March 22, 2021

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Peloton has seen dizzying highs and lows recently, but the wheels are still spinning.

Peloton CEO Talks Supply Chain, Product Safety

Peloton/Design: Alex Brooks

The growing interest in Peloton over the past year is no secret, but the connected fitness company has faced its fair share of challenges.

Deliveries were notoriously delayed, a commercial was decried as sexist and cringeworthy, and classes were called out as racially tone-deaf. 

But there’s been good news, too. The company reported its first $1 billion sales quarter for the three months ending Dec. 31 and said it would invest $100 million in correcting supply chain issues. It also acquired Precor for $420 million, gaining U.S. manufacturing capabilities. 

Last week, CEO John Foley told Bloomberg that Peloton’s production capacity grew 700% over the last year and that supply is finally close to meeting demand. Peloton now estimates a shipping time of eight-to-10 weeks for its Bike+.

On the heels of the company’s success, new challenges have arisen.

On Friday, Foley released a letter saying a child was killed in an accident involving a Peloton treadmill, and that a small number of other children had been hurt in Peloton-related incidents. NBC News reported that the Consumer Product Safety Commission is investigating.

“We are always looking for new ways to ensure that you have the best experience with our products, and we are currently assessing ways to reinforce our warnings about these critical safety precautions to hopefully prevent future accidents,” the letter said.

Overall sales of health and fitness equipment more than doubled to $2.3 billion between March and October, according to The NDP Group. Peloton continues to move forward with plans for an Australian expansion and discussions on products for strength training and rowing.

NFL Free Agency Reaches Peak Chaos

Matthew Emmons-USA TODAY Sports/Design: Alex Brooks

A 2016 rule change, the pandemic, and a lower salary cap made for a tumultuous opening to the NFL’s free agency period, and one coach hates it. 

“That was awful, and I don’t believe it should be that way,” said Jacksonville Jaguars coach Urban Meyer, referencing a rule that allows players and teams to negotiate two days before the start of the new league season. “Not when you’re making organizational decisions. I’m not sure how that rule came about, but to me that’s not good business.”

The rule that allows for a two-day “legal tampering period” dates back to 2016, but changing it would likely not improve the issue Meyer spoke to, which is that there is no time to get to know a player before signing them. 

Players and teams are not permitted to negotiate until the tampering period starts, but the speed with which some deals come together raises questions of whether everyone is being true to the rule.

The chaos this year was compounded by revenue losses from the pandemic, which lowered the league salary cap to $182.5 million, and pandemic-related restrictions that forced teams to rely on neutral doctors rather than team doctors to evaluate players.

This year especially, NFL front offices are making team-defining decisions in the dark.

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BMW Scales Back Motorsports, Amplifies EV

BMW Motorsports/Design: Alex Brooks

Led by three-time IndyCar champion Bobby Rahal, BMW Team RLL got back on the road over the weekend. 

The Twelve Hours of Sebring is part of the WeatherTech SportsCar Championship series and the second major endurance race of the 2021 season. The team last raced the Tour of Sebring in November after the race’s traditional March date was delayed due to the pandemic.

Despite Team RLL’s participation, BMW announced ahead of the race that it will limit its involvement in motorsports this year. The company will only be involved in four of the 13 scheduled SportsCar Championship series events. 

The decision comes as BMW focuses on electric vehicles. “We are intent on ensuring that the ‘greenest’ electric car on the market is made by BMW,” CEO Oliver Zipse said in a statement. The company expects half of its sales to come from electric vehicles by 2030. 

BMW recorded a pre-tax profit of $5.6 billion in the final six months of 2020 compared to $5.1 billion during the same period in 2019. Q4 specifically saw pre-tax profit reach $2.7 billion compared to $2.4 billion a year earlier.

BMW could have 2 million electric vehicles in circulation by 2025 and 10 million by 2030. It’s set to unveil its first all-electric sedan, the i4, later this year and hopes to have 25 electric cars in its lineup by mid-decade.

Most Who Watch Pirated Sports Willing to Go Legal

Design: Alex Brooks

There is a $28 billion market opportunity for sports broadcasters who can convert viewers who watch pirated content, according to a report from Ampere Analysis and Synamedia.

An estimated 26% of pirated broadcast watchers have no interest in changing their habits, whether for cost or ideological reasons. The rest signaled a willingness to switch over to licensed broadcasters, and 52% of fans who watch pirated streams are paying to do so. 

A related study by the same firms from June found that 84% of sports fans use pirated streaming services at least occasionally, and just over half do so on a monthly basis.

Though the broad trend in sports watching is toward streaming, the report found that only $5.4 billion, or 19% of the total market opportunity, is available to over-the-top streaming services like Netflix and Amazon Prime Video, some of which are prioritizing sports events.

Amazon gained exclusive rights to Thursday Night Football games in its upcoming broadcasting deal with the NFL, and DAZN has sole rights to several niche sports around the world.

Netflix is taking more aggressive steps to prevent password sharing, including temporarily locking people out of their accounts if too many households are accessing it. With billions of dollars at stake, don’t be surprised if sports streamers follow suit.

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Conversation Starters

Conversation Starters

  • There are no perfect brackets left in the NCAA men’s basketball tournament this year. No. 10 Maryland’s victory over No. 7 UConn busted the final three perfect brackets.
  • In a rough weekend for the NBA, LeBron James is out indefinitely after a high ankle sprain and LaMelo Ball is likely out for the season after fracturing his right wrist.
  • “Fortnite” creator Epic Games is finalizing a $1 billion funding round at a $28 billion valuation, per Sky. The company received a $17.3 billion valuation after raising $1.78 billion last July.
  • The Kansas City Royals gave catcher Salvador Perez a four-year, $82 million contract extension — the richest deal in Royals’ history.

Question of the Day

Do you own a Peloton bike or treadmill?

 Yes   No 

Friday’s Answer
On Friday, we asked you to reply with the best sports movie ever made.

The most common responses were: Rocky, Hoop Dreams, Remember The Titans, The Sandlot, and Friday Night Lights.

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Written by Abigail Gentrup, Owen Poindexter, Justin Byers

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