UP456 The Bundle: Netflix F1? TNT Six Nations? What if, streaming is just a bad business?

Will Netflix buy F1 rights in the US? Will TNT buy Six Nations in the UK? Will DAZN back out of their Ligue1 deal in France?

Streamers' January accounts: is anyone not losing money?

Is TGL any good? Do you go to the Super Bowl just for the meetings? 

Join Richard Gillis on The Bundle with Yannick Ramcke, General Manager of OTT at OneFootball and Murray Barnett, 26West Sport, formerly World Rugby, F1 and ESPN. 

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.
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Transcript

0:00

Hello there. Welcome. It's Richard Gillis here, and you're listening to Unofficial Partner, the sports business podcast. this is the bundle, our regular series on sports media and streaming with Co hosts Yannick Ramker, the general manager of OTT streaming service OneFootball. And Murray Barnett, founder of 26 West Consulting, formerly of Formula One, World Rugby and ESPN Disney.

yannick-manuel-ramcke_1_02-10-2025_182215: 0:36

One second, one second. I haven't watched the Super Bowl yet. I am very much looking forward to watching the Super Bowl tonight, so I'll I don't know if we wanted to make it part of it, but I am not aware of the results yet. And I would prefer to not be aware by

richard_2_02-10-2025_172215: 0:51

Wow. How have you avoided that?

yannick-manuel-ramcke_1_02-10-2025_182215: 0:53

This is, I mean, I was supposed to go into the office today, I did not for that reason. That's like how serious I took it.

murray-barnett_2_02-10-2025_172215: 0:59

well, I wasn't going to tell you the result, other than I was going to say that it's kind of like a bit of a mini sportel because there does seem to be a wealth of, international media executives who have descended on New Orleans to have high level discussions about future rides including from the look of his Instagram, Ian Holmes

richard_2_02-10-2025_172215: 1:22

I was talking to so last week we had our event Teneo event about India and one of our guests is Will Brass from the Premier League and the next morning he was flying out to the Superbowl and we were talking about exactly to your point, there is a, a week. Now the Superbowl has become this sort of sport LS leaders esque type moment in time in the States, but not just in the States where you, you can line up a load of stuff to the extent where I think that you go do that and then leave before the event. I, I would be quite happy to sort of get out of town before the Superbowl even starts. That's what I do with golf events. I quite often go Tuesday, Wednesday, and. Thursday, you get a sense of the place, you get a sense of the course in that case, you know, in golf's case, and then you bugger off and watch it on telly. That's my major event strategy, mainly.

murray-barnett_2_02-10-2025_172215: 2:13

Well, when, when I was at Formula One, we used to try and leave after the start of the race and then watch the end of the race at the airport and then fly out so that we could beat the crowds.

richard_2_02-10-2025_172215: 2:25

And the bloke in the fastest car won, apparently, each time. That's my main, my main point, that's my only point about Formula One. We could, we could jump from that, actually, to To our first story. So we've got, we should set this up. We've got four stories. Will Netflix acquire formula one us media, right? So story number one, and then we're going to talk about streamers and their financial results. There's quite a lot of information that's come out over the last few weeks about that. We've got a rugby question, rugby media rights. Is there a strategy? There's a. Question, a story running about TNT and six nations. And we're going to talk about that for a moment. And we're also going to be talking about TGL and Gulf rights and the impact of live on Gulf media rights more generally. And then there's a story about the zone and trying to renegotiate LFP. But we, we, there's a, there's quite a lot there and we'll get through it all, but it's again, in what order and how we do that. Is uh, open to suggestion. You're making quite a lot of noise. Yannick, are you, are you fiddling? There's a bit of fiddling going on.

yannick-manuel-ramcke_1_02-10-2025_182215: 3:29

Yeah, I know let me, let me actually change setup.

richard_2_02-10-2025_172215: 3:32

Feel sorry for you in that new mic. He's, you bought that mic. It's very expensive. And you still, you always unplug it when we start. I'm worried about, I'm worried about this new apartment that you've moved into and I'm worried about its wifi. I think you're being ripped off. So I'm going to read this off it's a mixture of the times and black book motorsport, which I think is sort of, Netflix is evaluating a bid for the U. S. media rights to Formula One, according to a report in the Times, ESPN's 90 million a year deal with Formula One expires after the 2025 season. Apple has previously been linked with the bid though. A question about the global nature of the deal, which might put them off. Netflix airs popular dare drive to survive docuseries and has started moving into live sport. Now, there's a few things to say before we get going on. This one is this story as emerged since. Murray Barnett made this prediction in our December episode. So well done, Murray. That this, I think this is, you know, we can overplay the role of the bundle in media, sports media discourse. But I do think that there's a sense that people have heard that and then started to go in search of the story. So, the other one is this feels very neat to me, and I'm always a bit skeptical about very neat stories, Drive to Survive Netflix and Formula One, blah, blah, blah. Murray, you should start us off here. just give us a bit of context to it.

murray-barnett_2_02-10-2025_172215: 5:05

So thank you very much for for bigging me up, although it doesn't take a genius to put one plus one and come up with two. I think the background to this is some of the evolution that you're seeing with Netflix as a platform. So when I was looking at this story, the most difficult part was actually to try and get it in some sort of logical order, because there's a few different strands going on here. Firstly if we kind of zoom out a little bit, Netflix is, is now with, it's now got over 300 million global subscribers, which has seen its largest ever growth in, in Q4 2023 as we've talked about previously, they've launched an ad tier. They've also got some, I guess you'd call them sort of stunty sports rights in sort of celebrity influencer boxing and then some sort of one offs, if you like, in terms of the FIFA Women's World Cup events, and a small package of NFL on Christmas Day, and then sort of really the FIFA the Party. Coming into sports in a bit more of a major way with WWE in January. And all of this is a sort of direction of travel potentially towards having more regularly scheduled live sports. So from that perspective, formula One could be a, a good option or, or, or something that kind of meets that direction of of travel. It's also against the backdrop that you see Formula One's audience growing considerably in the U. S. And Netflix, unlike say Apple, has taken, and to a certain degree Amazon, have decided to have taken a bit more of a regional or local view. So certainly the U. S. being their most important market would be interested in U. S. only rights, unlike probably somebody like an Apple. And The rights are also relatively keenly priced at, depending on who you listen to, somewhere between 75 and 90 million a year. So perhaps that's a little bit of a setup for Yannick.

Yannick Ramcke: 7:10

I mean, there were a bunch of points in the mode that you addressed. Maybe let's start really like a couple of years back because I think by now we can bury the conversation around, okay, is Netflix into Sports, live sports, a mixture of sports or entertainment and the process where they actually showed their hands many, many years ago was the exact same time last time Formula One went to market in the U. S. where they actually did a bid. They were the highest bidder at the table. Back then, there was always the question between reach and revenue when it comes to a new distribution platforms and given the maturity level of the formula one in the U S where they were really on this growth path and had significant revenue expectations in the outer years ahead of them, they choose to stick with ESPN back then nominally a significant increase, but as you said, still yeah, respectable, but, acceptable price point with 90 million US startup per per year. So they have been at the Formula One or with Formula One at the negotiation table before for Formula One, I do see the fit. It's a fully produced product. Remember, even ESPN is taking the Sky uk broadcast and and feed. So Netflix would not. Need to get into all things production. As you said, Marie, Netflix is interested in global rights. I think it's a point that has always made, but let's be aware of actually the existing media rights agreements of the formula one. They are extending all the way out to 28, 29, 2030, especially in high value European markets. So if it's a long term corporation and that is a third point, Netflix. Obviously interested in owning, if not owning then long term renting rights, we would need to consider like a mighty year roll up as territories become available, but certainly starting with the U S in the short term, meaning after the upcoming season.

Murray Barnett: 9:20

My point was more that it seems like Apple is sort of saying unless they can get everything on a global basis that they're just not interested and The out of all of the streamers netflix seems to be the one that's most flexible the other really interesting thing about formula one is Formula one would probably admit that it has some territories where it feels like it underperforms And having netflix either incorporate those territories Or acts as a stalking horse in some of those markets, may help them get back to kind of where they think their rights, fees, and distribution levels should be in some of those markets.

Richard Gillis, UP: 10:00

there's a question here about the story that Netflix has to tell audiences. So it's, it's sort of shareholder audiences or the markets and it's beginning to sort of change that. I mean, in terms of the, is it now an advertiser based business, you know, is this ad the push into live sport comes with it along, along with its,

Murray Barnett: 10:22

premium advertising.

Richard Gillis, UP: 10:23

Be it build into a premium advertising product. So essentially what we talk of as, you know, it's a sub streamer isn't right. It's, it's not, it doesn't fit that characterization or at least that their growth plan is about premium advertising and advertising sort of platforms.

Murray Barnett: 10:41

Well, Formula One offers a double whammy because they've already got the inbuilt audience from Drive to Survive. Plus, they're now bringing in an ad, an ad tier, which sports lends itself very well to. So if you like it, it's kind of a win win. And I think, you know, that's what the stock market is really loving about them getting more heavily into sport, is that, you know, you probably couldn't find something more perfect than Formula One. And the premiumization of an audience. Of a sports audience from an advertising perspective is a perfect fit for them. So

Richard Gillis, UP: 11:12

And your, your point, your point about a sort of the different markets, because I mean, this is a while ago, but I remember seeing an F1 deck where the numbers of the audience, there was a, there was a huge sort of sway towards four major market, UK, Spain, Germany, and Brazil, the America was always the question mark. Is it, but it wasn't, it was quite uneven in terms of, you know, we talk about it as a global sport, but there were quite a lot of disparity between the key markets and the rest. And I didn't know, I never quite knew whether or not the, the liberty moment or the, you know, the era. That's obviously been a lot of focus and a lot of talk about its growth in Africa, in America, but it was coming from a low base and whether or not this moat, you know, this year where we're seeing the rights come back to market in the U S what that tells us about that split of formula one's audience. Cause again, it was always, it was really quite, I was quite surprised how uneven it was.

Yannick Ramcke: 12:15

And I don't think that's specific to Formula One, but rather inherent to sports. Sports is ultimately tribal. It's local, which is also one of the reasons why I'm not a super fan of this. Global or globally set mindset that Netflix and to a bigger extent, as Marie mentioned, like an Apple tries to apply because,

Richard Gillis, UP: 12:36

I think I think it's a way you make a good point, Yannick, because I think this app, you know, if again, it's a projection on to Apple that they want it globalized, they want a global product, one ticket. That's a that's not ever going to happen, is it? Because sport, as you say, is a series of local markets. It's, it's very rare. I mean, you only you get to golf and tennis, and those aren't particularly tribal. And, but they fit that characterization of, okay, well, you know, it's a, it's a, the most global sports because it's America plus everywhere else as well. But no one beyond the grand slams gets very excited about tennis. I know that there's a lot of heat in the private equity and, you know, the PIF going after the, the middle of the marketplace, but I think that's. It's, it's an odd one because I think there's a sort of, I'm not sure what Apple wants, if indeed that is what Apple wants, will ever be the case. I don't see one ticket global, one around the world as a viable sports strategy.

Yannick Ramcke: 13:37

and travel circuits like tennis, like formula, what actually better position to fit that kind of approach, but still, there's too much there are too many local differences. It comes down to local heroes that comes down to where actually the events or races are taking place. So. If you want to go into sports and have somewhat of a global business and want to apply global mindset that you may know from non sports video content or any of your other business lines. Formula one might be a good bet or a good fit, but as I said, again, there would be, if that is the go to market strategy, a mighty new roll up required anyway. And some high value markets, including the France including France, the UK, Italy, Germany are locked up for like two or three years at least starting 2025. So, I see. The point for the U. S. market, but also let's be aware that viewership in the U. S. has accelerated since the last media rights agreement between Formula One and ESPN was closed, but has also flattened out over the past three seasons. So it's a bit of okay, let's capitalize on the growth trajectory that we had the past five to six years. Because it might be seen that actually appetite and we have some leading factors also with the drive to survive series where most recent viewership did not lift up to previous seasons. So I think also for Formula One, it could be a good deal because Netflix invests into storytelling, into creating, and ideally also capturing value from IP creation and everything, but for Formula One, it might be even more valuable for the cycle that is coming next after Netflix, as Netflix can further build the property because the property has somewhat stored in the US, which was a success story until very recently.

Richard Gillis, UP: 15:41

Okay. I've there's a couple of questions that, that I've got that build on this, which sort of take it slightly broader. One is the price point. So we're looking at what around 90 million a season for 25 races. cheap in the comparison or relatively cheap to other things that they might be able to buy. So Murray, give us a bit of context on that in terms of that's, that's one lens into this. And the other bit is the, makes a lot of noise for. That price point for Netflix, presumably it, it reaches a sort of higher end audience, particularly in the States. It's seen as quite exotic, isn't it? It's really, it's not a sort of NASCAR audience. It's not the NFL audience either.

Murray Barnett: 16:25

I think it's, there's a lot, obviously lots, lots to like about it if you're Netflix and, and indeed Formula One. And I think I did a sort of It makes sense for Netflix because and then it makes sense for F1 because list in the, in the notes and you know, we talked about relatively cheap. You look at what Amazon paid for Thursday night NFL games, which keep me honest. I can't remember how many that is. It's only a handful and they're paying circa a billion a year for that. And albeit that's a very different rating that that delivers. I think as you said, there's a certain amount of noise that Formula One delivers. And it's. It's that kind of regularly scheduled program, which is a bit of a stretch to call it akin to WWE Raw, but you're getting that kind of roughly every other weekend, a big a big push. And it's not, you know, Formula One is built, so it's not just the race. It's actually sort of three days worth of programming. You've got this really a big lead in that you can have, which would involve, you know, people dipping back into drive to survive. For sure, Formula One is going to be planning some other non race related type content, of which they'd want Netflix to be a part of, so I think there's probably a small bit in F1's mind as to It's all about money, but it's also about trying to keep those long term relationships going with the likes of Netflix. And again, that's, they've proven that with Sky and Channel 4 and others that they, they like to build long term relationships where they can, albeit that they're not afraid to to jump ship when the moment is right, but they prefer to build these, these long term strategies. And so I think that that's That all points to it might be the right time for them to do an agreement with Netflix. But again, you know, that being said, they'll be quite loyal to ESPN as being somebody that's been there for the last couple of cycles. One, one sort of very crucial part, which is Sort of somewhere in and amongst all of the noise and news about this has been the appointment at Netflix of Kate Jackson, who is a very well respected vice president of production at ESPN, who's now moved over to Netflix. Over the course of her career at ESPN, she managed NASCAR, IndyCar, College Football, and latterly Formula One. And I think that that's another important point about Formula One. It'll give them a lot of confidence that there'll be a smooth transition from somebody that really understands and has worked on the sport for a while. And I'm sure that that was one of the things, one of the many things that attracted Netflix about hiring. How was the thought that it's starts to build a peripheral case for them acquiring it in Formula One's eyes, in addition to all of the other things that we've, that we've talked

Richard Gillis, UP: 19:17

Can I just ask quick before you come in, Yanni, a quick question on that. Cause there were sort of echoes of another story that we talked about, which is the Premier League taking in house their production, how that role. On Netflix's side, the producer of Motorsport, whatever her job is, Kate Jackson, her job, what is it? Because she, she's not the direct, she's sort of, is it a sales and marketing presentation job of the sport when it comes to Netflix? How, what is she actually in charge of? Cause they're going to control the pictures, aren't they?

Yannick Ramcke: 19:51

You

Murray Barnett: 20:04

that. And I, and I think, you know, some of the, some of the bits that I found interesting in sort of looking into this in a bit more detail was that, you know, a few people were sort of saying, does, does it mean that, that if Formula One goes to Netflix, you end up with something, which is the drive to survive vacation. Of the live event, you know, would Netflix be able to do a good job of integrating the narratives and the storylines and the drama that you create and drive to survive into the live feed? And I think we don't really know what that means, but it sounds very clever, but it also seems to make sense that. Ultimately, they're going to try and create a presentation which is going to have a wide and broad appeal because we know that a vast majority of the people that watch Strive to Survive are either new Formula One fans or don't watch live Formula One. So, it follows that having somebody that's come from the live side of the sport but taking it into an environment which is used to dealing with the storytelling and narrative side of entertainment is, um You know, that kind of makes sense to have that kind of marriage and maybe Kate Jackson can be a good sort of transition point for that.

Richard Gillis, UP: 21:16

Yeah. Yeah. Yeah.

Yannick Ramcke: 21:17

And I don't, I don't think they will reinvent the wheel in the short term. I think every evidence to date suggests that Netflix, when in doubt. Takes a conservative approach. I mean, if we have looked at the broadcast and productions of their most recent live sporting events, it looks pretty much like, any other traditional broadcast that we have seen or observed today. Doesn't mean that they won't integrate it more into this whole idea of storytelling, which they still consider their core competence, but I also want, or wouldn't overestimate, like. How innovative or different it might be in the, in the short term. But maybe just before we finish it off that actually Formula One is punching above its weight compared to other motor series like Nesco or Indica. I think that, I think that was something we discussed before, both in terms of media rights fee and viewership generated. And the interesting thing actually, I is I think in the most mature market and United States certainly sticks out. Sports content or live sports programming might actually the best return on advertising spend that they can invest. So it almost feels like it comes out of the marketing budget because exclusive sports content is still a subscriber subscriber, acquisition driver. And if you look at, I think Antenna put out some interesting data, look at the daily signups on Netflix. It is like steady as it goes. But actually those events, Jack Paul, NFL games and the WWE Raw debut on Netflix actually created spikes and spikes are super rare for, for Netflix. So, I think subscriber acquisition increment incrementally expanding the total addressable market is one point at support the business. The other, even though ironically ESPN has used the ad free version. So whenever sky went to at break. ESPN kept or ESPN slash ABC kept the programming. So it was actually ad free, which is a bit ironic now in the context of Netflix, which always had the ad free experience. And I don't think it's a big, or they expect huge contribution when it comes to retention. Yes. There's like this. Recurring event schedule, but I think Netflix is simply market leading when it comes to retention and they have other more cost efficient retention mechanism than keep buying live sports programming on a weekly or monthly basis. I'm

Murray Barnett: 24:03

final thing I would say on this is the most important thing and probably the genesis for this whole series of podcasts

Yannick Ramcke: 24:11

Okay.

Murray Barnett: 24:12

to create a competitive marketplace. That there will be at least Two bidders for this if not three or four and that's exactly what formula one wants So they'll be delighted that we've just spent the last 20 minutes talking about how netflix are really into formula one

Richard Gillis, UP: 24:27

But it's also, that's not, it's a question I was going to ask you actually is about, there is the perception and the reality of that as well, you know, in terms of I was looking at just recently, you know, the match room came out with a, you know, Netflix are in for darts type storyline, which people thought, Oh, well, you know, this is interesting. You could see it got a bit of a circle now, whether it's real. Yeah. Or whether that's just, you know, Eddie and Barry Hearn playing with, with headlines for the, for obvious reasons. But I, there is a question about what the impact of a Netflix coming in to every major sports rights auction, whether they are actually in the auction or not the perception of them and what that does to overall values over time. And actually they don't have to spend each time to have an impact on the marketplace.

Murray Barnett: 25:21

You're right richard, but you know, it's funny because whenever we do this podcast, you know we're always trying to find these points of difference about Streamers as opposed to sports broadcasters as opposed to free pay whatever it is And at the end of the day, it's all the same thing, which is actually competition, you know, and I remember You know When we talked about Premier League rights auctions, you know, years ago, it would always be that you'd always trundle out like, Oh, is it going to be ESPN? Is it going to be, you know, be in that's going to do it? And now it just seems to be fashionable that it's now we're talking about Apple and Netflix and Amazon. And, you know, the principles haven't changed. It's just the names of the players have. I would say, though, that I'm I, I would bet money on the fact that Netflix will definitely be at the table for, for, for Formula One. I don't think it's a stalking horse. I think that they are going to be serious about putting something out there, but you're right. I mean, they are used as a stalking horse. I mean, if you want the, if you want the one that is That is definitely not going to do anything. I'd stick my neck out and say, Apple will not put anything on the table that is interesting for Formula One.

Yannick Ramcke: 26:32

And it's actually that the claim is viable because Netflix did it before they were just not successful. And ultimately, as you said, competition is. It's a single most important determined for market prices, because if I'm a bidder, why should I concede on margin if I don't have to, and I only have to if there is someone else who would otherwise be the successful bidder. So it's part of the core job description of a match room, a liberty, whoever owns the rights to steer up competition.

Richard Gillis, UP: 27:02

There are, there are sometimes I think. We'll wake up one day and Apple have said, no, solve this. We're not in, we're not gonna do this anymore. Content is a, you know, why are we doing this? Let's go back to what we're.

Murray Barnett: 27:13

Well, I think that also you, the reason why Apple is coming out is people conflate two different things, which is the Formula One movie, which is coming out later with Brad Pitt and live sports rights. And the big, of course, the big difference is that they actually own the movie. So that's amortized over it's, you know, lifetime, which will be, it's a, you know, a large part of that is when it's first released, but they're only ever renting live rights. And so that's, that's sort of an anathema to them in terms of their thinking of it. And MLS, as we've discussed in previous podcasts, they have a 10, they had a 10 year agreement. They've got various outs. They've got a fairly low base to get to in terms of rights fees with various kickers on top of it. You know, it was a win win deal for them.

Richard Gillis, UP: 27:58

Okay. Right. Let's push it forward to story two. So streamers, financial results, and. We're just picking up on a couple of things that came out both around Peacock and ESPN and a few others as well. But it's just interesting to see what's happening. Yannick, I'm going to come to you for this first of all. So just give us a, give us a bit of context for this story. What's, what's happening.

Yannick Ramcke: 28:25

I think main takeaway is that OTT was, has been, and remains a difficult business to be in, but it's a business that pretty much any and every legacy media company needs to be. In at least with one or two house, I mean, you can go from one end of the spectrum, like the Fox who has tried to hold out as long as, as, as it could with the collapse of venue sports they actually now have communicated, okay, there will be an over the top proposition out there in the foreseeable future. All the way through the other side where like, Comcast, for example, has subsidized it's Peacock streaming service for years now, as pretty much put a lot of exclusive expensive life sports programming on it to drive and retain. Subscriber. So my main takeaway was actually on Peacock and ESPN plus. Maybe we start with a Peacock, which as of today is around 36 million subscribers in the United States. And the one thing that really stood out to me is why all the other streamers have at least on paper, and this is more a spreadsheet exercise that anything else has reached profitability. Except for Peacock, which doesn't even get there. I think accumulated losses since launch are around 9 billion US dollars. And that is, I think what also contextualize all of that, just because. I read a break even run rate, however, I got there with all the different spreadsheet wizardry that you can do. It is about recouping and upfront investments. And this is right now at 9 billion and they haven't even start earning money. You can't even. Put a multiple on AVTR or earnings or whatever, because there are none. So I think that's really contextualized how big of an investment this has been as there are many many years in and there are still streamers out there as part of bigger conglomerates that are not profitable on on paper

Murray Barnett: 30:31

But some of that is quite natural, because as we talk about cable bundle decline, the more that that declines, the more that People will be talking up their streaming entities and partly because they have to, because that's becoming the more immediate future, but also because they're getting less revenue by definition from their, their cable businesses. So I think you'll just see this constant managing of the message whenever these results come out about cable decline and the street, you know, and the,

Yannick Ramcke: 31:05

Okay. Okay.

Richard Gillis, UP: 31:14

above sports. You've got the, the, you know, the, the, the impact of this on sport and its role within this bigger story of, of, you know, massive amounts of money being invested and lost and, and you know, huge media companies at what point does. I mean, if it's private equity, if that's the play starts to say, right, you know, consolidation at that level. So at the, at the, at the major network level, because that's the only way you can see really profitability over a longer period of time is that there were just fewer entities competing at that point because people, you know, there's, there's viewers in their millions, tens and hundreds of millions, there are paying, you know, a lot of money. Individually, but still these organizations are competing and, and, you know, people are sort of losing money. So logically you'd say, right, the, the play is consolidation on the, on the big media side, and obviously that would have a ripple effect on the sports rights market because you've got fewer people bidding for individual sports rights, but that's the longer term play, surely.

Yannick Ramcke: 32:27

And it comes back to then reduce competition, and we just discussed how this may or may not impact downstream market prices, but I think you're right. And I think ultimately it's about. Do you have the scale required to run a sustainably profitable business? And Netflix can allocate its cost base across millions and millions of subscribers. If you are subscale, it doesn't only impact the cost allocation of your fixed cost base, but also the advertising business. If you're a subscale advertising business. Probably not a good position to be in. So I think there will be consolidation from number three, all the way down to six, seven, eight, because this is not sustainable. It is deficit finance right now by legacy business lines. I would make the argument that. Comcast with it's cashflow rich broadband and cable network businesses has resided in some complacency for like how to operate a peacock. But I think. Ultimately, investors will only have a limited amount of passions on, on that one. And we will see consolidation just to consolidate item, ultimately the economics, which are not sustainable for a good, a good share of the current contenders in the OTT streaming space.

Murray Barnett: 33:52

It will also be different market by market because, you know, as we've talked about again in the past is the genius about things like NFL, NBA, MLB, et cetera, is that they've divided their packages so that there's no. One winner, as it were, when the, when the rights are sold, that there are multiple packages on multiple networks. So I think you'll find that in America, there'll be a lot more opportunity for multiple services to keep going for a longer period of time, whereas where there's a single buyer, or in some cases, no more than two buyers for a particular right in, in say some European markets, that the dynamic for.

Yannick Ramcke: 34:31

So

Murray Barnett: 34:31

OTT will be or direct to consumer will be very, very different.

Yannick Ramcke: 34:35

Being used

Murray Barnett: 34:37

you're also seeing that the smart people like ESPN and looking at through this sort of project flag flagship or whatever it's called trying to figure out how to find that optimal mix between bundling ESPN in certain instances, operating it as a standalone in others. And then there'll be some experimentation, I suspect as to. what that optimal mix is to make sure that they are generating as much money as they possibly can, but at the same time reaching the widest possible audience because, you know, they have multiple revenue streams, whether that's ad sales, whether that's a la carte subscriptions or, or bundles. So. There'll be some experimentation going forward, but I think in the States you'll still have quite heavy competition amongst a good half a dozen major players, and we're already seeing some of them go away, you know, FUBU with, with the Walt Disney Company and so on, but, you know, I think the major networks are all too vested to really. Let their, let their streaming products wither.

Yannick Ramcke: 35:36

think that's a good segue to ESPN because in the ESPN or Disney earnings, what stood out to me where I don't know if it's a coincidence or not, but conceptually it does make sense that both Disney plus and ESPN plus. Lost 700, 000 subscribers quarter over quarter. And we discussed before that the introduction of the Disney bundle composed of Disney plus, Voodoo plus ESPN plus the big beneficiary of that was actually ESPN plus because. The standalone sports streamer tappered out at low single digit million subscribers at the end of 2019. The Disney bundle was launched together with the Disney Plus streaming service and it has rocketed all the way through 25 million plus ever since. That ESPN Plus subscriber base decreases to the exact same amount as Disney Plus. I think it's a good sign or tell that ESPN plus has been dragging along or taking along the Disney bundle, but pretty much has hit a growth feeling and I'm pretty interested in the faith. Of ESPN plus one's flagship without and I think it'll Paul or will be decided as part of what happens with the UFC because right now the VUFC pay-per-view, which is sell through via PN plus, is the one property driving. ESPN plus, but the sales strategy, you don't need ESPN plus for that. We can also just go through flagship and then what's the point of ESPN plus. Doesn't it just make sense to roll it up? So I think also there in terms of pricing and packaging, a lot to be determined. Okay? I

Richard Gillis, UP: 37:25

And of course, if we're talking about streaming services and lost money, we can't not talk about the zone, the sort of poster boy for this story, but there's a a story about they're trying to renegotiate their French. League on TV rights deal keep reported to zone are looking into the, into a legal loophole to stop their contract ASAP. They may activate an exit clause by December, 2025. If subscriber targets aren't met, be in sports may also exit. So what's happening here. That's it. This is just them saying it was a bad deal. We're going to try and get out of it.

Murray Barnett: 38:02

Yeah, I think, you know, this is a classic example as you, as you kind of teed it up of just how hard direct to consumer direct to consumer is. They've got a target of something like a million and a half to get to, or that's been sort of said there's a million and a half to get to, to see an ROI. And they allegedly currently have something like 500, 000. And it just shows you how tough the market is out there in terms of getting the pricing right, the marketing right. It's also conditioned a little bit by the history of what something's been sold for or where it's been previously. And I think we've talked in the past about how there's been a lot of disquiet about the way in which The French media rights have been sold. The French League media rights have been sold in the past. And there's some I know we're going to go on and talk about rugby in a minute but it's quite interesting because there's an an analogy here between or a similarity here between the way that Canal Plus has been alienated from acquiring French League rights and how Sky has walked away from PRL rights Premier League rugby rights in the UK and how You know, your job as a salesperson is just to make sure that you maximize the competitive tension in the marketplace. And DAZN felt like it managed to get in there at a reasonable price, but maybe there was already some, you know, bad taste in some people's mouths about how the league was run, and DAZN is taking a first shot at trying to figure out how to do the pricing, and they already have moderated their pricing a couple of times in the marketplace, which has created a bit of upset in, in the marketplace. So I guess it's, it's, it is just this point about like everybody thinks that launching a direct to consumer service should be easy, you know, like I've got a billion followers, 10 a month 10 times a billion times 12. Wow. Isn't that a great business? And it's actually super difficult. And. That's why even big companies like the Walt Disney Company are struggling with it.

Yannick Ramcke: 40:07

And we even set back then upon the market entry from the zone to the French market. They are very positioned. The fixed cost base, i. e. the media rights he paid for the most important property, were deemed reasonable. They had a playbook of market entries from many, many other markets where they executed accordingly. They have the tech stack. Hosting and delivering all of that. So I think the initial position out of the gate was better than they may have been in a couple of other markets that they took a shot at, but I'm really concerned, or I would say that it is actually a bit of a function of the media product of the French league. In the past. I also would have said that. Okay, well, the quality of the league is mainly impacting international media rights revenues or commercial opportunities. But it's rather resilient in the domestic market, as long as football is a thing. Because then it's the best available domestic product. But I think the league with the exodus of star players, with the lack of competitiveness competitiveness in international competitions. I think actually that the Ligue 1 as a media product has degraded to an extent that it's actually impacting the domestic. Valuations, which as I said, I thought would have been mostly resilient or independent. So the change in pricing and packaging that you mentioned from the zone, I mean, it's as much as an about face it, you can do as a, as a broadcaster, you don't change pricing and packaging to that extent as the zone has done. If it's not extremely bad. So I really think that they are significantly behind a business plan. And then it's about, okay, if I can renegotiate rights fee. I almost has a duty to my shareholders to do this. And this, yes, it's not good for the league and everything, but I would not overestimate that the zone is putting the plug on the market. It is just, if they can renegotiate because of this, this set of the other clause. It's like the fiduciary duty to pretty much do this because ultimately it's transfer of margin, right? It's either they can improve margin by lowering the cost base or they don't. And if they can, they should. The

Murray Barnett: 42:49

Well, just this one more point on this, and I know, I know Richard, you've, you know, you've covered it with, with others around piracy. I was talking to two or three French guys in their sort of 30s over the weekend, and you know, their attitude towards piracy was really quite,

Yannick Ramcke: 43:05

And then you

Murray Barnett: 43:06

Astonishing in the sense that they were so sort of blase about it. It's, you know, they wouldn't steal from a shop, but stealing a TV signal for them was completely, completely normal. And they didn't see, if anything, it was kind of like, well, we hate Dazon and Canal Plus and all these companies that are pay TV. So if we can get a chipped fire stick or whatever it is, then, then why wouldn't we? And I, I, I wonder if that's also just such a massive thing that we don't talk about enough even as part of the bundle is just what an impact that's happening. And I, you know, I just caught a headline today that saying it's, I think the Swedish parliament are also looking into it in relation to the recent sales of the Swedish league because they were not able to see any uplift in their, in their fees. And the government wants to understand if that's to do with, you know, sort of rampant piracy.

Richard Gillis, UP: 43:57

Yeah, yeah. Well, as you say, we have done a lot on it and it's also, but it's one of the questions that is always there, you know, it's just sort of perennial question about, well, what's the value of it? No one quite can, there's very limited data on the actual number. So in terms of, you know, the amount of money that, that is leaking out of the the economy, I know they've all

Murray Barnett: 44:19

Sports pro, in November, I think it was Enrique from Telefonica was saying they, he thought it was as high as 40%.

Richard Gillis, UP: 44:29

Yeah, yeah, it sort of varies between 30 and 60, depending on who you talk to. And, you know, in terms of who the, there is a, there is obviously a cottage industry or more than a cottage industry, try it, you know, in terms of the security and protection of rights, which eggs up that number. And, you know, there is a sort of scaring the marketplace, but it's absolutely, you know, I completely agree with you. It's, it's both in the data, but it's also Anecdotal as well. And you can, you know, you, you know that it's happening.

Yannick Ramcke: 45:03

But it's also a welcome stalking horse, right? And if media rights, income and revenue is not living up to expectations or budgets, then it's an easy one to mention, even though as easy it is to speak about it, it's as difficult as to solve it. And for me, the other three things, it's legal framework. And forcing different laws and regulations. It is the security stack, technically speaking, and it is actually product innovation because it's like there will always be a leakage and just the combination of legal enforcement, product innovation, and a more airtight security stack will ultimately solve this permanently. Otherwise it's a vocumole, it's a cat and mouse

Richard Gillis, UP: 45:51

Made work, made worse by OTT sport, only OTT platforms who, you know, so as, as the market breaks up into more and more channels, that's the data point that, that stuck with me, which I always quote is the most people who pirate also pay. For a subscription of some sort. So they are in the marketplace. So it's, it's economics, but it's not just economics. It's also just the tiresome job of following sport in 2025. Right. We are going to go to rugby rugby media rights. Now there's a story either talking of, you know, how we. Spend our weekends. I had the classic seven seven nations. I had the classic six nations experience on Saturday. I'm not a rugby fan, but watched and got excited about England versus France. Exciting game, England win in the final moments. Suddenly I'm a rugby fan. It's on the BBC. In fact, it was on ITV, wasn't it? But it was on free to air. So the, you know, that's. The anecdote, and then we've got a question of TNT, are they going to be making a bid? So the, the, the sort of hubbub around running into the six nations is that the rights are up for up for auction. And there is a question of, are they going to stay on free to air? And then you get to the traditional reach versus revenue. Arguments in various forms. Murray is a former world rugby person. I'm coming to you first on this. there's the question of TNT and six nations initially, but there's also a broader question about the relative health of rugby as a media rights product. Let's talk about TNT first of all.

Yannick Ramcke: 47:37

a

Murray Barnett: 47:37

Yeah, so where to start on this? I feel like we've covered this a couple of times over the last couple of years. And Yannick hopefully you'll have a German perspective on UK rugby rights at the end of this. I'm not sure, cutting to the chase, I'm not sure that,

Yannick Ramcke: 47:53

Okay.

Murray Barnett: 47:57

and TNT themselves are trying to talk it down a little bit. I think autumn internationals makes sense for them. You could argue that the timing of, of six nations with champions league and Europa league, et cetera sort of ending the group phases and getting into the knockouts around this time of year means that they. don't need content that makes a lot of noise at this time of year? I think the answer is always the same, which is that it's worth it to them at a certain price, but they don't want to be seen to be overpaying for something. And interestingly enough, it appears that I can't help but think it's anybody other than CVC have got enders to, enders analysis to talk up how great and undervalued various rugby rights are, but. That's only true to the extent that somebody's willing to pay for them. Because, yes, I think if you asked anybody, they would say, of course, I'd like to have Six Nations. It's a great product. It's sort of something that's woven into the cultural fabric, and some of that is because it's always been on free to air because it's also something about the, the different nations that make up the United Kingdom. So it's kind of a little bit unique compared to, I can't think of another event where you have that kind of nationalistic pride between sort of Wales, Scotland, England, Ireland. And it's a, it's, it becomes that catch 22 of the reason why it's so sort of. Woven into the sporting fabric is because it exists on free to wear, but free to wear is probably what's holding it back from achieving more money because by, by definition, you probably make more money out of pay television than you can free to wear. So where was I going with all of that? I suspect that it will be tough for a variety of different reasons, both historical and because TNT to see anything other than a renewal. Or, or, or that it remains on, on, on free television, at least a substantial part of it, which I think is basically contradicting what I said probably two months ago on this podcast.

Richard Gillis, UP: 50:06

Well, I think there's a, there's, it's interesting, the.

Yannick Ramcke: 50:08

And

Murray Barnett: 50:27

been in five now.

Yannick Ramcke: 50:29

this would have been my initial point besides the fact, okay, let's start with my semi informed German perspective on rugby in the United Kingdom. I think I think it's evidence for the fact that I, which I mentioned before that Bortz is tribal. It is not traveling well, let alone globally. And I think that's a good example for that for that point. But the point that Richard made, I think it's key here regarding private equity investments, which more often than not, and I don't know all the in and outs of this CVC investment here, but any private equity investment was often I have often been collateralized against media rights income. And if I look or imagine the revenue mix, for example, of that rugby federation, it might not be as dominated by media rights income as some other sports or leagues might be. Ticketing commercial revenues, sponsorships. May make up a bigger share of the cake driven potentially by the free to air availability, which comes with increased profile and visibility. So I think there's a bunch of or a confluence of different interests and that private equity means revenue optimization means from free to air to pay due to what Marie mentioned, it's a more powerful. More powerful revenue model that was the fear that was there from the beginning. And I mean, I hope for you and your fellows that it remains on free to air airways, but ultimately CBC needs to earn a return on their investment. And it's not like that the other investments in sports have gone gangbusters. We just come from legal on a related note. So those are the two things both is tribal, not traveling globally and the private equity investment here in those kinds of decisions should not be underestimated because ultimately they have to earn a return on their investment. And the big hypothesis from private equity has been media rights. I think this was one consistent theme across. Different sports markets, everything that this is where the growth they expected to, to come from.

Richard Gillis, UP: 52:49

just one other thing before we move on from this. Cause there's a couple of things again. It's a, one theme is, can you, is rugby. a sport you can build a home for. I'm always interested in when, whether it's TNT or whoever is there enough value in this to make, to say, right, we're going to be the rugby channel. We'll, we'll get as much rugby as we can. And we make that bet. I can see a sort of, okay. Posh audience argument, premium advertisers, et cetera. But I just don't know. The numbers don't appear to

Yannick Ramcke: 53:23

and

Richard Gillis, UP: 53:25

And, but I don't know what is that? Is that a feasible strategy? What a TNT, why do they want rugby? What's what's in it for them?

Murray Barnett: 53:34

I think we've been wrestling with this for, for quite some time. And I, you know, certainly I having sort of worked at World Rugby and being a fan of the sport and wanting to see it do well, I've tried to figure out what's the right. Strategy and the only thing and it's not particularly revolutionary that I could sort of come up with was there needs to be a bit more long term ism. There needs to be a view about like, let's work with a major broadcaster with that sky TNT or potentially somebody else and say, we are not just going to do a 34 year cycle. We're going to do it. tenure agreement with you. And we're going to be pragmatic about what growth can be developed over that longer term instead of what's really pissed people off as being the chopping and changing around different broadcasters. And, you know, URC or EPCR rather is probably the poster child for that having gone from Sky to TNT and it's now gone to Premier Sport. And it's been a sort of you know, uh, diminishing returns for the, for the sport in terms of the money that it's been able to generate. And I think that that's because they've always just tried to find who, what's the best price at that particular moment, instead of saying, look, how can we just work with you for a long period of time and have this partnership? And, you know, I was going to say this earlier when we were talking about Formula One. One of the really fascinating things about Formula One is this sort of symbiotic relationship that they have with Sky and how Sky is very carefully sorry, very embedded into the, into the careful decision making processes around how the sport is produced and so on. And it's very much a two way street of Sky gives Formula One a lot of knowledge about, you know, this is what we works with audiences and so on. Formula One converses are saying, look, this is how we want the sport to be portrayed. And this is what we think we can do. And this is the innovation we think we can bring. And it benefits both parties. You know, Sky is willing to pay more as long as they feel more integrated into the process and they're getting what they want. And formula one is willing to do that if they can get more, more money out of the process. And I think that there's probably something around that in the world of rugby, which is, there's just been too much short term ism in terms of just trying to take the checklist on the table and, and, and treat it in a very transactional way instead of a true partnership. And I think that that's just the way we're having to go as the markets gets more and more challenged and more and more complex is to, is to not treat these related media relationships as transactional.

Yannick Ramcke: 56:08

Yes so two points, one from each perspective, I think this short termism and pretty much the need and the urgency to maximize the media rights income for next season because I have a budget, I need to maximize on field playing success and everything. This was where the strategic value from private equity came in because you would have been able to disconnect yourself a little bit from short termism on media rights income. But as we discussed before, private activity was pretty much just plugging the revenue gaps by pulling forward future revenue that they may have incurred during COVID and all of those kinds of things. So that is from the sports perspective, from the broadcaster perspective, I am not a fan of those sports verticals because I think there's also pretty fast, a diminishing return. And how much rugby do you need in order to deliver on business objectives? You obviously, and apparently don't need to have everything and you just have to have sufficient or enough inventory of any given sports. So I think there are a lot of conflict and interest that ultimately yields a suboptimal setup that we have in in many, many different sports and and markets.

Richard Gillis, UP: 57:29

Okay. Right. We'll keep an eye on it. And see where the six nations ends up. It's quite interesting. You know, it's, it's, it's interestingly it gets people's backs up for obvious reasons. Right. Final story. And it is golf. We're going to talk about, so there's TGL. Which again is an interesting sort of entry into the January sports calendar. As a golf fan myself, I'm sort of taking a while to digest what it is and work out my position on it. I don't love it is my initial thought, but then I didn't, I don't love live either. So I need to get beyond the, I need to start, I need to find a sort of disruptive sports property that I do like. And park my sort of a conservatism having said that let's talk about what will happen. So there's a, there's a couple of rights deals, first of all. Well, first of all, let's talk about the TGL sort of results or what we know about TGL. From a, from a television media perspective, Murray, what's caught your eye? Is it, is it working from a media perspective?

Yannick Ramcke: 58:41

can

Murray Barnett: 58:42

important market is the US and it seems to be doing reasonably okay. I mean, I think the jury is probably still out in terms of making a long term or having a long term view on it, but. The one data point I was able to find is that its audience has been four times greater than Unrivaled, which is the women's three on three basketball competition, which is fairly new and albeit not like for like, because they're on different networks and so on. But It does point that it's resonating to some degree, I think the investment has obviously been much greater in TGL than it has been in Unrivaled. And it's got some, you know, bonafide superstars in TGL with Rory and and Tiger and a bunch of others. It's got something going for it, but I think it's probably too early to tell whether it's actually going to stay that way.

Richard Gillis, UP: 59:38

Yeah, it's, it's sort of, Yannick, have you had a, you had a chance to, I know you're, you're saving yourself at the Superbowl, but you might fit some TGL viewing in.

Yannick Ramcke: 59:49

May or may not be able to do just that. I think for me, whether it's TGL or to a lesser extent, like an NBA commissioner, Adam Silva speaking and talking about 10 instead of 12 minute quarters. I think it all comes back to reimagining the presentation of the same thing. So the sports in a different form and shape catering to change consumer preferences and habits. And the fundamental problem I think is as of today, sports are not capturing the value of a more fragmented nature of engagement because all the sports say that. People and consumers are engaged as ever, but the engagement is not purely by sitting in front of the television and watching 90 minutes straight of a football match, but it's fragmented and splintered around the digital sports ecosystem and much of that engagement is not monetized. So I don't know if the TGL, which actually, by the way, was probably mainly an outcome of this coming in and then golf players having direct participation in the revenues, et cetera. So we should also not underestimate what is actually the. Main reason and origin of all of that, but it's comes back of re imagining the presentation of the sports. And I don't think that a 10 minute quarter in the NBA or this different presentation of golf is actually creating sustainable change. It's more for me, how we can monetize consumers engagement. Now that engagement might look differently. Then it looked I don't know, 10 or 20 years ago. And this is, I think the fundamental challenge of sports. And I don't think that those small tweaks in the presentation will change the fundamental or the fundamental or basics of the economic model of sports.

Richard Gillis, UP: 1:01:59

no, I agree with you. And I think certainly there's a few things to say. One, it wouldn't, well, I can't imagine it would have seen the light of day had live not

Yannick Ramcke: 1:02:07

the

Richard Gillis, UP: 1:02:08

sort of got in there and disrupted the PGA tour, the PGA tour as a, as a product hasn't evolved for, you know, since Arnold Palmer's day, really. So that is a, I think is inarguable. I think there's also a question of the

Yannick Ramcke: 1:02:23

on a

Richard Gillis, UP: 1:02:25

Your point, I think, is a good one about you've got this dilemma where you've got the, you know, the commercial people or the commercialization of sport as it moves away from television. The casual fan has migrated to TikTok and YouTube and finding a way of. You know, making money from that casual fan is, is the most important game in town because, you know, to the previous story about rugby, you could lose 90 percent of the audience if you go from ITV, BBC in the UK to TNT for six nations. And, you know, the story, we say it quite often, but one of the themes of the last. 10 years has been that sport didn't have as many fans as they thought it did. They've got enormous number of casual fans. The number of avid fans who will pay for a subscription for your sport or for your event is actually much lower than you might have anticipated. So that's quite a hard pill to swallow. It doesn't mean that they, they're not interested in sport. And again, you lead, you bounce from there into other cliches about Gen Z's appetite for sport. It's just that they don't want to pay subs and they, they're going to watch it and consume it on Tik TOK. So it's. It's that, that central dilemma and TGL seems to me a sort of an attempt to try and find part of a solution to that. It's obviously it's geared up for just to be cut up and shared, you know, so you've got the central audience on television or ESPN. I mean, it's in the middle of the night here, isn't it? So it's a really unfair sort of look at. The popularity of it here because it's, I don't know when it screens, it's on at two in the morning or something on is it on sky Murray?

Yannick Ramcke: 1:04:10

as you said, Richard, it is, they are seemingly creating value because they create consumer demand. But not demand in the form that is monetizable as of today. So they are creating a lot of value fully and wholly captured by the content platforms rather than the content owners. And that I think goes back to, I think we had a longer discussion around value exchange between broadcasters and platforms where actually like a big chunk of the engagement and interaction is as of today, but the revenue model It's a new form of presentation and everything different colors, different names, different formats, but the revenue model is pretty much what it has always been. It's a you, you would be to be licensed to like the pay TV Shannon, which you know, how they are making money and they are less and less people who are paying for the way that these

Richard Gillis, UP: 1:05:05

Yeah, yeah. I think it's also okay. Again, one point I'll come back to this on another podcast. I think we've got we'll talk about it on wedge issues. Soon in terms of our golf podcast, but the, I think it's stuck between performance and entertainment. And I think there, that is a really tricky one because I think that they started out thinking they were in the end, they were, this is going to be an entertainment. I think they've moved, this seems to be taking it more seriously or attempting to take it more seriously. There is a staggering lack of jeopardy in the whole thing. You know, these are millionaire, billionaire, in some cases, golfers hitting onto a massive screen and it's, it feels. Weird. And there just is, you know, I don't care about any of the teams and the teams are, you know, manufactured and whatever, all of that's by the by. There are some stranger missions. There are no, you'd have thought, you know, a creator element to it might be interesting to, for this audience that it's targeting women are completely absent from it again. That's a really weird omission as it is in live golf, actually, I think given. Even bigger with, what Saudi is trying to achieve with, with live golf. I think the absence of, of women players in there is a strange one. So there's loads in there and I think it's really interesting. I find it fascinating to, to study. It's not for me, but you know, relatively fewer and fewer things are Yannick these days I'm finding. It might be, might be a sign of when you get to my age, Yannick, you'll find that it might be fewer and fewer sports are for you.

Yannick Ramcke: 1:06:45

And at the same time, I think you're engaging with a lot, a lot, a lot of thoughts, but back to the topic on hand. For most of them, you're not monetizable, even though you can make the argument or they can make the argument that you have interacted or had a touch point. But if it's all vanity, then it doesn't reside in sustainability ultimately.

Richard Gillis, UP: 1:07:07

I think vain, casual and unmonetizable are the three words that I'm going to, that those might have a t shirt made of that. That's the the unofficial partner strap line. Right. Thank you gents for your time as ever. And we will meet again at some point next month, but another episode of the bundle flies by and we will reconvene. Thank you.

Murray Barnett: 1:07:30

Enjoy the Superbowl, Yannick.

Yannick Ramcke: 1:07:33

I will. This is the on demand generation. At my terms, at my time,

Richard Gillis, UP: 1:07:39

That only works if I don't tell you the result, and the result is