ESPN Just Sold The X Games

November 01, 2022

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Hey Friends,

Last Wednesday, ESPN sold its majority and controlling stake in the X Games—its extreme sports competition—to private-equity firm MSP Sports Capital.

MSP Sports Capital will immediately assume control of the X Games’ day-to-day operations, while ESPN maintains a small, non-controlling minority stake in the business. And while the terms of the deal have not been made public, there was a rumored price tag of $50 million floating around earlier this year.

Also, as part of the deal, ESPN will remain the X Games’ U.S. linear TV partner in a multi-year deal, with ESPN and ABC airing the competition.

The 2019 Winter X Games Starts This Week—Here's What You Need to Know | SELF

For those who don’t already know, ESPN launched the X Games in 1995—the first event was known as the “Extreme Games” and focused on skateboarding—and they have run it for the past 27 years.

The event was initially designed to become a cornerstone of ESPN’s offering to a younger audience. And it worked. For example, almost 270,000 people attended the event's fifth edition in 1999, and some of the biggest stars across action sports competed in the X Games each year, including Shaun White, Tony Hawk, Dave Mirra, Chloe Kim, Travis Pastrana, and many others.

But viewership has started to decline over the last several years—from 851,000 average viewers in 2018 to an average of 585,000 over the past four years. And the event has moved outside of ESPN’s core strengths. For example, ESPN says each event requires multi-year planning and a staff of more than 1,000 to help build courses, find judges, sell tickets, schedule concerts, deal with athlete health and safety, and more.

So ESPN has decided to move on and sell the majority of the business to MSP Sports Capital, a private-equity fund that has already established equity positions in sports properties like McLaren Racing and several European soccer teams.

Of course, this will allow ESPN to focus on what it does best: providing a world-class sports viewing experience. But more importantly, it will enable MSP Sports Capital to take control of a generational asset and expand on its recent digital innovation.

For example, when COVID-19 hit, and it was evident that spectators couldn’t attend the X Games in person, the team went all-in on digital. And it appears to be working—X Games Aspen 2021 delivered more than 105 million video views across TikTok, Instagram, YouTube, Facebook, Twitter, and Snapchat (+483% YoY).

X Games Aspen 2021 Social Media Overview

  • TikTok video views: 63.3M (+4,421% YOY)

  • TikTok followers: 403,507 (+1,097% YOY)

  • Instagram video views: 23.8M (+166% YOY)

  • Instagram impressions: 107.1M (+194% YOY)

  • Instagram stories: Garnered another six million impressions, with 46K average story views (+31% YOY)

  • Instagram followers: 2.9M (+113% YOY for event week)

  • YouTube: 4.1M video views (+11% YOY)

  • YouTube: 42.1M minutes watched (+7% YOY)

  • Twitter: 11.4M impressions (+75% YOY)

  • Facebook: 578K total engagements (+319% YOY)

  • XGames.com also saw triple-digit growth the week of the event, with a +692% YOY increase in average daily unique visitors, a +736% YOY increase in page views, and a +835% YOY increase in total minutes spent on the website

MSP Sports Capital will now double down on that strategy. They will still air the event on ESPN each year, as their purchase agreement allows them to do, but they have already implemented Steve Flisler (former VP of content at Twitch) as CEO of the X Games, and he has made it clear streaming is a big part of the companies future.

“Going forward, X Games will likely work with Twitch and YouTube on a free live streaming distribution model,” Flisler told Variety. “There’s an incredibly strong legacy with the brand, but the growth hasn’t been as aggressive as the brand could be…There’s a younger generation hungry for content like this.”

So I’m excited to see how this goes. The X Games is an iconic franchise that appears to fit perfectly (and ready to thrive) in the digital world. Let’s see what MSP can do.

Have a great day. I’ll talk to everyone tomorrow.

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