Unofficial Partner Podcast
Unofficial Partner Podcast
UP494 The Bundle - Women's Euromania; F1 and Apple, RTL and Sky Germany; Ligue1 contagion
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.
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Hello Richard Gillis here and welcome to Unofficial Partner, the Sports Business Podcast. This is an episode of our ever popular series, the Bundle, which focuses on the sports, media and streaming marketplace. With my co-hosts, Yannick Mka, who is general manager at the OTT Streaming Service, one football and Murray Barnett, founder of 26 West Consulting, formerly of Formula One, world Rugby, ESPN, international and Disney. This episode of Unofficial Partner is brought to you by Sid Lee Sport. Sid Lee Sport is a new breed of agency that combines world class creativity with deep sponsorship expertise, flawless operational delivery. And a culture of marketing effectiveness. We've got to know the team over the last few months. They're an impressive bunch who believe that sports marketing can and should be done better. They've got a creative philosophy of producing famous campaigns and activations that build buzz and conversation in a category that too often looks and sounds the same. And they're pioneering a new standard of effectiveness in sports marketing using econometrics and attribution models to go beyond traditional media, ROI. So if you're looking for an agency to take your brand to the top, get in touch with the team at Sid Lee Sport where brands become champions.
richard_1_07-28-2025_170952:We had a question for you actually, Yannick, which is about the. Women's Euros, because obviously we are in the uk, it's gone mad. They've won and the numbers, TV numbers are big and the streaming numbers are gonna be even bigger. So did it, does it resonate? Obviously Germany got knocked out. Did it? What's it like over there? what's the lens on it? From the, our German correspondent.
yannick tk2:I think we discussed this before that I think it's, and it's true for the last decade plus, that it's very cyclical and it's a big function of how successful the national team is in the big, uh, European World Championships and. As such, you have a high or a low after the tournament, but it's so cyclical that I think the best case that you can do is that you have higher highs and lower lows over time. But one year, fast forward one or two years, uh, I think even you, where you are like at the top of the hype cycle at the moment it comes and goes. If over time the low is a little bit higher than the, the previous low or the high is a little bit higher than the previous high, it's the best we can do. I don't think, uh, it is, uh, sustainable, uh, right now. Whatever you feel right now, remember it because I don't think it's there forever. It's it, it comes and goes, and as you said. As a result in Germany, it'll never come for the next one or two years, because I think it's a big function of just national success.
murray_1_07-28-2025_170952:But I think that here, it wasn't just about winning it, it felt like that there was a really strong momentum that built throughout the tournament. And obviously that's partly to do with. Good scheduling in terms of not a huge amount of other sort of big sporting activities happening at the time. Certainly not that much football after the sort of end of, certainly after the end of the club World Cup, if you call that a big tournament. Um, but it definitely sort of ramped up and you kind of felt it. I mean, this is the first. Women's football tournament where I actually had, could hear it in the street. Like I could, you know, when goals were being score, I could, I could, I could feel it and hear it down my street.
yannick tk2:think it's this confluence of things, right? Um, but I also think that fast forward a few months when once like all the different, uh. Both football competitions, but all the other, other sports are like going strong again. Um, I said I do see a positive lingering effect,
richard_1_07-28-2025_170952:I was talking to, John Ridge in the week about, or last week about the Olympic effect. It's the sort of version of that. But the numbers are, you know, I'm just looking at, um, uh, our old mate Carlo, uh, Demarius on LinkedIn has got, just pulled the numbers together and Chris Hearse has done this as well, but we've got just, you know, so 12.2 million, um. Across all BBC platforms, making it the most watched television moment of 2025 across all TV broadcasters, BBC Sports Online Live, page 11.4 million views. Um, 59% of all TV audiences peaked at, uh. On BBC one additional 4.2 million streams on iPlayer. These are, you know, these are big cultural moment numbers, aren't they? And I think, you know,
yannick tk2:Yeah, but haven't you seen those numbers before? think we have, and if it's not in the uk, it's in whatever country is that, uh, the peak end has been advancing to the final And potentially won the final. Um, I think we need to component that, those kind of events. Right. It's not that, okay. The, we have this one of event now and it's now in the middle of the cultural fabric. It was for a couple of weeks, but I just think it it comes and goes, and as you said for the Olympics for, uh, women's football, it's about sustaining
murray_1_07-28-2025_170952:I dunno if you have the same effect in Germany though, but certainly I, I would say that at least half a dozen of the, the players are gonna become household names if they're not already. And that will definitely see sort of some transition into WSL. You know, Skye just announced a, a dedicated slot, which obviously was in the planning beforehand, but at sort of 12 o'clock on a Sunday. I think this is definitely. A moment for WSL here, at least to take a, a bit of a spring upwards in terms of, in terms of its average audience.
richard_1_07-28-2025_170952:Okay. Let's get into. Apple and Formula One, right? I find this a bit fascinating actually'cause they're sort of, it's, it's one of those stories that feels too obvious. So, uh, and one of the things that we've been tracking is Formula One's popularity in the US and the, in the think in the last podcast or even the podcast before that. The episode of the bundle was the Murray Barnet theory of, you know, peak formula one, when are they gonna sell? And we mentioned Saudi as potential, uh, suitors. So is the American story, how va you know, we've, we've just running through and touch points of drive to survive, blah, blah, blah. Launched in 2019. Then we've just had the Brad Pitt F1, the movie. Again, it's an Apple product, and now we are getting into, okay, formula One, sold to Apple. It, all of my senses feel like this is a, what you would call Murray a fluffer.
murray_1_07-28-2025_170952:Um, well, I've, I've heard that they're planning to announce this as soon as next week in Budapest, so I'm not so sure that it's a, whether they will or they won't. I think it's more gonna be a question of what the deal actually looks like. It's a bit of a head scratcher, I think, in many ways. And, you know. Some people have already written some, some interesting things about it. Uh, you know, especially liked how Nick Meam sort of laid it out in, uh, on LinkedIn and, and Yannick wrote a good piece about it on, on, on Twitter as well. Um. It feels slightly counterintuitive, uh, when you're looking to create the widest possible base for the sport, which arguably is still in a growth phase, and let's not forget that Liberty are promoting Vegas Grand Prix, so they're also incentivized to have the big, the biggest possible audience for it. I suspect that maybe. Not all races will be exclusive to Apple. Uh, I think there may be some sort of carve outs or something that sits within in, in front of a paywall, but you know, who knows Stranger Things have happened. It, it just doesn't feel very Apple to me.
richard_1_07-28-2025_170952:So you think it's definitely happening then You think that, that they're gonna buy the, and we should, we should define that in terms of this is the American rights for Formula One.
murray_1_07-28-2025_170952:That's the rumor. Um, apparently ESPN got close to around a hundred million in offer, um, but apparently Apple are in$120 million plus. Um. Which, you know, there've been various articles that say that's what the market can hold. But you know, as Nick Chen points out, there doesn't seem to be a huge amount of competition for these rights, um, other than ESPN and, and, and Apple kind of wonder a little bit, I would be very curious to know what happened with Netflix, because to me that seems like such an obvious. Uh, uh, um, mix for them, especially because, you know, Netflix have got more or less comparable number of subscribers to ESPN compared to the 45 odd million. You know, Netflix has got about 82 million in the us. Uh, apple has got about 45, I think, um, an ESPN, around 75. 75, um, uh, linear homes. So there's still. A gap around the, the potential viewership if it is all exclusive to Apple and behind a paywall.
yannick tk2:Yeah. I also think if we indeed, uh, get this, uh, I guess by now all but certain, uh, uh, deal between Apple and Formula One, there must be a significant and material difference between, uh, the bit, uh, from Apple, uh, apple, which may, uh, um, writing the hype, uh, from the current, uh, F1 movie and any other bit that might be available to. Formula One. Um, just they are on a very zoomed out perspective. I mean, ultimately the, um, majority owners of, uh, formula One in, in the form of Liberty Media is publicly traded. Right. Um, and it might be as simple as having just, um. Um, a fiduciary duty to the shareholders to maximize, uh, return on invest. They could be as simple as this, but uh, they wouldn't do this. I think if we would talk about a couple of millions per, per year, I think that would not, uh, make a difference. Though we always said that. Ultimately also media rights strategy. Is, uh, like informed by the revenue mix of an organization. And, uh, if you like, look at Formula One. Formula One is not as heavy on media rights as many, many other tier one, uh, sports, uh, properties. So you could, could make the argument that actually like a reach first. Distribution mix is somewhat important to amplify and to support many of the other revenue streams. Uh, first and foremost, uh, uh, commercial and, uh, sponsorships where they, especially in the US have closed some major deals, uh, lately. Obviously hosting fees and, uh, hospitality and those kind of things are. Dependent on, uh, media, uh, reach. But long story short, I think there must be huge difference between what, uh, they have, uh, tabled by, uh, apple and anyone else at, uh,
murray_1_07-28-2025_170952:Well, well surely this is also gonna have a massive impact on F1 TV Pro. I mean, can F1 TV Pro and Apple Plus coexist?
yannick tk2:I. Thought that this would be a no go for Apple given just the, uh, the premium on exclusivity that they normally have to self contain this in their, uh, ecosystem. But I mean, reports have been that, uh, formula One will push hard for the coexistence of F1 TV Pro with. Apple tv, which for me would absolutely change, uh, the deal. And, um, that, uh, in combination, um, with, um, the fact that it is also not apple to apples with MLS because MLS is like a sell through. It's like a premium add. Here, my understanding is that, uh, the entire Formula One calendar is thrown as part of the base plan. Apple, uh, TV plus. So those two things that there is an coexisting ounce and operated. Uh, leak operated or operated by the sports organization and F1 TV Pro still in the marketplace, which all of a sudden for, I don't, I don't know, 10 or 11 bucks per month, it's a much better value proposition compared to today. Um, where the alternative for the end consumer is, um, an ESPN, uh, subscription, or oftentimes it's even on, um, network, uh, a B, C. So all of a sudden the leak operated, uh, F1 TV Pro is a much more enticing proposition. And the fact that we are not talking about a premium add-on that I need to purchase through epi tv plus, yes, I can buy the MLS season plus a LA card, but then almost add, uh, cost prohibitive, um, price. I think those are those couple of things that. You can't, you almost can't blame the Formula one for taking this deal. The only critique from my perspective would be whether 90, or let's say 100 million from um, from ESPN or 180 from Apple. In the grand scheme of things where other markets are making much more media rights income than the us. It's not a game changer for their business. And here I would. Question if it's worth it, but then again, publicly trade the company, fiduciary duty for the shareholders, and so on and so forth. So I think there are a lot of things in play where it could be the reasonable decision. And I mean, these are all smart people to actually go with. Um, apple,
murray_1_07-28-2025_170952:It, it's interesting'cause it's almost the inverse of current, isn't it? That that. F1 TV Pro is cheaper than subscribing to, uh, ESPN, arguably, but under the terms of the app, if we understand everything is gonna happen as it is, apple TV is, I think, still cheaper than F1 TV Pro, and I'm sure that that was, if it does happen, that, that's a deal point, is that if F1 TV Pro continues to exist, it needs to be at a higher price point than, than the basic subscription to Apple.
yannick tk2:I agree, but, uh, we look at it like epi tv plus, if you look at current market penetration, I mean, rumors are, I don't know, 20 million, uh, ESPN if you combine linear, traditional, uh, multi chain video distributors, plus, uh, the virtual, uh, distributors is a more than 60 million uh,
richard_1_07-28-2025_170952:said that there are 20 million F1.
yannick tk2:20 million EPI TV
richard_1_07-28-2025_170952:Oh, okay. Yeah. Sorry. I thought you, how many, how many are on the Formula One, uh, direct? The, the, the Pro service.
yannick tk2:No one knows because I think an agreement between ESPN and uh, formula One is also that. I don't think that Formula One is allowed to make a big marketing push around that there's actually the service in the marketplace that you can sign up to, uh, and you get access to. I think they would position F1 TV Pro in the future as like a diehard super fan product that goes way and beyond, uh, what you get through, uh, epi TV, um, plus, but. I can't imagine that they, uh, fight for, uh, keeping that in the marketplace because it's is simply a difference. Whether the alternative is adopted by 20 million or by 60 million, they're like 40 million all of a sudden who don't have access, who have then, uh, the decision, okay, do I sign up to Epi TV plus, or do I subscribe, uh,
richard_1_07-28-2025_170952:I, I, I must say I'm a bit confused'cause I was, so, we talked, this is a while ago when they did the MLS deal and the whole story of Apple and sport and football and I, you know, you thought I could say Yeah. Okay. I can understand that there's a sort of interest there. It hasn't worked as, as far as I can establish and. I'm thinking, you know, there's always two sides of this, what it means for Apple, but also what it means for F1. Obviously it's a massive check if it's a big increase in their rights fee. Fine. Again, a while ago we were talking about Netflix as potentially the buyer of Formula One in America'cause and then you can join all the dots there, drive to survive, blah, blah, blah, sports adjacent, and then look at them. They're in wrestling and they bought. Bits of NFL and the F1, um, in the States is gonna be, uh, the next one. So it sort of feels like it's going all over the place. And I just, I could, it's really hard for me to get a lens on Formula One in America because there's so much bullshit. You know, there is so many people just saying it's the, you know, there's across social media, across LinkedIn, across, you know, the trade mags where they're, they're making the story of F1 and Liberty had done brilliantly to create this American story. But I don't know how real it is,
murray_1_07-28-2025_170952:Formula One skews younger audience, so that's definitely. Uh, an Apple type audience. It's something which is a big sexy buy. So I think that ticks another potential box. From an Apple standpoint, I think there's probably no getting away from the sort of. Uh, a momentum that's been generated by the film, which I think I'm right in saying is Brad Pitt's largest ever, uh, opening box office. So, you know, big hit. Um, I'm sure that there's lots of other content that will be wrapped around Apple, so you can look at lots of positive reasons why they should do it. I'm probably inclined to agree with Yannick that ultimately it comes down to a fiduciary responsibility. Um. I also think that under the old regime at Formula One, so Chase Carey's still on the board, but you know, under the sort of Chase Carey, Sean Bratcher, I think it probably would've been a more measured approach to how they think about media. But I think they're in a stage at the moment where, and I don't say this with any sort of insider knowledge, but I. I feel that it's definitely about maximizing value and if the best deal by some margin is coming from Apple, it becomes quite binary. Perhaps
richard_1_07-28-2025_170952:Which talks to the, you know, when Liberty, when are Liberty gonna sell question. I can see that, you know, that's, and this would be a, a, a very nice deal for them, if that's the aim. Sorry.
yannick tk2:And, um, uh, I agree in the sense of that. Um, we talked about how much Formula One is. Punching above its weight. Uh, figuratively speaking in the us. Um, you mentioned Richard, like all the trade magazines, uh, public coverage and so on is all over it. At least this third bubble, if you look at, uh, audiences, and if you look at actually media rights, income, I, I mean, nasca a multiple. Of what Formula One is doing, uh, in the, uh, in the us but you mentioned, uh, the point of realizing a return on their invest, um, and a potential exit scenario. And then could be as simple as, okay, if there's a discrepancy of 100 million per annum and you put a revenue multiple on that, when you want to derive a company valuation. It could be as simple as that potentially. I don't know. But I think if we are really down to realizing a return on all the upfront investment that the company did in the US American, uh, market is either you point now or, uh, I don't know, 3, 4, 5 years down, down the line, uh, that opportunity is not available to you, uh, anymore.
richard_1_07-28-2025_170952:Okay.
murray_1_07-28-2025_170952:Well, it's probably only gonna be, we only have to wait until the Hungarian Grand Prix to find out.
richard_1_07-28-2025_170952:It's always a date in my diary. The Hungarian Grand Prix, right? Uh, RTL and Sky Sports Germany. So RTL Group will fully acquire Sky's businesses in Germany, Austria, and Switzerland for 150 million. Euros in cash and a variable consideration linked to RTL group's Share price performance of up to thirty three seventy 7 million. The deal, which is subject to regulatory approval, combines sky's premium sports rights, including bundas, Liga Premier League Formula One again, and, uh, DFB. Is it
yannick tk2:It's almost like, uh, uh, a native, Like a native. The, the German
richard_1_07-28-2025_170952:Poke Health? Sorry, just so I'm, is that the. German Cut. Okay. With rtls Entertainment and news brands across RTL plus free to air and pay tv. Also unites streaming platforms. R TL plus and Wow Sky Germany has never made a profit. Sky Group has been looking to sell for some time. RTL gets scale at a price that amounts to roughly N point N six times sales and acquisition. Multiple unheard of. Premium video. Right. And pick this for me again, I need some insider German knowledge on what RTL is. Gimme a comparison that I would understand. It feels a bit like ITV
yannick tk2:Uh, I think that's in the ballpark. It's a, uh, or it has been, uh, primarily a freeto air, a supporter, commercial broadcaster who has a transition from linear to streaming as many, many do. Also introduces subscription product. So I think you see the parallels to. ITV, uh, in the uk, whether RTL is the, uh, local champion or Ian probably depends on whom, uh, you are asking. But these are the two big, uh, commercial stations, uh, in, in Germany.
richard_1_07-28-2025_170952:Okay. Um.
yannick tk2:Okay.
richard_1_07-28-2025_170952:Why is this happening? Just first of all, and I've got a question about what Sky is now, but because I, I find it interesting'cause we've had the Comcast sort of, uh, adventure and I'm now there looking at sort of selling various bits of it off. But just so just gimme a, a sense of, of, from your perspective, um,
yannick tk2:I think it's a natural conclusion of, uh, a process Who or which has been in the making for a couple of years now. Uh, I think, and both on both ends of the transaction. Um, I think, uh, on the. RTA side, you have the. Uh, obvious question that many, many local champions are facing, uh, right now, how to compete, uh, with, uh, the global. Uh, companies entering the market and it's not a cookie cutter. And there are some challenges, uh, as a global company to operate and compete locally. It's not like, uh, like a foregone conclusion, but, uh, just in terms of scale and resources, it's obviously, uh, a major, uh, challenge. So this whole topic of consolidation. Uh, nationally to compete with, uh, uh, global market entrant. I think that's on the RTA side and on the sky side. I think the big question was, uh, what's next? Um, you mentioned that they have never been profitable. They intend, uh, to be profitable, uh, this year, but this would've been a major, major, multi-year effort to get there, to not lose money anymore effectively.
richard_1_07-28-2025_170952:Is it just on the price? So 150 million. I mean, so Comcast paid what for everything in 20 19, 30$9 billion. Is that right? Is this not incredibly cheap? Why is this so cheap? Why are they selling skyger? Which I,
yannick tk2:Yeah, let me, sorry. Let me, uh, resume to my point. Um. What's next? Just because you had a. lot of heavy lifting and this was also like with deep cuts, uh, on the cost side, including on the, uh, people side and personal side. You downsize pretty much the business to profitability or let's say to break even. That doesn't mean starting next year, you all have a sudden scale in profits. It'll always be like, uh, limited in profitability and best case is probably low. Single double digit millions in, uh, bottom line, uh, ebit, EBDA profit, whatever profit metric you want to, uh, you want to choose. So it's not that all of a sudden, and this has been the case with Sky uk, that all of a sudden you're printing money. For the next, uh, five to 10 years. So I think this what's next was the big question for Comcast. Uh, I mean, uh, there, it was like an open, uh, secret that they looked, uh, for options and alternatives for a long time. There were all, there was always option of divesting. Or acquiring, like making it a business that is based on more than one segment. You can get into the telecommunication business as they have done in the uk or like some add-on business that it's not a pure content play anymore. And uh, like until a couple of years ago also. The other main containers to acquire Sky since it has been on the market in Germany for some time. For example, they are telecommunication companies because the dual play, triple play, et cetera. I mean, this blueprint had been highly established. I think now the. Comcast wanted to have an exit or wanted to double down. Um, I think that shows, uh, the exit. But ultimately you are purchasing a lot of legacy. You are purchasing, uh, a lot of financial obligations in the form of media rights, uh, contracts with limited profitability, if at all, without strategic value attached to it. And I think this is, uh, the reason why you come up with the sales multiple that you come up with. Um, if you look at it from a EBIT or profit, uh, multiple, it's actually not that low given the fact that the business doesn't make, uh, big profits. And even if it escalates, there's an escalator in the purchase price. Um. If, like, I think RTA shares are like doubling, uh, within a certain uh, period of time, it'll actually escalate quite significantly, can more than double or almost double the purchase price. But I can tell you in the scenario that RTA share price is doubling within that timeframe, they will be more than happy to pay, I think, up to 377 million for, for Sky.
murray_1_07-28-2025_170952:There, there was quite a good quote from somebody at Omed that said, is it, sorry, om dear. That said, this move positions the combined business with enhanced scale in both content and technology investment. From a market perspective, this deal underscores the importance of scale, brand strength, and cross-platform integration in competing effectively with international players. I thought that was quite a good summation of why it makes sense
yannick tk2:is always in the detail, right? If you talk about scale, I think if you're adding up the different, uh, subscription basis, you are at, I don't know, 11.5, something like this. Yeah. Half of, uh, RTS subscribers are through a wholesaler agreement with. With Magen tv, which are low mar uh, low arpu, low margin, if at all. So, um, that will always in the detail. I'm also super interested in how, uh, for example, the tech stack is, uh, developing or migrating because Sky has been super busy ever since they were acquired by Comcast to migrate to the Comcast tech stack. RTA doesn't really
richard_1_07-28-2025_170952:It's always, it's always fun migrating across
yannick tk2:Problem is RTA doesn't really have a proprietary tech stack. So do you license a Comcast tech Actually. So I think there are still so many unknowns and the biggest, unknown, unknown probably is also on the antitrust, uh, side of things because.
richard_1_07-28-2025_170952:I think so just on that though, I think there's a sort of, there this way there's gonna be a wave of consolidation as part, um, presumably to Murray's point at the beginning, this is gonna be, you know, there will be other examples of this. I.
murray_1_07-28-2025_170952:Is this media? Certain sky, sky, Italia, sky sports, Italia? Is this, you know, uh, gonna happen in France? Um, I think there's a, a, a couple of different scenarios that this could ripple through
richard_1_07-28-2025_170952:The UK version ITV buying
murray_1_07-28-2025_170952:ITV and Sky, ITV and TNT.
yannick tk2:And it will have down through implications, right? For example, I mentioned the second local champion, which is pose es, which is a similarly sized, uh, media conglomerate, which has been back and forth this media set for like, I don't know how long. Um, like, which are hovering around, I think the 30% equity stake threshold, like right one share below until this must be filed, or they must do a mandatory offer for the shareholders. So they are now under pressure. So how they will they react? So this whole topic of consolidation, it's just industry going through a cycle, right? And we are entering the phase where consolidation.
richard_1_07-28-2025_170952:So if I, if I'm, if I'm selling, if I'm. Formula one, tennis, cricket, rugby, football Champions League. If I'm looking at the German market, this is not great news. When I wake up and see this, I'm thinking, okay, well one of my buyers sky are always gonna be on my hit list of people who are gonna be in competition. Even if they're not interested, I'm gonna bung them into the papers to say they are interested. So I'm, they've taken that out of play. So there, there is someone, a con, significant figure in the sports market that's. That's gonna take a,
murray_1_07-28-2025_170952:I mean, I think, I mean, I'd be curious on Yannick view of this, but I've always thought that that sky have largely been an outlier when it comes to the international sports rights market in the sense that. You know, I've never found Germany to be a particularly competitive market for rights, other than maybe a very few very key. Um, section, you know, if you are out there trying to sell
richard_1_07-28-2025_170952:I thought, I thought,
murray_1_07-28-2025_170952:Tennis, you know, traditionally in the last few years, sky has just not paid anything. You know, they'll, they'll show them, but they've been very reticent to really come to the party in any rights sort of, uh, auctions.
richard_1_07-28-2025_170952:So Ger, I mean, what's the site, the German sports rights market is, I mean, It rivals the UKs, isn't it? I mean, it's like a big, it's, it's the first or second in Europe.
yannick tk2:It does. So in if you look at course, Europe. UK is by far, uh, the biggest one. Uh, but ultimately the sports rights market is always a function of or some function of the GDP, given that the size of the German economy is, uh I mean, knock on wood is relatively. sizable and being the biggest economy in uh Europe. As result, you will have somewhat of a sizable sports sports rights market. But if you look at spend on sports rights per GDP per capita or something like this, like uk, Italy, much higher than uh, in Germany. Reason being ultimately as a sky, for example. And there's a reason never have been profitable because, uh, Germany is a tough market for pay two v. Reason being you can only pay on the one side in the sports rights market what you make back in the sports programming market. And, um, Germans have been quite, uh, advantage with a strong future air, public broadcasters. Has always been strong. It's well funded in Germany. They cover a lot of the even tier one sports properties, at least on a select basis, but also above and beyond, uh, sports. It's a well
richard_1_07-28-2025_170952:The last thing to say on it though, Yannick, is, is we've gotta tip our hat to Rupert Murdoch, haven't we? Surely?
yannick tk2:Um. He, he for foresaw it, uh, obviously, but, and then we, we are also sheep like spending on pay TV or spending also content subscriptions for a long, long time hasn't a thing in Germany. I mean, with the emergence of Spotify, for example, the market got reeducated, which also helped Sky and then especially the zone to get a toehold, uh, in, uh, in the market. But I think it's just. The German market itself, pay has always been, uh, a challenge and that's primarily for, um, the willingness or lack of willingness to pay for content the futile air of free accessible
murray_1_07-28-2025_170952:the analysis of this, I came up with another new, uh, phrase for the sports business, which I really liked, which is sport are engagement anchors.
richard_1_07-28-2025_170952:Gotta be careful how you say that. Yes. Go explain. What does that mean? Again, you might have to explain that just as people just.
murray_1_07-28-2025_170952:of the reasons why RTL likes acquiring, uh, Skyport Germany is that sport Live Buns League, or Premier League F1 aren't, it aren't just programming, they're strategic pillars or engagement anchors.
richard_1_07-28-2025_170952:Okay.
yannick tk2:Now we can revisit and we had this, I dunno, couple years ago, uh, when I started to talk about a portfolio strategy. You have different assets in your portfolio. Some are there to acquire customers, are there to engage customers who, Uh, ensure retention. All of this and sports is certainly critical. Uh, but at the same time also able to do it on. their own because they all know the limitations of the pure sports contemplate.
richard_1_07-28-2025_170952:Okay, let's jump from here to, from Germany to France. Again, in a very nice pan-European way, because again, we, talked about this quite a bit, but League un, the French Professional Football League has voted to ditch outside broadcasters and launch its own direct to consumer streaming channel for the 25 26 season. So that's starting presumably next month. The service will carry eight of the nine league UN matches each weekend. Qatar owned. Be in sports, keeps the 5:00 PM kickoff through 2026. Obviously owned by the same P blo, who owns Paris? Sanger Man. So I can imagine who's gonna be playing on a Saturday at five o'clock. Um, quite a lot of the, the, uh, season and. Price point, introductory retail price is 1499 euros a month, uh, to see every match. Fans will still need a B in one subscription, taking the all in outlay to about 30 euros. A month. This is obviously post zone walking away, um, from the league and the 400 million Euro domestic package that they bought in 2024 unraveled after payment disputes and piracy complaints, leaving a rights black hole and only re weeks to find a new carrier. Can our PLU said no. I'm reading this off our mate, Carlos, excellent, um, bloke with a scarf. Uh, newsletter on LinkedIn, Murray, this, we've touched on this in the past, but again, always with these stories, it's like the last one, the sort of RTL buying sky. We then jump to the, make it, you know, from the specific to the universal and say, well, look, the, this is going to happen across the board. We're gonna get aggregation. Is this, what's gonna ha, you know, is this part of the play, the playbook for others? Or is there something specific in France which has been a car crash of, you know, or a slow moving car crash in terms of its, uh, relationship with sport? What do you think?
murray_1_07-28-2025_170952:We talked a lot about this in the past, and I don't, we don't, we don't need to rake over kind of how they got here and, and why they're doing it. But as, as you said, I think the key thing here is there's gonna be a mixture of, uh, trepidation and anticipation that comes, I think from a, a large number of the other, um, European football leagues who will be on the one hand. Very thankful that they're not currently in this situation, but then also very hopeful that that li are successful because it gives them another out when they get to the next round of rights negotiations. So the thing which I think is really difficult to, to sort of see is. Why does Liga think that they can make it a success when, you know, a supposed expert in their business like D Zone couldn't make it a success in a direct to consumer type world? And I think we can argue about the various failures of D Zone in, in coming into it late and not really understanding the French market or misuse around, uh, some of their pricing structures, which li have certainly addressed. In terms of, you know, I think it's a fairly reasonable price point. They're not being completely crazy in terms of saying that they want to get to about 1 million subs in the first year with an ambition to get to somewhere like two, two and a half eventually. So they're not, you know, they have learned a little bit about not being completely crazy about where they think that this can go. I just still think it's a massive, massive ask. You know, D Zone allegedly got to somewhere around half a million and. Each, once you get past, you know, Yannick favorite low hanging fruit, the, the higher up the fruit tree you have to go to pick the fruit, the more expensive and the more difficult it becomes. And I think the more specialist you need to be at, at, at attracting those fans. So I think it's gonna be, you know, I, I think there's, there's obviously a certain amount of needs must here, but I wonder if they're also sort of thinking well. We are gonna try and, uh, you know, build a plane as it's taking off and we'll adapt as we go along to try and figure out how this can work we don't have any alternative.
yannick tk2:Yeah. I think it will be scrutinized, by a lot uh, other, uh, tier one properties. Um. It will give ammunition to either one or the other, either the broadcasters getting it black on white, that, um, whatever threat the leaks, uh, are putting out there to go D two C to do it on their own will even, Uh, be less credible. Or actually there's a tier one property proving. the case, and you made a couple of good points that when it comes to subscription targets and what are the adjustments to the strategy compared to how, for example, uh, uh, the zone or a media pool, uh, before, uh, went to market. These are all good. Points less ambitious at the same time, significantly lower price point, which ties into this whole topic of piracy. I mean, Richard, you mentioned that what is so specific about the French market that OCT players? I mean, we had tier foot for media pool, we had the zone from, um, the zone, um, didn't make it, uh, with the tier one property in, Uh, in France, piracy is the one thing that always mentioned. Uh, backed up by data actually, that quite high penetration of adoption among consumers, uh, of ping content and that France is simply not an OTT market yet. So we have all the telcos that are really like gatekeeping, uh, the audience, but lower price and, and ubiquitous like distribution strategy. So they are really so. Aiming at being everywhere. So they're not to like two or three distributors. They are talking to everyone, uh, who has some consumer touchpoint who could wholesale their, um, streaming service. So I think there will be very little D two C ultimately. It'll be a distributor first, um, business by a far margin. But I think this combination of lower price point ubiquitous in distribution, can get them to, I think their business, case. So I think the business case is reasonable. I think they have put out a four to to five. year business, uh, case. I don't think, we will see year three, four, and five. I think, um, as soon as they have a valid and viable guaranteed bid on the table again, that they could
richard_1_07-28-2025_170952:So let's just, uh, just on that, the numbers were in Laki and the LFP media, which is the entity within Le Lagoon that's gonna be running it. And again, we don't know, I don't think who is, gonna be the production, partner or what, what platform it's being,
murray_1_07-28-2025_170952:No. They have announced it. Yeah. It's, uh, it's a, it's a French company.
richard_1_07-28-2025_170952:So The shortlist. The shortlist was Media Wan and 21
murray_1_07-28-2025_170952:Yeah, it was Media one. Media one, one.
richard_1_07-28-2025_170952:Okay.
yannick tk2:yeah. So, but both on the production side and also on the technical side, think, I don't know, but it makes sense that they extend the D two C business. If they, had launched in the UK with Endeavor streaming,
richard_1_07-28-2025_170952:so just on that, just to finish this off though, so LFP media, again, this is, uh, loki's numbers. And they call them ambitious in inverted commas. Growth targets for this year, 101.1 to 1.2 million subscribers, which equates to 151 million euros of revenue. That runs it. Then cranks up 1.5 million. Up to 320 million next season, then to 2 million subscribers, 407 million euros, and then 20 28, 29, which is the fourth year, 2.15 million subscribers and 470 million euros of revenue. So that is, that's obviously no costs put against that, but that is the, you've got to imagine the absolute best case scenario that they're putting out in the public domain, Janet.
yannick tk2:Which I think as said is a fair enough business case and more realistic due to a couple of factors that we mentioned before. just want to call out two things. One thing is if you just multiply a number of subscribers times, um. Monthly price come up with the revenue figures, you assume zero churn and 100% retention month over month. If the 1.1 is second average monthly active subscriber base per season. Fair enough. By just that one, uh, call out. And the second one with, we talked about production and technical backbone, there's a huge difference in the nature of licensing and these kind of subscription revenues and it comes to the margin profile. License revenues pretty much margin only. Yes. You have a couple of, like, if you have mandated, either the sales agency gets a commission or you have an in-house sales team, media right sales But these high margin revenues Here what we see or consider revenues that is not comparable to media rights income because whether it's on the tax on the content production side, are on the hook for all of this, and this is a long item list on the cost side that needs to be deducted from the top
murray_1_07-28-2025_170952:Also Yanick, just on your first point, it's basically you have to make the assumption that they're only gonna get a PSG game every other week, which. Assuming that they can get these subscriber numbers on a, on a effectively a non-exclusive basis, where the, the one club, by far and away dominates the viewership in France is, is is challenging.
richard_1_07-28-2025_170952:I've got just, I've just gotta ask this question before we move on to something else. Why not YouTube? If YouTube the other option. You know, I'm told all day every day that YouTube is the answer to all my questions. So why they would build on their own rather than go to YouTube. And I'm assuming it's to do with money, but can you just enlighten me?
murray_1_07-28-2025_170952:YouTube is a, is an answer, not the answer.
richard_1_07-28-2025_170952:Ah, very good.
yannick tk2:I also think we are still talking about the dual revenue stream at the top of the sports rights market. Uh, it's not a single model where you go free to air, uh, ad supported. Um, and the final point here, I think actually the sum of things, the sum of of local distributors, who have local customer might be as powerful if more powerful. Than, uh, YouTube, um, distribution, especially when you talk about, um, a paid product.
murray_1_07-28-2025_170952:And I'm sure that there'll be a whole ton of content that goes onto YouTube. It just won't be live.
So having just talked about LFP and going direct to consumer, there's kind of. And, and sort of antidote or an opposite that's happening in the US with ESPN buying into the NFL networks, which I thought was kind of an interesting play. For the last four years or so, ESPN's been in negotiations with the NFL, which has kind of ramped up just pre the last Super Bowl to acquire NFL network and NFL Red Zone, uh, which the owners are expected to vote on before the start of the next NFL season. And you know, much as we talk about the decline of linear, and we've mentioned this a number of times in relation to the us, when you look at ESPN's revenues, uh, which are somewhere around$18 billion. I still. 10 and a half billion of that is associated with the affiliate fees. So the more they can do to continue propping that up, the better. And certainly you can't think of a better way of doing that than acquiring NFL Red Zone, which is the sort of the network for when it gets to the, to the most important plays o of each game, a kind of a whip around service. And then NFL network, which carries NFL films and replays and a whole bunch of other NFL related. Content. Uh, and the other interesting part about the story that's been reported is that it, uh, it's NFL will take an equity stake in ESPN. That could be as much as two, two and a half billion dollars, which would equate to roughly 10% of ESPN. So in terms of where the line between what the NFL is and what ESPN are. It is very blurry, presumably. Well, the timing is no accident because you have the ESPN app coming out in Q, end of Q3, early Q4 I think it is. Um, so they're definitely wanting to get. As much hype around that. And we know that NFL is by far and away the, you know, the biggest thing in in the us but perhaps more importantly, the NFL has a right to open most of their rights negotiations between 28 and 30. And you've gotta think that when you have NFL as a shareholder of ESPN, it sort of positions ESPN much better for those future rights negotiations. What is the app? Why, what's the. I've seen this next era. Yeah, so we talked about this, I think, uh, last episode or the one before that. It's effectively, it's just called ESPN and it's the one home for all content. You know, the, the, the sort of holy, supposedly the holy grail for the sports fan in the US where you get. A fully customizable app that follows all of your teams, directs you to where all the content is, whether it's on ESPN or not, whether it's part of your subscription, whether it's a bolt on subscription, uh, and just, uh, theoretically it's gonna reduce a lot of friction, uh, about you finding the content that you care about the most. So it's a sort of front door into sport in the us basically. That's what they want it to be. Yeah. In addition to the fact that it's the first time ever that you can pretty much sign up to the ESPN or to prop up, uh, ESPN programming without, uh, signing up to its additional pay tv, um, package. But I think we discussed the fact that the main users of that app will probably be to additional pay TV customers or subscribers since you get access. To this Holy Grail app with all the belts and whistles that you probably can imagine if you are a traditional cable slash satellite tv. Subscriber, so how incremental this is, how much new signups that are only signing up for the channel through the ESPN app, I think is something to be, uh, determined. I think estimates have been ranging around one to 2 million for the first couple of years, but just as we, you know, we've talked a lot already in this episode about. How things about contagion, how, how these stories affect other, other parts of the market. I thought it's worth framing this up as a sort of, you know, NFL media, uh, uh, or NFL films rather is struggling. As, as it kind of gets into a more challenging and fragmented media environment. So why not let somebody else take the risk when it's not their sort of arguably their core business? They've already used it as a stalking horse, made a ton of money out of it, so that's kind of an interesting idea to sell it to somebody else. But then, and, and, uh, Anthony, uh. Kru, I think his name is in Sports Echo, had a really nice quote about this, which is a successful marriage between the country's biggest sports media outlet and the indomitable National Football League is the stuff that futures are built on. So you could imagine it doesn't take a, a massive leap to say. Why wouldn't there be some kind of more symbiotic relationship or more symbiotic relationship than there already is between say, sky and Premier League? And I understand that there are regulatory issues and so on, but you can see that that the blurring of lines between the rights holder and the media sports, media companies is getting more and more fuzzy, uh, as we go along. What I don't quite get about that, I can sort of see it, but what does that do to sort of tension in the rights market?'cause if you've, aren't you sort of just buying one of your biggest customers, in which case the incentive for the SPN to. Bid for NFL, you know, just it's so fragmented already. So the NFL have got five, six rights holders now, so arguably it's de-risked there because they're not relying, uh, just on sort of ES ESP n and a couple of competitors. I think they'll also say that ESPN will still be treated very much at arm length'cause they're only a minority shareholder and they'll still be expected to bid as they would do normally. Um. But for SPN, you know, it's, it's two sides of the same coin, isn't it? It's like you can argue that this is, a very bold move in a very challenging sports media rights market. Um, or you can say it's, it's actually, uh, much, much more desperate than that. And, and I think, um, I've always talked in the past and, you know, having worked a long time at ESPN, I still think ESPN and Disney are some of the smartest people in the room when it comes to media. And I think that they're actually. Onto something really interesting here about securing their long-term future by bringing their most important rights inside, uh, rights holder inside the tent. Yeah, I, I don't, I don't think it's, uh, from the N NFL's perspective that nurturing, uh, ESPN to keep them at the table. I mean, we discuss core competency of a right holder is to make sure you have one more better than packages. I don't think, uh, it's about, uh, it's about that because they're all at the mercy of the NFL, uh, in the us. Um, I think from an NFL perspective, it is more about completely selling out. To broadcast us, uh, because NFL media has done its job, it did secure affiliate encourage, uh, fees for a decade, especially at the height and peak of, uh, traditional pay tv. It was always this competitive threat in the marketplace that, uh, yeah, stewarded competitions for, um, for the packages. It was also like a mouthpiece. To some extent, um, for the leak to get certain messages, uh, out there. I just think NFL media has outlist its utility for, uh, NFL and now it's just, uh, selling out to maximize, um, media, um, revenues. Um, and I think there's a lot of uncertainty actually, what this transaction actually entails. Is it a pure asset sale? Uh, for example, the regular season game that are included, seven or eight. Is this like, for this right cycle, is this a permanent asset sale? Like how, um, how durable are those assets that are sort here? And if a red zone channel, is this for the current right cycle or is this, um, in perpetuity that, uh, ESPN buys. Red Zone channel. So I think it's a asset, not fire sale, but asset sale by NFL because it's the best way to monetize those assets stage. Be clear. It seems like it's a, it's a full on acquisition. This isn't like, you know, a, a, a rights renting scenario because they only have a limited number of games on. You know, the question as you say, is whether those will continue to appear on those networks forever or whether they'll redistribute those amongst other rights packages, which undoubtedly they're gonna have the carve out to do.