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This is the Dan Levator show with the Stu Guts podcast.

David Sampson has stripped the label from his bottle of Water, which is how you know we're back, about to record the sporting class with John Skipper and David Sampson. Hello, John.

Hello, Pablo.

Hello, David.

I don't like giving free advertising away. We don't have a water sponsor yet.

So if you would like to sponsor the liquid that powers David Sampson, as we get into the most pressing topics about rich guy stuff and sports business, that is an open space for you to bid on. Speaking of bidding, I want to start with the College Football playoff, John, and I want to start with this idea that, okay, the CFP is expanding, a tv deal is expanding. Lots of things are changing in sports business. But this one, I come to you first because, as I always say, you were the guy as the head of ESPN who dealt with all of these conferences, who dealt with the future of college football. You redrew the map of the sport. And so here is ESPN in the present agreeing to pay $7.8 billion to broadcast the College football playoff over six years. Dot, dot, dot, unless some stuff happens that is not to their liking. Can you explain what's happening here with the condition around the 7.8 billion and what ESPN is looking for here?

I can tell you what I think is going on, but I'm not sure that the public information provides everything you need to know. It feels like ESPN has a deal with the College Football Playoff organization, which is headed by, I think still by Bill Hancock. So it sounds like they have a deal with them at some point. About a week or ten days ago, the SEC and the Big ten announced that they had an advisory board. So it feels like the SEC and the Big 10 may not yet have agreed with the College Football Playoff governing body that they are okay with this bid for ESPN because they're still sort of arguing over the format.

Yes, the field. And so, okay, a twelve team College football playoff field is projected. It's the five highest ranked conference champions who will receive auto bids, the seven highest ranked teams remaining will round out the twelve teams.

I think what they're actually fighting about is governance. Remember, we've talked about, and I think all the time about Tony Patiti, the former. He started MLB Network and ran it first and then left and is now the commissioner. And they had of the Big ten. They had this meeting where they were getting together and saying here's how we're going to operate. And it was just the two conferences and then all of a sudden there's an announcement of a deal that of course would involve them and then there's an announcement that the deal isn't really a deal yet. And what I was thinking behind the scenes is Tony Patiti standing up and saying, hey, you didn't come to me. I want to be in charge of how this deal is structured. I want to understand what this means for distribution of this money, who's getting what, when, where and how, who's getting the bids. So that's what I think the delay is. Were I to fashion a guess, because sitting in his shoes, I would do the same thing. It's one thing to make a power play in a meeting with a fellow commissioner, but it's a whole nother thing to hold up an entire tv deal for an entire sport.

And that's what I think is happening.

Well, I'm assuming they're concerned about governance over two things. Who gets in and how does the money get distributed. And if that is your concern, I'm puzzled by this 5.75 plus seven format. They seem to be, as people always do, solving the last problem they had. Right. The five highest ranked conference champions are going to get in. They solve the Florida state problem, but all they do is create other problems. What is the governance for how the other seven teams are going to get in? I don't know why they're not just agreeing that there are four major power conferences. I realize they have legal issues with what the contracts they've signed with the PAC twelve, which now has two members, they've got to figure out how to get rid of that stub. And then they've got to figure out, I don't know why it's not the top three tens, top three teams from the SEC, the top three teams from the ACC, the top three teams from the Big ten, the top three tens from the big twelve.

Well, what about everybody else?

Well, if they're arguing about governance, if I was arguing about governance, I would say, well, you know, we're the big conferences, our teams are going to get in. And people want to see Alabama and Georgia and Ole Miss and Texas and Michigan, Ohio State and Penn State, and they don't really want to see, and I'm just not going to name, you know, who I'm talking about. They do not want to see the teams from the other conferences. It would be better for television, would be better for ratings, and I don't know why they need a middle person to run the tournament.

Can I take you inside a room? Both of you?

Sure.

It's a room I was in.

Just to be clear, we are in a room. David, are you going to take us into a virtual room?

I would like you to go into a magical room where there was a time when the New York Yankees and the Boston Red Sox had a conversation about forming their own league, where the conversation is they don't want to give revenue sharing dollars to teams like the Guardians, or then the Indians or the Marlins or the Royals and the Guardians and the Indians, the same team, then the Indians. This conversation happened when they were called the Indians.

Okay.

And the conversation went like this. Go ahead. Except you're just going to have to play each other every day. So if the two of you want to be your own baseball league, then it's Red Sox Yankees for 161 games, or you can do it for 80 games or 40 games and not be a World Series. You can do your own cup, the Yankees cup, and if you want to do that, that's fine, but you need the little teams because that is what fans want. They want a build up, a crescendo to a season. And what you're talking about reminds me of that. Because you'd prefer it just to be the top teams?

No, I'm not suggesting what I would prefer. I'm suggesting that if I were the commissioner of one of the big leagues, I would be concerned about how do I get the most teams I can get into this plow system and how do I get the most money out of it.

That's what I would care about, Spence. Yes, but if you give all the bids to three conferences or four conferences, there's a whole lot of teams out there who will just say, okay, then I guess we're no part of you, and then we're not going to ever play you during the regular season. We're not going to play you ever again. No bowl games, no nothing.

Well, there will be no bowl games for the teams in the big conferences. I don't think. I think eventually that will go away. And by the way, it's a problem. It's not two teams. It's somewhere between 60 and 70 teams. That is plenty of teams. And by the way, it would be great for television, media rights if they only played each other. Because the least valuable games are when Alabama plays Troy and Penn State plays Youngtown State and you get rid of all those games that nobody cares about. It's a super league. Yes, it's a super league. It's back to what they tried to do in Europe with football.

They don't work.

Why not?

Because you're forgetting the fact that fans, if you buy, let's go to Michigan. Should we in the big house. Is that Michigan or Notre Dame?

I think it's Michigan.

If you only played Harvard Yale.

What?

If Harvard only played Yale all year, every game.

They can play Texas, Oklahoma, but they're.

Just playing each other.

So what? It's 60 some teams.

That's really not an alumni group.

So if you're getting season tickets as an alum of Michigan, you would not want to see them play. Every game is a good, competitive game with a major team. By the way, you know, the teams, the games that nobody goes get. There was a guy who was the athletic director of Florida. He used to complain to me that ESPN put too many games on television. Consequently, nobody went to his home Florida games. I looked at the attendance of the home Florida games. Every time they played a team from a major conference, sold out. Every game in which 20,000 people didn't show up was the game that they had scheduled just so they could win. And now if you have a system where the automatic bids are the 1234 best teams from a conference, you no longer have to worry about how many losses you have. As long as you finish fourth or better. If you have two, three, four losses, doesn't matter.

So maybe we'll have a division one. Division one a. Because this concept already exists. It's called division two and division three. That exists in the college world, right?

The FCS, the FBS.

It depends where you go to school. If you go to know, you're not. Although Lehigh's division one. Take a different, whatever school.

Division two is the problem. Lehigh, a fantastic school. I do think they call themselves now the Golden Eagles or something. They were engineers for years.

Never heard of.

That's the problem. Lehigh is in the same conference. Nobody wants to see Lehigh in the College Football playoff. They don't. And by the way, why you say fans won't? People always say fans love a Cinderella. They love a Cinderella. What are the worst rated games in the history of the tournament. It's when Florida Atlantic ends up in the final four, less people watch. If they're so excited, why don't they watch?

Let's have a world that's so exclusive, I can't believe we've switched chairs now. But let's have a world that's so exclusive that it is always only teams playing each other. And there can never be an upset. There can never be a surprise team in the CFP. There can never be anything. Now we have to take it to march Madness, Cinderella's and March Madness. Drive the needle, people.

Cinderella's will be the teams that are in the second half of major conferences and upset a team. Georgia Tech beat North Carolina this year. That's a Cinderella. Wake Forest just beat Duke.

But we should talk about what the incentives really are. The head of a, if you're the head of a conference, if you're a conference commissioner in college football at the highest levels, which means you're the guy running the SEC or you're the guy running the Big ten. Right. What do you actually want? Because when you bring up March Madness in the NCAA tournament, a parallel question can be asked of the commissioner of the ACC. Right. And so John is circling this idea that actually if these guys really wanted to maximize the hand that they have to play at this card game, they would say, we want our own card game.

Yeah.

And you'd have to split it by sport. Yes, because there's certain schools that are better in basketball than in football and others that are better in football than in basketball. So if you're going to do that, then actually what you're saying is that you'd want Duke to be in two separate conferences because they're not invited to any super league in football as a team. But they certainly are in basketball.

No, I think they would qualify for being one of the top 64 college football programs.

So the Super League is not going to be conference delineated, it's going to be the top 64 program. Well, recruiting, this is why change.

No, this is why it's completely unrealistic. You can't do it because you'd need to start with a white sheet of paper or blank sheet of paper. So it can't happen.

What I'm talking about because too many contracts are preexisting.

I'm just suggesting that if you are the conference commissioner, what you care about is automatic bids for the teams that are the best in your conference and being guaranteed to receive the most money you can receive from the playoffs.

But if they're the best they're going to get the bids. If FSU, if there were five teams in the CFP, you don't think FSU would have been the fifth?

I'm always going to be arguing over that undefeated San Diego state team that by some definition belongs in the championship. But that is, if I'm the commissioner of the Big Ten, I'm going. They're not as good as Penn State or Wisconsin, Iowa. No, that's not the Florida State problem because it's not the top of the team. It's the second, 3rd, 4th, 5th, 6th team.

What he's trying to argue is that he wants a world where, forget I'm.

Not arguing what I want. I'm arguing what they would, what they.

Should want as Tony Patiti. Let's keep talking about Tony behind his back.

And by the way, to be clear, I have not talked about this with Tony Petiti. I don't think you have either.

No, but John is cosplaying the role of Tony Petiti, head of the Big ten, or Greg Sankey head of the SEC. What would they do?

And what he's saying, I believe, and I'd like you to confirm this, that the fifth best team in that conference deserves the postseason appearance more so than the number one team in a lesser conference.

If I'm the commissioner of a conference, I'm not paid for some sense of justice of meritocracy and meritocracy. I'm paid to do the best job I can do for the teams who belong in my conference association.

The argument from a union standpoint and a quality of play standpoint is this, and I don't agree with Samson Union guy I am making, what is that argument, which we've switched like we're 13 going on 30 today, is that if everyone gets in, then it's a race to mediocrity. Why do you have to pay to get the best recruiting class? Why do you have to do anything to be a good team?

You want to win, but you're going.

To have in the playoffs. You're in the playoffs automatically. That is one of the reasons why the baseball union, as an example, is concerned with certain of the salary quashing rules that happen because they believe that owners are incentivized to just get into the playoffs. It's why they didn't want expanded playoffs. Because if you get into the playoffs, you get hot, you win the World Series and that's what owners really want. And if you can win the World Series with a low payroll, why wouldn't you do it. If you get automatic bids low in the conference, explain to me four is.

Not low in the SEC or the Big ten. Those are big time programs that want to win and will do anything to win. And you have alums who are not going to go, oh, we're going to get in, let's don't pay for the coach.

Four could be Alabama, Georgia, Texas, Oklahoma.

I don't know. We can't quite do it here. But if I said, by the way, there should be a 16 team playoff, there should not be a twelve team playoff. I don't understand what the value of that is. But if you had a 16 team playoff and you said that listly, Michigan, Ohio State, Alabama, John is writing a piece of paper, Florida State, you all got in, would you be unhappy?

I'm not asking whether I'm happy or unhappy. I'm asking whether or not it is sustainable as a model to have this super league concept. But it's never happened.

It's never what happens in european football. Every year in England there are 120 teams that play and they play in six different levels. And by the way, gives me an idea. They should introduce relegation into college and the team that finishes last. I do like that in the ACC at some point goes down to another conference.

Do they lose the distributions from the tv package?

They do for the year after they're out.

Which is exactly what doesn't work.

Well, it does work. Relegation works beautifully in european football. You may not believe it works in.

It doesn't work in american sports because you can't buy a team and value what your revenue is, what your stream of revenue is from a broadcast.

We're talking about an amateur sport. I know we are not. We are, but there's no value to the University of Alabama team.

They're out there selling the rights. They're actually monetizing their team. They're going out and doing Alabama every day is monetizing its team. Of course there's a value and what we're going to see in the next ten years is we're going to see private investment in these teams. We could see some of these teams go public as entities.

It's interesting. This is not a subject we thought about doing, but what is the rationale for investing money in a college, in a university sports program? How does that actually work?

You want your kid to get in.

No private equity firm a gives Miami a billion dollars for 25% of their rights in the future. What do we think is going to happen? To who? To the Florida state. They will spend all that money, and then at the end of, they will take the money they get from the private equity firm, they will spend it immediately, and in the future, they will be paying 25% out of every dollar of their media to the private equity firm, and they'll be worse off than they were before they did.

But now you're making an argument for companies that shouldn't take investments from private equity, and things are happening, just seems, aren't companies. So my argument is that they are, but they're not, and that they are now, and they're actually going to officially be. So, because we're seeing it a little bit in college sports already, in my opinion.

So the logical conclusion of that is I'm the richest alumnus of the University of Georgia. The University of Georgia. I'm going to buy the football team. I, Betty Smith, am going to buy the football team, and I get to make the decisions about who starts. Really, that's not going to happen.

It's like you're living in fantasy land. That is exactly what happens now with boosters. And I hate to keep bringing up Harvard Yale. It's such a ridiculous flex. But you ever looked at who's sitting with the president of the team of Harvard and Yale during the Harvard Yale game when they play Princeton? It's the smaller donors for Harvard Yale. It's the biggest donors are around the presidents of Harvard and Yale. It's the same concept with any of the schools. You are paying for access, you are paying to go to practices.

But what, John, I want to translate your argument, though, that the reason a college football team is not a company is because the money does not go into some mechanism in the company to make the company what? Different. It's just replenishing the coffers that they'd spend on the stuff they were going to spend on anyway.

Right.

And so David is saying what? You're saying that it is a company because.

I'm saying because there's A-P-L. So let's start just at a macro level. These individual sports have their own p ls. Are you willing to acknowledge that?

Of course I have my own P-L-I make a certain amount of money, I spend a certain amount of money. I'm not a company.

I could argue that point, but I won't on behalf of Carmen. So there is a football team that is a sub, a subsidiary of a university. There's the big time university where there's a full budget for the university. Then they do budgets by department, academic department, sports department, and any department that can go out and fund itself. That makes that department that much better. It's why in science they try to get endowed chairs where it's money.

The argument is the science department a company?

Yes. And there's someone who runs the science department and they're out there running their own little fiefdom, trying to get donors to give to their department for their research and their capital needs.

I'm going to agree with your essential point and suggest that we're mostly in a semantic discussion about the word company. They're not officially companies. They don't file as the football company doesn't file taxes. You're right, they don't get.

But here's the question that's beyond semantic right. So leave the vocabulary aside. The question is, is it a good economic idea for this non company company to take outside investment? And John is saying no, because what you're going to do is spend it all and then be back in the same place. Except now you're going to owe somebody more money.

And I'm saying yes, because that's what borrowing money is. All of us go out and borrow money to buy a house or to buy a car or you borrow money to start a business. What private equity does is they fund people who have ideas. The private equity people are just doing spreadsheets. They're figuring out what they want to invest in and what the return will be. And so when you're investing in FSU, in your case for future media rights, this all just happened in Germany with the Bundesliga. We were going to talk about this on nothing personal before the fans stepped in and said, no, we won't allow it. But what they were ostensibly doing was selling their future media rights and monetizing it.

Well, that has happened. The Syria and Italy did sell, but all they're doing is leveraging their future.

For the current welcome to the world. That's what all of.

But there is no mechanism by which that borrowing that the university is going to do is going to turn into profits, which they can use to pay the loan off. They're going to end up in a deficit situation again. And they're going to be complaining that now they no longer have enough money because the Big ten teams, Florida State has $150,000,000. That's their budget. In their athletic department. They're saying, not enough. We're going to go to the private equity market and get 50 more so we can compete with the Big Ten. They operate probably there. I don't know this. So I'm speculating. Their athletic department at best, probably operates. Even so, they don't make any money. Most of them lose. So how are they going to pay that loan back other than rolling it over?

That's what all companies do. Disney has debt. When it comes due.

They're going to pay for that with the profits that that borrowed money provides them. If I can guarantee you, if Florida state gets 50 million more dollars, they're not going to generate 50 million more dollars that allow them to pay that debt.

Yeah, they think they're going to generate more. The purpose of what they're doing is to make their program get better players, maybe do upgrades to a stadium, get the ability to charge more for your tickets, get more boosters, et cetera.

I know of one school which definitively has shown a profit on football, by the way. I could be ignorant about others, but the University of Texas does make money, their football program does make money, and they have always been very proud that they give a check back to the school.

It's funny. It is all semantics.

I'll point out Alabama reported 199.9 million in total operating revenues, 212,000,000 in total operating expenses. That's the 2023 fiscal year.

But that's the athletic department of the football team.

That's the athletic department, yes, but there's no information there. So what's the allocation? The people who are doing security around the football stadium, is that allocated to the operation of the University of Alabama or do they charge into the football program the hourly rate of the security guards?

I don't know the answer.

The answer is we don't know. So that's why these sort of articles and it gets everyone in an uproar and they're so misleading.

Right. Okay, so the question of accounting aside. Right. The question has been raised, what do.

You do.

If you're a very powerful football program that wants to make more money? And John's proposal is if you are a big ten or an SEC school, you should tell the guy even it's beyond the NCAA. John, what you're really saying is go to Bill Hancock, the guy running the college football playoff, and say, thank you, but no thank you. We can do this without you. And I just want to hear your rationale for why you don't need that guy.

I'm not suggesting I think it's necessarily good or bad. I'm thinking that if I was a power for conference commissioner, I would not quite understand why I need a third party to provide governance. You said, david, the problem is they don't want. The issue is when you say they can't agree on governance. They don't want governance. They want to run it themselves.

Everybody says they don't want governance until they all of a sudden need to govern. So you can't have three conferences.

It's like very George Washington.

It certainly is. How about if you started a business with someone 50 50 and you had no rules of governance? Are things magically going to happen? Like you're just going to agree on stuff? And what happens when you don't? Then it's a pain in the ass for everybody.

I don't understand why the governance among the power conferences would be that hard. Each of the conferences would have a vote.

They can't even agree on the size of the table they want to negotiate at. So they all want.

I haven't really read that story. I haven't heard that they're having a problem deciding on the table. I think that was a Vietnam. I think that was a Kissinger.

I was trying to make a reference that only you would get. Thank you for getting it. My point was the same, but I will stand down from any further Vietnam references.

I cannot believe we've gotten to Henry Kissinger. But of course we have. Of course we have. So, look, the point here is there's a super league logic to how college football at the very top end could reform itself, right. If they said, nah, I don't want to deal with all of this stuff, all this diplomacy, no thanks. We don't need you guys. We can just ensure that we have profits in a bigger way year over year by just making sure that we mostly play each other to our liking.

And we're always in the playoffs.

And we're always in the playoffs and.

We can always win a national championship. But is it the same national championship without the CFP? Would it still be the national championship if only the certain teams have the right to the possibility to be there?

If the conferences had been running this tournament this year without the CFP and Michigan one, would anybody be suggesting Michigan was not the national champion.

Because UCF was undefeated? Because University of Central Florida said, I.

Mean, by the way, did you have anybody suggesting Florida State should have been the national champion?

Even Florida State?

I think they did not attempt it.

No, they did not.

There's an actual national champion because there's a CFP in your world. FSU could play their own game against our company team.

How many national CFP has been operating? What about 2025 years?

When did you first start it?

I didn't start it. It was started at ESPN sometime early in this century. I think it could be 1999. Somebody's looking it up. I'm hoping we're fact checking that. So it's been operating 20 plus years. Has anybody ever won who wasn't from the current Big Ten, SEC, ACC or big twelve?

You're asking a question that's easily answered. I just don't know the answer. But is your point that it's already happening?

Yeah, it's already happening. While there is the occasional Cincinnati that slips in, this is already a College Football playoff between the best teams from the major conferences. No one is even threatened. I'm not sure. Has anybody even made the championship game?

It's really a chicken and an egg. Because the teams that you're talking about, the most powerful, bigger teams, they just have better opportunities to be better. And the irony is the Nils have tried to level that playing field and maybe that's why Nick Saban disappeared and Jim Harbaugh and other coaches, because they're concerned that all of a sudden their false perch is going to be broken.

Well, I would quarrel with that. The Nil is not going to level the playing field. It's going to make it less level. Because who is spending the most money on Nils? I think it's southern Cal and Oklahoma. But there's no barrier to Alabama, there's no barrier to entry, except you're Lehigh. And maybe you find somebody who's willing to spend a hundred million dollars to make you a great team. Maybe so.

This is the southern Methodist question, as we've talked about before on this show, like where are the boosters who might want to pay? I want to point out it was the BCS, 98 to 2013. The CFP started in 2014.

So a decade of BCS and CFP were the same.

They're pretty close. They're pretty close to the same.

Again, there's a semantic distinction here, which we won't necessarily was computers, now it's a committee. That's the big difference.

Do you think what I think about in professional sports, and maybe the equivalent is in college sports when you buy a team that's not the Yankees or the Red Sox, you're aware that that team is being sold for only a billion and not 8 billion because you're aware the reason for that vigorous is that the Yankees have more revenue. So there's a different multiplier, but also that the Yankees have greater opportunity to win more often than you will, that your windows will be open for a shorter period of time and you may never win a World Series where the Yankees window to be good is open all the time. It's the same thing in college. There are certain programs whose window is always and there are certain programs that, hey, every once in a while, and for a lot of people that, hey, every once in a while it's good enough. And what you're suggesting is that that disappears and that there's no more hay every once in a while.

Yeah. It's the equivalent of the English Premier League, where only teams from the English Premier League go to the Champions League. You might argue that it's unfair to Wimbledon, who's in the third or fourth division, that they don't have an opportunity to play the best other teams in the world, but it doesn't really seem to be a problem for the fans and the players and those teams. Now, we did forget one thing, by the way, which is, and we forgot it because of the discussion about company and we're trying to look at the football program in isolation. There would be smart people who would say to us, to me, maybe, gee, you're forgetting about the overhang. Positive benefit of if my team wins a national championship, I raise my ticket prices, my boosters give more money, and I doubt anybody is doing a PNL that says, here is the hangover effect of we won. We're Florida Atlantic and we made it to the final four and GR donors raised what they give us by 40, 50 million. So I will see the point that if you actually looked at it that way, there might be profits involved.

It sounds like a company.

Hey, folks, it's Mike Ryan. Now, you've had the distinct privilege of knowing me for close to 18 years, and you know that I've changed. A lot of my personal life has changed. I've changed as a professional. I am a parent now. My level of involvement in my favorite college football program has also changed. But one thing that hasn't changed for me is my favorite beer. You know, when it's real with me, I think you do anyways. And you know how much I love Miller light. I've loved it forever, really. It's my favorite beer of all time, and it made all the great moments in my life all that much better. And when Miller Light came aboard on our show, I was super stoked about it because I believed in the product, because every time I take a sip of Miller light, I look around and I think, yeah, this was the right call. Times change. People like me can change, but you can always enjoy the great taste of Miller light. Taste like Miller. Time to get Miller light delivered right to your door. Visit millerlight.com dan. Or you can try to find it pretty much anywhere that sells beer.

Celebrate responsibly. Miller Brewing Company Milwaukee, Wisconsin 96 calories per 12oz don Lebotard oh, I like firing people.

So I take the opportunity to fire whenever I possibly can because I can use it as a learning experience for them and try to help them out and try to point out what they did wrong. But in this case, the employee was enough levels below where I was that I did not do the firing, but I had it done within moments of discovery.

I like firing people. It's just absurd. It's absurd.

Still got, I'm talking about people who I fire, who deserve it, who have done something that actively requires me to fire them. It is my unadulterated pleasure to do so.

This is the Dan Levatar show with the Stu guards.

I feel like we should move on to the topic of actual companies now that are not in dispute as such, because we've talked about super leagues. We talked about the definition of a corporation. Somehow none of us quoted Mitt Romney in terms of our people corporations. I move on to this notion that Disney, Fox, and Warner Brothers are now facing because of the three headed streaming service we've discussed on this program before, they are facing an antitrust lawsuit from Fubo TV. Okay, and so this is the latest update here. So on the notion of the joint venture between those three media companies, there's some other stuff we can discuss about how Adam Silver says, NBA commissioner, he didn't know about this until after it was announced. But here is Fubo TV, the CEO David Gandler, saying, quote, to me, this is almost borderline racketeering. And he files a lawsuit that accuses these companies of, quote, leveraging their iron grip on sports content to extract billions of dollars in supra competitive profits. And the implication there, of course, is that consumers pay more for all of this very popular sports content. And so, John, you have, of course, a unique perspective in the world of people who talk about this stuff.

And so when you see this lawsuit and this news, your reaction is what?

My reaction is that it is a bit of a Hail Mary pass for company in some distress. And I don't think they will win this suit, nor do I think there's any particular merit. I'm interested in the quote you just had which accused these media giants of leveraging their iron grip on sports content to extract billions of dollars in profits. I think that's called capitalism. So I'm going to channel my David Sampson to suggest that that's legal, and keep in mind that sports rights are the most expensive content in the world. So is he actually suggesting, well, you can buy the most expensive content in the world and you can buy a whole lot of it. And the reason you buy that, and you buy it exclusively is because it provides you enormous opportunities to make money. Is he suggesting that somehow that is racketeering? I don't sort of see the through line there.

He's suggesting that this stuff is anti competitive, that here is a grouping of companies that are working in concert to even further leverage that.

So if I buy the Michigan Ohio State game exclusively and I am the only one who has it, hell, yeah, I'm being anti competitive. That's why I paid the money for it, is to get it exclusively. You option to book to make a movie, you get it exclusively. It's not competitive.

You buy it exclusively, you don't get the story exclusively. You get the book exclusively. You can't write a book about the civil war and then say they want.

To do recreations by quick drawings of live games. They could do that.

A degue of the.

I am concerned. Several parts of this lawsuit bothered me. Number one, throwing out the word racketeering, it gets everyone in a fluff because they view it as Al Capone type stuff. But number two, he's suing about a concept that yet is not understood by anybody, including the people who started the streaming service.

Remind people what this supposedly is.

So what we said it is, and we didn't even have agreement in this room. We were deciphering the press releases when this first came out. The view of John is that these are three companies that got together and they're going to put their channels, ESPN, TNT, TBS, true tv. They're going to put them on this new platform like YouTube tv, and they're going to call it blank and they're going to charge you 59 or $99.

I suggest kebras, which is a three headed dog that guards the gates of hell.

I think they won't choose that.

You're going to put that in the maybe pilot.

I was going to put it in the no chance toilet pants column, but whatever column you want. So they get together and they get these networks. And people then have a choice where they can buy just these networks. And within these networks is live sports. But what we said is they're going to show NCIS at 02:00 p.m. And then an NBA game at 08:00 p.m..

Right. Any channel that has sports would be folded into the bundle.

So it's a bundle. It's a mini bundle, but a. We don't really know anything about what this is going to look like because my view of it is that it was just going to be sports and that they were going to have to figure out how they were going to decide what content gets put on this new streaming network, because there's already a conversation that a Super bowl and ESPN would not be inside this streaming service, that they would want it to be on ESPN plus solo, not ESPN plus as part of this new three headed company. We don't know.

Well, if ESPN. So ABC will get Super Bowls in the new deal, and those Super Bowls will be in this service if it is launched as suggested.

But we don't know yet.

We don't know that.

But we just don't know. So there's a lawsuit that's filed, and to me, it makes fubo look desperate. You called it hail mary, and I completely agree. They're worried that they are being marginalized because they can't afford to get a product that they're not willing to pay market rate for.

Yes, and this speaks, john, to something that Fubo has been complaining about for a while, even before this joint venture was announced, as they outlined in this lawsuit, which is to say that these companies, you, rights holders, are forcing potential channels, distributors, I should say, like fubo, to carry hundreds of unwanted channels in order to get the things that they actually want. They wanted to show people sports, and they can't because you people are making them take all this other stuff and therefore charge more money.

He's been doing that since day one as an executive, making people take crap they don't want in order to get the good stuff.

Well, we didn't have any crap.

Excuse me. Everything's not like roses. Esp on the twelveth was pure roses.

Go back, fubo. The people who started fubo, and I think this is accurate, were us by no, but I'm going back to the original conception, was they had the smart idea that, oh, there are a lot of people for whom sports is the most important content. How about we create a company and we go out and just buy channels that have sports? And they went out to try to buy those channels. I was there when they tried to buy the Walt Disney channels that had sports on them, which is mostly ESPN license, I'm correct. And we said, fine, we're in business. We absolutely sell to distributors. You want to buy our channels, here's what they cost. And they said, well, no, that's not our contemplation. Our contemplation is to put together a tight package of only sports and take that to the market. And we said, well, that's great, but that's not the business we're in. That's your business. We will operate as we always do. We're happy to sell you our network, our family of channels. That includes a lot of sports, more sports than anybody else. So that stymied them. And actually, the reason that their price point is now 70 plus dollars, I believe, is that when they did finally relent and bought all the Disney channels at market rate and that meant they had to raise their price from sort of apologize if I got that a little wrong.

And that, of course, is 59, 99.

For the first month, 79, 99 per month after that. Yeah.

So they're mad because they're going, shit. These guys are now offering kind of what we wanted to offer many years ago and they wouldn't sell it to us that way. They're now doing this. And by the way, they have a right in their own rooms to be angry. They're angry.

They're reading the room, not inaccurately.

They're reading the room, not inaccurately.

It doesn't give you legal standing.

And that's the question. What do you do about this? If this is the power that all of these media companies, two things, you.

Stand on the highest hill you can find and you yell racketeering. And two, you try to use all of your power to get the government to look into the deal and try to quash it from an anti competitive standpoint, those are the only two things you can do because otherwise Fubo is done.

I think you're right about the motivations. And again, I'm somewhat sympathetic, though I do not believe they have any legal standing here. But to be fair, they probably don't understand either. And they may be also doing discovery in a way, in this way. Bad pun for this.

They won't even get to discovery, this lawsuit.

Yeah, we might not get to discovery the topic because discovery is no longer pursuing merger talks with Paramount Global. Do we want to talk about that?

This is a great one. The reason I've been thinking about this a lot now I have to say this, so make sure we don't edit this out. I do work for CBS Sports. Okay, thank you. CBS Sports is part of Paramount. Thank you. There has been a lot of issues at Paramount, as with all these other companies, there being these huge mergers, Warner Brothers, Discovery, paramount with the Redstone family and Viacom. Guess what? Lots of debt. With lots of debt, the hope is that you have economies of scale where you combine departments and you fire a lot of people. They call it, whenever there's a merger, there is a concomitant firing, always mass layoffs, because otherwise why do it when you can have one CFO instead of two? Do you agree? So that's merger. The reason why two companies that both have large debt would enter into merger talks is they want to further consolidate and do further layoffs and have further sort of one point. But the problem with these big merger talks is who's in charge. So we're right back to governance. And the biggest reason these merger talks fall apart is who's going to be the person who's in charge?

Well, as you pointed out, you don't need but one CEO, and it means one CEO is out of a job.

Right. So there was, when I was at Morgan Stanley, when Morgan Stanley and Dean Witter merged, I don't know if you remember back then, Pablo, that could have been way early in your career. But Morgan Stanley, Dean Witter became a combined.

Much more interested in Dean Warmer.

I love Dean Warmer 0.0. Huge fight over what the company is going to be called and then who's going to run the whole thing. And it almost fell apart because of it. And there was a huge cultural divide between Dean Witter people and Morgan Stanley people. And when you think about Warner Brothers, Discovery and Paramount, how many more consolidations can you have before it becomes truly a monopoly market?

Yeah, I do think it's clear. I doubt in this case not only you're suggesting that, that it was over who's going to be the CEO, it would be David Zasloff or over what the company is going to be called. It's going to be called Max, probably.

At this rate.

I think this is more a fact of they looked at it, they looked at what consolidation they could do. They looked at the assets and what they could do, and they couldn't do enough. Right. There's not a path forward to buying these assets from CBS, Paramount, Showtime, whatever it is, and putting them together with Warner Discovery.

I think Warner Bros. Was still scarred from its last merger. Warner Bros.

Discovery, huge thing. 2019, right?

Yeah. Where they have not been able to actually make it work the way they thought.

Right. CBS, Viacom coming together to become Viacom CBS and then now rebranded Paramount.

So that's two separate deals that have happened, and neither of them, in theory, have worked the way they were supposed to work. But it's only been several years. And it seems like there's people getting nervous. And what Paramount is doing now, the global company, there's talks that they may try to merge with the NBC Universal streaming service, Peacock. So now instead of a full merger, now they're looking at, let's see if we can just do something with Peacock and with Paramount. But then, if I could just add, finally, we had a profitable streaming service. Max announced that they were profitable, the only one other than Netflix and their parent company stock went down 10% the next day because they weren't hitting their earnings. So the entire industry that we talk about on this show is a hot mess.

It is. And of course, there still has to be consolidation, so there are not going to be enough. It's a game of musical chairs, and there are not going to be enough chairs for all the companies exist right now to make significant profits. But I actually would regard it more likely that NBC Comcast takes some of the assets from CBS Showtime. But they are going to have to. I mean, they are sort of pecking order. They're pretty far down in the pecking order and they're further down than you'd want to be. You don't want to be the 9th? I don't know if they're 9th. I don't know if they're 6th or fifth or fourth or 9th, but they are not first, 2nd, 3rd, fourth or fifth in terms of the size of company, the value of the assets, Amazon.

Apple merger is that you can take number five and number eight, merge them and become number two. Right. You don't merge a five and an eight to become number seven or number six.

But my guess is that's what some smart people from Warner Bros. Discovery figured out is, oh, my gosh, we're going to merge here and we're not going to be whatever we are, we're going to be the same and maybe one better, but we're not going to be number two. We're still going to be. We're merging five and eight and we're.

Going to be five and have more debt. And then they walked away.

Yeah. So to go back to the Disney Fox Warner Brothers strategy here, in terms of that three headed dog guarding the gates of hell, that feels to the Fubo CEO like a Super League forming. But in reality, again, let's go back to Adam Silver, who's saying, I didn't know about this. What does this really feel like to you now? We've had a couple weeks to process it. What is this thing?

Look, I don't personally believe this is of dramatic concern to Adam Silver or Roger Goodell. They might have preferred to get a call earlier than they did, but so what? I don't think either one of them is losing much sleep because this doesn't. I don't see anything problematic in this for them. All it is, is the games they have licensed to ABC, ESPN and Fox are going to be on this service. But it's no different than being on FUBU TV or being on Comcast or being on anything else. It's just that they have the right to distribute those channels to anybody they want to. It's just another service. I don't think they're concerned. I think that's a made up media.

I'm really trying to bite my lip here. Should I. Do you want me to? I'm happy to do.

I don't bite your lip.

Well, I'm not going to get blood. I'll be fine.

You'd be.

No, John, I would think. Why do you think Adam Silver and Roger Goodell were unhappy? They weren't called. They were unhappy because who knows that they were unhappy? Well, can you tell us from your last meeting with Adam whether he was unhappy?

I've not talked to Adam lately, but.

I'm going to talk to Pablo now because you're not going to listen.

I haven't seen anything reported that says they're unhappy. I've seen speculation about and they've asked them, did you know about this before? And the answer was not, hell, yeah, hell no. And I'm mad. The answer was no, I didn't know about before.

So the commissioners would not ever come out with their name and do anything to impugn the actions of the hands that feed them. However, they would do it through leaks and they do it through underleans to make it out there that, hey, we wish we had known about this because we have some concerns. One of the concerns we have is that all of you are going to get together and collude against us, and we don't want that to happen. Adam Silver is the number one candidate for that level of concern because he's looking for new media rights deals. It's not MLB, it's not NFL. They are locked up for the next five, seven, eight years. Adam Silver is not. Is he concerned? I promise you, and I wish he'd come and do an episode with us so we could ask him. In all seriousness, do you have any concerns with your total meteor rights package with consolidation? Does consolidation worry you?

And were you talking specifically about the consolidation of these three companies that creating a server.

And in general.

I don't think right now there is a reason from this new entity, this three company beast. I don't think there's any reason for them to be concerned. There's nothing bad in this.

Sworn enemies are working together for the first time.

I think they're more likely to end up in their own conflict than end up in a conflict with the two leagues. Because the NFL rights and the NBA rights are too important to those companies to risk not getting them by doing something stupid. So the heads of those three companies could call each other up and have a private room for dinner if they wanted to collude. There is a really significant impediment to doing that, or even to sending lieutenants to do. Yeah, not going to jail. It is against the law. And my guess is that Adam and Roger both know it's against the law and so do Bob and David. And forgetting the third and Lachlan Murdoch, they all know this. You comedy always forget the no reason. If you really want to break the law, you can find a private room somewhere in which to do that. In my career, I never compared what my bid was going to be with anybody else. I don't believe anybody at the Walt Disney company ever even looked at somebody and said, wink, if your bid's over a billion dollars, how doth protest too much? Once I had David Hill ask me after we'd submitted our bids for the Olympics what our bid was, and he and I made a bet as to whose bid was lowest and I won.

Our bid was lowest, but that was after the just. I don't think there's anybody, any of the companies that have enough resources to.

Let him get away with this when his main line to you is always, do you know what? Something's worth $1 more than the other guy's willing to pay. I never had anyone study at ESPN what the worth of anything was. I would always pay $1 more than what anyone else.

Not a contradiction. Because you're negotiating with the league, they give you guidance as to what you need to bid and you bid it. You don't go. But wait, do you think I did that by going and finding out, by illegally finding out what somebody else bid and bidding $1 more?

John has grabbed David's elbow. David is tapping John. I will quote Dean Wermer, fat, drunk and stupid is no way to go through life, son. For anybody contemplating illegal activities, David and.

I may have many problems, but I will. Fat, drunk and stupid is not usually one of them. I've behaved stupidly and I have been drunk.

Same.

Right now.

I think it's time for all of us to end this. For all of our not frozen self interest. There it is. Thank you, guys.

Can we stipulate not drunk, just stupid? Maybe a little stupid. Thank you, Pablo.

Thank you.

Hey, folks, it's Mike Ryan. Now, you've had the distinct privilege of knowing me for close to 18 years, and you know that I've changed. A lot of my personal life has changed. I've changed as a professional. I am a parent now. My level of involvement in my favorite college football program has also changed. But one thing that hasn't changed for me is my favorite beer. You know, when it's real with me. I think you do anyways. And you know how much I love Miller light. I've loved it forever. Really. It's my favorite beer of all time. And it made all the great moments in my life all that much better. And when Miller Light came aboard on our show, I was super stoked about it because I believed in the product. Because every time I take a sip of Miller light, I look around and I think, yeah, this was the right call. Times change. People like me can change. But you can always enjoy the great taste of Miller light. Taste like Miller. Time to get Miller light delivered right to your door. Visit millerlight.com slash Dan. Or you can try to find it pretty much anywhere that sells beer.

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