NCAA settles: Big payday for college athletes
This week on Yahoo Finance Sports Report, host Joe Pompliano takes a look at some of this week's biggest headlines in the sports business world that you and your portfolio need to know.
Plus, Sportico Legal Analyst and Senior Sports Legal Reporter Michael McCann stops by the show to break down everything you need to know about the House vs. NCAA settlement.
Yahoo Finance Sports Report with Joe Pompliano, a vodcast brought to you by Yahoo Finance and Yahoo Sports, looks beyond the latest sports business headlines and analyzes all the need-to-know news—the teams, trades, and billion-dollar deals—so you and your portfolio will win BIG.
Yahoo Finance Sports Report is developed and produced by Lauren Pokedoff.
Welcome to Yahoo Finance Sports Report, a unique look at the business of sports brought to you by Yahoo Finance and Yahoo Sports. I'm your host, Joe Pompeiano, and I'm here to coach you through the financial game. Today, we've got Sportico legal analyst and senior sports legal reporter Michael McCann joining us to break down the House NCAA settlement and so much more. Let's huddle up and get right into it.We are kicking off this week with Pop's Playbook. Why take a look at some of the biggest headlines in sports that you and your portfolio need to know. First up, Warner Brothers Discovery announced earlier this week that it will split into two separate public companies by 2026. 1 company will be a streaming and studios business that will house WBD's film and TV properties and its streaming service HBO Max, and the other company.will be a global networks brand that will include TNT Sports, Bleacher Report, and multiple other networks. Now, this book will impact the distribution of WBD sports rights in the US as TNT Sports major events are often available to stream on HBO Max. In a call with Wall Street analysts on Monday, WBD CFO said, quote, The US sports rights will reside at global networks, and itManagement team will determine the streaming and digital rights over time, end quote. But WWE's statement still leaves a few questions. Will TNT sports events continue streaming on HBO Max once WBD splits, or will the new global networks company look to sell the streaming rights for TNT sports events to a different partner? We'll see how the details shake out when WBD completes its split next year.Next up, the 125th US Open takes place this weekend at Oakmont Country Club outside of Pittsburgh, Pennsylvania, and will have significant economic implications. Founded in 1903, Oakmont Country Club is one of the most historic venues in golf and will host the US Open for a record 10.This weekend. However, Oakmont is also one of the most exclusive clubs in the country, with a reported $200,000 initiation fee and $10,000 annual dues for its members. Big money will also be on the line for the 156 golfers competing at this year's US Open. The prize pool for the 2024 US Open at Pinehurst number 2 was worth $21.5 million with champion Bryson DeShambe earning $4.3 million for his second major win.And the event will be a major economic driver for the Pittsburgh area. 200,000 people are expected to attend the US Open at Oakmont, and the United States Golf Association estimates that the event will have a $200 million economic impact on the local economy through direct and indirect spending. To finish out, Wrexham AFC, the Welsh soccer club owned by actors Rob McElaney and Ryan Reynolds, is looking to sell a minority stake in the team at a $475 million.valuation, according to Bloomberg. Wrexham, which was recently promoted to the EFL championship, is reportedly seeking to raise funds so it can upgrade its roster and be a real competitor in its new league, which sits just one tier below the top flight English Premier League. Bloomberg also noted that Wrexham seeks additional capital to fund the construction of a new 7000 seat stand, which will increase the capacity of its home stadium to over 18,000 seats.Now, talks to sell a minority stake in the club are reportedly still in the early stages, and Wrexham hasn't yet found a new investor. But if the club can sell a stake at a $475 million valuation, the sale would represent a 19,000% increase in value from the $2.5 million that McElaney and Reynolds paid for Wrexham in 2021. I'll also have an update on another sports investment from Ryan Reynolds here in a few moments.This week for the deeper dive, where I give you a play by play analysis of news in the sports world and its significance to your bottom line, we're talking about the rise of Sail GP. Now, last weekend I was in New York City watching 12 50-foot catamarans race each other in front of the Statue of Liberty for Sail GP, the fastest growing sports league you've never heard of. Sail GP was founded by billionaire Oracle co-founder Larry Ellison, and America's.Cup legend Sir Russell Coots in 2018 to bring sailing out of the yacht club and into the mainstream. And even though the league is in just its fifth season, Sail GP has already built a thriving business model. Now think of Sail GP as the Formula One of sailing. There are 12 nation-based teams that compete in 13 Grand Prix events around the world, featuring several 15 minute sprint style races each weekend. TheseTeams compete for millions of dollars in prize money, with the season-long champion taking home a $2 million prize alone. However, unlike Formula One, where teams with the most resources regularly win races by building the fastest courses, every sail GB team uses the same 50-foot catamaran. These sailboats reach top speeds of 60 MPH and are powered by 78-foot wing sails, turning each race into an even competition.Sal GP is also one of the most innovative TV products in sports, with augmented reality overlays that track the speed and distance of each boat, and drones and chase boats supplying incredible footage with 4K stabilized cameras. The league is broadcast in over 200 countries and territories worldwide, has a broadcast agreement with CBS Sports in the US, and drew 1.78 million viewers for last year's race in Spain on CBS. Now, while Sal GP's TV and in-person products are outstanding, its business.It is even more fascinating. In just 7 years, CellGB has expanded from 6 teams completely owned by the league to 12 teams and has gone from 5 races to 13 races today. 10 of the league's 12 teams are now privately owned, with teams selling for $50 million or more to investor groups that include celebrity owners like soccer superstar Kean Mbappe, actress Anne Hathaway, and entrepreneur Gary Vaynerchuk. And just last week, actors Hugh Jackman and Ryan Reynolds became co-owners of the Australian LGB team.Additionally, Sale GP is expected to generate more than $100 million in revenue for 2025 through a diverse set of revenue streams. The league commands six-figure host fees from cities to host Sale GP events, with Auckland, New Zealand paying over $1 million to host the Grand Prix in January of this past year. And Sale GP.Receives millions each year from sponsors, including high-end luxury brands like Rolex, Emirates, and Accora Hotels. Now, Sale GP still has a long way to go if it wants to match Formula One's global appeal and commercial success, but don't count them out and keep an eye on their growth in the coming years because this once niche sport might just be the next big thing.We've made it to the one on one, a conversation where I get to break down news and sports with the key player in the industry. This week, we're talking to Sportico's senior sports legal reporter, Michael McCann, about the recent NCAA versus House settlement, which will pave the way for universities and colleges to directly pay their student athletes starting this year. Michael, thank you so much for joining the show today. I want to start right there. I mean, there's plenty that we could talk about with the settlement, but if you could just do a quick explainer for people who may not know exactly what happened.
Yeah, so last Friday, Judge Wilkin, the judge in the case, approved the settlement. The settlement is a game changer. It will have a couple big pieces to it. One is that athletes who played over the last eight years, Division One athletes will be paid over 10 years, about $2.8 billion. Now, most of that money is gonna go to football, it's not equally distributed, but it basically compensates athletes for NIL deals they could have gotten money for broadcast, video games that were never published.So there's a remedy portion to the settlement in terms of damages. That's not as controversial as the other piece. The other piece that's really gonna change college sports noticeably will be the injunctive relief, and specifically,Colleges going forward can opt into a system where they can share revenue with athletes. This is totally new, right? All the years of amateurism, that's gone. Colleges and those in the power conferences will do it, others probably will not, but they can pay players a share of revenue up to what amounts to $20.5 million total. Now, schools that give most of that money to men could run afoul of Title IX, wouldn't surprise me to see.Title IX litigation. The other piece to this is that there are no more limits on scholarships, so every athlete could conceivably get a full ride, which is great for the athletes, and there are now a roster limits, so the roster sizes in some cases will be a little bit smaller. College football teams are traditionally about 120, now they're going to be 105, so some walk on athletes are gonna lose the spot that they would have had.The other piece is NIL review. So deals that are in excess of $600 will be subject to neutral review. NILO will be a new service that will basically try to figure out if the deals are in fact reflecting fair market value. If not, the athlete can dispute that in arbitration.So there's a lot going on. If you're a college athlete, here's the thing, you now can get NIL deals plus a full ride plus a share of revenue. So, so for this is why we're seeing athletes now sue to stay in school, right? Traditionally people want to leave school and go to turn pro. Now people want to stick around.
Yeah, so Michael, my first question off of that, and I have plenty, is how do collectives fit into this, right? Because I think people over the last number of years have heard a lot about collectives, and the traditional college football fan especially probably views collectives as this organization that is essentially funneling money from boosters to athletes to.For their school. Now some of these collectives are a little bit more legitimate where they're actually sourcing and sort of acting as an agency, but now that the school can pay you directly and those collective kind of like boosters deals are taken out of it because they have to be legitimate NIL deals, where does that leave the collective industry today?
Yeah, you hit it, Joe. So the work that collectives were doing is now essentially shifting to the schools and athletic departments. Some of these collectives will be folded into athletic departments. Some of the people might be brought into the athletic departments, we'll we'll have to see on that. So the collectives now, as you say, could still do NIL deals, but they'll be subject to this review process. They can't be paid for play, so that's gone.Uh, now what they could do is marketing, they could do, uh, perhaps brand development. I mean, there are a lot of folks with in collectives that are really talented at business dealings, they may be able to provide some assistance, but their role will probably shrink being honest about it. Now, there may be some collectives that still do what you said, that they still try to funnel money in, and, you know, this will, this will be a good test of how the enforcement process works.Because we could certainly see a scenario where NIL collectors, even if they're not operating as a collective, they're just operating more in the traditional what we grew up with sort of money going to athletes uh under the table. I, I don't know if that's gonna happen, but we'll have to see.
So how are schools actually gonna be paying this money, right? Where is it gonna be coming from? Because if you think about the big conferences, the SEC, Big 10, whatever, ACC, those schools can afford it based on the money that they're getting from the conferences every year from media rights, but there's a bunch of smaller conferences sort of on the longer tail, that maybe can't afford $20.5 million especially just for a football team. How are schools thinking about funding this and how many schools do you think will actually reach that limit?
Yeah, I, I think many will opt in but not go to 20.5 million, and Joe, you're hitting at a real set of problems for colleges right now, cause it's not just this, it's not just coming up with 20.5 million or whatever fraction of that. It's also the fact thatThe population pool is going down for colleges over the next several years, there's the enrollment cliff hitting universities where there will be fewer US aged kids that will be applying to college, so there's going to be more competition for students, meaning more uh scholarships and other ways of trying to entice students to go. And then there's the fact that grants are being cut off, right? We know the federal government uh disposition is now to be more scrutinizing of grants or just cutting them off.Uh, also, if it's a more difficult entry point for international students who tend to be full tuition payers, they're having more difficulty now under the current administration. So there's a lot of pressure points hitting schools. What are they gonna do to come up with this money? They're gonna, I, I, you know, we'll see what it would be raising student activity fees. I know that's unpopular, but colleges sometimes do that as a way of making money. They may have to,
what does that exactly mean? What, what, what do you mean by student activity fee?
It means if you and I are classmates at a college and we're paying $38,000 now we get a fee tacked on that used to be $600 and is now $1200 and our parents complained to us saying, why are we spending all this money, you better be studying, right? So it's that fee, it's that, it's that fee that goes on the student, that's one possibility and restructuring.I mean, this is gonna happen regardless of 20.5 million. We're gonna see with lower enrollment, colleges, I think, go into serious restructuring where they need to maybe cut some departments, maybe even cut schools. I, we don't want to see that happen, but there there are certain realities kicking in.
Yeah, it's sort of a difficult situation because if you look at the schools that are successful, like really successful in football, even schools that just have a lot of attention around them, like in Colorado or in Alabama, of course, or schools like that, the football program, uh, drives a lot of money for the school from enrollment and all that kind of thing, especially with out of state students that are charged more money. All right, everyone, we've got to take a quick break, but we'll be back with more of my conversation with Michael McCann after this.Welcome back to Yahoo Finance Sports Report. I'm your host Joe Pompriano. I'm here with Sportico legal analysts and senior sports legal reporter, Michael McCann. I'm curious how you think about new revenue opportunities, right? Like, uh, I think it was last year, or maybe even 2 years ago at this point, we saw Tennessee implement the, uh, the tax on tickets, basically saying that this money was going to be used to fund NIL activities.And a lot of the fans actually seemed quite OK with it, right? Like if you're paying a tax, at least you know what it's going for. A lot of them are probably donating to NIL collectives anyways, at least in a smaller amount. So a 5% tax or whatever it ends up being on the ticket, uh, wasn't a deal breaker for them. But I'm curious if you think we'll see either more schools implement that or any other ideas that you've heard that they might be be implementing as well.
Yeah, I mean, you're right, the tax was surprisingly not, I didn't receive a hostile reaction, at least from what we could tell. I, I do worry that that that model may be unpopular, or if we see it play out at other schools, the idea of paying a tax, I could see some objections to now, maybe it doesn't matter, maybe the sports are so popular thatThey can just raise fees. Uh, you know, other ideas, I think better media rights deals is part of it, right? How, how is college sports being monetized in terms of not just TV but streaming? Are there avenues left unturned? Are there opportunities for really better negotiations and, you know, we're seeing now general managers hired by schools. Part of that, part of their job is gonna be coming up with ways of expanding the revenue pool.So we're gonna see some business folks brought in, uh, as you know, athletic departments have traditionally been run by, uh, you know, people like me, lawyers or compliance folks, and now I think we're seeing some more business people brought in that may have creative ideas, particularly with licensing, particularly with with monetizing intellectual property rights, there's all sorts of ways, stones that maybe there's low hanging fruit as well, but there are certainly stones that haven't been all turned.
Yeah, we may be getting the NFL model where there's select games on Netflix and Peacock for the SEC and other conferences like that. Um, but Michael, I would love to hear just your thoughts on how sustainable the $20.5 million dollar number is, right? Like, are we gonna go substantially higher than that, or do you think it'll stay sort of there for a while?
It's projected to grow gradually about 10 to $12 million over the next 10 years, and it's based on a formula. It's based on a formula that the settlement has. So, I mean it could grow, right? It could grow if revenues go way up. And if, and if it turns out that college sports is worth a lot more than it's generating, which some people believe, some people believe that that college sports should be.You know, if, if they had the, the insights of the NFL, they would be able to generate more revenue. Maybe that's true. But I think the expectation is that it will be a fairly slow growth of that figure, which is also interesting because think about it, that's 20.5 million for everyone in the athletic department, right? I mean, there are a lot of, a lot of athletes in that department. Does the quarterback say, I, I want 5 million andYou know, or does a school say, let's put all of our eggs in the best running back. Let's go all out for a running game. Or maybe a school says, we want, we want basketball to be our focus. We think we can put together a great team, forget the football team. We know we're not great at that. We're gonna put together the best basketball team, and we're gonna use that 20.5 million on that. There are all these really interesting permutations that it that it seems like pro sports, right? This sort of sounds like uh pro sports.
Yeah, it's sort of an interesting look at it because it's almost like Moneyball, right, where you're trying to find where you get the best return on your investment, whether that's specific players or whether that to your point with the basketball, uh, analogy there, whether that's an entirely different team where you're competing kind of as a bigger fish and smaller pond. It'll be really interesting to see and, and again, to your point, uh, it's part of the reason.Why a lot of these schools are hiring GMs and capologists and different things like that. But I, I would love to just double click on one thing you mentioned earlier in this conversation, which was some of the, uh, alternative sports teams, some of the Olympic sports, some of the non-revenue generating sports, and just get your feedback and insight on on how those uh teams might be uh impacted by the settlement.
Yeah, I mean may expect that they will be adversely impacted by the settlement, that the settlement will funnel more money towards the revenue generating sports. Now, let's remember, most colleges are not going to opt into the system. So in a lot of schools, the world's not changing. The Ivy League is not changing. They're keeping the same model. They're not paying players. So, you know, in a way at the top schools, it's possible that some sports, particularly the Olympic sports, particularly the sports that are played by men.Because Title 9 remains, remains an important law that will ensure that there are equal opportunities for women athletes. Uh, that, that may make it harder to say cut a women's team than, uh, depending upon which men's team we're talking about to bring a number of roster spots. So yeah, I mean, I, I, I think the expectation is that the money will, I mean, it's already mostly for certain sports, but I think that effect will be amplified.
Yeah, it's sort of an unfortunate situation because if you're looking at a team that, you know, spends $2 million a year on salaries and expenses and other things like that, that's $2 million that could go towards this for the football team that's bringing in a lot of academics and things like that from a monetary standpoint, it certainly makes sense. Um, the, the last thing I want to touch on there is just the NIL go portion, right? You mentioned earlier that deals that are legitimate NIL deals, the Doctor Peppers of the world and other businesses like that.Those have to go through and get approved by NILO. Where do you think the line is drawn on this? So like, first off, who's actually enforcing this? And then second off, like, where is that line gonna be drawn between what's legitimate and what isn't? Because as we know in college sports, there's, you know, car dealerships in the hometown that uh are sort of legitimate, but also sort of not legitimate.
Yeah, so Deloitte is the key player in this arrangement. They're gonna be running NILO with the College Sports Commission. They're gonna have authority. So what is, what is fair market value? Some would say fair market value is whatever the market will pay you, right? So if that car dealer wants to offer you, Joe, $2 million you're worth 2 million. I mean that that that's a not illegitimate argument.Now, that, that argument though is not one the NCAA would embrace. The NCAA would say, well, that money is really going to Joe because we want Joe to come to our school. He, his actual value in terms of his image, his likeness, uh, that's not nearly worth that much. What we're really paying him is because Joe's this great football player that we want in our school. So this new entity will look at data points. They'll look at, for instance, what other athletes in the same position.Would get an endorsement deal, and that car dealership, well, what have they paid in the past for endorsement deals? If they pay 10,000 bucks and they're on local TV and then suddenly they're offering you $2 million that that's gonna raise some questions about the legitimacy of that transaction. And the smart thing that they did with this settlement is they have arbitration.That that is, that cannot be stressed more.
Yeah, it sounds like we're gonna have a lot less legitimate NIL deals whether people aren't just gonna want to file them in time or whether they're gonna get denied, it could be either, but uh certainly seems like there will be less. But thank you so much for joining us today, Michael. I learned a lot and I'm sure everyone else did too.
Thanks, Gerald. Appreciate it.
The clock is winding down here, but we have just enough time for some final buzz. So let's talk about the trading card market for Oklahoma City Thunder superstar Shai Gillis Alexander.The NBA finals are in full swing, with Game 4 between the Oklahoma City Thunder and Indiana Pacers taking place tomorrow night at Game Bridge Fieldhouse in Indianapolis. And while there has been plenty of action to discuss on the court, one player in the finals is dominating the collectibles market off the court. According to data shared at Yahoo by professional sports authenticator, Oklahoma City Thunder superstar Shai Gillis Alexander is the most.Player in this year's NBA Finals. Now, it's not necessarily a surprise that the 26-year-old guard is popular among collectors. The Thunder have a chance to win their first ever NBA championship after a historic 68 win season. And SGA won his first NBA MVP award last month with 71 out of 101st place votes. But SGA isn't just PSA's most collected NBA Finals player.year. He's the most collected player by a wide margin. PSA's top three most collected 2025 NBA Finals players include SGA at #1, his Thunder teammate Chet Holmgren at #2, and Pacers superstar guard Tyrese Halliburton at #3. However, PSA's data says that SGA has nearly doubled the cards graded than any other 2025 NBA Finals player this season.And what's even crazier is that SGA alone has 2 times the number of cards greater than the entire Indiana Pacers roster combined. Now, this NBA final series is far from over. If Tyrese Halbburn keeps making buzzer beaters and the Pacers pull off a championship upset, Halliburton could skyrocket his value among card collectors. But as of right now, there's a huge gap between SGA and every other NBA Finals player, and that gap could become even bigger if he adds an NBA championship to his resume this season.We're all out of time, so it's officially game over for this week. Thank you so much to Michael and for all of you for joining us. Please make sure to scan the QR code below to follow Yahoo Finance podcast for more videos and expert insights and catch us every Thursday wherever you get your podcasts. I'm your host, Joe Pompeliano. See you next time.
This content was not intended to be financial advice and should not be used as a substitute for professional financial services.
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Why this professor says WNBA revenue model is 'almost criminal'
This week on Yahoo Finance Sports Report, host Joe Pompliano takes a look at some of this week's biggest headlines in the sports business world that you and your portfolio need to know. From WNBA players' push for equal pay, to Trump's threats over the Commanders $3.8 billion stadium deal, to Snoop Dogg's investment in Swansea City A.F.C., the world of sports is being transformed by big financial plays. Yahoo Sports Senior Writer Jordan Shusterman joins the show to talk about the latest coming out of the MLB, including the $1.7 billion Tampa Bay Rays sale. Plus, Washington University in St. Louis Sports Business Program executive director Patrick Rishe stops by to talk about everything from the WNBA, to the House vs NCAA settlement rollout, to even which professional sports he thinks have the most growth potential in the coming years. Yahoo Finance Sports Report with Joe Pompliano, a vodcast brought to you by Yahoo Finance and Yahoo Sports, looks beyond the latest sports business headlines and analyzes all the need-to-know news—the teams, trades, and billion-dollar deals—so you and your portfolio will win BIG. Welcome to Yahoo Finance Sports Report, a unique look at the business of sports brought to you by Yahoo Finance and Yahoo Sports. I'm your host, Joe Pompeiano, and I'm here to coach you through the financial game. Today we've got Yahoo Sports senior writer Jordan Shusterman coming on the show to discuss the latest coming out of MLB, as well as Washington University and Saint Louis's sports Business program executive director and sports impact founder and CEO Patrick Ribb to break down some of the latest headlines. Let's huddle up and get right into kicking off this week with Pop's Playbook, where I take a look at some of the biggest headlines in sports that you and your portfolio need to know. First up, WNBA players made a bold statement at last week's All-Star Game amid ongoing collective bargaining negotiations between the league and the WNBA Players warmups of last Saturday's WNBA All-Star game, players entered the court wearing shirts that said, pay us what you owe us as a negotiation tactic for CBA tolls. The shirts, of course, went viral across social media and sparked a discussion around fair pay for the W's players, as well as the league continues to explode in popularity and expand its number of there is still plenty of time for the WNBA and the Players Association to strike a deal before the current CBA expires on October 31st. However, it's evident that both sides of the negotiation table are far apart, and the players have said that they're willing to enter a work stoppage as a last result. But one thing is clear, negotiations have officially entered the court of public opinion, and these next few months will define the WNBA for the next up, President Donald Trump wants the Washington commanders to change their nickname back to the former Redskins moniker, and he's threatening to pull the franchise's new stadium deal in Washington DC if the change isn't made. Trump posted to his true social account on Sunday saying, quote, The Washington Whats should immediately change their name back to the Washington Redskins football team, end quote. Then a few hours later, Trump doubled down on his statement and posted aAnd to True Social, saying that he won't make a deal for the team to build their new $3.8 billion stadium in DC unless the change is done. However, it is unclear if there's any way for Trump to derail the commander's plan to build a new dome stadium at the former RFK site, as Congress gave full control of the RFK land of the city of Washington DC last December before the control was officially signed into law by former President Joe Biden in the meantime, the commanders are seeking approval from the DC City council for the multi-billion dollar stadium project, which includes over $1 billion in public up, Fox Sports has signed a massive agreement with Barstool Sports to feature Barstool shows and personalities on its sports programming. According to multiple reports, Barstool sports founder Dave Fortnoy will become a regular commentator on Fox's Big Noon kickoff football show starting this fall. As part of the deal, the Barstow College Football Show will also air before Big Noon kickoff on Fox Sports' digital platforms and 2B, and Portnoy and other Barshall personalities like Dan Big Cat Cats will be part of a new two-hour studio show produced by Barshall that will air on the the network's popular midday show, The Herd with Colin Coward. Now this move comes after Fox canceled its 2 FS1 morning shows, Breakfast Fall and the Facility, as well as one of its afternoon show, Speak, early last week due to low ratings. However, Fox is now betting that Barstool can help as FS One's morning programming and big noon kickoff show better compete against ESPN fixtures like GetUp, First Take and College Game week's money shakeups continue, but this time on the baseball field, the Tampa Bay Rays are changing ownership in a deal that could reshape the franchise's financial future. Here to help break it all down is Yahoo Sports senior writer Jordan Shuchman. Jordan, thank you so much for joining the show today. I want to start with exactly is the Tampa Bay Rays sale, $1.7 billion to a Jacksonville developer. The team is reportedly going to be staying in Tampa Bay, but we had a stadium deal over the last number of years. Obviously, they're playing in the minor league stadium now. What do you think about just the sale in general and what it means for the future of Tampa Bay's Rays team? Yeah, I mean, this is a, a really important story that goes really beyond St. Petersburg and Tampa Bay, just because, you know, Rob Manfred, as he kind of heads towards the commissioner, as he heads towards kind of the end of his tenure, uh, at the top Major League Baseball, you know, expansion is a major priority for him and a big part of that has been settling the stadium and kind of ownership situations in both, with both the A's, as we know, they are, uh, very slowly moving towards Las Vegas and thenAlso the Rays, who have, of course, had a lot of upheaval, some of which under their control, some of which, you know, out of their control because of what happened with the hurricane and, uh, the damage done to Tropicana Field, their home where they're unable to play this year. So this is an important, uh, of course, bit of news for the franchise itself, but it is also in the big picture, a, a very big goal for the league office. Yep. Speaking of Rob Manford, uh, he was at the All-Star game, of course, and he did a media session where he touched on a bunch of different things between different interviews, everything from, uh, ending blackouts to media rights negotiations to, uh, essentially saying that the MLB MLB hasn't done a good enough job working with content creators over the years, like some other sports leagues have what did you just take of his kind of appearance in general, and, and I preface all of this with, uh, after all of that, I think it was Alex Rodriguez said that he belongs in Cooperstown. So there obviously claims to be, you know, differing opinions on, uh, whether people think he's doing a good job or a poor job. But what is your just kind of 30,000 ft view on how good of a job he's doing, if it is a good job, and then some of the comments that he said specifically during the weekend. Yeah, I, I think, you know, some of the stuff that A-Rod was referring to, I mean, a lot has changed in Major League Baseball over the last half decade. And, and also, again, some out of necessity, and some out of just very big, bold decisions, you know, changing what the, how the game is played with stuff like the pitch clock with, uh, soon to be, you know, a, the ABS challenge system with, with balls and strikes. So this commissioner has changed so much about the sport, and a lot of these haverousing successes, and I think attendance and ratings do say that, but the media landscape is a totally other different discussion. And that's something that is very, I mean, I'm less well versed in, in the exact numbers and financials of those as, as maybe someone like you are, but I do know that these are also big decisions that are going to shape what the sport looks like and what the financials are for, for owners who, for a long time were relying, you know, on uh, local sports revenue, uh, TV revenue that is not necessarily the same because of how these rights are being split up. And so that is going to determine, I think, kind of the spending power for some of these markets. Some of these markets are completely impervious to this because they have these massive TV deals and other smaller ones, this is going to make a big difference on the kinds of money that they're going to be bringing in, uh, via TV revenue over the next few years. So these are big decisions that the league clearly has to make. Yeah, during the CBA negotiations, there's been a lot of talk about uh salary caps, salary floors, you know, implementing some system that looks more like the NFL, NBA, etc. Um, do you think we'll ever get there? There's, there's an argument, right, that uh the players obviously don't want it because they can get as big of salaries as they can command right now, but they also sometimes, uh, depending on the math and the year, sometimes sharing a smaller percentage of total revenue than some of the other sports leagues do. So what is, what is your feeling around kind of what ends up happening there? Yeah, I mean, that, that is the ultimate question as we head towards these new CBA negotiations is, you know, the, the players, I think, uh, especially baseball in this union that has managed to avoid, uh, a salary cap for so long, I think that that really is the number one non-starter. I think a lot of fans want to see a salary floor to get some of those smaller market teams to be a little bit more competitive. Now, we are always going to have imbalance in baseball, and that is always going to be a reality of this, no matter what exact financial structure is put of just how disparate the spending, not just the spending power, but the spending willingness. I mean, this is the other thing. We do see teams spend when they want to. A lot of these teams are more capable than they're actually showing off. And so maybe they aren't all capable of spending like the Mets and the Dodgers, but we know that they have a lot more money that they're spending, uh, than, than, than what we have seen. And so I think that is the crux of the issue that teams can spend to be more competitive, and the owners, who, of course, Rob Manfred is explicitly working for, they're trying to find ways to keep spending down and to, in theory, level the playing field when ultimately they're just finding ways to spend less, uh, to remain more competitive. And so that is a very difficult issue. This is of course going to be the headlining of the CBA negotiations upcoming after next season. Yeah, it's gonna be interesting. I mean, if you put it in a salary cap, you got to have a floor just makes more sense, but uh the owners obviously want to keep costs down as much as they can. But Jordan, thank you so much for joining us got to take a quick break, but when we come back, we've got Washington University and Saint Louis's sports business program executive director, Patrick Risch joining the back to Yahoo Finance Sports Report. I'm your host, Joe Pagliano. We've made it to one on one, a conversation where I get to break down news and sports with the key player in the industry. This week we're speaking with Patrick Risch, executive director of the Sports Business program at Washington University in St. Louis and founder and CEO of Sports Impact. Patrick, welcome to the show. Thank you so much for joining me today. Now, I want to talk about a few different topics and a few different sports.I think the most logical place to start with is the WNBA. I think everyone saw last weekend, the players protesting during the middle of their CBA negotiations, wearing shirts that basically said, go pay us what we're worth. Now, you've probably, I assume, looked at this economic model for a long period of time as the league has grown with Caitlin Clark entering the league. What can you tell us about some of the challenges or what we might eventually see during the CBA negotiation? Well, it is challenging and it's also interesting, and, and the fact that if you look at the history of collective negotiations and all these other leagues, I think there are lessons to be learned from that as well. The players currently in the WNBA are earning roughly 9 or 10%.Of the revenue generated from the league. So you look at that in comparison to all the other more established leagues, and you said, well, that's, that's almost criminal because most of these leagues have now reached, I guess you could call a steady state where the players and the owners are of league revenues. So I think that's a place where we eventually are likely to see this end up. Now, whether that gets there in this particular round of negotiations or in the next CBA is, you know, remains to be seen. I think my biggest concern, as it relates to the growth of the WNBA is, is making sure that we're growing at a rate that is bringing in these expansion franchises, I believe, the last round of expansion with Cleveland, with Detroit, with Philadelphia, each franchise, they're paying $250 million. Part of the benefit of that for the other league owners is that money is now shared, those expansion fees are now shared across the league, buttressing some of the annual losses that the league has sustained operating loss over the growth, I think that's the key. Now, the other thing that you've got Joe, is huge in media revenue where the league starting next year is gonna be making, I believe it's $200 million per year, which is 4 times larger than where they've been. That obviously is going to help from an operating profits perspective for all the teams. So, fascinating. I don't know if they're gonna get to a 50/50 split on this particular round of negotiations, but I do anticipate that the players will, at the, at minimum, probably get up to 40% share of league revenues after this round of negotiations. Very interesting. I want to change gears here for a second and roll over to the House for NCAA settlement. I mean, this was a groundbreaking moment in sports history and certainly collegiate sports history, where through the House versus NCAA settlement, there's now going to be essentially this revenue sharing program with the schools and their athletes. Schools are going to be able to spend up to $20.5 million starting this year on their student athletes. They're gonna be able to sign of that stuff. There's also going to be a clearing house that's gonna kind of monitor all the existing and future NIL deals to make sure that they're actually NIL. So theoretically we should see, uh, you know, some of these collectives take a step back and more traditional NIL with revenue share mixed in. Now, that is to be determined what that looks like, but I'd love to get your opinion on just sort of the rollout, what that might look like, and sort of where we go from here. The lawyers are licking their chops. Uh, you know, look, I think there should be a clearing house, and I do like the fact that there is more, you know, kind of monitoring the types of engagements that are taking place and partnerships that are being done we opened this era of name, image and likeness, the part of the perspective was players have to do deals where they're actually receiving, uh, and providing services in return for, uh, the resources that they're being given. Uh, I think we got away from that and we got back to kind of this old school under the table collectives were creative way of getting around more traditional sponsorships and endorsement deals just to find ways to kids money. Uh, I, I, I really hope that we can, can kind of rein that in a bit. However, uh, I think that the house settlement obviously is changing and professionalizing collegiate sports in a way that we've never seen in the I do think that, uh, some of these schools where football is their main sport, they're gonna have to make some very interesting resource allocation decisions, right? Because most of that money, reports that I'm reading, you know, of 20.5 million, 1617 million of that may be spent on football. So now the non-football schools, uh, may have the opportunity to be a little bit more competitive in, let's say men's and women's basketball, because they can allocate those resources more so to those particular, uh,Revenue drivers for their school. Joe, it's gonna be absolutely fascinating as I, as I let off. There are going to be some legal challenges because lawyers typically with respect to student athlete rights, they want to give their athletes freedom to be able to choose and earn as they wish. So I, I, I, I think it's going to be still a degree of wild wild west, and we'll see if the government is gonna step in and create some kind of national legislation. I think that's gonna be more trouble than it's worth. Yeah, to your point, it's gonna be interesting to see when that first school sort of goes over that bumper and tries to navigate the rules, uh, in a different manner and what that punishment is, because I think that's gonna be sort of a watershed moment for the, for the industry as a whole to really see what the punishment is. But time will tell, probably in the next couple of years here, if I had to imagine. But Patrick, you recently released a study, uh, an economic study on the 2025 NFL draft in Green Bay. And I want to dig into this a little bit if we these events are really interesting from a finance perspective, because everyone looks at events and they say, oh, it brings this huge economic impact. And sometimes maybe that's true, a lot of times it's probably not. But Green Bay is sort of a unique area where they weren't going to be able to get a Super Bowl. They built out this Title Town district, basically an entertainment district around the stadium. So then they were given the NFL draft. Now, this is still a big event in a small market. Tell me a little bit about what you were able to determine through this study. Sure, you know, the NFL draft is interesting and, and yes, you're bringing in a lot of fans. Now granted, you're bringing in a lot of, let's say regional fans or fans from bordering states, unlike, let's say the College World Series in Omaha, where you truly are getting people from all over the country and it's a higher percentage. For the NFL draft, and I've done the study now the last couple of years, last year in Detroit, this year in Green Bay, you are still getting a lot of non-locals, people that are not from the immediate, let's say, surround uh the host city, but it tends to be more regional in the sense that maybe you'll get people from other parts of the state, Milwaukee, Madison, and then bordering states like Minnesota, Michigan, uh, Illinois and the like, but they're coming in, regardless of how far away they're coming. They are coming in, they're spending money at hotels, and they're also getting a chance to kind of, in in some cases, experiencing Green Bay for the first time, and that could lead to future tourism. Uh, you, always fascinating when you're doing the survey research as we do on site, and then you just have these anecdotal conversations with people. Man, I've never been up here before. I look forward to coming back at some point, whether it's for a Packers game or, oh wow, this title town was amazing. Uh, I'd love to come back here when there's not a football game. So it's that kind of anecdotal feedback that shows you, yeah, yeah, there's, there's a lot of value, um, that these communities receive from hosting these events, and it also builds up a profile, uh, so it serves as a great marketing pitch for the community. Yeah, I think that's, uh, spot on, and we saw it in Detroit, and we certainly saw it in Green Bay as well. Switching gears to, uh, FIFA. FIFA did the Club World Cup this past, uh, summer, this summer, and we're going to be hosting the World Cup across North America next year. What was your general feedback on sort of how the Club World Cup was run and what do you think that says for the future with the World Cup coming next year? Well, I think we need to understand, uh, they got a lot of bad press because a lot of the matches were not well attended. And uh people have to understand, I think part of the whole reason why this was put on was it was a dry run for next year's World Cup in terms of logistics. And yes, maybe you can't gauge the logistics of how you're gonna operationally run a World Cup match when you have only half the audience that you're going to have next summer, but it' a dry run to ensure that, OK, when we host the World Cup in 2026, what are the things operationally, logistically on site we need to think of day of security, entry, flow, all these logistical operational issues, uh, that you just have to think about when you are running an event at a particular property. So I, I think that's the main takeaway from, from the Club World Cup is, you know, it's hard to it's apples to oranges in terms of the magnitude and the, and the crowd sizes and so forth. But I think at least hosting this, you at least have an initial sense and a feel for what groups, when I say groups, uh, a venue and property owners are gonna have to do to run those events at SOI in Miami, in Kansas City, at, at the GHA Field, uh, all these places that are hosting World Cup matches next summer. Yeah, and the last thing I'd like to talk about is just kind of overall the sports industry and where things head over the next few years. As someone who looks a lot at, uh, virtually every sports league, I imagine, and certainly the ones here in North America, are there any specific sports leagues, uh, that stand out to you, maybe one or two of them that you think are poised for growth over the next couple of years? You know, there's been so much focus on the WNBA and NWSL and of course, of the women's professional sports leagues, those are the leagues that, you know, arguably carry the most gravitas and most attention, uh, for a variety of reasons. But I think that when it comes toTo the the love volleyball league as well as women's softball, you know, women's sports generally, as we all know, has really picked up momentum in the last several years for a variety of reasons, more love from media, more love from corporate partners, and those two kind of flow I, I, I actually think that women's softball is going to be a growth sport because if you look at the women's College World Series, all the ratings continue to grow, uh, the attendance is usually sold out there in Oklahoma City, but I think that's an area where, you know, the games are faster, the action is fast, and that and volleyball, I are two areas that are going to see more growth, more expansion, as more people want to get into the ownership of pro sports but are priced out, you know, there, it used to be that people would get into, uh, the NWSL and the WNBA because they were priced out of being in the NBA or in the NFL. Guess what? Those franchise increased so rapidly in women's basketball and women's soccer that now the next tier of ownership could be those sports volleyball and softball and, and quite frankly, again, we've seen the ratings, the college level have grown, so I do think this is a growth opportunity for many, uh, for many markets and also many people that want to invest in women's sports. Very interesting. I love those two picks with uh softball and volleyball, but thanks so much for joining us, Patrick. I had a great time talking to clock is winding down here, but we have just enough time for some final buzzs. So let's talk about Snoop Dogg. Snoop Dogg famously keeps his mind on his money and his money on his mile, and now he's putting some of that money toward a new ownership stake in soccer club Swansea City. Last week, Swansea City confirmed that the American rapper is joining its ownership group as a co-owner and investor, but financial terms were not disclosed. The 53 year old will join an all-American ownership group led by Andy Coleman, Brett Kravitt, and Jason Cohen, who collectively own the Football LLC. Snoop Dogg said in a statement released by the team, quote, The story of the club in the area really struck a chord with me. This is a proud working class city and club, an underdog that bites back, just like me, end quote. Snoop also helped Swansea City launch its 2025 26 jersey kit a few days before the official announcement by wearing its home shirt in a social media post from the club. Now Swansea City competes in the EFL championship, which is the second tier of the English Football League behind the top flight Premier club last played in the Premier League in the 2017-2018 season before being relegated to the championship, where the team has played for the last seven seasons. But this coming season, Snoop Dogg will have fellow American celebrity owners to compete against. Wrexham AFC, the now famous Welsh club owned by actors Ryan Reynolds and Rob McElaney, were promoted to the EFL championship after finishing 2nd in the 3rd tier EFL League One last and Swansea City will also battle against seven-time Super Bowl champion quarterback Tom Brady, who is a minority investor in Birmingham City, which secured promotion to the championship with Wrexham after winning League One in 2025. Now it's time to see if Snoop Dogg, Macklin, Reynolds, and Brady can have their soccer investments pay off bid by securing promotion to the Premier all out of time, so it's officially game over for this week. Thank you so much to Jord Patrick and all of you for joining us. Please make sure to scan the QR code below to follow Yahoo Finance podcast for more videos and expert insight and catch us every Friday wherever you get your podcast. I'm your host, Joe Polianaa. See you next time. This content was not intended to be financial advice and should not be used as a substitute for professional financial services. Related Videos VW CFO on US Auto Tariffs, Electric Vehicles, Earnings Tether CEO on US Stablecoin Policy, US Dollar Hegemony, Staying Private Alphabet posts Q2 earnings beat, but boosts spending outlook German Exporters Can Live With 15% Tariff, Ifo Says Yahoo Finance Sports Report is developed and produced by Lauren Pokedoff. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
4 days ago
- Business Insider
Advertising Pivot Renews Upside Hopes for Netflix Stock (NFLX)
Netflix (NFLX) has executed one of the boldest pivots in recent corporate memory, shifting from a subscription-only model to becoming a major force in advertising. Last week, the company stunned Wall Street by raising its revenue guidance by $1 billion to a range of $44.8–$45.2 billion while boasting 302 million global subscribers—that's almost half of Europe's entire population. NFLX's performance has fueled a stock climb, especially since April, leaving the S&P 500 (SPY) in the rear-view mirror. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. But here's the twist flying under the radar: Netflix now trades at a sky-high 52.8x forward earnings, nearly quadruple the average of its sector peers—a valuation that assumes near-perfect execution. For now, I'm maintaining a Hold rating. Netflix's operational performance is undeniably impressive, but at these elevated valuation levels, even small missteps could lead to sharp corrections. Netflix's Internet Breaking Password Crackdown Investors and streamers alike will remember when Netflix declared war on password sharing. As it turns out, that controversial crusade became financial alchemy. Management didn't just convert apparent freeloaders into paying customers; it orchestrated one of the most successful customer acquisition campaigns in streaming history while barely breaking a sweat, as shown by TipRanks data. The next masterstroke was Netflix's strategic rollout of its ad-supported tier—a move that essentially said, 'Can't afford the premium plan? No problem, we'll serve you ads instead.' This wasn't a desperate attempt to boost revenue; with a solid balance sheet behind it, the shift was a deliberate expansion into a previously untapped audience segment. Yet beneath this move potentially lurks a troubling reality: Netflix's share of U.S. streaming time has flatlined, while viewing hours inched up a measly 1%. Netflix subscriptions are competing with Disney+, HBO Max, Apple TV+, and multiple other apps for your attention span in a challenging economy. Netflix may be winning plenty of battles, but the war for viewership has become a brutal, expensive stalemate, as Q3 EPS suggests. The content lineup reinforces the same message. With Squid Game 3, Wednesday, and the final chapter of Stranger Things on the horizon, Netflix is leaning heavily into its established blockbusters rather than chasing unproven concepts. When streaming giants start playing it safe, it's usually a sign that the era of effortless growth is coming to an end. AI-Powered Efficiency Meets Old-School Hollywood Drama That said, Netflix's real secret weapon isn't just its content—it's the data-driven innovation powering everything behind the scenes. The company has rolled out AI tools that have accelerated visual effects production by a factor of 10 for shows like El Eternaut, shrinking timelines that once took months down to just weeks. Netflix's algorithmic prowess goes far beyond just trimming costs. Its recommendation engine has become so advanced, it often feels like it knows your tastes better than you do—surfacing shows you didn't even realize you wanted to watch. This creates stickiness that transcends basic subscription logic; when the platform feels that personalized, canceling becomes a much harder decision. Still, even cutting-edge tech has its limits in today's hyper-competitive landscape. Disney (DIS) commands a multigenerational content library, Apple (AAPL) has the financial firepower to reshape industry dynamics, Amazon practically gives Prime Video away through ecosystem bundling, and legacy media giants appear to have finally shaken off their digital inertia. Netflix's geographic expansion strategy is also evolving. Instead of spending heavily to enter new markets directly, the company is partnering with local players, such as CANAL+, to tap into under-monetized regions across Africa and Latin America. It's a more efficient approach, but whether these markets can move the needle on earnings remains the billion-dollar question—especially given the relatively low revenue per user compared to U.S. subscribers. Netflix's Precarious Valuation At 52.8x forward earnings, Netflix stock is priced as if the company will flawlessly execute on all fronts—content creation, advertising, global expansion, and intense competition—all at once. For context, Disney trades at 25x, while traditional media peers average around 15–20x. In essence, Netflix carries the valuation of a high-growth startup but faces the operational demands of a global media conglomerate. A conservative DCF analysis using a 2.5% terminal growth rate and an 8.2% cost of capital estimates Netflix's fair value at around $1,040 per share. With the stock currently trading at $1,233, that implies roughly 20% overvaluation—even factoring in potential advertising upside that may never fully materialize. Valuation concerns deepen when examining revenue multiples: Netflix trades at a 12.5x forward revenue multiple, significantly above the sector median of around 2x, effectively pricing in years of flawless execution in an increasingly unforgiving environment. The advertising pivot is arguably Netflix's most high-stakes gamble yet. Turning a vast subscriber base into meaningful ad revenue is a delicate balancing act—too many ads risk alienating users, while too few won't generate sufficient financial returns. So far, early signs are promising, but the real challenge will emerge as ad loads increase and subscriber tolerance is put to the test. No one really knows where the breaking point lies—largely because Netflix has never pushed its audience this hard before. Market Saturation Meets Expansion Reality Netflix faces a brutal mathematical truth: developed markets are essentially tapped out. North America and Europe have reached natural penetration ceilings, forcing an increased reliance on emerging markets, which have anemic revenue per user and inflated acquisition costs. The password enforcement windfall represents a one-time harvest, meaning future growth must emerge from genuine market expansion or competitive victories, both of which are significantly harder than converting existing viewers. This fundamentally pivots Netflix from subscriber growth champion to operational leverage specialist. The company must now excel at advertising sales, inventory management, audience segmentation, and monetization optimization, entirely different competencies than those that built the original empire. Macroeconomic turbulence could paradoxically benefit Netflix if consumers migrate to ad-supported tiers, accelerating diversification strategy. However, looming tariffs, economic volatility, and regulatory changes add risk that could disrupt even the most masterfully crafted plans. Netflix's global footprint, advantageous for content amortization, also creates exposure to geopolitical tensions and currency fluctuations that domestic competitors avoid entirely. What is the 12-Month Forecast for NFLX Stock? Wall Street maintains a Moderate Buy consensus based on 26 Buy ratings, 11 Hold, and one Sell rating over the past three months. Netflix's average stock price target of $1,391.88 implies ~17% upside over the next twelve months. For a stock trading at nosebleed valuations, these tepid expectations feel vulnerable. Recent earnings revisions trend bullish with 17 upward EPS adjustments, but target dispersion ranging from $950 to $1,500 reveals genuine uncertainty. Netflix at a Crossroads: Brilliant Execution Meets Valuation Gravity Netflix is undeniably evolving in ways that unlock real value. Its push into advertising, operational efficiencies, and strategic global expansion has created meaningful competitive advantages that, under the right conditions, justify a premium valuation. The management team has earned considerable respect, and Netflix's technological edge remains a defensive moat that few rivals can match. That said, I believe the current share price already reflects these strengths—leaving little margin for error. The company's next chapter will reveal whether its operational excellence can continue to defy valuation gravity, or if even the most impressive execution eventually meets the limits of financial reality.
UPI
4 days ago
- UPI
Watch: Josh Allen leads Bills training camp in HBO docuseries trailer
HBO Max is previewing "Hard Knocks: Training Camp with the Buffalo Bills." Photo courtesy of HBO Max July 23 (UPI) -- HBO Max is previewing Hard Knocks: Training Camp with the Buffalo Bills ahead of its Aug. 5 premiere on HBO and HBO Max. NFL Most Valuable Player Josh Allen is described in the teaser released Wednesday as "superman right now." The preview shows the Bills quarterback leading training camp. "Head coach Sean McDermott and general manager Brandon Beane will be featured," according to a press release. Liev Schreiber will narrate the docuseries. Hard Knocks will air on HBO and stream on HBO Max.
