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- [00:00]
A
Welcome to Pablo Torre Finds out. I am Pablo Torre. And today we're gonna find out what this sound is.
- [00:06]
B
Whatever.
- [00:07]
A
Whatever.
- [00:08]
B
Whatever. God damn it.
- [00:10]
A
Right after this ad, you're listening to Giraffe Kings. Do we have. How's your voice doing, John? Is it. Is it in singing shape for. For David today?
- [00:34]
B
My. I can't sing.
- [00:35]
A
So how are we going to do this? Happy birthday. Appropriately.
- [00:37]
B
Well, we'll just sing badly.
- [00:39]
A
Okay. David, what. What number are you up to these days?
- [00:42]
C
Heinz 57.
- [00:45]
A
A secret recipe.
- [00:46]
B
Oh, you're catching up to me.
- [00:50]
C
What do you like my mother? Are you aging backwards?
- [00:53]
B
No, no. I was trying to make a pun on ketchup. Your ketchup.
- [00:56]
C
I understood it just wasn't all that creative or funny.
- [00:59]
A
As always, I'm not sure if David ever really understands, but we'll go with it because it's his birthday. David, you're celebrating your special day with us. The only place of course you would ever be.
- [01:09]
B
Well, the fact he's not celebrating with us, he is appearing with us by a remote camera. But you should be here on your birthday.
- [01:20]
C
Well, I had a lovely time with Mr. LeBatard on his show. We had a lovely nothing personal show today. And I'm topping off the day with a bunch of amazingly interesting meetings, followed by a few movies that I will be watching. It's a 24 hour day for me. That's. That's what I do on my birthday. I. I stay awake the entire 24 hours so I can milk every second out of the day.
- [01:44]
B
That's. That's actually pretty cool. It is.
- [01:47]
C
I do it every year.
- [01:48]
B
Have you seen the Brutalist yet?
- [01:50]
C
I watched it last night from 2:20 to 4:30.
- [01:54]
A
God.
- [01:55]
B
Well, if you watched it from 2:20 to 4: 30, you actually missed about 30 minutes of it.
- [01:59]
C
Because it's actually intermission.
- [02:02]
B
It's actually three hours and 40 minutes.
- [02:06]
C
No, it's about 3:25 with a one minute home media intermission.
- [02:10]
B
Oh, you're right.
- [02:11]
C
So it's about 3:24 of running time and I got it all in, I promise, including the credits.
- [02:17]
A
What I got from David's laundry list of stuff he's doing is that we're like sloppy fifths at this point.
- [02:24]
B
You know, I'm okay with that. Even a little sop from David Samson is worth it for me on his 57th birthday.
- [02:36]
C
You are a young man happier to allocate this time to the two of you. It is my absolute pleasure. I've been basically biting at the seam. That is a mixed Metaphor of talking about what's going on in sports business. We haven't done the show in a week or so or two weeks. I don't know how long it's been. And I haven't been able to reach John because he's so busy. Because even when we're not taping, I like just calling John and discussing these issues because it's so fascinating to hear his point of view and how absolutely predictable and wrong that I think it is on so many of these issues.
- [03:10]
A
We're going to get to all that stuff. I'm trying to parse though the mixed metaphor. You are bursting at the seams. I don't know what you would have been biting though. You know, it's bursting again. It's just your day. Whatever. Whatever your kink is today will indulge it, I suppose. I, I do want to point out though, that we got a message, a review from a very special listener. There's a really great chef, his name is Shai, and he sent a message in to a friend who sent it to me. So this is journalistically just sourced in a very particular way. But he said this on Saturday. Some guy I barely know gave me way too high of a shroom dose. I was kind of geeking, so I went home and watched three and a half hours of the Sporting class and thought I was there in the room with them, which is.
- [03:57]
C
Love, David.
- [03:59]
B
I love that. I, I think we probably have an over index on people who are on mushrooms while they listen.
- [04:06]
A
I mean, this is our, this is our target demo. He says it's the best show on YouTube right now. Just me at 5 trying to go to bed thinking, quote, I have such a full grasp of sports business.
- [04:20]
B
All I remember is how much you laugh. So I'm assuming this guy laughed at us for three and a half hours.
- [04:27]
A
I think he thinks that like, like any good birthday celebration, we welcome, we welcome our listeners in like their family. Like, it's like it's the Olive Garden. David Samson, when you're here, are you crying? Is that what's happening?
- [04:42]
C
I have a little tear in my eye that someone allocated three straight hours in the middle of the night. That's my kind of audience. And it just means we're doing something right. Foreign.
- [05:12]
A
I want to start with the thing that we have been chomping at the bit. David, that was what we were looking for. You've lost the game show of what mixed metaphor was David Sampson really trying to say? We've been chomping, some say champing at the bit to discuss, truly the center of the Venn diagram between John Skipper, former president of espn, and David Sampson, former president of the Marlins, which is the divorce between ESPN and Major League Baseball. And I use that term knowingly and so invitingly. Does this feel like a divorce? What's the word you use to describe this? David, we'll start with you. It is, of course, your 57th birthday.
- [05:46]
C
Oh, it, it definitely feels like a divorce. It feels like that it has been building up for a long time. The relationship, in my opinion, has been mediocre with occasional doses of crappiness since my early years in the game and with John at the helm, where we were so busy worried and, and kissing his arse and trying to get more attention, more love, more money, and none of it ever came. And it finally baseball realized that there are other dancing partners out there and it was time. And like many divorces, it's really mediocre for a while until it becomes untenable. And that's when you decide to pull.
- [06:28]
B
The rip cord that your statement assumes that it was baseball that served the notice. And that's not what I believe. I believe that espn, who I also believe wanted the opt out, that they made the decision not to continue with the deal. And I think baseball at this point is, I don't disagree with you, David, that they reached a breaking point, but I think they reached that breaking point where they got the notice that said we are opting out or a phone call.
- [07:09]
C
The breaking point has been building. If you want to say an opt out. This, remember, this is a mutual opt out, which means in the, it's not like a player opt out with a contract in sports where the player can decide do I want to opt out of this deal and they go out and try to get more money. And if they can't, they don't opt out. And, and if they can, they do opt out. This was a situation where both baseball and ESPN had a right to opt out of the deal and both of them decided that it was in both of their best interest to do it. If you want to argue that ESPN made the first call versus mlb, I'm not going to describe it because I don't know the answer of who made the first call. I can only tell you that MLB wasn't hiding from that call or fearful of that call. They were very interested in that call.
- [08:00]
B
I, I don't have any information about who made the decision first. I do believe that ESPN doing a baseball deal with the NFL negotiation in front of them with The NBA negotiation in front of them with a College Football Playoff negotiation in front of them probably insisted on an opt out. It may be. Well, that may well be the case that baseball said, we're fine with that because we're not happy the way we're being treated. So we're happy with the opt out. It would not. It's not my instinct that that's what happened. My instinct is that ESPN wanted not to go long term because they had other money they were going to have to spend. They have to save some money in the current environment, and they wanted the option to save that on baseball. But I do not know that they made the decision before baseball or baseball made the decision before them. I will say that the tone of Mr. Manfred's statement reads like the person who got served, not the person who was serving.
- [09:04]
A
Well, let me. David, I want to read this notice. I want to read the statement, at the very least, that announces a mutual. And that's the key word that we in espn. Rob Manfred, Commissioner Baseball speaking. Now, we in ESPN have mutually agreed to terminate our agreement. While ESPN has stated they would like to continue to have MLB on their platform, particularly in light of their upcoming launch of their DTC product, direct to consumer product, we do not think it's beneficial for us to accept a smaller deal to remain on a shrinking platform. And then they go on to say, to that end, we have been in conversations with several interested parties around these rights over the past several months and expect to have at least two potential options for consideration over the next few weeks. To be clear, our games will continue to be on ESPN for the entirety of the 2025 MLB season, including the postseason. Any new deal will commence in 2026.
- [09:52]
B
So wait, we have a little clue there. They didn't say, we know this is no longer a good deal for us. They said it would not be a good deal for us to take less money. He did not say the current deal is a bad deal. He said it would not be a good. Isn't that what it said, Pablo?
- [10:09]
A
It. It, it says, we do not think it is beneficial for us to accept a smaller deal to remain on a shrinking platform.
- [10:18]
B
David, that situation.
- [10:20]
C
First of all, we're misleading our audience. This was not a PR statement. This memo that was sent to MLB owners by the commissioner, which the commissioner.
- [10:31]
B
Well knows will get leaked.
- [10:33]
A
Yeah, hold. I just. David, hold on. David Sampson is the number one. He does exegesis. Exit the exegesis of the PR statement. Right? You approach this talmudically almost, and you're Telling me that you don't think Rob Manfred knew that owners would then release this and circulate it?
- [10:51]
C
Oh, I think it was written like all memos are to owners, as though they will be released immediately. And as a matter of fact, if I'm baseball, I'm more than happy to have this released so that everyone is clear about what's happening. Because the most important part of the memo was pointing out to owners in no uncertain terms, they're going to be fine. And we are getting away from a partner that was not valuing our relationship or our assets in the way that other partners will. And you can't write that memo to an owner and then leak it if you do not have a deal that you know you're gonna cut that is going to be worth that amount or more.
- [11:34]
A
John, I, I wanna, because I wanna bring John as a character into this story. Right. When you talk, David, about how there has been a coarsening, a dissatisfaction in the relationship, John, as you put it, John and his arse were there for you to have dealt with when you were running the Marlins as a witness, participants, protagonists to the corseting. And so when Rob Manfred says, quote, furthermore, we have not been pleased with the minimal coverage that MLB has received on ESPN's platforms over the past several years outside of the actual live game coverage. John, how does that statement land with you as the guy who is ostensibly making those calls?
- [12:13]
B
I, When I was there, I got more complaining from baseball than anybody else. I frequently ask what percentage of the highlights own SportsCenter are baseball? And the answer was never the answer I would have expected given the tone of the, ah, it's minimal coverage. We're never on. Take a random sports center from baseball season and it is full of baseball highlights. And there was never any direction from me. I can't be aware of what direction would have been before me or after me. Well, I know I can. Before me, there was never any direction to do less baseball. If anything, I called several times and fussed that we had the top 10 highlights and all 10 of them were baseball. And I thought why would, why when there is tennis and there's other things being played, do we have nothing but baseball highlights? It's just, it's inaccurate. Mike and Mike talked about baseball all the time. Tony Kornheiser and, and Mike Wilbon talked about baseball. Stephen A. Smith doesn't talk baseball. But I don't. I never understood it. I never. We covered baseball. In fact, I think ESPN's biggest problem here is they need the highlights and there is how Commissioner Manford may make the money up. I don't think he's going to get more than 550 from anybody else, but I would go back and he will get some couple hundred million dollars from ESPN for highlights. So he's going to add everything together and it may add up to more. I do not believe there's a single entity in the market that's going to pay 600 million for ESPN's package.
- [14:02]
C
You understand that economically if you have to go to four places and if you add up the four, it's greater than what you get from one place, you've gotten more money. So you may be right that there's going to be different partners, that they have a broadcast partner, a streaming partner, they will be able to sell the highlights. There's also a chance that espn, because they've said it, they want local rights to certain teams. And so when you put it all together, that's the way the owners look at it. But John, I can't, no matter where I'm sitting or what day it is of the week, I can't let you get away with what you just said because it's not right when you talk about all of the baseball that was talked by Mike and Mike and the Top Tens were full of baseball. When you take an opening day of a season and you want to move it to the Deuce and you're unwilling to do anything with ABC and you're unwilling to do any sort of outside of prime window or you just want the one o' clock window for regular espn, but then at night you're going to show some sort of college game or other sport that you seem to love more than baseball. We would keep track of that. We would have memos internally about exactly where our game show and exactly reality that ESPN was treating us. And I'm. I don't sound like a scorned lover because you do what you want. It's your network. That's fine. But then don't question why we're feeling as though we're not getting treated right when in fact you are making the decisions of how you are allocating baseball and its programming.
- [15:44]
B
You seem to be suggesting that any of those decisions was a decision made because we didn't like baseball. My guess would be if we wanted to put a baseball game on ESPN2, it's because we had something that would rate higher if we put it on ESPN1, the decisions weren't about what we liked or didn't like. I never took an MLS game and said I got to put this on one. We also had contractual obligations. We had to juggle at all times. So are you suggesting that just we didn't like baseball or that it was.
- [16:21]
C
Suggesting that on one episode of Sporting Class you're happy to say that ratings don't matter and now you're going to say that, hey, if something's going to rate better, we're going to move that to the big channel and make sure that we've got baseball on the one that's barely distributed. And so we're trying to get the, our product out to as many people as possible on what is now a declining platform. The number of people with ESPN and you'll agree to this is down significantly since the height. Is that. Are you denying that?
- [16:52]
B
I am denying that ESPN is a declining platform. The cable television universe is declining. The overall ESPN platform. I don't have access to the numbers, but my guess is about as many people watch some version of ESPN as have ever watched it. And the ratings aren't down nearly as much as the number of households.
- [17:16]
A
What I want to jump in here to say is that I love it when you guys do your old jobs as part of your new job. Like you guys, David just said, our John is defending espn. Just a wonderful trip through memory lane. And I want to point out what Pablo.
- [17:30]
C
What David, you know, you say that, but, but it never leaves. So once you've run a team, I still always think about it from the perspective as the, from the commissioner's office, from ownership, from being a president. And John, no matter how far he gets away from the president, espn, he'll always be that. And that is what. And that's fine. That's his perspective of everything.
- [17:53]
A
It's more than fine. It's the reason why some dude out there is on mushrooms watching three and a half hours of this. It's because you guys actually have a unique vantage point and intimate knowledge of these jobs. And what I want to point out though is also the comedy, though John, of David Sampson being a guy who loves to allocate, behaving in this context like a union boss. You're, you're not fighting for quite the same thing as just dollars per second. You're fighting for the rights of your people. And that to me is also jumping out.
- [18:29]
C
And the reason why it mattered to us is that we didn't want to be considered a second class sport. We didn't ever want to lose a Bake Off. And we had these with our regional TV deals too, of because you know, all the regional networks had the deuces and the traces. We had a deal in baseball as an example that we would never be moved off the main regional network. If there's a competition with a hockey game or a basketball game, that we get priority no matter what. And sometimes you get that in full, sometimes you don't. But it was something that always mattered to us the most, that we wanted to be looked at as the number one priority by our partners. When we had Jewel events, or when we had major events during the season, like an opening Day, All Star game, etc.
- [19:20]
B
When we had Jewel events, they went on ESPN. Yankees, Red Sox games went on ESPN. On Sunday night, the Home Run Derby went on ESPN. We didn't regard that we were making a decision about the reputation of the league or the pride of the league. We were making a decision based on what we thought. Remember our. Our mission at ESPN was to serve fans. So if we were putting something else on one, I'm not contradicting. I've frequently said that people overrate the importance of ratings. I've never said they don't matter. And when we put something on, go back and find me an example where we took a baseball game and put it on two and put something else on one that rated worse.
- [20:13]
C
Oh, I'm not gonna. John, go back to 2012 when you and I were together way before Metal Arc was even a kernel of a thought. And go back to where you were in April of 2012. Opening of Marlins Park, a game against the St. Louis Cardinals to start the season. Any recollection of being there?
- [20:35]
B
I do have a recollection to be in here.
- [20:38]
C
Do you recall the fight that took place, that you wanted that game? You. Because you were the president of espn. Any recollection of the fight that took place, of what channel that game was going to be on?
- [20:50]
B
No. I suspect given the tenor of your question, given the position he turned to, I would suggest that we were honoring baseball by putting the opening game of a stadium in a city that was not going in, a team that was not going to rate. Putting that game on was a favor to baseball.
- [21:12]
C
We were on the COVID of Sports Illustrated. This is before we traded them all away. So you can't pretend that it's after the fact at this point. We had Ozzie Guillen as the manager who hadn't professed his love for Castro, Jose Reyes, Mark Burley. We had won the off season. We were the talk of baseball. Our M was actually the top selling, top selling item at that time. And the way you and I will never forget your presence because obviously you have such an amazing presence, both in height and in anger. But your presence was such that you were so dismissive of what we were doing in Miami and collectively as a sport. I'm not over it. Pablo.
- [21:54]
A
Well, you don't say.
- [21:58]
B
I'm hearing this from the man who had to, who had to generously increase the stated attendance figures at the Marlins park and find me a game in which The Marlins got 2 million people to watch them. Is there such a thing?
- [22:19]
A
I want to jump in here because I just realized as David was citing Sports Illustrated, that I am also a character briefly in the story because that cover of Sports Illustrated happened when I was at Sports Illustrated. It was the third week in a three week run. I had written a Jeremy Lynn cover story, Linsanity. Another Jeremy Lynn cover story, Linsanity, and the third one. And I'm not saying that they put the Marlins on the COVID because they wanted to make the pun. But David, what was the COVID line of that Sports Illustrated, do you remember something?
- [22:49]
B
Sanity.
- [22:49]
A
Obviously it was Marlin's sanity. So I'm just saying we all benefit from the circumstance in which we may get be receiving press coverage.
- [22:57]
C
It's absolutely fine for you all to think that. And it's 12 years ago, so I don't want to belabor it, but I just would mention about this divorce that's taking place. It is not an example where after a divorce if the older man is all of a sudden parading around with a 20 year old beauty queen and you say, oh, I won the divorce, this is going to be very easy for us to measure because either baseball is going to be right or wrong. And my view is they're going to be right. But John, it's going to be a very simple equation. And I'm not talking about the spin because I and you can ask Coca this, we spend plenty of time criticizing the commissioner, the commissioner's office and other owners over what they do and say and how they spin. We'll know if they're spinning and we'll know if they got a deal that was actually better than what they had.
- [23:46]
A
The second thing though is that when it comes to cobbling together a portfolio of rights and what ESPN is going to spend on and what others are spending on. Here are some economics. Right? So Apple is paying $85 million a year for their baseball package. Roku is paying $10 million a season for baseball rights. And so part of the thinking here, David, is that ESPN, when they're negotiating down, as they already had, from 700 million annually to 550 under the deal that is now going to expire after this year. There is a, A, a shift that makes me ask a question about why does Major League Baseball think that they. Or how do they. I don't want to presume. I don't want to lead the witness. Why does Major League Baseball feel like when the NBA signs a deal, they, they are, they are being mistreated because of the difference in size.
- [24:39]
C
First of all, let me just say that when you say it went from 700 to 550, don't mislead our 5am schroomers. It was a different set of assets that went into the deal.
- [24:51]
A
Please explain.
- [24:52]
C
Things were pulled out, which is what caused the number to go down. And MLB was then able to take a playoff package and go elsewhere with it and it ended up being an increase. How do I know? Because we got a bigger distribution of money year two than year one. So that's first of all. And John, are you nodding?
- [25:13]
B
Because you're right.
- [25:14]
C
You're with me.
- [25:14]
B
Yeah.
- [25:16]
C
So Pablo missed. You missed that part.
- [25:18]
A
I'm, I'm, I'm hosting the show. I'm here to have you explain why the characterization of baseball's decline is actually a misread of baseball's estimation of its own value, which I think is a fundamental question I still want your answer to.
- [25:31]
C
Scott Boris is on immediate tour right now trying to say that The NBA is 10 years behind. He basically talked about your deal and our deal with bamtech and he spent a lot of time in the media saying baseball, they'll never be the NBA, that they don't have the ratings. They're literally a decade behind and they had something good and then they sold it off. The streaming rights they sold off. He doesn't understand in the audience, I hope can now be clarified. What was sold and what the deal was was really technology. It was a tech deal. It was not the streaming rights. Where baseball has a problem and what they're trying to fix is that streaming rights are held locally by each team. And the advantage that the NBA and that the NFL have, and certainly the NFL is number one here, is they collect everything and then sell it as a package and they're able to get more money for it. And that's what baseball wants to do.
- [26:31]
B
Yeah, the. I'll go back and make the first point that the deal for which I did for 700, 750 included 90 regular season games and all they got was 30. It didn't include other things that were different. They didn't take a decrease. It's just a different deal. I do not. Again, I do not believe they're going to find a single entity to pay them 750. But it doesn't matter. As you pointed out, David, they will fit. All that matters is what the distribution of revenue is ultimately. And I think the distribution of revenue, their bigger problem is the RSNs, not this package from ESPN.
- [27:11]
C
And I agree. And I want to go back to Pablo, you mentioning the Roku deal and the Apple deal, espn. There's no way whoever is in charge of espn, whether it's Bob, Jimmy, take whoever you want. They didn't say, oh, Look, Roku spent 10 million. That's what we should be spending. It's absolutely ridiculous. The Roku deal is for some Sunday games, like 18 of them. And the Apple deal is for Friday night games. It is. There's no postseason. There's no Jewel events. There's none of it. And forget exclusive Windows like ESPN had on a Sunday night, which are now available to be sold on a Sunday night again to somebody else. So nobody, not even Scott Boris, can argue that it's Apples to Apples doing Roku and Apple, pun intended with this ESPN deal.
- [28:16]
A
So the point is well taken, right? These are different packages promising different things. And John and David, having negotiated on some level the previous versions of this, you guys know this. What I want to get to though, is why it is John, for instance, why the NBA is getting triple its right steel, while baseball, which has significantly more games, is struggling to have that presumption be as obvious.
- [28:45]
B
Obviously, at some point when the market speaks, that's what something is worth, right? You can argue to your blue in the face that the house you want to sell is worth a million dollars, but ultimately the value is determined by what somebody is willing to pay. And the market, the media rights market has spoken that NBA games are more valuable than baseball games. I'll give you one fundamental difference. The average age of someone who watches a baseball game is over 60 years old. And the average age of somebody who watches an NBA game is 43 or 44 or something. It also is a more diverse.
- [29:27]
C
That's old information where you saying that that's today. Because that was true when Bud Selig was commissioner. And we worked very hard to get that average actually going down because we viewed that all of our fans were just. If you keep having a demographic that's aging, eventually they croak and you're at Zero. So we reverse that and each year, each year for the last three or four years of my career and since 2017, each year the average age of baseball viewers has gone down. And it was never 60 by the way. It was 58.
- [30:07]
B
By the way. Which you will celebrate that birthday next year. I would appreciate if Matt could look up. If you just Google what's the median age of a baseball viewer?
- [30:18]
A
We will have Coca look that up.
- [30:19]
B
What's the median age?
- [30:21]
A
Coke is so good at producing this show that I can cite this from the Sports Business Journal. The average age of fans watching live MLB, NFL, NHL, NBA games baseball 57 NFL 50, NHL 49 NBA 42.
- [30:38]
B
So I stand corrected. That is not 60. May never have been 60, but there still is a 16 year age difference between the average viewer media. The median age of a. Was it 50?
- [30:53]
A
57. Verse 42.
- [30:55]
B
15. 15 year age difference. And that matters. And, and you acknowledge it, David, by suggesting that you guys were working to try to make sure that your audience didn't continue to. To get older. But, but again, I don't think you'll argue. David. The market speaks. And when the market speaks with their checkbook, it sets the value of what something is worth. And baseball is not going to get the money that the NBA got. They're just not.
- [31:23]
C
It's a different. But it. Again, we don't have. I keep saying we. Excuse me. They do not have the bundle to sell the way the NBA does or the way the NFL does, which is why they're trying to get into that position. If everything were equal, everything, the NFL would get more than the NBA and Major League Baseball. But NBA and Major League Baseball would be super close and they would be in second place by a fairly high number. What I'm interested in seeing is once all of the local streaming rights and many of the local rights are actually under one umbrella within baseball, then we'll be able to figure out whether or not they can get more national days the way Adam Silver's done. More exclusive windows the way Adam Silver's done. Because there are already more bidders. John, back in the day you, ESPN was our daddy. We had, we had, we had very little other choice.
- [32:21]
B
I'm your dad.
- [32:22]
C
And to deal with you. We know you guys, we know you.
- [32:25]
A
Guys smelled the same deodorant wise. So there is that.
- [32:28]
B
It sounds very Pedro Martinez like there.
- [32:32]
C
I don't mean it to be that. I just mean it to be that. Now MLB will have many more than one bidder. Let's face it why did the NBA get a triple? You know, because there was more than one bidder and WBD was in a position where we can argue till we're blue in the face that they were going to bid, bid, bid and then be okay with not winning baseball. Now they think, and we're going to find out, they think there are more bidders than have existed in the past and they plan to take advantage of that fact in order to drive the price up.
- [33:08]
B
That all sounds sensible. And I'll surprise you by saying I hope baseball gets a very big number. I It would make me happy. I think we have a better sports calendar when Major League Baseball is stronger. So there's no, I have no, no enmity towards. I hope they succeed here. I think it would be good.
- [33:30]
A
One thing that I want to get to though when it comes to David is smiling Riley as if John's well.
- [33:36]
B
Wishes are not because we wouldn't exceed to their wishes. They thought it had something to do other than with what worked for us in a financial model. We haven't talked, by the way, about.
- [33:49]
C
Why you told me you never cared about the financial model. You used to say if it's something I want, I'm gonna go or more than the next guy because I don't care what the numbers are, I'm going to get the deal done.
- [33:59]
B
Well, that is a financial.
- [34:00]
C
And now you're saying, oh, it's all about the financial model.
- [34:04]
A
You're looking at the financial model in the middle screen here.
- [34:07]
B
I always said my financial model is which is more valuable and I am going to buy the rights for the things that are the most valuable. But that was my financial model. No, I did not do spend a lot of time on a computer figuring it out. And all that mattered at that point was what are the most important things for us to have so that everybody feels that they have to have a pay TV subscription to get espn. That is still the case. And when you talk about flagship, flagship will change what matters because there what matters is subscriptions. And David, to your point about summer, it doesn't matter. Does not matter when you say what's on there in the summer doesn't matter. All that matters is will you do people cancel and so if you have enough other stuff, it will be a thin service if they don't have baseball. And I think they should try to get some baseball but it will not matter if they don't for their subscription. Economics.
- [35:13]
C
I may be confused about something. Why was ESPN showing? Was it the Korean Baseball League? Was it The Filipino Baseball League. I can't remember what it was. When there was no baseball going on during COVID and there were no sports. And in order to try to keep their subscription revenue, cable revenue, they had an obligation to show something, and so they were just throwing whatever they could on tv. I may have made that up.
- [35:40]
B
No, no, it did happen. But it only makes my point, not your point. It didn't matter what it rated. It mattered that we were either fulfilling a contractual obligation to have baseball or that we needed yet to have something to put on. Nobody's canceling their.
- [35:57]
C
Exactly. John, you're actually agreeing with what I'm saying. Well, because you had to replace it with crap. And if that had lasted longer, your entire financial model would have disappeared.
- [36:10]
B
No, it wasn't true. The money we saved on paying the rights actually benefited the company's bottom line. So putting the crap on did not. We didn't lose distribution fees at all. And we save rights deals.
- [36:24]
C
Then why do you do rights deals? Then why do you do any rights deals if you can just put crap on? Just put crap on.
- [36:29]
B
It's like the chocolate chip cookie, David. You gotta have a certain number of chocolate chips in there to actually have a chocolate chip cookie. We wanted to be the worldwide leader in sports. We want the best sports on his. We always did. And I don't mind that you say we and I say we. If you put heart and soul for 20 plus years into something, you're going to say we. Why not? I was on the home team and I will always be on the home team. You know what the ad revenue against baseball is on ESPN? $58.5 million. $58.5 million. So they just saved themselves $540 million, give or take. And by the way, they'll put something.
- [37:08]
C
In those slides, but you're not counting sub revenue. All of a sudden you're going to say that ad revenue is the driver of these deals, when you know very well that ad revenue is a tiny little component of why you do these deals.
- [37:20]
B
No, the, the, the sub fees are 10 times more important. No, they're not. It's about 73, about 70, 30. So there are two over two times more important, the sub fees. And they will not lose any sub fees. Nobody will cancel. They're declining. The KTV is declining. The rate of decline will not be affected by ESPN not having baseball in the summer. It will not be.
- [37:46]
C
This is your chocolate chip analogy. That's fine. Do without the baseball chips and eventually you're having a sugar cookie.
- [37:53]
A
I.
- [37:53]
B
But you don't. If you have all the sec, all the acc, the NBA, Wimbledon, US Open, NFL, you don't. I mean, it's not. You can argue about what is, what is essential programming. I would argue that having some baseball is essential. But if you are ranking it and it. It just is the fact if you're ranking it, you care more about NFL, college football and NBA.
- [38:36]
A
I can't decide if I'm doing a horrible or great job hosting the show right now. I've tried to get in a dozen times. Each time you guys have energy that is so deep inside of you that I am regretting even trying to dip a toe in in between you guys. Just some accounting though. I believe David did try to argue that the reason to have baseball is because there might be another pandemic and you need something. So point taken. World looks like it's real shaky.
- [39:05]
C
Thank you.
- [39:06]
A
Understood. The second thing though, when it comes to is, and this is the fundamental question here that I want to get to and John alluded to it, is ESPN's decision specific to ESPN or a symptom of a marketplace that is pretty much seen and we've celebrated it. Sports rights increase. Right. So the question that we're gonna find the answer to in a way to see Pablo finds out crossover is what's the actual number in the end? Because that's going to tell us something about the economy that all of us are working and analyzing.
- [39:37]
B
I personally think it was pretty specific to espn. They have spent a lot of money on rights. They are, as you pointed out, David, declining. The pay TV universe is declining. They are going to have to spend some money to launch Flagship and they decide to save money here, I believe. And it didn't get nearly as much attention because it's much smaller. But I do believe that ESPN has already suggested they will not be bidding for F1. It's the same thing was going to bring that up. They are looking at what in their minds, and I've said already, David, I don't necessarily agree with it, but they are looking at in their offices what do they not have to pay for because they can't buy everything and they.
- [40:22]
C
Have decided what can't they live without.
- [40:24]
B
Yes, right.
- [40:25]
A
F1, by the way, David, in that way is a compliment to baseball. It's not merely that they're shedding the thing that feels archaic, allegedly. They're also shedding the new hot thing that apparently is getting too financially onerous to include in the portfolio of what they take into the media apocalypse.
- [40:44]
C
Well, they're looking for way more than a triple, and they're out there. And it's interesting you've got bidders for it. All these. You know, I'd love to talk for a second about Netflix and how interested they are in not doing live events. And all they do is live events. And I was watching SAG recently, the last. The award show Live, and so on Netflix. Live on Netflix. And Netflix is a bidder.
- [41:08]
A
That's right. The SAG Awards are sports now, John.
- [41:12]
C
Oh, I'm just saying live events.
- [41:13]
B
It's live.
- [41:14]
A
No, no, no. But my point being that, like, the business of. Of live is clearly, Netflix has always said we're not putting a toe in this. And now their. Their whole body is in it.
- [41:23]
B
By the way, is an interesting thing, because you suggested that F1 is the hot thing. The F1 ratings, while I know they don't count, the F1 ratings are not that dramatic, they're not that spectacular, and they want three times the money because it's perceived to be hot. And it is a bit of a problem for baseball that they're not perceived to be hot. I apologize for that if that's offensive. I don't think it is. They. They have a hard time suggesting that they're that culturally relevant. And I've always believed that one of the issues with baseball is they have not figured out how to market their players or their players have not allowed them to market. They have maybe the best baseball players who have ever played the game, and most Americans don't know who they are.
- [42:19]
C
When you look at. To me, it's much more of a supply issue. And the biggest issue that we have is that there's 162 regular season games followed by only one month of postseason. And what we've been trying to do, and we're having a hard time with the union, is we're trying to get the regular season shorter and the postseason longer. Now, we've definitely added a round with the wild card round. Love the idea of the one and done. Where the Game seven thing that happens, where more people pay attention, both advertisers and social relevance, cultural relevance. But I don't agree with that. It's anything other than we're flooding the market with games and what used to be an amazing amount of money that would come because of that, that has now changed. And I want to say what I mean, John, because when you're negotiating with the regional sports network and you're providing 150 games, because that's all we could offer and you're offering three hour games plus pre and post. You are taking up a lot of programming time for these RSNs who are collecting huge sums of money from the cable companies for distribution of that regional sports network. That entire financial model has now changed and baseball is now stuck with all of this inventory trying to figure out the best way to monetize it when the union is not being altogether helpful because the other leagues have much longer postseasons.
- [43:55]
B
There's nothing to disagree with there. But it doesn't address the essential question, David, of why aren't the best baseball players bigger stars? You know this. It's a fact. You can say, you look at sponsorship numbers, you look at posters that are up in 17 year olds rooms and there aren't baseball players there. I forget how many baseball players.
- [44:16]
C
I really don't know how to say this, John, in a way that you may or may not.
- [44:19]
B
It's ESPN's fault. It's ESPN's fault.
- [44:22]
C
No, because the best players in baseball don't speak English and aren't all that comfortable. And it's been a big issue with marketing because the commercials they do don't have them talking, they don't have them. You don't have a Patrick Mahomes in baseball. We wanted Mike Trout to be the person. He came out and said I don't want to be that person and I don't want to. I don't want this to become a sensitive. It's not a race issue.
- [44:44]
A
No, no, no.
- [44:45]
C
But this, but this is, is a real thing. Pablo.
- [44:48]
A
What's funny of course is that in these arguments we have a glut of games. We have foreign players who don't feel comfortable in English. These are parallel problems what the NBA is grappling with, except they just tripled their rights. Deal. I just want to point out when it comes to the problem you're articulating, David, it is. I want to take this clinically as opposed to ideologically. It does seem like it is a shame that many players born abroad who don't speak English are not as popular as their talent and charisma athletically would lead them to be.
- [45:21]
B
I don't think that's the problem. If you take the NBA All Stars and march them in this office one by one. I know who every one of them is. It doesn't matter. Jokic, Don, Victor, Bumbiana, they're all international players.
- [45:39]
C
I get one name right, 5% pronunciation on that.
- [45:44]
B
Well, I may not have got the pronunciation, the spelling right. I got that right.
- [45:50]
A
Winyama. Very close.
- [45:52]
B
Very close. Very close. But by the way, I know who every one of them are. If you march all of the baseball players who will make the All Star Game forget me, you take them to a high school and you send them across the stage. Do you think there are any NBA players that almost all those people don't know?
- [46:10]
C
I think the number of NBA players known by a group will be the same as the number of MLB players. There's 15 on an NBA team. There's 26 on an MLB team. The superstars are recognized. But there are definite issues because what makes someone more recognizable is being more present nationally, both while they're playing and also while they're promoting. And baseball has a problem because there's not a lot of national inventory and there's not a lot of national commercials. That's just my view of it. And if you disagree, you disagree.
- [46:47]
B
But no, no, I don't disagree with that. In fact, one of the other problems that I think you and they are working on is the, the regional blackouts. They were disaster if you were a broadcaster. It's like, really, I can't get. I couldn't get enough games to that were exclusive. All I could get was Sunday night. Everything else had a, had a conflict and that was a problem.
- [47:16]
C
That's exactly right. That, that. But that's what's now changing. Because it has to. Because you're exactly right. Because all the teams would never vote to give another national window. Every team in baseball was Jim Dolan.
- [47:30]
B
Yeah.
- [47:31]
C
And when you have more than 23 Jim Dolan, you can't get anything done. But now in baseball, there are way fewer Jim Dolan.
- [47:40]
A
I just shuddered at the hypothetical of 23 Jim Dolan's Walking into a room. Look, there is an empirical question. You guys oppose that. We here at Pablo Tori finds out, would like to test. I do want a focus group, a bunch of NBA All Stars and MLB All Stars and see if the math of Kyle Kuzma having 3 million more Instagram followers than Aaron Judge is going to bear out in the market research. Which is sad. Which is sad on lots of levels, by the way. Like, and subscribe all of our shows, please here at Metal Arc Media. We would like more followers. As always, what I'm left here having found out though on David Sampson's birthday, is that what you guys both really want from each other is to be loved. It's very clear. It's very clear.
- [48:25]
B
No question.
- [48:25]
A
You guys both want to be recognized by each other in the way that you recognize yourself and that's what is that if not a fanatic but what.
- [48:33]
B
Is the shuddering David I mean it genuinely Cal Kuzma I'm just have more why does Cal Kuzma have more followers on social media than Aaron Judge? He's not.
- [48:46]
A
That's a depressing question, frankly.
- [48:48]
B
The answer is partly because the league doesn't insist on marketing them. They don't The NBA insists that these guys do this stuff. Again, you're going to have the problem.
- [48:58]
C
Brought Aaron Judge John if you brought Aaron Judge and Kyle Kuzma into your office and 80 out of 80 people will know Aaron Judge and one out of 80 will be able to point out Kyle Kuzma if you put him in a lineup.
- [49:11]
A
We are strictly now in yelling into our own echo chamber territory. Each of these panels on YouTube being an echo chamber. More research to come. David John I love you both.
- [49:26]
B
Thank you, Pablo thank you, David.
- [49:29]
A
Happy birthday.
- [49:30]
B
Happy birthday.
- [49:32]
A
Happy birthday.
- [49:34]
B
Whatever. Whatever. God damn it. Whatever.
- [49:46]
A
This has been Pablo Torre finds out a Meadowlark Media production and I'll talk to you next time.
- [49:57]
B
Sam.