Athletic Director U. from D1.ticker - Original content every Sunday evening designed to help you lead.
Athletic Director U. from D1.ticker
Athletic Director U. is a new, weekly series from D1.ticker designed to land in your inbox every Sunday evening. Articles will delve into pertinent topics from around the industry, providing unique perspective into many critical issues facing collegiate administrators today. Feedback is welcome anytime to
Virtually every week while curating and writing D1.ticker, I come across a piece of content so deep and rich I have trouble wrapping it up concisely in one single clip. Many times I think out loud, “People around the industry really need to read/watch/listen to this whole thing.” It’s really a bit ironic, right? D1.ticker was created to save you time (and therefore money) by building efficient clips of developments from around the industry so you don’t have to click through to read/watch/listen to more in order to understand the key news from the day prior. Efficiency is arguably D1.ticker’s most important value proposition. Nevertheless, there are most certainly important media entries that deserve and need further review in order to fully understand the key takeaways within.

In addition to Jason Belzer’s excellent lead off piece last Sunday with Georgia Tech Men’s Basketball Head Coach, Josh Pastner, and former Kent State Women’s Basketball Head Coach, Danielle O’Banion (link), another focus of the new ‘Athletic Director U.’ series will be the identification of important long form content and an effort to distill the content into a Cliff Notes-type entry for you to easily consume.

One development I’m incredibly curious about and one many of you also have your eye on, is the changing media landscape as it relates to TV rights for college athletic conferences and  leagues around the nation. There’s been more than a fair share of excellent analysis and commentary on this issue from Wall Street to Silicon Valley to Hollywood and many points in between, the most interesting of which consistently appear in D1.ticker. The sub-topic I find most compelling at the moment is who will handle the guts of an OTT play as it seems inevitable that someone soon, maybe even the Big Ten in the second part of its new league deal, or the Big 12 as part of determining the right overall media play, will push more of its inventory through a dedicated OTT effort. The place to start on this question seems to be with Major League Baseball Advanced Media President Bob Bowman and specifically a February interview at recode’s Code/Media conference in Dana Point. recode’s Walt Mossberg led the interview (link), below is what you need to know.

(1:10) - Bowman quickly explains the history of MLBAM: Started in 2000, will do $1.2B to $1.3B in revenue this year, “high margin business, high growth business,” “people love baseball, we’re lucky. It’s like being born to rich parents, we got born with great content.”

(1:50) - Mossberg asks about the decline of baseball in younger generations. Bowman believes there are inaccuracies in the marketplace on the narrative of the sport. MLB’s app (run by MLBAM) is opened 8M times a day with an average user age of 31. “Where we don’t skew young is Nielsen and guess what? No one skews young on Nielsen…For all of us in this space, we really have to understand who is watching it and where because all media is skewing a lot younger than Nielsen says because of who is watching it and where they’re watching it. Because of time shifting and device shifting.”

(3:15) - Here’s where the good stuff starts for those of us in college athletics as Mossberg presses on everything else MLBAM is doing: HBO Now streaming & app, rights to NHL (launched this season), PGA, March Madness (5-6 years w/ Turner, then CBS), Super Bowl (Bowman: “We don’t talk about that.”). MLB owners still wholly own MLBAM (though you can read more on ‘BAM Tech’ spin-out developments in ‘Additional Content’ below).

(5:15) - Next steps for MLBAM. Bowman: “We’re going to take the technology business, the third party business, and separate it from the baseball business. It deserves to be separated, it should be separately focused on. Probably separately capitalized. The risk profile may be different in that business.” Possibilities include strategic investors and/or financial investors (again, more on that below). “We can probably grow this better. We probably could use smarter people around the table and people more experienced than we…Money is one thing, brains are another, experience is a third and we could use all three.”

(7:25) - Mossberg mentions an interview with ESPN President John Skipper the night before. Asks how to be OTT & a successful TV channel at the same time. Bowman: “Skipper is phenomenal. I’m not nearly as negative on ESPN. They are burdened by their success…They can go to 4B screens 24/7 (with all the rights they have). It’s hard to imagine anyone is betting against ESPN.” 

(8:40) - Mossberg presses on how Bowman & MLBAM will figure out the same issues facing ESPN. “You don’t have to figure it out, you just go where the people are…If consumers are on their mobile device and spending 90% of their time on mobile, it’s not hard to figure out where you need to go.”

(9:45) - Here it is. Bowman says he wants to be bidding for rights in the next five years. “Are we going to be ESPN? No. But, is there a role for over the top, virtual mpvd (multi-platform video on demand) worldwide sports programming? I think there is and we’d like to at least compete in that business.”

(11:09) - Lots of talk on Bam Tech’s non-sports programming plans, including some reluctance on behalf of content creators to partner on a risk/reward framework. But, "One of the reasons we're raising money is so we can take that risk."

(12:44) - More good stuff here as Mossberg asks about the potential of Netflix, Apple and Google getting in the sports rights OTT game. Bowman does not think it will happen anytime soon because infrastructure simply doesn't support regularly doing the necessary number of concurrent viewers (he mentions 10M). But, 5G broadband is coming, therefore so is the potential to do much larger viewership numbers. Highest volume of concurrents to date for MLBAM has been 1M. Notes the three mentioned could certainly afford the rights, "But is it worth it. Don't know. Is that a business model or a stunt? Don't know."

(16:06) - Lots of talk about Eddie Cue (who is a huge Duke MBB fan) and Apple's plans for OTT. "When you get in the content delivery business, it's a different game and everyone assumes they'll get in and be the best. I'm not so sure about either." Bowman continues on feelings that Apple can't favor any sport over another or people will stop using their phones.

The rest of the interview (~5 minutes) covers some Snapchat, the need to be on virtually any platform with some type of content and some questions from the audience that don't quite pertain to our review here.
Additional Content

If you want to read/learn even more about MLBAM, BAM Tech and the niche, here are some suggested articles since the February interview, as well as others from days gone by for greater context.

(May 30, 2016) SportsBusiness Journal’s Fisher indicates a funding deal for BAM Tech is in the works with a possible announcement at the August owners meetings. - link

(May 25, 2016) Fitch Ratings affirmed an ‘A’ rating for MLB’s $1.05B senior secured credit facility and around $955M in term notes. TV contracts and “the diversity of MLB revenues from MLB Advanced Media (MLBAM) and revenue sharing has bolstered individual team financial health…Revenue derived from MLBAM provides additional cash flow that marginally reduces leverage on an individual franchise basis. MLB's leverage is comparable with the NFL's (League-wide, Football Funding and Football Trust rated 'A'/Outlook Stable) leverage of approximately 1.74x and lower than the NBA's (Hardwood Funding, LLC, 'A-'/Outlook Stable).” In a rough nutshell, MLBAM has been a huge reason MLB is in very solid financial condition. Again, that’s MLBAM, which includes the built-in content of baseball, not BAM Tech, which is the spin-out, but it’s still a notable piece of the MLB narrative. - link

(May 23, 2016) It’s very important to note MLBAM is not the only white label solution in the sports industry. NBC announced at the end of May plans to launch ‘Playmaker Media’ to compete with the likes of BAM and others. NBC/Playmaker has been streaming sporting events since 2006 and the upcoming Summer Olympics will be a huge first client. NBC Sports Group General Manager of Digital Media Cordella: “The growing demand for live streaming support in the marketplace combined with our experience and expertise make this the perfect time to launch Playmaker.” - link

(April 15, 2016) recode reports Disney is negotiating to acquire an equity portion of BAM Tech. recode’s Kafka: “An ownership stake in a Web video operation could help the company launch and operate new digital services aimed at replacing some of the pay TV revenue that’s at risk from cord-cutters and people who never sign up for pay TV. Industry sources speculate that a Disney investment in BAM Tech would include an option to eventually buy a controlling stake in the company.” The valuation of $3B is thrown out as a possibility for BAM Tech. - link

(August 14, 2015) Turner paid $200M for a stake in iStreamPlanet, a competitor of BAM’s which has previously worked with Viacom, AMC Networks, Fox & NBC Sports. Turner Chief Executive Martin: “This partnership will expand our capabilities to offer live events within and outside of the traditional ecosystem and, by bringing iStreamPlanet’s innovative technology in-house, allow us to cultivate future business opportunities on digital platforms.” - link

(July 13, 2015) Bowman shot down rumors that BAM Tech would be taken public right off the bat (pun intended), “There probably won’t be an IPO. We’re going to carve out our technology business, and we're talking to about dozens of strategic investors.” Interestingly, the time line for investment moves nearly a year ago was a rough date of the 2015 World Series that has since come and gone. This piece from CNBC also mentions the WWE Network as a partner of MLBAM. Also from Bowman: “Baseball's been growing 15 to 20 percent a year, and the outside business has been growing 20 to 30 percent.” - link

(March 19, 2012) If you really want to dig-in on the operational and technological guts of MLBAM, this 2012 piece from Fast Company is when I can remember first saying, “Oh my.” Much of the tech ability is still eye-opening and now MLBAM has had four more years to test, iterate and implement cutting edge stuff. - link
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