Will the WWE-UFC Merger Amp Up the Streaming Arms Race?

Welcome back to the Bulwark goes to Hollywood. My name is Sunny Bunch, culture editor at the Bulwark. And I’m very pleased to be rejoined today by Sean McNulty over at the Anchler, author of the Wake Up Morning newsletter. It’s the first email I read every morning, everybody should. It’s the best round up of what is going on in the business.

Thank you for being on the show show shop. Thanks

for jumping back, Sunny.

So the reason I I wanted to get you on today was to talk about what I think is not only going to be the biggest business story of this week full disclosure we’re taking a little bit early this week. But also, I I think one of the big news stories of the year, which is the the merger of UFC and WWE, into a kind of giant combat sports like entertainment that will be I think I think the new the new company is valued at something like twenty one billion dollars or something like that, some enormous amount of money. Bulwark us through walk us through what happened here. You spoke to WWE the WWE CEO, right, about about this deal. Yeah.

Briefly about the morning of so the deal broke Sunday night. BSCMBC. And then the official statement came out very early on Monday morning from Andeavor, the parent company of UFC. And WWE announcing this deal. So I talked to the phone with Nick Con as CEO of WWE.

You know, they’re pushing a lot of synergy. The the flywheel is a big term that they use, you know. So endeavor, you know, I don’t know, I want you wanna get into the endeavor business, but Endeavor owns many businesses. One of them is the way a Morris agency. They own, what we call, I m g and in a big events business, location.

They do big VIP ticket packages. They do kind of events around events with brands and kind of things to upsell live events. As well. And they have a sports technology division as well, which is gonna launch in q one as part of their their earnings report. They have USC in a sports division.

It also includes the professional sport writers association, European basketball, and a few other small leagues which are which are not part of this deal, but they have a they do own some sports leagues. So they’re essentially, you know, again, combining forces with WWE, if you will, Contributing UFC to this new company, which gives them a fifty one percent stake ownership of this UFC WWE company. They’re Ticker is t k o, which I thought was pretty pretty priceless. That one was pretty good. And WWE shareholders still have a forty nine percent stake.

Obviously, an endeavor as a parent company runs or owns the company, but the WWE shareholders, you know, still keep a forty nine percent stake in the company. So that’s kind of the business overall business metrics of it. But they see clearly a lot of overlap in audiences, potential to increase sponsorship money to increase ticket value to and remember, you know, as a part of WME, though the agency division, they sell a lot of sports rights they did the big deals for the big twelve, the big ten. I believe they did the men’s bed men’s march madness deal a few years back. So they’re about maximizing value for I mean, for all their clients, they represent bigger movie stars, things along those lines.

But for sports leagues, And as sports becomes the new most viable, you know, product to have in the streaming, you know, the Bulwark TV world, they feel, you know, that combination unlocks more value in WWE so they can get the most value for it, not just in the US, but worldwide. Yeah.

I mean, I think it’s just it’s just really it’s it’s really interesting to see how focused everybody is on live, entertainment, live sports. For the reasons you mentioned, I mean, this is, you know, what what is what is what is fascinating about this deal is that, you know, WWE has been looking for a buyer for a while. They, you know, there was some talk about maybe Comcast would would buy WWE, which makes some sense because the WWE Hub is on peacock. Right? That that would make, you know, in a a bunch of it would make a lot of sense for Comcast.

It would be it would be a great deal for Comcast, but it wouldn’t necessarily be the best way to maximize revenue for WWE or for value for the shareholders there because the future is selling these rights packages to the highest bidder on a rotating basis. Right?

Exactly right. That’s worldwide. So just to give you some scope at WWE, media rights is I think it was about seventy five percent of their revenue. So that’s how much of the company is based on selling rights to Japan, to Australia, to, you know, Abu Dhabi, to not end, of course, in the US as well. So and and UFC, about seventy one percent of their revenue is based on media rights.

So these companies, while we think of, oh, they must so much money at the events, which they do, the the majority of money to maximize here is in selling the rights worldwide and to your point, in perpetuity in various cycles in these things, as we’ve all witnessed that any league for the past thirty years have only gone up in value to this to this point. Now that more streamers are competing, the WWE announced, you know, when they did their deal in the UK, you know, they had six bidders, you know, for the rights for WWE, so they’re not seeing any kind of lag in that. So, yeah, that’s the real value there. These big media deals, which are and they’re all about not about to be, but there in the US, the WWE is on Fox, of course, on on broadcast on Friday nights, and on USA Bulwark on cable. And those both of those deals are up in twenty twenty four to be renegotiated.

They have the first let’s call the right of first refusal. Which just started right now. So they had the, you know, the first bid or to make a deal and get it done early if they want, if the WWE is or and now WWE UFC is happy with the money. Can get that done. If they think they can get more money on the free market, then those rights go out to whoever wants them.

So and then the UFC, which of course is on ESPN, Those rights are up in ESPN plus, probably even more so. Those rights are up in twenty twenty five, and the peacock deal you alluded to with WWE for streaming in the US is up in twenty twenty. Six. So this deal which is supposed to close by end of this year, which should solidify that as they go into these important rights to go renegotiations. Yeah.

We talk a little bit about ESPN and UFC? Because I I find this deal to be really interesting for a bunch of reasons. One of which I I, you know, I used to know a guy at Disney who was, like, you know, what actually makes us tons and tons of money, the UFC. Like, the just just the UFC. It is an enormous cash cow.

But us, we make we make tons of revenue off of that and and nobody ever talks about it because it’s not it’s not, you know, sexy. Like some of the other stuff. But it is it’s an enormous revenue driver. Right?

For the company at Disney, I prefer for ESPN plus, certainly. I mean, they’re about that twenty five million subscribers. How many of those are bundle subscribers? Because, again, you get that Disney bundle — Mhmm. — you know, where you get Hulu and Disney Plus and, yes, p m plus.

So a big contingent is probably that. But, you know, Sony named me something else that’s on ESPN plus exclusively. Yeah.

No. I had no idea. Nothing. Yeah.

Right. So they own the space. So yeah, exactly. Not only is it a passionate and pretty sizable fan base, they’re the big draw on ESPN plus you know, to sign up for I think it’s up to at least ten dollars or not eleven dollars a month now. Pretty you know, it’s pretty price.

It used to be down seven dollars or or or back in twenty twenty two. So it’s it’s not nothing to buy it on its own. Again, if you disney bundle it, it gets the cost go down. So it holds a lot of sway at ESPN plus right now without having any other major rights exclusively for ESPN plus. We’ll see if Bob Iger, you know, changes that or not in in the next couple of years.

But as of now, they’re the only show in town really on ESPN plus.

Yeah. So so what does So what what does this mean then going forward for w w w e and UFC? I mean, are they going to be package together as you if you want one, you gotta get the other one, or is it just gonna be, like, we’re gonna sell right here. We’re gonna sell right here. It’s it’s all we’re just creating more competition to generate, frankly, more more revenue.

Right? This is the big question. And, you know, those that the years I mentioned are a little bit staggered, and they’re streaming, and there’s, you know, broadcast elements to it. But, you know, the more windows you create, the more paychecks, you can get in. Or if you give somebody one big thing for, you know, broadcast and streaming, you got a big check, but the more you can split it up, chances are you make more money?

Something a big question that maybe is starting to arise is, oh, is there gonna be a big streaming service, you know, for combining the UFC and WWE into one. But let me just give you a little snapshot about how much money these things are making in the US alone. So these the existing rights deals, this is before the renewals, which will presumably be for more money for WWE and UFC for all those deals that I just mentioned is about one point one billion dollars a year. So that’s number you need to hit in streaming service revenue to make up just for the Fox deal, the USA deal, the peacock deal, and the ESPN deal for those two networks. That’s a lot of math.

I mean, you remember WWE used to be had to go on streaming service until they did the Peacock deal. It only got up to about roughly one point five million subscribers paying ten dollars a month, which is fine, but that’s only a hundred eighty eight million dollars a year. That’s nowhere near, you know, the money that they get. They get over seven hundred fifty million dollars in US rights alone, not the WWE through those deals I mentioned. So there’s a lot of math to make up there.

Plus, if you’re doing your own streaming service, you have to do all the marketing, you know, the you have to do all the tech support, you have to do a customer retention. Now those are very expensive costs on top of the money you’re leaving on the table just to have the right. So I think the arms dealer approach you mentioned, Sunny, is where I would say they’ll probably go within these new renewal deals because they’ll be a, very much in demand. And b, being a rice dealer is nice. You don’t have to deal with that customer acquisition thing and you get the the flywheel of being in the Disney empire to be promoted across ESPN and Hulu and other things like that where if you’re doing it yourself,

You

gotta buy all that stuff. You know, you were a a loan a loan wolf operator there. So there’s something to be said that I know whether it stays on peacock, Or do you look at Paramount Plus who maybe is infamously, you know, playing baroque creating content for between the coasts, you know, with the Yellowstone and at twenty three. Is that a better demo fit for the WWE versus Peacock? And will they step up with a check?

And the WWE can pitch against each other and have a bidding war, which is what you want as a rights holder.

Yeah. Yeah. I mean, it it is it’s fascinating. I’m gonna hop back to sports in a sec here, but I do wanna I I I I love this I love this arms dealer concept because it really it really crystallizes the the two paths, studios, and sports leagues, and everybody else can take here going forward. Because, you know, you’ve got a studio like Sony, Columbia Pictures.

Right? Says, well, we we could we we tried to do the streaming thing with Crackle didn’t didn’t quite

work. Sorta.

Yeah. Exactly. Yeah. You know, tried to do the Playstation Bulwark. That doesn’t that didn’t entirely Bulwark, you know, with and instead, we’re just gonna sell of first runs of our movies to Netflix for a billion dollars a year.

And then that’s easier and it makes more financial sense. I I I do wonder if we’re gonna see more more of that going forward.

I think, you know, that’s the great realization that’s happening right now. Sunny in Hollywood is, you know, the from about twenty, eighteen, nineteen until about twenty twenty two, the thing was we’re bringing it all in house, you know, NBCU, you know, we we bought the office for peacock even though it was making I think it was four hundred million dollars a year from Netflix wherever the deal was. They said we’re gonna, you know, when you get that in house, you lose that four hundred million dollars, you know. Friends at Warner Bros. Rage b o max.

We’re taking that off Netflix, and that was a, I think, a half a billion dollar year check or whatever it was, you know, major money because we wanna focus on streaming service. And now the server is kinda going back to, was that such a bad thing to have this elsewhere and having those checks from a rev everybody’s back to revenue, Sonya. How much money and and profit are you making and keeping this stuff in house? Some, you know, some of it is important, but doesn’t need to be exclusive. Can I also sell part of it to you?

You know, the office also exists on Comedy Central still. You can turn on any cable network in the, you know, in the country for the linear TBV version still watch the office. It’s not exclusive everywhere. So this back to becoming arms dealer you know, ETHELUS is definitely coming back in vogue. Sports one hundred percent, I think that that’s what the this WWE UFC, you know, value they see there.

But in in any TV rights, certainly, that we’ve seen HBO do this. They’ve been selling Westworld rights to to Pluto, took it off HBO Max, you know, there’s every finding that there are other paychecks where it’s having zero value for them on HBMX. Why don’t we put this somewhere else where we can get a check? It may not be a billion dollars, but it’s like it’s money. Right.

Money is money.

Well, and it wasn’t just zero value. It was negative value. I mean, you had to pay you had to pay. For the they were paying, you know, whatever whatever we’re calling residuals now, you know, the the rights — Right. — the the the rights to to the the creators to license it for For

straight actors and exactly. Exactly. So there’s, yeah, there’s there’s hidden costs and everything. So you can just put it on there forever and it’s free. I’m like, this isn’t YouTube.

That is not how streaming these services Bulwark. There are other rules that have effect here that are are, you know, what we call sunk costs, I mean, where it’s like, yeah. That’s not you have to you’re starting in the hole. You have to get viewers to get back to zero. And then on top of that, you know, when you would get any any gravy, so to speak.

So this and and Bob Igerger is also speaking this week, the the CEO of Disney about this, about what’s his philosophy going forward. And he it seemed to imply, you know, the Marvel Disney Star Wars will stay, you know, on Disney plus, but everything else, so presumably all the Fox library you bought, and the Simpsons and things along those lines, maybe there’s leeway to sell all of that stuff right out to other third parties and not keep it all on the Hulu property or whatever Hulu’s gonna become or Disney plus for that matter. So there’s just a rethinking of this sort of this sunny where it’s like, yeah, did we we left a lot of money on the table here in doing this strategy, and they’re not seeing the results as, especially in the US, as streaming subscriber growth. Kinda has plateaued at certain levels for most people that maybe there’s other checks to get here as we’re again being asked by Wall Street, where is your profit? Well, You’re not gonna get it by those subscriber numbers anymore.

You’re gonna get it by selling stuff off to other people. So it’s kind of a everything old is new again — Yeah. —

in Hollywood, Sunny, as always. Yeah. It’s always how that works out. Alright. So back back to sports here for a second.

We got numbers last night on the or yesterday for the women’s Basketball. Try again. We’re taping this a little earlier in the week. That that’s a that’s a big that’s a big bump in viewers for the women’s NCAA tournament. I mean, is is are we going to see more Equitable shall we say distribution of capital when it comes to the women’s tournament going forward do you when that that deal comes up in twenty twenty five or six.

Right? I mean, it’s they still have a few more years. Next

year’s a next year’s a last

year. Okay. Twenty

four. So the next ornament is the last one under under that deal. Yeah. You know, define equitable. You know, I I didn’t even know.

I read this this morning in the The Wall Street Journal coverage of it. The women’s tournament rights deal as the rent his fee is thirty four million dollars. The men’s tournament is about nine hundred million dollars. I mean, let that’s I mean, look, there are different economics behind us and what have you. I mean, it makes sense.

There’s a certain at a certain point that did make sense because many more people watched Men’s Army with, you know, with

And to be clear, the men’s tournaments still even the women’s the women’s the championship got ten million viewers, the men’s first round average nine million viewers across, you know. So there is a scale thing here, but that women’s championship was was two x last year’s number. They’ve been you know, and this year, you know, Caitlin Clark’s been a great to follow. I don’t know if you’ve been following it all, but, you know, and a lot of great narratives this year, Sony, whichever year you’re not gonna get, but it’s put it on the map and and Yes. But Caitlyn Clark is coming back next year.

She’s not going to the to the draft. So this is, you know, they’re in a great back to that negotiating position, Sunny, about sports leagues. That’s not a bad position to be in coming off next year. What I mean, presumably if Iowa does well again and they get back in there that the audience will return and there’s room, you know, to have both, I think, and they’ve just been quite frankly ignored for many years. And it’s, you know, it’s a different style of game.

And it but it’s I I love that. I watched the many games this year, the one I watched many of Ben’s games as well. It’s how do you schedule it perhaps so it’s offsetting a knock peeing against each other would be, you know, the first thing you wanna look at. But, you know, that rights fee seems very low and back if he gets back to the experienced hand, like, away a more endeavor or an agency who knows how to sell this stuff and you get more sponsors involved, then again, follow the money, Sunny, as you say, the men’s tournament does bring in bringing over one point one billion dollars in advertising revenue this year, so that makes it worthwhile. You’re not getting that money on the women’s tournament.

But is there room for growth that Yeah. I mean, seemingly there’s gotta there’s gotta be here. So it could be a really good story to watch next year.

Yeah. It’s it is fascinating again just from a a business angle. The one more sports question. I didn’t I didn’t mention this in the pre show. So if you don’t if you don’t have thoughts, no, we’ll we’ll just we’ll cut it out.

But But one of the one of the big stories here over the last few weeks and months has been the the kind of slow motion and then very looks like it’s speeding up motion, collapse of the regional sports nets — Oh. — which is, you know, again, we’re talking we’re talking about live sports, hugely valuable. I think there was news news last week that the New York Yankee’s are headed toward headed off of basic cable. They’re gonna you know, doing doing the streaming thing. What what is going on there in that in that space?

It’s collapsing. I mean, you know, so this is a decades long business. Somewhere in regional sports networks just for everybody in the deal. So that’s in New York. The yankees are on.

The s Bulwark, s n y, the ballet sports networks are very big and other parts of the country. It’s very, you know, very local to where you are, NBC, universal loans, I think, three or four of them at this point. Chicago and Philly, Natalie, had them. So they’re around the country in each owned by kind of different operators. But they’re built on the cable bundle.

The cable bundle, you know, has been lost five percent, six percent up to seven percent of the base in twenty twenty two, it’s only increasing its melting. And the beauty of it was that everybody was paying even though, you know, very very very very few people were actually watching. Mhmm. But as that starts to melt, that’s less revenues being paid to each sports team for those rights. And at a certain point, they’re losing these cable operators are losing money on on the proposition and they’re saying we’re done.

So here you go. And the regional sports networks are now being caught in the middle, being like, well, I’m gonna go direct to streaming, but I gotta charge the customer at least twenty dollars, if not, the S network, I believe, is thirty dollars a month. Yeah. So, you know, NASA and the New York New England sports network in in Boston has been doing this for almost two years thirty dollars a year. I’ve heard very little of any data out of that other than a lot of unhappy people about the tech that’s behind it.

So it’s a, you know, this the the US sports consumer is understanding how much sports really cost when you see these multimillion dollar contracts being paid, oh, isn’t that great? You’ve never felt the pinch before. Now when you’re gonna be like, oh, you yeah. We’re we’re asking you to cough up the money now because the bundle is not subsidizing the cost of this anymore, and the teams counted on this revenue of the local teams to guarantee check. Again, back of those right, Sonny, They didn’t have to market the product.

They’d have to sell the product. They just dip. Here you go. And it was on the Comcast, the Charlie Sykes, or whatever it is to really do the nuts and bolts of the deal. They’re saying goodbye, Comcast famously dumped MSG Bulwark, which covers the Rangers and other sports teams here in New York a couple of years ago.

So we’re not paying anymore. You can’t get the MSG network in New Jersey, in the New York City area for a couple years now. MSG is now also going direct to consumer for, I think, twenty five or thirty dollars a month. So but they had to make that money back. And are you gonna make that same check from those subscribers?

They don’t know because we’re gonna find out Sunny. So it’s a real precipitous moment of the the local teams. I think we’ve always seen those team valuation sunny. Right? Where you hear when the team’s going for three billion dollars, that’s predicated mostly on again sports rights.

Yeah. And

if that starts to dip in this area, that’s a real we don’t this is a big shift, Sunny. We don’t have the answer to it, but it looks wobbly and that’s a big change that has not happened in about I’d say, thirty years of of sports sports model. Well,

I mean, it’s it’s it’s interesting too to look at the difference between Major League Baseball or to a lesser extent, NBA also NHL. Right? Compared to the NFL. Right? The NFL has a national deal.

They sell all their games, all the games are on, you know, Sundays and Mondays and then, I guess, Thursdays and sometimes there. But, you know, Sundays and Sundays and Mondays. Right? That’s like the big those are the big days. And all of those games get sold under the same package and they all the the owners all make out huge huge like bandits because they but I you know, I’m an Oreals man.

I’m a Baltimore Oreals man. So I when I when I lived in the DC area, I would watch on Matson, the mid Atlantic Sportsnet, And I would and it was just part of my cable package, and that was great. But the the the the theorial sports rights are not worth two hundred million dollars a year, I can’t imagine, for for some Bulwark. You know, I like, who who is who to your point, I I I don’t see and as you said, we don’t have the answer to this. But I just don’t I don’t understand how they how the the smaller market teams make up that money without some sort of huge bailout from, like, Apple TV plus picking up all the rights to baseball all over the country or something like that.

I mean, is that do you think that’s in the offing? I like, is that is that a thing that could happen? Or is it just still so atomized and localized that, like, the Yankee’s, for instance, would never sign off I’m like, we’re not gonna be on we’re not gonna be on Apple TV plus and we can sell our rights to our market for twenty five bucks a month or a year, whatever it is. Yeah.

The divisional the the the it’s not all one thing fits all. Right? M o m o b teams are not the same. And the money you can make in New York is not the money you’re gonna make them a Milwaukee or even, you know, Baltimore for that matter, I should say. So that’s a big issue.

And the other is it is it a league or is it the team of, you know, a league of twenty eight different, thirty different, you know, individual businesses. So MLB is so it’s it’s great. Baseball is the most I’m not gonna say, in trouble, but they’re they’re the season that’s starting right now. The NBA has been paid out already this year. They don’t have a worry.

They’re a part of this, Sunny, but that won’t come up again until the fall, which is gonna be a long time in this a long you know, six months is gonna be two years in the in this process, you know. So the MLB is a league, is there’s still negotiations. The company still Valley Sports is still going through its bankruptcy process. But talking about doing that, Sunny, and maybe there’s an MLB TV streaming bundle where you can pay one fee and, you you know, it’s split between all the teams and things like that. But to your point, as an oil fan, Do you care about watching Rangers games and paying for them?

No. I’m not gonna I’m not gonna do that. Oh, I I mean, if I Exactly. I mean, if I really cared, I guess, I could get MLB TV, but I but I frankly

don’t That’s out of market too. So that’s that doesn’t cover so they wanna make that more expansive in market, you know, watch your local you can watch out of market teams with that, but clearly, it’s not the most valuable thing to have. It’s like you wanna watch the team in your area. Yeah. So you as a consumer may have this other super streaming option for a certain price?

Or, Sunny, do you wanna pay twenty five bucks of millennials a month every year? Yeah.

No. I don’t I don’t think I don’t know. Okay. Well,

if we’re gonna find out a lot of sports fans. Yeah.

No. I mean, it’s just it’s just really interesting to think about. I mean, you know, the the The biggest streaming sports deal that we’ve seen so far, of course, is Amazon picking up the rights to Thursday night football. And that’s kind of a mixed bag. Right?

I mean, they use you were tracking the the ratings on that all season long. And it was they it did okay, but not not it didn’t hit the the benchmarks that they had set for advertisers. Right?

Yeah. It under delivered. They, you know, they were promising, I think, gonna say, twelve point five million, if I’m a little off on that fine.

I think that’s right.

Vastly under delivered I mean, you’re talking maybe ten, you know, something if that even under what the final average was, but nowhere near what they promised. So, you know, and they’re talking about instilling what’s called flex games now where they you know, so usually you get the schedule and that’s it. You know, and Thursday, as you mentioned, is not the high priority for for teams every week. It’s traditionally been the lowest rated game of the week, even when it was on Fox and on NFL Bulwark, the previous deal, the TV deal. Will changing the games, you know, and it is you are based on the game.

So they would see little spikes if there’s more interest in the game and if it’s Dud. They had two Denver games this year, which were two of the worst games of the year. So, you know, you’re you’re at the mercy of the luck there a little bit, but It’s a lot of money in Amazon. And it sounds like giving them money back, you know, that’s not how this works. Can they put flex rules in which they’re gonna vote on next month or sorry.

Yeah. In in May, the owners will vote on that if they could institute to so the second half of the year, like, you know, on Sunday night football, they can change the lineup and swap games out, but it’s still not the high priority. Sunday night is still the priority. Sunday afternoon is still you’re talking thirty million, you know, twenty five or thirty million people tuning in for local games. You know, Amazon, as you said, is getting ten million.

It’s a hard argument to make in in that regard. So do. Maybe they’ll get better at it and people more it looks first year. Let’s see how it goes. They also have a a Bulwark Friday game in the day after Thanksgiving this year, which could be a nice you know, late year boost for them as well, which will be free on Amazon for for it’ll be free for everybody on Amazon Prime, so they’re making that free to the public.

So there’s other things to come. The the tech was great out Michaels. The was fantastic. So I did the production I thought was really good, but the audience was underwhelming and what they, you know, what they’re respecting?

Yeah. I mean, it’s not the only underwhelming performance in in in the world of Amazon right now. There was a big story in the the Hollywood reporter earlier in the week hitting hitting the highlighting the completion rates on Lord of the Rings and kind of the the chaos over there. What is going on at Amazon. What is what is the what is the buzz about town about what is happening within within the

the studios there because it’s it’s more it’s multiple studios. Right? Yeah. Right? They bought one.

MGM, you know, for eight point five billion, which everybody pretty much knows is vastly overpaying for what that was worth. But, you know, welcome to the to the tech money. Yeah. The piece wasn’t, you know, it was, I guess, the I I put a big shrug emoji kind of going on. Nobody knows.

What is the metro you know, Amazon doesn’t release any numbers for Amazon Prime video in terms of the others the famous, you know, two hundred million Amazon Prime subscribers. That’s, you know, for the shipping. And it’s like, that’s all, you know, that’s globally. And that that’s useless information, basically. So how much money are they making?

What’s a profit and loss? What’s the whole point of this? It’s not even number one job. The one number one job for Amazon Prime is selling you shipping. That’s how they make the money.

They wanna get you in the door to being an Amazon customer. That was the theory Sunny behind this whole thing. It wasn’t like, oh, let’s start a streaming services. Oh, let’s add value to this thing. So we can get more people into the tent and more people coming back into the Amazon universe to watch shows and movies and so forth.

Football was next, you know, they’re big on sports. Sunny they have a that’s they’re the biggest streamer with the biggest sports ambitions globally. So, you know, this piece came out about more about the studios, which they have MGM Studios and Amazon Studios. They own two different movie studios. They own two different, you know, TV departments.

And they all kind of compete against, you know, the the TV the TV groups can can counterbid for projects, you know, against each other. If you’re going walking in the door there as a seller, if you’re a a show to pitch, it’s like, well, who am I speaking to? There seem you know, the takeaway in the piece was a lot of confusion still about what they even want, what the brand is. Which is never a great thing. Not that, you know, there may be everything to all people, but if the town, if the if the sellers are not real clear on that and Amazon Prime videos have been around.

There’s there’s not a new product. Right. For years, that’s not a great repped to have and that was the, you know, I think, the gist of the piece. What did you I was curious, what your, you know, where your takeaways were, what are your impressions were about the piece though?

Well, no. It’s it’s it’s just fascinating to think about Amazon Amazon’s uncertainty with its own video brand because of, you know, a a friend who is a screenwriter, as Accident, noted on Twitter that, like, Amazon has a brand. You know what Amazon’s brand is? It’s dad shows. It’s Jack Ryan, and it’s the terminalist.

And Be sure. Richer or even like the boys to, I think, to a

certain extent. Yeah.

Like, I think that all that all kind of fits into, like, you know, again, Dad shows is a good a good rubric there. If they could if they could acquire Yellowstone, they’d have they’d have quartered the market on on Dad shows. But the but, like, that is not that’s not that is not, like, awards stuff, that’s not, you know, kinda sexy. They don’t they don’t wanna be, like, Yeah. We’re the guys with guns to go in and shoot stuff up.

Like, they they want they want they want something slightly different. My other takeaway from it was just like, I I could not believe the amount of money that they were like, lighting on fire on these overall deals. Like, people who — Who do you watch? — people who they had who they had signed and who they were paying, you know, low eight figures too over two or three years and just produce nothing. I couldn’t I couldn’t believe it.

I I was like I was actually shocked because I you know, there’s one thing I know about Jeff Bezos, it said he doesn’t mind spending money, but he hates wasting money. Does not does not, like, wasting money. And there’s there’s a difference there. Third takeaway, one last takeaway was that, like, the best the best the best value in that whole that whole story for Amazon seems to be Donald Glover, who is, like, who makes who makes a buzzy show the swerve, it’s not that expensive. I think it was like thirty million bucks, something like that.

It’s doing numbers similar to to their their actual big, the Reese Witherspoon thing, Yeah. I I I can’t even I don’t even know the name of that truck because I I like the dad shows. I don’t I’m not, you know. But, like, it it it wasn’t it wasn’t that expensive and he like, Donald Glover continues to be the most under underrated and underappreciated talent really in in town. I say this because I just is binging Atlanta.

I I just got I just got through it. So Yeah. Yes.

I was doing mister and missus Smith. Coming up as well at Amazon. So he’s — Right. — he is actually producing for Amazon. Like, he is putting things up.

But, yeah, you know, these first look deals, what we call them, talent deals, you know, some in famously existed in Hollywood for years or studios, some times it’s a vanity deal because you want them to act in your movies, some produce some actors really take it seriously, and they they also have a Michael B. Jordan has set up a lot of projects there. Yeah. Robert. So some people really are doing stuff there, but Nicole Ki Bin has an overall deal there, and she has projects you know, around ten you know, she is not doing all the Amazon things.

And it’s like, what are you paying for? Exactly. The quite not be the question. It’s like, you know, you get she has a couple of things, but her next five projects, I think one of them is that, you know, is that Amazon? So it’s like, well, it’s a lot of money to pay for what about and you’re still paying her to be in the movie.

That that money, they that check, you’re tied to that ten million dollars check is not in you know, inclusive of their acting fee. That’s an overhead deal. So it’s a lot of money from what yeah. And what are you getting? And and again, they don’t release numbers so you put it swam number.

Sure. I don’t you had no idea what doing. But — Yeah. —

but

the male SKU thing just to touch back on sports betting and tie in football to that too as to why Prime is going after sports. And it’s like, yeah, they see an opportunity to kind of, you know, skew into a a dad show or a male demo as, you know, Netflix is a lot of shows for a lot of people, but a lot of if you look at their top ten of their TV series, a lot of reality shows, dating shows that are in their perfect match has been on there for a few weeks now. You you know, even Wednesday arguably, maybe skews a little more female. But, you know, they have the the Sarah Longwell show, the five Vilane and, you know, adder banks. These are the what are their big shows?

They kind of I mean, most of them skew to a female demo, so Amazon sees an opportune rightfully so, sees an opportunity and maybe own that male demo a little bit more and that print sports and that mix for them plays a much bigger role. So I I see why they’re doing it, but as to what the is it working? All this other stuff that’s going on? It’s the black box is never a good sign in my book, and they certainly have one. Apple has the same problem.

Yeah. Same thing. I’m like, what are you doing here exactly? So, you

know Yeah. Yeah. Well, I mean, this was alright. This is what Richard always says. What what is what is Apple?

Why is fold.

What is What’s the business model here? Yeah. Exactly. Red Halo. It just go was great.

Yeah. One one last sports thing, and then I’ll I’ll let you go here. I I feel like nobody in America understands the importance for global user acquisition numbers that pricket plays. And what how big is the audience for cricket in in India and and elsewhere?

Yeah. So I just wrote about this —

Yeah. —

today in in the wake up newsletter. So for those who don’t know, the world’s largest sporty sporty match Sorry, NFL is taking place right now. Although halfway around the world in the US and India call the IPO, the IPO cricket league. A hundred and forty million people that were the numbers on linear TV alone in India tuned into the opening day or opening match on Friday, which is March thirty first. The Super Bowl the Nielsen number was a hundred and thirteen million for the Super Bowl.

Some numbers put up to a hundred and thirty with additional viewing, but, you know, still below that number. And you throw in mobile viewing, which is about sixty million, you’re talking two hundred million people on one day essentially one country that that other broadcast, other countries in the Southeast Asia, watching a sporting event. So a cricket is the biggest sport in the world. You know, set a lot, but that’s what that’s exactly what people mean when they say that. So what does it mean for you know, so the I read a lot about this study, but the rights deals were a big thing last year, their rights deals again.

Back to back to rights were up last year before this season started. And the price essentially doubled. So between linear TV and and and streaming, previously Disney had both. Mhmm. On their Hotstar service, which is their streaming service, and the Star service, which is their their TB service there.

The writes this year were split for about six hundred million dollars for each. So about one point two billion dollars a season, which is, you know, not NFL money, but certainly a big check and much bigger than a lot of other sports leagues in the US. So and the streaming service that got it, usually, it’s but, you know, behind a pay wallet, pay for it, put it on for free because they’re a new a newer service that they’re using as a loss leader. So they had fifty million people sign up or download the app this weekend alone. To watch these games.

So they added fifty million new customers to their to their platform. So huge number is, Sonny. When you look at, you know, even back to the college, you know, sports and the women’s championship at ten million, which is great, and that’s a record and fantastic. On a on a global scale about sports, know nothing about cricket, Sunny, so I wanna make sure that that’s on the record — Yeah. — about the sport itself and how it’s played and who the teams are.

The Super Kings are very popular. That’s really all I know. They played on Friday. Sounds over the The drink is Yeah. And that’s the thing.

Yeah. And the IPO was a it was only a two month tournament, Sunny. So it’s done in May.

Yeah. And

it’s just like it’s almost like a super March Madness if you wanna you know, it works March Madness is three weeks. This is two months and infinitely more popular. But it plays key role in these burgeoning streaming services and India is getting a lot of investment from the Netflix’s, the Amazons, and Disney is legacy scale there with their star business, which they bought from they got the Fox deal back in twenty eighteen, which is what all this stuff is based on there. Sony is also pending a merger there with a major player called Z, which is gonna go through soon. So that’s gonna be another third player.

And then this company called Viacom eighteen, which is become a kind of a local conglomerate called GEO, which is their big mobile phone provider, he owns everything, reliant industries. He’s like the Amazon of India. I think he’s the second richest person in the world, something like that. He’s vastly vastly rich. But, anyway, he’s the big player in the streaming service giving away all this all this, you

know, six

hundred million dollars here to build the streaming service. So it’s a lot going on, a lot of activity, Sunny. Again, the revenues aren’t quite as large, but the popularity is there. Yeah.

Well, I was gonna say that it is it’s it’s interesting because you know, Disney Disney had a a fairly large drop, if I remember correctly, had a fairly large drop in the number of users that didn’t take as big a hit in revenue as people thought because the average revenue per user in India is is much lower than in North America and and the rest of the world. Yeah.

That’s the secret to the Disney plus number that everybody loves to tout in the headlines of, I think, of about a hundred and sixty two million whatever it was last time, Disney plus one third of that is it India? And how much they make per subscriber? About seventy cents. Yeah. So the revenue there, I think, I I did the math recently in the wake up, but it was, you know, it was maybe one hundred and fifteen million dollars in the first quarter, total revenue, subscriber revenue.

They’ve spent six hundred million dollars on cricket in the for this for this season alone, that’s not good math. There’s other parts of the business and so on and so forth. But what’s gonna happen? Because they they lost the streaming rights, as I said, for this cricket league, which which just started essentially at the start of the second quarter. So the question we’re gonna find out in early May is how many people canceled Disney plus Hotstar, which is the name of their streaming service there, and that total back of that one sixty two or whatever it is, you know, one hundred sixty two million Disney plus number is probably gonna go down for the first time.

And that’s just, you know, again, it’s not when you look at the money, you’re right. Exactly right. And that’s the the narrative that Bob Iger is gonna have to now try and, you know, present to people because they were just riding that hot star number to the moon. And nobody was asking questions about, you know, how much money they were making and now they’re trying to change, like, no. No.

No. Wait. Well, that’s not important anymore. I think we’re telling you for over two and a half years. Yeah.

No. No. No. That’s not the big deal anymore. Now it’s about the money and then oh, yeah.

Of course. So that’s It’s a debt, Bob Iyers. I’m an excellent communicator, Sony. I never underestimate him, but that’s a I wanna see how he kind of presents that.

Twenty three. I I think that’s true. I think it’s I think it’s actually true. I I think he’s, you know, the the the issue has been that, you know, we’ve we’ve all been kind of touting these eye popping numbers. And and very few people have actually said, like, wait a second.

Wait. Where? You know, how much

Actually, I haven’t said it for two year for a good year and a half in the way. So I’m like, it makes no money. Stop looking at this. And and

this is why I, you know, I’m well informed because I’m a writer, Sean, McNulty at the Angler. Barry, it’s always it’s always I I always like to ask, as you know, if there’s anything I should have asked, if there’s anything you think folks should know about? In terms of what’s going on in the world, sports rides, anything else? You’ve talked

about the strike. We’ll leave that one who knows where that’s going, but You know, the up fronts are coming up sunny, so advertising revenue. The up fronts are where the broadcast networks and now this year YouTube and Netflix are doing fronts, which is about the third week of May, sell the bulk of their advertising revenue inventory for the year. So they present their print out their fall line ups for broadcast TV and, you know, this is a dog and pony show. Mhmm.

And if you’ve been reading anything in this, you know, sector of the advertising business is been very challenging. It’s been down. And no one knows when it’s gonna rebound and it’s not there is a lot of eyeballs on how much money is gonna be coming into this and what the ad rates are gonna be. Watching a lot of these, you know, the inflation metrics, the unemployment, all the larger economic signs that everybody’s trying to read the tea leaves on here that’s still for me, I I still couldn’t really even tell you a a a note a note an analyst, MoffettNathanson, put out a note saying, you know, there’s a belief in the among the studios that there was that will rebound in the second half of twenty twenty three. This business will come back.

His note was, but I’m not seeing a lot of things that point to a lot of confidence in that. And the upfronts when they happen will be your canary in the coal mine of that. So that is, you know, it’s about a recording, you know, instead on early April. So it’s about maybe five, six weeks away when we we start this this all begins. So that’s the next thing I’ll be keeping an eye on certainly coming out that will be a big narrative in about a month.

So that’s — Yeah. — out there in the ether.

Yep. Alright. Thank you again for being on the show. Sean on. Again, I’m you know, I I’ve to say that just personally, I am also very excited to be on the same kind of, you know, masthead real estate.

As as the wake up and everybody else over at the Angler. So this is a nice little nice little bit of synergy here. For for for

me. We need to know I need to know as a flywheel setting. We will be all set.

Yeah. We yeah. We do. We gotta we gotta have a live event you know, can we do live, you know, or, you know, you know, Taylor Swift just sold out the AT and T stadium here three in a row. I think we could probably if we get Richard to fly out the Dallas, we could get at least one night of eighty

thousand. Yeah. Me singing is probably not gonna add his driver, sonia. But we’ll work something out. We’ll we’ll do a big ARPU presentation.

There’ll be a lot of fun. Average revenue. There we go.

Alright. Alright. Thanks for being on the Church My name is Sunny Bunch. I’m culture editor at the Bulwark, and I be very excited everybody here listening. Hope to you next week.