August 15, 2022

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Have you checked out Front Office Sports’ podcast The Leadoff? In today’s edition, Peloton cuts nearly 800 jobs and hikes prices, the Panthers have a repayment plan for the abandoned Rock Hill facility project, China’s cycling market could hit $16.5 billion, and Barcelona offloads a media stake for $102 million. Click here to listen [[link removed]].

Activist Investor Calls on Disney to Spin Off ESPN [[link removed]]

Ron Chenoy-USA TODAY Sports

An activist investor is calling on Disney to let one of the biggest names in sports media chart its own course.

Daniel Loeb’s Third Point has upped [[link removed]] its stake in The Mouse — and penned a letter to CEO Bob Chapek calling on him to spin off ESPN.

“ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting,” Loeb wrote, adding that “most arrangements between the two companies can be replicated contractually.”

Disney has reportedly explored spinning off ESPN, so the latter could pursue sports betting without conflicting with Disney’s family-friendly brand.Chapek said [[link removed]] last year that Disney’s research found “a very significant isolation” in the public perceptions of Disney and ESPN, implying such a move might not impact Disney too much.

Sports betting appears to be coming to ESPN one way or another: In a call with investors following an earnings release last week, Chapek said [[link removed]] Disney was in talks with sports betting companies to integrate betting opportunities during sports broadcasts.

“Our sports fans that are under 30 absolutely require this type of utility,” Chapek explained.

Quite a Quarter

Disney’s revenue rose 26% year-over-year to $21.5 billion in the fiscal quarter ending July 2. ESPN+ subscribers leapt 53% to 22.8 million. Disney+ surpassed analyst expectations in reaching 152.1 million subscribers.

Both Chapek and Tim Bunnell, ESPN’s senior VP of programming and acquisitions, have described ESPN+ as vital to ESPN’s future.

SoulCycle Shutters 23% of Its Studios, Reportedly Cuts 75 Jobs [[link removed]]

Soulcycle

Equinox-owned SoulCycle, known for its indoor cycling and spinning workouts, is closing 19 of its 83 studios in the U.S. and Canada.

SoulCycle CEO Evelyn Webster told [[link removed]] employees the news on Friday, adding that the closures will result in some layoffs. CNN reported [[link removed].] that around 75 of the company’s 1,350 employees will be laid off.

“The timing was appropriate to look at our studio footprint by market to understand whether we continue to believe that we had indeed oversaturated some markets,” Webster said.

Webster stated the company does intend to relocate some employees from the affected locations in New York, California, Massachusetts, Illinois, Florida, Georgia, Washington, Toronto, and Washington, D.C.

A SoulCycle spokesperson told Business Insider that the downsizing was partially based on “shifts as a result of the pandemic.”

In early 2020, SoulCycle launched a connected fitness bike to better compete with companies like Peloton.That year, it recorded [[link removed]] a $350 million loss due to pandemic-related closures.By May 2021, SoulCycle saw its New York membership sales increase 55%. Six of the 19 closures are in New York.By July 2021, more than 50% of SoulCycle’s locations were again open. Fitness Falls

SoulCycle isn’t alone. On Friday, Peloton CEO Barry McCarthy wrote in a letter to employees stating the company would eliminate 784 jobs and increase prices for its products. In July, Peloton announced [[link removed]] it would exit its owned-manufacturing operations.

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Bayern Munich Extends Telekom Deal For $51M Annually [[link removed]]

FC Bayern Munchen

Deutsche Telekom has extended its shirt deal with Bayern Munich for a reported $51 million annually.

The agreement, which runs until 2027, extends [[link removed]] a relationship that dates back to 2002 and has been extended three times.

Worth an extra $5.1 million per season, the deal also includes exclusive access to content offered on FC Bayern.tv on the MagentaTV subscription service.

The agreement will focus on [[link removed]] “the effective support of brand and product communication as well as the successful implementation of sales-supporting measures.”In their time working together, the pair have launched the StadiumVision multimedia experience and 5G coverage in Allianz Arena.

“Thanks to the enormous media presence, innovative energy, and the effects of that, our partnership is worth many times over what we put into it together,” Michael Hagspihl, Deutsche Telekom’s SVP of global strategic projects and partnerships said.

Bayern’s Business

Bayern Munich’s deal extension is the team’s latest business move this month.

On Aug. 3, the club announced [[link removed]] a multiyear deal with Adobe to create personalized experiences for global fans and support the club internally, and on Aug. 5, it renewed [[link removed]] its agreement with software company SAP as part of a three-year deal. The club is reportedly [[link removed]] looking to expand in the U.S., too, by increasing the value of its media rights.

Forbes last valued [[link removed]] the team at $4.275 billion — the fifth-most valuable soccer club in the world.

Conversation Starters Brittney Griner’s legal team has filed [[link removed]] an appeal of her nine-year Russian prison sentence, according to Russian news agencies. Naomi Osaka has signed [[link removed]] five college athletes from multiple sports to promote her suncare brand KINLÒ, which was created specifically for melanin-rich skin. About 3.1 million fans tuned in to MLB’s second-annual Field of Dreams game, only about half [[link removed]] as many as last year’s matchup.

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Market Movers

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

ARMK [[link removed]]

Aramark

[[link removed]]

$37.29

[[link removed]]

+0.57%

[[link removed]] NKE [[link removed]]

Nike, Inc.

[[link removed]]

$116.32

[[link removed]]

+0.77%

[[link removed]] UA [[link removed]]

Under Armour Inc

[[link removed]]

$9.07

[[link removed]]

+0.95%

[[link removed]] LYV [[link removed]]

Live Nation Entertainment Inc

[[link removed]]

$98.48

[[link removed]]

+1.65%

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

Walt Disney Co (The)

[[link removed]]

$124.20

[[link removed]]

+2.97%

[[link removed]] VFC [[link removed]]

VF Corp.

[[link removed]]

$46.93

[[link removed]]

-0.15%

[[link removed]] All as of market close on 8/15/22 What to Watch

The Chicago White Sox (59-56) host the Houston Astros (75-41) on Monday at Guaranteed Rate Field.

How to Watch: 8:10 p.m. ET on FS1

Betting Odds: Astros -1.5 || ML -135 || O/U 8.5

Pick: Expect the Astros to continue their run. Take Houston to cover.

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

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

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