June 17, 2020

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MLB’s future gets cloudier, the XFL journey gets juicier, a billionaire is offloading an arena and Fortnite’s developer is worth $17 billion.

Mixed Messages

Photo Credit: Sam Greene, Cincinnati Enquirer

The return of baseball this summer grows more unlikely by the day as reports surfaced Tuesday that at least eight MLB owners don’t want a season. Those reports come a day after MLB Commissioner Rob Manfred said, “The owners are 100% committed to getting baseball back on the field.”

Manfred’s comments came after the MLB Players Association told him to set the schedule, a solution which would need 75% approval from league ownership. The owners could be employing a scare tactic in an attempt to remind players there’s more than a half-season at stake. Whether the owners are telling the truth and want to avoid losing billions of dollars or are concerned for health reasons or just bluffing, there’s plenty of mixed messages coming from the baseball world.

League News:

  • More details are emerging around the NBA’s return to play in Orlando at Walt Disney World, which will include hotel amenities, access to pools, barbers, manicurists and pedicurists, a 24-hour VIP concierge, and daily entertainment, including movie screenings and DJ sets. There could also be special access to the Disney parks. The Athletic’s Shams Charania also reported details around teams’ 35-person traveling groups and game day processes.
  • As the English Premier League kicks off today behind closed doors, fans will be featured on video walls. Other components to minimize the impact of having no fans: club-specific wraps around stadium lower tiers, use of music, and a “celebration cam.”
  • The NFL announced the Pro Bowl would be in Las Vegas on Jan. 31, 2021. For the past four years, the annual all-star game has been held in Orlando after a long run in Hawaii. Las Vegas will also host the 2022 NFL Draft after the live portion of the event was canceled this year.
  • Canadian Prime Minister Justin Trudeau said Edmonton, Toronto, and Vancouver all are eligible to be a hub city for the NHL’s return. The hubs are yet to be announced, but Canada’s border restrictions were a hurdle – Trudeau said players would not be required to quarantine for 14 days after entering the country.
  • The US Open is set to go ahead as scheduled, beginning August 31, but without fans. The tennis tournament will help the USTA weather a tough financial year, even with international stars voicing their concerns about the event.

XFL Saga Continues

Photo Credit: Billy Hurst-USA TODAY Sports

The XFL made four payments totaling $2.05 million to Vince McMahon’s main venture WWE in the month between play stoppage and the league filing bankruptcy in April, adding to suspicion there was more at play into the league’s failure than the pandemic. 

That detail adds another twist to the XFL’s collapse, according to ESPN. Currently, the league is working through a sales process – preliminary bids from 30 vetted parties are due June 22. Final offers are due July 29 and a court auction is scheduled for August 3.

The league could emerge from bankruptcy with a new owner, but spring football appears to only have a few paths to success. One could be an official development relationship with the NFL – more than 30 XFL players have signed NFL contracts this spring. 

The XFL is pitching a 12-week “made-for-TV” 2021 season, which could be a selling point depending on the continued impact of coronavirus on sports. If that’s the case, major tech companies with broadcast capabilities and plenty of cash on hand looking to get into sports, like Apple or Amazon, could be some of the potential bidders.

Key XFL Numbers: 

  • 1.9 million TV viewers per game
  • $20 million in gross revenue
  • $46 million projected gross revenues for the 10-game season

WWE Unrest

WWE could be a factor in why the XFL struggled, but it has struggles of its own now. A “development talent” at WWE has tested positive for COVID-19, leading the organization to pause its production. It’s the second member of WWE personnel to test positive, the other occurring in April. The WWE has continued to hold weekly shows from its training center in Florida for roughly three months amid the pandemic, albeit with no fans in attendance. Through all of the XFL and WWE struggles, Forbes reported that McMahon’s net worth has dropped from $2.9 billion to $1.9 billion in the past year.

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Island of Opportunity

Photo Credit: Brad Penner-USA TODAY Sports

Long Island’s Nassau Coliseum is shutting down. Onexim Sports and Entertainment operates the venue and is looking for investors to take over operations and its remaining debt.

The new investors would take on approximately $100 million in loans for the lease. The arena, once the permanent home of the New York Islanders, could also be surrendered to its lenders.

Onexim has been working on a $1.5 billion redevelopment project called Nassau Hub that would build out offices, housing, and retail on the 70 acres of parking lots around the arena. “While we still believe in the enormous long term economic value of the Coliseum and the development of the surrounding land, we recognize that such value will be best realized by other parties,” Onexim said.

Onexim is owned by Mikhail Prokhorov, the former Brooklyn Nets owner worth $11.5 billion. The company acquired full control of the Coliseum in 2018, and kept that stake when Prokhorov sold his interests in the Barclays Center and the Nets to Joe Tsai in August.

The Coliseum closed in 2015 for a $180 million renovation before reopening in 2017. It has been hosting approximately 200 events a year, but the coronavirus pandemic has put a dramatic strain on the venue’s finances. The Islanders had planned to play all home games during the 2020-21 season at the Coliseum while its new arena at Belmont Park is being built. Other tenants include the Nets’ G League team and the NLL’s New York Riptide.

Epic Funding

Photo Credit: Catalina Fragoso-USA TODAY Sports

Epic Games is finishing up a $750 million round of funding, valuing the video game company at $17 billion. Epic is the developer of Fortnite and recently acquired the networking app Houseparty.

The round has brought in new investors like asset managers T. Rowe Price and Baillie Gifford, while others are increasing their investments such as KKR. Epic had been previously valued at $15 billion in 2018. Other Epic investors include Chinese internet firm Tencent – which owns 40% – as well as Walt Disney Co. and aXiomatic Gaming. Endeavor also owns an estimated $100 million stake in the company, but is reportedly looking to sell it.

The investment in the developer comes at a time when video games have surged – the industry had its best May in more than a decade with $977 million in sales. Fortnite has also enjoyed massive success in recent months as the free-to-play battle royale game reported 350 million registered users in May, an increase of 100 million compared to 2019. Those users played 3.2 billion hours in April.

Fortnite is aiming to be more than a game, however, as more than 28 million users watched a virtual Travis Scott concert in April and a trailer for Christopher Nolan’s new movie Tenet debuted in the game. The game’s latest in-game event was capped at 12 million users while another 8.4 million watched on Twitch.

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What We're Covering

What We're Covering

While “The Last Dance” might have ended, a successful nostalgia trip for the Chicago Bulls has continued across social media.

The Denver Broncos one-upped themselves yesterday, signing another deal with a sports betting company after becoming the first NFL team to sign a local deal in the category on Monday.

During a typical year, San Diego Padres host an estimated 300 events annually that add significant revenue for the club. With no live games, the team is being extra creative with its ballpark footprint.

Question of the Day

Have you ever played Fortnite?

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Tuesday’s Answer
74% of respondents said they have a more negative view of MLB in recent weeks; 24% of respondents said their opinion of MLB did not change; 2% of respondents have a more positive view of MLB.

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