Josh Pate Gets Drafted

0:04Josh Pate:Congratulations! You made the varsity, the podcast. My name is John Aranda and I am Puck's sports correspondent and the host of this pod. And today, we're going to go deep on the college football landscape with Josh Pate. Last week, Josh was in the news. He announced a deal where on three, rivals in Yahoo Sports are going to distribute his popular college football show. It's a unique deal, but it is one that you've heard many successful people talk about. You see, Josh bet on himself a couple of years ago, turning down a big salary offer from CBS Radio and venturing out on his own. And it seems like that bet is starting to pay off.

0:45Josh Pate:But before we get to Josh, today is Sunday, August 10th, and this is what I'm focused on. I spent all last week trying to make sense of all of ESPN's deals. ESPN is launching its direct-to-consumer app, what we used to call Flagship, in less than two weeks. It also cut deals with the NFL and the WWE. And because of all this activity, I ended up appearing on a bunch of radio shows and podcasts last week to try to explain what's going on. And what I noticed is that every single host eventually at one point would ask about ESPN's commitment to journalism. You see, if the NFL is going to take an ownership stake in ESPN, what does that mean for ESPN's investigative unit, a group that has unflinchingly uncovered, unflattering stories about ESPN's biggest business partners, including, yes, the NFL?

1:42Josh Pate:So anyone who regularly listens to this podcast knows how fond I am of Don Van Nadeau. He's been with ESPN for about 13 years. DVN, of course, has been a guest on this pod several times, and he really has become the face of ESPN's commitment to journalism. And this much I know. If the NFL tries to keep ESPN from doing tough stories on the league, actually, more to the point, if ESPN becomes more susceptible to holding off on these types of reports, DVN is not long for the company. And neither is any of the other great journalists at work there. Seth Workisham, Tisha Thompson, TJ Quinn. I hate to start naming names because I'm going to forget so many.

2:26Josh Pate:It's a legitimate topic. It's something people should be keeping an eye on. But right now, I'm taking what Bob Iger and Jimmy Pataro say at face value. They say that ESPN's commitment to these kinds of stories won't change, which I hope is right. In fact, I credit DVN's reporting for getting Dan Snyder out of the NFL. Here in DC, everybody's pretty much celebrating that. He's also had plenty of stories that put Roger Goodell in an unflattering light, including a behind-the-scenes expose on how the NFL commissioner initially wanted to continue playing the game after DeMar Hanlon almost died on the field.

3:02Josh Pate:So I called Don Van Nade last week after everything went down, and I asked him simply if he was concerned at all about the NFL taking an ownership stake in ESPN. Of course I'm concerned, he said, but I've had assurances from everyone who I work with that nothing will change. Again, I choose to believe Bob Iger and Jimmy Pataro here. Even before the NFL took an ownership stake, the league still was ESPN's biggest business partner. You'd think that ESPN would have tried to stop some of these stories about a league it was paying two and a half billion dollars to each year. But ESPN's investigative team kept plugging away.

3:40Josh Pate:And I suspect, actually, no, I hope that will continue to be the case. Now, let's get to Josh Pate. Josh Pate, thank you for joining the pod. Big news coming out this week involving you and your show and on three and Shannon Terry. I think the world of Shannon Terry, I think what he does is, you know, following Shannon and generally is a pretty good idea. Walk us through the actual news though right now. Well, I appreciate you having me first off, John. What's happening right now is sort of a hurricane of media movement in the space, if you will. I do my show, Josh Pate's College Football Show.

4:22I've owned it for a couple of years now. Started it under the CBS umbrella, gained ownership of the assets and whatnot about two years ago. And And so I knew, you know, we kind of had a next stage coming. I worked with Shannon first in 2020. He's one of the first people who gave me an opportunity and brought me to Nashville, Tennessee. At the time, I partnered with CBS and 24-7 Sports. He had moved on to start other ventures, as you just mentioned. And I knew our paths would probably cross again. So the news is we are entering into a partnership with them. And Yahoo Sports and On3 have entered into their own partnership.

4:58And, you know, the show for the viewer doesn't change a whole lot. Same channels, same feeds, same cost of zero dollars and zero cents. But as you know, from a behind the scenes perspective, when you find the right sales apparatus, when you find the right marketing engine, or in this case, when you find the right social media engines, and on top of that, in the college football space, when you find the people who are doing the best work in covering the portal, in data and distribution of NIS, figures and recruiting rankings, it does not help or does not hurt rather to be in business with them above and beyond that.

5:35They're just good friends of mine. So that part has become public and I'm really, really excited about that.

5:41Josh Pate:I want to take you back to your decision to sort of take ownership over your own rights, which is something a lot of journalists, reporters are doing now, like with Substack. It sounds like you came to this decision though, years before that. It sounds almost like more of a risk when you did it. What went into your thought process about like, you know what, I need to own my own rights? Maximum risk, well worth it, but maximum risk. This was three or four years ago now. I'd come to Nashville, I'd come to CBS. I was doing my show on YouTube or on podcast feeds and we had really started to scale the audience.

6:22And I was in a contract negotiation with CBS and there was a big salary number on the table. And it's just not where my mind was at. My mind was in ownership, the lane of ownership, IP assets. I wanted to own it. I wanted it to be Josh Pate's college. It's exactly what we call it now. Josh Pate's college football show. And the folks at CBS were wonderful about it. Open lines of dialogue, open communication. They listened and I appreciated that. But at the outset, John, it was just, well, let's just give you a bigger salary number. Stop worrying about the ownership. And it's just, I wasn't willing to do it.

7:02And so it took a whole lot less in terms of downside guarantee, as I would call a salary, downside guarantee. But in exchange, we got the assets, we got the ownership, we got the channel, we got the feeds. And that was where I wanted to be. Because at that point, everyone can talk about betting on themselves, but that's how you really bet on yourself. You leave money on the table up front in hopes that what you're doing means something, what you're doing is meaningful, and ultimately the audience will be the dictator of that. But that was three or four years ago. Obviously, I'm very happy that it went the way it did.

7:34And now, I mean, we've continued to scale the numbers. I think we're probably the most trafficked college football show in the entire digital space. And I still view it as a wide open frontier. I mean, I still think about it as a wide open portion of the industry.

7:48Josh Pate:All right. So this is where I always have a question of like, and if I was advising you, I would have told you, take the, take the bigger salary because you now own the Josh Pate college football show. How do you profit off that? Are you going to sell the Josh Payton? You're it, pretty much. Spin this forward five years or so. Where do you hope to be? Well, we've got several different buckets of revenue on this. I mean, you've got just your AdSense revenue from what you do anytime you do business. So by the way, just by the way you intro'd that is you're not looking to sell out. You're looking to build a business out of it and have these buckets going all the way through.

8:27I'm glad you mentioned it like that because I do think it needs to be presented that way. There is not a scintilla of my mind that thinks, let's build this thing so we can sell it to someone one day. The last sale I'll ever do has already been executed. So everything from this point is going to flow this way. And if it dies here, it dies here, but it's going to flow that way. So, I mean, you've got your AdSense that you just get from doing the show on YouTube, and that's really, really good money. But we've got incredible partnerships with different brands out there. I mean, we do business with Quick Trip.

9:00We do business with Academy Sports and Outdoors. We've got several others that we'll probably announce in the near future. And we're, John, we're able to secure an extremely high CPM rate because our retention rates through the roof. And I got to thank our audience for that because they hang around. I mean, we're like 25, 26 minute average viewer retention per show in an era where everyone tells you attention spans are garbage. So we've got that. I mean, we've got a merchandising branch off of that. Public speaking has been a venture that I haven't really delved into a whole lot, but there's a huge market for.

9:39So we do several, several, several times better the way that we run it now than I ever could have done in raw salary numbers. Talk to me a little bit about the market that's out there

9:54Josh Pate:for your type of show. I'm looking at the networks, the TV networks that are deep into college and ESPN, you know, they have the college pre-game show, college game day, you know, but it seems like they can't wait to get like to NFL programming. Same thing with Fox. What's the market like for college football? Would you describe yourself as college football or all college sports? 100 % college football. Okay. So what's the market out there for that? Is there still a hole in that market? The listener can't see this, but I have a huge grin on my face as you're asking the question. The answer is it's totally untapped.

10:32It's almost inexplicably untapped. I cannot believe it's a reality. But to back you up about 10 or so years, I'm down in Columbus, Georgia, working in construction. I'm working in a fabric warehouse down in Columbus, Georgia. And all I'm doing is I'm consuming sports talk radio every day. I'm living the same life that my buddies are living.

10:54Josh Pate:Josh, a fabric warehouse in Columbus, Georgia, that's got to be just denim, right? Is that the fabric? What's a fabric that we're talking about there? You got denim, yes. You got upholstery. You're doing business with a lot of the big furniture manufacturers. Trust me, I know all the freight companies, all the furniture distributors. Yes, absolutely. But what do you do? You've got a non-air-conditioned warehouse. You've got nine, ten hours a day to fill. You just listen to talk radio. And I remember thinking, even then, John, why are there 37 different NBA shows being fed to me? Why does the NFL have a show on every street corner?

11:28And I mean, college football has grown into what it is now, which is the number two sport in America. and it's so painfully underserved. Now, here was my viewpoint on that. You can either complain about that or you can do something about it. If you really think you understand the market, and in this case, I'm part of the market. I am a diehard college football fan. So if you understand the market and you understand that there's a huge unquenched thirst out there, not just for games, we're not talking about live programming, but we're talking about anything from commentary, studio-based programming, ancillary programming, then go do something about it, was my thought.

12:05And this is just kind of a blessing that the timeline worked this way, but I'm sitting down there thinking this about the time that you have YouTube live streaming coming to be. You have Facebook live streaming coming to be. Podcasting is well on its way to becoming what it's become. And that removes the barriers of overhead and distribution, which in a previous life would have been a barrier to entry for people like me, but no longer. And so we kind of started to toy around with what became the show and took a little while, but people at CBS, Shannon Terry, noticed it when he was still there and calls me up just cold one day.

12:43I sent him to voicemail. I didn't even know who the number was. And he said, hey, we don't even have something like this. I mean, we're over at CBS and 24-7 Sports at the time. We don't even have something like this. Will you move to Nashville and do this for us? And John, I knew if we got the opportunity, it would work. It's not like it was a big mystery that you got millions upon millions of, of like P one college football fans, not folks who kind of watch college football, but they love the NFL first and foremost, diehard P one level college football fans that are just begging. I know because I was one of them and I was begging for it.

13:17And it's still underserved.

13:19Josh Pate:Well, I guess if I'm a TV executive, my only, here's my pushback on you, and I'm not even sure if I believe this, but college football is a regional sport. So like you're in Nashville, that's SEC country, you know, and if you're in, you know, Columbus, Ohio, you know, that's Big 10 country. And then out West, you have what used to be the Pac-12, I suppose. And it's hard to, With the NBA, I care about what Ant-Man's doing in Minnesota or LeBron's doing in LA, and the NFL is the NFL. That's sort of another league. Have you found it difficult to join up those different regions, or have you found that it's not regional at all, that SEC fans do care what happens in Ann Arbor or do care what happens over in LA?

14:07If it's presented the right way, everyone cares about everything. That's what our research indicates. That's what our data indicates. Now, you are right that your hot markets are going to be Dallas. It's going to be Atlanta. It's going to be Charlotte. Those will be very hot markets. But I'm telling you right now, Detroit, Michigan is a hot market for us. Seattle, Washington is a hot market for us. And I know they're not just watching when I talk, you know, University of Washington Husky football either. I think what that's been used for in a lot of cases, candidly, has been a cop-out mechanism to not go down the road.

14:40Because I can confidently tell you the product that is on the field on Saturday, the entire aura that surrounds it, the tradition and pageantry, when it is bottled and leveraged and presented properly, when the fundamental layering of what makes it great is understood properly and packaged up in terms of content, it scales and it presents itself viably coast to coast. That does not necessarily need to mean someone in Los Angeles, California once visited Tuscaloosa or has a cousin in Columbus, Ohio, and he went to a game with him one time. That helps. But when this stuff's presented properly, it is digestible coast to coast.

15:19And I also will say that there is such an old school way, sort of an old school media market-esque way of thinking about this stuff. And you don't have to think that way anymore. In the digital media world, you don't have to think that way anymore. Certainly when I talk to an advertiser, when I talk to a potential partner of ours and they want to do business and their heat maps really, really pop across the South, well, that's a layup for us. Whereas a business that's based in Canada, we may be a little tougher pulling across the finish line, but that's our business from a broad strokes purpose.

15:54We see it like in indisputably we see in our data, there's a passion for it coast to coast.

16:01Josh Pate:So what you're saying essentially is the TV networks, they will take a look at Tuscaloosa or Alabama and say like, yeah, the population, I know it's a good team and it's a huge brand, but we'd rather have, you know, Michigan or Ohio state or something sort sort of with a bigger population center around it than, than, than a, you know, Bama or Auburn. And you know what? Yes, yes, I am saying that. And you know what? If they think that way, great. All that did was it created not a pool or a lake, but an ocean of untapped potential for people like me. I'm not the only one, but people like me looked at that.

16:37That's kind of going back to what I was talking about a second ago. There's almost like an arrogance or a hubris about that attitude. So you could get mad at that in 1994, but not do anything about it. But in 2024 or five or whatever, you just go do something about it. Pull out a microphone, pull out your cell phone. And in our case, you scale and you scale and you scale, then you make a lot of money on it. You reinvest, you go hire the right people, and then you build a product that's comparable from a quality standpoint to anything that's being presented in the broadcast world anyway, but you don't have any of the limitations.

17:13and you are innately in tune with your audience because you're on the ground with them every day. I'm not guessing from Bristol, Connecticut. I'm not guessing from Los Angeles or New York. I know because I'm one of these people and I came from there. And so there's really no guesswork. I just, when I hear that attitude and you're dead on the money with how you described it, when I hear that attitude, I look at it, I shake my head and I just say, all right, you do you, we'll do us. That's fine.

17:41Josh Pate:Josh, let me take a quick break. I want to come back and I want to talk about the current state of college football.

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18:55Josh Pate:Okay, so, you know, we used to have a Power 5. It's now kind of like a Power 4, I guess, but it's really two big conferences that are going national. You know, the Big Ten has California schools and Maryland and New Jersey involved with it. The SEC has stayed somewhat regional, but those are the two power schools. This is a two-part question. Is that good for college football? Is that good for your business? If it's bad for college football, it's bad for my business. And it's bad for both long-term. I've got, I mean, as we're speaking, I've just come from a multi-day symposium meeting about this very thing.

19:34I am very hopeful that the environment you're describing is a temporary environment. And I'm really hopeful that when you and I are watching the documentary 20 years from now, that we're talking about the early to mid portion of the 2020s as a headache, but it was very transitional, getting us to what would end up being. Now, I've always had a theory on this, and my theory is worth as much as the next guy. But my theory on this has always been that those big two, the SEC, the Big Ten, were always eventually heading for sort of a parallel AFC, NFC type of world. And I think it'd be foolish to assume that that doesn't include more acquisition of brands in the future.

20:20And what that means for people in our world is different than what that means for the fan. But what it means for the fan directly impacts our world. Because if interest wanes, then our world fundamentally shifts. So what I hope it means, John, is we get to a place where the SEC makes the moves they need to make. The Big Ten makes the moves they need to make. They acquire what they need to acquire. And it may be that one gobbles up the remaining valuable assets in the ACC. And the other one gobbles up the remaining valuable assets on the West Coast and in the Big 12. But as long as there's a button that we can press at the end, and once you get to your 24 or 32 teams, and I get to my 24 or 32 teams, we reasonably divide ourselves up where college football has maps drawn on it.

21:05We used to call those conferences and they used to be very, very regional based. As long as we can get back to that, I don't think the casual fan really cares that the new Big 12 is a subsidiary of the Big 10. I really don't think the average fan in Sarasota, Florida cares that I'm watching a Florida State game and they're in the ACC, but it's property of the SEC. I don't think they care about that. I think they care that college football is moving the needle coast to coast. They feel like they have access to whatever the post-season model is. And the other hope that I have that we'll get here is because I think you and I both know you don't spend billions of dollars on the rights to these broadcast deals, playoff contracts, et cetera, only to watch the audience walk away.

21:54And so you got to do whatever it is in your power. And that power is pretty immense from the companies we're talking about to make sure not only that interest is maintained, but interest increases. You got to grow that game. And I'm hopeful that that's where we're headed, but it is very, very foggy right now. I got to be honest with you. It is very hard to see through the fog right now.