F1 Extends With ESPN, NBA Finals Viewership Is Up, And Arch Manning Picks Texas

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Hey Friends,

Happy Monday! I hope everyone had a great weekend. Today’s newsletter will be a little bit different—I’ve included a few recent events below, my high-level thoughts on each topic, and sources for you to learn more. Enjoy!

Formula 1 And ESPN Extend Their Broadcasting Agreement

Formula 1 has agreed to renew its US broadcasting deal with ESPN for another three years, according to Sports Business Journal. ESPN will pay “around $75-$90 million annually,” up from the $5 million per year they pay today, and the deal gives ESPN flexibility to put “a small, but undetermined” number of races exclusively on ESPN+.

• ESPN intends to still use Sky Sports F1 coverage going forward.

• The rumor is that the races will still be commercial-free (as they are now).

This is a big deal. And while Amazon and Comcast also submitted bids—Amazon is rumored to have bid $100 million annually—it’s by and large the outcome that many people would have predicted months ago. That’s because ESPN has been a good partner—the average per race viewership has gone from less than 500k to nearly 1.5 million—and ESPN’s rights fee has increased along with it—going from free to $5 million annually, and now all the way up to $75 million to $90 million annually.

And with F1 continuing to expand in the United States with races in Austin, Miami, and Las Vegas, this was a no-brainer. But my guess is that at a fee of $75M+, ESPN requested that, in order to see an ROI while keeping races commercial-free, they would need to have at least a few races exclusively on their ESPN+ streaming platform.

I’m going to release some longer-form content later this week on the details that led up to this deal but check out the article from SBJ in the meantime.

NBA Finals Viewership Is Up From 2021, But Down From 2019

The 2022 NBA Finals averaged 12.4 million viewers per game, according to analytics firm Nielsen. That made it the most-watched NBA finals in three years. But it was still a 20% drop from the 2019 finals, which averaged 15.14 million viewers per game—that was pre-pandemic and the last time the finals were played during its traditional time.

Still, you can’t count that as a win for the “NBA is dying” crowd. Why? Because the total number of people watching cable TV each year also continues to decline. For example, the total viewership number might be down about 3 million from 2019, but the 2022 NBA Finals still had a 20% share of all people that were watching cable TV at the time—that’s a number that has never been higher in the history of the NBA.

Instead, the way people watch sporting events is shifting. More people consume games via streaming or social media, and the NBA has never been more popular than it is today, especially with advertisers. For example, according to iSpot.tv data, the NBA playoffs brought in $842 million in sales revenue for Disney and Turner Sports.

That’s 19% more than the $705 million networks brought in last year and a 54% increase compared to $546 million in 2019. So my point is…numbers can be deceiving.

Read more on NBA Finals Viewership and NBA Finals TV Ad Revenue.

Arch Manning Picks Texas — But What’s The NIL Number?!

Arch Manning hasn’t played his senior season of high school football. He is just 18 years old, and until recently, he didn’t even have a social media presence. Still, he is the best recruit Texas has landed in years, and many people say he is a NIL goldmine.

That’s all true, to some degree. Recruiting & NIL website On3 says Arch Manning has an estimated NIL value of $3.1 million. And I think that is probably way too low—part of the calculation is based on social media followers—and it wouldn’t surprise me if Arch Manning were able to make $5 million to $10 million his first year in Austin.

But I also find it hard to believe that NIL opportunities were the main factor in him picking the University of Texas. Not only is the Manning Family worth more than $1 billion collectively, but Arch also took official visits to Alabama and Georgia—they also have trophy cases full of national championships and plenty of NIL opportunities.

Instead, he probably felt Texas had the best combination of the things he valued, including a big stage, the opportunity to develop and go pro, and an intense college football town. Still, that doesn’t mean Arch won’t take advantage of NIL opportunities.

You can read more on Arch Manning’s commitment here.

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

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