Welcome back to The Varsity, my twice-weekly private email on all the machinations of the sports media cinematic universe. The videos, pictures, and stories emanating from L.A. are heartbreaking. My partners Peter Hamby and Dylan Byers, two adopted Angelenos, discussed the harrowing situation, and the local media response, on an impactful episode of The Powers That Be podcast this morning ( listen here). The L.A. fires are going to have profound second-, third-, and fourth-order impacts on the sports media world, from the rescheduling of this weekend’s NFL wild card game at SoFi to the personal lives of so many dislocated Angelenos.
Stay safe, everyone.
🚨🚨 Pod alert: TGL, Tiger Woods and Rory McIlroy’s made-for-TV virtual golf league, launched on ESPN this past Tuesday. And so Mike McCarley, the former Golf Channel president who founded TMRW Sports with Tiger and Rory, joins The Varsity this weekend to spill the beans. In the meantime, make sure you listen to the most recent episode—a conversation with my partner Eriq Gardner about Disney’s unexpected deal to merge Hulu+Live TV with Fubo.
Let’s get to it…
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Player of the Week: David Gandler
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Perhaps the biggest winner in Disney’s decision to merge its Hulu+Live TV with Fubo is Gandler, the co-founder and C.E.O. of the publicly traded streamer, who will run the combined entity. While Fubo was making headway with its antitrust case against Venu, this combination will offer Gandler much more leverage in negotiations with programming networks. As my friend Ted Hearn noted in Policyband, his excellent substack, Fubo’s stock surge helped Gandler personally. Per Teddy, Gandler received 1.3 million new restricted stock units on January 1, worth $1.8 million. After the announcement on Monday, that value ballooned to $6.9 million.
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The fact that NFL viewership is only down 2 percent this season is nothing short of remarkable, especially considering all the headwinds the league faced this season, including fewer Monday Night Football simulcasts on ABC and ESPN (MNF was down 14 percent) and one less Christmas Day game.
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Down to the J.V.: Skip Bayless
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The insufferable agitator, who has been off major television for half a year, was in the headlines for all the wrong reasons this past week. Noushin Faraji, a former Fox Sports hair stylist, filed suit against Bayless and Fox Sports for sexual harassment. (FS1 executive vice president Charlie Dixon and host Joy Taylor, among others, are also named in the lawsuit.) But the allegations against Bayless—including making unwanted advances and offering Faraji $1.5 million to have sexual relations—dominated the headlines. (For the record, Bayless has yet to address the allegations, while Fox Sports released a statement saying, “We take these allegations seriously and have no further comment at this time given this pending litigation.”)
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- The NFL’s management of the L.A. wildfire situation: The horrific natural disaster in Los Angeles has sent multiple professional leagues into logistical overdrive. The Lakers, who play in the Crypto.com Arena in comparatively safe downtown, postponed their home game tonight against the Hornets, but the team hasn’t made a decision about Saturday’s contest against the Spurs. The L.A. Kings, who also play at Crypto, postponed their Wednesday game against Calgary. (The team’s next home game isn’t until January 20.) The Clippers, who play in the brand-new Intuit Dome in largely unscathed Inglewood, have a Saturday game scheduled against the Hornets, as well.Meanwhile, all eyes are on the NFL. The Rams’ scheduled playoff game against the Vikings on Monday night has been relocated from SoFi Stadium, also in Inglewood, to State Farm Stadium outside Phoenix. Both the league and the team were determined that the game go forward, not least for competitive reasons. (The winner of the game, after all, will have to come back on an already short week for the divisional round. And the Rams were loath to give up home field advantage.) If the Rams, Commanders, and Packers all win this weekend, the NFL will have another decision regarding a Rams’ home game the following weekend, too.
- So what makes an NFL game a Netflix game?: The Netflix Christmas Day doubleheader unsurprisingly had a light touch of CBS Sports, since the O.G. NFL partner took a fee to produce the games for the streamer. But Netflix added its own unique elements, too, as EverWonder Studio founder Ian Orefice told my partner Dylan Byers on his great podcast, The Grill Room. “If you were watching a global feed between every ad break,” Orefice said, “we had Drew Brees providing analysis and speaking to a global audience about football. That dialogue has to be different than how you speak directly to the core football fan.”Orefice also mentioned the Madden-on-Thanksgivingesque player-of-the-game presentations, which included dispensing Netflix Santa coats and football-shaped cakes: “Every decision throughout the day, we wanted to make sure, Is this going to deliver for a core football fan? Is this going to speak to a global audience? And is this going to feel like Netflix?”
Interestingly, when Dylan asked him to identify up-and-coming sports that could work on Netflix, Orefice’s answer surprised me. He named golf, college basketball, and… chess. “I think there’s a lot of opportunity if you can figure out the visual format, which no one has done yet,” Orefice said. “Chess is a sleeper. I know that might be a little out of the box, but chess could be a true home run, if someone can figure out a way to visually bring it to screen.”
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- (a) Fubo’s “lucky” investors: My jaw dropped when I read this passage from my partner Bill Cohan’s peerless private email Dry Powder last night: “Someone got really lucky with Fubo, according to one of my most trusted Wall Street sources. This person wrote to me implying that someone, or multiple someones, had a pretty good inkling that Disney would be buying the sports streamer out of the blue on Monday, and acted on that knowledge to great profit.”According to Bill, some 35 million Fubo shares traded all of last week, at prices between $1.20 and $1.50 a share. And then on Monday, after the announcement of the Disney deal, some 680 million Fubo shares traded at around $6 per share. “If someone bought some 2 million shares, or about 6 percent of the volume traded last week, at a cost of around $3 million, that stock would now be worth $13 million,” Bill wrote. “Not bad work if you can get it.”
But there’s more… Per Bill: “My source also pointed out that unknown parties made a killing buying $2 Fubo January 17 calls, which had been trading at a low of around one penny each, on the theory that it was unlikely the stock would trade above $2 per share by January 17, since the shares had been trading at less than $2 since August. Well, someone bought those calls, and on Monday, with the stock trading above $6 per share for the first time in two years, those calls were suddenly worth $4 each. So, to once again put it in illustrative terms: If you bought, say, 1,000 calls for two cents each, that would have cost you $2,000 (each call contract is 100 shares, so 1,000 calls equals 100,000 shares, bought at two cents each is $2,000), and now those calls are worth something like $440,000.”
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- (b) Elsewhere in the streaming universe: Last night, my partner Matt Belloni broke the news that Kelly Campbell, president of Peacock and direct-to-consumer at NBCUniversal, is leaving the company. “Comcast is reorganizing its NBCUniversal media unit as it prepares to spin off its declining cable networks, which include MSNBC, USA and E!. As part of that process, TV executive Mark Lazarus is exiting to run the unnamed SpinCo, while Matt Strauss has been upped to chairman of NBCUniversal Media Group, and Donna Langley, the previous film studio head, is now chairman of NBCUniversal Studio Group, overseeing all content operations, including for Peacock,” Matt reported. “Campbell had reported to Strauss, and sources tell me her exit is the first step in a remaking of the TV and streaming business group under its newly elevated leader. Langley is likely to do the same to her side of the organization. It’s gonna be a wild 2025 at the home of the Peacock.” You can read the whole thing here.
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- More Venu hell: Fubo’s antitrust fight against Venu may be over, but that doesn’t mean the sports streaming love child of Disney, Fox, and Warner Bros. Discovery is completely out of the woods. Both DirecTV and Dish Network, which have been trying to merge themselves, sent letters to U.S. District Judge Margaret Garnett this week arguing that Disney’s Fubo deal failed to mitigate the antitrust concerns at the heart of the case—an issue that my brilliant partner Eriq Gardner recently flagged. (Jeez, what did any of you guys do before Puck?)When I asked a spokesman for DirecTV if the company would pursue the antitrust case on its own, they responded, “We continue to evaluate all available avenues to protect competition and our customers.” (Usual disclaimer, which you already know: TPG, an investor in Puck, is finalizing its purchase of DirecTV.) In the letter to the judge, DirecTV’s general counsel wrote, “By this settlement, Defendants pay off and seek to subsume the very competitor that raised these antitrust violations to the Court. However, Defendants cannot purchase their way out of the antitrust violations.” As Eriq explained on The Varsity podcast this week, the key is whether the incoming Trump administration pursues the case. “With the kind of flux involved, and the different priorities, the new administration might not get involved,” Eriq noted. It’s also a good idea to monitor what happens at the state level. Sixteen states plus D.C. filed amicus briefs in support of an injunction, so the attorney general for any of them could seek to step forward with a challenge of their own.
- TKO’s boxing league: Saudi Arabia’s Public Investment Fund, the proprietor of LIV Golf, is close to standing up a boxing league with TKO, according to a report from the Times’s Tariq Panja and Kevin Draper, with an announcement likely coming within the month. The deal would pay TKO $30 million per year in management fees, and give the UFC owner a foothold in a market it has coveted for years.
For me, the most interesting part of the story was the speculation that TKO could bundle the media rights for the new boxing league with UFC, which is entering its four-month exclusive negotiating window with ESPN next week. My sources expressed skepticism: The UFC is looking to double its average annual rights fee on its own, and a fledgling boxing league without star names could be a drag on those lofty goals. Most observers expect TKO to split UFC rights between two media companies. ESPN executives have said that they want to retain a piece of UFC. And streaming pure plays, like Netflix and Amazon Prime, have also expressed interest. The rights to a new boxing league could come up during negotiations, but it doesn’t seem likely.
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Diamond Sports Group has emerged from bankruptcy reborn, renamed, and with Norby (!!)—but is it all too little, too late? Plus, news and notes on Liberty and Peacock.
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This week’s most fascinating personnel news, which once again reinforced the international growth potential of the sports media business, seemed to be John Malone’s anointment of Derek Chang as the C.E.O. and president of Liberty Media. Chang, a former NBA and DirecTV executive, most recently ran EverPass Media, the joint venture between the NFL and RedBird Capital. Now, he’ll be growing Formula One and MotoGP for the insatiable and ageless Malone. (Liberty owns F1, and its purchase of MotoGP should close by summer.) Among the items on Chang’s to-do list will be cutting a new deal for Formula One’s U.S. media rights, as its current ESPN deal expires after this year.
For members of The Varsity H.R. department, however, that news paled in comparison to a concurrent announcement. For nearly two years, Main Street Sports Group (né Diamond Sports Group) has worked to emerge from bankruptcy—a convoluted and byzantine process that involved cutting deals with distributors, working out agreements with leagues and teams, and appeasing debt holders. Now that the company is solvent, focus has shifted to the hard part: actually running the business. To that end, C.E.O. David Preschlack has made his splashiest hire, convincing his old friend Norby Williamson to come aboard and run production and programming for the reborn group of regional sports networks.
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Norby, of course, spent nearly 40 years at ESPN, overlapping with Preschlack, before his well-publicized, McAfee-fueled defenestration back in April. Norby will be replacing Michael Connelly, a former senior vice president and executive producer who left Main Street a couple of months ago. (Norby’s ESPN deal ran through the end of last year, I’m told, emancipating him to accept this job a little more than a week ago.) Officially, Preschlack has hired Norby to oversee all production and programming, including live games and studio shows, for all 16 of Main Street’s R.S.N.s. But many assume he’ll have an even more expansive mandate.
The R.S.N. business exists solely because of live games, and there’s not much that Norby can do to change how they are produced beyond ensuring consistency among Main Street’s FanDuel-branded R.S.N.s (A Marlins game in Florida will have the same production values as a Royals game in Kansas City, etcetera.) I suspect that we’ll really see Norby’s influence on studio programming, which is where he made his biggest mark at ESPN, as a longtime talent whisperer and the custodian of SportsCenter.
But this won’t be easy, either. Not only will Norby not have access to a Bristol budget, he’ll be working within the strictures of Diamond’s— sorry, Main Street’s—post-bankruptcy austerity plan. And the paradigm for success on these platforms is complex. For decades, R.S.N. executives bled money building out original programming, trying to retain viewers by expanding pre- and postgame shows, airing batting practice and shootarounds, etcetera. Even the content that was able to attract audiences, like Fox Sports Net’s Best Damn Sports Show Period, were simply too costly to produce and didn’t bring in enough money. For its part, Main Street already has a couple of FanDuel-branded shows in its rotation. This will be a fun comeback attempt, both business and professional, to watch play out.
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On CFP changes: “Your interview with Rich Clark was good, but he quickly pivoted to that pro–bowl game rhetoric that the Bowl Industrial Complex keeps feeding fans. They try to convince fans that cities that host eight football games a year are incapable of hosting a football game. They also seem to think that inclement weather makes for bad football. Yes, ASU students weren’t in class for the quarterfinals, but I’ll go out on a limb and say that it would be easier for a majority of them to get to campus for a playoff game than it would be to go to Atlanta. Bowl games are now mostly neutral-site games in NFL stadiums.” —A Varsity subscriber
More on CFP changes: “Great to hear Rich Clark’s pragmatism that the NFL head-to-head for CFP’s first round is not ideal for college or pro football. However, I’d be curious if he, an Air Force alum, would be willing to ask his stakeholders to explore a calendar adjustment that forces Army vs. Navy to find a new weekend for their annual matchup, so the CFP first round starts a week after conference championships. This would also force the postseason awards, including Heisman, to move, but it seems like that’s where we are headed for the overall greater good of college football.” —A Varsity subscriber
On the Fubo-Disney merger: “Your view of Venu as a winner of the Disney-Fubo deal leaves me with a lingering question: What if Venu launches, and ‘Flagship’ never does? If Venu has all of ESPN + TNT + Fox, it is by definition wider than Flagship alone. Sports gets carved out of Max, so there isn’t consumer duplication or confusion.” —A sports business executive
On WWE changes: “The rumor was always that Vince McMahon was against having sponsorships on the ring mat, and Nick Khan saw it as one way they could still monetize. Here’s to Puck sponsoring The High Chief Tribal Chief/Hobbs & Shaw 2 match between Roman Reigns and The Rock.” —A Varsity subscriber
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Have a great weekend,
John
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