Welcome back to The Varsity, my twice-weekly private email on the money, deals, and egos that fuel the sports media business. I’m back home from New Orleans for a brief respite before my cross-country flight to San Francisco for NBA All-Star Weekend. Thanks to Marchand for staying on hold for eleven weeks and three days to ensure I got the best table at the French Laundry, I really appreciate it. (Andrew, please make sure the Rivian is set to 68 degrees before I get in for the two-hour drive to Yountville. You know I can’t stand dry heat this time of year!) Super Bowl week is filled with world-colliding moments, and Michael Rubin’s Fanatics party at the Sugar Mill on Saturday afternoon was the ultimate crucible of wealth and influence, if not always taste. As I was chopping it up with a sports business executive, Kevin Costner and Pete Davidson were pottering about behind us, Ludacris had just wrapped up a set on the stage, and Donald Trump Jr. and his entourage sailed past on their way to the exits. Where else but Super Bowl week can you see sports business all-stars like Gianni Infantino, Josh Harris, David Tepper, and Jimmy Pitaro post up at the same party as Leo DiCaprio, Post Malone, Megan Thee Stallion, and even Turtle from Entourage? Before we get started, I want to pour one out for 91-year-old Hubie Brown, who called his last NBA game for ESPN yesterday, concluding what an emotional Mike Breen called “the most remarkable career in sports broadcasting history.” (I encourage all of you to watch this touching six-minute video.) Also on Sunday, amid his ongoing battle with cancer, Dick Vitale triumphantly returned to ESPN’s college basketball sidelines for the first time in two years to call Clemson’s upset of Duke. (This heart-warming ABC News video is also worth a click.) 🚨🚨 Pod alert: Shams Charania, the wunderkind NBA insider, joins the Varsity podcast on Wednesday to preview the NBA business agenda that will dominate discussion in the corporate suites and nightclub V.I.P. sections during All-Star Weekend—including today’s blockbuster arbitration ruling that puts A-Rod and Marc Lore on the path to purchase a controlling stake in the Timberwolves and Lynx. Plus, make sure you don’t miss Sunday’s episode of America’s favorite sports media podcast: I caught up with NBC Sports president Rick Cordella in New Orleans. Let’s get to it…

The Brady Meter: Super Bowl Edition Eagles 40, Chiefs 22 Grade: C+

Late in the second quarter, it seemed like Patrick Mahomes and the Chiefs were absolute toast: The Eagles, up 24-0, were controlling both lines of scrimmage and subjecting an all-time great quarterback to the sort of pass rush that he hadn’t countenanced since his Texas Tech days. Who better to have in the booth than a quarterback who, eight years earlier, engineered the largest and most dramatic comeback in Super Bowl history? Who better, indeed, than Tom Brady—The Varsity’s own $37.5 million man—to convey the emotions percolating inside the Chiefs’ locker room during the half? Alas, Brady offered scant context or insight or personal reverie. It was only hours later, with seven minutes left in the game, when the Chiefs’ dire deficit prompted a strikingly candid confession. “I think about … the three losses probably more than I think about the seven wins,” he said of his Super Bowl career. “I still haven’t lived it down, because you care so deeply.” You could hear the anguish in his voice as he recalled his long bus ride to the hotel after the Patriots’ stunning loss to the Giants in 2008. Brady was obviously prepared to call the game, but he ran into a broadcaster’s worst nightmare: a blowout Super Bowl, with empty minutes of time to fill that can feel like hours. It’s hard for even the most seasoned broadcasters to rise to the occasion, let alone a rookie. Brady has been very good this season when talking about strategy during close games, but he’s clearly pulled out of his comfort zone when called upon to be a storyteller. But shake it off, Tommy! Now begins a period of gradual renewal: watching film, working on that sore throat and chipper voice, and preparing for a return to the salt mines in September—and the debut of The Brady Meter, Season 2.

The Starting Five

Super Bowl ratings: Don’t be surprised by Fox’s incredible Super Bowl record of 126 million viewers—the final number will almost certainly be higher—even though the game was a dud from the moment that Mahomes got picked off by Cooper DeJean. After all, Fox streamed the game on Tubi (which added 13.6 million viewers to the count), both Telemundo and Fox Deportes carried the game, and Nielsen changed the way that it counts out-of-home viewers. If the game had been even slightly competitive, Fox would have certainly blown past the 130 million mark. After all, yesterday’s game peaked in the second quarter with 135.7 million viewers. The day that a Super Bowl eclipses 140 million viewers can’t be far off.
UFC-ESPN talks start slow: It’s becoming clear that both ESPN and UFC will allow their exclusive negotiating window to lapse on April 15 without reaching a deal. The window opened about four weeks ago, and I’m told that the two sides have yet to have formal talks, nor are any scheduled. ESPN hasn’t soured on UFC, but the league needs a stalking horse bid in order to trigger any significant increase over the current deal. Right now, ESPN pays UFC around $550 million per year for about 30 fight nights and 12 pay-per-view events. In fact, the network would likely try to keep the pay-per-view rights, particularly since it’s launching its direct-to-consumer service later this year. Meanwhile, UFC should expect some interest on the open market—both Netflix and Amazon Prime have expressed a willingness to talk. And Netflix recently started carrying the WWE, which obviously shares its parentco, TKO, with UFC.
A broadcast renaissance: One of the leitmotifs of The Varsity has been the changing ways in which the sports media business contemplates reach. Broadcast networks have always drawn the largest audiences, but this year was the first time that a streamed NFL game (Amazon Prime’s Thursday Night Football) out-rated a traditional linear TV contest (ESPN’s Monday Night Football) during the same week. It happened only twice, but it’s clear where this is headed. On this week’s Varsity podcast, NBC Sports president Rick Cordella explained the evolving dynamics. “Broadcast is having a little bit of a renaissance. It’s just the best place to reach the mass audience, bar none,” he said, referencing viewership from the NFL playoffs, Sunday Night Football, the Kentucky Derby, and the Olympics. Cordella told me that the gap between broadcast and streaming is around 30 percent for great games, and even more for run-of-the-mill contests. “We see it with first-party data from Peacock,” he said. “If it’s a casual game, you’re getting hardcore fans to show up. It’s difficult to get casuals there on streaming. Whereas on broadcast TV, people still stumble into things. That’s the difference. I’m not naive enough to think that over some longer period of time, streaming and broadcast becomes somewhat of a similar level. But that time horizon may be longer than we anticipate.”
Next year’s Olympics-Super Bowl-NBA mash-up: During our chat, it was clear that Cordella was also focused on nearer-term burdens. But next year, NBC will produce the Winter Olympics Opening Ceremony from Milan on Friday, February 6. Two days later, it will carry the Super Bowl from Santa Clara. A week after that, while the Winter Olympics are still ongoing, the network will carry the NBA All-Star Game from Los Angeles as part of its new league deal. That’s a lot of marquee events to produce in nine days, but Cordella sounded excited about the full schedule. “I think I’ll go to Milan, then back, then Milan, then back, then maybe back to Milan again. I have to figure that out,” he said. “When you come to these events, I feel like. This is fun. It’s intellectually challenging, and it’s fun. We work in sports. … We’re lucky to have the access that we have. You walk around the field at a Super Bowl—it’s a pretty cool experience that not a lot of people get to have. You’re walking around the halls of the hotel at an All-Star Game, and there’s NBA all-stars there? Growing up as a fan, to experience what we experience, we’re incredibly, incredibly lucky.”
Did Jimmy Johnson just retire?: This four-and-a-half-minute Jimmy Johnson A.I.-inspired tribute on Sunday night certainly had the feel of a retirement announcement. The gold watch vibes continued after the video segment, when each member of Fox’s lachrymose NFL broadcast crew offered a few words to the 81-year-old former coach turned broadcaster. “This is the happiest I’ve ever seen you,” said Howie Long. But when host Curt Menefee asked, “Was that goodbye?” an emotional Johnson said, “One day at a time, Curt.” So what happened? Did Johnson get cold feet? My Fox sources insist that the moment—which took up nearly seven minutes of air time on Super Bowl Sunday—was never meant to be a retirement announcement. Fox executives simply said that they wanted to make sure to honor their longtime TV personality on a big stage. The network’s next Super Bowl isn’t until 2029. Fox did smuggle a more explicit retirement announcement into the telecast, however. With about 10 minutes to play, the network saluted cameraman Don Cornelli, who’s retiring after 38 years of covering the league for CBS and Fox. Cornelli, who has been on the lead NFL crew dating back to John Madden’s days at CBS, is known for running up and down the sidelines with his handheld camera. Incredibly well-liked by Fox’s production staff, he grew emotional during Thursday’s camera meeting when director Rich Russo honored him. “The greatest handheld camera person in the history of what we do,” Kevin Burkhardt said during the telecast. “There’s nobody better, and there might not be anyone better.”

And now, the main event…

ESPN and the NFL Enter Deal Heat

Once again, ESPN and the NFL are in renewed negotiations for the former to take on the latter’s media assets. What’s changed since the last time these dance partners played footsie? More linear decline, Flagship, and maybe the Draft going up for bidding, too.

John Ourand

The NFL may be the most powerful entity in media these days, but it seems not even the Shield is immune to the ravages of cord-cutting. It was nearly four years ago that commissioner Roger Goodell retained Goldman Sachs to look into selling a group of the league’s assets, including NFL Network, NFL RedZone, NFL.com, and its fantasy business. And while the league has talked to every one of its media partners about the properties since the spring of 2021, there has been little interest. ESPN had demonstrated the most curiosity, but 18 months of on-again, off-again talks had reached an impasse by the middle of last year. In September, as the 2024 season kicked off, the NFL folded its tent and back-burnered the soliciting of any such sale. Well, the talks are back on. It’s too early to predict whether a deal will be struck, of course, but ESPN’s plan to launch its D.T.C. product, code-named Flagship, has provided some renewed momentum. The two sides have discussed the parameters of a deal that would have ESPN take control of NFL Network and NFL RedZone. On some level, this makes sense for ESPN, which already programs a host of 24/7 channels, and would be able to synergize the additional programming and related costs. NFL Network and NFL RedZone could also help the brand’s negotiations with cable and satellite distributors and elevate ESPN’s status as a preferred partner with the league. The NFL, for all its power and glory, has never had much influence in the cable and satellite world. After all, in coming to market with only two linear channels, the league has found itself at the mercy of traditional distributors, like Comcast and DirecTV, to set the terms. That would change if NFL Network and NFL RedZone are matched up with ABC and ESPN. While cord-cutting has hit league-owned networks especially hard, it’s unlikely that NFL Network and NFL RedZone would act as a drag on ESPN’s bundled channels, especially since NFLN carries eight live games a year and RedZone has become a popular upsell to push consumers into more expensive tiers. More importantly for ESPN, the NFL channels add programming to Flagship, which is expected to launch this fall. The NFL’s fantasy offering, which would also be part of the deal, would be a big attraction as well. (Sports betting is expected to play a major role in Flagship’s launch.) Meanwhile, this exit opportunity would unburden the NFL from carrying a rare declining asset on its balance sheet. NFL Network, indeed, has been in cost-cutting mode for at least the past year, even moving its beloved daytime show, Good Morning Football, from New York to Los Angeles to save a couple extra pennies. Negotiations for the media assets have also coincided with talks regarding the NFL Draft, which the league has put up for bid starting in 2026. Thus far, the draft has received a lot of interest. ESPN, Fox, and Google/YouTube all submitted bids months ago, but the NFL has yet to make a move. All sides expect developments in the coming weeks.

From the Cheap Seats

On da Bears: “I have been told for the last nine years that the team will only be for sale when Virginia Halas McCaskey dies. Don’t forget, the McCaskey family has no real outside business interests, unlike most other NFL team owners. The season is officially over, so now is the perfect time… I don’t believe the McCaskeys will publicly put out the For Sale sign, but I do believe a few billionaires will make offers and then take those offers to the media if the McCaskey family refuses.” —A sports business executive On the NFL’s desire for an 18-game schedule: “Here’s what I don’t get about the 18-game discussion. The Eagles just played their 21st game. Every player in the NFL is theoretically willing to play 17 games and then four playoff games to win the Super Bowl, so why is 18 games such a problem? Only two teams at most would have to play more than the 21 games that players would readily participate in now.” —A Varsity subscriber On the NFLPA’s opposition to an 18th game: “I am not a labor expert by any means. But to my untrained eye, every single negotiation between a players association and a Big Four American sports league in my lifetime has benefitted the league far more than it benefitted the players. I recognize that owners hold the leverage, but someone please explain this to me like I’m 5.” —A Varsity subscriber

See you Thursday from San Francisco, John

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