I did a Super Bowl week edition of “Scott’s Takes” with Scott Friedman yesterday. We covered a lot of ground and I talked about the way that the NFL’s On Location program has helped the Super Bowl maintain price integrity. Then, overnight, there were about 1,200 tickets dropped on the secondary market which could impact that price integrity.
In Scott’s honor, I decided I’d jot down 5 things I think I think about SportsBiz right now with a Super Bowl week edition.
Crypto Everywhere and Everything is a Crutch:
I have been investing in cryptocurrencies for the last year or two on the advice of my financial advisor. You shouldn’t ever rush into an investment based on some numpty on the internet.
That said, the way that NFTs and crypto everything has been embraced by the sportsbiz crowd is wild because in general, this is an industry filled with caution and lack of innovation in almost every case.
I mean, sales floors filled with phone crushers is still the norm on too many teams.
The cryptocurrencies and NFT obsession is a crutch, a sugar rush to mask a challenge to redefine the value proposition of sports for a changing audience, pure and simple.
I’d bet money that the Crypto.com sponsorship in LA doesn’t reach the end of its contract, but Vegas won’t take that play.
The rise of betting everywhere will have unintended consequences:
Sure, betting might make baseball popular again or whatever Mark Cuban said on the topic, but building an economy on betting revenues and other vices as the core of your value proposition is probably a dangerous place to be.
I’m not anti-gambling or anti-gaming. In fact, I have tried to sign up for DC’s gaming app several times but the UI is awful and I gave up.
The worrying thing is that the push all-in on gambling seems likely to have tons of unintended consequences that are likely to start popping up in the next few years.
Don’t look at me for answers either. I’d tell you to check out the work that Rob Davies is doing covering gambling for The Guardian. https://twitter.com/ByRobDavies
The gambling hysteria likely opens up the Pandora’s Box of more gambling addiction, alcoholism, financial troubles, and other challenges that the American mental health and health care system won’t and don’t have the capacity to deal with and unless something changes could care less about dealing with.
“Normal” is another BS dodge:
There is no “return to normal”.
Ben Fischer tweeted out a picture of his NY to LA flight during Super Bowl week to highlight the talk about “return to normal” is likely a bit of a stretch.
The reality is that there won’t be a “return to normal” and even if there were, for most businesses that wasn’t a direction that a lot of folks were looking to go down anyway.
There won’t be a “new normal” either because no one knows what the next few years will really look like.
There is likely to just be “now” and that means that each situation will have to be dealt with using the best information that you have on hand and adjusting accordingly.
College sports is looking to re-inflate that bubble, baby:
If one part of the sports business world needed to get its act in order, it was college athletics.
But they are all-in on re-inflating that bubble and pretending that the pandemic didn’t happen, NIL isn’t here, and that everything is a-ok.
The pandemic laid open the amount of debt that many school’s athletic departments are carrying. The way that kid’s health was discarded for the health of the program is another mark on the permanent record of college athletics. And, the continued wild cash splashing on coaches, facilities, and other expenses that don’t seem attached to any sort of results is pretty funny to watch.
Also, the heavy discounts and $6 tickets aren’t a really solid foundation for your business. They almost never work. I say, “almost” because I’ve never seen them work, but someone will have some obscure example involving some esoteric argument that they’ll send me if I say always. In other words, if it is the exception to the rule…it is likely just luck.
The era of wild secondary market spending is over:
A weird thing happens to me.
A lot of people on the primary side are super dismissive of the secondary market and brokers until they need a new job or get fired.
Then, all of a sudden, I get an email or a call that starts with something like, “I’ve always been really interested in the secondary market” or “I want to get into technology” with technology being a stand-in for the secondary market.
I had the chance to spend a week in Las Vegas with the brokers and I came away with a few takeaways that have only hardened since I left Vegas in August:
- The models and decision making power of the secondary market has only increased.
- The ingenuity of the folks working on the secondary market has only increased.
- The rate of learn, adapt, and change that drives any good business has accelerated in the secondary market.
Do I think there are structural challenges, bad activities, or real issues in the secondary market?
Do I think we are going to see wild amounts of money continue to be thrown around to “win” deals that have no chance of paying off?
I think that model was changing before the pandemic and that the pandemic likely put the final nail in the coffin.
Do I expect the secondary market to innovate new business models and new ways to capture value?
I absolutely do.
Originally, I had 9 items on this list. I’ll hold them back for a second list or something else.
If I had to sum up what I think about sportsbiz during Super Bowl week, I’d say that there are some foundational challenges that are being papered over by huge rights’ fees, legacy contracts, and sugar-high tactics. A fundamental rethinking of the value proposition of attending a game at the prices and manner that the industry had come to expect is likely coming sooner rather than later.
And, I’d expect that it won’t be met with a proactive focus on reinvention.
You tell me, the comments are open.