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John Skipper: People Will Long For Cable When They Can’t Find Their Games

“You are going to go through a very difficult period of time in the next 5-10 years in which people are not going to be able to find the game they want to watch nearly as easily as they did in the 2000s and 2010s.”

Ricky Keeler

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With the lucrative contracts that have been given out to college football coaches in recent weeks, it has led some to wonder whether those coaches actually deserve the large sums of money that they are receiving. 

To discuss that topic and the future of streaming rights and television, Dan Le Batard was joined by the CEO of Meadowlark Media, John Skipper, and the former president of the Miami Marlins, David Samson on a special episode of the South Beach Sessions podcast.

Both Skipper and Samson believe that coaches do deserve to make that much money. Both men arrived at the conclusion for a different reason.

“I think they are worth the money they are being paid. It may seem outlandish to some people who are making $53,000 a year and don’t understand why you have to pay a football coach 5 or 6 times more than you pay a university president. But, relative success on the football field leads to excitement from your donors, leads to increased admissions, leads to a lot of people showing up in your town for football games. A 12-0 Miami is worth $8 million more than a 7-5 Miami,” said John Skipper. 

“The reason why football coaches to me are making this amount of money is universities are realizing that they are getting fewer and fewer students to pay full freight tuition. They are running at a deficit operationally in a way they never have before. What they are finding is people like you running broadcast empires who are willing to pay rights fees in numbers that are probably irrational, but based on the need for live content. Sports live content in the college area drives so much revenue that if you can get a program that is attractive into a conference that is attractive, it’s going to do way more for your bottom line than anything you can do in any other department. University presidents think coaches are the key master to that money and that’s why they do it,” said Samson. 

Skipper even mentioned that the first broadcast rights deal he negotiated when he was president of ESPN was with the Big Ten. While he was able to accomplish a lucrative rights deal, there is one thing he wished ESPN did not allow to happen in that deal: 

“The first conference deal I worked on was the Big Ten, which came up in 2005. We were competing with FOX. We did a 10-year, $1 billion deal. That was the first billion-dollar deal in college sports for the rights to most of the Big Ten’s games. They kept some games for the Big Ten Network. We should have never let the Big Ten Network happen at ESPN. Wasn’t good for our business that those games leaked out of the system, but Jim Delany had the smart idea to launch a network with FOX and that also was good business, even though it had a rough start.”

Samson mentioned that when he was in charge of the Marlins, he never made a decision with the fans’ thoughts in mind. Well, he now believes that fans are going to have to be heard because they are going to control what actually happens over the next few years.

“What’s happening is there’s a greater demand for people 18-34 to not put up with that. They want no wall in the way of what they want to watch when they want to watch it and where they are when they watch it and on what they watch it on. One of the things team owners have done is they have tried to get back the streaming rights that they gave away to broadcast networks. The reason why networks are willing to pay teams so much for their local rights fees is that’s all you got and you are going to pay your cable company or you are going to pay to have that network available to you to get the game. If you don’t have to pay that network, that network is not going to pay that team and that team isn’t going to pay the players.”

So, what could the future of sports television look like? John Skipper mentioned that people should prepare to be frustrated that it won’t be easy to find their team’s favorite game: 

“You are going to go through a very difficult period of time in the next 5-10 years in which people are not going to be able to find the game they want to watch nearly as easily as they did in the 2000s and 2010s. I will hazard a guess that people will be nostalgic about paid television before too long because it was a great system and very great value because everything you wanted to watch, you paid Spectrum or Comcast and every college football or baseball game was on.

“You can find them all with a single remote and single service. You are going to enter into a bewildering time where people do not know where their game is because 5 of them will be on NBC broadcast and 3 of them will be on ESPN+ and 2 of them will be on Paramount+ and one of them will be on the ACC Network. Every week, you are going to have to figure out where the hell are they playing this week…It’s going to be more expensive, more difficult to find.”

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Paramount CEO Bob Bakish: ‘Hard to Believe’ Disney, FOX, WBD Joint Streaming Venture is ‘Ideal’ for Consumers

“There’s still a lot we don’t know about this service – things like price; packaging; consumer appetite.”

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Courtesy: Paramount Global

Paramount Global revealed its quarterly financial results on Wednesday, summarizing the three and 12 months ending on Dec. 31, 2023. While the company fell short of its overall revenue expectations, it reported gains on its Paramount+ streaming service with a total of $67.5 million subscribers. The metric is up 4.1 million subscribers compared to last year, although it does not take into account the recent Super Bowl between the Kansas City Chiefs and San Francisco 49ers. The National Football League’s championship matchup attained a record audience of 123.7 million average viewers with a household rating of 43.5 with broadcasts across CBS and Nickelodeon, both of which were available to stream on the platform.

Although a report from CNBC indicated that merger talks between Paramount Global and Warner Bros. Discovery has come to a halt, there are concerns about the future of the company. Paramount shut down Showtime Sports last quarter and laid off approximately 800 employees in the week after the Super Bowl, equating to about 3% of its workforce. Shares for Paramount Global have declined of late with the media conglomerate closing Wednesday down 1.69% at $11.06 per share.

Total company revenue finished at $7.6 billion with earnings at $0.04 per share, but the outlet experienced a substantial slide in advertising revenue that affected total revenue by 6%. Revenue in the “TV Media” category finished at $7.638 billion for the quarter, which is down 6% from the previous year. For the four quarters within 2023, the company garnered overall revenue of $29.652 billion; however, it attained a loss of $451 million overall. Media revenue during the 12-month stretch equated to $20.09 billion.

Direct-to-consumer revenue increased 34% year-over-year with a 27% boon in global viewing hours. According to Antenna, Paramount+ was the No. 1 premium streaming service in U.S. sign-ups in the fourth quarter and since its launch. Overall revenue for the business sector was $6.74 billion on the year, a 37% increase compared to the finish in 2022. The direct-to-consumer segment continues to operate at a loss with an adjusted OIBDA of $1.664 billion, a 9% improvement from the previous year. Global average revenue per user for Paramount+ augmented by 31% in addition to a 69% increase in revenue for the subscription-based platform.

“Our disciplined execution and strong content offering drove our results in 2023, as we continue to evolve our business for profitable growth in 2024 and beyond,” Bob Bakish, Paramount Global president and chief executive officer, said in a statement. “In Q4, Paramount+ revenue increased 69%, DTC Adjusted OIBDA improved for the third consecutive quarter, and we now expect to reach domestic Paramount+ profitability in 2025 – a significant milestone.”

During the company’s earnings call on Wednesday afternoon, Bakish discussed the joint streaming venture between The Walt Disney Company, FOX Sports and Warner Bros. Discovery that would also include its other cable networks. As the company continues to try and lower costs and increase shareholder value, it has reportedly discussed combining streaming services with Comcast, the parent company of NBCUniversal and its NBC Sports division. The aforementioned joint streaming venture is scheduled to launch this fall but is facing a lawsuit from FuboTV that alleges the service is in violation of U.S. antitrust law.

“There’s still a lot we don’t know about this service – things like price; packaging; consumer appetite – and to the consumer point, for a true sports fan, this product only has a subset of sports,” Bakish said. “It’s missing half the NFL, a lot of college [and] has virtually no soccer [or] golf. So look, it’s hard to believe that’s ideal, especially at the price points that have been speculated in terms of our view on sports.”

For the quarter, Paramount Global cultivated $558 million in net operating cash flow along with $443 million in free cash flow. The company also believes in its sports strategy, primarily driven through its CBS Sports division that includes live broadcasts of games in the National Football League, Big Ten Conference and the PGA Tour. CBS Sports Chairman Sean McManus is planning to retire from the company in April after leading the division for 27 years. He will be succeeded by David Berson, who will lead the division in the role of president and chief executive officer.

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‘The Match’ Does Record-Low Viewership Numbers Across TNT, truTV and HLN

The ninth edition brought in just over 500,000 viewers across TNT, truTV and HLN.

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Logo for 'The Match'
Courtesy: Warner Bros. Discovery

The ninth edition of ‘The Match’ which featured Rory McIlroy, Max Homa, Lexi Thompson and Rose Zhang earlier this week, brought in just over 500,000 viewers across TNT, truTV and HLN. That was more than 250,000 less viewers than had tuned in for the event in June 2023 featuring Patrick Mahomes and Travis Kelce against Klay Thompson and Stephen Curry, which was the previous record low. The numbers were first reported by Austin Karp of Sports Business Journal.

Monday night’s event began at 7 p.m. ET and took longer than the three hours it was originally scheduled for.

The record high for the event came in 2020 when Phil Mickelson and Tom Brady faced Tiger Woods and Peyton Manning during the early stages of the COVID-19 pandemic. That Memorial Day weekend broadcast featured 5.6 million viewers on TNT, TBS, HLN and truTV.

According to Golf Week, the made-for-TV event has raised more than $41 million for charity.

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Sinclair Reports Fourth Quarter Financial Results

“Sinclair delivered a solid finish to 2023 with our local media segment meeting guidance and Tennis Channel exceeding expectations.”

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Sinclair, Inc. recently reported its fourth quarter financial results for the three and 12 months ended Dec. 31, 2023, revealing performances and insights about several key facets to its business. The diversified media conglomerate is the parent company of Diamond Sports Group, which is currently in Ch. 11 bankruptcy hearings and trying to enact a resolution to emerge. Earlier in the week, the regional sports network operator received approval for $450 million in debt financing and an amended management services agreement (MSA) with Sinclair. Diamond had sued Sinclair earlier last year alleging that the company had attained funds through misconduct, but plans to drop the litigation in exchange for a cash payment of $495 million.

Company-wide revenue for the quarter finished at $826 million, down 14% to last year’s period when it garnered $960 million in this category. Media revenue specifically also fell 14% to $821 million, $54 million of which comes from the Tennis Channel. Adjusted EBITDA for the company equated to $181 million, attributing the 41% decline from last year’s fourth quarter to lower political advertising revenues. The adjusted free cash flow for the company, which includes several factors deducted from adjusted EBITDA such as distributions to non-controlling interest holders and capital expenditures, totaled $91 million.

During the quarter, Sinclair reached an agreement with Verizon to renew and extend carriage agreements for its television stations in addition to Tennis Channel and YES Network. Last month, the company achieved a multi-year renewal of all its FOX affiliations in Sinclair marketplaces and those where Sinclair provides sales and other services as per the terms of a joint sales agreement or master service agreement. In the fourth quarter for the three months ending Dec. 31, 2022, Sinclair earned $12 million in management and incentive fees from Diamond Sports Group and Marquee Sports Network.

“Sinclair delivered a solid finish to 2023 with our local media segment meeting guidance and Tennis Channel exceeding expectations,” Chris Ripley, Sinclair president and chief executive officer, said in a statement. “During the year and through early January, we continued our commitment to deleveraging, repurchasing over $91 million in debt principal across all tranches, at an average discount to par of 19%.”

On the year, Sinclair earned $3.1 billion in media revenues but operated at a $279 million loss overall in its net income. At the conclusion of 2022, the company had income of $2.7 billion, representing an 89.6% drop-off in this area. The company noted that it considers adjusted EBITDA to indicate its operating performance and ability to service its debt, implementing several factors within the calculation to finish at $549 million on the year. This figure is also down year-over-year from the $944 million it posted at the end of 2022, paying $325 million in cash sports programming rights during that year. Adjusted free cash flow declined by 72% to $234 million, which includes Sinclair, Inc. and its subsidiaries.

As of Dec. 31, 2023, Sinclair has $4.175 billion in debt and has 63.5 million outstanding common shares, which are composed of Class A and Class B varieties. The company paid a quarterly cash dividend of $0.25 per share last December. Cash and cash equivalents for Sinclair total $662 million – $319 million from Sinclair and $343 million from Ventures. At the conclusion of the fiscal first quarter of 2024, the company projects to achieve between $787 million and $800 million in media revenue with an adjusted EBITDA of $128 million to $139 million.

Sinclair continues to roll out NextGen Broadcasting technology, which has been launched in 43 markets thus far, and projects that Diamond Sports Group’s reorganization plan improves the positioning of regional sports networks. Ripley referred to RSNs as “an important asset for pay-TV bundles” in his statement accompanying the earnings report.

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