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Show.

With the Stugartz Podcast.

I love talking to you guys about topics that no one else talks about at the level that you guys have lived them. David Samson, John Skipper. John, of course, is smiling, grinning. He loves doing this. David is tense as if he's a coiled Panther.

Well, he is a coiled Panther, isn't he?

We're three minutes past when we should have started, and I prefer to just stay on schedule as much as possible. But it's like herding cats around here.

Well- Panthers.

We were a hurting panto. We were prepared. We were ready. And you're off topic, John. You're all over the place. I just need you focused.

Okay. I like Lucy Goosey.

I'm honing in.

All right, we're all honed in.

This is me honing in.

The goose is less loose. John has been scolded. Do not move away from your microphone, but that is impossible physically, as you'll find out on YouTube or the.

Draftings Network. Which is amazing that you bought a microphone for him where he cannot move and you know that he always moves. That is not taking care of your CEO.

I'm not good at managing up, David. That's a difference between you and me. I want to get, though, to what the people who are managing the world of streaming have promised us. John, I'll start with you because here's a quote from The Globe and Mail, and it begins like this, quote, Streaming was supposed to make things cheaper and easier for sports fans, but for many, the opposite is turning out to be true. And you're already smiling, but to make the point, it's about how fans are confused. They don't know where to find their games. They're paying more than they ever have in totality. We don't know how to cancel our streaming services. We have to watch games. It's all very bewildering. So what part of this, John, guy who presided over ESPN, the greatest business in the history of media and certainly linear cable television. What do you object to there?

What I object to is it's a supposition that is completely and utterly inaccurate. No serious business person ever said, Oh, the great news about streaming is we'll be able to deliver to people cheaper and easier than we're currently doing. I said 8,000 times, and it may be the only thing that I'm going to assert that I was right about, which is, Gee, you're all going to regret the decline of the cable bundle because it was the greatest entertainment value in the history of entertainment. For about $100 a month, I know that we all experience $300 and $400 cable bills, but most people did not. The average cable bill was about a hundred bucks. Everybody said that's too much. They believed that if you extracted the nine things you were watching out of the 500, that you would pay nine, five hundredth of what you were paying. That was absurd on the face of it. You were getting the equivalent of a great buffet dinner where you got to get shrimp cheaper than you could buy shrimp by itself in a restaurant.

But you also risk stomach food poisoning. So I think that where we disagree significantly- Oh, is that at all? -is that I'm more than happy. The All-You-Can-Eat 399 buffet that you are describing, the famous All-You-Can-Eat pre-COVID, that was frequented by Randy Quade in vacation. That is not frequented by fine diners or even middle fine diners, not even the McDonald's crowd. The whole point of streaming was supposed to be, and that's why I'm fine with this article because the real issue is, where do I find my games? That's what people are more complaining about. They're on every channel. They're on some this week, some last week. Yankees fans have a big problem with this. Every day, different. My view has been streaming has been terrific for people who have pointed interests. You, the old school guy, wants to keep appealing to people who are, I'm neither here nor there. I want the whole buffet. But those people are being squozened out.

Maybe my analogy was slightly miscalculated. You may be right. Because I actually believe it was the buffet of fine dining. You were getting everything you needed and the best of it for $100. And your belief that you could extract only the sports from the bundle and only pay $35, I don't know how anybody ever made that supposition.

There's a lot of people who don't watch sports. They don't. I think it's very important if we're going to talk about why teams are struggling and why leagues are concerned is when teams start telling you, and this is what executives are saying all the time, Our reach is so much greater now that the cable bundles disappeared and the regional networks are bankrupt. We're showing it for free. Where's the money coming from? You said maybe 10 % of the revenue will ever come back in the next five years. Agents are saying it's all back already. Team presidents are lying, saying, This is great, everyone can watch it. Where's the money? The money comes from the people who were paying for what they didn't want.

That may be true. Of course, I'm going to comment on the other thing, which is the notion that the number of people who could get your games ever mattered. Everybody who ever let ESPN pay them more money to put it on a cable channel that was less distributed than Free Over the Air television puts the lie to the idea. I believe you agree with me on this that the front offices of most sports companies or sports associations are overwhomely focused on making the content available to the most people possible. They're focused on getting the most money possible for the content. And of course, you get more money for content that is more difficult to acquire inexpensively. Why do you think clubs cost more than it costs more to go to a club that's a restaurant than a restaurant is not a club? If you let everybody.

In- It's the same concept as scripted versus unscripted in Hollywood. Why are we seeing so much more unscripted television? Not just because of the strike. This was happening well before all the strikes. It's way cheaper. You don't do first look deals. You don't need to have developments. You don't need to pitch 10 ideas that cost money to write and to figure out you come up with another ridiculous game show, and I love reality shows, was on one. It's cheaper, and you're getting the same revenue for it if you're the network. Why would you not do it? So for sports teams, if you're getting more money to show it to fewer people, no problem. We'll show it to fewer people.

Well, you're maximizing for the variable of cash, of money, shockingly, in all of this. But I want to point out that when it comes to the money spent by sports fans, let's hone in on them specifically as our target demo here. If the concern is, how am I spending more now than I was before? Is any of that eye-opening to you? John is indicating that he saw this coming, right? The idea that, in fact, the buffet, the steak tips that you get there are college football games, the high end steak tips, right? You're going to pay more for that without the package that I have negotiated that will, of course, force the other non-sports fans at this dining, at this restaurant, excuse me, to actually pay for the stuff they're never.

Going to eat. It's brilliant because that's how every buffet actually works, where there is a base amount. You get this food for your $29.99, and if you'd like to upgrade to Waguih, it's plus $48. Or if you want to upgrade to this type of shrimp, why can't sports and our viewing habits be the same thing and finish my thought, that's the cable bundle. It's exactly what the cable bundle was.

Yes. And all I would say, I'll make a future prediction it's going to get worse and it's going to get more expensive. There was lots of derision. When I suggested that the Super Bowl will ultimately be a pay-per-view event. You're going to see more of that. You're going to see it cost more and more because sports is the most passionate interest most viewers have, and they will pay the most money to get their sports. They will love to complain about it, but they're going to pay the money to get the sports and it is going to remain hard to figure out where to go. It's going to remain hard.

To accept. Ease of use is a.

Problem right now. Who's getting the money? You're saying that there'll be more money because the leagues aren't necessarily, the teams, the players, the extra money that people are paying over the cable bundle to get their individual streams, streaming networks plus sports games, where do you think that money.

Is going? Well, the way the money always works is it's paid by the consumer, it goes to the distributor/broadcaster, and then they send it to the leagues. And that's what's going to continue to happen. The content providers? Yeah. So the content providers will end up with the money. That's the.

Way it works. Will the content.

Providers- Oh, no. The money will end up with the leagues. It starts with the consumers, goes to distributors, broadcasters, and they end up paying it to the league. Now, that money lags, meaning they may pay more money to get the same rights from the league, and then they try to figure out more ways to make money from consumers. Consumers will end up paying more money. That money eventually will end up in.

The league spot. So then what I'm trying to come to gross with is my belief that going to streaming and having no RSN, I believe that will be fewer dollars for me from a team standpoint. Our broadcast revenue will go down.

You will agree. As a front-office executive.

As someone running a team, we're the content provider. We provide the live content, and we want to get paid for that.

Okay, this speaks to the larger question, maybe, right? The macro question here is whether sports itself, the teams, the leagues will regret the revolution that they've ushered in.

I'm not sure they will regret it. I think the group that's going to suffer the most here, the fans are going to suffer some sense of displacement. It's going to cost more money. This is going to be most disruptive to the broadcast distributors. They are going to be the ones who make less money. And I think that's being proved right now in the fact that ESPN and they did release their revenues for the first time, their revenues are down over historical highs. And I think the traditional broadcasters and the people who relied upon the previous distribution system are going to suffer the most in this.

But my hypothesis is that ESPN is losing money because they counted on so many dollars from the old cable way. Forget that advertising revenue may be up or down, but just because the number of subscribers is down and their revenue was often a multiple of subscribers.

To be fair, they're not losing money.

They are making less.

Their profits are declining.

I love that.

Thank you. But it's true. They are still making considerable.

Amounts of money. Yes, they are.

But the trendline is suggesting that when you remove the... And I suppose it's almost a beautifully desperate codependence in the way that we're suggesting, like, Oh, these distributors, the broadcasters, they need sports in a way that the streamers do not. And once you remove that level of desperation, the question then, Well, can you possibly be making as much money from a less desperate buyer?

So this is where my head is to remember back in the day, an unfortunate Levitard expression, what jump-started Fox? I always have thought that what jump-started Fox was getting the NFL rights, that they used that as a loss leader to try to buttress the rest of their scripted programming and to bring attention to Sunday night shows, etc. Do you recall? Do you feel the same way about what they did with Rights?

That is the traditional narrative of what happened with Foxbrook.

Is that not correct?

Yes, I think it is correct.

So is it not true that streamers acting like traditional networks would be willing to use sports in the same way?

I do not know because sports is not and content is not their core business. I don't know whether Apple is going to believe it makes sense to deficit spend on sports. For what?

This is exactly where my head is.

Well, this is the question of desperation.

This is it. Because we're looking at, Adam Silver specifically, is looking for Amazon to do its own package. Adam Silver is looking to triple his rights fees in a bubble that will never burst. He's doing it by adding competition, except the competition is not Jonesing for sports content. Look at what Netflix is willing to do for its, quote-unquote, sports content. They're willing to do live crap. That's not even... It's literally crap.

Well, it's not literally people.

Crapping live. By the way, that would do better and sound better and even.

Look better. That's separate from Netflix's program.

Yeah. That make it an afraid. So what happens when the streamers say, you call it deficit spending. That's a great word for losing money.

It's a great term of art.

That just means that it's a waste of money.

Well, I don't know that I would agree with that. There are.

Things- We have different political views. Deficit spending is difficult to prove.

Okay, I'll accept that it's difficult to prove to you and not attempt to do it in the short time we have. I will go back, though. I believe that the fans are going to find it somewhat bewildering and more expensive. I believe that the traditional distributors and broadcasters are going to find that the new business model is not as good as the old business model. I believe that the sports rights holders themselves will suffer the least.

Well, let me ask a forward-thinking question based off of that theory, which is, do you then see the streaming landscape re-bundling, recreating, chasing the buffet-style strategy that they ruined to the point that we are now sitting here talking about all of it.

You will have some of the traditional distributors and some of the new streamers will serve as aggregators. This will get less confusing because you'll be able to go on to Apple or Netflix or Comcast, Xfinity or Charter Spectrum and say, I want to get all of the Yankees games. I want to get all of the Ranger games. How do I do that? And they will say, Here's how you do it. You click here, here, here and here, and you'll get every sports event you want to get. And here's what it will cost you. And the person will go, Well, damn, I should have just stuck with the cable bundle.

It's less expensive. Wouldn't you need multilevel authentication for that? Which was a huge issue in baseball with people wanting, like ESPN, wanting their own level of authentication and not letting MLB and MLB wanted authentication. Authentication means how many times do I have to reenter my username.

And password? No, because it won't be. You'll be getting it from that aggregator distributor as opposed to I bought it over here, but I want to watch it on my current system. So I need to authenticate that my current system, now that I bought it over here. You'll just buy it in one place and you'll get.

It all. So you think... Now I'm thinking about fans because this solves the issue. So what Skipper, I think, is saying is you don't need to worry about where you're going to find your games anymore because everywhere you look, once everything settles, whether you go to Apple or Amazon or Netflix or or whatever, you'll be able to access any content you want from any of the other services.

Depending on web, and you can enter the paywall, so to speak. You can walk through it if.

You've paid. Issue over.

Well, you pay to one person. The problem was before you were paying for somebody who had it exclusively on one medium and you wanted to watch it on another medium. I want to watch it on my phone, but you, Fox, own it for your television linear station. That's not going to matter anymore. Somebody has to be working right now on the ability to go to Xfinity with Comcast and say, Gee, I want to watch all the Yankee games. I know that I can buy all the services that have Yankee games on Xfinity? You can. And they'll say, Check and buy all these services, and you'll get it. By the way, the Charter Spectrum deal with the Walt Disney Company ended when Spectrum agreed to pay the increases they wanted or something approximating it. And the Walt Disney Company agreed to let Spectrum sell Disney Plus, Hulu, ESPN Plus. That's the beginning of that. Spectrum is going to want to say, Okay, great. You want the Yankee Games? You got to buy Yes! Network. You got to buy ESPN. You got to buyApple, or you got to buy Amazon.

You got to go to the buffet.

I'm going to take the under on that.

Because- On what?

What John is hypothesizing here, I believe, and again, I may be confused, one place I can go and get whatever I want.

No, you won't get what you want. You'll be able to subscribe to everybody.

Through a distributor. But that exists now on Hulu. I can subscribe to HBO, I can subscribe to Showtime and Max. I can do everything under Hulu.

Let me refocus it a little bit, because that's about ease of use. And I think what we're really talking about, though, is whether there is a world in which on a la carte- No.

-is ever going to be cheaper for the average No.

Yes, we have to get to that world. That is the whole purpose of what streamers are trying to do, is to have people pay for only what they want, which is the biggest concern that leagues have because more people will pay for the Yankees than for the Royals.

Well, why does anybody believe the streamers won't to only sell you what you want? They want to sell you-.

Yes, that is what I'm thinking about.

-whatever Roystract the most money from your wallet. They're not going to say yes. You will not have to subscribe to the YES network. You just get the Yankees games that are on the YES network for less than the YES network.

That's exactly where we're trying to go. That's what the YES app is, where you can just get the YES app and buy Yankees games.

Well, you can, but you have to buy it from the YES app.

Correct. Okay. What we're saying is that that is getting paid for what you want.

What.

Bigger example of a.

Card is that? And you will find out that if you want six Yankee games, you might as well buy the whole year.

They do that. That's just pricing, where you incentivize people. That's the.

Thing where you- But you're leading people to the false hope that, Oh, I'm now spending $300 on sports, but I only want to watch these 38 games. It's a tricky-Those 38 games are going to cost $10 a piece, and it's going to cost you 380.

The world of consumers, their job is to figure that out now, and it's being figured out, and that's the problem, is that what's happening is that consumers are saying, Wait a minute, we were promised cheaper.

By whom? Who promised them cheaper?

By the world, by God. It doesn't matter. Once it's perception, it's reality.

No, it's not. Perception, I love that people say perception is reality. It's not reality. The fact that a bunch of people perceive that there was not an insurrection on January sixth does not mean that there was not. There was. It does not mean that anybody promised them they were going to get sports for free. So that's the reality. The reality is that analysts who wanted to disrupt the old system made a promise that they weren't responsible for keeping for other people, and nobody is going to keep that promise. Sports fans are going to pay more to get less consistently over the.

Next few years. We're in the media business. Perception is reality. We could argue this for 20 minutes if you want. But hold on.

I get the epistemological perspective that David is bringing to this conflict, but I think it's also worth pointing out in David's defense that whether or not it's a promise, there is a logic. John's position, which is persuasive to me now as I am bewildered as a consumer, a sports fan, as to how I'm paying so much more and having a worse experience watching games, despite having all this better technology. The promise is in the logic of if you don't pay for the stuff you don't watch, therefore you will pay less. What John is saying, the cartel of the buffet has always treated you better than you appreciate it. It's a confusing thing that only now at this table, really, do I appreciate the persuasiveness of it because on paper, it doesn't make any.

Fucking sense. I'm taking the other side because I want you to realize that that will only last so long. The cartel of the buffet is a beautifully put concept because it is a cartel. And the reason it's a cartel is that you can't go anywhere else. That's the purpose of a cartel. It becomes a monopoly. If you want this and you want it because you're addicted to it and we're going to make you addicted to it, you have to get it from us and pay us. Then we're going to kill the middleman sometimes literally, but generally figuratively.

In.

The metaphor? In the metaphor. That's what the.

Cartel does. But it's funny. I'm taking your analogy. I dealt with lots of people at Leagues who for years told me, StreamY is going to lead to our taking our own rights back and we're going to get rid of middleman, middleperson. They've never been able to do that because.

In order- They're doing it right now. Right now. Yes, they are doing it right now. The NBA is getting back all of their rights. All the teams, the deal that just got done with Diamond in bankruptcy court, part of their reorganization, is that the NBA has a one-year deal with all the RSN teams. The Regional Sports Networks. The Regional sports networks, all the Diamond teams. But after the year is over, all the rights revert back to the NBA. And they will own all those rights to monetize as they wish.

As opposed to deciding to sell those rights if somebody will pay them more money than they can monetize.

They are then going to put those rights together, exactly as you predicted, by the way, where the local part may disappear and Adam, we'll have more, Adam will have or Adam Silver will have a bigger bundle to sell to all of the people buying content.

I agree. But he will still get more money from somebody paying him for the rights, and he will by keeping those rights and producing and distributing those games.

Of course. He's collecting them to resell them.

But the middleman there must.

Remain alive. Still a middleperson.

Who's the.

Middleperson now? Whoever buys the rights.

No, because the person buying the rights is the one distributing the content. And where you go, that's the platform on which you watch the content. How about this one? In my head, when Amazon does a deal with Roger Goodell for Thursday Night Football, who is the middle person?

Amazon. They do the same thing ESPN did. They produce and distribute the games to fans in.

Espn's case. Wait, so are the fans always the under-person? The low-person?

We're always the addicts. That's your question. Yeah, that's your question. Is that it? Yeah.

All right.

Don.

Lebertard. Pablo leads all of.

Podcasting in Reading While Smiling.

If you listen to ESPN Daily, he sounds like he's having the time of.

His life. Stugats. Coming up next.

I'm going to tell you.

About the.

Savannah.

Bananas are changing faces.

How do you know I'm in a banana? Yes. How do you.

Know I'm smiling? That's how I find my vocal range.

Sometimes I just say.

Savannah.

Bananas. Savannah Bananas. This is.

The Don Lebertard.

Show with the Stugats.

I.

Want to keep this moving because we've teased some of the stuff that I'm also fascinated by. When we talk about... The word bundle has come up. And so, again, the question of, Are now all these streamers acting like cable companies? Well, we're already seeing, for instance, and scripted to David's earlier reference, HBO Max, Max now, is leasing shows out to Netflix, right? And so what is Netflix up to? Well, let's ask the question, what is Netflix up to in sports? They've sent signals up that say, We are serious and you guys have seen these signals. I would like you to assess the seriousness of what they are doing in the world of sports.

They are being very responsible as they get into the business of producing sports content, of disseminating sports content, of purchasing sports content. They are figuring out what is the best way to do it so that they don't do what the other networks have done, which is spend too much money on rights and then lose money. They're trying to figure out, Can this be profitable from the start? Because that's what my shareholders require.

So they're trying, John. They're trying these one-off golf things, right? These events.

Are we talking about the Netflix Cup?

I grant you. It's a tiny little toe in the water.

Are we suggesting… Look, Netflix has a serious sports business, right? If you look on Netflix, they have a ton of sports content, documentaries, scripted. Drive to survive.

So they have sports. That's not live. We're talking live sports.

I'm just making a distinction. Sorry. Because you didn't make the distinction. You said they're serious about sports.

You can turn my mic off for 10-second penalty.

Ashamed David Samson is a rare David Samson of the job.

They are serious about sports. The question is whether within their model live sports can make sense. And they have been very disciplined, very open about the fact that live sports feels hard to them. And they have been under or under a ton of pressure from Wall Street to show they could make money. They've shown they can make money, and they've done it without live sports. So they're going to be quite careful. They're very well-positioned right now to be the winner of streaming. Yes. And the question is, to be the ultimate winner, do they need live sports? I have always believed that they have made it further than I thought they would without live sports. I've always believed that ultimately you will need the content that most people are the most passionate about to be the winner in aggregating the most subscribers.

I may be wrong about that. Is that NFL football?

Well, it certainly is NFL football, right?

Well, Don, before we get into that, though, because I think there's another rabbit hole that we're about to plunge into on the NFL there. As the person who was running live sports more profitably and prolifically than anybody else in human history, what is so hard for Netflix to figure out about live sports?

It's expensive. All right. They're in the business of aggregating subscribers, retaining those subscribers. Sports in this country, they're at a place where they have almost complete penetration of the US market. They do not have a lot of upward growth, so they cannot add a lot of subscribers by adding a lot of sports. David, checking his heads.

Because where did you get your money from? Espn got all the money that it used. He's saying it's expensive, and I respectfully agree. But the money wasn't being pulled off a tree. The money wasn't funded by anyone other than all of the people who bought cable subscriptions. That's correct. That's where you got all your money from. That is from the, what do we call them? The low person?

The addicts? No, they're the fans.

Who want.

The Who want the content but are in no position to buy that content directly from the leagues. I don't think they ever will. So they get that content by first 10, 15 years ago buying a pay TV subscription. They get it now. Now their problem is they got to buy multiple things to get it rather than a cable subscription.

What's happening here is that Mr. Skipper is bemoaning the changes that have taken place because his entire foundation of success was based on a model that no longer works, as evidence by the dip in subscribers, by the lessening of ESPN's profitability. If you were still at ESPN or if I were the president of ESPN today, I wouldn't be able to hold on to past thoughts of profitability and past mathematical equations of spending hand over fist.

I'm not doing that. They have to adapt. I don't have to because I'm not there now. Why don't you? Okay, sorry. He has.

To adapt to you now, David.

It's not my job.

This.

Is almost as hard. Almost. And I'm making a lot less money. I can't.

Even believe it. You just gave up your point so fast. No, but.

John, it's an analysis of what's happening, less of.

A-they have no possibility how ever-smart, how at ESPN of returning to a different model. Now, I don't think you're pretending that they're simply going to leave the old model. It is still where the majority of their money comes from is the declining pay TV universe. The universe is not dead. It still generates over $100 billion in subscriber fees.

A year. But it's on its.

Way to death. No, it's not. It's on its way to decline and stagnation.

When you own a business where your average customer is getting older, eventually they die. And so you have to get younger customers.

I believe that the pay-TV universe will decline to somewhere between 50 and 55 million households and stay there for a very, very long time.

I don't because those people are going to die. All the 50-55 million who still have cable who aren't cutting cords are your age and we're going to die soon. And once we do, do any of your kids have cable? You're in the business of cable. Does one.

Of your kids have cable? Wait, am I in the weed? Are we all of us going.

To die? Well, we're all going to die just no matter when, not if.

You just said we're going to die soon. Do you know something? I don't. Have you been in touch with my doctor and found out something? I don't know. Because I don't know if I want to finish the show. If I'm dealing with my last moments here and doing the show with you, I may choose to go do something else.

I respect that, and I'm happy to end as early as you want. But I would like you to answer the question. Do none of my kids have cable?

I have a 37-year-old and a 34-year-old, both of them cable and will have cable for the rest of their lives.

Do you feel that is related to the fact that you're their father?

Potentially.

Just throwing it out there. I would like to put it on the pole how many 37-year-olds, 27-year-olds have cable. I would argue that what he's talking about in stagnation doesn't exist in a market. Markets don't get stagnant. They're either increasing or decreasing. Stagnation is a temporary moment if you take a snapshot of a market. This market is declining, and it's not half-lifing, it's declining to zero.

Yeah, I don't believe that. I do believe it's declining. I'm not pretending it's going to go back up. I do believe it's going to find its level. I think some number of people are actually going to go, Wait a minute. I could just get a pay TV subs and get most of this content that I'm now trying to figure out how to buy a la carte because I was trying to save money. I'm not saving money. The incentive that I'm going to save money by doing this should be gone. You're not saving money. But you're right, David. I run into many, many people who say, I've never had a cable television subscription. I'm never going to. I do not think it's going to return to anything near those levels, but I do not think it's going to zero. I'm not suggesting in 2156 it won't be zero, but in our life, since we're dying very.

Quickly here, in our life it won't be zero. In our life, it won't be zero. Wait a minute. You didn't say that. I agree. In our lifetime, it will not be zero. Well, this is important clarification. But in my grandkids' lifetime, it.

Will be- What's the timeline? Let's put some numbers on this because soon is a very vague and scary proposition.

Socovid, do we all agree that COVID advanced the decline? It changed the curve. It was declining at a certain percentage, and then COVID made a decline at a greater percentage.

Because people were at home assessing what they were spending their money.

On from home. They were like, This is ridiculous. I don't watch any of this stuff, and I don't leave the house. If I'm not watching it now, I'm never going to watch it. That was the theory.

And the crunch of the economy, simultaneous made.

Yeah, I thought it was slightly different, meaning it doesn't mean it is. My perception was people at home with no sports during COVID went, I need Netflix because I got to get some stuff. I need Hulu. I need Amazon Prime.

But it went away like that. What's the name of the thing? The Tiger guy. Tiger King. Everybody watched Tiger King. I did. Everyone watched it. Did you watch the second one?

No.

Neither did I. Did you? No. Why not?

Well, I got enough in the.

First one.

Because- I didn't watch the first one.

Oh, you didn't watch the first one? No. Oh, I thought everybody watched the first one during COVID.

I wonder if Netflix could actually call the Tiger King live sports.

Killing.

Someone? I mean, watching a live tiger.

Is compelling. I think we're within 50 years is my general guess. If you said 50.

Years, in 50 years, it won't be at zero. That's not a lifetime. No, but it's funny. People used to ask me in 2012, and I would say, In the near term, no. I'm not worried in the next rights deal.

About Apple. It's not going to zero in.

Five years. So near term, it's not going. Medium term, I don't think it is. I think of near term as three years. Medium is five to ten, long term is 20 plus. Granted. Twenty plus, it's going to go down, but it's not going to zero.

I just love that we just did an ink block test for both of your perspectives on the meaning of existence. John is like, I'm thinking about the world around me and in front of me, the one I inhabit. David is like, I'm worried about the market in '50. I'm worried about the market in 21:56.

I'm merely predicting what I think it'll be like on the hope that I'll still be alive as I examine all possible freezing techniques.

Who do you think is going first? You or me?

I think that that is clear as day.

That's a live sport. Let's bet on that.

We'll take the parlay. It's called switch games. I wonder if anybody will take the parlay of who's.

Going first? Yeah, throw me in there. Yeah, yeah, yeah. Well, okay. So we're actually in quite a bit of surprising agreement on how much time-.

On my mortality.

-on all of our... Less our mortality than the mortality of the cable television business. What I am thinking about next, though, is how... Maybe this is mine. The most naive thing you'll hear on the show today is this thought. It is a bummer when $100 billion is essentially like you're a giant loser, which speaks to the David Samson School of Capitalistic Perspective, right? If you're not growing, you're basically dead. And that seems like a- Or you're shrinking. But it seems like a plague upon the thinking of how we consider business and products and how consumers actually exist in relation to the things that they spend money on. That seems like a bummer.

Pablo, I'm sorry you feel that way, and I understand why.

You feel that way. I'd just like $100 billion business to be a thing that doesn't just have to die and might actually be considered something that is useful.

But that's the same concept as the dinosaurs. I mean, the dinosaurs are the equivalent of the $100 billion business, aren't they?

Yeah, man, that happened in a hurry, right? The fragment hit the earth. We think. It blew up and everything was dead in 48 hours.

I don't think that's that quick. I have no way of knowing that that is true.

I was around. That's why you think I'm going to die before you. I remember it.

I was.

Trying to give you an equivalency to think about.

And instead you became a dinosaur truther. Right?

I'm not trying to be that because I don't know of truth or false on that. But I think that it is reasonable to think that the business of streaming, it hasn't settled yet. I think the way that I've been looking at this business, the consolidation that I've expected has not totally happened yet. The settling that I know has to happen in any business like this has not happened yet, but it's coming, and that is not a long term. The settling and consolidation maybe is not even midterm. I'm thinking it's short term because there's such a stress on the economics of these companies, and Netflix has figured out. But the others, including Disney, have not at all.

Yeah, I think the consolidation is medium term. I don't think it's the next year or two. A lot of companies that could be consolidators have a lot of debt, which is going to prevent that from some period of time. I would have assumed it would have been happening now in '24 and '25. I think now it's going to be a little longer. We didn't expect to talk about this, but I'll raise one other interesting thing, which is the real promise of streaming was not, in my opinion, you're going to save a bunch of money and only buy what you want. It was that you're going to have an interactive experience. That was the promise of streaming. It's no longer going to be a dumb box. You're going to be able to interact. You're going to be able to place bets. You're going to be able to look at your own camera angles. You're going to be able to get a personalized production. All that is also, in my opinion, mostly a false promise. I don't think we're anywhere near personalized advertising, going out on the stream, getting… Nobody cares about camera angles. Nobody really cares about megacast, where you do a whole bunch of stuff and pretend that people are watching those other channels.

It's mostly just about the replacement cost of programming on those other networks that they're.

Putting it on. That's not the promise that I felt I got. What promise did you have? The promise I felt I got is I don't have to worry about thunderstorms. I lived in Florida. I started with DirecTV.

Well, that's the promise of cable television.

Not streaming. No, but I'm going through my promises of what happened. So first it was the thunderstorms, and that DirecTV can't deal with. You're in the middle of watching a game. That's it. Direct TV is not a suitable technology. Then you get okay cables and we're going to bury them and we're going to get it in from the curb and everything's going to be fine. But the problem with cable happened is that the bill, you lose track of your bill. What was on the basic tier versus the advanced and the paid tier, it kept changing, thanks to Titans like you. That no longer was satisfactory to me. Then streaming came where I was able and there was a period of time where people had both cable and streams. Then people said, Well, wait a minute, I am fully satiated by the streaming apps. I can get everything I want. Then cable went away. Not true, of course. -no, no, it is exactly true. There is nothing that I can't get on Hulu that I could have gotten on my cable package.

Well, the whole sports thing.

No, but I had to pay extra on cable for those. You don't just get sports on cable.

On basic cable you got sports.

It depends which ones. It depends which ones. That's not how my recollection of my cable bill was. I had all of these different tiers where I had access to different content.

I now feel like what it must have been like to be the cable company phone operator fielding a call from David Samson.

Never. Never... Why should I call the cable guy? So you have I called the cable guy. So you have that wrong.

Sir, I'm sorry. I cannot fix your general abstract sense of dread that is informing all of your consumer media- It's.

Just math. It was math.

It is the case, though, David, that for the average American consumer, there was the basic cable bundle. You could choose to only get broadcast channels, so you could get the thing that just got you connected to a few things. Almost nobody bought that. And you could get basic cable, and that was what I think 89 % of people got. You could add on HBO, that was an add-on. You could add on Showtime, that was an add-on. But you didn't have to add on really any sports.

Why are people canceling cable then?

Because they thought it was too expensive. And because somebody not named John Skipper promised them that they would cancel cable and get to buy everything they wanted, streaming cheaper. I don't know who promised them that. Now we're back to the beginning. Pablo, take us.

Somewhere else. We have driven around an increasingly depressing cul-de-sac. But I want to get to the idea that the mansion, in whatever condition it exists now, thanks to these financial reports of ESPN, their solution to all of this chaos is to say, There is another business that we are now interested in, and this is the business of gambling. And so ESPN Bet launched this week, and there are complications when the biggest news-gathering operation in all of sports and all sports history, overseen by John Skipper once upon a time, I was a part of it when I was full-time at ESPN, now a part-time gas bag over there. But the point being, this is a tricky scenario, is it not? The idea that your news breakers can move the line that you then profit of from as the operator now of this sports betting whole operation.

For as long as I've lived, there's been conflict of interest in industries across the board. All what's happening now is more consumers are interested in this conflict of interest because they feel there is some alienable right that when they are betting that they are in the same position as everybody else. Here's the thing. Where else does that exist? I would argue nowhere. Do you think the people who are buying stocks, day trading, are in the same position to make money as the people who really know how to do it and are market movers on Wall Street? Do you think the ordinary guy sitting in his underwear on Main Street has the same right to make money as the people who do it for a living who are market makers and movers? If you think that, then you're going to have a problem with potential issues with ESPN, Bet, where the market could be moved by someone who would have more information and profit on that versus the guy in his undies on Main Street.

Yeah, I don't personally believe it's an unmanageable conflict for ESPN. I think they have to make it clear, which they will, to their journalists that they have to have a wall between this and what they do.

Yep, there are guidelines that have been set forth.

Already on that.

Funny guidelines.

I think that will happen overwhelmingly. I'm also not surprised to see ESPN do this in the face of the declining pay TV universe. They have to look for ways to cut expenses. They have to look for other ways to make money. And they're exploring here whether they can make money this way. Seems like good business to me, and we'll see what happens. I think the more interesting question is, and we have to be... I need to disclose we're sponsored by DraftKings. So if I relay any point of view here, I need to express that conflict. I don't think I have a conflict down. I do think ESPN faces an uphill battle. They are aligned now with PenBet, which I believe is also ran in this. That doesn't mean that Pen has a very profitable business, but right now in the sports business- Compared to the scale of Dragon's Fairible- I think they're a 2% shareholder.

Of the sports business. I think it's important to point out that ESPN has made money already on this deal. It's like a sponsorship deal. If you really want to get down to the definition of ESPN Bet, they're not launching a fledgling, gambling app today or yesterday or whatever day this week. They're getting paid by PenGaming. That was the divorce with Barstool, and then it was the re-up with ESPN, where they're actually... Espn has a revenue stream, a guaranteed revenue.

Stream from this. It's basically a licensing deal, right? To use their brand. So this was good business for them, assuming that they can manage that, the conflict, and the conflict that they also derive a lot of advertising revenue from the other.

Competitors on this market. Yeah, and that conflict is based on them not wanting to piss off Pen because Penn needs people on the app betting. They do. And so it's all part of learning how ESPN is going to.

Deal with this. But one more thing. I mentioned the idea of being the phone operator, taking angry calls from customers, right? I want to do the consumer point of view here because if I'm a retail better, a retail investor, so to speak, and I'm saying I bet on this game because of this report. That report turned out to be not true. And now I'm losing money to the place that is making money off of my loss. And I just want to address, John, the idea that this is a thing that, in a bottom-line financial incentive way, ESPN might be tempted to engage in the moving of a line to profit off of the line.

I think it's absurd. It doesn't mean that some knucklehead somewhere someday might not do something absurd. But the idea that ESPN would engage in, Oh, let's put out that somebody might be injured, we'll benefit from the line on that through our association with Pen, it's just ridiculous.

Is the elephant in the room the way it's always worked in the non-gambling world? Where people would have CNBC on their monitor and they would hear Jim Cranery yell about a stock and they'd say, I've got an idea, I'll buy that stock. And then they wonder why they lost money. Have we not been aware of all the networks who spend their entire time? Cbs Sports HQ. I do business with them. As an MLB analyst, I'm happy to say it because I don't care as much as you do. They have people on the air who say, Here's what I'm betting. Here's a great bet. Here's what I'm doing. If we're wrong, I do a pick of the day and nothing personal. I'm pissed off when I'm wrong because I don't want to be wrong. But if you're making bets because I tell you to make bets or anybody tells you to make bets, it's like buying a stock because someone tells you to buy a stock. A fool and his money are.

Soon separated.

Indeed, they are.

Particularly a sports fan without cable TV.

What at the end here do we want.

To get to? He's going to hold on for the rest of his life on.

The ground. I love it. I love that we finally… It's been a long time coming, the episode in which we air all of the grievances about cable television.

I just want to be clear. I'm not suggesting that cable television is coming back or that I long for it. I don't care.

Because I don't- You sound like you care.

I don't care. I'm simply suggesting that the false premise that streaming was going to end up providing you with more than less. Tell me the next time that the big disruption in the world of business creates an opportunity for a consumer to get more for less money. The disruption in the music business. It did.

What John is saying in the context of sports, though, is that he is not Noah offering you relief from the floods. He is the guy off to the side on a hill being like, I told you guys it was going to be a flood, and you just didn't believe me.

While watching the water rise.

While watching the water rise. That's right.

I'm Cassandro.

You better get to higher ground.

That's a great Netflix spinoff. Cassandro, a reboot in which an older white male happens to be the ignored prophet. David Samson, what is your thing that you want to get to this week that we have not touched?

I wanted to just say what I'm thinking about, what I've been thinking about for the last few weeks as I've watched the Marlin's hire new President of Baseball Operations. I'm thinking about Kim-Aong, who was brought in as the general manager, the first female general manager in Major League Baseball, and how her reign ended the way it ended, and wondering whether, as an owner, the juice was worth the squeeze. The pain that they had did it outweigh the pleasure. The pleasure when they hired, she was on the cover of Time Magazine. She was doing all these.

Different news things. Asian-american woman- It was brilliant. -atop a baseball team.

Check, check, check, check. Back. Then when they had to let her go because of job performance, which is why the owners said, We're bringing in someone because we want to do it this way, not.

That way. Which was controversial because, of course, this was a team that, by some measures, over-performed, but did not perform as well. They wanted to hire a president over Kim-Aing.

She said, No, I don't want to do that. But what I've been thinking about is when you're making hiring decisions and you want to bring back Legends or you want to actually be a trailblazer, is it worth it to be a trailblazer when the leader of the pack so often gets his head cut off. That is what happened to Bruce Sherman, and I feel badly for him because he got eviscerated for firing her. It was worse than the credit he got, which was outstanding for hiring her.

Yeah, I think the credit for hiring her was appropriate. I think it's a sign of progress, actually, that we're debating a woman being hired. I wish there was no discussion about it because it wasn't odd for there to be lots of women in the executive ranks of team ownerships. I do ultimately think that that will be seen as a brave move and a good move and won't be considered unusual. We won't think that we have to comment on a woman being fired because there's so many of them in the front office that, of course, they're getting fired because lots of.

People get fired. Also, as a quick side note, I also don't begudge her for thinking to herself, How dare you? I am somebody equipped to do the job of President of baseball operations. For you to hire someone over me means that you never believed in my talents in the first place, and I would have been cut loose without enough time to prove as much.

I'm going to quickly, because we're going to run out of time, I'm going to suggest what I'm thinking of is whether the Super Bowl will go on pay-per-view first or go to London. Roger Goodell this week said that he would not rule out going to London. I wouldn't rule out going to Istanbul or Johannesburg or Sydney or Taipei either. Why rule it out? But I would suggest that it is going to go pay-per-view before it goes to London.

Wow.

I'll again take the under on that. It will go to London before it goes pay-per-view.

What are we charging for the Super Bowl on pay-per-view? Did we ever establish that? What are we sending the line on there?

90-99-99.

Over.

Yeah, maybe. But in fact, we won't belabor this, but if you're an owner, you're going to say, Am I getting more value out of going to London than I'm getting out of charging 25 million.

Households $100. And the answer is when you have four expansion teams and you're getting expansion fees for an entire division that's in Europe and the condition is that there's a Super Bowl in London, the owners are lining up the jets at Teeterborough to get over to London for the.

Super Bowl. I would take the 100 in that case as well.

Yeah. I'm hungry for some shrimp is where I am at the end of this episode. David, Cassandro, thank you for another episode of The Sporting Class.

Thank you, Bob.

See you later.