August 8, 2024

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Good morning! We’re diving into this week’s market turmoil. The sports and media sectors were hit hard—particularly Warner Bros. Discovery. How are brands reacting to the chaos?

— Colin Salao [[link removed]], David Rumsey [[link removed]], and Amanda Christovich [[link removed]]

WBD Plunges Amid Bad Week in Sports Stocks [[link removed]]

Gary A. Vasquez-USA TODAY Sports

Monday was a turbulent day for the stock market as the Dow Jones Industrial Average dropped more than 1,000 points, or about 2.6%.

The crash was a reaction to Japan’s Nikkei 225 index slipping by more than 12%—its steepest drop since 1987—and to an increase in the U.S. unemployment rate, which rose to 4.3%, the highest since October 2021.

The S&P 500 fell by 3% on Monday—its biggest single-day drop in two years—and around 6% when extending to Thursday. The Nikkei recovered by 11% on Tuesday—still short of its Monday drop, but enough to stop the heavy bleeding for many of the stocks in the U.S. as the S&P 500 rose by 1%.

The broader sports sector was not spared in the market crash.

Sports Stock Round-Up

Media: Companies like tech giants Amazon and Apple were hit hard. Amazon is down 14% over the last five days, but most of the dip [[link removed]] came before Monday’s crash as the company announced on Thursday that it had missed revenue estimates in Q2.

Warner Bros. Discovery, which recently lost [[link removed]] its NBA broadcast rights, is down 10% over the last five days as of Wednesday’s market close. It dipped [[link removed]] another 9% in the hour following market close after announcing a quarterly operating loss of more than $10 billion.

The company is looking to sell off some assets to recoup losses. It’s also suing [[link removed]] the NBA for breach of contract, as the TNT parent company had matching rights to the league’s media-rights deal that were not honored by the league. Despite the shaky financial situation, CEO David Zaslav said Wednesday that he feels “very good about where we are.”

Disney had better news on its streaming side, with its direct-to-consumer unit reporting its first profitable [[link removed]] quarter on Wednesday, despite its stock dipping around 9% since last week.

Apparel: Adidas, Under Armour, and Lululemon all saw their stocks begin to dip last Thursday, declining by at least 5% over the last five days. Nike did not feel the drop last week the same way its competitors did, even seeing a slight gain Friday before a 4% dip Monday. However, The Swoosh is navigating a tumultuous [[link removed]] year when its stock is down about 32%.

Sports betting: DraftKings reported its first profitable quarter last week, but its stock is down nearly 20% since Thursday. The betting giant’s stock crash was triggered by an announcement [[link removed]] it would impose a tax on winnings from bettors in certain states and issue a stock buyback worth $1 billion.

Browns Push for $2.4 Billion Domed Stadium in Cleveland Suburbs [[link removed]]

HKS/Cleveland Browns

The Browns have seemingly made their preference known for a new stadium site, as the NFL team looks beyond its current lease that ends in 2028.

On Wednesday afternoon, the franchise released renderings and a hype video [[link removed]] for a proposed $2.4 billion domed venue in suburban Brook Park, about 15 miles away from the club’s current downtown stadium. “The more we have explored the Brook Park option, the more attractive it has become,” the Browns wrote in a letter to fans [[link removed]]. “And we are excited to share the current vision with you.”

This comes less than a week after Cleveland mayor Justin Bibb announced [[link removed]] a $461 million offer for publicly financed renovations to the Browns’ current open-air stadium. “Losing the Browns would harm Cleveland,” Bibb said. The Browns said they are evaluating that proposal and have requested additional information from the city.

Dome Sweet Dome

The Browns want to build a dome so they can bid on major events like Super Bowls, Final Fours, College Football Playoff games, MMA fights, and concerts. But the team said it can’t put a roof on its current stadium due to economic constraints and FAA restrictions.

The Brook Park site is the most compelling dome option for the Browns due to what the team calls its “central location for our regional fan base” and “proximity to downtown.”

Money Talks

The Browns said they are seeking a 50-50 partnership to fund the new domed stadium, excluding cost overruns, which the team would cover. That would come out to $1.2 billion in public money under the current terms. Earlier this year, the Brook Park City Council passed [[link removed]] a resolution encouraging the Browns to strongly consider building a stadium there.

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The Next Women’s Sports Win May Come From March Madness

Kirby Lee-USA TODAY Sports

As women’s sports continue to reap more financial rewards than ever before, March Madness is one step closer to equalizing the men’s and women’s basketball tournaments.

The NCAA’s Division I Board of Directors has released a proposal for distributing a pot of up to $25 million in prize money in the women’s March Madness tournament, starting with the 2025 event. It will be a similar system to the units the men’s teams and their conference receive for participating each spring. This year, those were worth [[link removed]] roughly $2 million each, from a pool of $226 million.

The women’s March Madness proposal will not see a final vote until the NCAA convention in January. Front Office Sports college expert Amanda Christovich has more details on the development, which you can read here [[link removed]].

Under ESPN’s new media-rights deal [[link removed]] for 40 NCAA championships, women’s March Madness is valued at $65 million annually. That steep price tag is leading the momentum around creating payment units for the women’s tournament.

That shift is coinciding with an upcoming revenue boost for the WNBA, which has sealed new media-rights deals worth at least $200 million annually, and potentially more [[link removed]] after additional contracts are signed.

But the Women’s National Basketball Players Association has said [[link removed]] it believes the new media deals still undervalue the league. The NBA led negotiations and ended up striking contracts with ESPN, NBCUniversal, and Amazon—the three companies that agreed to pay $77 billion for NBA rights from 2025 to 2036.

The ESPN deal that includes women’s March Madness runs through 2032, the same year that the men’s contract with CBS and TNT Sports expires. The idea of bringing the men’s and women’s media rights and even Final Fours together has already gained some traction [[link removed]]. Perhaps by early next decade, March Madness units won’t be the only thing the two tournaments share.

FRONT OFFICE SPORTS TODAY The Evolution of the Olympics

FOS illustration

Carli Lloyd won two Olympic gold medals with the U.S. women’s national team, but she has been a critic in recent years of the American women’s soccer program. She joins the show to discuss why she took that stance and how things have changed under coach Emma Hayes. Later, we hear from Caitlyn Jenner, who won Olympic gold in 1976, and sees that era as the tournament’s glory days.

🎧 Watch, listen, and subscribe on Apple [[link removed]], Spotify [[link removed]], and YouTube [[link removed]].

ONE BIG FIG Big-League Bucks

Kevin Jairaj-USA TODAY Sports

$374 million

Total amount of signing-bonus money that MLB clubs have given rookies drafted last month. That’s a record amount, eclipsing last year’s all-time high by more than $24 million, according to Forbes [[link removed]].

Reds pitcher Chase Burns (selected No. 2) and Rockies outfielder Charlie Condon (No. 3) each received [[link removed]] a signing bonus of $9.25 million, eclipsing the then record $9.2 million Pirates pitcher Paul Skenes received last year, before turning into one of the new faces [[link removed]] of MLB this season.

FRONT OFFICE SPORTS AWARDS

Award Deadline Approaching

College athletic departments support athletes across a multitude of sports and through a variety of verticals. From education services to training facilities, athletic departments uniquely impact college athletes.

Powered by Sports Innovation Lab, the Best College Athletic Departments Award uses data-driven methodology to identify which programs are leading in the space.

This is the last chance to submit [[link removed]] for this inaugural award. Don’t miss your opportunity to recognize your school. Deadline to submit is Aug. 18 at 11:59 p.m. ET.

Conversation Starters The Titans will launch a new, dedicated fan section in their future stadium—the Mosh Pit. Check it out [[link removed]]. Penn State’s football team just upgraded its menus and dining as part of a $31.9 million facility renovation. Take a look [[link removed]]. Minor League Baseball is giving away [[link removed]] five “Munchie Mitts” that can hold ketchup, mustard, a hot dog, a drink, and a baseball. Editors’ Picks How a Shot at Deion Sanders’s Mom Fueled a Viral Sunglasses Campaign [[link removed]]by Amanda Christovich [[link removed]]It all started with one comment from CSU coach Jay Norvell. Why Shilo Sanders’s NIL Deals Are an Issue in His Ongoing Bankruptcy [[link removed]]by Alex Schiffer [[link removed]]A bankruptcy trustee says Sanders hasn’t been transparent about his NIL income. ‘Kangaroo Court’ NCAA Drops Hammer on NFL Coach Jim Harbaugh [[link removed]]by Margaret Fleming [[link removed]]The sanctions are not related to the sign-stealing scandal. Question of the Day

Do you think taxpayer dollars should be used to help fund NFL stadiums?

Yes [[link removed]] No [[link removed]]

Wednesday’s result: 73% of respondents think Team USA should pay its gold medalists more than $37,500.

Advertise [[link removed]] Awards [[link removed]] Learning [[link removed]] Video [[link removed]] Podcast [[link removed]] Sports Careers [[link removed]] Written by Colin Salao [[link removed]], David Rumsey [[link removed]], Amanda Christovich [[link removed]] Edited by Matthew Tabeek [[link removed]], Or Moyal [[link removed]], Catherine Chen [[link removed]]

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