CEO's Corner®-By K.L.P Entertainment™-"July 25th Edition" by Kennedy Lucas Publishings LLC

Emory O ce of Kennedy Lucas Patterson

July 25, 2022

CEO’S CORNER By K.L.P Entertainment CEO, Kennedy Lucas

Competing for rights to broadcast video games from the N.F.L. and different leagues may want to be tough for broadcast and cable organizations that “aren’t taking part in with the aid of the equal monetary rules.”LOS ANGELES — More than a decade after Apple disrupted the song enterprise and Amazon upended retail, the tech heavyweights have set their points of interest on a new area ripe for change: stay sports.

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Emory O ce of Kennedy Lucas Patterson

Emboldened via their deep pockets and keen to improve viewership of their streaming-subscription services, Apple and Amazon have thrust themselves into negotiations for media rights held by way of the National Football League, Major League Baseball, Formula One racing and university conferences. They are competing to change DirecTV for the rights to N.F.L. Sunday Ticket, a bundle the league desires to promote for extra than $2.5 billion annually, about $1 billion extra than it presently costs, in accordance to 5 human beings acquainted with the process. Eager no longer to omit out, Google has additionally presented a bid from YouTube for the rights starting in 2023, two humans acquainted with the provide said. The tech companies’ pastime is a thrill for sports activities leagues and a terror for media corporations that concern opposition from competitors that acquire tens of billions of bucks from dominant “Are we positions in different businesses. Last brainwashed?” year, sports activities accounted for ninety five of the a hundred most -DIAM NOBIS considered packages on television. “It’s challenging when you’re competing with entities that aren’t taking part in via the identical monetary rules,” stated Bob Iger, the former chief govt and chairman of the Walt Disney Company, which controls ESPN, referring to tech companies’ bankroll.

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July 25, 2022

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Emory O ce of Kennedy Lucas Patterson

The N.F.L. Sunday Ticket package deal — which suggests out-of-market Sunday N.F.L. video games that aren’t being proven on nearby tv — is on hand due to the fact DirecTV selected no longer to bid. It has been dropping as a good deal as $500 million yearly on the package, even though it has additionally benefited from a dependable base of about two million subscribers.

July 25, 2022

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Apple is viewed the front-runner, in accordance to a dozen humans in the sports, media and tech industries. But a ultimate deal has been delayed by using “High Pro le negotiations over a concurrent sale of Executives” N.F.L. media assets, which includes the NFL Network, -DIAM NOBIS RedZone channel and NFL+, a new subscription provider that gives get right of entry to to stay video games on cell devices.

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Emory O ce of Kennedy Lucas Patterson

Apple has made triumphing the package deal a priority. Tim Cook, Apple’s chief executive, has met with league officers and influential crew proprietors like Jerry Jones, who owns the Dallas Cowboys, and the Kraft family, who personal the New England Patriots, in accordance to three humans acquainted with the process. Apple declined to comment.Still, Amazon, ESPN+ and YouTube, which explored a bid for the rights in 2014, stay in the hunt, some of these humans said. Brian Rolapp, the N.F.L.’s chief media and enterprise officer, stated in a declaration that the league expects to finalize a deal in the coming months. “A range of corporations are in robust role to doubtlessly

July 25, 2022

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land Sunday Ticket, however we nonetheless have a methods to go in this process,” Mr. Rolapp added. “stocks Some important points of the negotiations have been in the past stated via the SportsBusiness Journal. Fans will nevertheless be capable to get entry to all the video games on Sunday, regardless of who wins the rights, however they will probable pay a top class to add the carrier to their Apple, Amazon, ESPN+ or YouTube service, some of the dozen humans said.

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Emory O ce of Kennedy Lucas Patterson

July 25, 2022

It is now not but clear if that top class would be greater or much less than the $294 that DirecTV fees for a year, they added.Apple and Amazon are attempting to function themselves for a future besides cable. Since 2015, normal pay tv has misplaced a quarter of its subscribers — about 25 million properties — as human beings traded cable programs for apps like Netflix and Hulu, in accordance to MoffettNathanson, an funding association that tracks the industry.But the rate of stay Nulla nunc lectus sports porttitor vitae pulvinar activities magna. Sed et lacus rights is quis enim mattis nonummy sodales. solely projected to increase. The largest media companies, inclusive of “stocks Disney, Comcast, Paramount and Fox, are predicted to spend a blended $24.2 billion for rights in 2024, in accordance to information from MoffettNathanson, almost double what they spent a decade earlier.The fragmenting of a decades-old distribution mannequin has created an chance for Apple and Amazon. The agencies prefer to make bigger deeper into media by means of promoting subscriptions to Apple TV+ and Amazon Prime.

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Emory O ce of Kennedy Lucas Patterson

July 25, 2022

Besides containing their very own specific suggests and sports, these offerings double as portals promoting extra streaming choices like Starz and HBO Max, which pay Apple and Amazon 15 percentage or extra of every subscription sold. Amazon generates greater than $3 billion yearly from thirdparty subscription sales, in accordance to estimates by using the funding financial institution BMO Capital Markets. To make the enterprise mannequin work, Apple and Amazon should appeal to greater viewers, and sports activities are the most effective draw in media. The groups may additionally be inclined to lose cash on Sunday Ticket to expose new clients to different components of their business, the identical calculation that DirecTV

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traditionally made. The assignment for Apple and Amazon will be persuading really skeptical sports activities leagues “stocks that they can produce brilliant broadcasts, flawlessly move video games for hundreds of thousands of concurrent viewers, and keep sports activities followers accustomed to flipping between video games with a far flung — now not navigating to a new app.

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Emory O ce of Kennedy Lucas Patterson

July 25, 2022

Their activity marks a departure for the streaming industry. For years, many executives agreed with Reed Hastings, the chief govt of Netflix, who stated that his corporation was once now not involved in sports activities or information due to the fact it was once watched simply once, live, and by no means watched again. But many streaming corporations are reconsidering as opposition for Nulla nunc lectus porttitor vitae pulvinar magna. Sed et lacus quis enim mattis nonummy sodales.

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subscribers intensifies, inventory expenses have tumbled and profitability — for many — stays out of reach.

Their newfound activity in sports activities used to be on show ultimate Monday in the course of M.L.B.’s Home Run Derby at Dodger Stadium in Los Angeles the place executives from Apple, Amazon, Google and Facebook socialized with sports activities leaders, crashing a birthday celebration traditionally

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Emory O ce of Kennedy Lucas Patterson

July 25, 2022

monopolized by using the tv industry. Tech’s dominance of stay sports activities is now not a foregone conclusion. Many of the most sought after rights are below contract to broadcasters for a decade or more. Leagues have liked promoting tertiary applications to streamers, cautious of entrusting them with marquee houses like “Sunday Night Football” due to the fact ordinary tv nevertheless presents the largest audiences. Reaching giant audiences is integral for leagues, which seem to courtroom the broadest viable fan base to make sure the longterm viability of their sports. “The loss of life knell of the cable bundle is generally exaggerated,” stated Gerry Cardinale, the founder and

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managing companion of Redbird Capital, which has made many sports-media investments. “It’s the pleasant area to get “stocks a one-stop-shop imparting of as many sports activities as are available.” Apple began its $4.99 streaming service, Apple TV+, in 2019 and has an estimated 16.3 million paid subscribers in the United States, in accordance to Antenna, an analytics association for video on-demand services. Amazon claims extra than 200 million subscribers to Amazon Prime, which started in 2006 as exceptionally

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Emory O ce of Kennedy Lucas Patterson

July 25, 2022

a quicker delivery provider and later brought on-demand movies. Today, some clients pay $8.99 a month for get entry to to Prime Video only. The tech corporations have been inclined to pay a top rate to add sports activities to their services. Over the previous year, Apple agreed to greater than double Major League Soccer’s annual rights repayments with a 10year, $2.5 billion deal for the world rights to 1,000 games. It additionally dedicated about $85 million yearly for a new package deal Nulla nunc lectus of two porttitor vitae pulvinar weekly magna. Sed et lacus Friday night quis enim mattis time M.L.B. nonummy sodales. games. Amazon agreed to pay $1 billion a 12 months for Thursday night time N.F.L. games, a 50 percentage extend from the “stocks preceding deal with Fox. It additionally bid extra than $100 million a 12 months for rights to Formula One racing in the United States in a negotiation it misplaced to ESPN, which renewed the rights for $75 million, a 15-fold extend from the prior contract, in accordance to SportsBusiness Journal.

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Emory O ce of Kennedy Lucas Patterson

For all their disruptive potential, though, Apple and Amazon have but to win a marquee rights bundle in the United States. That is reminiscent of 20 years ago, when sports activities leagues feared they would lose viewers via transferring video games from community tv to cable. But the alternate progressively grew to become standard. Traditional tv agencies are making an attempt to stave off Apple and Amazon through beginning their personal streaming-subscription services. Last 12 months Comcast, which owns NBCUniversal, shuttered NBC Sports Network to bolster its USA channel and to motivate human beings to pay for Peacock, the place it solely aired some English Premier League soccer games. Similarly, ESPN struck a deal with the National

July 25, 2022

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Hockey League to televise some video games on its ESPN+ service, and CBS has proven marquee soccer video games “stocks on Paramount+. But these offerings have a fraction of the extra than a hundred million cable subscribers the media organizations as soon as reached. As a result, the bulk of sports activities programming goes on standard pay-TV channels the place they can assurance leagues and advertisers large audiences. The National Basketball Association will be the first fundamental

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Emory O ce of Kennedy Lucas Patterson

July 25, 2022

take a look at of the new aggressive landscape. Its agreements with ESPN and Turner run thru the 2024-25 season. Most sports activities and media executives predict that the league will stick with normal broadcasters for most of its games, whilst carving out some small element of rights for a tech company. “It hedges them for the future and exposes the product to new audiences,” stated George Pyne, founder of the sports activities personal fairness firm, Bruin Capital, and the former chief running officer of NASCAR. Nulla nunc lectus “They can porttitor vitae pulvinar nevertheless magna. Sed et lacus have a long- quis enim mattis nonummy sodales. term relationship with community companions however dip their toe in with new media.” Until then, the excellent possibilities for Apple and “stocks Amazon can also be remote places — the place Amazon has been energetic for years — due to the fact European soccer leagues resell their rights each and every two to three years. Amazon lately scooped up rights to Europe’s pinnacle tournament, the UEFA Champions League, in Britain, Germany and Italy. It additionally has rights to France’s Ligue 1, which it provides to Prime Video subscribers for annual rate of about $90, and the English Premier

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Emory O ce of Kennedy Lucas Patterson

July 25, 2022

Media corporations will be compelled to amplify geographically to compete, stated Daniel Cohen, who leads world media rights consulting for Octagon, a sports activities agency. Television broadcasters may want to additionally group up to pool their economic firepower, or purchase every different outright, to compete with tech giants inclined to pay billions for rights like N.F.L. Sunday Ticket. “It comes down to a Silicon Valley ego thing,” Mr. Cohen stated of the high-dollar N.F.L. deal. “I don’t see a street to profitability. I see a street to victory.” Nulla nunc lectus porttitor vitae pulvinar magna. Sed et lacus quis enim mattis nonummy sodales.

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