Hey y’all!
A few articles caught my eye today and I don’t think they need a full analysis or write-up, but a few ideas and thoughts may add some value.
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Arts Council gives ENO £24M to help with a move to new permanent home:
I follow these things because I love England and the arts.
I also appreciate the way that the arts are offered funding in Europe, a move I wish we had more of in the United States because the arts can be a significant booster of cities, communities, and people.
As I read this, I do wonder if there won’t be unintended consequences to the decision to move the English National Opera to a new city and out of London.
Why?
Because I’ve seen pieces about artists quitting if the Opera moves out of London.
This makes sense because if you move too far, you might miss out on opportunities.
At the same time, have the changes COVID introduced made this less of a point of contention?
Something to watch!
Biden administration reinterprets antitrust rules:
This is exciting because this is all about competition.
Something I’ve spent a lot more time talking about lately.
We’ve seen consolidation in the ticket game because there is really one large player and a few other businesses nibbling around the edges in the United States.
This has made the secondary market even more important due to the need for competition to increase efforts at marketing and selling tickets to consumers.
At the same time, we’ve seen lack of competition and exclusive deals erode the effectiveness and innovation in marketing and sales programs.
ESPN makes money, but for how long?
I’ve been wondering how long the cable bundle would last.
I’ve also been wondering how long it would be before we started to see the TV model start to strain and start causing teams problems.
The cable bundle is still kicking.
This year, we’ve seen the TV model start to buckle as we’ve seen the RSN business start to look unsustainable.
Teams like the Suns and Jazz have taken one route. MLB is helping some of their teams go another. Other teams are still on the RSN deals that they signed.
MLS went to Apple.
In fiscal year 2023, ESPN made $3B which is great until you realize it is 29% less than the year before.
71 million people pay the $8+ a month to ESPN through their cable bundles. Again, solid until you realize that 10 years ago there were more than 100 million subscribers.
Why does this matter?
Because the TV money is the biggest bucket of team revenue.
NFL teams get around $300M a year from their TV contract. My back of the envelope math tells me that is probably somewhere around 50%+ of their revenue.
MLB’s teams get around $100M. I hate averages, but the average RSN deal for an MLB team is around $85M according to research reported on by the Wall Street Journal.
This might be a slightly lower percentage of total revenue, but probably still in the 40% range.
The 49ers were reported to have the most ticket sales of an NFL team and their numbers were around $135M. Their total revenues were projected at $575M.
I’ve gone a long way with this, but it raises the question: where will the money come from if the cable/media rights system starts to buckle?
Tony Knopp posted about the potential ‘blood bath’ in corporate ticketing if ticket practices don’t change.
I’ve been on this beat for years.
I’ve always been in the vein of “if you don’t disrupt your business, someone else will.”
This feels like a moment where there is disruption being brought down that people weren’t necessarily ready for.
The question now: how do folks react to this?
I got a note from a colleague that has worked on the primary and secondary market that mentioned that people are starting to catch on to the way that the cookie cutter method of managing sports teams brands isn’t really working and that the rising tide of TV money, selling to the secondary market, and raising prices has started to not work as well either.
What do y’all think?
Anyway, I’ve been thinking about these 3 stories and putting together a few cool things.
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