What are non-fungible tokens? Well, first of all, if you’re cool, you call them NFTs. According to Coinbase, NFTs are “are a special kind of cryptoasset in which each token is unique”.
Most of the cryptocurrencies we are familiar with offer a single thing for a single price. Bitcoin, for instance, was valued just under $60,200 when I started writing this. Before I hit publish though, the price plummeted by 10%. Fork over whatever the current amount is, and you get a single Bitcoin.
With NFTs, you are buying something specific. In the case of Top Shot, your investment gets you a particular highlight. That makes it possible to swing trades and make deals with NFTs in a way that is more akin to an NBA GM than a day trader.
Following so far?
Honestly, me neither, so let’s just get to the question at hand.
Art is sold as NFTs. Albums are sold as NFTs. Any bit of code can be an NFT, so is there a way radio can make money off of the trend?
In order to figure out the answer to that question, I asked my friend Jordan Holberg for help. We went school together from third grade until the end of high school. Fun fact about Jordan: when we were in sixth grade, he once made me laugh so hard I peed my pants.
He was in AP and honors classes. I mostly didn’t do homework. That meant I went to Alabama and he went to NYU. Now, I write about sports media for a living, and he has just started his own company that mints NFTs and cryptocurrency.
He is very smart. I am very dumb. A perfect example of that fact is that when we were exchanging messages and emails about this column and he referenced the SEC, he stopped to make sure I understood that he was talking about the Securities and Exchanges Commission and not the Southeastern Conference.
Full disclosure: I did not, but pretended I did.
Anyway, Jordan explained that the idea of non-fungible tokens is sort of the final evolution that futurists and the Cyberpunk genre had been envisioning for cryptocurrency all along. NFTs themselves are not a cryptocurrency. They are how you invest your cryptocurrency.
I told Jordan that between something like the NBA’s Top Shot and a band like Kings of Leon releasing their latest album as an NFT, they seemed more like something you buy because you are a fan than a strategic investment. Jordan says that it helps to think back to when you were a kid collecting baseball cards.
“Was that about fandom or investing? I certainly remember going to card shows at the Howard Johnson and drooling over a Nolan Ryan rookie card, or placing value on cards with printed errors,” he told me in an email. “Non-Fungible Tokens exist in this very fungible space at the intersection of gaming, social, and finance, and I think it’s fascinating the Internet has facilitated the existence of this new type of entity.”
Okay, so we’re talking about a “you got chocolate in my peanut butter” kind of situation. Sure, NFTs are investments, but the desire to invest in a lot of cases is driven by fandom. That means that entering the NFT market may not be viable for everyone in the sports media industry, but iconic brands like ESPN or local institutions like KFAN in Minneapolis or WFAN in New York may be able to offer fans something in this space.
I asked Jordan what would be a reasonable NFT offer from a sports media brand. I was prepared to hear him mention something like a podcast or the ability to download a show that may not be available to own or have on any other platform. Instead, I was surprised by how familiar his suggestion seemed.
“The first thing that pops into my head is community,” he answered. “It’s dead-simple, at least in relative terms, to create a gated social community experience for NFT holders. It’s like a virtual ticket that isn’t forgeable, could be non-transferable, and has the potential to constantly make money for its issuer.”
That sounds an awful lot like ESPN+ or Mike Francesa’s ill-fated Mike’s On app. I am not saying it is the wrong answer. I don’t even know enough to know if there is a wrong answer. Maybe it speaks to the idea that an NFT can be anything.
The other thing to remember is that before any company can make a fortune on NFTs, it may have to invest a fortune. Take Jordan’s exclusive community. Why is it different than something like an app or a subscription service? Jordan tells me that when NFTs are involved, consumers’ concerns do not stop at status updates or memes. Their investment has them thinking about much more significant factors.
“When it comes to brands, big or small, lawyers have to get involved for sure. Again, NFTs are just digital property rights, but we aren’t digital beings and the world doesn’t exist only on the Internet. Intellectual Property, indemnification, terms of service, all that typical stuff still needs to be considered and isn’t part of anything on the blockchain. That said, it’s as complicated as you want it to be, but because NFTs are forever (if you code them that way), it’s a lot to consider.”
One advantage large, well-known sports media brands could have in the NFT space is the trust factor. I cannot help but think that is part of what has driven Top Shot’s success. Sure, fans love the highlights and the players involved, but the NBA is a global entity. I would guess most NFT believers are more confident in its integrity than some other players in the space. At the very least, people dealing in NFTs can be confident that the NBA has too much to lose to openly run a scam.
Look, I’m not naive. The banking industry, Wall Street, insurance companies, government. I know there are plenty of well-known, long established entities that are perfectly capable of operating in ways that are designed to screw their customers. There is something about fandom though that makes us willing to take on some risk. We want to trust these things and people we have something invested in wouldn’t screw us.
For instance, Jordan tells me that he believes that a large percentage of the NFT art market is being driven by money laundering. “Remember, this is a completely unregulated, brand new industry, and one should never underestimate the greed of others,” he says.
He says that for consumers, the thing to remember is that an NFT is really just a contract. It says that the buyer is exchanging a certain amount of cryptocurrency for a digital entity of some sort.
“These contracts are little programs and each one has been coded by someone. There are contract standards, but it’s up to the consumer to understand what they’re getting into. There’s nothing stopping a smart contract programmer from coding the NFT to say, ‘after 30 days, destroy yourself’. That’s an incredibly daunting task for anyone other than the most technical and hardcore blockchain user, so there’s a certain amount of trust most NFT holders are placing in the system.”
Companies in the media space can achieve plenty of monetary gain from the NFT craze. There is also something to be learned. Perhaps the windfall a media company can receive has less to do with generating income by selling NFTs and more to do with adjusting to the behavior of those participating in the trade.
Jordan doesn’t have predictions on what will happen. What he does know is that NFTs have shown consumers that the model social media networks, company websites, and mobile games have operated under for so long is not the only way consumers can access the content they are looking for online anymore.
“There’s going to be a huge shift between the current attention economy, where creators are paid based on engagement (likes, follows, clicks, eyeballs) and those doing the actual engagement get nothing other than their data mined and sold, to a participation economy, where everyone is compensated and has a stake in whatever it is they’re engaging with. If NFTs are based on crypto and part of a larger whole, and they have value assigned to them, and those NFTs can be bought, sold, and traded, the more compelling their use-cases are, the more functionality they provide and active the community, the more monetary incentives, policy, and governance can be created to compensate and incentivize participation.”
Technology is a constantly evolving thing, so each generation’s expectation of entertainment changes. Think about social media. The idea of being able to send a message to your favorite player after a game and the potential for them to respond directly to you was something that existed only in our dreams when we were teenagers. It makes sense then that the idea that a fan should get something more for their investment than just a newsletter or t-shirt is coming. It’s an expectation sports media companies should be thinking about right now, so that they aren’t the last ones into a flooded marketplace.
“Crypto/NFTs have opened up a whole new world of what it means to be a consumer of entertainment and culture, and, for the moment, the sky’s the limit,” Jordan tells me. “We are very early.”
Gary Bettman Wants You To Have More Access
“Both of these partnerships we have are outstanding examples of being extraordinarily fan-friendly.”
In the wake of the NHL’s latest national television contract, Commissioner Gary Bettman has solidified the league’s broadcast future. Recent contracts dictate that the league will be appearing on ESPN and TNT/TBS next season after its relationship with NBC concludes after 10 years. Still, the key to both deals is streaming and Bettman explained how there is more work to be done.
“First and foremost whatever media package you’re going to do, particularly on a national basis, you want to make sure you’re getting the most exposure, the best possible production, the best possible promotion that you want to be able to give your fans as much access to the game as possible,” Bettman said on Episode 299 of my Sports with Friends podcast.
The deal with Turner is for seven years worth a reported $225 million. ESPN’s contract is also for seven years for more games than Turner and is reported to be more than $400 million.
The keys to these deals are the streaming apps. Both ESPN+ and HBO Max are key components to each deal that are making out-of-market games as well as exclusives available to subscribers. Still, the controversial decision made by the Regional Sports Networks to require cable subscriptions to stream the local teams is impacting cord-cutters across the US.
“Media distribution and the platforms are going to continue to evolve,” Bettman explained. “Frankly with new technology also represents improved camera coverage. The productions are better than they’ve ever been. You have HDTV, which didn’t exist decades ago. We use more technology, whether it’s player tracking or any of the other statistics that we use. With SAP and Amazon and Apple, the opportunities to get within the game, because there are more distribution platforms have never been greater.”
My takeaway from Bettman’s statements on the subject is that both he and the broadcast people in his office are well aware of the facts presented. While some fans are expecting a quick fix, these deals are complicated. Each team has its own contract with an RSN. Bettman can’t legislate a new way to circumvent those contracts. Plus, he still believes in linear television.
“There is some cord-cutting going on, but linear television still predominates, and more people are watching on a big screen TV in a large room with a couple of other family members or friends,” Bettman said. “Or when you go to a bar sports bar, you see what’s on in the background.”
Because I’ve known Bettman for over a decade, I take him at his word. We did discuss him coming back on the podcast for episode 399 (which would be in June 2023). I’d love to see progress made on the issue then.
“I think there is an evolution going on, but I think it’s easy to over-generalize,” Bettman said.”
The deal with NBC was profitable in many ways over the 10 years. Originally, games were aired on the Outdoor Life Network (OLN), and now to NBC and NBC Sports Network, which be shutting down by the end of 2021.
The ESPN deal was signed in March. The Turner contract was made public in late April.
“Both of these partnerships we have are outstanding examples of being extraordinarily fan-friendly,” the commissioner said. “Giving more content than ever before in more places than ever before. We couldn’t be more excited to have the Walt Disney Company (ESPN) and Warner Media (Turner) working with us and the game. Our organization is excited and thrilled, and we know both of their organizations are thrilled as well. This is an exciting time for us.”
Other highlights from the 45-minute conversation had to do with competitive balance. Unlike the NBA, the NHL regularly has quality teams with records above .500 that don’t make the playoffs.
We talked about the impact that Covid-19 has had on the league. Bettman addressed the decision to create the “playoff bubble” in Toronto and Edmonton as opposed to an American city.
He also discussed the fact that the NHL and NHLPA extended their collective bargaining agreement by four years while negotiating the return to play in the summer of 2020. That’s with former MLBPA head Donald Fehr at the helm. My memories of the canceled World Series made the NHL extension seemingly impossible.
Finally, Bettman addressed his legacy. He takes being the first commissioner in modern sports to be openly booed as a badge of honor, noting that nowadays all commissioners get booed. “(NFL Commissioner) Roger Goodell got booed at the draft last week,” Bettman said.
Still, he knows his legacy will always be connecting to canceling the 2004-2005 season. Yet, the growth of the league is unprecedented, and he has been the architect of that.
Bettman sees no end to his tenure, or at least wouldn’t admit it to me. Maybe we can address that in two years for episode 399.
Media Noise Podcast – Episode 27
Demetri Ravanos begins this week’s episode by looking at Thursday Night Football moving to Amazon exclusively in 2022 and what it means for future business deals with the NFL. Russ Heltman drops by next to offer his thoughts on Rob Parker and Chris Broussard’s heated discussion over Tim Tebow being the beneficiary of white privilege and his value to ESPN as a college football analyst. Seth Everett closes things out by weighing in on Gary Bettman’s legacy and the NHL’s recent deals with broadcast groups.
News & Sports Is A Perfect Marriage For Sales
“Plenty of sellers have a news talk/sports talk combo to sell especially if they are in AM-heavy clusters.”
There are a lot of similarities in sports talk and news talk radio sales. And there are some differences, some of which are actually complementary and work to the sellers’ advantage. I was fortunate to sell news and sports talk as a combo for years.
As Jason Barrett recently announced, the Barrett Sports Media and News Media web sites have merged. Plenty of sellers have a news talk/sports talk combo to sell especially if they are in AM-heavy clusters. One of my 2021 resolutions was to seek out the positive in most situations so let’s look at the similarities the two formats offer to a salesperson.
- Both are foreground formats. For the most part, spoken word radio listeners are seeking to focus on what is being said. They don’t listen to podcasts or talk shows so they can free their mind up to think about other things. Plenty of music listeners have their minds completely elsewhere and don’t even hear what the air person has to say. In fact, most music jocks are told to shut up and play the music. Great selling point for live liners, spots and why our commercials are worth more money.
- We have very loyal customers. The best results for any advertiser comes from the heaviest users of a station- their “P1’s”. Most news/sports talk tsl comes from a much smaller % of the cume. Listeners to Sean Hannity, Jim Rome, Ben Shapiro, and Colin Cowherd stay put. Music listeners tend to chase the hottest song or diary responders to music stations will flip to the station with the contest to win concert tickets. Often this can lead to fewer spots needed in a schedule to achieve a better frequency.
- We got the dough. Nothing sells luxury goods and services like a news/sports talk radio station. Look at any consumer index survey and these two formats will always score near the top. Make sure you load up on luxury car dealers, independent import car repair, jewelers, stockbrokers, realtors and home services companies.
- Sports formats can skew younger especially with stations that have guy talk driven hosts. Some sports stations have local play by play and that can cume in a younger audience. News talk radio is heavy 55+ and especially 65+. Younger buyers will carry a bias at times vs news radio and the age of the listener.
- The news talk format is conservative and mostly anti-liberal/Democrat in general. Some national advertisers would not allow their commercials to fall into the Rush Limbaugh show for example. Sometimes, buyers will not place ads on a conservative station for personal reasons. In sports, at least traditionally, that doesn’t happen as often. Historically sports have steered away from conservative or liberal positions on any politics. We have a chance to change that. See below.
- Sports talk typically has 80/20 Male to Female audience. News talk skews much more female and can be a 60/40 split Male to Female. That opens the door to what a 45–64-year-old woman may be more interested in home services, jewelry and more!
A Happy Couple
- A sports and news talk combo buy provides a great one stop shop for anything with a male skew. And, make sure you point out the earning power differences. We used to have fun with a graphic that pointed out with our combo you get customers and with the rock stations you got convicts. Get it? Customers or Convicts?
- If you are selling to male store owner and he is over 40 years old there is a good chance he listens to one of your shows. Just ask him.
- It may be time to start talking politics. If you have a conservative news talk station loaded with local news and political talk in the morning and Shapiro, Savage, and Hannity at other times, you got a conservative station. If you have a local show or two on the sports station, why not encourage them to speak up? Occasionally, the talent will not be conservative Republicans and certainly most athletes who speak out on political matters and command attention are not republican conservatives. Seems like a perfect balance for buyers who object to one lean over the other.