Editor Note: Below you’ll find Volume 4 of “Early Entrants”, a bi-weekly newsletter from JohnWallStreet that will introduce sports business “rumblings” before the news breaks. Have a tip for the 5th edition? Send it to JWS@JohnWallStreet.com.
Editor Note II: In Vol. 2 (Jan. 27) we told you that Formula One is for sale, once again. Apparently, former Pirelli boss Paul Hembery has since heard the same thing. Early Entrants had that story before anyone else, folks.
Zion Williamson is OUT of the ACC Tournament
Duke University has officially listed Zion Williamson as day-to-day with a Grade 1 right knee sprain, but Atlantic Coast Conference tournament organizers are acting as if the Blue Devils will be without their freshman phenom. Sources tell JohnWallStreet that organizers – concerned about their ability to sell seats without the country’s biggest draw – have begun looking to liquidate inventory in bulk.
Dundon’s Investment Week-to-Week, May Not Be Sole Investor
Much has been made about Tom Dundon’s investment in the Alliance of American Football, but the league did not receive a $250 million bailout. The Carolina Hurricanes owner “committed” to an investment in that amount, but sources say it’s a week to week agreement and if the AAF fails to show progress, the financial backing ends. JohnWallStreet has also heard that Dundon is may not be the sole investor in the round (as reported). Former Padres owner Jeff Moorad has reportedly been interested in taking a stake in the start-up football league for some time.
MLB Urging Clubs to Sacrifice Ticket Sales to Keep League Partner Happy
MLB attendance dropped below 70 million for the first time since ’03 in 2018, but a valuable partnership with StubHub has the league office encouraging teams to forego future gate receipts in favor of exclusive partnerships with the resale giant. StubHub allowed MLB’s 30 clubs to take a larger percentage of fee revenue as a term of the 5-year renewal agreement it inked with the league in November 2017, but the company failed to grow secondary market share in 2018 – at least not to the level it needed to offset the reduced margins – making them an unhappy partner just one year into the new deal. Sources tell JohnWallStreet that the Angels, Cardinals, Pirates & Indians have all taken MLB’s directive and inked exclusive deals ensuring secondary market sales go through StubHub. Each will see their fee revenue continue to increase as they contribute to league’s attendance decline.
Liga MX Considering Centralization of League Media Rights
JohnWallStreet has heard that Liga MX is exploring the idea of centralizing the league’s media rights. As it currently stands, each team controls their own rights and negotiates broadcast deals both domestically and abroad. While that independence has been beneficial to clubs owned by Mexican television companies (see: Club América), it has also prevented Liga MX from growing its international audience and reaching its revenue potential. While I won’t speculate on what centralized Liga MX broadcast rights might be worth, it must be noted that La Liga clubs have watched its rights fees climb +80% (to $1.5 billion) since adopting a centralized model between the ’13-’14 and’14-’15 seasons.
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