobile and tablets. If you are already a subscriber to Sky or Virgin TV or to the Sky digital television platform, there is no additional charge for access. The digital version of MUTV will include Legends matches, under 23 and Academy games, first team highlights, live audio of all first team matches, exclusive interviews, behind the scenes access and film presentations.
Howie Long-Short: Real fans in the UK already have Sky, but this might be good for my MANU fans Stateside with a VPN!
Fan Marino: The ROI here is poor. $6.40/mo. for access to highlights and interviews? At least for ESPN’s $7.21/mo. (carriage fee per subscriber within bundle) you get live NFL and NBA game broadcasts.
HARLEY DAVIDSON BECOME 12TH CORPRORATE SPONSOR TO PLACE LOGO ON JERSEY; EXTENDS PARTNERSHIP WITH MILWAUKEE BUCKS
The Milwaukee Bucks have announced a partnership with long-time sponsor, Harley Davidson (HOG), that will enable the motorcycle brand to place their logo on the team’s jersey beginning next season. The patch has the potential to receive 2 billion+ impressions across Bucks local & national broadcasts, video and digital platforms. HOG was founded in Milwaukee and maintains their corporate headquarters in the city. It should be noted that NBA contracts prohibit players from riding motorcycles.
Howie Long-Short: Certainly some synergy between Bucks and Harley fans, but as a long-time sponsor, this move is about reaching the fans of the other 29 teams.
Fan Marino: You have to wonder if Bobby Hurley & Jay Williams read the terms of their contracts, before purchasing their bikes.
D.C. UNITED MAY BE FOR SALE; ENTERPRISE VALUE PUSHING $500 MILLION
The Washington, D.C. based United soccer club may be up for sale and if a deal goes through, it will be the most anyone has ever paid for an MLS franchise. With the new stadium and team debt included, the franchise has an enterprise value pushing $500 million. It’s been reported the team has reached out to several prominent D.C. based investors including, Redskins owner Dan Snyder and Wizards owner Ted Leonsis, to gauge their interest. It is worth noting that league expansion fees continue to rise (currently at $150 million, expected to reach $200 million) and Forbes estimated last fall that the average MLS franchise value was up 18% from 2015.
Howie Long-Short: $500 Million for an MLS franchise sounds like a lot, but it sounded like a lot when Joe Lacob & Peter Guber paid an NBA record $450 million for the Warriors, back in 2010. The franchise is worth $2.6 billion today.
Fan Marino: D.C. United is the Green Bay Packers of MLS. Early domination (4 championships in 10 years) and then nothing for what seems like an eternity.