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requires ADT complete pro monitoring plan and compatible devices copyright 2025 ADT LLC all rights reserved Ryan Reynolds here from Mint Mobile I don't know if you knew this but anyone can get the same premium wireless for $15 a month plan that I've been enjoying it's not just for celebrities so do like I did and have one of your assistants assistants switch you to Mint Mobile today I'm
I'm told it's super easy to do at mintmobile.com slash switch. Upfront payment of $45 for three-month plan equivalent to $15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. See full terms at mintmobile.com. From the Vox Media Podcast Network, this is Channels with Peter Kafka. That is me. I'm also the chief correspondent at Business Insider.
And today we're talking about something we talk a lot about here, sports and TV and how that relationship is changing. The short version is that sports depends on TV networks or huge Vs and TV depends on sports because sports is pretty much the last thing that people watch on TV. But that equilibrium is changing and that can have a big impact on sports fans, TV networks and Internet companies and sports teams and leagues.
Here to guide us through all that is John Oran, the longtime sports media reporter. I used to read and talk to John when he was at the Sports Business Journal. Now he's at Puck and I read and talk to him there. So let's talk to John right now. I'm here with John Oran. I'm trying to remember, the last time we talked, were you at Puck? How long have you been at Puck?
I've been at Puck for a little more than a year now. I went over there in January of 2024. So I came on here once with Puck and I've had you on a couple of times since Puck. You have been on since Puck. All right. John Arand is one of the great sports business reporters. He's at Puck. I read him all the time. I rely on him heavily to explain what's going on in sports media. And that's what I want to have him do now for all of us. So welcome back, John.
Oh, it is. Everybody says this, but it's a thrill. It is a thrill to be here. It's a thrill to have you. Last time I saw you was in person and we were at WrestleMania in Philadelphia. And those are funny things to say out loud, but it was a totally fun experience. You know, I was blown away because we were at WrestleMania on the Saturday night and the finale was on a Sunday night and it was in Philly.
And I just remember looking around Lincoln Financial Field, and it was packed to the rafters with this teeny little ring down in the middle. And the video boards weren't even that great. Like the people that it was, and walking into the stadium, it had a real Super Bowl, a big event feel to it. People were like tailgating and selling stuff. It was really a unique event. It made me feel oddly good about America. And now I feel less good. So-
Let's move on to other discussions. WrestleMania in Philly was a high watermark for Peter Kafka. Yeah, things have gone downhill since. But I want to sort of take you through a whole bunch of questions I have about the sports media landscape. So
Let's start with what's going on right now, which is March Madness, the men's college basketball tournament. There was a meme going around the last few days that college basketball wasn't as exciting anymore and the tournament wasn't as exciting anymore because we weren't having Cinderella upsets anymore. And there's a discussion about, you know, there's structural changes in college sports we can talk about.
And I didn't watch a minute of it, but that's just because I wasn't into it this year. Turns out, at least the headlines I'm seeing, people are watching more college basketball this year than they ever have in the past. The tournament seems like it's done very well the first weekend. So one, is that right? Is that data? Are those headlines I'm seeing correct? Is audience actually ticking up for college basketball?
You know, I hate to talk about TV ratings right now because... But it's your job. Well, I know, but... So sorry. Right now, everybody... Which isn't to say you asked a bad question, but everybody, it seems, is setting a record for viewership. If you go back to the Super Bowl, it was a terribly boring Super Bowl. It was over before halftime.
And then they didn't only set viewership record. They set a viewership record by like 10 million viewers, but by a lot. And if you peel back the onion a little bit, they periodically Nielsen makes different changes to what it does. And so it counts a lot more now. And now this year it started counting more.
It used to count like 60% of out of home. And this year it's counting like it's up to 100%. And as a result, events like March Madness, which most people watch out of home, they're watching in the office or watching in bars. Those numbers, it doesn't surprise me that those numbers are big. So that's one sort of answer to that. When you say like, well, the ratings are up, so it must be good. Well, the ratings should be up because they- You're literally counting people that you weren't counting before.
So it might be the exact same audience. We're just counting them differently. So now they show up because they're at a bar before they weren't counted. Now they are. Exactly. Yeah. Which doesn't mean that they weren't there, but it means when you do a comparison to years before, it's a little bit different.
One of my favorite tropes is when people come out and say that they love Cinderella's and they really miss the 15th seed beating a two seed. Exactly. And the truth is, when George Mason made the final four, nobody really wanted to watch George Mason. They want to watch Duke play Kentucky or they want to watch, you know, what they call in the college business, the Blue Bloods play.
Well, both things can be true, right? You want exciting upsets at the beginning of the tournament, and at the end, you want the real teams there. The real teams actually do it. And I think one of the problems is in the Sweet 16, you only have teams from the Power 4 conferences, SEC, the Big 10, the Big 12, and Duke from the ACC. And so that's what people are looking at. This is one year in.
And college sports is in such upheaval now with the transfer portal, which allows players to basically become a free agent every single season. NIL, name, image, and likeness, which allows players to get paid. And that benefits bigger schools.
Well, it was just a couple of years ago that mid-majors, they had all the benefits because they had players that would play for four years. And so by the time the tournament comes, you had these experienced teams that were playing against freshman one and dones. Right. Yeah. Let me try to just explain it for people who aren't hardcore sports fans. So the best players in college basketball went to the biggest schools, but because they could go pro right away, they would spend a year at, say, Kentucky University.
And so you'd have these Kentucky teams stacked with basically future NBA players, but they only played together for a few months, essentially. The smaller schools that didn't that didn't have those players stuck around. And that's no longer the case.
And my point is that it all changes. And so right now, it's a really good snapshot of where we are. The big money schools and the big schools that can afford these players and the NIL, they're doing better. Five years ago, they weren't. Five years from now, we'll see. I think college basketball is changing so rapidly. But I know that all of the stakeholders that are involved are
which include Warner Brothers Discovery and includes CBS, and includes the colleges and the NCAA. They're plenty happy with the tournament right now and how it's progressing. Can we just stop and talk about the NIL stuff for a minute? Because...
This is something I really have not covered nearly enough and frankly didn't know that much about until recently. NIL is name, image, likeness. And when this stuff first came out, it was the NCAA has been under pressure for years to allow college athletes to make money, which they should because they're making a lot of money for their schools and
I think it's intellectually the correct thing to do. And NIL was supposed to be, as I understood it, a way for people, for athletes to get paid, not for playing, but for, you know, selling their likeness. And there were issues there, right? Because only sort of the whitest, most attractive people were getting, were able to get those deals. But it seems like it's morphed into something else. And NIL is just a way to pay players, you know,
straight up and schools and boosters now are essentially spending millions and millions of dollars to assemble teams. Larry Ellison helped buy a quarterback for Michigan last year, even though he didn't go to Michigan. Apparently someone he's dating or maybe married to went to Michigan. And so that's why he threw in. And so you're going to have that sort of, I mean, it just seems like we're headed towards a place where Elon Musk or whomever is
just assembles the best players from around the world and pays them, and it's called college athletics, but it's not what most of us remember college athletics being. First of all, am I describing that scenario correctly? Well, you are, because what name, image, and likeness is about has nothing to do with name, image, and likeness. It's about getting... It used to be that boosters would line a kid's pockets, and if they got caught by the NCAA, there'd be penalties for...
Now they can line the pockets as much as they want. And it's seemingly limitless and there are no penalties or stuff that stuff that would get you kicked out of college and stuff that got colleges kicked out of sports. Southern Methodist University right in the 80s got got banned from sports for years for paying players. And now it's basically 100 percent above board. Exactly. And it's it is in the process of changing right now.
Everybody that's involved with it describes it as a wild west. The players can leave after a season. They can leave in the middle of the season. We saw the quarterback for UNLV
after four games, said he wasn't getting paid what he was promising and he decided to stop playing so he could take a redshirt and sell himself to the next highest bidder that's going to come around and get him. So there are seemingly no rules around NIL right now. And it is in such a crisis that the NCAA –
has gone to Congress of all places. It's gone to Congress to try to get Congress to, to legislate some sort of rules that, that they, they can, uh, they can live by. And the, the belief is that that's going to happen at some point this year. That Congress will pass a law about college sports players and how, how they're paid.
It's big. Ted Cruz is the chairman of the Senate Commerce Committee, and this is one of his pet projects. So it's something that- So we can't get Congress to do anything, to do anything other than sort of keep the lights on. They don't seem very interested in passing laws or anything else. But you think-
there is a decent likelihood they will weigh in on college sports and pass a law. From the people that know, they're expecting to hear from Congress about a way forward that they can take. And when you say it's a crisis, is that a crisis because... So there's some people who say this is very bad because it takes away from what college sports is supposed to be. It was this idea that these are amateurs doing it for the love of the game and or their schools.
and that really hasn't been true for a long time for the biggest sports, but it seems very hard to argue that you should prevent players from making as much money as possible if they're generating a ton of money for their team or people want to pay them. What do you think that compromise would look like? Well, let me also explain. It's a crisis not because of that, but because there are no rules right now. So to use that UNLV quarterback, he was promised certain payments
that the person making those promises had no business promising them and there was no, there's no contract to be signed. So they can renege and, and, and, and there, there's nothing that the quarterback can do about it. It's like, you know, you're, and so there's just no laws in place. I don't want to name any colleges cause this is still sort of, you know, it's a little bit more than rumor, but there have been colleges that all of a sudden, all of a sudden had really good basketball teams and all the kids played
transferred because they were promised certain payouts that they didn't get. So when I say crisis, it's just there are no contracts and there's no repercussions for people making sort of false claims and false promises to some of these athletes to go and play at various colleges.
So that seems like a real crisis, right? You don't have contracts, you don't have rules that are enforced. And I guess where I was started with this whole question about Cinderella is March Madness not as good. The memes that I'm sampling all sort of center around, well, because the economics around college sports have changed so much, college sports is no longer as entertaining to watch. And that's what they're complaining about. It
It seems like what we said at the beginning of this conversation that we don't actually know that that's the case, that people may not be turned off. I don't believe that at all. And in fact, you said you're not watching a lot this year. Well, I went to Maryland and Maryland's in the sweet 16 and I'm, I'm, uh,
I've become a super viewer this year of, of, of those games as has everybody else in, in the, uh, you know, district and, uh, and, and Maryland that sort of following this team going through. So, you know, if your team is in and your, your team is playing, you're more interested in that. Had Wisconsin not gotten bounced in this, this round, I would have watched the next round. Oh, no doubt you would have. Absolutely. Tough call by almost Wisconsin, by the way. See, I didn't even watch it. So I barely have any idea what you're referencing to. Yeah.
We'll be right back with John Arant, but first, a word from a sponsor. Support for this show comes from ADT.
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And we're back. Let's stay in spring sports. Baseball season is coming. Basketball playoffs are going to start soon. These are two, I guess, hockey two we can throw in playoffs. All sports that are affected by something, again, that I don't cover that I should have because I know it's changing the way the sports media business is working. They all rely on various degrees on regional, what we used to call regional sports network.
Those seem challenged now at best. So can you explain what an RSN is and what is happening to RSNs?
- RSNs are the greatest things to happen to the sports business. You couldn't come up with a better business than regional sports networks. Essentially, let's use New York. In New York, if you wanna watch the Yankees games, you have to watch them on a channel called Yes Network. And so Yes Network was totally conceived to be a regional sports network. It carries the Yankees in New York, parts of Connecticut,
in New Jersey. And because it has the Yankees, cable operators for decades were terrified about dropping it. Because if cable operators dropped it, they would lose a lot of really avid consumers that just want to see the Yankees play all summer. As a result, Yes Network and all of the RSNs across the country, they're in Milwaukee, they're in any place that has a team, Kansas City, Los Angeles, you go through. As a result, RSNs...
became the priciest channels on pay TV networks. The cable channels paid a high premium and then passed that along to you, the consumer. And you had to pay whether or not you were watching or not, just because that's the cable. Well, and that's the beauty of it. So the Yankees were getting paid by cable. Let's say they're no longer Cablevision. Optimum. Optimum. Thank you. Yes, I'm showing my DC roots here.
So, so optimum is paying yes network based on the number of subscribers that it has. Even though like maybe 10%, 15% of those subscribers are watching the yes network, 85% everybody, your proverbial grandmother down the street is helping to pay for it. And I, I think about that all the time as an Orioles fan living in DC and I watch mass and, and I,
When I walk my dog at night, I can see TVs in different homes. I'm the only one watching baseball on my entire block, but the entire block that's a bundled cable subscriber is helping to pay for my addiction to baseball. So I thank them for that profusely. I'm worried about the news story where respected media reporter John Arand is arrested for peeping Tom violations, but go on.
I stay on the sidewalk. Does that help out? Does that help me out at all or no? It's a 2025. So we're describing a scenario that people who listen to this podcast have heard before about ESPN and sports networks in general, that they minted money for a long time because everyone had to have them whether or not they wanted. And we know what's been happening. People are just ditching cable in part because they don't want to pay for a bunch of networks they're not watching. Right.
So that brings us to now. And so what's going on with RSNs now? Well, and also, so the difference with ESPN is that when ESPN goes to a cable operator, it's not only ESPN, they have ABC and they have all the Disney channels. And so they go with that bundle. All the regional sports networks can go with is, well, we have the Yankees and then we also show the Nets in the winter. And what the cable operators have figured out
And this started with Charlie Ergen at Dish Network. You know, if we drop the regional sports networks, we'll lose some avid fans, certainly. But all of a sudden, we don't have this channel that costs...
as much as ESPN, if not more, that's weighing things down, we're able to sort of get a skinnier, like, you know, more cost-effective bundle together. And you've seen these... We'll have a cheaper and more attractive product and we're better off not having that kind of sports programming. And so, you know, what really happened that really got my eyebrows arched was Comcast, which
itself owns regional sports networks decided that it's going to take the diamond sports group ones these are the ballet sports rsn's and it was going to take them and put them on a tier so that and which essentially is almost a killer so it was going from like you know 80 penetrated to like 50 penetrated on this tier it was it was a killer move and uh
All of these RSNs, they've all had to go to this tier. And the fact that they're being moved by one of the biggest cable operators to a tier just shows that the future of the regional sports networks is – it's not over, but it is in chaos. What we're going to see happen is that these rights that they pay for –
So if you're a Yankee fan, you're going to be able to get it direct to consumer. Maybe Amazon might buy it. Maybe ESPN flagship, the direct to consumer, might buy it. There's going to be no exclusivity to the RSNs eventually. That's already the case in many markets. And eventually it's going to be across all markets, I would say. So when you say there's no exclusivity, what does that mean in sort of real world terms? I can watch the Timberwolves on TV.
on cable in Minnesota, but I can also pay to stream them. - If you were a Timberwolves fan and you wanted to watch a Timberwolves, you had to buy a cable or satellite subscription and you would have to buy a cable or satellite subscription that had a Ballet Sports North, which is what carries the Timberwolves games.
Now you can go and you can get it direct to consumer. It'll still cost a bit. It's entirely possible they'll take some of the games and sell them to an over-the-air station so you can watch them on a local over-the-air station. And it's entirely possible it'll be part of an MLB package of local games. So they're going to be different areas. You don't have to be a cable subscriber or a satellite subscriber to watch these games anymore. That's what I meant by exclusivity. So this seems...
Like a lot of the changes we've had in TV in the last decade or so, good for consumers. If you don't want to watch and pay for this stuff, you don't have to. If you do want to watch it, you can pay for it. It won't be cheap, but it's the stuff you want to watch. That seems like kind of consumer-friendly.
It seems like it's very bad if you run an RSN because your stranglehold on that market is no longer stranglehold. What does it mean for the sports leagues who've been getting that RSN money? Does the money stay the same? They're just getting it now directly from me and also from an RSN and it nets out the same. Do they think the pot's going to increase, decrease?
So there are two questions there. One is, what does it mean for the teams? And it means the teams are going to get a lot less money because the RSN system really benefited the teams. And so their local media rights money is going to drop precipitously. And so what it means for the leagues is I can tell you that baseball is
is really looking at the way that Adam Silver and basketball handled their media rights deal recently. Baseball has been, because of the popularity of the RSNs, a really localized sport.
And meaning that, you know, a regional sport, people watch it, people watch, you know, the Orioles in Baltimore and don't really care about the game of the week. That's not the case in the NBA, which is really star driven and national. So you can have, you know, a star player in Denver, you know, with the Joker there and people are going to watch those games there.
As a result, the NBA nearly tripled its annual average value of its rights deal when it sold to ESPN, to NBC, and to Amazon. And part of that is because they were able to sort of take all these games from the regional sports networks and put them in a package. And that's a package that, you know, moving forward, we're going to see how they sell that package as well.
So one of the things that Rob Manfred is trying to do now with baseball is he's trying to get control of the local streaming rights and he's trying to get the teams to deal with them. And this has been the problem with baseball for decades. We'll see what happens. The small market and mid-market teams are thrilled to do that. That's what the Royals would love to have the, you know, the, the baseball handle their local rights and,
The Yankees, not so much. The Dodgers, no chance. The Red Sox, you know, these are teams that really have figured out how to benefit and how to profit. This situation benefits us financially, benefits us competitively, right?
We get the most money. It benefits them, but it's also like we don't want to help subsidize the Pittsburgh Pirates who don't pay as much as we do on payroll. And, you know, it's sort of a welfare there. And by the way, the NFL, the most successful league by far, right, is completely socialist when it comes to this. Yeah, that's my favorite line, Peter, is you have, you know, 32 capitalists that have agreed to act in a socialist environment.
So we don't know what's going to happen to baseball money. We just got an interesting, maybe an interesting test case where in the NBA, which is affected by this RSS stuff and the rights deals you were talking about,
They just the Boston Celtics just sold for a number that's either six billion or more. It's a record. People were sort of scratching their heads around that the value of kind of all of these franchises, but definitely NBA franchises keep going up and up.
It's unclear whether the ratings are going to go up. They were down at the beginning of this year. It looks like they've stabilized a bit. Should we expect to see the value of sports franchise continue to rise, even though there's sort of real economic questions about TV and overall sort of...
viability of these revenue streams? You know, there are serious questions about the viability of revenue streams. However, the NBA is about to start on an 11-year deals, you know, that will take...
Take it into the mid 2030s. The NFL, they have an out in 2030, I believe, but their deals also go deep into the 2030s. So for some of these bigger leagues, they're already set in terms of- They've guaranteed money coming in for years. Exactly. Exactly.
And I always go back to Mark Cuban. Mark Cuban had owned the majority of the Dallas Mavericks and he decided to get out. He sold his stake. And one of the things that he has said is that
There's no more growth in media revenue. I mean, you can see what's happening with cable. You can see cord cutting and these streamers are not filling in financially to help it. And he's like, there's still areas of growth for these teams in
in terms of real estate, you know, building an arena and then building like restaurants and, and, and like veritable cities around these arenas and things, things along those lines. And he was like that, that that's, that needs somebody with a different skillset than what, what I came in into the, the, the league with. And so, uh,
Are these valuations going to keep going up there? Yeah, I think they're almost certainly going to keep going up, but they're not going to keep going up because of media revenue. It's going to be because of a lot of other things that, that, that sports can benefit from. Is there a chance that sort of, I mean, you're seeing, again, if you listen to this podcast, if you read what I'm writing, follow what you're writing, you know, there's story after story about the, the general sort of fate of the TV business, um,
I don't know why it's so hard for me to talk today. You see story after story about sort of the decline of conventional television. And conventional TV was a great, great symbiosis with professional sports. You guys have all seen the stats about how 93 of the top 100 rated podcasts
last year were NFL games. But it still seems like there is just a, you see the stories about, you know, Comcast ditching its cable networks, Warner Brothers Discovery might like to do the same. Paramount had a huge right. Everyone's saying all these assets that were sort of fueled, all these TV assets that were fueled by sports are no longer as valuable as they used to be. And in fact, we'd like to get rid of them. And the reason we haven't gotten rid of them yet is because Wall Street doesn't want them.
Then you cut over to the sports franchises and they get more and more valuable. Is everyone thinking what Mark Cuban's thinking, that there's just other ways to make money here and we haven't figured that out? Or do a lot of them assume that the TV value for the thing they own will continue to get more valuable even as everything else decreases? I think a lot of them...
are in the dark, even though people have been sounding the alarms about the dangers of losing local media revenue and about the dangers of just of cord cutting. Cord cutting exists and it's hurting broadcasters as much as, well, not quite as much as cable channels, but everybody else. And it's a slow decline. One thing that I will say though,
because there have been, there's been so much written about, you know, Netflix doing two NFL games on Christmas and the Amazon came in and did an NBA game and everything is, they're doing an NBA package and everything is going to streaming. And of course it's a trend that's happening. My, I'm not, my head is not in the sand about that. I, I will say that
If you want to watch the Super Bowl, that is going to be on good old-fashioned broadcast television for the next decade at least. If you want to watch the NBA playoffs, those are going to be on – the vast majority of them are going to be on traditional linear television. If you want to watch NHL playoffs –
That is all on traditional linear television. There's still a role for traditional linear television. They're still paying these leagues a lot. And nobody thinks that ESPN is going to go down to zero. Nobody thinks that ABC or Fox or NBC, those broadcast networks are going to go down to zero in terms of, in terms of its distribution number. So the, the, the,
There's an unmistakable trend going towards streaming, but it's the broadcasters and traditional linear TV is still holding pretty strong right now. We'll be right back with John Arant, but first a word from a sponsor.
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And we're back. It's funny, if we talked about this 10 years ago, a lot of this conversation would be the same, except you still had all of the networks saying, all the cable operators saying, we don't see any evidence of cord cutting. You got all you nerds keep talking about cord cutting, but we don't see any evidence of it. But, you know, anyone...
And anyone who watched TV and anyone who knew anyone who used computers knew knew what was going to happen, what was happening. And then it all sort of caught up very quickly and they all moved to streaming. We know how that story, you know, that story went. We don't know how it ended. It kind of feels like we're still in the same place. We can see lots of these trend lines moving, but everyone's saying, well, it's not going to affect me. My business is going to remain intact.
Yeah. And in fact, I used to have a line that I used to say, well, you know, all of the packages that would go to streaming sports packages were sports rights that traditional television passed on.
So Amazon got Thursday Night Football. The NFL couldn't sell – they tried to sell Thursday Night Football to CBS and Fox. They had had it before. They couldn't make it work. They all passed on Thursday Night Football. Same thing with MLS and Apple. MLS was dying to get a deal done with ESPN or Fox, and they couldn't find anywhere near the amount of money that Apple paid.
Slowly, though, over the past year, we've seen Amazon get the NBA package that Warner Brothers Discovery then ended up trying to sue to try to get back. There was a package that Linear TV certainly wanted. But the one story, and this kind of flew under the radar, Peter, is the Women's World Cup rights issue.
went to Netflix for, I think it's 2027 and 30, I forget exactly what the dates are for it, but it's two Women's World Cup rights. Fox was being very aggressive to try to get those rights. And so that was another one where Netflix came in, it wanted them, it bid on them. And so what we're seeing right now is that some of these bigger streamers
are in fact stepping in and getting the rights to some of these sports packages that linear TV wants. And that's been a change over the past year or so that shows that this trend certainly is happening.
Netflix for years said they didn't want sports, even though there were stories, well-reported stories about them bidding on some sports rights. And then they would say, well, maybe we will do sports, but the only sports we want are one-off things or things where we can own the whole thing. Like they looked at like maybe they would own the entire thing.
What's F1 Racing League? That was a bid they were looking at at one point. And they can argue that airing two NFL games isn't airing a whole season, but it's an event because it's on Christmas Day. And they can argue that, I think rightfully, that the Women's Soccer World Cup is just an event they can own because no one's really watching that stuff except for the World Cup. They're not watching great numbers. Point being, long-winded way of saying they still have not shown...
shown real interest in bidding on season-long league deals. Yeah, but you know what makes me so confused about that, Peter, is that they did do...
The WWE Raw deal. Yeah, I know that's not sports, but it's it's a live event programming that they have coming in every single week. And so that's what just confuses me about that. And I'm not sure. I think I think their argument there is this. We're kind of owning. We don't own all of pro wrestling because you can still see some of the other places, but we own most of it.
And we definitely own it internationally. And to us, that counts as owning a whole league. And that's we're interested in that. Right. Right. Let me ask you one more question. I'll let you get out of here about the state of sports gambling and specifically the amount of money that sports gambler sports gambling companies were throwing out to media entities. Yeah.
As we all know, sports gambling was legalized essentially in the US in 2018. We saw a bunch of players come in and each time a new state opened, a ton of more money would get spent. All these different competitors trying to carve out market share for themselves and trying to convince new gamblers to spend money. Most of those markets have been opened up. A lot of sports gambling companies that were in the market have left. It's kind of a duopoly now between DraftKings and FanDuel.
What does that mean for the money that was getting lavished on network, sports properties, anyone else who could take a dollar from a sports betting company?
Well, in terms of advertising, the sports betting is still a massive category for all of the broadcast networks as they try to sell the NFL games and sell advertising around NFL games, NBA games, all the different sports. So I don't see that changing.
What I have been sort of fascinated by is that I forget when the first time was. It had to be like eight years ago. Somebody like, look, what's going to stop one of these sports betting companies from buying the streaming rights to a league? And then, you know, you go within a sports betting app, you watch the game, and then you can bet with that app. Not only did that never materialize,
But we're also seeing a lot of some of these sports betting companies sort of take a little bit of a, you know, retrenchment. You know, they were big about, well, we want to start up sports networks. We want to drive sports fans.
into our ecosystem. We don't want to just be advertisers on someone else's network. We want to own our own network so the customer comes to us. And guess what? Something that you've known for decades and I've known for decades is it's hard to build a sports network that people actually want to watch. Like,
The RSNs that we talked about beforehand, they've tried to do shoulder programming for their entire existence, but people only go to their networks for the live games. And so we've seen DraftKings sort of step back a little bit from – it hired a bunch of ESPN talent to try to just –
to have content so people would come in and watch it. Penn owned Barstool Sports for a little bit and then sold it back to David Portnoy for $1 famously, you know, because it just didn't fit in with what they were doing. DraftKings bought Brent Musburger's company, Vizen, and then ended up selling it back as well. So, you know, you are seeing...
I think it's, I'm not sure if it's a maturing of the industry so much as it's an acknowledgement of like, okay, that's a strategy that everybody was pretty much into that they sort of, you know, pulled back from.
The, the, uh, for all you got the other half of that, that Penn barstool story was the Penn had bought barstool, uh, because it wanted to expand. Penn was a regional gambling company. They wanted to expand and they wanted to tap into the barstool audience. Um, and they didn't just get rid of barstool. They got rid of barstool and then did another deal with Disney. Um, so Disney now has its own brand by busy, basically rebranded, uh, Penn as, as ESPN bet. And, um,
But you can see the numbers because Penn is still a publicly traded company. It seems like the Disney sports betting thing is not working at all. Like almost no one is using it. And I didn't think that simply having an ESPN branded sports book would be an automatic huge win for ESPN. But I figured between their audience and just the fit, you'd think they would do okay with
Any sense that Disney would like to sort of take a mulligan on this one or is looking for a different strategy? And what does it mean that Disney can't sort of make real headway in sports betting, even though it literally owns ESPN? So whenever I talk about this, they are preaching patience because this fall,
they are launching a direct-to-consumer app called ESPN Flagship. Well, that's the internal working name. It's going to be called something different. And so...
It's the thing everyone said they wanted for years. I want to just get ESPN. I don't want to pay for any other cable. You'll finally be able to get that. Yeah. And here you can get it, but it's going to be so much more than just ESPN because it's going to be... They just want people to come into the app and watch ESPN and play fantasy and gamble. And so when they make
When they make it a lot easier for people to place wagers on some of the games that they're watching, then we'll see whether or not or how well this works. But you've covered Disney longer than I have, Peter, or as long as I have anyway. The idea of Disney finally cozying up to sports gambling is...
I think you could have predicted that there would be some bumps in the road and not necessarily a full on embrace of that, even after Iger ended up saying, like, yeah, we'll do it. Do you think that's because there's something in the Disney DNA that makes it still difficult for them to hand? I mean, whenever I visit ESPN, they're shoving ESPN bet down my throat. It doesn't seem like they're timid about that at all.
I'm just wondering if it's a fact it's a, if it's just reflects the fact that everyone who wants to bet on sports is already betting on sports and they're doing it at draft Kings and fan duel. And there's very little that someone else can do to get them to switch.
Well, you mentioned DraftKings and FanDuel. I mean, they are the clear number one and number two. And I think it is hard to get people to churn away from betting services that they're already on. But I do think there is some... You're right about ESPN. And ESPN has jumped in with both feet. But I just get the sense that it isn't a part of the Disney culture. And it's different from... Sports gambling is different from what Disney wants to promote. And
I don't have any evidence to point to to say like, hey, here's a perfect example of that.
But it didn't surprise me that it was bumpier than it needed to be just because I feel like it's really not in their DNA. Okay. So what we really learned here is that you're really psyched about March Madness. So I'm going to become an honorary. Am I a Terp? A Terp. You're an honorary Terp. I'm an honorary Terp for the remainder of the month. Go Terps. At least one more game against Florida, which everybody's a little bit nervous about, Bun.
Well, it's easy to root against Florida. Okay, go Terps. Go John O'Reilly. Wisconsin, you got to root for the Big Ten. I know you don't feel like Maryland is part of the Big Ten, but like, come on. Well, also, I mean, it's more part of the Big Ten than, was it Cal now is part of the Big Ten? We'll have a separate conversation next time you're back. We're getting in Washington, yeah. Next time you're back. John O'Reilly, you can read him on POC. You can listen to him on his excellent podcast twice a week. Thanks for coming. Thanks, man.
Thank you again to John Arand, who always makes me smarter when I talk to him. Thanks to Jelani Carter, who's great too. He produces and edits this show. And our advertisers, also great. We know what they do. And then you guys. We know what you do. Listen, thank you. See you soon. Support for this show comes from ADT.
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