Unofficial Partner Podcast
Unofficial Partner Podcast
UP449 The Bundle: What Next for Netflix, DAZN, Disney, News Corp, YouTube and Apple
Welcome to The Bundle, our regular series on the sports media and streaming marketplace with co-hosts Yannick Ramcke, General Manager of OTT at the streaming service OneFootball and Murray Barnett, founder of 26West Consulting and formerly of F1, World Rugby and ESPN International.
Unofficial Partner is the leading podcast for the business of sport. A mix of entertaining and thought provoking conversations with a who's who of the global industry.
To join our community of listeners, sign up to the weekly UP Newsletter and follow us on Twitter and TikTok at @UnofficialPartner
We publish two podcasts each week, on Tuesday and Friday.
These are deep conversations with smart people from inside and outside sport.
Our entire back catalogue of 400 sports business conversations are available free of charge here.
Each pod is available by searching for ‘Unofficial Partner’ on Apple, Spotify, Google, Stitcher and every podcast app.
If you’re interested in collaborating with Unofficial Partner to create one-off podcasts or series, you can reach us via the website.
Hello welcome Richard Gillis here and welcome to unofficial partner. This is our first episode of the bundle for 2025, our regular series on sports, media, and streaming marketplace with my. Co-hosts Yannick Aramco, the general manager of OTT streaming service, one football and Murray Barnett, founder of 26 west consulting. Formerly of formula one world rugby and ESPN international and Disney.
Murray Barnett, 26West:I'll stick my neck out slightly. Netflix will buy the F1 rights to the us
And yes, there's going to be predictions for 2025 involving. Netflix does own Fox. Apple. NFL. MLS. It's all in here. And also published today is the bundle bulletin, which is the homework notes that. Marie and Yannick and myself put together. For your delight. So if you don't get those, you're missing a trick because it's, uh, it goes really deep into the stuff that we talk about in the podcast. Welcome to an official partner. Let's get going.
Richard Gillis, Unofficial Partner:let's get going cause I want to leave room for predictions. I'm obsessed with predictions this time of year. I know it's infantile, I think predictions are quite revealing. I think they're, they're, they're about our hopes and dreams and our sort of desire for certainty. So, this is what I'm after from you
Yannick Ramcke, OneFootball:you are after a catchy headline for your podcast title. That's what you are keen to do.
Richard Gillis, Unofficial Partner:Ramka says. And then the rest takes care of itself. Right. We're going to start then. We've got let's line up and give a bit of preview of what we're going to be talking about. We're going to inevitably going to talk about Netflix. So we're going to talk about two different stories. FIFA Women's World Cup deal that they've just done. And we'll bleed that into what happened over Christmas. NFL screened on Christmas day. Then we're going to talk about News Corp selling Australian group, Foxtel to DAZN. Which, again, has got lots of Interesting little bits to it. And then we're going to leave some time for some predictions. So we've got a load of things at the end which we think may or may not happen, and we'll get into that towards the end of the podcast. But we're going to start off with then the first one. Netflix snaps up US broadcast rights for Women's World Cup in a landmark deal. This is in The Guardian. The streamer has exclusive rights for 2027 and 2031 editions. Netflix says it's about celebrating the rise of women's sports. Secured its first major deal in football after signing exclusive deal. FIFA described it as a landmark media rights deal in women's football, means the streaming platform acquire the rights to cover a football competition for the first time and include coverage in multiple languages. Brazil in 27 Gianni Infantino says as a marquee brand and FIFA's new long term partner, Netflix has shown a very strong level of commitment to growing women's football. This agreement sends a strong message. about the real value of FIFA Women's World Cup and the global women's game. Interesting phrase there about the real value given some history about the selling of World Cup rights last time around and Gianni Infantino's view on the broadcasters not coming up to his valuation or FIFA's valuation. Murray Barnett, what do you think? What's going on here?
Murray Barnett, 26West:Well, as you said, there's a few interesting angles and I think all of our stories today Really focus around, or primarily focus around Netflix and D Zone, which I think will have a big year in 2020. Both organizations will have big big years in 2025, and we can come and focus on that when we get to the predictions a bit. But this is. There's a number of firsts here. So it's the first time that the Women's World Cup has been sold independently of the Men's World Cup in the US. Uh, it's the first time that Netflix has sort of got into football in a major way in the US. It's comes off the back of the successful NFL games, which were sort of the first time they'd done very high level of multiple concurrent streams and. Proven that that could work. So there's lots of interesting things here. The other sort of point is that traditionally the rights in the U. S. have been sold on a language basis. So, with, with Fox taking in the past the English language rights and Telemundo taking the Spanish language rights. So this is also a first in terms of one person. Well, not really a first, but certainly first in recent times of one broadcaster having multiple, multiple languages in the U. S. as well, because as we know, Spanish language is also hugely important in the U. S.
Richard Gillis, Unofficial Partner:How difficult is that?
Murray Barnett, 26West:What do you
Richard Gillis, Unofficial Partner:point there, that language. question.
Murray Barnett, 26West:It's not really, I think, that the principal reason why they've been sold separately in the past is it was a monetization thing about, you know, they could generate more money by doing it on a sort of language exclusivity than they could do, uh, doing it combined.
Yannick Ramcke, OneFootball:And I think it was particular to the North American market that it has just historically become like a. Generally accepted business practice by rights owners in that market because different players may address different or completely distinct audiences. So, as Moritz said, it's simply a revenue maximization strategy, particular and specific to the U. S. market. I think a practice that is not widely established in any other market. Major s market, even though there's, that started to change as EPNA traditional English speaking channel ventured into ESPN Deporters with ESPN Plus had all of a sudden bigger interest to have language agnostic rights. But as ma said the first one here for, um, yeah, granting both English and Spanish rights to the. Same bidder, since Netflix obviously is interested in both communities to reach, engage and monetize.
Richard Gillis, Unofficial Partner:Any ideas on how much they've paid for this?
Yannick Ramcke, OneFootball:I think last time we spoke, we alluded to that was somewhat of a risky move, I think, this unbundling of media rights and the North American market or the U. S. market was the first market of true commercial relevance, where the FIFA opted for that go to market strategy, and I think last time we sat in this group, we said, or we had read about reports that there is lukewarm interest from bidders, or that at least FIFA is not 100 percent happy with bids to date. So, just pure speculation, but going back to Netflix viewpoint on sports, which always was, we are not anti sports, but pro profit. So, just pure speculation, but going back to Netflix viewpoint on sports, which always was, we are not anti sports, but pro profit. I think the cost base must be, uh, or must have a size that puts Netflix in a position to make it profitable in however you define profitability. Or in other words, I expect a below market deal or at least evaluation that is not meeting what FIFA initially thought this tournament would be worth in the biggest sports rights market of the world.
Murray Barnett, 26West:There is also the view that it's kind of an elegant solution, right? Because if the traditional pay TV broadcasters have not been valuing the women's events to, to the, to the degree which FIFA thinks that they should be, FIFA have now brought somebody who they are saying does value it properly. And it kind of lets the likes of Fox and ESPN and others off the hook a little bit in terms of, you know, constant bad press with with FIFA and maybe them. So being strong armed into taking rights, which they maybe don't necessarily want.
Yannick Ramcke, OneFootball:And that goes back to, if we yet again have a situation where digital is and acquiring the linear leftovers in other words, what traditional rights buyer or licensees didn't really want to have at least at this price point anyway anymore. But I think it's a discussion for another day, but it's a common theme that is told in the filter bubble of the sports broadcasting market.
Richard Gillis, Unofficial Partner:It's quite difficult because the last World Cup, I mean, when the, this sort of, you know, the standoff happened, the time zone was really bad, wasn't it? For most, so there's a sort of, yeah, and there's a sort of conflation with, is this about the value of women's football or is this just about anything that's held in Australia and New Zealand? It's always going to be a pain in the arse for European and American Broadcasters.
Murray Barnett, 26West:I think you would have seen the broadcasters come to the party a lot more for something that's in Brazil in 27 and most likely in the U S in 31. And that's not just a U S broadcasters. It's probably European broadcasters as well, because it's a bit more of a favorable time zone, but this is probably the right solution for everybody right now. So. I think it's a, it's a, it's a pretty good one. Just as an aside, I saw some interesting stuff about Ari Emanuel saying that Roger Goodell should be paying him a commission for helping to open up Netflix. So because obviously he had the W-E-N-F-L and then followed by NFL. And so you can imagine Gianni now saying to Premier League and to everybody else. So you should be thanking me now that I've got, uh, uh, I've got Netflix to the party in buying major soccer rights in the us.
Richard Gillis, Unofficial Partner:Um, Um, sizzle. There's a, there is something, you know, there's a big intangible here. Netflix, Women's World Cup, FIFA. It's a really good story. I mean, to, to um, Yannick's point there about you would expect them that there are the non financial reasons for doing this are significant and, you know, it just felt strategic, it builds a story. People can project onto it, both in terms of the, the value of the game. The, the event, but also Netflix's future ambitions. So there's a lot in it, which we all projected onto initially. And it's, it's, it's one of those. And I imagine that that probably, you know, they would leave that sort of story in their negotiation.
Yannick Ramcke, OneFootball:Exactly. So regardless of ultimate media rights income that is attached to this agreement, I think it was a very, very welcome off ramp for FIFA to solve that situation because I mean, the PR is tremendous as we just notice. It is a win also along other fronts, including the topic of reach. I mean, Netflix, especially in the United States, which is probably their most penetrated It has become the new cable TV and channel serving is it is where most of the people are starting their weekly their nightly. TV viewing experience to surf and search for what they want to when, when to watch and the storytelling. I mean, we have often said that Netflix is not in the business of sports or they themselves have said it, but in the business of storytelling, which can include. Sports programming, but the entire storytelling opportunities that are around it might be worth much more to the women's football than the incremental media rights dollar that they may have gotten through traditional buyers in the U. S.
Murray Barnett, 26West:There are two other really important reasons why this is a really good deal for both sides, actually, is that the summer is a less competitive sports time, so you basically only have baseball on during the course of the summer, so it's less congested sports market, so it allows a wider cut through for the tournament, which is good from a from a Netflix perspective, but also, you know, It's no accident that the reason why they've bought the NFL games to a certain extent, WWE, and now the Women's World Cup is the launch of their advertiser tier or advertising tier, because they've topped out now, probably in the US in terms of the, the sort of pure, pure pace subs that they can get. And so the only incremental or the largest incremental growth is going to come from the, from the advertising tier. And this. You've got to have these kind of must have live programming to really generate those incremental ad dollars.
Yannick Ramcke, OneFootball:I think ultimately it says more about FIFA than about Netflix because we already established or at least I think it had been established that Netflix arrived in the sports rights arena. If your expectation is that. All of a sudden all sports content available and imaginable will be on one Netflix. This is not gonna happen. It's just one more player, but a player that has arrived. That doesn't mean that fast forward five years. Netflix has a monopoly on sports programming. I mean, would probably be nice from a consumer perspective, but on the other hand, the short term it's adding to the level of fragmentation rather than solving it. So I think. It doesn't say much about Netflix because for them it wasn't a must have property. And I also can't imagine that they earmarked the calendar two years ago that FIFA will come with the women's World Cup rights to market. It just, I think it's an opportunity driven. Uh, agreement that they have closed here because it fits their strategy. And that is a benefit that you mentioned early regarding where is growth coming from, especially in a highly developed market like the U S. It comes across through two dimensions. One is ARPU expansion and the other one is lifetime extension and ARPU expansion will be driven to some extent by price hikes, obviously, but primarily through the advertising business that they need to get up and running. And here we have some established that sports programming with built in breaks and everything is just a native opportunity to scale the advertising inventory.
Murray Barnett, 26West:Without going off on like a massive tangent, I'm vaguely obsessed with the fact that the likes of Amazon and Netflix are spending upwards of 150 or 200 million on original movies. So you take like Red One, which was the, the, the Dwayne Johnson a big tentpole Christmas movie, which I think cost them close on 250 million. And if you look at it in the context of, let's just make the assumption that for the fee, for the, for the FIFA Women's World Cup, they paid a hundred million, right? Probably probably a little bit too low, maybe. But let's just assume it's a hundred million that actually the utility that they get from that hundred million over the course of the 60 odd games. Yes, you get the lifetime value of the movie because you have the movie for, you know, for infinity, but the real value of that movie is going to be within a you've got to figure it's in the three months after the window of it appearing. That's where the vast majority of the utility comes. That actually does it, does it change the dynamic about the way that they think about sports rights? That so long as you are, yes, it's a bigger risk if you're talking about a billion dollars for a package of NFL or for NBA or whatever, but when you talk about. a Women's World Cup tournament, or some of the predictions that will come to at the end of rights that they may acquire, it all of a sudden looks like it's quite cost effective, because it's also not really a risk, it's a known quantity. You're not having to bank on a film being of a certain quality. You know that if you have Women's World Cup, you're going to get X amount of audience in the US. So I think that's an interesting sort of, sort of theory there.
Richard Gillis, Unofficial Partner:The, just on the ad tier question, I don't know how much it is. I mean, it's still, there's a, there's a sub and a, and the, you don't get it for free, do you? For the, on the ad tier, but you're still a subscriber effectively. What are the risks from their point of view of. Of the ad tier. Is it, you know, cannibalizing their, their expensive subscriptions or they're more expensive? I mean, I, I can't remember how much I pay now. Was it a 10 or a month? Is it Netflix? Can't remember. 12.
Yannick Ramcke, OneFootball:mean, it depends on your location, but I think risk is certainly limited because they can face the risk of downselling, right? It's like the ARPU of an ad free premium subscriber is higher than this of an ad supported subscriber. But then you have some risk of, of downselling, but I think this is why they already took. Strategic pricing adjustment that they premium priced, really the ad free version. So the ad free version has become more and more expensive just to keep up with the ARPU of the ads of the ad supported subscription. So I don't think there is a. Apple dilution of existing subscribers, whether it's at supported or not. And at the, on the other hand, you obviously reduce the cost barrier for new subscriber acquisition. And I think there have been a bunch of studies as of late that subscribers or consumers prefer advertising if they can spare a couple of. Box on the on the subscription. So it has been an obvious move. Obviously it has been a move that they either did not comment or said never gonna and not going down this road when it comes to introducing advertising, but I think we are back to where we started the dual revenue engine of subscription class advertising. But Did power the pay TV ecosystem for the past two decades. It's a go to model.
Richard Gillis, Unofficial Partner:what can you see being the limit of what they could buy? In terms of, so Netflix, if they said, right, it's working, suddenly, you know, sport is suddenly working for us, what could they and couldn't, you know, realistically, could they buy in the men's World Cup? Could they, if they remove, could they be defined as a free to air, if they remove the thing for an Olympics, for example, could that be a deal that would be Even thought about. I've just, I don't know. I'm just trying to, cause we've spent so long thinking about Netflix as a niche test and learn all of these platforms. But if you blow it up and say, yeah, it's definitely working for us, the NFL, we have all of it. I just don't know what the implications of it, obviously price, but there's a, there's a just strategically from, I've no idea what the limit of their ambitions might be.
Yannick Ramcke, OneFootball:I mean, it's an optimization problem, right? Because you have diminishing returns on investment in sports content. So, if your expectation is that in five years, you only need the Netflix subscription and you have your total and complete fix for your sports needs, I think you will be disappointed because it just one more player in the ecosystem might be a very active player because it's economics support the acquisition of a bunch of sports rights. But at some point, at some point there are diminishing returns. So, it's not like that. Everything will happen on Netflix because sports plays a specific role in their programming portfolio strategy. And there are other genres who play a different role at a different price point. So I think it's just part of their portfolio, but it's not like that they will dominate the sports rights market anytime soon. It's just another player that adds to their portfolio. Fragmentation, even though a highly accessible player, given the current penetration it already has in the consumer marketplace, and
Murray Barnett, 26West:You said it earlier, Nick, you know, it's this lovely Ted Sanderos quote of, I'm not anti sports, we're just pro profit. And I think that that's exactly how they think about it. They don't think about having a sports strategy. They think about sports as a tool. to help them meet their business objectives, just in the same way that they do when they're requiring third party content or doing original entertainment content. So every time they have an opportunity to, I don't know, let's call it, let's say La Liga, you know, to buy La Liga, they're looking at it and saying, okay, Well, so I could go and do an original movie, or I could go and buy this library of content from somebody else, or I could buy La Liga, which of those is going to help me achieve what I want to, rather than sort of the slightly egotistical idea of we want to be into sports, and we want to say that we've got all of the major sports, I just, I don't think that they have the sports DNA that you have, if you're from Fox Sports or NBC or, you know, ESPN or wherever it is where, you know, that is your lifeblood. That is your whole raison d'etre is to be a sports broadcaster.
Yannick Ramcke, OneFootball:that is the major competitive advantage that you as a, as such a business can leave the negotiation table, if terms and conditions are not matching with what works for you as sports. Only a programmer cannot afford to say no, we don't need sports programming to a certain extent because as you said, Marie, it's a reason to exist for them.
Richard Gillis, Unofficial Partner:Okay. Let's just push it into just before we finish on Netflix, the the, we've got to talk about the NFL. Christmas show. So first year the most streamed NFL games in US history. Figures include local CBS stations, Chiefs versus Steelers averaged 24. 1 million and the Ravens versus the Texans achieved 24. 3 million, peaking at 27 million for Beyonce's halftime show. So did we learn anything from this? And is it again, just given what we've just said, what is it, what's the significance of this? Do you think this is obviously the numbers appear to be that this is, this was a hit, right?
Murray Barnett, 26West:So firstly, it was a technology it was a proof of concept for the technology. You know, that obviously, seems to have held up reasonably well. There was a few reports I saw that said that some people had had some problems, but in general, it seemed to have worked pretty well. Didn't it, Yanni?
Yannick Ramcke, OneFootball:Absolutely. And I think that goes back to what we said last time that when we discussed Jake Paul versus Mike Tyson. There's simply no real test scenario. It's like almost a box that you have to tick. And I think we all agreed, NFA shouldn't be worried just because for the first time ever, when they had a large scale event, that technically speaking, it wasn't flawless. Above and beyond the fact that it's a one to one experience, right? Each single end consumer can have issues for various different reasons that are unrelated to Netflix.
Murray Barnett, 26West:I think there's also the ad sales aspect of it that we talked about before. You know, I think there was some curiosity amongst the ad community as to, you know, whether viewers would be able to, you know, Would translate on Netflix as they have done on traditional broadcasters, and that seems to have worked out fine. And I think it also has emboldened NFL to think about Netflix as a major opportunity for them in a couple of years time if they decide to open up their, their domestic TV deals.
Richard Gillis, Unofficial Partner:Age of the audience. Is that significant? I mean, I'm,
Murray Barnett, 26West:So nice to have.
Yannick Ramcke, OneFootball:I have a somewhat controversial, not perspective here, but They always uh, price their uh, younger than linear TV audience, which is fair enough because on paper it is indeed the case. The question is since streaming only presents still a compromise on reach, is it just because that You have a younger screen audience because you are losing, losing the older demographics and has a smaller total reach. Or is it indeed that younger audiences are over indexing because it's more accessible for them. So I would be always a bit careful with those average age numbers, because if they're just reading out. All the demographics because they are incapable of reaching them or have a disproportionately good ability to reach young audiences. So that's always a bit of a pet peeve when we talk average age of an audience.
Murray Barnett, 26West:Well also, although we've talked about these as streamer games, they were available on local affiliate, local CBS affiliates. So, you know, there's a certain amount of the traditional audience that would have still been able to get them through their local local, TV stations.
Richard Gillis, Unofficial Partner:it's also quite a culturally interesting, just in, you know, the chance of me, what, sitting down and watching a football match on Christmas day, it's pretty remote, you know, just get, and I, it's quite a behaviour.
Murray Barnett, 26West:It's quite traditional in the US. I mean, certainly with the NBA up until recently, you know, the NBA would put some of their biggest matchups on Christmas Day because, I don't know, you know, maybe all the families fallen out by three o'clock in the afternoon and all the guys go off and watch a game. I don't know, but it's been traditionally a pretty good hunting ground for sports in the US.
Yannick Ramcke, OneFootball:Indeed. And what is uncommon or would be anything but traditional for me is like tuning in on Boxing Day to watch Bundesliga. I think it's just like local cultures and tribal communities where it differs from, yeah market to market where you're in. So I think for the Americans it's quite common to tune in into sports on Christmas Day.
Richard Gillis, Unofficial Partner:Right, let's move on to second story then. And it is DAZN, another familiar name to people who are listening to the bundle on a regular basis. Again, this was an interesting deal. I think the response to this was, was quite revealing. So. Global Sports Streaming Service, DAZN, has agreed to buy a majority stake in the Australian pay TV giant, Foxtel, and its subsidiary streaming service, Kayo, Binge, and Hubble, 3. 4 billion dollars, which will, which is still subject to regulatory restrictions. Approval could boost the international profile of Australian sport and provide a major windfall to DAZN, which remains relatively unknown in Australia. News Corp, the Murdoch controlled media empire, will get a 6 percent stake in DAZN and a boost. Board seat in the deal. Murray, take us through this because there's a few things in this that it was, I want to talk about Kayo because I hadn't, they, they weren't on my radar and lots of people have been sort of talking them up since this deal has been done, but give us a broader picture of it. What's happening?
Murray Barnett, 26West:Well, this isn't the first time that DeZone has sort of bought an established sports broadcaster, sorry, looked at buying an established sports broadcaster. You know, there are rumoured to have looked at both BT and Premier Sports in the UK and walked away for various different reasons, but the market conditions in Australia are pretty good for them because Foxtel is really the only pay. Paysports broadcaster there. It's a sports rapid market and Foxtel had two of the crucial rights in AFL and Cricket Australia under long term agreements. So DeZone had some revenue certainty. They also have NRL for another two or three seasons, I think, um, which is this sort of the other sort of crown jewel when it comes to sports in, in Australia. So, You know, there are a lot of reasons why it made perfect sense for DAZN. I think there's a, there's a bit of wastage or there's a little bit of stuff that they get as part of the deal, which is probably not part of their core their core expertise or their, their core interest. And so I suspect that they may look to sell off some of the entertainment aspects of the Foxtel purchase, but core sports proposition, It's pretty good. You know, you've got one and a half million odd subscribers for Kayo, which is their OTT service or the direct to consumer service and a number of then sort of Foxtel overall subscribers that sits on top of that. So there's, there's a. It if you're looking at the deal, and I think, I think it worked out, it's like eight times revenue or something like that. So it's, it's actually a pretty good deal for D Zone albeit, which allows'em to also value the company pretty highly because they're, they're, they're giving what it nine, I can't remember. Is it nine or 10%? 9% Telstra and to NewsCorp. So there's a kind of a nice story there about the valuation of it. So there's lots of. Positive reasons there. The one bit that I, that I'd like to sort of say before, before Yannick jumps in is that, like, I'm always, I'm fascinated about this idea about, you know, Murdoch sold out of, of, Sky in the UK. He's now selling out of this. He's, he's been more right than he's been wrong over the years. And it just makes me wonder if it could be something as simple as he's, he's realized that there is a wider margin to be made in a bunch of his other businesses. He wants to solidify his legacy and control over his legacy before he dies. Cause I think he's what, 92 now or something. So, I mean, it's unless he's going to live forever. Um, so it may be that I'm looking for something when there's not there, but you know, often he's been the one that's sort of seen the way the market is going a little bit before others. And I, I wonder if. You know, he's recognizing that the legacy sports business is, is actually not a great business to be in anymore. And you can't really change the cost base of it. So, whereas perhaps you know, DeZone comes at it from a different angle.
Richard Gillis, Unofficial Partner:Well, I think there's a, there's a couple of things. One is he's having a row with his kids, isn't he, about who gets his money, you know, the divvying up of his legacy. It's a sort of succession question. But the other bit is, you're right, I, you can't see this happening 10 years ago, you know, certainly not 20 years ago. And so it's, as you say, betting against him would be a brave shout. So it's, yeah. I think that's worth, it's definitely worth thinking about
Yannick Ramcke, OneFootball:Now, I think I'm seconding a lot of thoughts from Murray, including Moloch selling on the peak. I mean, for me, the poster child is and remains Fox in the U. S. selling to Disney. And all the different other divestitures as part of it with the local and regional sports networks, I think was a quite good deal for him in hindsight. So, seconding this, also an interesting topic that you alluded to regarding the valuation arbitrage, given the actual valuation that has been pegged now here for the Foxtel assets and devaluation and multiples at which it is own entity and its revenues, which has now increased significantly are valued. But actually my first thought when reading the news was more on a macro rather than on the micro level. In the sense of it speaks to the co existence of linear and OTT streaming for the foreseeable future. So it's not like that OTT takes over the world. I think for now it is this linear to streaming transition, but it is a co existence of traditional linear pay TV, a big chunk of which the zone acquired as part of this transaction. And it's Dreaming's first future, but especially in the established zone markets, for example, Germany, the zone has launched linear channels that are distributed through traditional Multichannel video like Telcos. So, I think it spoke to this, it's not an either or, because now the distribution system has a monopoly on the audience anymore. It's fragmented, and therefore I first thought about this one really speaks to the quo, that linear and OTT coexist because it's not like that one or the other has a monopoly on the audience and ultimately if you want to make the numbers work you need to address and reach the total addressable market and not only a sub segment of the market.
Richard Gillis, Unofficial Partner:Yannick. I guess just before we sort of move on is there's the Saudi question. So a couple of people messaged me straight away. And again, it's one of those when the news came through, this is the next deal after the club world cup deal that DAZN have done with, FIFA and always the thought being, where's the money coming from and is it Saudi? And then the jump from, if that's the case, is this, is Saudi using DAZN as a sort of, in the, in the same way as be in sport, evolved over, you know, a decade ago. So there's sort of, it feels like, okay, this. Taking this in isolation is probably the wrong steer because actually it feels like it's just the proximity of this deal in relation to the previous one.
Yannick Ramcke, OneFootball:I wouldn't draw a direct line between source of capital and use of capital in this particular example, because also what Murray alluded to, it has been a proven strategy for the zone to accelerate its market expansion to buy existing businesses instead of Acquiring a rights portfolio as rights become available, but because in addition to the content and rights, you also acquire a built in customer base. That comes with it and an established local I think also best practice for the zone has been that for the time being, they keep those brands up and running. And then as part of a multi year post merger integration, at some point they rebrand. So I wouldn't draw a direct line between those conversations because it's not the first time that the zone did exactly this blueprint. I think the most notable example was, I think, 11 sports which has in Portugal and Italy where they supercharged or accelerated the market entry strategy.
Murray Barnett, 26West:feels like it's a pretty good deal for both sides. You've got, you know, Fox who are kind of perhaps wanting to get out of the market. You've got Dezone who want global expansion and rapidly. I think it's quite notable that, you know, That that News Corp get a seat on the DAZN board, which I think, again, is strategically interesting and important for DAZN and could gear them up well for future sort of rights discussions. So it's probably, it feels like it's just one of those things that's actually just a pretty good deal on both sides.
Yannick Ramcke, OneFootball:And the theme of global, I think was probably the most frequent word in the entire press release and quotes. But I think it's really like a theme that is inherent and fundamental to where the zone wants to go. And you can define global in many, many different facet. It can be global rights. I think that to some degree a topic here, but it can also be that. They have invested a lot of time, money and resources into their tech stack. And I would say the tech stack is really, can now be leveraged for running a global business. But in order to earn a return on that investment, they need scale. And this means they need to, one by one, enter in more and more markets, um, to, Come up with critical mass that then can be leveraged through this, um, platform with state of the art technology with a built in customer base that you can then cost sell and upsell. But I think we will hear more about the zone, especially on the global front as the key markets, the key local markets like Germany, Italy in the future, Australia need to show and prove a path to profitability because this will always be a. Important proof point for the business that they can run a locally profitable business in their most important markets.
Richard Gillis, Unofficial Partner:Okay. Right.
Murray Barnett, 26West:Basically, all of this has been the hors d'oeuvre to get to Richard's predictions. That's all he wants to
Richard Gillis, Unofficial Partner:well, they're not my predictions. They are a selection of predictions and we're going to sort of throw them up. So, we all,
Murray Barnett, 26West:Richard, if you're reading this off the list, some of these are semi serious and some of these are a little bit tongue in cheek.
Richard Gillis, Unofficial Partner:give me your first, give me your absolute banker. What is definitely. What do you think is, is going to happen?
Murray Barnett, 26West:Well, there's a few in there. I mean, obviously the first one has already happened because that was, I wrote the predictions before the venue deal came out. So I look amazing because I said that it would come to some kind of resolution. Uh, Absolute bankers, Netflix. Well, I'll stick my neck out slightly. Netflix will buy the F1 rights to the us
Richard Gillis, Unofficial Partner:Oh, are they up for my, are they in market in 2025? What's that? Who would be competing with them?
Murray Barnett, 26West:well incumbent, ESPN, previous incumbent NBC, probably Amazon, you know, apple have got the Brad Pitt movie coming out, so, you know, they might they, they might come back to the party. I think it, I think it'll be a fairly competitive process
Richard Gillis, Unofficial Partner:Very nice. Yannick.
Yannick Ramcke, OneFootball:I mean, when you gave us the homework about around predictions I'm not a fan of, like, predicting concrete business outcomes in the sense of company one and does this thing by company to the other. Um, I had a couple of more macroeconomic thoughts, what is going to happen. One was for example, that for sure the US sports rights market, but also many, many markets across Europe are rather locked up and set in stone when it comes to who has which rights. So it will be rather rigid in the sports rights market, which I think will lead to the result or to the fact that. There's a lot of movement, developments, and actually innovation in the sports programming market. So when, whenever I bought in the rights market, I now need to monetize and distribute and earn my return, that investment, that there will be a lot of innovation including. Bundling new forms of packages and so on to just cater and capture consumer demand. That is like an evolving situation like preferences and habits of
Richard Gillis, Unofficial Partner:Let's, let's just play the game of who we think Netflix will bid for by what rights they'll buy. So Murray's gone with formula one. Which is quite a night. I like this story. I like, I think there's a lot to that. I can see, I can see that happening. Anything else that we think they will do? Let's stick with Netflix because we talked about them earlier. Any, yeah, yeah.
Yannick Ramcke, OneFootball:mean, if you really force me to do and to say something, I think this is the yet to be created, quote unquote, out of thin air uh, packaged by the NFL with international games. Uh, which is currently parked with NFA network because they don't have the full 16 game schedule just yet. Once it's a 16 game package with international games, I think that is almost tailor made for, uh, Netflix to, to go after.
Richard Gillis, Unofficial Partner:What needs to happen for them to change the package? Is it, is it just a, they just do it. There's nothing stopping them doing that in terms of creating something that Netflix can buy out. Is that outside the U S is that what you're saying?
Yannick Ramcke, OneFootball:Now I'm saying it is globally including the domestic market. I think what needs to happen is that that. The package currently consisting of I think six games will need to reach critical mass and this will require an 18th game, I think, to the NFL season to really have then 60 games staged outside of the U. S., which can be rolled up into a package that, uh, is obviously interesting to a global player such as Netflix.
Murray Barnett, 26West:With another slightly out there. One for Netflix. is this idea of them creating a daily sports news show.
Richard Gillis, Unofficial Partner:Hmm.
Murray Barnett, 26West:And this is just a hunch that Yes, they've bought a bunch of rights. They've certainly got regularly scheduled rights in sort of WWE. They're getting increased tonnage. One of the problems that you have for subscription services, especially in entertainment, which is why they go and spend a lot of money on movies and original movies and series, is to remind you that you've got these services, to get And, you know, there's some interesting anomalies, and I won't go. too much off tangent about things like. Everybody says that they love Slow Horses on, on Apple Plus, but actually very few people watch it. It is, it barely touches their, their, their top programming whenever they release anything, you know, anecdotally. And so it's important that, that, that Netflix reminds people about the sports content that they've got. And, you know, Why wouldn't it be a great idea to find a fantastic host or a well-known host in somewhere like the us, like Stephen A. Smith, whether you like him or not, but it's a big sort of character to do a daily sports news show, which highlighted some of their stuff, but also was just a reminder about how great it is to come to, to Netflix every day for your sports fix.
Richard Gillis, Unofficial Partner:I think that's a great shout.
Yannick Ramcke, OneFootball:Okay. And then let, let me predict that this is not going to happen because this, because the same idea did have Amazon, Amazon launches daily sports debate show, and I can't even tell you if that still exists or not, but what I can tell you is that it didn't cut through and I
Richard Gillis, Unofficial Partner:Yeah, but that, that was very half arsed. I think if you've got a, you know, a sort of, if you look at ESPN and Sky, which are, you know, very, news, this is what DAZN doesn't have. DAZN doesn't have a reason for me to go every day to check them out. News, I think is very strategically useful. And I think that Murray's onto something there, whether it will be, whether it's, it's Netflix or someone else. That, Spot as we're seeing, which leads into another type of prediction, which is there's going to be an absolute shit show around piracy on across social media as you know, if you the Facebook announcement about, okay, it's just we're going to turn into the wild west again, we don't give a toss, just any, you know, there'll be no moderate moderation at all. The implications for it. Sports piracy are quite profound, I think, and probably, you know, is a secondary level implication from Facebook's point of view, they don't give a fuck, but the other, the rights holders already are, are concerned about it. And I think there's a as people gravitate away, there's always, there's the sort of the, the Twitter Musk world. As if. Facebook, Instagram go a similar way. There is going to be, and it might be a middle class thing. It might make a middle class flight to trust, but news is actually both strategically useful, and I do also think it's going to be I find myself now going back to more traditional news. Outlets and more sources over to buy. Used to be almost ignore them completely and just have all my news on Twitter. I don't do that anymore. It's a long time since I've, I've I've gone to Twitter for anything. So it's I think there's a, there's something in that.
Yannick Ramcke, OneFootball:Okay, then just for the record, I predict that it's not going to happen. You predict it is going to happen. I just think there's a better way of spending time and effort for Netflix, who is the master in engagement and retention among the streamers to make their business even more successful than it is then launching a daily sports show.
Richard Gillis, Unofficial Partner:Right. Who's going to buy a global deal for Kings league?
Murray Barnett, 26West:Well, I put that down as just a, a. Slightly tongue in cheek, but I would have thought that it's the perfect property for a Netflix, in particular, but, you know, possibly an Amazon and well, in design, I've already acquired it in certain territories, but I meant
Richard Gillis, Unofficial Partner:One, football.
Murray Barnett, 26West:but, you know, to do a, to do an I think, you know, Netflix would need to have some level of exclusivity and that's not the business model that, that it has at the moment. And maybe the answer is that Kingsley might do that in two or three years time and it's a bit more established, I don't know.
Yannick Ramcke, OneFootball:And I think you the last point was the essential one. It might be a matter of time here that predictions 2025, I think it's not going to happen because it's still reach first but at some point it will transition. Or be a more balanced approach to reach and revenue and exclusivity sales. So within a couple of years or two, four years time might be more exclusivity in the marketplace that the mandate exclusive broadcasters for their competitions, either locally or globally, but I think 2025 is still maximizing reach and eyeballs and any exclusivity is not a topic just yet.
Richard Gillis, Unofficial Partner:Okay. Second, next one. Who is going to reinvent buzzer?
Murray Barnett, 26West:I think that that's a bit of an outlier, but I still think it's an interesting one. And, you know, I love the concept of buzzer this idea that you'd get in a that you'd be alerted when your team or when your sport was playing. And I mean, I, you know, I'm a fan of a bunch of different teams and struggle to remember when they're on on which service and so on. So you think that even if it's a It's not a very expensive thing to create some kind of alert service that basically tells you when that live sport is on and, you know, and I'm kind of amazed that it's not out there already. I mean, maybe it is and I'm just haven't come across it yet.
Yannick Ramcke, OneFootball:I think it is. I think you haven't come across it yet. For me, it's rather back to, it's not about the idea. It's really about the execution here. And I think the idea in that context that made the most noise was the. The storefront or TV guides from ESPN, I think it was by now a year ago that like there was a, there were a couple of weeks where this was the story of the industry, but it's about ultimately building a storefront and that is aggregating all the content, even though it might still then require like a subscription to the actual content programmer and where it takes place, but.
Murray Barnett, 26West:I mean, I'm talking about something slightly different. It's like, because I am an Amazon Prime customer and it knows that I have watched football on Amazon Prime in the UK before. Why there's a, why am I not getting an email or an email for an old person like me or, you know, an SMS or, or some sort of Twitter
Richard Gillis, Unofficial Partner:you a letter.
Murray Barnett, 26West:You carry a pigeon, um, you know, or some kind of notification that I could sign up to that says, Hey, every time there's a Premier League game that's about to start on, on Amazon, I want to get something that says it's starting now. Do you want to watch? Because obviously it's, it's available on my phone. If I'm out, it's available at home. If I'm at home, And I, you know, I don't spend enough, I don't spend time sort of really building myself around the sports that I want to watch because, you know, I'm relatively time poor as opposed to, um, you know, having the, all the time in the world just to sort of plot the sports that I want to watch.
Richard Gillis, Unofficial Partner:Yeah, I'm saying, I think the athletic gets quite close with some of its Spurs based. You know, communications, but that I've, you know, signed up for that. I take note of about 10 percent of it probably, but it's not much of a jump from that to
Yannick Ramcke, OneFootball:Alternatively, you may turn on your push notification for your prime video app and curate your settings. And then you will always have the click of push notification for your favorite primary club when it's on prime video.
Richard Gillis, Unofficial Partner:Yeah. But they've got so
Murray Barnett, 26West:Okay, but I get that And maybe I'm just not that smart with that one. But I mean, it's, I don't think it's the same for Netflix. I mean, I know they're fairly new to the sports game. But anyway, I think that better discoverability is the main theme here.
Richard Gillis, Unofficial Partner:Okay. Right. Before I want to talk about YouTube, cause you haven't mentioned them. They are becoming the The big deal in the middle of the the marketplace. What are they going to do in 25? What are, what are we thinking about YouTube?
Yannick Ramcke, OneFootball:For me, it's a continuation of what I said before, I think their challenge and their roadmap uh, to create more value for content creators on their platform is to become a full funded business. Not only the top of the funnel where you aggregate and acquire a bunch of eyeballs that are then difficult to translate into business impact. Um, instead having a full funnel business in the sense of there are more monetization tools on platform. So where I develop an audience and a bunch of followers, I can more directly. Better monetize them on that platform. That might be pay-per-view, that might be subscriptions that a content creator like sky who publishes highlights and highlights on the YouTube channel can offer directly on the YouTube platform. So it's in. Toolbox for content creators to better monetize the audience that they develop on YouTube.
Richard Gillis, Unofficial Partner:Again, using the Gillis household as a you know, research base of one. My, I really have noticed my sports viewing really has shifted to I got YouTube premium now, and I watch most of my sport on the telly on that, in the gaps where I'm allowed to take control of the telly, which isn't very often. So it's sort of. That, and it then, the seamlessness of it, you know, from phone to, to laptop, it just, it's so powerful and it still feels like cheating watching Premier League, Champions League, you know, goals, cricket. I was watching the Australian India series over, you know, and it's just, it feels wrong, but it's so, so good as well. I know it's not wrong, technically.
Yannick Ramcke, OneFootball:is a challenge that YouTube is creating a lot of value, but also captures a lot of value. And it's great for you as a consumer, but what's in there for the owner of the actual content. And that this, I think this is the front where YouTube need to involve, uh, to create value for these guys and any other sports broadcasters or creators.
Richard Gillis, Unofficial Partner:Well, I guess they would say that it's up to you to make money. Yeah. We're creating the plat. That's always their argument, isn't it? As you say, it's great for me. And we shouldn't forget there are fans out there that you think, Oh yeah, this is great. And I'll, I'll, you know, it might, as we've said before, what does it mean for match of the day is a very sort of downstream effect, but I haven't watched it for six months and I used to be quite a regular watcher. I used to think it was the perfect sort of, you know, Product for just dipping in. I don't want to watch wall to wall football, but it was I'd watch it on the iPlayer on callback But I don't do that anymore because YouTube.
Murray Barnett, 26West:I think we, we've talked about this in the past is that YouTube should be an important element of any rights holders strategy, but it shouldn't be its only strategy.
Richard Gillis, Unofficial Partner:Yeah, I think it gets back to if there was a fan on this podcast They would say that's brilliant You know, make money. I don't care how much money you make. And that's where that, we know that that's not the reality of the sports business, but it gets to this sort of, you know, this endless conversation about the, the friction between the commercialization of sport and the experience of the fan.
Murray Barnett, 26West:Agreed.
Yannick Ramcke, OneFootball:And this is the reason why they have leverage and power over the content creators, because the content creators can't do without. But how sustainable that is, if there is no value exchange is to be determined. But I think there is an increasing, increasing open mindedness and willingness from YouTube to address that inherent conflict.
Richard Gillis, Unofficial Partner:Okay, excellent. Right. What any geographies that we should be thinking about? I, we did a thing, which is a it came out last Friday, the predictions. Episode that we did, and it was quite interesting the countryside that we had in terms of people flagging, you know, growth areas. One was India, and we've got an event coming up closed sort of VIP event about India and the sports market in 2025. But also Morocco was mentioned a few times, but also, and also Albania and Rwanda as sporting destinations. But anyway, just throw that in. What about China, Murray?
Murray Barnett, 26West:I think with Morocco, Rwanda and Albania, these were as much about hosting events, weren't
Richard Gillis, Unofficial Partner:Oh, yeah, yeah, yeah. Not, not, we're, we're, yeah,
Murray Barnett, 26West:think when we, when we get back to the, to the, to the core essence of the bundle, I do think that having been out, been sort of somewhat bearish over the last few years, China is going to come back, I think a little bit in 25. I think it's probably a little bit early. I think it's more like 26, 27, but I think you'll see some interesting. deals Out of China, which, which will point to valuations going,
Richard Gillis, Unofficial Partner:Their, their relationship with the big dogs, you know, the sort of, the Olympics, in terms of, again, the story always was India and China, we don't get enough money out of those marketplaces. And, and obviously we're seeing the story about, you know, India's Olympic bid. Coming in cricket in the Olympics. I'm trying to sort of jump from that to China and they've had the Olympics. So that's not going to be an issue. NBA is, is traditionally very strong in China. Premier League. I don't, I still don't know off the top of my head, how much they pay in terms of the value of the, the media rights. Marketplace in China, obviously it's a gazillion people and that's
Murray Barnett, 26West:Well, if you do it on a, you know, per capita rate basis, it's pretty low. Um, but you have a sports rabid market certainly when it comes to football and basketball. And You've got some basketball rights out in the marketplace next year and things like FIBA on the global quad package, you know, there's some football rights coming up. So I think that you'll see a bit of a resurgence in fees and in China. another important point is that, you know, their growth projections over the last few years have not been where the Chinese central government wanted them to be. And so it's not encouraged people to go out and spend big on these rights, but the economy seems like it's picking up a little bit.
Yannick Ramcke, OneFootball:and as you said, it would really be a resurgence because he had, like, we have gone through half of the hype cycle, I think with China, that was the initial spending like crazy. Then a lot of also credibility and reliability. So whenever you signed the contract didn't mean automatically that you end up with the money that you thought you would have. So I think there were also payment issues and stuff like that. So that the market has completely vanished except for a couple of crown jewels, including the Premier League, which has. Compared to all the other football leagues, continue to make good business in China. And I think now it's like on this recovering trajectory to balance in somewhere in the middle. Uh, but I think it will be better than the last couple of years. It will not reach the craziness that we had around 2017, 18 and 19. Where this piece or the money that League thought they would have they have made in the, in the market will be repeated or will come close anytime soon.
Richard Gillis, Unofficial Partner:There's a, I've got a question just, which is about consolidation and whether or not 2025, we're going to see a sort of radical consolidation on the media side. That's again, a theme running. And a lot of people talk about the American market. Obviously we've discussed the zone buying Australia, Foxtel. Can you see that happening? Cause again, logically you would. You would look at the marketplace and say, it's still got a lot of people watching television. There's not much excitement about the broadcast, you know, the linear broadcast marketplace, but it's still deep and significant. It's got large numbers. The, the obvious thing that might happen would be, okay, if you just reduced and centralized the cost base to a small number of, of Channels or outlets rather than this sort of disparate nature of the marketplace that feels like it should happen logically and whether it happens in 25 is a different question.
Yannick Ramcke, OneFootball:think this was back to what I said with innovation in the sports programming market. I see a lot of consolidation and collaboration. Which does not automatically mean mergers and acquisitions. I think mergers and acquisitions is a more long term development. I mean, just think about like closing times of the year. They, I mean, from announcement to closing up probably more than a year. So I don't think that is really something that will be contained to 2025, but something for the next two to three years. But what I see is a lot of consolidation and collaboration without actually merging companies. But by Building up bundles, combine packages just to make it easier both on the cost side, but also accessibility and discoverability for the end consumer. To the hopefully benefit of both sides, the consumer, but also the programmers.
Murray Barnett, 26West:There's a lot of marriages of convenience which are already happening. And I was talking to a primary pay tv sports broadcaster in one of the top five european markets and i was asking him about how he felt about one of his competitors stealing one of the biggest sports and in his market and he said it makes no difference to me because i still have the ability i still have the large subscriber brace which they need access to so You know, I, I don't have to be on the hook for those costs. I've got this infrastructure, which they need. And so we end up with this marriage of convenience. And so, they're developing different business models now. So it's not, you know, it's, it's terrible if you're a rights owner, because you actually, In a market where it looks like you have three or four competitors, arguably you don't have anybody, because really, they're so used to colluding that there's no real competition there.
Yannick Ramcke, OneFootball:And that is an unspoken truth in the industry that you don't need to own the content to deliver the content. And the end consumer doesn't care who owns the content, whether they have the watermark of company A or B on the broadcast. What they worry or care about is where can I access, through which gatekeeper can I access the content? Which inevitably. Lessens the competitive tension in the marketplace. And as we established many, many times before competition is still the single most determined for market prices paid, which then you can or you know what it means for rights owners.
Richard Gillis, Unofficial Partner:Okay, I'm going to draw a veil over our predictions for 2025. Well, I'm sure we'll come back to many of the themes that we've covered. A few that we had on our list that we didn't, MLS and Apple to renegotiate their media rights deal, possibly not until 2026. That's interesting. And unconventional buyers of rights, Budweiser in the NBA in Brazil, Pickleball and QVC in America. So all of that we'll come back to, but in the meantime, as ever, thank you to the the bundles, Yannick Ramca and Murray Barnett. Thank you very much for your time.
Murray Barnett, 26West:Thank you very much, and Happy New Year to both of you.
Yannick Ramcke, OneFootball:Thank you, same to you and looking forward to what's next. I think what's safe to say, it's not going to get boring in our industry.
Richard Gillis, Unofficial Partner:True enough.