#2: How To Lose $9 Million in 90 Days

Kyle: Lots of clever math here. Article lands on roughly 4% of Americans will place a wager online. Cool. I don’t think the World Cup will be the BIG BETTING EVENT, at least in terms of activations. We’ve seen this before— one off sporting events (NFL Draft, Masters, even March Madness) don’t drive huge volumes of new users. It’s football or bust.

Jason: U.S. set for 3 games thus far Wales on 11/21 , England 11/25, IRAN yes IRAN on 11/29

These games are your major betting drivers….England game on Black Friday will be most popular, BUT will not engage a large new user activation event. Nobody knows how to bet on soccer in the US. Forget prop bets as most people have no clue who the players are. Add in the baseball like moneylines and + or - 1.5 goals and most average Joe bettors are turned off.

AGA is also using a lot of clever math here to make this seem bigger than it is. "30% of American Males born in February (but not the 29th) who identify as an Independent plan to watch the World Cup. 42% of those say they will consider betting on it, legally or otherwise."

Here's the fun part: That $1.8 billion in handle is the equivalent of a couple of months slots handle for an online casino.... in Pennsylvania

This is crazy to me. The Athletic, which don’t forget reinvented sports journalism as we know it because subscriptions, has lost the NYT nearly $30 million in 9 months this year, including $9 million in Q3 despite $24 million in subscription revenue in a single quarter! 

Content (written!) that makes that sort of revenue per year with annual recurring subscriptions, many of which look like they hit in Q3, should not lose money. But these guys spent so wildly on writer salaries and #growth because they convinced investors that they were a tech company that they now have no idea how to unwind the spend without killing subscriptions. All of this, and they make, as best as I can tell, basically no money from sports betting despite being one of the best positioned companies to make literally 10s of millions on sports betting advertising or referrals. Dopes

How about bad timing as an issue? Substack, Beehiiv….writers are potentially preferring to control their premium content in a small silo. Could it be the case that they could lose 20% of their best writers to independence?

Good point. It’s like the theory of bundling and unbundling. The Athletic was beloved by media types because it paid top writers a fair price because of direct subscription revenue— unbundle the newspaper! But maybe now the top writers could break away and just do their own Substack or Beehiiv (shout Beehiiv) and make more on their own. Ironically NYT is trying to justify the cost by selling a bundle with its... wait for it... newspaper subscription. You can't make this stuff up.

So the Braves will become a standalone public company. Shareholder capitalism comes to sports. This is the end (if it wasn’t over already) of the crazy, win at all costs sports owner. Jerry Jones, Ed Snider, Steinbrenners of the world were already going by the wayside, but this marks the end. Sure, they were part of a public company before (so are the Flyers with Comcast). But you can bury costs there. Standalone not so much. The fan experience will suffer. Everything will be done in a spreadsheet. Delight, doing right by the community, SPENDING TO WIN… all gone, unless it supports the bottom line. Good business, but probably a net negative for sports.

I’m all for good business and making money by the way, just noting this will change the fan experience as public companies and PE shops continue to buy up sports franchises.

This seems like a massively bad idea. Why would you open up your sports team to the political and social pressures of a publicly traded company? Moving the All-Star was one thing, but when the other 50% of investors in the political divide hate your decision, you now risk stock loss AND ticket/merch loss.

There goes the chop.

BTW, this idea has to impact revenue sharing down the road, correct? What if a small market team goes this route and they become flush with cash, but still get to benefit from rev share? Different way to get cash.

Apparently this will make it easier to sell the team too. More trimming, investor pressure, spreadsheet game. Who knew all those dumb sports stock market apps would just become the actual stock market?

You watching this Friday night?

WTF……who would want to see that???? Martini Jay will not be on the interwebs Friday night.

Hundreds of years from now, historians will mark the leak tape era (2006-2022) as beginning with Kim K and Ray J and ending with SBF. Next stop: Metaverse.