Editor Note: Early Entrants is a series of sports business “rumblings” before the news breaks.
DAZN’s “RedZone-Like” MLB Show a “Complete Dud”, Makes Similar NBA/NHL Programming Unlikely
Sports by Brooks and Front Office Sports reported that DAZN is interested in producing live NBA and NHL whiparound shows (think: NFL RedZone) as they’ve done with MLB, but sources tell JohnWallStreet that “ChangeUp has been a complete dud. While the show is well produced, it simply hasn’t driven new subs as hoped.” The decision to invest in ChangeUp – “a particularly costly way of getting into business with the league” – was said to be “mainly [executive chairman John] Skipper’s”, so we’ve heard that “there’s now a sense of vindication within the building among those who had opposed it.” The perception exists that with NBA and NHL whiparound shows bound to experience a similar fate, “unless John is making decisions unilaterally, DAZN won’t be making the same mistake again.”
Reports of On Location Experiences Sale Premature
Back in early April, it was reported that Endeavor was closing in on a deal to acquire the 80% of On Location Experiences – not owned by the NFL – for between $650 million and $700 million. It’s now clear that those reports were premature. While it’s true that Endeavor expressed interest in the high-end hospitality firm, OLE “never initiated a sales process or pursued a banker; a deal was never imminent.” Sources with knowledge of negotiations tell JohnWallStreet “those earlier reports failed to see the big picture. Sure [majority owners] RedBird Capital and Bruin Sports Capital would sell (the company has done particularly well), but Endeavor’s priority has been their IPO – or lack thereof. To make an acquisition in the middle of that process, to add debt to a balance sheet that is already highly leveraged, would only complicate things. Discussions are ongoing, but nothing is imminent.”
Boxing Bubble Will Eventually Burst
Rumblings that the sport of boxing is sitting on a bubble are getting louder. Sources close to ESPN+ tell JohnWallStreet that while the OTT service “has been able to attribute subscriber growth to the company’s investment in the UFC, boxing has not delivered.” DAZN and Showtime have also posted underwhelming viewership figures for recent high-profile fights leading one boxing insider to say, “I don’t see boxing as this thriving sport. I don’t see a lot of sponsorship. There’s not millions of people watching. I see media companies spending crazy amounts of money hoping to use the sport as a building block for their SVOD products. That’s a bubble that will eventually burst.”
RPM Sale Seems Inevitable
Richard Petty Motorsports – one of NASCAR’s preeminent franchises – is in need of a revamp. Sources tell JohnWallStreet that despite the team’s claim that it’s running $5 million – $7 million short this season, “the figure is probably closer to $10 million – $12 million.” RPM’s problems began with the rise of ride sharing apps like Uber and Lyft, which severely challenged team owner Andy Murstein’s core business (he’s the president of Medallion Financial Corporation – MFIN – and the company’s largest shareholder). With MFIN shares down -47% (to $6.13) over the last 5 years, Murstein has cut back on team spending. As a result, the #43 car “runs way in the back of the pack (currently sitting 28th in the standings) and they’re unable to sign marquee sponsors because no one wants to invest in a team that has an owner cutting corners on head count.” The Petty team needs a proper owner and NASCAR needs RPM to be competitive. One NASCAR insider suggested “a sale would seem inevitable.”
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