November 2, 2020

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Potential bidders are lining up for the Orioles, Under Armour changes course for growth, regional sports networks continue to struggle, and Activision Blizzard forecasts suggest video game growth could slow.

Orioles for Sale?

David Butler II-USA TODAY Sports

At least three potential bidders have emerged for the Baltimore Orioles. Reports suggest there could be a favorable sale opportunity for the family of Peter Angelos, the 91-year-old owner of the team who is in declining health.

Angelos bought the team in 1993 for $173 million and to date, the family hasn’t hinted at a sale. Forbes recently valued the franchise at $1.4 billion.

Former team president and CEO Larry Lucchino has reportedly been approached to form an ownership group. MLB has told Orioles Hall of Famer Cal Ripken Jr. that it would like him to be part of an ownership group if the team is sold.

Recent MLB Team Sales:

2020 — $2.4 billion, New York Mets, Steve Cohen

2019 — $1 billion, Kansas City Royals, John Sherman

2017 — $1.3 billion, Miami Marlins, Bruce Sherman

2012 — $2 billion, Los Angeles Dodgers, Guggenheim Baseball Management

2012 — $800 million, San Diego Padres, Ron Fowler

UA Reshapes Future

Under Armour

The $345 million sale of MyFitnessPal represents the slimming of Under Armour’s operations and its narrowed focus on being “a performance brand.” CEO Patrik Frisk said the apparel company still has plenty of growth potential after it reported better than expected earnings last week.

Under Armour will concentrate on digital growth as it cuts distribution to 2,000–3,000 wholesale stores. Global e-commerce sales grew 50% year-over-year in the quarter.

Connected fitness — which generated $37 million in revenue in the quarter — will remain a core element for Under Armour with the MapMyFitness app. Unlike MyFitnessPal, Under Armour believes the data collected in MapMyFitness better aligns with its target “performance” consumer.

Under Armour Q3 by the Numbers: 

$1.43 billion in revenue, flat year-over-year

$927 million in apparel sales, down 6%

$299 million in footwear revenue, up 19%

$145 million in accessories revenue, up 23%

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RSN Struggles Continue

Dan Hamilton-USA TODAY Sports

Boston-area NESN, which carries Boston Red Sox and Bruins games, was dropped by YouTube TV last week. It’s the latest regional sports network to be dropped by a broadcaster looking to cut costs.

Sinclair’s networks, which have exclusive local rights to 42 professional teams, have been dropped by YouTube TV, Hulu, Dish Network, Sling TV and FuboTV since last year. Without sports in its second quarter, Sinclair’s sports revenue fell 38% year-over-year to $616 million.

It’s unclear if these cost-saving measures will be reversed once leagues predominantly featured on RSNs like MLB, the NBA and NHL start their next seasons. Any significant shift in the revenues RSNs bring in could lead back to the teams. MLB teams alone collect more than $2 billion annually in local TV contracts.

Gaming’s Forecast

Activision Blizzard

During the pandemic, Activision Blizzard released a variety of games, updates and free-to-play options, which executives said helped boost third quarter revenue to $1.77 billion, up 46% year-over-year. Shares are up 31% on the year.

Activision plans to hire approximately 2,000 workers to help produce content for the next-gen consoles set to release this month, but its fourth quarter forecast was lower than those from some Wall Street analysts. The disparity suggests the company believes the video game boom is fizzling even as COVID-19 cases surge throughout the U.S.

Outlook for the video game industry could become more clear with Take-Two Interactive and Electronic Arts set to release earnings this week.

Notable Earnings Reports This Week: 

11/2 — MSG Networks

11/4 — Fitbit, Sinclair Broadcast Group

11/5 — Caesars Entertainment, Peloton, Take-Two, Electronic Arts, Liberty Media Corp., DISH Network, Nielsen, Roku

11/6 — ViacomCBS

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Latest On FOS

Latest On FOS

Since Sept. 1, Joe Biden’s campaign has aired ads during national college football broadcasts that yielded more than 15 million views, while President Donald Trump’s have yielded only four million.

Will Ventures — which calls itself the first venture capital fund focused solely on the sports and sports-adjacent space — launched in September. Co-founders Brian Reilly and Isaiah Kacyvenski spoke with FOS about the early-stage venture capital firm.

Sports media company theScore reported quarterly revenue of $2.5 million, down from $6.4 million in the same quarter last year. But there was a bright spot in the company’s fiscal 2020: esports.

Question of the Day

Do you track your fitness stats via an app?

 Yes   No 

Friday’s Answer

22% of respondents follow WWE.

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