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REPUBLICA PRESS
Your Business & Political News Source

National Basketball Assn

Why Big Tech Is Making a Big Play for Live Sports

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LOS ANGELES — More than a decade after Apple disrupted the music industry and Amazon upended retail, the tech heavyweights have set their sights on a new arena ripe for change: live sports.

Emboldened by their deep pockets and eager to boost viewership of their streaming-subscription services, Apple and Amazon have thrust themselves into negotiations for media rights held by the National Football League, Major League Baseball, Formula One racing and college conferences.

They are competing to replace DirecTV for the rights to N.F.L. Sunday Ticket, a package the league wants to sell for more than $2.5 billion annually, about $1 billion more than it currently costs, according to five people familiar with the process. Eager not to miss out, Google has also offered a bid from YouTube for the rights beginning in 2023, two people familiar with the offer said.

reported by the SportsBusiness Journal.

Fans will still be able to access all the games on Sunday, regardless of who wins the rights, but they will probably pay a premium to add the service to their Apple, Amazon, ESPN+ or YouTube service, some of the dozen people said. It is not yet clear if that premium would be more or less than the $294 that DirecTV charges for a year, they added.

Apple and Amazon are trying to position themselves for a future without cable. Since 2015, traditional pay television has lost a quarter of its subscribers — about 25 million homes — as people traded cable packages for apps like Netflix and Hulu, according to MoffettNathanson, an investment firm that tracks the industry.

But the price of live sports rights is only projected to increase. The biggest media companies, including Disney, Comcast, Paramount and Fox, are expected to spend a combined $24.2 billion for rights in 2024, according to data from MoffettNathanson, nearly double what they spent a decade earlier.

The fragmenting of a decades-old distribution model has created an opportunity for Apple and Amazon. The companies want to expand deeper into media by selling subscriptions to Apple TV+ and Amazon Prime. Besides containing their own exclusive shows and sports, those services double as portals selling additional streaming offerings like Starz and HBO Max, which pay Apple and Amazon 15 percent or more of each subscription sold.

Amazon generates more than $3 billion annually from third-party subscription sales, according to estimates by the investment bank BMO Capital Markets. To make the business model work, Apple and Amazon must attract more viewers, and sports are the most powerful draw in media. The companies may be willing to lose money on Sunday Ticket to expose new customers to other parts of their business, the same calculation that DirecTV historically made.

SportsBusiness Journal.

For all their disruptive potential, though, Apple and Amazon have yet to win a marquee rights package in the United States. That is reminiscent of 20 years ago, when sports leagues feared they would lose viewers by shifting games from network television to cable. But the change gradually became standard.

Traditional television companies are trying to stave off Apple and Amazon by starting their own streaming-subscription services. Last year Comcast, which owns NBCUniversal, shuttered NBC Sports Network to bolster its USA channel and to encourage people to pay for Peacock, where it exclusively aired some English Premier League soccer games. Similarly, ESPN struck a deal with the National Hockey League to televise some games on its ESPN+ service, and CBS has shown marquee soccer games on Paramount+.

But those services have a fraction of the more than 100 million cable subscribers the media companies once reached. As a result, the bulk of sports programming goes on traditional pay-TV channels where they can guarantee leagues and advertisers larger audiences.

The National Basketball Association will be the first major test of the new competitive landscape. Its agreements with ESPN and Turner run through the 2024-25 season. Most sports and media executives predict that the league will stick with traditional broadcasters for most of its games, while carving out some small portion of rights for a tech company.

“It hedges them for the future and exposes the product to new audiences,” said George Pyne, founder of the sports private equity firm, Bruin Capital, and the former chief operating officer of NASCAR. “They can still have a long-term relationship with network partners but dip their toe in with new media.”

Until then, the best opportunities for Apple and Amazon may be overseas — where Amazon has been active for years — because European soccer leagues resell their rights every two to three years. Amazon recently scooped up rights to Europe’s top tournament, the UEFA Champions League, in Britain, Germany and Italy. It also has rights to France’s Ligue 1, which it offers to Prime Video subscribers for annual fee of about $90, and the English Premier League.

Media companies will be pressured to expand geographically to compete, said Daniel Cohen, who leads global media rights consulting for Octagon, a sports agency. Television broadcasters could also team up to pool their financial firepower, or buy each other outright, to compete with tech giants willing to pay billions for rights like N.F.L. Sunday Ticket.

“It comes down to a Silicon Valley ego thing,” Mr. Cohen said of the high-dollar N.F.L. deal. “I don’t see a road to profitability. I see a road to victory.”

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John Cena Apologizes to China for Calling Taiwan a Country

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John Cena, the professional wrestler and a star of “F9,” the latest installment in the “Fast and Furious” franchise, apologized to fans in China on Tuesday after he referred to Taiwan as a country while giving a promotional interview.

Joining a long list of celebrities and companies that have profusely apologized after taking an errant step through China’s political minefields, Mr. Cena posted a video apology in Mandarin on Weibo, a Chinese social network.

Beijing considers Taiwan, a self-ruled democratic island, to be a breakaway province and claims it as part of China. Referring to it as a country is often an offensive assertion in China, where matters of sovereignty and territory are passionate issues driven by a strong sense of nationalism.

Mr. Cena apologized for a statement he made in an interview with the Taiwanese broadcaster TVBS. In it, he told the reporter in Mandarin, “Taiwan is the first country that can watch” the film.

Xinjiang, pro-democracy protests in Hong Kong or the status of Taiwan and Tibet.

a fierce backlash when Daryl Morey, then the general manager of the Houston Rockets, tweeted in support of the Hong Kong protests in 2019. (LeBron James, one of basketball’s biggest stars, offered a China-friendly response, saying Mr. Morey “wasn’t educated on the situation at hand” by supporting the protesters.)

Movie studios often preemptively ensure their content won’t run afoul of Chinese censors, a practice once mocked by “South Park.”

But quite often, the political problems arise in cases where a company appeared to have no idea it was accidentally crossing a line.

That list would include Gap, which in 2018 created a T-shirt that omitted Taiwan, parts of Tibet and islands in the South China Sea from a map of China on the shirt’s design. The luxury brands Versace, Givenchy and Coach said in 2019 they all made mistakes when they produced T-shirts that identified Hong Kong and Macau as countries.

“Versace reiterates that we love China deeply, and resolutely respect China’s territory and national sovereignty,” the company said in a statement at the time.

China ordered 36 airlines to remove references to Taiwan, Macau and Hong Kong as separate countries on their websites in 2018, a step the Trump administration dismissed as “Orwellian nonsense.”

That year, Marriott clarified on its Weibo account that it “will absolutely not support any separatist organization that will undermine China’s sovereignty and territorial integrity” after a customer survey listed the territories as separate countries.

Mercedes-Benz Instagram account quoted the Dalai Lama, whom many in China view as a dangerous separatist advocating Tibetan independence.

The release of “F9” was delayed for a year during the coronavirus pandemic. It drew an estimated $162 million in tickets in eight international markets, including China and South Korea, over the weekend. As the newest film in a hugely successful series, “F9” is seen by Hollywood as the kind of blockbuster needed to draw people back to theaters.

Amy Chang Chien contributed reporting from Taipei, and Claire Fu from Beijing.

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How ‘Put That on Top Shot!’ Became a New N.B.A. Mantra

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Late in the third quarter of a March game between the Utah Jazz and the New Orleans Pelicans, Rudy Gobert, the Jazz’s 7-foot-1 center, caught a pass and slammed down a dunk as the Pelicans’ Josh Hart leapt to contest the shot.

As the two National Basketball Association players jogged back down the court, television viewers could see Mr. Gobert bark out something to Mr. Hart.

Trash talk? Sort of.

“As I was running back on defense, I told him that would be a nice Top Shot Moment right there,” Mr. Gobert said in an interview. Mr. Hart said he had responded with a four-letter word that was not suitable to be printed.

LeBron James reverse windmill dunk Top Shot, for example, sold for $210,000 in March.

Nearly four dozen N.B.A. players have created Top Shot accounts, from All-Stars like Mr. Gobert to journeymen and rookies. Some have collected just a handful of clips, while others own dozens or hundreds.

The trend is an engaging — if expensive — way for fans and players to celebrate exhilarating basketball plays. It’s also a moneymaker for the N.B.A., which lost about $1.5 billion in revenue last season between the pandemic’s emptying arenas and China’s pausing the broadcasting of basketball games over a geopolitical dispute.

The N.B.A. has long been one of the most innovative leagues in finding ways to make money. It finished its 2019-20 season in a Disney World bubble and squeezed in a condensed All-Star Weekend in March to recoup some lost revenue. But with arenas only now slowly filling, Adam Silver, the N.B.A. commissioner, recently told Time magazine that the league would still miss out on 30 percent to 35 percent of revenue this season.

dozens of N.B.A. players blew their millions on risky investments, but the league has pushed in recent years for its young stars to educate themselves financially.

Top Shot is risky, too, because the price of the highlights could plummet at any time if people decide they are no longer interested. One warning sign: Top Shot’s sales last month, $82 million, were down from $208 million in March and $224 million in February, according to CryptoSlam, an NFT tracker. Dapper said that the marketplace was still growing, and that April’s numbers were more normal after a brief NFT boom.

“It’s a marketplace that obviously is purely built on demand and scarcity,” said Darren Heitner, a lawyer and a sports law professor at the University of Florida. Between shifting interests and the ebbing of the pandemic, he said, “there’s a lot of reasons you could see this marketplace drying up and find individuals left holding the bag.”

valued at $2.6 billion in a recent funding round. In April, The Information reported that Dapper was raising another round that would value it at more than $7.5 billion.

streams live on YouTube while opening Top Shot packs.

Of course, it’s still the N.B.A., and the fraternity of Top Shot aficionados engages in plenty of antics and inside jokes.

In the locker room and on team plane rides, Mr. Ross and teammates Cole Anthony and Michael Carter-Williams answer questions from curious coaches and debate which vintage basketball play would make the best Top Shot.

“We’re making jokes, like, in-game,” Mr. Ross said. In a game against the Washington Wizards, for instance, Mr. Ross had an impressive dunk, and Mr. Carter-Williams told him as they ran back down the court that he hoped it would become a Top Shot.

In San Francisco, the Golden State Warriors guard Damion Lee — also a Dapper investor — is trying to start a new tradition: having players swap Moments instead of jerseys after games.

The king of Top Shot, though, is a Sacramento King: the rookie guard Tyrese Haliburton.

Bored one day in February, Mr. Haliburton checked Top Shot and saw the value of a Moment featuring him had grown by $600. He posted about it on Twitter and immediately saw another spike, piquing his interest.

“From there on, I was full go with Top Shot,” said Mr. Haliburton, who owns 163 Moments and has spent months exhorting other players to get involved.

During one postgame interview, he even urged Sacramento journalists to pool their money to buy a $10,000 highlight of his 6-foot-4 teammate Buddy Hield dunking over 7-foot Mitchell Robinson of the New York Knicks.

“There’s only 50 in existence, and you will never see Buddy do that again,” he said. They laughed at the advice; Mr. Haliburton, who makes $3.8 million this season, clearly did not know how little journalists earn, they said.

The next day, the Hield Moment surged to $50,000 in value.

Mr. Haliburton, who also invested in Dapper recently, has persuaded at least four other Kings to join Top Shot, including Harrison Barnes, who was “hooked.”

Mr. Barnes, the secretary-treasurer of the players association, is another veteran with a reputation for financial smarts. He owns 242 Top Shot Moments, the most of any player.

Mr. Haliburton thinks the Top Shot bets will pay off.

“I have a real belief that this is the future of our world,” he said. “I’m just going to keep collecting.”

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China’s Forced-Labor Backlash Threatens to Put N.B.A. in Unwanted Spotlight

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U.S.-China tensions, human rights and business are once again meeting uncomfortably on the basketball court.

In China, local brands are prospering from a consumer backlash against Nike, H&M and other foreign brands over their refusal to use Chinese cotton made by forced labor. Chinese brands have publicly embraced the cotton from the Xinjiang region, leading to big sales to patriotic shoppers and praise from the Beijing-controlled media.

In the United States, two of those same Chinese brands, Li-Ning and Anta, adorn the feet of N.B.A. players — and those players are being rewarded handsomely for it. Two players reached endorsement deals with Anta in February. Another signed on this week. Klay Thompson of the Golden State Warriors already had a shoe deal with Anta that has been widely reported to be valued at up to $80 million.

Dwyane Wade, the three-time N.B.A. champion and retired Miami Heat player, has a clothing line with Li-Ning that is so successful he has recruited young players for the brand.

online, however.) Still, their full-throated support of Xinjiang could have reputational consequences for the American athletes.

once said he wanted to be the Michael Jordan of Anta. His teammate James Wiseman, as well as Alex Caruso of the Los Angeles Lakers, signed with Anta earlier this year, according to the sportswear brand’s social media account. Precious Achiuwa of the Heat announced this week that he was joining Anta.

Requests for comment from Mr. Thompson and other N.B.A. players also went unanswered.

Outside China, Xinjiang has become synonymous with repression. Reports suggest as many as one million Uyghurs and other largely Muslim ethnic minorities have been held in detention camps. In March, Secretary of State Antony J. Blinken accused China of continuing to “commit genocide and crimes against humanity” in the far northwestern region.

voiced his support for the Hong Kong protests on Twitter in 2019, Li-Ning and Shanghai Pudong Development Bank Credit Card Center paused their partnerships with the team. The Chinese Basketball Association, whose president is the former Rockets player Yao Ming, also suspended its cooperation with the Rockets.

quickly denied. But the incident left a scar on the N.B.A.’s reputation for supporting free speech and severely limited its access to the Chinese market.

China Central Television, the state-run television network, stopped broadcasting N.B.A. games after Mr. Morey’s message on Twitter. Late last year, it briefly resumed coverage for Games 5 and 6 of the N.B.A. finals. A week later, Mr. Morey stepped down as general manager.

In a radio interview this week, Mr. Silver said that CCTV had stopped airing N.B.A. games again, but that fans could stream them through Tencent, the Chinese internet conglomerate. He said that the N.B.A.’s partnership with China was “complicated,” but that “doesn’t mean we don’t speak up about what we see are, you know, things in China that are inconsistent with our values.”

A spokesman for the league declined to comment for this article.

Money and a large China fan base are at stake for players like Mr. Thompson and the dozens of other American athletes who have been heavily promoted by Anta and Li-Ning. Mr. Thompson has had a partnership with Anta since 2014 that has given him a popular shoe line and sponsored tours in China.

More recent deals between the companies and N.B.A. players could face questions in coming weeks as tensions between the United States and China escalate. Jimmy Butler, a five-time all-star who plays for the Heat, and the Toronto Raptors guard Fred VanVleet signed on with Li-Ning in November. Mr. Wade, the retired Heat player, helped CJ McCollum and D’Angelo Russell, two star guards, secure deals with Li-Ning through his sportswear line.

“My decision 7 years ago to sign with Li-Ning was to show the next generation that it’s not just one way of doing things,” Mr. Wade wrote on Twitter when he announced Mr. Russell’s contract in November 2019. “I had a chance to build a Global platform that gives future athletes a canvas to create and be expressive.”

Sopan Deb contributed reporting from New York, and Cao Li from Hong Kong.

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Rooting for Your Home Team in Person? Here’s What You Need to Know.

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In California, a color-coded system determined by local infection rates determines restrictions. Until recently, Los Angeles County was in the strictest purple tier, which would have restricted attendance to 100 fans at LA Galaxy and LAFC soccer games and Dodgers baseball games.

But the county has since moved to the red tier, which allows 20 percent capacity at sports venues. So when the Dodgers play their home opener on April 9, as many as 11,200 fans will be on hand at Dodger Stadium. Orange County also moved to red, which will enable 9,000 fans to turn out at Angel Stadium. So did San Diego County, giving the OK for 10,000 Padres fans at Petco Park.

And so it goes in a checkerboard manner across the country. The Colorado Rockies can fill their ballpark to just over 42 percent of capacity, or 21,000 fans who must wear proper masks. In Missouri, the St. Louis Cardinals can fill up to 32 percent of their stadium, and in Pennsylvania, the Philadelphia Phillies and Pittsburgh Pirates can fill 20 percent. But in Michigan, current regulations mandate that the Detroit Tigers admit only 1,000 fans, though the team says that figure could be increased.

In Oregon, state officials have not yet cleared the Portland Timbers men’s and Portland Thorns women’s soccer teams to allow fans into Providence Park. That’s also true for 13 N.B.A. basketball teams, though that number could shrink in the coming days.

Indeed, the N.B.A. has perhaps the most uniform leaguewide policy regarding Covid protocols. In the 17 arenas that currently admit fans, none are allowed to sit courtside and must be at least 15 feet behind team benches. Fans with seats within 30 feet of the court must present a negative Covid-19 test within 48 hours of game time or pass a rapid test on-site, and they are prohibited from eating.

The N.H.L. has also made rink-side adjustments after a few early-season outbreaks among players and officials in closed-door games. The plexiglass panels were removed from behind the team benches and the penalty boxes to promote air circulation. And at 18 of the 24 U.S. rinks that now or will soon allow attendance, fans are prohibited from sitting behind the benches and penalty boxes or along the glass.

Then there’s the Lone Star state, where Gov. Greg Abbott recently removed all Covid-19 restrictions.

The Texas Rangers took that as their cue to allow full capacity, all 40,518 seats, for the first three games at their new retractable-roof baseball stadium in Arlington — the first team in North America to do so. There will be no protocols beyond a mask-wearing rule at those two exhibition games on March 29 and 30 and the season opener on April 5. Subsequent games will be at less-than-full but still undetermined capacity.

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