iSportConnect Business Index: “What’s going on with Warner Bros.”

Carlo De Marchis “A Guy With A Scarf” pens down this month’s Business Index.

Global markets are strong and confidence has returned so there is naturally more green than red on our monthly index. The outstanding winners are Guild ESports but they are tiny so today let’s look at a long term decliner and talk Warner Bros. Discovery (WBD) where all is not rosy. The past few months have been a rollercoaster ride for Warner Bros. Discovery (WBD) and its investors. The media giant’s stock has experienced a significant decline, hitting an all-time low of $7.36 on Tuesday, May 1, 2024. In fact the longer view is truly troublesome since April 11 2022 when the media and streaming firm was formed from the $43-billion merger of Discovery Inc and assets of AT&T Inc. Initially this was to compete directly with the likes of Netflix and Disney. Since then WBD shares are down nearly 70% and as a reference, Disney is down 15% and Netflix is up more than 50%. Something isn’t working.

This recent plunge can be attributed to a combination of factors, including concerns over the potential loss of NBA broadcast rights and the company’s struggle to adapt to the rapidly evolving media landscape.

One of the primary reasons for the stock’s recent tumble is the looming threat of losing the NBA broadcast rights to NBCUniversal. According to a report in The Wall Street Journal, NBCUniversal is prepared to pay an average of about $2.5 billion a year to air NBA games, effectively doubling the current fee paid by WBD. This bid threatens to eclipse WBD, which has aired NBA games on its cable network TNT for many years.

The potential loss of the NBA rights could not come at a worse time for WBD CEO David Zaslav, who has been grappling with the challenges of selling Wall Street on his vision for a one-stop, one-size-fits-all streamer to compete with Netflix. Since WBD first began trading on Wall Street, the stock has lost roughly 70% of its value despite a huge rally in early 2021. While investors have been patient, shares plunging to a new all-time low on Tuesday is not a welcome development.

Moreover, WBD has made significant investments that hinge on maintaining the rights to NBA games. TNT has built a programming slate around the NBA, most notably the highly rated “Inside the NBA” show. Charles Barkley, a key figure on the show, recently signed a new, 10-year deal with WBD worth up to $200 million. Losing the NBA rights could jeopardize the value of these investments and make it harder for WBD to charge distributors for carriage of its channels.

The potential loss of the NBA rights also raises questions about WBD’s recently announced deal with Disney and Fox Corporation to launch a sports super-streamer. The absence of NBA games could throw aspects of this business partnership into question and undermine WBD’s pitch to consumers about live sports being a key differentiator for its flagship streaming service, Max.

While it’s possible that WBD will overtake NBCU’s bid or at least secure some NBA games, the current state of play is not a welcome development for Zaslav and chief financial officer Gunnar Wiedenfels, who have been known for their cost-conscious management of the company.

The optics of the situation are far from ideal, given that executives such as Zaslav and Wiedenfels have been handsomely compensated while investors have watched their assets evaporate over the years. According to recent financial disclosures, Zaslav’s 2023 compensation package grew to nearly $50 million, while Wiedenfels’ topped $17 million.

It’s important to note that WBD is not alone in facing these challenges. Legacy media companies are struggling to adapt to the rapidly changing media landscape, with consumers cutting the cord in favor of streaming options. Disney CEO Bob Iger has openly spoken about the numerous challenges he is navigating, and Paramount Global is engaged in merger talks with David Ellison’s Skydance Media as it fights to find a path forward for survival.

In this context, securing sports rights has become even more crucial for media companies. Live sports are one of the few remaining pillars supporting the traditional cable television package, which has been a lucrative revenue stream for companies like WBD. As legacy media companies search for audiences and try to entice the public to sign up for their streaming platforms, securing these sports rights is more important than ever.

For Zaslav and WBD, the battle for NBA rights could not come at a more inopportune time. With other aspects of the business struggling, the NBA becomes an even more critical asset. The potential loss of these rights, combined with the company’s ongoing challenges, has contributed to the significant decline in WBD’s stock price over the past few months.

However, a glimmer of hope has emerged in the form of a new streaming bundle announced by Disney Entertainment and Warner Bros. Discovery on May 8, 2024. The bundle, which includes Disney+, Hulu, and Max, is set to launch in the U.S. this summer, offering subscribers access to an unprecedented selection of content from the biggest and most beloved brands in entertainment. This partnership could help drive incremental subscribers and stronger retention for WBD, potentially offsetting some of the losses incurred by the potential loss of the NBA rights.

As WBD navigates these turbulent waters, it will be crucial for the company to adapt quickly to the changing media landscape, secure valuable content like the NBA rights, and convince investors of its long-term vision. The recently announced streaming bundle with Disney Entertainment could be a step in the right direction, but the company will need to continue to innovate and evolve to remain competitive in the rapidly changing media industry.

The tumultuous decline of Warner Bros. Discovery stock serves as a stark reminder of the challenges faced by legacy media companies in the age of streaming. As the battle for the NBA rights unfolds and WBD continues to grapple with its internal struggles, investors and industry watchers alike will be keeping a close eye on the company’s next moves. The success of the new streaming bundle and the outcome of the NBA rights negotiations will likely play a significant role in determining the future of WBD and its stock price.

Here’s the full index:

Telmont appointed Official Champagne Supplier of the UIM E1 World Championship

Telmont’s constant concern is to break the codes of Champagne, transforming environmental respect from a mere obligation into a vibrant source of inspiration and innovation. In 2021, the Maison launched its “In the name of Mother Nature” project, aiming to craft the highest-quality Champagne with the greatest respect for the environment. This project is accompanied by numerous initiatives aimed at reducing the carbon footprint of the company. Telmont aims to be Climate Positive by 2030 and Net Positive by 2050.

E1 is the world’s first all-electric raceboat championship and has a sustainability mission to accelerate the electrification of marine transport through clean technology with ambitions to inspire and support iconic coastal cities such as Venice in transitioning to a greener future. The nine teams of male and female pilots race in locations around the world including Monaco and Hong Kong and are owned bysome of the biggest names in world sport, music and business.

Champagne Telmont will be served at the VIP Ocean Club and to members of the public at all E1 events, and this service began last month at the E1 Venice GP on the 10th and 11th May 2024.

“E1 has looked for partners who have the same shared vision as us when it comes to striving for high performance, and a positive impact on the environment. With high net-worth individuals attending our events, it’s important we offer some of the finest champagne in the world, and it is a pleasure to have Champagne Telmont join the E1 Championship.” Rodi Basso, CEO of E1

“Leveraging on innovation and technology, E1 is revolutionising – and decarbonising – a prestigious sport, a discipline of excellence, while continuing to offer an exceptional experience. This is exactly the spirit in which Maison Telmont acts in Champagne: innovating to help reduce our impact on the environment, while upholding traditional know-how. We are proud to be an official supplier of the UIM E1 World Championship.” Ludovic du Plessis, President of Maison Telmont

The Devil is in the detail for INEOS

In this week’s Member Insights piece, David Alexander, the founder and MD of Calacus PR looks into ups and down of Manchester United.  

Running a football club is never easy.

The fans are demanding, the media makes a drama out of every incident and results are everything.

Since Sir Alex Ferguson left Manchester United more than 10 years ago, the Red Devils have struggled to compete for the Premier League and Champions League, trophies they were always contenders for under the Scot.

American owners the Glazer family could not longer rely on the mercurial Sir Alex to bring them regular success and leveraging their takeover through debt and receiving dividends into the bargain hardly helped matters.

At last count, eight different coaches have been given control of the United first team, with limited success. 

The United brand endures, though, and according to Deloitte’s Football Money League, they remain among the most commercially viable clubs around, raising commercial revenue to over £300m in 2023. 

British Billionaire Sir Jim Ratcliffe has already shown his interest in sport by taking over the former Team Sky cycling team and backing the British America’s Cup bid as well as Ligue 1 club Nice and one-third of the Mercedes Formula 1 team.

Sir Jim has been incredibly successful in business and understandably wants to bring that United after taking a 27.7% stake in the club.

“We will bring the global knowledge, expertise and talent from the wider INEOS Sport group to help drive further improvement at the Club, while also providing funds intended to enable future investment into Old Trafford,” said Sir Jim at the time.

“We are here for the long term and recognise that a lot of challenges and hard work lie ahead, which we will approach with rigour, professionalism and passion.”

Football is an emotive sport, but regardless of his minority stake, it was clear that Sir Jim has ambitious plans to help the club compete for the biggest trophies once more.

A quick win among his initial reforms was to announce that he would instigate a three-year freeze on dividend payments, bucking the controversial trend set by the Glazers.

A central part of this journey, says Ratcliffe, is investing in the right people to ensure success can flourish, leading to changes in the club’s leadership team including the inclusion of Dave Brailsford, the director of sport at INEOS.

Brailsford is a veteran in the world of competitive sports, having supercharged British Cycling to unprecedented heights during his role as Director of Performance with Team GB cyclists winning eight Olympic golds at the London 2012 Games while Team Sky, rebranded INEOS Grenadiers in 2019, won the Tour de France in the team’s third year under their new name.

Former Manchester City Commercial Director and Chief Football Operations Officer Omar Berrada was appointed as the new Chief Executive of the club in January as a precursor to Sir Jim’s official arrival the following month, a post he will most likely assume this summer after his gardening leave. 

Berrada has an extensive background in football, particularly when it comes to player contracts and transfers, which will be crucial for United in the coming months and years.

But it hasn’t been all plain-sailing for Sir Jim and INEOS, with some clumsy communication underlining the scrutiny United constantly finding themselves under.

The proposed appointment of Dan Ashworth and United’s poaching of Technical Director Jason Wilcox from Southampton, further underlines Sir Jim’s intention to transform the club.

The pursuit of Ashworth has been controversial, after details of his covert email negotiations with Berrada were discovered, highlighting the fact that Ashworth was being tapped up, breaching Premier League guidelines and confidentiality agreements. 

An audit of United staff and the club’s facilities has led to some clumsy communications that further underline the importance of listening to expert PR support.

In late April, Sir Jim made the decision to cut staff perks as part of his money-saving measures ahead of the men’s FA Cup final. A company-wide email outlined that while staff would be given a free ticket to the final, employees would have to pay for their own travel to and from the stadium. 

Other perks such as the pre-match party, hotel accommodation and the ability for employees to bring friends and family to the match were also scrapped. 

This was just one of many announcements Ratcliffe made to staff, detailing his cost-cutting programme and general displeasure at the way the club was being run

In early May, after a tour of the Trafford Training Centre, Sir Jim sent another email to staff condemning the state of the training ground: “I had a good tour around some of the facilities. I am afraid I was struck in many places by a high degree of untidiness. In particular the IT department which frankly was a disgrace and the dressing rooms of the U18 and U21 were not much better. These standards would not come close to what we would expect at INEOS and we are a chemical company.”

Sir Jim also cited email traffic statistics to Manchester United staff as the basis for a ban on working from home and told them to seek “alternative employment” if they are not willing to come to club premises, despite United’s lack of sufficient office space and some consultants on contracts whose terms do not require them to be in the club’s Manchester or London business complexes.

According to reports, these communiques have turned the atmosphere at the Carrington training centre ‘toxic,’ although it is understandable that Sir Jim wants to get the basics right and fix United’s organisational challenges.

When United lost 1-0 to Arsenal in May, it created a raft of further embarrassment.

With the rain pouring down, the dilapidated Old Trafford could not cope, with 41mm of water cascading through the roof, later dubbed the ‘Old Trafford waterfall.’

Sir Jim has made his plans for Old Trafford clear from the start, with a vision to create the ‘Wembley of the North’ and provide a stadium that the club can be proud of after years of neglect under the Glazers.

Sir Jim spoke of claiming funds from the public purse to help upgrade the stadium, which lacked self-awareness seeing as he has officially moved to Monaco to avoid paying UK tax.

By attending the game against the Gunners, Sir Jim also missed the women’s FA Cup final at Wembley, which United won 4-0 against Tottenham to earn their first major trophy. 

Many disgruntled fans took to social media voicing their concerns over this alleged favouritism, presenting Sir Jim with a further communications set-back, this time with the fans, despite INEOS representation at Wembley.  

On X, @TheUnitedWayyyy posted: “Zero excuses for INEOS, Ratcliffe & his representatives not attending the Women’s FA cup final at Wembley.

“The game against Arsenal is not going to decide anything for us. The men’s team’s fate has been decided & is done for. Think it reeks of biased priorities. Not a good sign.” 

Sir Jim was keen to right this wrong, sending a message of congratulations to the women’s team later that day calling it a “wonderful achievement” and a “historic moment” for the club. 

For many, this was compared to the Glazers’ reign of operational disinterest, and when it was later revealed that the women’s end-of-season awards dinner was to be cancelled, it raised further concerns that the women’s team is not an INEOS priority.

Given that United finished eighth in the Premier League in the 2023-24 season, their worst finish since 1990, and with a goal difference of minus one, the future of manager Erik ten Hag has been under scrutiny.

Ahead of the men’s FA Cup final, there were reports that the Dutchman was almost certain to be fired, regardless of the result. 

The shock 2-1 win over Manchester City prompted a delay in that potential development, with fan groups writing an open letter to INEOS urging them to have patience with ten Hag’s project. Either way, the timing of the story was embarrassing and avoidable.

Ratcliffe has certainly made an impact during his early leadership, with executive appointments, cost-cutting measures and his overall strategy for Manchester United’s governance. 

These drastic measures demonstrate an unwavering commitment to getting Manchester United back on track in the long-term, and any attempt to instil a degree of vigour should be welcomed with open arms. 

But it’s also a reminder that senior leaders, however successful they have been in their professional lives, would do well to work closely with their communications teams so that unpopular but necessary decisions can be planned and communicated sensitively. 

So often we see that the best intentions, clumsily delivered, can do more harm than good that undermines credibility, trust and the support of those key audiences that leaders seek to engage.

Click here to know more about Calacus Sports PR.

Oaktree Capital takes ownership of Inter Milan

Inter Milan have announced the change of ownership from Suning to Oaktree Capital. The club’s departing Chinese owners failed to repay their debt to the US-based investment company by Monday’s deadline.

Therefore, they relinquished their shares in the Italian club to Oaktree who are now in control.

The American fund had already announced the transfer a couple of days ago. The company’s officials even visited the club’s headquarters and held talks with Inter CEOs Beppe Marotta and Alessandro Antonello.

Oaktree in a statement said: “Today marks a new chapter in the partnership between Inter and Oaktree. As we assume ownership, we want to reiterate our commitment to the Club’s prosperity and success.

Since 2021, we’ve been supportive partners of Inter, valuing its legacy, history and the unwavering spirit of its players and fans. Your passion and loyalty are the heartbeat of the Nerazzurri’s enduring success.

We are proud our financing helped support the Club’s successes over the past three years and look forward to working closely with the current management team to build on the momentum of the historic second star. For this reason, we are focused on ensuring operational and financial stability to help deliver consistent success to the Club on and off the pitch.”

ICC extends partnership with FanCraze to launch a Web3 fantasy game

The International Cricket Council (ICC) and FanCraze have announced a multi-year partnership extension marking a significant milestone in the evolution of digital fan engagement with the launch of exciting new products during the ICC Men’s T20 World Cup 2024.

The announcement also detailed the upcoming launch of ICC Crictos SuperTeam, a Web3 fantasy game featuring officially licensed ICC digital video collectibles. With SuperTeam, fans will be able to build fantasy teams using their ICC Crictos and compete in contests to win amazing rewards on a daily basis, week after week proving their cricket nous to the world.

The exciting partnership will build on the success of ICC Crictos over the past two years which has provided opportunities for new and existing fans to engage with men’s and women’s cricket. ICC Crictos transformed the way fans experience the sport, providing them with exclusive digital video collectibles that celebrate the greatest moments in cricket history, from iconic match-winning sixes to unforgettable performances by the world’s best players.

Through unique activations such as gifting special ICC Crictos to fans that attended the ICC Men’s T20 World Cup 2022 and exclusive behind-the-scenes experiences, ICC Crictos have brought supporters closer to the action than ever before. Events like the ICC Quiz Night and ICC Stadium Tours have further enriched the fan experience, offering enthusiasts the chance to meet their heroes and participate in engaging activities that celebrate the spirit of cricket.

ICC Head of Digital, Finn Bradshaw, said: “We are delighted to unveil ICC Crictos SuperTeam and offer cricket fans around the world a new and innovative gameplay experience for the ICC Men’s T20 World Cup 2024. We are excited to enter a new era of digital engagement, using innovative technology to deepen fan interaction and grow the sport on a global scale. Signing up will give fans the chance to be closer to the game than ever before and be a part of the biggest cricket carnival spectacle ever, from anywhere in the world.”

FanCraze Co-Founder and CEO, Anshum Bhambri, said: “The ICC Men’s T20 World Cup is a truly global competition and has been the home to so many iconic moments and players over the last 15+ years. As cricket fans ourselves, the launch of SuperTeam is something we’ve dreamt of since we founded the business.

“It’s a major milestone for us as we pursue our goal to build a compelling global community for cricket fans, and we can’t wait to see fans put together fantasy teams using their ICC Crictos during the ICC Men’s T20 World Cup 2024. SuperTeam will revolutionize digital sports fandom and will build upon FanCraze’s userbase across 100+ countries.”

Northwoods League partners with Endeavor Streaming to deliver enhanced streaming service

The Northwoods League has partnered with Endeavor Streaming to deliver an enhanced streaming service, Northwoods League+, and reach new baseball and softball fans across the world for the 2024 season and beyond.

Northwoods League+ will stream all 825+ baseball and softball games live and for free to fans across the world, including the inaugural season of Northwoods League Softball. Live coverage begins on Monday, May 27 and will continue throughout the Summer until the final regular season games on August 10, as 26 baseball teams and four softball teams compete in one of the sport’s most intense amateur collegiate competitions.

The service is available across web, iOS and Android, as well as AppleTV, Amazon Fire, Android TV and Roku. It features an enhanced user experience and will be ad supported, enabled by Endeavor Streaming’s ad technology.

Northwoods League+ is powered by Endeavor Streaming’s Vesper platform, a complete end-to-end streaming solution that enables leagues and rightsholders to build upon and deliver memorable direct-to-consumer streaming experiences for their fans.

Dick Radatz, Jr., Chairman/Co-Founder of the Northwoods League, added: “As we celebrate the launch of the inaugural season of Northwoods League Softball this season, the new Northwoods League+ streaming service demonstrates our investment in providing the best possible viewing experience for our fans. We look forward to bringing the excitement of Northwoods League baseball and softball to a broader audience than ever before.” 

Peter Bellamy, Chief Commercial Officer at Endeavor Streaming said “As the popularity of college sports continues to soar, more fans than ever before are tuning in to watch the stars of the future.  We’re proud to help the Northwoods League not only deliver a seamless viewing experience and reach new audiences through greater access to live coverage, but also generate additional revenue opportunities through its owned platforms.”

Tixr becomes ticketing partner of Nitrocross Electric Car Racing Series

Thrill One, the global leader in thrill-based entertainment, has chosen Tixr, the largest, fastest-growing privately-held primary ticketing and live event commerce marketplace, as the exclusive ticketing partner for the fastest growing motorsports property on social media. Four Nitrocross events scheduled for fall and early next year are on sale now at Tixr. 

“Nitrocross is one of the most innovative and exciting racing experiences in motorsports,” said Nate Liberman, Tixr’s Vice President of Sports Partnerships. “We’re looking forward to working with our partners at Thrill One to engage Nitrocross fans and deliver a cutting-edge, best-in-class ticketing experience to meet the demands of today’s sports fans.”

Nitrocross is one of the world’s most dynamic and electrifying racing leagues. Its races are battles waged on ground-breaking, sky-touching tracks designed to unleash the full power of world-class, high-performance electric vehicles at stadiums and raceways nationwide. 

“We are thrilled to partner with TIXR to elevate the fan experience at Nitrocross,” said Josh Tucker, CMO of Thrill One, parent company of Nitrocross. This collaboration reflects our commitment to prioritizing our fans, ensuring they have the best possible access and flexibility in securing tickets. By working with like-minded organizations dedicated to innovation, we are confident that TIXR will help us deliver an unparalleled event experience that keeps our fans at the heart of everything we do.”

Four Nitrocross events are currently scheduled – Nitrocross: Richmond at Richmond Raceway, September 7-8, Nitrocross: Salt Lake City at Utah Motorsports Cam, October 5-6, Nitrocross: Phoenix at Firebird Motorsports, November 15-16, Nitrocross: Miami at Miami Marine Stadium, January 11-12, 2025 and NItrocross: Las Vegas (Location TBD).

Tixr has experienced rapid growth as demand for its tech-forward product has reached an all-time high. Ranked #12 on Inc. 5000 Regionals: 2024 Pacific list, Tixr exclusively powers more than 500 of the most respected live entertainment brands in 40 countries including Acura Grand Prix of Long Beach, Rip City Remix, E1 Series, International Tennis Hall of Fame, NOLA Gold, Carvana PPA Tour, and the Military Bowl. With notable backers like Dragoneer Investment Group, Verance Capital, Helium-3 Ventures, and Sony Innovation Growth Fund, the 11-year-old, founder-led company is well-capitalized and profitable. Since its inception, Tixr has processed $2 billion in transactions through its highly visual, modern, unified commerce platform built for sales beyond admission tickets.

Magnifi joins forces with Starzplay in Middle East

Magnifi has joined forces with STARZPLAY to revolutionize live sports delivery in the Middle East!

Magnifi known for its cutting-edge clipping and automation technology, is teaming up with STARZPLAY, the region’s leading all-in-one media streaming platform, to enhance the viewing experience like never before.

This innovative partnership promises to deliver more engaging content, personalization covering languages and geographies, and a superlative live viewing experience.

ESPN and the English FA agree to four-year extension of the Emirates FA Cup media rights in the U.S.

ESPN has reached an agreement with the English Football Association (FA) for the media rights to the oldest and longest-running national cup competition in soccer, the Emirates FA Cup, in the United States for the next four seasons, 2024-’25 through 2027-’28. 

The agreement extends ESPN+’s position as the exclusive home of 79 Emirates FA Cup matches each season, beginning with the First Round and running through to the Final at London’s Wembley Stadium.

The agreement includes the FA Community Shield, the annual season-opening match between the latest Emirates FA Cup winners and Premier League titleholders which will also stream exclusively on ESPN+.

ESPN+ has been the exclusive home of the Emirates FA Cup in the United States since the 2018-’19 season. The renewal agreement was brokered by the competition’s media rights partner in the United States, IMG.

Highlights:

  • All 79 matches produced by the English FA each season will stream live exclusively on ESPN+ in English and select matches in Spanish
  • The FA Community Shield match at the start of each season
  • Additional content will feature across ESPN+ and other ESPN platforms, including Emirates FA Cup preview shows, branded highlights shows, and live coverage of Emirates FA Cup draws
  • Extensive Emirates FA Cup highlights across ESPN studio news and information programming.

“We are thrilled to continue our relationship with the FA and to offer fans in the United States the best European cup competitions and domestic leagues in the sport,” said Tim Bunnell, Senior Vice President, Programming and Acquisition, ESPN. “The Emirates FA Cup is an iconic, historic, and resonant competition, and offering it as part of the robust content offering on ESPN+ continues to make the platform a must-have for soccer fans.”

James Gray, The FA’s Commercial Director, added: “It’s an exciting time for soccer in the US, with the game’s growth evident for all to see, and the FIFA World Cup in North America on the horizon. ESPN have been our valued partner for many years, so we’re really happy that they will continue to share the unique stories of the Emirates FA Cup with their audiences until 2028.”

Hillary Mandel, Executive Vice President and Head of Commercial, Americas for IMG’s media business, added: “The Emirates FA Cup remains a key event on ESPN+ and this deal demonstrates the ongoing appeal for one of soccer’s most prestigious cup competitions, which continues to grow. We’re pleased to extend the successful partnership with ESPN so fans in the US can continue to watch their favorite teams and players.”

The Emirates FA Cup on ESPN+ continues an impressive collection of soccer content available on the No. 1 sports streaming platforms in the United States. The iconic knock-out competition in England joins the DFB Pokal (Germany) and Copa del Rey (Spain) to complete a triad of domestic cup competitions among the sport’s top four leagues available on ESPN+. In addition, ESPN+ is the U.S. home to matches from LALIGA, Bundesliga, the Dutch Eredivisie, Supercopa de España, and more.