June 27, 2022

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Wimbledon is officially underway [[link removed]], and this year’s favorites, Iga Swiatek and Novak Djokovic, are competing for a record $2.5 million winner’s payout. Notably missing: Russian and Belarusian athletes banned from competition due to the ongoing Ukraine invasion — and over 2,000 ranking points.

Apple, Amazon, Disney Fight For NFL Sunday Ticket [[link removed]]

Kirby Lee-USA TODAY Sports

The NFL is finding a new home for its Sunday Ticket package, and the bidding is down to two of the world’s largest tech companies and one of the world’s largest media conglomerates.

Amazon, Apple, and Disney are all vying [[link removed]] for the out-of-market set, which the NFL reportedly wants to shift at least partly to a streaming property.

The league is seeking $2.5 billion to $3 billion annually for the Sunday Ticket.Disney-owned ESPN is reportedly willing [[link removed]] to pay $1 billion to $1.5 billion. The network is already on the hook for an annual $2.7 billion to continue its broadcast of “Monday Night Football.”Amazon is paying around $1 billion per year for exclusive rights to “Thursday Night Football.”

The league is looking to package Sunday Ticket with a stake in NFL Media, which includes the NFL Network, NFL RedZone, and NFL.com.

The league has a fourth option: put the package on its own streaming service, NFL+, which it plans to launch later this year.

Direct Losses

DirecTV has held the rights to the service since its launch in 2014 and is on the hook for $1.5 billion for the upcoming season. The broadcaster, which requires buyers of the $300 Sunday Ticket package to also purchase its core satellite bundle, has lost roughly $500 million on it each year for several years.

Contractual agreements with Fox and CBS prevent the eventual owner of Sunday Ticket from reducing the price too much below the current $300 annual cost.

USFL to Touch Down in More Markets [[link removed]]

Vasha Hunt-USA TODAY Sports

Ahead of its inaugural championship this weekend, USFL chair Eric Shanks confirmed the league is returning for a second season in more markets.

Shanks, who also serves as CEO and executive producer at Fox Sports, told [[link removed].] Sports Business Journal that the league’s eight teams will play in two-to-four markets during the 2023 season. In its first season, all teams played in Birmingham, where the league’s office is located.

Each of the new markets will house multiple teams, but the USFL will stick with eight teams for its second season. Players reportedly [[link removed]] make $4,500 per game.

“We’ve always had an expansion plan that could potentially come into play in Year 3 and beyond,” Shanks explained. Fox owns the USFL through USFL HoldCo, LLC and committed [[link removed]] $150 million over three years.

The league will stick to a similar schedule — its 36 regular-season TV broadcasts averaged around 715,000 viewers across Fox, NBC, FS1, and USA Network.

The league’s debut game brought in 3.1 million viewers.The last regular-season game had 181,000 viewers.

“I would say yes, it was a profitable property for us,” NBC Sports executive Jon Miller said [[link removed]].

Spring Flings

The USFL’s return was expected but not guaranteed. Several other spring football leagues didn’t make it past one year, including the Alliance of American Football — which averaged 556,000 viewers — and two versions of the XFL.

The XFL, which averaged 1.9 million viewers in its latest iteration, is making a return [[link removed]] next spring.

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The Evolution of Esports and Crypto

Over the last few years, esports and gaming has grown exponentially. What was once only considered a hobby is now a legitimate, competitive segment of the sports world that is constantly evolving.

The rise of blockchain technology [[link removed]] and cryptocurrencies have made a significant impact on the evolution of the esports industry.

In Lesson 3 of Crypto in Sports Essentials [[link removed]], Steve Arhancet, CEO & Owner of Team Liquid, sits down with Team Liquid member and professional gamer, Juan ‘Hungrybox’ DeBiedma, to discuss how the mainstream adoption of cryptocurrencies and NFTs is changing the landscape of the industry and improving the fan experience for all.

Sign up [[link removed]] for the course today.

Allied Esports Posts Record Revenue Amid Mounting Losses [[link removed]]

Allied Esports

Allied Esports Entertainment announced record revenue in its latest earnings report, but also posted losses — a trend that has become increasingly prevalent in the gaming industry.

The esports entertainment company saw its revenue jump [[link removed]] 381% year-over-year to $2.4 million in Q1 2022. Despite the encouraging results, Allied posted a net loss of $3.8 million during the quarter, up from a loss of $3.3 million in Q1 2021.

Total costs and expenses reached $6.2 million in Q1 2022, a 15% increase year-over-year.

Allied posted record results behind increased traffic at its HyperX Arena in Las Vegas.During Q1, the company launched its first original branded content offering and NFTs.It produced 92 events with 68 proprietary events and 24 third-party productions in Q1.It also renewed its deal with NASCAR to host eNASCAR Arcade events.

Luckily, the company continues to invest in its balance sheet, which reached $95.7 million in Q1.

Troubling Trend

Allied is another example of mounting losses for gaming-related companies due to increased spending on marketing and securing deals.

Esports Entertainment Group reported [[link removed]] a net loss of $63.8 million in fiscal Q3 compared to $15.7 million in revenue, while esports betting company Rivalry posted [[link removed]] a net loss of $19.2 million in 2021 against $8.6 million in revenue.

In April, FaZe Clan submitted [[link removed]] an amended filing to the SEC indicating that it posted an adjusted EBITDA loss of $28.7 million in FY2021, compared to a projected loss of $19 million.

Conversation Starters In The Leadoff, ESPN scores U.S. Formula 1 media rights, esports collective FaZe Clan gains approval by the SEC to go public, Ligue 1 club Angers is reportedly set to be sold for $84 million, and Turkey’s top two soccer leagues renew their deal with BeIN Sports. Click here to listen [[link removed]]. Russian authorities have set [[link removed]] July 1st as the start date for seven-time WNBA All-Star Brittney Griner’s trial for alleged cannabis possession. Kith and TaylorMade Golf have partnered [[link removed]] to unveil a line of apparel, equipment, accessories, and J.R. Smith will be the face of it. Over the past several months, collectives have been framed as the scandalous side of NIL. But athletes and industry experts told Front Office Sports [[link removed]] that currently, collectives are much less powerful than the headlines would suggest.

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The Continued Growth of Pickleball

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Our most recent report [[link removed]], The Continued Growth of Pickleball, explores:

Pickleball’s growth to 4.8 million players last year in the U.S., representing a participation growth rate of 39.3% since 2019. The U.S. lack of current infrastructure to support demand for the sport with only 10,000 places to play by USA Pickleball’s count. How the world’s best players currently earn around $200,000 annually through prize money, sponsorships, and other revenue streams.

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Market Movers

U.S. stocks experienced declines across all three major indexes on Monday. Here’s a look at how sports-related stocks performed:

WWE [[link removed]]

World Wrestling Entertainment, Inc.

[[link removed]]

$60.90

[[link removed]]

+0.61%

[[link removed]] GOLF [[link removed]]

Acushnet Holdings Corp

[[link removed]]

$42.26

[[link removed]]

+2.80%

[[link removed]] T [[link removed]]

AT&T, Inc.

[[link removed]]

$20.77

[[link removed]]

-0.98%

[[link removed]] MGM [[link removed]]

MGM Resorts International

[[link removed]]

$30.02

[[link removed]]

-1.23%

[[link removed]] DIS [[link removed]]

Walt Disney Co (The)

[[link removed]]

$96.45

[[link removed]]

-1.50%

[[link removed]] (Note: All as of market close on 6/27/22) What to Watch

The Las Vegas Aces (13-4) face the Los Angeles Sparks (7-10) on Monday night at Crypto.com Arena.

How to Watch: 10:30 p.m. ET on NBA TV

Betting Odds: Aces -8 || ML -330 || O/U 175

Pick: Expect the Aces to rebound after two consecutive losses. Take Las Vegas to cover.

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Written by Owen Poindexter [[link removed]], Abigail Gentrup [[link removed]], Justin Byers [[link removed]] Edited by Matthew Tabeek [[link removed]], Brian Krikorian [[link removed]]

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