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Welcome back to The Varsity, heading into one of my favorite weekends of the year. No,
not Father’s Day—the U.S. Open. I plan to spend a significant portion of the weekend mesmerized by the sight of the best golfers in the world out at Shinnecock, looking like your average weekend duffers. Check this out.
For tonight’s issue, I spent the week speaking to sources to get to the bottom of one of the industry’s great mysteries of the moment: What is going on with
YouTube’s live sports acquisition strategy? Not so long ago, the world-conquering video platform seemed like it would be a big-time player in the market. But after a few swings and misses, some are now wondering if it's going to stay in the game at all. As usual, the Thursday issue is available exclusively to Inner Circle members. Sign up here if you haven’t already. You know you
can afford it!
Pod alert: With all the chaos happening in college sports these days, I asked Nicole Auerbach, NBC Sports’s lead college football insider, to join The Varsity this weekend to try to make sense of it all. Also, I received a ton of nice feedback from yesterday’s podcast with ESPN’s Brian Windhorst and Mike Breen about how Jim Dolan was able to change the culture at MSG.
Also
mentioned in this issue: Brendan Sorsby, Neal Mohan, Antonio McDyess, Mark Lazarus, Tommy Tuberville, Chris Murphy, Eddy Cue, Justin Connolly, Jen Chun, Eddy Curry, Gary Bettman, Cody Campbell, Ken Curry, and more. |
Player of the Week: Gary Bettman
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I’ve been so focused on the World Cup, not to mention the Knicks’ surprising championship run, that
the NHL’s Stanley Cup performance nearly escaped my attention. In all, viewership was up 68 percent—an increase that’s way bigger than any Nielsen changes would account for. The TV audience for the finals themselves doubled from last year, which sounds great but maybe isn’t all that surprising. Last year, the finals were on cable; this year, ABC carried them. The stats: ABC averaged 5.2 million viewers for this year’s six-game series, which is still up 26 percent from the last time it
aired on ABC, in 2024. Not bad for a very small-market team and another from a city that doesn’t have ice. |
Down to the J.V.: Cody Campbell
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There’s lots of blame to be spread around from the Brendan Sorsby mess, starting
with Judge Ken Curry, who reinstated the quarterback after the NCAA suspended him for betting on college football games. But the real villains of this story are in Lubbock, where Texas Tech boosters like Cody Campbell took a belligerent approach as the rest of the college community fumed. Read the room, guys! |
- The “It’s Never Going to Become Law” Act: Time to pump the brakes on the Protect College Sports Act, which got through the Senate Commerce Committee on a 19-9 vote today and now heads to the full chamber. I called one of my Capitol Hill sherpas this afternoon to get a sense of what’s going to happen. In short: nothing.
First off, there’s not enough time to do anything with this bill. There are only 39 legislative days left before the midterms, which doesn’t
leave a large-enough window for any bill, let alone one that had nine no votes coming out of committee and faces powerful bipartisan opposition from senators like Tommy Tuberville and Chris Murphy. “The Senate doesn’t have the bandwidth to do this right now,” my source said. “I mean, I’ll even go a step further. I don’t think anything gets done in the Senate before November, let alone a controversial bill like this.” - Apple’s F1 deal: Cupertino is notoriously secretive when it comes to Apple TV viewership. Back in May, after just three races, Eddy Cue boasted that the platform’s F1 viewership had already eclipsed last year’s races on the circuit’s old media partner, ESPN. Naturally, he offered zero numbers to back up that claim. But today’s news that Apple will put the Australian Grand Prix in front of its paywall suggests that the streamer and league see the need
to grow their audience—or at the very least aren’t confident with the performance behind the paywall. After all, if the numbers are as high as Cue suggested, he wouldn’t need to remove the paywall on these types of races. Right?
- Versant’s sports strategy: On a recent and excellent episode of my partner Dylan Byers’ podcast The Grill Room, Versant C.E.O. Mark Lazarus articulated the framework of his
sports strategy. Laz acknowledged that the company, which was recently spun out from Comcast, won’t be a negotiating player in top-tier sports like football. Instead, he sees opportunity in niche sports and fandoms. Lazarus highlighted deals with the Premier League, NASCAR, WWE, as well as women’s volleyball and Pac-12 games. “Will there continue to be sports opportunities for us? Yes. Are we going to be in the NBA or the NFL business? Not likely,” he said. “They still have real value. They have
real fans. And they have a place on our networks.” (Download The Grill Room here.)
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For a while, it seemed as though YouTube was coming to eat everyone’s lunch in the
sports media business. But after its recent miss on a suite of NFL games, many media insiders are wondering how much the Google guys really want to be in on the actual game action—and if they need the league at all. |
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When YouTube C.E.O. Neal Mohan talks to big-time sports commissioners, he often
invokes a familiar refrain that few in the industry could ever disavow: Live sports are, to steal ESPN chairman Jimmy Pitaro’s phrase, needle-movers. And what commissioner, pray tell, wouldn’t want to hear that love language from arguably the most significant C.E.O. in the media industry, who controls the largest video platform and feeds from Alphabet’s $4.4 trillion market cap?
For a while it seemed like Mohan really was going to throw around his weight.
YouTube shelled out $2 billion per year for Sunday Ticket through 2029. The platform paid around $100 million to carry one NFL regular-season game last season. Meanwhile, Mohan entrusted YouTube’s sports division to some of the most respected sports executives in the business: ESPN veteran Justin Connolly, whose departure ignited a nasty legal dispute, and former NBA executive Jen Chun.
But YouTube has also lost out on rights, or at
least has been more disciplined than other bidders, leading some industry insiders to speculate that Mohan’s live sports strategy is more nuanced than many once perceived. Back in 2024, YouTube made a serious, ultimately unsuccessful bid to get one of the NBA’s national media packages that ultimately went to Amazon, ESPN, and NBC. Just last month, Mohan failed to land an NFL package that many observers thought was destined for YouTube. In the end, Netflix swooped in and took the five
games.
All of this has been the cause of some angst in the industry as many league executives have begun to second-guess a seemingly no-brainer bidder for their content. This week, nearly a dozen well-placed sources voiced their increasing doubts about Mohan’s infatuation with live sports rights packages—or perhaps put more adroitly, some wondered if the platform remains more focused on capturing the obsessive fandom around live sports without having to pay the costly rights fees for live
games. “I have a hard time understanding if YouTube is trying to be the community to other people’s live sports, which is a great business in itself,” said one insider who deals with the company. “Or do they actually want to be the rights-holder? The truth is, I don’t think YouTube has made up its mind on that, which is why you see these timid bids from them so far.”
His comment reminded me of YouTube’s World Cup partnership with FIFA. On July 12, the two parties are staging a soccer
tournament in Central Park, featuring a bunch of influencers, all streamed on YouTube, demonstrating precisely the sort of relatively inexpensive ancillary content around pricey live sports that has worked so well for the platform. Indeed, it is YouTube, rather than the NFL or the NBA, that seems like it can do whatever it wants. |
YouTube executives counter that they are still very serious about obtaining live sports
rights. In fact, sources said that they are currently engaged with both the NBA and MLB in conversations around packages of local and out-of-market games. But according to people I spoke to at various entities that have negotiated with YouTube, the company operates with hyperscaler tendencies—and bureaucracy—that have delayed its foray into the deeper circles of the sports world.
Several rights-holders described their negotiations with YouTube in a similar fashion: Once company executives
have demonstrated interest in a property, even relatively small ones, they still take two to three months to hold internal meetings and run the numbers and analytics before they can proffer a bid. Their competitors turn those decisions around in a matter of weeks—or even days. That lugubrious time frame has kept YouTube from completing several deals with rights-holders who were intrigued by the platform’s reach, demos, and relationships with content creators, but frustrated by the
company’s slow pace. “It’s such a laborious process whenever I pitch them,” one rights-holder told me. “I really do believe that they’re genuinely just trying to figure out if they want to be in the live rights game or not.”
Part of the issue comes down to strategy and cost. To wit: YouTube put its NFL game from Brazil in front of a paywall, which meant its sole path to profit on the $100 million deal was through ad sales. Sources said that YouTube’s bid for an NBA package also would have
put the games in front of any paywall. Meanwhile, every one of YouTube’s competitors have a second revenue stream to defray the high cost of sports rights: Amazon and Netflix depend on subscription revenue; legacy media companies still make a ton of money from affiliate fees.
But the primary observation that worries sports business executives, of course, is that Mohan may want live sports but doesn’t need them—there’s a reason why those internal meetings take months to
convince stakeholders. Amazon invested deeply in live sports only after moving into premium content; Netflix bit as it launched its live tier; meanwhile, deep in the recesses of Mohan’s financial models is likely some data point suggesting that he has a better R.O.I. on sportsfluencers than the live games themselves.
That’s been a letdown for the leagues, and a hard reality to stomach. After the Super Bowl, YouTube was considered the odds-on favorite to land a package of five NFL games,
which included the Week 1 season kickoff in Australia. But during the negotiations, the NFL took that game out of YouTube’s package. The league had expected that YouTube would still be interested in splitting the five-game package with Netflix. But several sources said that YouTube executives were so upset at losing the Australia game that they walked. The message was clear: YouTube wanted those rights. But it didn’t need them.
And maybe, in the end, that’s the position that most
distinguishes YouTube from its competitors. Hours after a marquee NFL game or World Cup match airs, a significant amount of the action is going to wind up on YouTube anyway. Indeed, the silver lining here is that YouTube’s posture may allow legacy players one less competitor to compete with as live sports become existential for their balance sheets—until, of course, Mohan changes his mind. |
On the World Cup hydration breaks: “The $750,000, 30-second ad sales figure during a hydration
break tells you something real about the market. But the bigger structural question is what happens next cycle. Soccer’s traditional ad inventory has always been limited: pre-match, halftime, post-match, and on-screen integrated logos. No in-game breaks. That was the trade-off broadcasters accepted when they bought soccer rights. Hydration breaks just changed that calculus. At $750,000, 30 seconds, every league rights-holder and their broadcast/streaming partner is going to want contractual language
around in-game break inventory in the next negotiation. The genie is out of the bottle. Whoever’s next to market is negotiating in a world where in-game ad inventory now has a proven price point.” —A Varsity subscriber
On MSG dysfunction: “In your opening diatribe on the Knicks, you left out Antonio McDyess and Eddy Curry!” —A sports business veteran and no longer long-suffering Knicks fan
On Fox’s World Cup
coverage: “Ah yes. Thank you, Fox, for signing off with World Cup coverage and sending me to FS1 for ::checks notes:: TMZ Sports?!?” —A journalist |
Have a great weekend. See you Monday,
John |
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Join Emmy Award-winning journalist Peter Hamby, along with the team of expert journalists at Puck, as they let you in
on the conversations insiders are having across the four corners of power in America: Wall Street, Washington, Silicon Valley, and Hollywood. Presented in partnership with Audacy, new episodes publish daily, Monday through Friday. |
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Ace media reporter Dylan Byers brings readers into the C-suite as he chronicles the biggest stories in the industry:
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