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This is the Don Levator show with.

The Stu Guts podcast. This is not how I've been.

I've been a terrible moderator. You now have a sense of just a brief, small glimpse into the chaos that is trying to prepare for this show with John Skipper and David Sampson.

I think we should actually start and go from there.

Now the mystery is even more mysterious. We've started, but not before the part that John just asked to cut out. And so now people are wondering what is happening. And what's happening is that this is a sporting class and this is how this goes. The week before the largest sports business event possibly of all time. I mean, I'm going to test and pressure test these superlatives, David, but the question I want to bring you guys.

Internationally, the World Cup's got to be bigger than the Super bowl fair. Way bigger.

Fair.

Finals of the World cup.

Right. Already exposed as being an ugly american.

But forgive me, because you're pretty good looking, actually, Paul.

Thank you, John.

Yeah, thank you. My confidence has been flagging and has been buoyed by the perpetually spinning chair of John Skipper. Spinning my own pr.

All I hear in my ear is, John, stop moving away from the microphone.

Las Vegas, the Chiefs, the 49 ers, a Super bowl unlike any other american sports business event. I want to ask John this question very simply to start. Is this peak NFL? The NFL has destroyed everything. It rules our country. Is this as big as it could possibly get?

No, I don't think so. I see no reason to think that their momentum, which is pretty stupendous, is going to end here. Their ratings are up. Their ticket prices are up. I don't understand why anybody would think this is peak NFL. My suspicion, other than the fact that they're in Las Vegas for the Super bowl, which is a unique environment. But other than that, what is. I mean, again, I think that's something they have capitalized on to create a great deal of atmosphere and talk. I don't really believe people are paying more money for their ticket for the chance to catch a glimpse of Taylor Swift in her suite. And I love when they suggest that the brand value of her appearances has been worth $300 million. What does that mean? Is there timing, how much airtime she gets? And if she were paying for that airtime, it will cost $300 million. I think that's what it means. Right?

How do you calculate something like that, David?

I'm interested in why you're poo pooing that so quickly in that you're in the industry where you're trying to value what it is when people are associated with Dan Levitar as an example.

The Taylor Swift of sports media.

More like the Travis Kelsey. The Melissa Athridge.

That's right.

I'm not sure he's the Taylor Swift, but I don't want to quibble the way these numbers come. Of course, you cannot justify them in a court of law. You cannot say there's $300 million of exposure. What they are trying to say is there's more people who are engaged in all of what NFL has to offer. And it's manifesting itself through merch, through ticket prices, through viewership, where they can announce more people watch the championship game than in a decade or in twelve years. So all the different touch points for the NFL, they get to go to advertisers and say, look at the demographics. We're now getting swifties, which are girls of an age, which every sport's dying to do. This is a brilliant way to have done it for the NFL. So I believe there are actual physical things that the NFL points to that helps it increase its business.

One note from the other side of the glass here. Our resident Swifty has entered the chat. And apparently there is a theory that Travis Kelsey may well propose on the field after the game. Which means that they're also getting tickets to a proposal of historical unique imports.

I will bet you a dollar, Mortimer, that Travis Kelsey will not propose to Taylor Swift on the field after the game.

Is that proposal before or after the endorsement of Joe Biden?

It's all the same.

I think it's all together.

Yes, on one knee.

There are bets that are being taken, but not by us sportsbooks.

Interestingly enough, bets relative to the proposal.

Whether Taylor Swift will be proposed to, whether they will endorse Joe Biden, whether she will make it from Tokyo. People don't understand the math of how easy it is to fly from Tokyo to Vegas. On a side note, it's not a big deal, especially with your own plane. But even in a commercial plane, she'd make it to Vegas.

I'm going to predict no proposal, no endorsement.

I would say you're a winner. That's like minus four.

I guess I'll be the one guy who believes in love here.

That'll be plus 3000. Put your money where your mouth is, in the Caymans.

No, I believe in love. And I believe if he actually loves her, he will do it in a restaurant somewhere or in a private moment, as opposed to doing it in front of a bunch of people.

Is there a correlation between love and selling it? So, there's many couples who sell their engagement photos to People magazine or who allow for the publicity of their love. Does that take away from the level of their love? I think they're trying to. Do you think that, Travis?

Kelsey, do you want to recline your chair into a therapy couch?

No, I like the angle, because what Kelsey's doing is all business. He's the number one podcast sports industry.

Being the only one who believes in love. I'm mostly talking about me versus David here. David is seeing the monetization and the brand value. And by the way, I want to put some numbers on this, too.

Right?

The tickets. Let's talk about the tickets, because for almost everybody, this is a television show in Las Vegas. The tickets are record levels. Right. And the secondary market currently, at last report, is almost $11,000 to get in to the building on average. Yeah. That's higher than ever before.

But everything but cricket, I would say, is a television first event. So more people watch the Knicks than the 19,000 who go. More people, of course, watch the Super bowl than the 60,000 who go. The question is, who wants to be an event like that? And the answer is, as you know from Super bowl days, it's not local. Las Vegas. Las Vegas. Las Vegans. It is sponsors.

I think Las Vegans are actually people who don't eat meat in Las Vegas. I'm Viva Las Vegans.

Hey, we should have done that for.

Metal arc, the Miami Heat jersey for Vegans.

But can we think about this from who's going to be in Vegas? Owners. Every team gets an allotment of tickets. All 32 teams.

Yeah.

Let's talk about what this is on the ground, this actual event.

This is not what people are thinking, that ordinary people are just getting Super bowl tickets. Ordinary people can have access to tickets in the secondary market. But if teams get caught by the league taking their allocations and selling them on the secondary market, they get in big trouble. You're not allowed to the tickets that are given to the broadcaster, and you give them to people. You didn't let those people put them on the secondary market, I assume.

No. In fact, we caught some people a couple of times.

And did you fire them?

Trying to.

Dugot just had a guy just needed to pay back.

Yeah. No, we did discipline people who did try to sell their tickets on the secondary market. It is tempting. I can understand the temptation, but. No, your point is accurate. A good, enormous percentage of the tickets are specified for specific groups, advertisers, sponsors, teams, friends, broad leagues, family of leagues.

Family and friends know Travis, Kelsey, Jason. They don't just get a suite. Magically, there's a know. It's funny where they show Taylor Swift in a suite as though there's some sort of free vip suite. Each owner gets a suite of when you're at a game or even if you're in the Super bowl, there is a suite. However, like in the World Series, you pay for your suite. We paid for our suite when we were in the World Series. In the all star game, you pay for your suite because it's a league event where revenue is split with players, with other constituencies, like umpires and the union and other owners. So everybody's looking for the last dollar and extra money on the secondary market doesn't go to the league or the teams. And that's why it's not ideal when you have a secondary market that is this out of whack to the actual cover price.

Cheapest ticket right now on Stubhub, one of those secondary markets, $7,600.

And I assume that's for a bad seat in the end zone, I presume.

Although I guess the question here, because we've now talked about all of these figures, from the literal president to the pop cultural president, and Taylor Swift is the trendline of how much bigger the NFL can get. Right? And by the way, we should also mention Patrick Mahomes. Like his name. He's in this, I mean, truly like this is maybe the most talented quarterback of all time. Certainly I would have said he's the biggest name, but now Travis Kelsey is. Again, how do you measure Q rating? I don't know the answer to these marketing questions, but I imagine that I don't know. John, let's use the parlance of Disney's marketing campaign. At the end of every Super bowl, I'm going to slash land. I imagine this is a dream scenario for a marketer who gets, I don't know, can you get Taylor Swift in the frame? Can they engineer that that is pre planned?

If Travis Kelsey is MVP, there is a deal that would be in place where Taylor Swift would either participate or not. I promise you that's been discussed with their business managers of how that would work. Because the value to Disney of that ad versus an offensive lineman or a defensive lineman or a cornerback or even Mahomes is a close second. But actually probably not even a close second to having Kelsey and Swift do that commercial.

There's nothing that will be a close second. So for example, Mahomes would be good. And they do. In fact, you guys are right. The Walt Disney company does make a deal with multiple parties before the game. There have been instances where there were reluctant participants. I doubt there will be reluctant participants here, but they have these deals in place before the game with, I don't know, eight or ten people who are the likely mvps and they have to scramble around if for some reason it's not one of the expected.

Rarely happens, I bet rarely happens. The AFC championship, a game where Kelsey has 100 yards catching, I would assume if that happens in the Super bowl, it would not be Mahomes who would be the MVP, which would be shocking and actually does cost Mahomes money as part of his contract. But I believe that the MVP would then go to Kelsey because it's just good for the league, it's good for their sponsors, it's good for everybody.

I would not think they would manipulate, I'm not quite sure.

Creating a psyop actually.

How does the MVP get selected?

It's voted on by members of the media.

Exactly. So how are they going to go give the members of the media? Did, we didn't.

When we were in the NLCS and in the World Series, we weren't surprised by the.

Okay, hold on. Let me give you a little wrinkle. Right? Okay. Because starting in 2001, I am reading the winner of the Super Bowl MVP award is chosen by a panel of, yes, 16 football writers and broadcasters. But also, and that's 80%. The remaining 20% is fans voting.

Electronically text 3678 for your MVP choice.

And I would have to imagine that this is where an aforementioned pop star might have a bit of sway.

You think they count those the way they count the votes in the ugandan democratic election by throwing them away? If you think if you got 20% of MVP votes on you.

With conspiracy theories, there needs to be a reasonable upside for doing something that outweighs getting caught manipulating the matter. And the NFL doesn't need to manipulate this. It's good.

This is the question. It's good enough about peak everything, right? Like we're now talking about squeezing yet more money out of every margin. And I think, of course there are edges that you could leverage and play, but do we want to even consider the incentives at play when people are talking about, what's the conspiracy theory that.

You'Re talking about when we have talk to the writers during the course of a game to get an idea of where their head is or what they're thinking and then trying to lead them in a direction and that MLB PR people and team pr people are involved. You're saying that does not happen?

I'm saying that that is literally a conspiracy theory.

No, this happens.

Major League Baseball and the teams manipulate that the person who would bring the most value to the league by getting the MVP is selected as the MVP.

Oh my God. What a horrible thought.

You're not watching on YouTube with the network. David put his hand to his mouth like a damsel and mock.

I think it happens because there's not enough value. What value does the league get if they pick Kelsey as the MVP instead of Mahomes?

They get all that happens over the next entire season when he is doing his season as the Super Bowl MVP. It is a brand awareness. It is monetized. Sponsors will be all over him, which they already are.

If you're watching games now, the doesn't get that money. If Kelsey becomes a bigger star, he gets more money. What advantage is that to the NFL?

This is a good question.

Yeah. And I think that you're talking like a CEO a little bit because who wants to keep his talent nameless, faceless and replaceable. What I think that you're trying to do, not you, but what should be done by companies is they're trying to raise up their talent, make them more popular, more recognizable, less interchangeable, creating stars.

Spoken like a guy who stressed about the faces that people knew in baseball.

Anytime you want to enter into a conspiracy to manipulate something, you have to at least think about what happens if you get caught. And is the damage worth the upside? You'll.

What's the conspiracy? When you're, when you're doing your staffing for sports center, you don't do it in a way to get the most viewers into.

When it's, what is the case. So I'm reluctant. I'm gonna be careful. So the SBS at one point, yeah, I was at an espies one time where there was an athlete who was very angry at not being selected for something and there was a scurrying around to see whether there was an award they could give said athlete. So that did happen. However, I did institute the fact that we instituted fan voting and insisted that whoever the fans voted for would win and that there would be no manipulation of the SP winners whatsoever. And by the way, it took it out of the hands of ESPN employees or ESPN writers or anybody put in the hands of the fans. So nobody would say, oh, they wanted such and such a person to win this award. And of course we would have athletes tell us, if I'm not going to win, I'm not coming.

Right?

Well, nobody knew who was going to win. I didn't know who was going to win. I know you'll be shocked that I wasn't picking.

The young knew. Ernst Young knew.

Yes, they probably TWC, your independent auditor.

And we never had a mistake. But I do not believe the NFL has any incentive to try to influence. We want this person to be the MVP rather than this person.

I just want John to know that it is my duty as the host of Pablo Tory finds out, to find out who that athlete is. I'm going to find this out, John, whether or not you help me go after it.

He's not the only one. Put it this way.

Go get it.

If you can just get a year and you can narrow it down to when he was in the ESPN, when the sps were, and then you can figure out whether or not there was any sort of award on a particular year.

James Award for being LeBron James was a little suspicious in retrospect.

I just.

Journalism will happen. Journalism will happen. We can leave it at my journalism.

Yeah. I don't know why you would open yourself up to. Let's keep going. Let's move to something else.

I am merely a host steering us through a stormy sea of theories and topics related to sports business. David Sampson is crying.

I am tearing up a little bit because I've gotten to know John more and more over the past year, and what he does with his body is very fascinating to watch. He's closed now, so if you're not watching this on YouTube, his arms are very. When we start talking about stuff that makes him uncomfortable, he gets closed. He has a different facial sort of tick from his sort of smile. It goes into more of a that, which is not a good one. And Pablo just keeps rolling merrily along, not paying attention to any of it.

Can I ask a follow up question about what we learned with the whole Peacock story? Because, John, the question and I want to get us back to the question of the empire and its peak. So Peacock, the whole thing with the Kansas City Chiefs Miami Dolphins wild card game. This is January 13. The audience was an average of 23 million, largest in the history of online streaming services. It turns out. Now we have the thing we had been asking for the last time we gathered here, which is how many subscribers did they add? And that's 2.8 million, the single biggest subscriber acquisition event that has been measured by this industry research firm, antenna. And so the question I have relates to your grandest theory about the Super bowl going pay per view? Where are you on that in light of everything we've just discussed?

Well, I think that the fact that that game did 23 million viewers, I think the fact that that game generated 3 million new subscribers, the fact that there's no way that Peacock did that without consulting with the commissioner of the NFL. So I assume they regarded it as an experiment to see what would happen. And the results are excellent and obviously means people will build upon this and more games will go behind a paywall. And I did it as a lark in one of our. A metal lark, potentially, but a lark. I did it as a lark in one of our meetings when somebody asked me, well, predict something that might happen, and I said, oh, I think the Super bowl will go behind a paywall. So I would not want it to be assumed that I had put much thought into that. Turns out to be, I think, a pretty good instinct, because somebody is going to go before too long, I believe, to the commissioner and say, gee, we have the Super bowl this year. What if we put it behind a paywall? What if we charged $100 for the game? They just figured out, I think NBC paid $100 million for that game.

If you assume that 25,000 of those subscribers stick, I'm sorry, 25% of those subscribers stick for a year or two years, and you have a lifetime value of $1,000 a subscriber, that's $70 million. That's not far off of what they paid for it. So they got their money's worth and made more money on that than they would have made if they broadcast that game. There'll be some.

Who's that?

The NBC NBC NFL doesn't make any more money. They got paid for the game.

NBC makes more money because they own Peacock. So when the Super bowl is on CBS, they're not requiring people to sign up for Paramount plus to watch the Super bowl. They're side by side. There'll be different casts of the game I'm interested in. You're saying that because NBC, when they're valuing their deal with the NFL and they allocate the Super bowl and how often they get it, NBC gets a Super bowl or playoff games. They're looking at the entirety of the deal, all the revenue associated over the years of the deal, and this was an expected level of revenue, in your mind, when they cut the deal, or this was a bonus upside case. And I believe when they cut the deal with the NFL, this could only have been as a best case scenario situation, because I don't believe that it was set in stone upon these broadcast deals being done, that there would be this behind a paywall.

I don't think the deal included a contemplation that this game would be behind a paywall. I think that NBC, because of how important it is for them for Peacock to work, decided to take the most valuable content they have, which was a playoff game for the NFL, and put it behind a paywall because it takes.

Away from NBC's P L. Now, of course, it's two pockets. You're taking out your left pocket, into the right pocket. They're separate silos. Peacock is its own entity. They get to announce Peacock versus NBC Universal. They're all different. NBC had an asset that they negotiated for that they bought, that they then passed on to one of their subsidiaries.

Well, part of the same company. I mean, Brian Roberts is the CEO, and somebody among Brian and his core team decided this was better value for the overall company.

How would you feel when you were ESPN if there were revenue that was part of ESPN, got recategorized as part of theme parks?

I'd be fine with it if it was of such importance to the stock price, because almost every executive of any stature at the Walt Disney company is making more money if the stock goes up. This is the best use of that game because Wall street wants to see the streaming services work. So putting on the game was smart relative to a public company with a stock price. And I'd fight a little harder.

I'd fight a little harder if I were president of ESPN and something they were taking away p l to give to theme parks.

Well, that's exactly how companies end up in dissonance and disarray. At least when I was at Walt Disney, we prided ourselves on the fact that, gee, if there's something that is good for the overall company, we're all going to go along. So why would you mean?

I'll answer that if you let me, if we have time. Because if you look at what Jamie Dimon's doing at Morgan is my favorite example of this. When he's doing his succession plan, he's having all of his top lieutenants run different silos within the bank. So they'll do investment banking and they'll go to consumer, then they'll do all different things, different silos. And the reason is he wants whoever the CEO is to have an appreciation for all the different fiefdoms within Morgan. And the only way to appreciate it is to run it, because if you don't run it and you just know about it, it's another guy in the food room or another person in the food room. There's many, many women who are part of this.

Thank you for diversifying this hypothetical food.

No, well, the JP Morgan is not a hypothetical. This is happening right now with Jamie Diamond's succession plan. There is fighting within all these companies between sort of revenue streams. And so NBC is not willing. The executives at NBC, NBC Sports, yes. Just think about their being especially showtime disappears. All sorts of sports. Things are disappearing. NBC loses a whole playoff game to peacock. It was not a small decision. That was my only. I just wanted to point out that it was not a small, not a.

Small decision at all. But I am assuming that they understand that they will be given the indulgence of. Not when that comes out of their PNL, it comes out. And I can't imagine being in arguing with the CEO about, well, I know this will be good for the NBCU Comcast Universal company, but this is bad for my little individual think. But what David is right about companies are if you took companies, many of them would be divided philosophically between people who believe, I love for my direct reports to fight with each other over Nickelodeon and those people who believe are all sort of working together will create more value for the shareholders. So that's what we're going to do now. And by the way, I've seen instances where pitting division heads against each other can be constructive financially. I believe it is destructive culturally.

It does, though, all speak to a bottom line. Which is the bottom line, which is that the stock price of NBC right now has never been more existentially dependent on this streaming service working. So there's a rare clarity, I think, in terms of the incentive. Why are we investing in this? Because our futures collectively, of course, then the domino effect of even your little fiefdom, all of us are eating off of the table, ostensibly, of the streaming service.

By definition, a fiefdom is a controlled entity that squabbles with other fiefdoms. Right. It comes from medieval times when your fiefdom was your castle in your keep and you fought against the guy who had the next castle over there. That, in my opinion, is not the best way to organize a business into competing fiefdoms.

That's very aspirational of you.

David's just over here believing himself to be a peasant begging for a warm stone to be dropped into his pot.

Of soup or even a second producer.

There it is.

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Don Lebotard David Sampson weirdo because he was not the fun substitute teacher who'd wheel out a tv and play a vhs tape of Armageddon in science class. He was the weird one who would eat an egg salad sandwich while clipping his toenails into the trash can and ranting about Ronald Reagan. Stu guts the guy kept talking about how his ass was smooth, smoother than a newborn's cheek.

He wouldn't stop bragging about his bare buttocks.

To me, this is the Don Levitar show with the Stu Gats.

I want to get to the other notion of CEO dynamics here because, look, a story that I've wanted to get to for a long time with you guys that now dovetails nicely with an update about his counterpart in the NBA is Roger Goodell's pay and now Adam Silver's contract extension. We've talked about Fiefdom's power dynamics among these competing but cooperative groups, and so this naturally begs the question of what is it that you want from a commissioner when it comes to the business side, when it comes to Adam Silver now getting an extension of a contract that will take him through the end of the decade and most relevantly, perhaps, past this next negotiation of the collective bargaining agreement for the NBA? So, David, that's a very important thing.

You just blew by the collective bargaining. When we have a commissioner, one of the main things, the main thing is asset value. That's the number one governor that we have to evaluate how commissioner is doing. What are our teams worth, what are they being sold for, et cetera. Number two, the union. We can't have the union think there's any issues. That's why they put him past the CBA.

It would be interesting to speculate. I mean, that is definitive. We sort of know that. What we don't know is does his new contract put him past the next rights deal or in front of the next rights deal?

It has to be passed because the new rights deal is up in 25. No, they're not going to do a four year deal.

That's why I'm suggesting this is interesting because if I was an owner, I would want Adam Silver to be there to negotiate the next deal.

Now, David, the one after the next one. Well, they're doing one now.

They're doing one now. So I'm counting that one. That's already in his current contract. He's doing that, so he's done a new deal, at least if I happen to own an NBA team. Very unlikely prospect, to your point, David, you think about the collective bargain agreement. You want Adam to do that?

I want the union to know who they're dealing with. Because if there's a lame duck commissioner, you lose a lot of incremental grievances during the course of a CBA. There's a ton of fighting that goes on with players during a CBA, and if they sense any little weakness in the commissioner or in the commissioner's deputies, they'll exploit it. So we always wanted our deputies to be extended like the Dan Helms of the world. It used to be the Rob Manford under Bud sealick. We wanted them to have contractual security through the next CBA negotiation so that the union leaders, whether it was Gene Orza or Michael Weiner or. Oh, my God, Donald Fear. Oh, God. That was a moment. The late, great Don fear has passed away.

Excuse me.

I think it's Michael Weiner has passed away, not Donald fear, but I could be wrong.

Born in 1948 and strong as ever.

Thank God.

Congratulations to the fear family. 75 and loving it. Please proceed.

It was important to us to have employees that were out past the collective bargaining because the union does exploit things like that. We had never thought about it from a rights feed deal, because when negotiating rights did the relationship that Bud would have with you or that Rob would have with you, it never really entered our calculus that there would be an issue that would hurt or quash the value of our rights, depending on who the commissioner was where we were actually worried about the impact it would have on salaries, payrolls if there were not a commissioner who had the backing of the owners with the CBA.

Interesting.

So the question here with, I suppose, how we should think of a commissioner versus the normal, quote, unquote, ceos we've mentioned at a media company or any bank, as we've mentioned as well, or a fast food enterprise. What's the job here really like? The standard of success seems like it's perceived in one way from fans and very differently from the people who are actually in these rooms where billions of dollars are at stake.

Well, I think David laid out already what the number one measurement of a commissioner's performance is, and that's team values. And I think, and David weigh in, the two most important factors in that team value are the meteorites. So the revenue and the corralling of expenses, which is what money the players get.

So that's collective bargaining agreement and the antitrust.

And the anti.

Very helpful.

Yes.

There can all of a sudden be 70 NFL teams or 70 NBA teams.

Yes. But I'm not at least aware of any significant movement or sentiment to take away these antitrusts.

There is not.

Which is a hell of a set up for these businesses.

No, it's fantastic because the ego premium, which is really the biggest part of the franchise valuation, ego premiums keep increasing because it's so hard to get a team.

Explain what an ego premium is.

When you look at an asset that you want to buy and you assign a value to it based on analytics, based on numbers, and then you offer above that, any amount that you offer above what an asset is worth, you explain away by saying, that's ego premium. Because I get to say that I own this.

An roi where the I is actually, I.

The I is I.

You know me, I'm a softie. I would have referred it to it as the intangible value of scarcity. Right. There are only so many. I tend to compare it to art. Right. There are only so many. And the greatest one to use is Vermeer. Because there are only 34 vermeers. They're extremely valuable if you could get one. I don't think any of them really ever come to market, and I think the same thing here. I think it's the intangible valuable of being the owner and getting to walk across the court. Sure. Always looked to me like Mark Cuban loved owning the Dallas Mavericks, and that is what you're talking about. But to me, it's intangible when you.

Look at Adam Silver and the job he's done, and you think about what teams have sold for the fact that he had to get rid of Sarver and Sterling, that he was able to do that, which were two big things that Adam's done. You look at the relationship with the players way better than what David Stern's relationship was. Even though he was very popular. Adam's even more popular than David was with the players. That's another positive. When you look at who owes him what, the more owners you bring in as a commissioner, the more favors you're owed. So the more job security you have. So commissioners love turnover on their watch because it creates loyalty. So that's a factor.

Key point, right?

People don't talk about that a lot, but that.

Well, okay, let's talk about that, though, because it's the question of why isn't this wildly rich, powerful billionaire automatically invited in when a Vermeer is up for auction? And who is preferred as a member of the club? Do you actually want you just power rank it based on money?

Seemingly. No, that's not Mark Cuban. We took votes not on the floor of owners meetings that we did not want Mark Cuban owning a baseball team. And so he was told in very certain terms he didn't have the votes. You need 23 votes in baseball to be approved by the other owners to allow you into their club. It's like a fraternity bringing in pledges. They throw shit against the wall if they don't like your face.

Yeah, I was just going to say it amounts the same thing. These are basically clubs, right? I mean, they are small associations of owners. And it is what is different. I do accept that a commissioner is a kind of CEO, but it's a unique kind because they have 31 or 32 bosses. And those guys do get decide some things. And one of the things they do get to decide is who else gets to join the club.

That's the biggest one. Who's Iger's boss? The board.

Board.

So how many board members at Disney would you suspect? 17 to 24.

I think that's high. My recollection is a dozen to 50 dozen brand. Probably closer to a dozen.

Every CEO has a boss. Every president of a team has a boss. The only people who don't have bosses are the people who own stuff. You have to own it. And in a public company, the owners are shareholders. And what they do is they elect people to speak for them and those are called board members. So board members are really, quote unquote, shareholders, voices of shareholders, and they're the boss of the people in the C suite.

That certainly is the construction. Of course, many, many ceos have managed to pack their board with people who are quite. And they don't get to pack their owners. Right. The owners are.

Well, this is what commissioners do. Talk to Adam about this. He is packing his board by who he wants and manipulating. Bud Sealig wanted John Henry to get the Red Sox. When Peter Angelos got the Orioles, that was not in their control. And they said, never again. We will never allow a team to be in bankruptcy court in a live open auction again because we cannot control who gets into our club. Done. We're not doing that again.

But you wouldn't disagree. While Commissioner Sealy could influence who got it, he ultimately had to have 23 votes.

He only had to have 23 votes.

Yes.

He actually preferred always getting 30. He was weird.

No, but I'm saying ultimate control sits with the other owners. The commissioner can. And by the way, the ultimate, look, Elon Musk pay package from 2016 was just thrown out because every board member was a crony of his. That was the ruling. And there has been a frequent criticism of american business is that the boards don't really exercise a significant amount of oversight for many ceos.

There are tremendous lawsuits happening right now. There's a lawsuit happening where shareholders are suing and it's in the WWE with that merger. Remember the Vince McMahon? Well, he's now gone, but the merger of WWE sports business story entity, and there's a lawsuit saying, wait a minute, you allowed us to merge with this entity, UFC. There were way better offers on the table. But this was you, Vince McMahon as the CEO, or Stephanie McMahon et saying, no, no, this is the best deal for our shareholders. No, it's not. And there's a lawsuit about it. So these sort of lawsuits happen. They're shareholder lawsuits. When you're on the board of these companies, you have a fiduciary duty, and that's a legal term. You have to maximize money for your shareholders. So self dealing is not allowed.

$55 billion was Elon Musk's Tesla pay package.

That's a good pay package. 55 million.

Billion.

Billion. Billion. 55 million.

I'm not backing Elon Musk, but I'd like a little more information. How much of that is in stock grants? They didn't write a $50 billion check to Elon Musk. It's the value of the shares that is of a certain date. There's restrictions on when he can sell them. I am not backing up Elon Musk I want to be clear, but I also don't want the audience to think that he pressed refresh in his bank account and there was 55 billion in cash.

That is accurate.

I do want to get back, though, to this notion of, okay, the CEO, the commissioner, has one incentive, or set of incentives around who he would like to be one of the owners of this artwork, one of these teams, this exclusive club, and the other owners also have incentives. And so the question I have is, is there such a thing as an owner who wants to buy a team, a potential owner who is too rich, speaking to the other way, that this specific enterprise, sports, is different, right. They're competing. They're actively competing around what they're paying their employees. And is there such a thing as an owner who is then too rich?

So that's very funny, because we had that exact debate, and the answer was, there used to be until the valuations got into the multi billions. So Steve Cohn was not a candidate to buy the Mets because there was a concern by the Yankees and more than seven other teams, and that's enough to block a vote. The concern was that he will raise payrolls, pay players, and that will make us look bad. When Jeff Morad, a player agent, tried to buy a team, he was not allowed to. We voted against it because we thought he was an agent, that we thought that he would be too good to the players, that he would be too loyal to the players. Therefore, he did not get 23 votes and could not be in the club. But Steve Cohn then says, all right, I hear what you're saying, but I'm going to pay the Wolfonts 2.4 billion. Hold on. 2.4. Okay, you're in.

Because they care more about the asset value.

Because in theory, what it was supposed to do is make every team worth more. But what we found with the Orioles transaction, which was just announced this week.

Here we are at that story.

It actually has not increased the value of franchises in the way that was supposed to happen when the Mets were sold at 2.4. And so the 1.7 for the Orioles is a negative for the commissioner and the other owners, and I'm sure they're quite disappointed about it. Actually.

$1.73 billion to this new ownership group feels like a disappointment to David. John, do you have a knee jerk reaction to that number feeling disappointing?

I don't see it as much of a problem as David does. He knows more about this subject than I do. But if you look at the Mets 2.4 in New York City, Baltimore, 1.7 in Baltimore. I mean, there's a significant difference in market there. The Orioles have had problems as a second smaller market team competing in the.

What's the euphemism, David, you guys liked for a small, low revenue.

There it is, low revenue. And by the way, they have had a very advantageous situation with the regional rights through massen because they control it. They get 75% of the rights fee.

Share with the nationals.

By the way, I do remember a year in which the Orioles were the lowest rated team in the major league in terms of their regional network. I think they were getting about 30,000 views per game.

Oh, we were well below that. We were always below that.

You were always below that.

So they weren't, they never finished 30, perhaps.

Maybe what I'm thinking is they were, relative to the money. The money per viewer was higher than any other.

It was unbelievable.

They were getting a shame.

That's like cost per win for Tampa. Yeah, you get to celebrate.

I was like, why isn't David so ashamed by this? He actually had a percentage justification for why it's not actually, no, the reason.

I'm not ashamed is that we were able to sell the team at 1.2. And if you think about that seven years ago, there it is. It turns out that the value of the team is not based on. So I don't know if you know any of the buyers, but they're venture capitalists, private equity guys, and one of them is 70.

You're talking about the Orioles.

The new Orioles, the new limited partners. They actually don't run the Orioles. They're buying a limited partnership share where they have the ability to buy the rest once Peter Angelos passes away. But I promise you, when they were evaluating this deal, they didn't look to the ratings on Masson and how many people were watching the games. It doesn't even go into your financial model.

I was suggesting, though, that the money they were getting from Masson is going to decline.

Yes.

Mason is probably not. I don't see how it exists three years from now.

And it used to be an asset of the Angelos family, and it still is an asset. That part of this deal is they're not selling their right of Massen, their rights to Massen. So, interestingly, Rubenstein is going to have a deal with a network owned by the previous owner and the previous owner's sons, in large part. And the bigger issue is, what value do you assign to these deals now? And so when a private equity guy is valuing a deal, they do numbers and projections and used to really put in pen what the tv revenue would be, and now it's in pencil. And that changes how you value a team. And I think that's what's hurt rob the most as commissioner. And the reason why franchises have not gone up the way Adam's gotten them or Rogers gotten them in the NFL is because the revenue is so, the broadcast revenue is so questionable in its sort of. You can't make it actual.

Well, it's the league with the biggest problem around, the regional network collapse. Right. They had the largest percentage of money. I think the National Hockey League has a similar problem. It's just smaller. Smaller.

And so the question here, David, for a seller of a team, how do you maximize your market, given the pencil that everything is being written in?

You have to build competition. The way we maximize is having multiple people who want to buy it and therefore making the ego premium larger. But you look at teams like the Los Angeles Angels. Artie Moreno's been trying to sell Mark Lerner with the Nationals. They've been trying to sell. The Angelos boys have been trying to sell, and it's hard because people have a view that, oh, the Marlins were at one two, we should be at 2 billion or two four, and they're not.

But aren't they also disadvantaged? They want to do this deal now, right, for estate planning purposes. So you're having the leisure, as Mr. Moreno did, right. He decided not to sell his team because the collapse of the regional sports networks is depressing prices. I'm assuming they've made the decision that $1.7 billion is enough for the next generation to live on. Probably, but they have.

It's not been a great investment.

Well, you'll explain why. Let's talk.

They offered money on an annual basis. When we looked at the pro formers in 1993, and I looked at them from the side, because I was not involved in the deal. But I got to see what work the bankers had done for Jeffrey. The profitability of that team was de minimis, and those were low payrolls and sold out stadiums. Now, the Orioles don't draw, and while their national revenue has gone up, the local revenue has not.

So let's lay out the outsider interpretation of what it means. When in 1993, you pay $173,000,000 for the Baltimore Orioles, and now you sell this thing at just a billion and some change, which seems like the dream, but David Samson is here to tell you that you misunderstand. What about that basic?

Well, if you have $173,000,000 and it wasn't exactly 173. That was the enterprise value in 1993. You take out the debt, and there's other sorts of things, but let's just assume that it's $173,000,000 and you deposit that in a stock account. Even in a fixed income, you could do fixed income and a stock. But there's a saying you double your money every seven years in a reasonable investment return, which is where we've been over the course of, if you look over the past, call it almost 100.

Years of the stock market.

Of the stock market. Or I could say also it's been rough recently in fixed income, but it's fixed income as well. Double your money every seven years. So take 170. In 1993, you're up to 340 by y two k, then invest 340 in 2000. By 2007, you're at 680. By 2014, you're at 1.3 billion. By 2021, you're at 2.6. So if Angelos had skipped being an owner, that 173 would be over two.

And a half billion dollars today by sheer compound interest.

Just by sitting there and doing nothing now, you don't get to go to owners meetings. You don't get to sit in the dugout premium. Not there, nothing like that. But from an ROI standpoint, a 32nd story is that when Jeff Conine was traded to the Marlins, Peter Angelos had his GM say to us that Jeff Conine is my favorite player and we will not trade him to you unless you give us another player. Jeff Conine, when traded to the Marlins, told me he had never met Peter.

Angelos, but there was a conine premium.

So Peter Angelos, in theory, was not the type of owner who know jock sniffing, not the type of owner who would take such a big ego premium while he has dementia now and is not with it and hasn't been for a long time. I don't believe that he would approve of $1.7 billion for his team in 2023.

I think the numbers that big for the average person, they just go, wow, if you just got $1.7 billion and you only paid 173,000,000, you just did great. If you think of it in terms of a real person who has $17,300 in the bank in 1993 and is 25 years old and wanting to have that money work for their retirement, that would be a return. If you do the math, I guess they have 17 three, you'd have 173,000,017.

Service to 34, 34 to 68, 68 to 121, 20 to 240.

No, I was doing something different. Just. Just if you had put $17,300 in a savings account, invested it to pay for your kids colleges, and you had how many years later? Almost 30 years later, you had what amounts to $173,000, give or take. Right.

But they could have had 240 if they.

I got that better. But yes, you would be disappointed. But nobody is disappointed because of the size of $1.7 billion.

I take issue with that, because you shouldn't be disappointed if you put $17,000 away. The problem we have, and this is a societal issue, people have a hard time saving. But even saving a dollar per paycheck, I don't know if you encourage your employees to do it, but that's what 401 are. And anytime you can put money into savings and put it to work for you, it's going to benefit you.

I'm going to go around to all the employees here at Metalart today and ask them to take $1 from their tech and give it to me. And if you put all those one dollars together and I invest it.

Yeah, look, it's just fiduciary prima nocta.

I believe you just get a fiduciary prima nocturnal braveheart.

Having people save money.

Gross reference.

Very important.

By the way, what I'm slightly mocking is the idea that I should have any concerns about Peter Angeles should have spent his money better and have more than a billion.

I'm merely saying that people telling you that it's the greatest investment the guy ever made is a genius. I don't view that as a genius investment. He may have loved being an owner, but he actually didn't. There are certain owners who do.

Right? You're saying that even with all the caveats appended of antitrust exemptions and all of the stuff that the civic. This is a whole other rabbit hole, but the civic benefits that accrue to owning a sports team. You're saying that from a pure financial perspective, if you put that money in the market, you come out with something.

Comparable or better or in a Baltimore situation.

This is why I refer to this show as rich guy onlyfans, by the way, I hope people out there enjoyed listening to John and David do math, because it's actually relevant to how it is that we think about the values of all of this. Rich guys only fans. How do rich guys think about stuff? So before we take issue with that, rich guys only enemies for David, perhaps before we get out of here, at the end of every show, we like to give you guys the opportunity to mention something that's on your mind that we have not yet gotten to. And so David is pulling out his phone. David's also been coughing a lot, John. I don't know if he's all right.

Well, I talk for a living like you do. And I forgot my menthol and we were delayed in the start of recording. So my body is used to this being done 12 minutes ago.

Man, that's a delicate mechanism.

It's very delicate.

Corpus de David.

That's a lot of layers to my onion.

Very rare Vermeer painting.

Actually, I'm going to need a prompt because I don't have my notes with me. What do you think would be interesting for me to comment upon here as we.

I have something else thinking about.

What do you think?

I'm thinking about how funny the NFL is and that they're having their team stay at Lake Las Vegas.

Okay, what is that? I don't know what Lake Las Vegas is.

It's not the strip. It's about 40 minutes away from the strip. So the teams, in order to keep them out of trouble, to keep them from being distracted, are going to hotels away from the strip and away from where the game actually will be.

It sounds savvy to me. I was at the last Super Bowl ABC ever had was the one in San Diego and the Tampa Bay Bucks won. I forget who they beat. Yeah, the Raiders.

Is that when Barrett Robbins.

Yeah, Barrett Robbins. Didn't he slip across the border something bad?

But he was sick.

Yeah, it was sick. Not a happy ending to that, but.

Not a funny story, but actually a.

Thing that's a real story.

But relative to your concern, I'm not sure I'd even send them to Lake Las Vegas. I think I would send them somewhere deep in the desert.

So have you been around players? It doesn't work. Do you think the players are going to go to the coffee shop in Lake.

I want to ask David Sampson, how would you program this if your goal was to keep your team maximum prepared for the most important game of the year?

I would get to Vegas the latest possible time, but the NFL makes you come early. During COVID MLB instituted security in the lobby and there are players who would get around it by going out the back door or paying off the security. But I would have security so players could not leave because bad things happen. I love Las Vegas, but the problem with the Super bowl in Vegas, the reason why there's never been a Super bowl in Vegas is it's so much easier to find trouble. You can find trouble anywhere in Missouri.

The case for why sports in general was hesitant to go to Vegas.

Exactly. So what they're saying is, the reason I'm thinking about it is, oh, we've got this covered. We're going to put the players in Lake Las Vegas. It's absurd. It's like having the Miami Super bowl and saying, hey, we're going to have you stay in Boynton beach and that'll keep them away from South beach.

What are your thoughts about ankle bracelets?

I have worn them before, but not the kind that beep.

Did you have to wear after you got out of the big house?

No. Where it was, it was a camp thing. It was a way to get more only fans.

John, the thing that you had mentioned before that I maybe want to squeeze in here is an update to your prediction, though. The prediction of Super bowl going pay per view, the peacock information has given you what perspective? I want to close that loop here as we enter the next calendar NFL year, so to speak.

Look, I would have thought that the NFL did I believe a ten year deal last time with each of the networks. With each of the networks. I would have thought that pay per view for the Super bowl would be on the outside of that deal. I now think that in the life of that deal, one of the Super Bowls will go pay, the Super bowl will go pay per view.

Do you mean paywall or pay per view?

I think either is a possibility. And depending upon who owns the Super bowl, it would be more or less valuable to put it behind a paywall and get subscribers. After you have the consolidation of streaming services and big broadcast companies, that's when it'll actually go pay per view. I think so you're looking at three or four years it'll be with them.

So first paywall, then pay per view. Just to clarify, those are two different.

Things at the very end of the show. Mark it down, John skipper profit spinning around in his chair. David Sampson clinging on for dear life. Thank you for another educational episode.

Thank you.

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