ESPN Bet: A Win for Barstool Sports 🎰
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ESPN Bet: A Win for Barstool Sports 🎰
Plus the opening up of a new rights category thanks to Open AI, and how the TGL could drive the golf simulator market
Welcome to Sports Pundit, where getting up to date with sports business news is as emphatic as that Chloe Kelly penalty ⚽️ 👀
In today’s email;
Buying Back Barstool Sports for $1 💵
The Opening of a New Rights Category? 🤔
How TGL Could Drive Simulator Market 🏌️
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TOP STORY
ESPN Bet: A Win for Barstool Sports 🎰
Despite only purchasing the remaining 64% of Barstool Sports in February, PENN Entertainment is set to write off almost its entire $551 million investment in the media company.
That’s because of a (now well reported) bombshell agreement that it has reached with ESPN to launch a new platform called ESPN Bet, worth up to $2 billion for the Disney-owned sports broadcaster over the next 10 years.
In doing so, PENN has had to sell its ownership in Barstool Sports, with reports suggesting that they have given it back to the founder Dave Portnoy for $1 – albeit alongside a non-compete and other restrictive covenants, as well as a clause for 50% of any future sale.
While there are mixed reviews on how this deal will shape up for ESPN and PENN (See: Sky Bet, FOX Bet), the consensus is that Barstool Sports and Portnoy are the ultimate winners of this announcement.
Portnoy explained in an ‘emergency press conference’ that everyone involved in the original deal with PENN had “underestimated just how tough it is for myself and Barstool to operate in a regulated world.”
Being free of those constraints now opens a world of opportunities for Barstool and Portnoy, who explained that following his buy-back of the company, “we don't have to watch what we say, how we talk, what we do, it's back to the pirate ship… This is now going to place for content, content, content.”
This is a business which had served him, and the company, well up until their acquisition in 2020. In 2019, the company recorded between $90 and $100 million in annual revenue, with earnings coming primarily from podcasts, merchandise sales and gambling.
Sports Pundit says
🤔 Of course, the gambling elements will fall away because of the non-compete, but there is room for Barstool to grow in other areas of content which have been restricted under PENN’s ownership – as well as benefitting from re-entering the game with heightened brand awareness (as a result of the marketing dollars that PENN have afforded them) but will need to find brands and brand categories that better align with its audience.
This could also have interesting implications for Barstool’s ability to grow and launch sports properties (See: Overtime’s model). The company acquired Rough N' Rowdy in 2017 and it was reported in 2018 that they were able to pull in more than $550,000 from one event alone.
There could be huge opportunities for them to scale this combat sport promotion now that the reigns are off, as well as for them to launch others – such as in golf.
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OPINION
The Opening of a New Rights Category?🤔
OpenAI recently announced deals to use The Associated Press and Shutterstock’s historical archives, as well as any associated metadata, to train their generative AI tools such as Chat-GPT and DALL-E.
The news may have flown under the radar of some sports industry executives - particularly those not subscribed to JohnWallStreet, who brought the news to the attention of many in his Monday newsletter.
To-date, generative AI companies have largely ingested creators' works without consent, credit, or compensation. However, this deal is significant in publicly acknowledging this and suggesting a potential change of stance - which could ultimately lead to a new rights category for sport’s rights owners to consider…
With all the capital being invested in the generative AI space, it's reasonable to expect a sports-centric platform will eventually emerge. And because it will have licensed footage users cannot get elsewhere, people will be willing to pay a subscription fee to use it.
It’s not yet clear how much sports rights owners will be able to command, and it likely won’t be known until the first goes to market.
“Someone must put their toe in the water and say, ‘I think it is worth this’,” [Peter] Scott, [Play Anywhere’s chief strategy officer,] said.
But the former Warner Media executive suggested ingestion fees would likely fall in line with what the leagues currently charge for video, photo, and logo usage.
HIGHLIGHTS
Saudi Arabia’s PIF has launched a new sports investment company focused on ‘fan engagement activities and transformative sports technology’ 💸
Google has committed to helping correct the internet and better highlight women’s sport 💁♀️
Man United record £900m Adidas kit deal, the biggest recorded in Premier League history ⚽️
MMA fighters' wage lawsuit against UFC estimated at between $811 million and $1.6 billion, can proceed as class action 👊
FC Barcelona have announced a new 'economic lever' worth €120 million through the sale of 29.5% of their Web3 initiative, Barca Vision 🏟
Saudi Pro League confirms global broadcast deals with DAZN, Canal+, Sport TV, Marca.com, and FOX Sports 📺
A MARKET SIMULATION
Going Full Swing: How TGL Could Drive Simulator Market 🏌️
TGL, the innovative, new primetime golf league has this week announced Full Swing (not to be confused with the Netflix docu-series) as an Official Technology Partner.
The company, a proud partner of Bruin Capital, is already the brand responsible for the Official Licensed Simulator of The PGA TOUR and will now also be utilised as the driving force of the TGL gameplay experience, which ultimately will feature more than 10 integrated technology elements, including:
KIT Launch Monitor: Accurate moment of impact data for each shot, including ball and club measurements.
Virtual Caddie: Interactive yardage book on a touchscreen monitor that allows TGL teams to preview and strategize on each hole.
Virtual Green: Three separate 15’ x 27’ Virtual Greens within TGL’s 3,800 square foot putting green, each the largest ever built with 189 actuators and jacks.
Simulators: TGL teams will warm up on Full Swing Pro 2.0 Simulators featuring a customizable driving range to prepare for matches.
Sports Pundit says
🤔 George Pyne, CEO and Founder of Bruin Capital, noted, “Years from now we'll be talking about the ‘gamification impact’ to the global sports economy,” which he believes will be significant – and this collaboration with TGL is likely to play an incredibly important role within that.
Golf simulators, a market already valued at $1.4 billion, currently allow golfers to practice their swing in a simulated environment that resembles the actual game, allowing them to analyse their swing, see errors, and improve without having to go to the local course.
However, with the launch of the TGL, the top PGA TOUR stars will now not only train on these devices in private but play on them, too - on primetime television. A major coup.
JOB BOARD
Head of Social Growth - SailGP (London, UK)
Commercial Director - The FA (London, UK)
Lead Sports Consultant - Two Circles (London, UK)
Senior Director, Head of Partnership Marketing - Cleveland Cavaliers (Cleveland, US)
Social Media Manager - Las Vegas Raiders (Las Vegas, US)
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