Man Utd Plans New Venue; Amazon Closing Streaming Gap Using Live Sports

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1:01Bloomberg Audio Studios. Podcasts. Radio. News. This is the business of sports. The business of sports can be intimidating or hard for a starter to break into. We really appreciate when our owners are actually there, you know, with us through the journey. Teams, ours especially, have been very intentional to diversify at all levels of the company. I think we're in the golden years for the NFL and college football. Our demographic reach has continued to expand. This is going to be really unlocking the streaming platform for sports fans. Sports valuations are rising. We'll see when they peak. You don't have to be the best in your sport to make a whole ton of money.

1:42Bloomberg Business of Sports from Bloomberg Radio. Hello, this is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr. I'm Damian Sassauer. And I'm Vanessa Perdomo. Scarlett Fu is on assignment. Coming up on the show, we talk soccer and Manchester United's plans to build a big brand new facility. We will also hear from Dan Hunt. Of course, he's co-owner of the Kansas City Chiefs, but he's got his eyes set on soccer as president of FC Dallas. He's got big plans for the FIFA World Cup when it comes to the United States. We're in a really unique spot in Dallas because Houston has six matches.

2:20Dallas has nine. Kansas City has six. So somebody can make a regional play to see a lot of World Cup soccer by staying in North Texas. All that and more is straight ahead on the Bloomberg Business of Sports. But first, we check in on the sports media landscape with some streamers looking to grow in live sports. Right now, Amazon's making up ground on Disney in ad dollars via cord cutters. And live sports is a big part of that. Here to take us through the latest research on this from Bloomberg Intelligence is Bloomberg Intelligence Technology and Media Analyst Geetha Raghunathan. Geetha, we've got a fight between Amazon and Disney.

3:00What is this spat all about? So this is really so, you know, we had the streaming wars. The streaming wars are over. We kind of know who won for the most part. That was Netflix. Now, really, the next phase, I would say, of this whole kind of streaming land grab has become the ad-supported streaming wars, right? So now everybody, all of these major platforms, whether it's a Disney, whether it's an Amazon, even a Netflix, has now advertising on their streaming platform. And everybody is trying to juice up their advertising business, as well as their advertising-based subscribers. And this really is just, you know, this makes sense because eyeballs are moving from linear platforms to streaming.

3:48And so obviously it makes sense that advertising dollars should also follow. And, you know, all of these platforms, whether it's a Disney, whether it's an Amazon, whether it's a Netflix, they want to make sure that they have skin in the game and they want to make sure that they're capturing as much as they can off that connected TV ad pie. You know, tell us how obviously sports must play a huge role in that. And now all these streamers want to get live sports onto their networks. And I mean, that's really the only time that I can think of when I'm sitting down watching during a game. That's pretty much what it is.

4:21You know, you've got to just watch it. So tell us about how sports is really pushing that next ad space. Oh, absolutely. So sports is really the last kind of bastion for linear TV, which is why linear TV has been really fighting hard to hold on to sports rights as much as they can, as long as they can. But, you know, it is kind of the bundle has, you know, kind of finally cracked and we are seeing more and more sports actually leak out of the ecosystem. And in many ways, I think Amazon has really kind of pushed the envelope here, right? So we've seen Amazon make a big play for, you know, NFL, the Thursday night package.

5:01And this year, I think, is really transformative in many ways because they have invested close to almost$2 billion. They're going to be paying about$1.8 billion per year for an NBA package, which allows them to stream 66 regular season games. So that's, again, a huge bet. And again, it goes to your point, Vanessa, this is all about, you know, this has become the new battleground for all of these ad-supported tiers. And everybody wants to make sure that they have the best content. And the best content is sports, because that is where you have a captive audience. And so advertisers are willing to pay those big bucks in order to reach those audiences.

5:40You know, Geetha, you just have to remind our audience, where do we find games for the NFL this season? I mean, I'm looking right now, right? And Amazon, I know it has NFL Thursday night. It's got the Black Friday. It's got some wildcard games, right? You've got, like you mentioned, linear TV. I can't believe we call it linear TV now, but we're calling it linear TV. I mean, they're going to get your Sunday, you know, kind of one o 'clock, four o 'clock. I mean, I think Netflix has Christmas. Alphabet has Sunday ticket. I mean, I just I'm trying to keep track of it all, you know, like talk to me about, you know, which, you know, which medium, I mean, is going to really benefit the most from sports broadcasting in the coming season.

6:16That's a great question. You know, content discovery and you're really talking about the biggest pain point. You have all of this great content, but sometimes just kind of finding it and knowing where to go, it tends to be so frustrating for all of these viewers. You know, I think we are going to see some improvements through the year. So the big, big, big thing that everybody is kind of waiting for in the media world actually has to do with a big sports announcement that's coming out from Disney a little bit later this year, which is for the very first time in their history, they have ESPN, which has always been kind of synonymous with the pay TV bundle, is actually going to go a la carte.

6:55So they call it ESPN flagship. And this is basically all of the marquee content, ESPN content, which traditionally you can only get through a TV subscription is now going to be available over the top. And that's going to happen sometime in August. And I think what ESPN, you know, they haven't necessarily made any announcements just yet. We do know that the product is probably going to price going to price anywhere from about twenty five to thirty dollars a month. What they have said is, you know, obviously all of the content is going to be there. They're going to have they're going to integrate sports betting.

7:26They're going to make it as customizable as possible, you know, kind of really, really prioritizing the user experience. I think that's that's what they're really going for. But I think eventually, once they have a critical mass of subscribers on the platform, they are going to finally, you know, integrate and kind of bring in all of the other different sources. that that's the way i i'm thinking about it it's you know we still have to see how exactly it plays out but uh they're going to i think make it easier for people to find all of the sports content that they want to watch in one single place i i want to ask this question and just giving a view on society in general and i'm old enough to remember free tv you just flip the channel you turn it on two, which was CBS, four, NBC, seven, ABC, and you saw what you wanted for free.

8:19And I remember one day when I was still living with my mom and dad and I wanted to get cable. My father lost his mind. He was like, why in the world would you want to pay for TV? Well, then, you know, three satellites later, he, you know, he clicked into it. My point is, how did we change as a society from, hey, this is free TV to now forget cable. We've gone all the way to streaming this and streaming that, whatever. Just your view on society, what changed us? Content is expensive. You know, so if you just kind of look at Disney's content bill, right, they are one of the biggest spenders in the media ecosystem, even more than Netflix.

9:05So they're spending roughly$25 billion on content every year, of which$11 billion is just on sports rights. So sports is a huge part of the equation. And yes, Disney is paying out for that content. They are, you know, they're paying and they have to get paid. And that's really the whole origin of the pay TV bundle and people kind of shelling out the$100 per month. and really the whole creation of the media food chain, if you will, which right now is kind of in shambles. But, you know, content is still expensive. Sports rights continue to be expensive. I mean, just that last NBA deal, the one that the NBA concluded last year, saw a 70 percent, not a 70 percent, sorry.

9:50It was a 270 percent increase in the total rights package. So it's really exploding in terms of, you know, how we are seeing some of these fee hikes play out. TKO is the other big one, which is right now actually negotiating for both the UFC as well as some of the WWE rights. They're looking for 100 percent increase. So all of these sports leagues, they know that their content is valuable. They know that people are paying to watch. And so, you know, they're charging heavy fees and that gets ultimately passed on to the consumer. Geetha, you brought up a lot there for Disney, obviously, spending all this money and ESPN still really is that name in sports that everybody knows is the number one.

10:35But so is really the new NBA deal and Thursday Night Football really how Amazon was able to close this gap with Disney? Like, I feel like Disney has Hulu and they have Disney Plus, ESPN Plus. They have all those things. So I feel like they should be really in a league of their own. How was Amazon really able to close that gap with them? Okay, so what Amazon did was kind of a little bit sneaky, I would say, but I think it served its purpose. So the way that, you know, normally some of these streaming platforms introduce their ad supported tiers is, you know, they do the Netflix route, right? So if a standard subscription costs$15, you basically introduce an ad supported subscription at about half the price, so$6 or$7 a month.

11:14What Amazon basically did is they said, hey, whatever you're watching right now, we're just going to stuff ads there. If you don't want to watch the ads, you know, you pay us extra. So they took the exact opposite approach by just making ads the default option for everybody and forcing them to opt out of it. So that gave them, you know, an instant subscriber base of almost, I want to say almost 150 million. They started out actually by saying that they had about 115 million. But we think that's obviously grown over the past year or so. And that just allowed them to not only serve ads, but, you know, go to their advertisers and say, see, we already have like 120 million subscribers.

11:57Is there any? Do you have any data that's come in where there are, you know, I guess, 50 year old plus guys like me who all of a sudden arrive in streaming and we're actually shopping on TV during the games? I mean, so I mean, now you talk about sports gambling, Michael Barr. You see where I'm going here. And maybe we're just now scratching the surface of the potential, right? I mean, Geetha, do you have any numbers there to kind of talk about people's willingness to sit through commercials and actually shop online during games? I mean, this is such an excellent point that you bring up, Damien, because this is really what Amazon's play is, right?

12:28The connected TV is just the gateway into really merging entertainment and e-commerce. They want to have shoppable TV, right? They want their viewers to make purchases right from their screens. And so that's, you know, that's exactly what they want. And Amazon, I mean, in terms of numbers, Amazon, the way that they've kind of conquered advertising, you know, just about five to 10 years ago, advertising was zero dollars. And today for Amazon, it's a 60 billion dollar business. In the next five years, this is probably going to go to about 100 billion. And a lot of that is, of course, their, you know, their e-commerce business, right?

13:07The search advertising or what we call retail media advertising. And ultimately, they want to do anything and everything they can to juice those, not only, you know, the number of people that they have shopping, but of course, also the, you know, the advertising dollars, everything. So everything goes hand in hand here with Amazon. But you're absolutely right. I mean, it is it is that whole integrated experience and they want people to spend more, you know, on their platform. and they're doing it through the ads, what they call shoppable TV. Our thanks to Bloomberg Intelligence Technology and media analyst Geetha Raganathan.

13:39Up next, we turn to soccer and Man U's plans to build a brand new venue. For my colleagues Damien Sassauer and Vanessa Perdomo, I'm Michael Barr. You're listening to the Bloomberg Business of Sports from Bloomberg Radio around the world. This message is brought to you by Apple Card. It's a great time to apply for an Apple Card. You'll love earning unlimited daily cash on every purchase. That includes 3 % daily cash when you buy the latest iPhone, AirPods, and Apple Watch at Apple. Through this special referral offer, when you get a new Apple Card, you can earn bonus daily cash. To qualify, you must apply at apple.co slash getdailycash.

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15:32This is Bloomberg Business of Sports from Bloomberg Radio. This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr, along with my colleagues Damien Sassauer and Vanessa Perdomo. Scarlett Fu is on assignment. One of Europe's biggest sports teams, Manchester United, is ready to build a brand new venue. The project for a new stadium could cost over$2 billion. Here to talk to us about the project and more is Bloomberg UK business reporter David Helliert. First of all, hello and welcome to the Bloomberg Business of Sports. Yeah, hi. Good to speak to you guys.

16:11Well, it's a brand new 100 ,000 seat venue. Tell us about it because it looks like it's going to be a big job producer. Yeah, it will be a big job producer if it gets produced. It's still very contingent on the government doing its bit and putting in a lot of money into the regeneration of the area. If that happens, it's going to be a very big deal. It was a curious announcement yesterday because, you know, we've been hearing a lot about redevelopment of Old Trafford or maybe a new stadium, which would it be? And Jim Ratcliffe announced it with kind of a bit of fanfare yesterday in London, which was a bit surprising.

16:50You would have thought he'd have done it in Manchester in the building of Norman Foster, the architect. And but yet he sort of kept saying it's only going to happen if the government does its bit. So it's still it's not a done deal, as it were. Is there going to be government funding helping build the stadium also? No, I mean, they were clear that they would fund the stadium themselves. The club, the company, Manchester United, would fund that themselves. but they are making it very conditional on transport links, you know, kind of landscape areas outside the stadium because they see this very much as a regeneration scheme for the whole area.

17:28And they were kind of saying if the government doesn't do that, then we're not really going to build, you know, we're not going to build a stadium. So it's kind of, I think there's a lot to go for here still. But it seemed to me that they were kind of like putting a bit of pressure on the government saying that this is what we're going to do. we're going to guarantee the stadium and it's going to cost two billion we're going to you know raise that privately but we do want you to do your bit and so i think now it's kind of like a bit of pressure it does fit in in a way to the government's overall program of you know growth being the number one thing that the government's talking about at the moment as well as sort of cutting back on other areas as expenditure but in in certain fields you know in certain areas the government's really committed to growing the economy.

18:14And whether then, you know, there's going to be a big political debate because should we really be growing the economy through the creation of a football stadium or should it be through the NHS or should it be, you know, industry or whatever? Like I say, the debate is kind of just beginning now. Well, David, you have to walk me through this, right? I mean, walk me back a year when Jim Ratcliffe spent about a billion and a half dollars to buy a third of the team, right? I think Forbes, just in December, placed Man U 14th of all global sports franchises at a valuation of$6.6 billion. And yet, I look at Manchester, it's the fifth largest city in the United Kingdom.

18:52I mean, it's got, what, 600 ,000 people there. I mean, London's got 8.8 million. You know, why should the UK government pay anything to build another stadium in Manchester? You know, in terms of the performance in Manchester United, I mean, it's spectacularly bad. the club hasn't been in this kind of situation in the league since 1991 before the premier league even existed and it's a very very small chance but they are doing so badly that they could be in the relegated at the end of the season and in the championship next season it is a very very tiny chance but it's not impossible uh three teams get relegated at the end of the season And they are very close to being in that fight, although points-wise, it would take a hell of a lot for them to go down.

19:39So they're playing really poorly. They've got a new manager. He said it's the worst Manchester United team in history. All right, let's not beat up Man U. But I mean, I guess what I just want to get down to is, does the city really need another stadium? I mean, with all that's going on in the U.K. economy right now, you know, should taxpayer dollars be used for another stadium? I mean, what is the benefit back to the economy? Yeah, I mean, that is a good question. And there'll be a lot of people that will not be wanting the UK government to put a penny into this. On the other side of the coin, the UK economy, as you say, is very focused on London.

20:18There's been, over the past few years, there's been all kinds of government initiatives to try to encourage growth in the northern part of the country, which is less prosperous. There was a northern powerhouse that the Conservatives tried to create, but it never really got anywhere. And it included sort of improving transport links and everything like that. And in Manchester, you do have two of the most famous football clubs in the world. Of course, two of them. So you have some, I would say, Manchester City, you know, would count. Well, no, but that's what I mean. I mean, there's already two, I guess what I'm just trying to say is for a population of 600 ,000 people, right?

20:53I mean, they already have 100, I mean, that's the existing stadium, right? The legendary stadium seats 100 ,000. So I don't know. What are they talking about? Are they talking about another 100 ,000 capacity stadium? Is it less than that? I mean, I'm just trying to get the thought process here. Yeah, no, sure, sure. No, I mean, it's an ambitious project. I mean, it's 100 ,000, which would be the biggest stadium, bigger than Wembley, which is sort of 89 ,000 in London, bigger than, you know, I mean, Old Trafford, the current Manchester United Stadium, is already the biggest stadium in London. This would be 25 ,000 more, so another 30 % on top.

21:30But, you know, Manchester United, Jim Ratcliffe yesterday was saying, you know, he thinks it's the biggest club in the world. It is one of the biggest clubs in the world. It is capable of attracting 100 ,000. And if it does that, and it would do that probably, unless it falls off a cliff on the field, which is doing a good job of looking like it's doing at the moment. But even at the moment, even 14th in the league, with no prospect of Europe next season, no prospect of winning the league, it's still getting 74 ,000 every single week. So there's no shortage of people that want to go to see Manchester United.

22:05The question is not whether the stadium should be built at all, but whether the government should put its hand in its pocket and kind of help it to be built. That's the question, I guess. I know we're running out of time, but I want to bring up, never mind on the pitch about Man U, off the pitch. Mr. Ratcliffe has been cutting jobs. He's trying to get cost under control. Can you comment briefly about that? You know, he's been so tough. I mean, like no other football owner in England in recent years, he's cut the workforce from about$1 ,100 by$450. He's cut the meals to free lunches. He's cut the perks for employees who come down to London for the Cup final last year.

22:46He cut the Christmas party. He's really sort of what he's kind of bringing, carrying over from his chemicals industry background, a real savage look at costs by nothing else being done before in football. But, of course, at the same time as he's doing that, he's losing money on making bad decisions. Bloomberg UK business reporter David Hellyer. Thank you so much, sir, for joining us on the Bloomberg Business of Sports. Our thanks to David Hellyer for joining us. This is Bloomberg News UK business reporter. And sticking with my sport here, soccer. Bloomberg Dallas Bureau Chief Julie Fine recently caught up with Dan Hunt.

23:23He's co-owner of the Kansas City Chiefs and is president of FC Dallas. And he's making big plans for the FIFA World Cup in Texas. Let's hear a little of their conversation. Big news. Dallas gets the International Broadcast Center for World Cup in 2026 in downtown Dallas. Kay Bailey Hutchinson Convention Center. Okay, so what exactly does that mean? Really, it's the storytelling of the entire World Cup. This is the centralized broadcast center. In the 2022 World Cup in Qatar, there were 187 countries that broadcast live from that studio there in Doha. And so we have what will be the broadcast center for the 2026 World Cup.

24:02And I expect it to be more than 187 countries. And they're saying as many as 5000 media people will be working at the center and broadcasting daily. Financially. I mean, that's a boon. I mean, let's talk about that. Yeah, I mean, you have 5 ,000 people staying here. This is truly the kickoff to the World Cup, though. You have so many people that will show up in January or February to start setting up for broadcast because this is the storytelling that goes back to the countries for each match. And there are 104 matches. The low estimates I've seen are$200 million of economic impact for the Dallas-Fort Worth area.

24:38And I've heard as high as$400 million. But you can imagine, this is tens of thousands of hotel nights. And again, this is the second time Dallas has hosted this. That's got some family meaning for the Huns. It's a big win. Back in 1994, we had the International Broadcast Center here in Dallas. It was at Fair Park. And it was something my father, Lamar, was so proud of. He just, you know, it was such a win for the community. I didn't really understand it at the time, but as sort of the evolution has gone on, and I've gotten to see these broadcast centers and now these latest generations, These are like pop up cities bringing thousands and thousands of workers.