Caught Stealing… The View?

0:00Eriq Gardner:The Varsity Podcast is presented by MLB. The National Pastime will be celebrating America's 250th birthday with a summer full of special promotions and events, including MLB All-Star Week in Philadelphia. Fans can find more information at MLB.com slash July 4.

0:23Eriq Gardner:When others hear noise, T. Rowe Price interprets market signals to find investment opportunities. That's the power of active ETFs from T. Rowe Price. Their portfolio managers approach data from multiple perspectives, analyzing trends and conducting deep research to give you their curiosity-backed active management expertise. Learn more about their active ETFs at TROPrice.com slash explore ETFs. Exchange-traded funds ETFs are bought and sold at market prices, not NAV. Investors generally incur the cost of the spread between the prices at which shares are bought and sold. Buying and selling shares may result in brokerage commissions, which will reduce returns.

1:04Eriq Gardner:T. Rowe Price Investment Services, Inc.

1:10Eriq Gardner:Congratulations! You made the varsity of the podcast. My name is John Aranda, and I'm Puck Sports Correspondent and the host of this pod. And today, I'm going to chop it up with my friend, Eric Gardner. We work together at Puck, and I have to tell you, Eric is one of the smartest legal minds I've ever come across. He also happens to write a column every Monday on the law and sports for the Varsity's private email. And let me tell you, he never runs out of things to write about. Happy to have Eric here. But before we get to Eric Gardner, today is Wednesday, July 15th, And here's what I'm watching.

1:46Eriq Gardner:I have my eyes on the 2030 and 2034 World Cups. Yes, those are the next two World Cups, and the U.S. media rights for those two tournaments are open, and they're going to be negotiated in late fall or early winter. Now, there's been a lot of speculation so far about who's going to bid and how much these rights are worth, but I'm here to tell you nobody knows. Seriously, I've been talking to a lot of people about this and they really don't know. Okay, let me amend that a little bit, actually. We do know that Fox will bid for them. Fox has the rights right now and loves the World Cup. Netflix almost certainly will bid too.

2:26Eriq Gardner:Netflix bought the Women's World Cup rights and grabbing the men's tournament makes a lot of sense for Netflix as well. And you can bet that others like Disney, Telemundo, YouTube, Apple are also going to show a lot of interest. That seems pretty obvious. The problem is that none of them know exactly what they're going to be bidding on. None of them know at all what they're going to be bidding on. Will these games have hydration breaks? Most Americans think it's a no-brainer, but FIFA is not made up of most Americans. That's a$200 million decision right there, and it is not a foregone conclusion.

3:01Eriq Gardner:What about the 2034 World Cup in Saudi Arabia? The last World Cup in the Middle East was four years ago, and FIFA had to move those games from the summer to right in the middle of NFL season. That's another decision that's worth at least a couple of hundred million dollars. Also, how big will the tournament be? It expanded to 48 teams this year. FIFA has said it could go up to 64 teams. How do you come up with a bid for a tournament when you don't even know how big it will be? As one media executive told me, I guarantee you nobody who's bidding has any idea what they think it's worth. Okay, now let's get to Eric Gardner.

3:43Eriq Gardner:Eric Gardner, great to have you back. So many topics that we can choose from. In the intro, I mentioned that you do a column every Monday for the Varsity private email that Puck puts out, the email on sports. and you never run out of topics to discuss. Every time you file, it's like, okay, what are we going to talk about now? Because there's always something going on. But I want to start, and this is a fast-moving situation, so let's not talk specifics about the Paramount-Warner Brothers Discovery merger and the fact that the states are sort of looking to derail that or at least slow it down somewhat.

4:33Eriq Gardner:The federal government already said okay to this merger. It seems like something that should sail through. How much of a potential impediment is this for that merger happening? Yeah, I mean, that's what everyone's trying to figure out, even those involved in the transaction. You know, the key thing is that the Justice Department had a way to hold up the transaction by, you know, asking certain questions, demanding certain information. And there was a set schedule that would happen. You know, the states look like they want to challenge it, but they are going to have to get a court to agree to hold up the transaction.

5:17They're going to file a lawsuit and ask for an injunction. And then it's up for a court to decide whether they have a likelihood of prevailing in the case and the balance of harms and whether it makes sense to hold back the merger now or whether it's impossible for the merger to go forward and then maybe unwind it later on. but nothing is for sure at this moment.

5:49Eriq Gardner:The thing about what you write about, there's always precedents, and we're going to talk about the Cubs case later on where you bring up a precedent from the 1800s. What was the year that you brought up? 1856, I think it was. Yeah, yeah. It's probably one of the older ones. What's a precedent here? Is there a precedent where the states go after a business transaction or a business merger similar to this? Well, you know, states have long signed on to briefs that have challenged mergers, but they haven't really traditionally played the lead in challenging mergers. Usually it's been the federal government that does that sort of thing.

6:37You know, the difference now is the perception that the Trump administration is playing favorites, that they're cutting deals based on lobbying and all that. Plus, there's key sensitivities around the particular assets of this particular transaction, in particular, the news assets. And that gets into a very kind of political flavor. So the fact that states are doing this is certainly a little bit unprecedented. but I don't think that it's going to be the last merger that they will step forward on. If you remember a few months ago with the Live Nation case, the federal government cut a deal and then the states nevertheless went forward and led a trial that led to a monopoly verdict.

7:33So I think that they're kind of learning in real time how to prosecute these cases. They're organizing amongst themselves. They've been hiring outside counsel to handle cases of this flavor.

7:48Eriq Gardner:When you first heard that the states were going to do this, I'm curious what your initial reaction was. And I'm curious how your initial reaction has changed or everything sort of has confirmed in terms of where we are right now. Well, John, you'll be no surprise. You won't be surprised to learn that I kind of predicted this. You know, I did see the state AGs intervening on this pretty early on. So that didn't really surprise me. I mean, there are certain small things that did kind of surprise me. For instance, You talked about the Justice Department kind of, you know, blessing the merger. But, you know, what usually happens in instances like this is that, you know, they'll get the clear, but usually the DOJ won't issue like a full-throated statement that says, you know, the merger is pro-competitive.

8:53That was certainly unusual and kind of surprised me. you know the the fact that this has become such a political football is certainly something I certainly expected that and that's one of the reasons why I thought that that's you know state AGs in California and New York and maybe some of the more liberal states would would step forward but to the extent to which you know this is the rhetoric has grown and all that you know certainly I suppose, you know, you know, surprised me a little bit.

9:31Eriq Gardner:On a scale of like one to 10, 10 being this is in peril and this is going to kill this merger. And one being, yeah, this is like not even a speed bump in the road. What is the level of peril right now for the merger?

9:47I don't think that the merger is in danger. I think that the question really is, you know, how much delay it's going to take. And, you know, how costly that's going to be, because at a certain point, it gets to be so costly that, you know, the states may have leverage to force some divestitures. You know, maybe they can force David Ellison to sell off CNN to rescue, you know, the broader part of his merger deal. So, you know, there's certainly, I guess, posturing when it comes to those initial wins, which are going to lead to, you know, appellate battles. You know, I've seen some signs in recent days about, you know, how Paramount is, you know, looking all the way up to the Supreme Court on this case.

10:41And, you know, they hired, you know, one of the most prominent appellate litigators out there. And, you know, they're talking about, you know, resetting kind of the, you know, the big precedent for how these merger cases are measured. so you know I think that everyone's thinking both the long game and the short game ultimately I'd be shocked if this merger doesn't go through but I definitely think that there are some key battles ahead that will kind of define what sort of win it will be because it might not be as so clean as you know the transaction proceeding as is

11:22Eriq Gardner:By the way, this illustrates to me completely why you are such a brilliant legal mind. Because for every lawyer, there's not one lawyer that I've ever interviewed where I give them a scale of one to 10 that actually answers within that scale. We try to be. But everyone tries to kind of be like, be carefully. Yeah. The answer still told us a lot. The lawyerly way of kind of like, you know, weaseling, you know, in the middle there. So there's also some potential like little fires happening over in Europe. Is that anything to be concerned about? Well, I think most of Europe is going to be fine. I think that the European Union is busting the deal.

12:11There might be some minor concessions that they get. The key that I've highlighted is the UK, which kind of came out of nowhere on this. The UK has a kind of weird process. You know, in other jurisdictions in the world, you file paperwork, you wait for approvals, and then you get blessings, and then you close the merger. In the UK, it's, you know, it's kind of like informal talks. And then if there's some problem that gets worked out at the end. And that's how it figured to go here, except for, you know, the UK, you know, culture, you know, secretary, who's kind of in the midst of her own kind of political dance.

12:58She, you know, announced that she was minded to intervene on this. you know she talked about you know new legislation that could be brought forward and so suddenly there was a scramble to kind of figure out whether this would hinder the merger in any way we still don't have answers to that uh you know that might be figures to be settled in the next couple weeks um i i don't expect it to um you know delay the merger but it's it's possible and i i don't think anyone should ignore it. I think there's going to be a lot of attention and buzz towards the state AG stuff domestically this next week because it's the most tangible.

13:43It's a thing that reporters can read and understand. The UK thing, by contrast, is very abstract, but we shouldn't forget about it because it does have the potential of interfering. Whether it will or not is another question, but it's certainly something to watch.

14:03Eriq Gardner:Okay, so I'm going to put words in your mouth again. It sounds to me like these are all things that are somewhat concerning, but in terms of just delaying the inevitable, which is a merger that eventually is going to work through. Do I have that correct uh yeah more or less i mean i might use more hedging language than you did but but but uh it's a close approximation of where i feel yeah um i want to ask uh skip to the world cup um have you caught world cup fever have you been watching oh i've been i've been you know obsessed with it i've watched almost all the matches it's uh it's uh i you know i do work and I have the game on in the background.

14:48It's been great. I actually really do enjoy the World Cup.

14:53Eriq Gardner:Well, you had a story that's been out there about sort of the ticket resellers getting sued because they're selling and they don't actually have the tickets to sell. And it seems to me when I first read that story that it was a problem with the ticket resellers. like but you in your story and you made made it sound like this is really a fifa problem much more so than like you know say a stub hub problem or something like that i think it's a fifa problem i don't necessarily know whether it's a like a fifa legal problem like a legal endangerment or something like that because it sounds like to me like they're on on solid ground but the fact is that they've made this event so very expensive to attend and quite inaccessible unless you're willing to go through hoops and go through the process and pay the fees and all that.

15:56StubHub really was trying to figure out, is there some way we can manage the situation so that people can resell their tickets and all that. So you can kind of understand that. The problem is that it raises issues when it comes to authentication and when FIFA changes how tickets are allocated and all that. Unless you have buy-in from FIFA, the resell platforms don't exactly work. And so I think it's totally fair to attribute some blame to that to FIFA, not just StubHub. Now, whether or not that's a legal problem for FIFA is less unclear. It's certainly a legal problem for StubHub right now because they're in court with aggrieved ticket holders saying, hey, you promised us one thing and we didn't get it.

16:53As for FIFA, like I said, they may be on safer ground legally, if not morally.

17:09Eriq Gardner:This summer, I'm shopping the small space solutions that America waited 250 years for at Bob's Discount Furniture. Bob's has everything from retro chic bedroom sets with plenty of storage, party-ready dining sets in four fun colors, stylish and space-conscious Bob-o-pedic sofas to feature-packed power recliners that let me kick back all summer long. So when you're ready to snag latest trends in small space styling, stop in or shop online at Bob's Discount Furniture, where America shops for furniture. Hey there, it's Jill Schlesinger. I'm launching a new show. It's called Money Moves, and your money is going to move.

17:46Eriq Gardner:We're going to help you make better financial decisions. We're going to call out the BS you're finding all over social media. We're going to give you actionable guidance to make your financial life clearer, less stressful. We're going to answer your financial questions and take the mystery out of your financial life. Follow and listen to Money Moves with Jill Schlesinger wherever you get your podcasts.

18:12Eriq Gardner:Well, you're so good about sort of spinning your stories forward. If I'm the NFL, why don't I take FIFA's position? Why am I sort of seeding the ticket reselling market to somebody like StubHub, right? Yeah, I mean, it's a little different, just the way that the member organizations are set up and one's international, one's domestic. Tickets are different than, say, television rights. It's easier to separate out television rights with tickets. It's a license, basically. you know, there's disclaimers on it and all that. So we're talking about different markets here. But certainly, yeah, if the NFL wanted to assert more control over the product, if teams, you know, wanted to assert more control over the product, they could, you know, probably, you know, take some lessons here and try to capture more of their resale value.

19:20and you know I would be surprised if that actually does happen now the the stories are

19:28Eriq Gardner:not quite heart-wrenching but they're they're terrible stories you know people that have traveled to Mexico so they have plane fare they have hotel fare they have you know this sort of vacation fare with the full expectation that they have then tickets for the game that they're they actually traveled to see and then they go and look and again the tickets have been recalled or There were no tickets to start with. It seems like I'm actually surprised it's gotten to this point. It seems like, again, I'm not a legal expert, but it seems like an open and shut case to me. Like, you know, StubHub, you know, provided a platform that had these tickets available and the tickets weren't available.

20:09Eriq Gardner:It seems like this is something StubHub. You say it's open and shut, but then there'll be defenses premised on the fine print of the waivers that you signed when you clicked by. I love the fine print. Whether this belongs in open court or whether it belongs in arbitration. Like at the end of the day, maybe they are at fault and they do owe something. But the question is, do they owe a whole entire class action of people? Why is there damages here? Is it the damages for one ticket or is it damages towards thousands of consumers? And so it's more complicated than did they do legally wrong. The question really is are they going to get punished to the extent that they change practices or not?

21:05Eriq Gardner:You know what I still don't get a sense of? Is this unique to the 2026 World Cup in North America? Or is this a suggestion of some change in ticketing policies or in ticketing resale values or something along those lines? I definitely think FIFA changed ticketing policies as far as I understand things. For 2026, they incorporated dynamic pricing and limited demand and they had different kind of release strategies. and they, you know, definitely intended this to make this a very expensive event. And you know what? It's been a very successful event. It's been well attended. You know, it's gotten a lot of eyeballs.

21:52You know, at the end of the day, I think that they will regard this as a smashing success and will continue, you know, these policies moving forward. So, you know, for all the, you there are out there, FIFA can say, hey, those are problems with the resellers. They need to get on board with our kind of program. And I think that everything that they've done, they will feel emboldened by. Yeah.

22:25Eriq Gardner:And I have such bad news for consumers or for sports fans. is FIFA, there are all these complaints about the cost of tickets, and they are absurdly high to me. But you're watching most games. You see empty seats in those stadiums. The stadiums get filled by raucous fans that are out there. And FIFA had two things coming. One is the U.S. sports market is so mature that they knew they could charge a higher ticket price than they could in other markets that they go to. And secondly, you hear this complaint from owners, like anybody involved with the business of sports, is that they sell tickets and then they watch the resellers sell them at a multiple of that.

23:20Eriq Gardner:And they're like, why are we allowing somebody else to make that much money off our ticket? We should be we should be putting we should be selling the ticket at that high price, just like they do on Broadway or just like they do for the ballet or things like that. So so so this whole story that that you are writing about with the FIFA tickets and, you know, the reseller just not having it available. It hits so many of different themes within the sports business to me. Yeah, I think it's a more complicated situation than people in the industry sometimes kind of frame it for the public. I mean, on one hand, yeah, it's easy to blame scalpers and resellers and say they're, you know, you know, they're taking advantage of consumers.

24:04And, you know, they're the reason why ticket prices are so high. On the other hand, you want to, you know, be able to give people the ability to, you know, dispose of their tickets if they buy them and can no longer make the event. You know, you want kind of like latitude and freedom there. So, you know, I think, you know, honestly, I've always, you know, felt more antipathy towards to kind of the systemic scalpers out there, the ones that buy up like thousands of tickets, you know, the second something opens for sale and then resells them. But, you know, I can distinguish that from just having a reselling platform at large, because I definitely think that there are, you know, good needs for that.

24:57You know, I think I think, you know, there should be kind of, you know, a change, a changing of ticket control in the marketplace. I think that's a that's a good thing to have.

25:10Eriq Gardner:A final question on this topic. Why did you decide to write that? There are so many legal stories out there that deal with sports. Why did this catch your fancy? A couple of reasons. One, it was just very timely. Everyone was talking about World Cup. And the other reason was that a lot of people were asking me about this. They just couldn't believe that, you know, FIFA has this reputation of being like, sorry to put it so bluntly, but corrupt. And so a lot of people, you know, were, were asking me, you know, uh, you know, can FIFA get away with this? Is, is, is this, is this kosher? Um, and so, you know, it was, it was something that I was paying attention to and, and just trying to, to try to frame it the best that I could.