Early Entrants: Vol. 3 - Blazers Vice Chair Angling for Ownership?

JohnWallStreet

Blazers Vice Chair Angling for Ownership?

Portland City Commissioner Nick Fish told reporters on Thursday that the word he’s “received from Blazers management” indicates that the team “will be put on the block” – and that he’s concerned a new ownership group would look to relocate the franchise. That’s news to my sources. Jody Allen (Paul’s sister, executor/trustee of his estate) may be willing to sell the NBA club - if she has an allegiance, it’s to the Seahawks and the city of Seattle - but no decision has been made. Some suspect that Blazers Vice Chair Bert Kolde is the source of Fish’s story. There’s a belief that Kolde is angling to buy the franchise and is looking to gauge the interest of PNW investors.

F1

Potential SPAC Exploring Purchase/Option of Multiple F1 Tracks

There are rumors circulating of London and/or New York based groups of high-level motorsport executives (think: creditable promoters, former team owners, advertisers within the sport, agency heads, real estate developers) - with access to capital - considering the formation of a special purpose acquisition company (SPAC) to purchase or option multiple Formula One (FWONK) tracks. FWONK currently takes in +/- $600 million in annual promoter fees.

The feeling is that if any one group were to acquire enough tracks (in the right markets), they’d be able to lower promoter fees (the reason races operate at losses) to the collective benefit of advertisers, fans and FWONK (less tracks to negotiate with); most importantly, it would give the sport some long-term stability. The Formula One Promoters Association has increased its pressure on FWONK over the last several weeks, disappointed with their plans to co-promote the Miami race (see: reduced or no fee) and upset with indications that 2019 could be the last running of the Mexican Grand Prix.

DAZN

DAZN’s 2019 Media Rights Budget Revealed

In Early Entrants Vol. 2, we noted that DAZN Group was considering selling off the company’s B2B play - Perform Content (think: data, news, game prod.) - to fund additional rights acquisitions. Well, Jochen Lösch - the former CEO of MP & Silva - has since shed some additional light on DAZN’s grand ambitions for 2019. Lösch, speaking on a panel at the SPOBIS conference in Düsseldorf, Germany, said he’d been told first-hand by a DAZN executive that the company would be spending $2.5 billion on global media rights this year. That total wouldn’t place DAZN in the same league as ESPN (spent $8 billion+ in ‘17) or Fox (pays $1.75 billion/year just for NFL rights), but it compares favorably to what Amazon and Facebook are projected to spend - neither has ever paid more than 8-figures on a sports rights agreement.

ESPN+.png

Metrics that Matter

Disney CEO Bob Iger disclosed on the company’s Q1 2019 earnings call that ESPN+ had surpassed 2 million subscribers - less than 4 months after hitting the 1 million mark - a proclamation that has more than a few industry insiders wondering about the OTT service’s cost of user acquisition and churn rate. As one industry analyst said to me, “you can get to any number [of subscriptions] you’d like by essentially putting more marketing dollars against it. What matters is does your audience hold.” A second remarked, “great timing on the announcement considering they added 568K subs around their first UFC event on January 19th, subscribers received a 30-day free trial, have the option to cancel at any time and they didn’t have to mention churn on the call.” For what it’s worth, OTT video service churn rates are +/- 20%.

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