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Jerry Cardinale getting real.

https://www.sportsbusinessjournal.com/A ... media.aspx

Over the summer, a group led by Josh Harris bought the Commanders for a record-high price of $6.05 billion.The problem is that while Cardinale still sees a lot of enthusiasm around buying into professional sports, it’s becoming harder to develop a business plan that works.

“I keep hearing the facile notion that it always goes up,” he said. “You guys are students of history. That’s not sustainable. That’s never been the case. … This is fascinating to me because this thing is exploding and there’s no foundation for doing it the right way. And now it’s the Wild West with all this money piling in, so I think all sports is overvalued.”

MarkNelson wrote: ↑Mon Dec 18, 2023 7:49 pm Jerry Cardinale getting real.

https://www.sportsbusinessjournal.com/A ... media.aspx

Over the summer, a group led by Josh Harris bought the Commanders for a record-high price of $6.05 billion.The problem is that while Cardinale still sees a lot of enthusiasm around buying into professional sports, it’s becoming harder to develop a business plan that works.

“I keep hearing the facile notion that it always goes up,” he said. “You guys are students of history. That’s not sustainable. That’s never been the case. … This is fascinating to me because this thing is exploding and there’s no foundation for doing it the right way. And now it’s the Wild West with all this money piling in, so I think all sports is overvalued.”

Good catch Mark.

Lots of topics that we discussed here... streaming vs TV, over valued sports teams (and the related media contracts), college sports even. If media doesn't stablize could media rights packages cap... wrote about this, but its clear media's the driver of valuation so its logical.

Interesting details on ESPN financials.

Here's AA comments on article:

https://awfulannouncing.com/nba/gerry-c ... nable.html

Starting with GC quote..
>> “I keep hearing the facile notion that it always goes up,” he said. “You guys are students of history. That’s not sustainable. That’s never been the case. … This is fascinating to me because this thing is exploding and there’s no foundation for doing it the right way. And now it’s the Wild West with all this money piling in, so I think all sports is overvalued.”

It’s certainly interesting to see this kind of skepticism from a prominent investor. Notable RedBird investments include Fenway Sports Group (parent of the Boston Red Sox, Liverpool FC, the Pittsburgh Penguins, NESN, the new SportsNet Pittsburgh, and more), AC Milan, the XFL (so now, the merged XFL-USFL), YES, the EverPass Media venture with the NFL for Sunday Ticket commercial distribution, and Front Office Sports (through RedBird IMI, with Jeff Zucker’s UAE-backed International Media Investments).

So this is coming from someone who has investments in teams, leagues, RSNs, and more. And it’s unusual to see this kind of criticism of the permanent-growth assumption from inside the house. But there is some precedent for it; it’s notable to see Cardinale mentioning Cuban, who expressed his own TV-growth skepticism before selling his majority share. <<

How does this square with GC/RBC investments and his further interest in XFL? Is he just trying to lower his investors expectations or will he make strategic changes or exits - like XFL/USFL merger. And when did he come to this revelation? I'd love to hear him explain his position within the scope of RBC.

I think its that streaming can't pay for sports like traditional TV can, and he's hedging a bit. Sure Amazon and Apple can but they are using money from other sources. Disney, Fox, Paramount, WB-D, NBC, etc... need the rights fees to make sense on their own.

Mark Cuban would have never sold a majority of the Dallas Mavericks if he didn't think the State of Texas would legalize casino gambling. The fact that he has sold a majority of the Mavericks to the Adelson Family means he is very optimistic that the state of Texas will pass casino gambling and sports betting. It has nothing to do with him having any financial issues.

4th&long wrote: ↑Tue Dec 19, 2023 10:36 am How does this square with GC/RBC investments and his further interest in XFL? Is he just trying to lower his investors expectations or will he make strategic changes or exits - like XFL/USFL merger. And when did he come to this revelation? I'd love to hear him explain his position within the scope of RBC.

The full SBJ article talks more in-depth. Cardinale is bullish on college football with the NIL boom. He believes of the remaining Power Four conferences pool their efforts, they have growth potential in terms of TV money. It's the top professional leagues, in Gerry's view, that are the only ones overextended. (That said, I'd argue the colleges are even more overinflated as far as TV rights go than the pros.)

So the XFL/USFL would provide a natural pipeline for those college talents who don't make the NFL. The XFL made somewhere around $20 million from TV last year, a pittance compared to, for example, the NHL, which the XFL has consistently rated at or above in the Nielsens. It's a value buy.