February 14, 2024

Read in Browser [[link removed]]

POWERED BY

Penn Entertainment does an about-face on its attitude toward New York sports betting. … The College Football Playoff moves closer to finalizing the specifics of its new competition format. … Chiefs players earned a tidy chunk of extra money over the course of their title run. … Plus: More on Manchester United, Stanford baseball, blockbuster NBA deals, and Gatorade-oriented bets.

— Eric Fisher [[link removed]]

ESPN Bet Partner Enters New York, Once Seen As ‘Margin Killer’ [[link removed]]

Kirby Lee-USA TODAY Sports

Penn Entertainment is offering a prime example of how market factors can force an abrupt change of business strategy, potentially reshaping part of the U.S. sportsbook landscape in the process.

The sports betting and casino company has paid $25 million to acquire the New York sports betting license previously held by Wynn Resorts, and will use that license to bring ESPN Bet into the industry’s largest individual U.S. market. ESPN Bet is now set to debut in New York later this year.

In a late 2021 earnings call, Penn Entertainment CEO Jay Snowden said the high operating costs of New York, particularly a 51% tax on operators’ gross gaming revenues, would preclude any company from being profitable in the Empire State, calling the locale “a margin killer.”

“I don’t think a single operator will make money in New York,” Snowden told analysts then, when the company was still aligned with Barstool Sports. “So I’ve always struggled with that. Would you rather be in or not? I think objectively speaking, you’d rather be in than not be in. But it’s one of those states where if you’re not in, you’re not crushed by that either.”

A little more than two years later, Snowden is conveying a very different mood. This week he called the deal “an important development that will bring ESPN Bet to the largest regulated online sports wagering market in North America.”

So what changed? Most obviously, Penn Entertainment last summer struck a $2 billion deal [[link removed]] to bring the biggest brand in sports media to legal sports betting, and that agreement carries [[link removed]] a series of aggressive growth targets for the venture as it challenges [[link removed]] established market leaders FanDuel and DraftKings.

Too Big to Ignore

New York, meanwhile, has solidified its status by far as the country’s top sports betting market—particularly as the larger-population states of California, Texas, and Florida have yet to fully embrace legalization—and ended 2023 with $19.1 billion in total handle, an 18% increase over ’22, and $1.7 billion in gross gaming revenue. That handle is also nearly 60% larger than the No. 2 state, New Jersey. And even with the potential of smaller operating margins and the current market dominance of FanDuel and DraftKings, New York is simply too large a force in sports betting to ignore.

“Operating in the New York market is key as we grow ESPN Bet across the U.S.,” Snowden said.

Big College Football Playoff Changes Could Be Formalized Soon [[link removed]]

Kirby Lee-USA TODAY Sports

The future of the College Football Playoff continues to inch toward gaining clarity.

ESPN’s reported $7.8 billion extension [[link removed]] for the CFP’s full package of media rights through 2032 is contingent on CFP leaders approving a new format for the expanded 12-team field, which has been in limbo since last summer’s realignment moves. But now, ESPN (perhaps not so coincidentally) is reporting [[link removed]] that the CFP board of managers is set to vote on a new format next week, on Feb. 20. The expectation is that a 5+7 model (five conference champions plus seven at-large bids) will be approved, therefore greenlighting the new media rights deal.

Meanwhile the two remaining members of the Pac-12—the conference most responsible for throwing the CFP into chaos—are crystallizing their future, too.

Oregon State and Washington State announced a formal measure to move on from Pac-12 commissioner George Kliavkoff, releasing a statement [[link removed]] that they had “given the departing 10 schools notice of a proposed leadership transition with an invitation to provide comment” and that they “expect to provide more information following a decision in the coming days.”

The move isn’t a surprise, given the turmoil surrounding the Pac-12, and Oregon State and Washington State’s plans to partner with the Mountain West Conference and West Coast Conference over the next two seasons. Kliavkoff’s contract was believed to have at least two years remaining, according to the San Jose Mercury News [[link removed]], with an expected annual salary of approximately $3.5 million. It is unclear whether a buyout was reached or Kliavkoff will receive his full remaining salary.

Basketball Changes, Too?

As March Madness approaches, college sports leaders are also thinking about making the men’s NCAA basketball tournament bigger.

Over the last three weeks, at two separate meetings, high-ranking college leaders took the initial step in exploring significant change to the NCAA men’s basketball tournament and the College Football Playoff. Last month, commissioners of the ACC, Big Ten, Big 12, and SEC spoke with NCAA president Charlie Baker about exploring NCAA tournament expansion, according to Yahoo Sports [[link removed]]. Any change would require additional work with CBS Sports and TNT Sports, which together are paying $700 million annually for the media rights to March Madness through 2032.

SPONSORED BY CISCO

Bringing Tech to the Sports Spotlight

At first glance, the NFL and the tech industry may seem worlds apart. But behind the scenes there are a handful of surprising parallels, namely: the strategic depth and teamwork essential for success.

Few understand this overlap better than Cisco [[link removed]].

Before the 2023 NFL season, Cisco teamed up with the league to launch the NFL IT Apprenticeship Program, allowing one graduate from Cisco’s esteemed Networking Academy to work alongside some of the world’s best sports technologists.

This initiative marks a major step toward weaving Networking Academy’s technical education into the fabric of the NFL ecosystem—and the first of many steps.

To explore how the NFL and Cisco are empowering both professional and former players with technical career opportunities, read the full article here [[link removed]].

It Pays to Win

Mark J. Rebilas-USA TODAY Sports

The Chiefs have now won back-to-back Super Bowls (three of the last five, in fact)—and with that success not only comes added value to the franchise but also more opportunities for players and coaches to make money.

And on the field, it definitely pays to keep playing—and winning in the postseason. As CBS Sports recently noted [[link removed]], each player on the Chiefs earned a total of $338,000 in salary during their Super Bowl run (not counting individual contract incentives). Postseason money comes from a league pool [[link removed]] and not NFL teams. Here’s how it breaks down for each player, with game check amounts per win:

Wild card: $50,500 Divisional: $50,500 AFC championship: $73,000 Super Bowl: $164,000 STATUS REPORT Two Up, Two Down

Kirby Lee-USA TODAY Sports

Manchester United ⬆ The $1.3 billion deal [[link removed]] for British businessman Jim Ratcliffe to acquire a 25% stake in Manchester United was officially approved [[link removed]] by the Premier League and Football Association.

Stanford baseball ⬆ Rintaro Sasaki, a 17-year-old Japanese baseball prospect who was projected to be the top draft pick in the Nippon Professional Baseball league, has opted [[link removed]] not to turn professional and instead play at Stanford, beginning in 2025. Sasaki will now be eligible for the MLB draft in ’27.

Blockbuster NBA deals ⬇ The Warriors made an unsuccessful effort to acquire LeBron James from the Lakers at the NBA’s trade deadline, according to ESPN [[link removed]]. Warriors owner Joe Lacob reached out to Lakers owner Jeanie Buss about the idea but was quickly shut down.

Gatorade bets ⬇ Chiefs coach Andry Reid was christened with a shower of purple Gatorade shortly after winning Super Bowl LVIII on Sunday night. But suspicious betting activity at some sportsbooks may lead [[link removed]] to the discontinuation of popular prop bets around predicting the color of celebratory Gatorade baths.

SPONSORED BY WILD ALASKAN COMPANY

Nutrient-Dense, Protein-Packed Seafood

Wild Alaskan Company [[link removed]] is your source for nutrient-dense, high-quality seafood from Alaska. Founded by a third-generation commercial fisherman, Wild Alaskan Company is on a mission to transform the way we eat, bringing us closer to nature with sustainably sourced [[link removed]] seafood boxes.

The company is a membership model of seafood delivered straight to your door. Each delivery is packed with a variety of delicious offerings, featuring fish and shellfish from Alaska. Everything is frozen shortly after harvest and always processed in the USA, locking in incredible quality, nutrition, and flavor in every box of seafood.

Members of Wild Alaskan Company also have access to recipe inspiration, live events, and a stellar Member Experience team to help them get the most out of their membership.

Join today [[link removed]] and get $25 off your first box.

Conversation Starters The Texas Longhorns are about to join the SEC and are making some multimillion-dollar [[link removed]] upgrades that include a football facility with a recruiting lounge, a “YETI Yard” baseball social area, and a new beach volleyball locker room. Ohio State fired basketball coach Chris Holtmann but will pay him [[link removed]] a buyout of about $14 million. NBC Sports California has named [[link removed]] Jenny Cavnar its new play-by-play broadcaster for the A’s, which makes her the first female primary play-by-play announcer in MLB history. Editors’ Picks Chris ‘Mad Dog’ Russo Lands ESPN Contract Extension [[link removed]]by Michael McCarthy [[link removed]]Russo will continue to team with Stephen A. Smith on ‘First Take.’ Arthur Blank on PE in the NFL: ‘There Are Models That Can Work’ [[link removed]]by Daniel Kaplan [[link removed]] Arthur Blank says the NFL will discuss private equity investment at the upcoming owners meetings. NWSL’s Bay FC Breaks Women’s Soccer Transfer World Record with Zambia’s Racheal Kundananji [[link removed]]by Margaret Fleming [[link removed]]The league’s record-breaking new media rights deal is trickling down to players. Advertise [[link removed]] Awards [[link removed]] Learning [[link removed]] Video [[link removed]] Podcast [[link removed]] Sports Careers [[link removed]] Written by Eric Fisher [[link removed]], David Rumsey [[link removed]] Edited by Matthew Tabeek [[link removed]], Catherine Chen [[link removed]]

If this email was forwarded to you, you can subscribe here [[link removed]].

Update your preferences [link removed] / Unsubscribe [link removed]

Copyright © 2024 Front Office Sports. All rights reserved.

80 Pine Street Suite 3202 New York, NY 10005