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Seider’s next deal
Was discussed in terms of bridge now, then 11mil in 2 years or 8mil+ max term now. The more I see him play the more I would lean toward getting the blue liner on max term sooner rather than later. I feel like Raymond may be either bridge or shorter term allowing him to perform “upward”. I have some of your projections, let me know where you think that is going and what strategy you would employ with Seider and/or Raymond.
Here it is, fair warning. If you don’t want broadcast updates, stop reading now.
The parent company of ESPN did their Q4 earnings report (Disney). The CEO Bob Iger also did a CNBC interview before the official report. In both he mentioned that the goal is for ESPN to be the “Digital Leader in Sports”. He then repeated on the earnings call that ESPN is being pushed to DTC (streaming) and ADTC (ad based streaming). The CNBC interviewer caught the CEO a little off guard with the next question. They asked if he was concerned about retaining the NBA. Clearly displeased, Bob said (on multiple issues) he won’t discuss negotiations.
Here’s the issue. The NBA wants 75 Billion for their next deal from ESPN. Keep in mind, right now Bally has the broadcast rights for around 15 teams. Currently, ESPN pays the NBA 1.4 billion per season. Compare that to the NHL deal. 330 million. 1.4 billion is more than half of the HRR goal the current cap is based on (roughly 5 billion). But to ESPN, that deal is worth 1/4th of what the NBA is worth. Do I think the NBA will get 75 billion? Yes. The reason is simple. 4 companies now want live sports (Amazon, Youtube TV, Hulu/Disney and Apple). Youtube got NFL Sunday ticket and it was a shock to DirecTV. They are down over 600k subs and continue to lose.
If ESPN loses the NBA, that’s going to have massive ramifications. Once ESPN pulls out of cable completely not all the viewers are going to follow. We’ve already seen a drop in viewership just by having too many places to catch games. The NHL needs to figure this out and fast. Bally is going and will be gone. Bob was asked if ESPN would pick up the local markets losing their providers (fairly clear reference to Bally) the answer was if that market was profitable then maybe.
Expect ESPN to push more and more into streaming and increase a la carte subscription. Get VPN fluent and hope the current bill banning VPNs from consumer use (attached to a Tik Tok bill) doesn’t get passed. ESPN will also crack down on password sharing as will Disney and Hulu.
As for Bally, the irony is that without Disney Bally wouldn’t exist. After Disney bought Fox entertainment, they sold 19 fox sports markets to Bally for 8 billion (almost the exact same amount as their bankruptcy). It must be coincidental that a chunk of those were weaker markets and the mouse doesn’t want them back.
Bally started having issues broadcasting NBA and NHL games with the company blaming their Internet provider. In court, they’ve asked for permission not to pay certain bills. The two may or may not be related. They cut revenues by 20% and have kicked AZ off their network as 2 other markets (Chicago and San Diego) got permission to leave the provider.
Bottom line, Detroit is part of what Bally asked to be able to keep (Great Lakes area sports). I don’t think it will be an issue for them to go full ESPN if needs be. Creating a new local broadcast network could be a nightmare and isn’t cheap.
For Red Wings fans, I’m optimistic that there will be an available platform. I personally think it will be through ESPN, though Bally is pushing Fubo in their ad slots which signals a partnership. Just keep yourself informed and watch for changes in NHL talking points. I was mocked when it was announced the NHL could get 2 new markets and I said that won’t be happening right now. Well, the new releases have said there’s “no need for expansion right now”. Shocker. The 5 states announced included Utah, Georgia (Atlanta getting a 3rd crack at it?) and New Mexico. What I think will actually happen is that AZ will move to Utah after the new owner’s 3rd stadium proposal is shot down. Winnipeg has to recover immediate income as they (along with everyone else) are still carrying debt related to the lockdown. Irony is that AZ is the old Winnipeg, and what if the jets went back to Atlanta? Insane possibilities.
Prepare yourself for another flat cap and journos now blaming players instead of the GMs that “guaranteed” that the cap would be around 100m by now. Even before lockdown, players were paying escrow meaning that the HRR target wasn’t hit since the 50/50 split inception. Players would have to allow a rise in escrow beyond 20% for the cap to go up. Meaning, the owners get more and spend the same or less. Not going over well.
Overall, ESPN had 3 rounds of layoffs this year. Their net value is around 20 billion which is less (without factoring inflation) than a decade ago. It still baffles me how much more the NBA gets. Their draw is around 2 million per game, the NHL numbers I’m hearing from people who know Nielsen (NHL puts out inflated numbers) may be at 600k per game. Down 250k from the NBC days. Watch if you can, encourage others to watch. In a country of 330 million people (USA) and another with around 40 million (Canada) there has to be a way to get people back. For now, teams need to reduce spending (limiting travel outside of conference would help a lot). The NHL has added advertising all over the place. Betting residuals aren’t what was hoped for, but ESPN bet opens next week. We’ll see if that moves the needle.
Thank you all for the support, this was a tough call to muddle through but for those who don’t like streaming or have Bally it offered clarity. Disney wants to get away from linear TV almost altogether. Plan accordingly.
Detroit Red Wings Blogger • 
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