MLS Expansion Update: The Quest For 30 Teams

After multiple attempts to achieve acceptance into Major League Soccer (MLS), St. Louis was awarded one of the final remaining spots (28th franchise) as the league moves towards their goal of expanding to 30 teams in the next few years.

The St. Louis bid to land a spot in the elite soccer circuit in North America was marred by issues over the past three years regarding the political support for the stadium proposal. The former Governor of Missouri had pulled the state funding from the original stadium proposal which cost the city an earlier bid for entry into the league.

St. Louis and MLS had mutual interest because the city had at that point in time recently lost the Rams NFL franchise to a relocation (the Rams moved to Los Angeles) and MLS saw an opportunity to capture fans with less competition for sports dollars in that market. St. Louis also has a rich soccer tradition and a history that dates back to the origins of the sport being played in America.

The original ownership group had some issues as well, and that coupled with the uncertainty of the financing for the stadium project doomed their initial attempts at landing a franchise (see my previous article on this situation). However, the city and their business community remained committed and resilient and they reformatted the stadium proposal to a privately-financed structured plan targeting land near Union Station, the public transit hub of St. Louis.

They also recalibrated their ownership group with the Taylor family (Enterprise Rental Car owners) and Jim Kavanaugh (owner of the St. Louis minor league soccer club) and it will be the first franchise to be majority owned by female investors. The land for the stadium site has to be formally transferred over so construction can begin, but that is considered a done deal at this point.

The franchise will begin play in 2022, with the announcement of the name of the club, and the team logo to follow in the coming months. In the meantime, some other cities are set to make their respective MLS debuts: Nashville and Inter Miami will join the circuit in 2020, and Austin will join in 2021.

Nashville SC will begin play in the NFL stadium used by the Tennessee Titans for a couple of years while the construction of the largest soccer specific stadium in the United States is being assembled at the Fairgrounds site. That project seems to be on target and that city will be an intriguing addition to the league.

Inter Miami, the 5 -year quest by David Beckham, is a whole other story. In an earlier piece I detailed the plan for the team to build a soccer stadium at the Freedom Park site in the downtown area. That site has encountered some significant environmental issues with contamination from when that site was used for waste incineration.

The remediation of that site is going to be costly and is going to potentially set back the time frame for the opening of the facility. The initial plan was for that facility to open in 2022, and the team has another stadium project underway for a temporary site. The Miami club is the only expansion bid with two stadium projects: the other one being the construction of a temporary stadium and new practice facility in Fort Lauderdale at the Lockhart Stadium property.

The club will play in Fort Lauderdale in 2020 and 2021 before moving to the Freedom Park stadium (if it is operational by then) but Lockhart Stadium was very old and it required a full teardown and a rebuilt stadium to conform with current construction codes. The original Miami MLS team, the Miami Fusion, played at the old Lockhart Stadium, but it folded due to low attendance.

This reboot of MLS in Miami should be concerned about having to play longer than two years in Fort Lauderdale because it is so far from downtown Miami and has no public transit options, it was part of the reason why the Fusion failed to gain momentum in the market. The timeline is also very tight, they have to be ready to play games at Lockhart Stadium in five months or so.

One of Beckham’s partners, Jose Mas, gave a press conference recently where he stated that both projects were progressing well. Mr. Mas felt that the Freedom Park land issues would be resolved and that everything will stay on track. He also stated that the team plans to have some sort of test event at Lockhart in February, so they are ready for opening night. I guess time will tell.

The Austin franchise is progressing forward with their marketing and promotional efforts while preparing to build their new stadium on the site of a former shopping center in North Austin. They recently announced the addition of Austin native, Matthew McConaughey, as a minority partner investor in the team.

The announcement of St. Louis as the 28th franchise leaves the league with two final spots for expansion. The two most likely candidates are Sacramento and Charlotte. The Sacramento bid is a topic I have covered in various articles over the past four years. They are the group that keeps getting passed over and have had some financial issues with the ownership group that have left them at some points treading water in the race to the MLS approval. The addition of Ron Burkle, the billionaire investor who also saved the Pittsburgh Penguins of the National Hockey League from relocating to another city, has bolstered the chances of Sacramento gaining a successful bid.

Burkle is known to be very methodical in his approach, and this is a huge commitment in dollars with $200 million for an expansion fee and the private financing of a stadium being around $300 million that is a tremendous amount of capital to invest, so it will take time. The Sacramento bid is looking at 2022 as a launch date anyway, and it has a proposed stadium site at the Railyards in the downtown area.

Charlotte has come from out of the woodwork to emerge as a really legitimate bid for the 30th and final spot. The group is led by billionaire David Tepper and Tom Glick who ran the NYC FC franchise in MLS for a period of time. Mr. Tepper also owns the Carolina Panthers of the NFL, and the plan is for the team to play in the NFL stadium, Bank of America Stadium.

MLS has some reservations about that part of the bid, but they have also seen success with Atlanta and the Seattle Sounders both playing in NFL stadiums and drawing large crowds on match days. I think the market demographics and the ownership group will be the deciding factor in Charlotte eventually gaining acceptance into the league at some point in the future.

It is an exciting time for soccer in America, and it is a very exciting time for fans around the country to get the opportunity to have MLS soccer in their city.

CBS Viacom Merger Impact

CBS and Viacom finally completed their merger after rumors over the past few years of joining forces, and more than fourteen years after the two companies had split apart initially. The deal follows about three years of drama around the various power players involved in bringing together two large media companies in an era of increased competition in the industry.

The new company will be split 61% to CBS stockholders and 39% to Viacom stockholders, and is estimated to generate $28 billion in revenue. It will be called ViacomCBS, will integrate content from both companies into the ever-popular area of streaming with the CBS All Access application.

However, the combined company will continue to license their programs to Netflix, Amazon, and others because of the enhanced revenue that can bring to their portfolio as well. The new content library is deep and their audience reach is massive, which will serve the new company well in negotiating for advertising dollars with the Fall TV season ready to begin soon.

The new ViacomCBS can compete in the space, but is dwarfed by Netflix ($136 billion in revenue), Disney ($245 billion in revenue), and Comcast ($193 billion in revenue) and one prevailing theory is that they are positioned now to acquire another media company to keep pace with the rest of the industry.

Some media industry experts have linked the newly merger companies to potentially target AMC Networks for consolidation. Some other reports have ViacomCBS in negotiations with Sony Pictures, Lions Gate (to purchase Starz), and Discovery Networks all as potential acquisitions that would help them compete with Netflix, Disney, and Comcast.

The immediate future revolves around integrating the personnel of both companies and determine who will take on some of the responsibilities of leadership in newly structured business units as well as on the corporate level.

The flipside to this deal is that some politicians have criticized the merger saying that it will limit competition, increase price of cable, satellite or streaming services. This observation is certainly justified based on the backdrop of the AT&T merger with Time Warner which produced some of those same consumer issues. WarnerMedia, the name of the new company, had content pulled from cable providers and available only on DirecTV, which is also owned by AT&T.

This maneuver has caused trepidation whenever media companies are consolidated or merged in the current climate. The CEO of the new company is Bob Bakish, and the Chairman of CBS is Joe Ianniello and they are looking to maximize some of the advertising revenue because they reach over 20% of all television viewers, and their strategy is trying to leverage that better as a combined entity in those negotiations with advertisers and sponsors.

CBS has also an uphill climb ahead of them with the harassment claims and the multiple reports of toxic work environment claims that have made headlines in recent years. The new executive team has promised a climate of “inclusiveness” and the company has made big changes to the CBS News division naming a female to the top executive post there, and installed Norah O’Donnell as the anchor of their flagship evening news broadcast.

CBS and Viacom have so many synergies that make sense in this deal, and the hope from their executive leadership and Wall Street analysts is that this new merged entity can usher in a new chapter for CBS amidst their struggles recently. The upcoming television season and the Fall “sweeps” period will prove whether or not this merger will begin a new day at the company, or if it will remain the status quo.

(Background courtesy of Business Insider, CNN, Vox.com, and Boston Globe)

Follow Up: Calgary Flames New Arena Deal Moves Ahead

This is a follow up to an earlier piece on this topic, with news yesterday that the City of Calgary and the Calgary Flames professional hockey team had reached a tentative agreement on a new arena in a blighted section in the downtown area. This arena would replace the Saddle Dome, their current facility, which is about 35 years old it was built for the Winter Olympics that Calgary hosted back in 1988 (believe it or not) it does not seem that long ago.

The deal has been discussed for a few years now, and active discussions began in 2017. The two sides reached a point last summer where the Flames ownership indicated, and senior management began to talk publicly about, relocating the team to another city. They even mentioned U.S. cities as possible destinations. This was seen as an attempt to “strong arm” the political powers in Calgary, but it is not like National Hockey League (NHL) teams have not relocated in the past, which put it inside the realm of possibility.

The framework of the initial deal, back about a year or so ago, had the city paying 33% of the cost of the building, the Flames paying a portion of the building, and the remaining amount would be supplied through a “facilities tax”, essentially a ticket tax paid by fans as well as other visitors to the arena.

However, the math in the current deal announced yesterday has changed, according to local news sources, Calgary will pay 50% of the cost of the proposed $550 million arena, the Flames will pay 22%, and the “ticket tax” will fund the remaining 28%. The city will own the building, the Flames ownership will most likely pay their contribution in some sort of annual payment over a ten year period, and the ticket tax will be paid to the city most likely annually.

The team ownership comes away from this deal well, the clear winners. It also triggers the conversation regarding whether a city should have ownership of an asset like an arena or stadium. It should also be noted that the Flames will be responsible for the maintenance and operational management of the facility, which will have a cost associated with it, especially as the building ages.

It is very similar to the agreement in Edmonton with the Oilers new arena. The structure with the “ticket tax” is similar in that agreement as well. The difference in Calgary is that they are trying to push a deal through by Monday of next week. Many parties involved, including residents, feel that is not enough time to make a decision of this magnitude, one that will impact the city for many years to come.

The proposal is supposed to be put into a public vote on Monday, if it is voted down, the path forward will be very unclear. In the event that it is passed, then the measure will most likely be the source of controversy in Calgary and could prompt certain parties to try to appeal the decision on a national level. The other way it could go is a conditional acceptance or conditional decline that would offer an extension of three months for further review and consideration.

The city officials have to figure out how to change the narrative that looks like they are being “taken to the cleaners” for 50% of the cost of the project. They have to come up with a rationale behind why the expenditure is beneficial for the city of Calgary.

The city and the team ownership also have to address the faction of the public who feel that the funds being used on a hockey arena (events center) could be spent on something with greater impact to the community. The objective being that the new arena will bring jobs, economic development, and investment to an abandoned area of Calgary.

This has happened in other cities with NHL and NBA arenas moving downtown with numerous examples of how the new arena has jump started the economic investment in city areas that were largely forgotten. Edmonton is a good example of this, the new arena brought tremendous financial investments and development to that area of the city.

The residents need to be consulted because the facilities tax is going to foot almost thirty percent of the cost of the proposed new arena. They need to decide if that is the direction that they want to go with their entertainment dollars in the future.

In the end, all parties involved could, in my view, use more time to evaluate this proposal and decide upon the best course of action for the funding of the new arena. The Saddle Dome is an aging facility that is becoming cost inefficient to maintain to NHL standards, which is prompting both sides to understand that a new facility is on the horizon. It just cannot seem like it is being pushed through on a fast track, which is exactly how it appears at this point.

Those deals, historically, have backfired, and the time and effort of so many end up being wasted. The parties involved have to consider that too before moving too fast with this agreement.

Someone To Believe In

This blog has featured articles on a range of subjects from sports, to business, to the environment, healthcare, marketing, and poetry. I thought about some different topics to write about since it has been a little while since I have shared on this blog forum, but nothing was “striking a cord” with me.

I decided that it was a good time to take a break from mergers & acquisitions coverage, or a piece on the media wars, or writing about healthcare (which are all important topics) in order to take a different approach.

I have shared on this blog a few times in the past that I host a podcast on Life Coach Radio Network twice per month titled, “Undivided”, the series just reached the two-year milestone and the episodes focus on social justice issues or wellness topics that impact people. I am hosting the 50th episode this evening on the debate over body image, which is a very big issue with people from across the demographic spectrum.

The episode is going to feature an expert in the area, Suzanne Reilley, and will be a powerful, inspiring program for those dealing with that issue in their lives. I am not an expert, but in my research, at the heart of all of it, there is a root cause just like anything else. That root cause is different in certain people or circumstances, but the common thread is similar to other emotional or psychological issues: it is the lack of someone believing in the individual and/or the lack of someone in their life to provide them with unconditional love.

The underlying fact is that we all need someone to believe in, we need someone we can look up to, and we need someone who believes in us. Many people lack the spiritual connectedness in an increasingly noisy world filled with distractions, to take the time to understand that when we do not have that person in our lives, God fills that role for us. God is always there to provide you with unconditional love and support.

Our society tends to forget that spiritual component very easily. However, anyone who has dealt with substance abuse addictions will tell you that in treatment they teach you to surrender to a higher power and acknowledge the presence of God. That void from alcohol, drugs, gambling, or addiction to working out/body image is all filled by the love of God. The presence of other people: friends, mentors, sponsors, teachers, coaches, or a relative are additional resources that are important and have their place in the process of wellness.

These other support roles do not measure up to the love and peace that come from having a connection with God. It is sadly being largely removed from our societal conversation in favor of worldly possessions and other methods which have proven to leave people still with an underlying sense of unfulfillment.

The pressures of society to look, act, or react in a certain way also confound the situation and can leave the individual eventually feeling adrift or disconnected. The long term emotional and mental anguish that this can cause is also scientifically proven to be a major issue in our society.

In addition to the need for a spiritual connection and other measures of wellness (diet, sleep, exercise) is the need for mentors. Many companies and non-profit community type groups have developed mentorship programs for young people or for young adults entering the workforce. These programs are invaluable and provide stability and support for those who do not have a family or anyone else in their life to provide it to them.

In the end, whether you are struggling with body image, substance abuse, or another type of medical disorder; we all need someone to believe in. We all need someone to believe in us. We all need to remember that those people are out there. We all need to remember that God is with us all always and that He loves us for who we are unconditionally. My hope and prayer are that fact provides comfort to those who feel lost and alone. Please turn it over to God, and let God do the rest.

GMO News: Monsanto, Executive Order, & Mexico

The GMO (genetically modified organism) in food debate continues to rage both here in America and in the European Union. The issues related to GMO containing ingredients in food have been well documented on this site in the past such as the conglomerate controlling the seeds for crops, the migration of GMO crop pollen into organic crop fields, and the dangers of the Roundup weed killer product being labeled a carcinogen by the World Health Organization.

The news this week about Monsanto and the mounting legal battles they face over the Roundup product and the lawsuits that have been brought against the company in nearly every state in the country have brought renewed scrutiny to the chemicals used in crop management.

The media also released a report that prior to Bayer merging with Monsanto they found evidence of Monsanto making lists of entities in the EU which were trying to stop them from using GMOs and detailing how they were going to “handle” these entities. This news tarnishes the image further of Monsanto, known as the “world’s most disliked company” and draws into question their business practices.

The legal claims of many farmers, custodians, grounds keepers, and other consumers who have developed cancer after being exposed to Roundup is going to be a narrative for Bayer/Monsanto in the years to come. The secondary issue that will stem from those legal proceedings will be the role of using Roundup on soybean crops and other staple food items and the ramifications of that process on food safety.

The role of Monsanto and other big bio-tech companies in creating GMO crops has also come into focus with an executive order that was put forward by the current administration from The White House last week. That executive order, according to UPI and other media outlets, streamlines the regulatory process of the three main federal agencies regarding GMOs in the food supply. Some maintain that the order makes it easier for GMO ingredients to be used in food products.

However, in fair balance, the executive order can also be interpreted to provide more clarity on the exact regulatory process that agencies such as the FDA and USDA need to take toward labeling a product that contains GMO materials. The current process is so convoluted that it creates opportunities for loopholes for the food companies with regard to GMOs.

The studies that came about this week regarding yield curves of GMO containing crops compared to organic crops were also revealing. The results tend to poke a hole in the GMO proponent’s contention that the yields are better with their products, the results show very little difference in the yield curves compared to organic crop yields.

The use of GMO components in farming also correspond with more chemicals being used in the overall process and make our food supply chain even further reliant on a few large corporations, which is an unsettling situation when you consider those consequences.

The legal battles over GMO crops in Hawaii and Mexico have been center stage in the GMO debate in recent months as well. In both situations, the bio-tech companies, namely Monsanto, have been dealt setbacks. The situation in Hawaii was a change in the law there to require a disclosure around the use of pesticides and the presence of GMOs in crops as well as the creation of buffer zones near medical centers and schools barring the use of those chemicals or GMO products in those areas.

Mexico banned the use of GMO corn and the planting of GMO corn within the entire country, which means that Monsanto cannot operate their corn harvesting production areas in the country. The law also stipulates that no GMO corn can be sold in Mexico as well, which is a significant blow to the big bio-tech companies.

Some have asked me: when will the U.S. “get it” on GMOs? The EU has banned them, now Mexico, and the lobbyists keep churning out messaging that GMOs are safe and are essentially for sustainable crop yields. Both of those statements are being heavily challenged at this point.

The answer to that question is unclear and complicated. The seeds are the main problem, because if the seeds contain GMOs even in the case of organic products we have a ramp up problem that we must deal with in the short term. The long -term issue will be the availability of land for organic farming and making sure it is far enough away from GMO crop sites due to the migration of pollen that I mentioned earlier.

The remediation and rehabilitation of certain crop land to convert it to organic farming standards is a secondary issue, one which was covered in an earlier piece on some of the programs currently being run that offer incentives to farmers to make the transition to organic produce.

A component that complicates the “GMOs are safe” debate is that most all of the research is tainted because it is paid for by the corporations that stand to profit from the expanded use of genetically engineered or modified ingredients. That is certainly a conflict of interest that cannot be ignored in this matter.

The average consumer is more educated on ingredients and more health-conscious than ever before. The consumer has far more information readily available than at any other point in time, so the case for GMOs is an uphill climb already. The impact of the all of these recent developments will continue to shape the debate in the coming months.

Follow Up: CVS Merger With Aetna Looks Doomed

The CVS and Aetna mega-merger in the healthcare space is, according to many trusted sources of news, doomed to be rejected in federal court. This merger has been the subject of many other pieces here on Frank’s Forum and the many aspects of this potential deal have been scrutinized.

In a prior piece, the role of the federal judge, Judge Richard Leon, was detailed with the background that he oversaw the AT&T merger with Time Warner, where he dismissed the claims of the Justice Department that it would harm competition and disrupt equal access to content made by Time Warner media properties.

In a few short months, AT&T has tried to limit content to provide an advantage to DirecTV (also owned by AT&T). The decision by Judge Leon has been criticized by numerous groups within the industry.

Then, the news that this same judge would oversee the gigantic proposed deal between CVS and Aetna. The pressure that Leon applied to CVS/Aetna was seen by many to be similar to a “make up call” in sports; where the referee knows they made a mistake earlier, so they make a different call to make up for the prior faulty ruling.

The $69 billion agreement between CVS and Aetna would be a rather landmark “make up call” and would certainly have repercussions across the industries of both healthcare and health insurance. The stock price for CVS took a tumble on Tuesday amid the reports that the court will likely submarine the planned merger.

In the center of the debate is the opinion of Judge Leon that CVS would be given an unfair advantage to their PBM business unit with the addition of over 20 million Aetna subscribers who would be pushed into an exclusivity with CVS for their prescription drug coverage. The secondary concerns have to do with prices on prescription drugs, and the Medicare Part D plans that Aetna offers.

Aetna has agreed to sell the Medicare Part D plans and has a deal in place for that which was a stipulation of the original merger agreement. The case certainly could go badly if the court reverses the ruling, and that will create uncertainty for the future of the merger.

The two parties could explore a recalibrated merger proposal making some types of concessions based on the feedback from the eventual court ruling this summer. The Department of Justice may also have some feedback in the process that would be taken under advisement by both CVS and Aetna. The DOJ could also appeal the decision of the court, though some experts feel that it could be hard to overturn the decision on appeal.

CVS is on a quest to become an elite healthcare company with the acquisition of Caremark and they seek to further transform themselves into with the merger with Aetna so that they are not reliant on just the traditional retail pharmacy channel. That is a smart strategic direction with the emergence of Amazon into the pharmaceutical and healthcare industries.

CVS was hopeful that gaining Aetna would help with the overall valuation of the company in the eyes of Wall Street. Aetna was hopeful that merging with CVS would provide them with a built-in base of consumers who would purchase healthcare products and who had a high brand loyalty to CVS.

The whole merger, and all of the time and money poured into it, which is a significant cost, is at stake. The ruling of Judge Leon will have a dramatic impact on both companies, their stock value, and the entire healthcare industry.

(Some background information courtesy of Barron’s, New York Post, and CNBC)

Food Industry Trends: The Market For Alternative Meat

The introduction of new alternative meat products into the grocery aisle, the fast food drive-in, and the trend towards healthier eating patterns are all factors in the reports issued on Wednesday that Barclays, JP Morgan, and other analysts predict regarding plant-based alternative meat products.

Those major analysts predict that the market for plant-based products will grow to $140 billion in 10 years. The major players in the industry segment, Impossible Foods and Beyond Meat, are banking on getting their share of that revenue influx. The combined effect of consumers being more health-conscious along with dietary restrictions (gluten allergy, soy allergy, vegan) as well as supply issues with traditional beef have led to this trend toward alternative meat products.

The secondary impact of the supply issues with beef and chicken are rising costs for those commodities, which has a direct effect on the profitability of a restaurant, diner, or fast food outlet. The mainstream launch into the alternative meat market has been spearheaded by Burger King with a partnership with Impossible Foods which has produced the “Impossible Whopper” sandwich.

The alternative meat version of a classic American hamburger sold so robustly in the test market phase that it has been rolled out nationally by Burger King. This news has been met with speculation that their rival, McDonald’s , will introduce a plant-based alternative meat burger option in the near future. It is speculated that they will work with Beyond Meat as a partner in that project.

The alternative meat option for products such as The Whopper, will provide an option to vegetarians and others who do not eat meat to become fast food consumers, and it opens options for hardcore fast food customers who struggle with having red meat 5 times or more per week. Those customers can now eat the alternative product, which all reviews say tastes like the “real meat” Whopper version, that they can visit Burger King every day, or nearly every day and use the plant-based option two or three times per week.

The gains from the fast food offerings and the additions to the grocery aisle will provide significant growth in sales for both companies as well as the rest of the industry segment. It should be noted that none of the players in the alternative meat space have developed an alternative to chicken.

Chicken, as a commodity, is still priced competitively and comparatively cost effectively when compared to the other traditional proteins and the plant-based protein alternatives. It remains to be seen whether that will play a role in a further shift by the restaurant, fast casual, and fast food outlets toward even more menu items that feature chicken.

The medical community has produced data for years around the dangers of eating too much red meat. The alternative meat trend is a response both in the grocery store aisle and the fast food counter to offset the trend towards eating less red meat. It is also a way to maintain profitability as the alternative meat protein sources are less expensive than beef to produce.

The demographics of the U.S. have changed as well, with Baby Boomers retiring and becoming more health-conscious with the time to dine out more frequently. The other end of the spectrum is the Millennials who trend toward being healthier in their eating patterns than prior generations were at that age, and they are armed with endless dietary information that they use to make food choices. This younger generation is staring to come into its own and have more disposable income to dine out or spend more money on a product such as an alternative meat entrée.

The Beyond Meat product sells for about $12 per pound in comparison to ground beef which sells for $5 to $6 per pound depending on the supplier or your geographic area. That premium is something that certain consumers are willing to pay, or if their dietary needs dictate it, they will pay for the alternative meat compared to the standard ground beef option.

The Beyond Beef alternative product is also appealing to those who are looking to go GMO-free, if they have a soy allergy, or if they are gluten free due to celiac disease or another autoimmune disease that necessitates them to observe a gluten free diet.

The alternative meat trend is also gaining popularity because of the environmentally friendly benefits of producing plant-based meat products. A study by the University of Michigan found that the Beyond Beef burger used 99% less water to produce than beef, 93% less land, and 46% less energy than a beef burger.

In a time of increased environmental awareness and conservation of resources, the alternative meat products provide a “green” friendly option to consumers. All of these factors drive the formula which Barclays, JP Morgan, and other analysts used to determine the explosive growth of the plant-based alternative meat market in the next 10 years. It stands to reason that they may be correct, and in a time where health, dietary considerations, and environmental conservation are “hot button” topics this industry could be at the right place at the right time.

Red Nose Day 2019: Fight To End Child Poverty

Red Nose Day in the United States is today, May 23rd, and as I have done each year here on this blog, I wanted to try to spread awareness of this very important fundraising event to end child poverty.

Red Nose Day is run by Comic Relief USA in conjunction with major relief aid partners and national sponsors. The national sponsors again for the 2019 Red Nose Day event are: Walgreens, Mars Confectionary Company, Comcast NBCUniversal, and The Bill & Melinda Gates Foundation.

Since the first Red Nose Day event in the US in 2015, about $150 million has been raised to help fight child poverty. These funds have helped 16 million children in all 50 states, Puerto Rico, Latin America, Africa, and Asia. The funding has brought education to about 1 million children, essential medical services to 13 million children, and has helped 75,000 homeless children.

In addition, the funds raised by this event have provided 36 million meals to American children living in poverty, a major issue that is often overlooked because of the perception of our country’s wealth. In 2018, the Red Nose Day programs and events raised $47 million in the United States.

NBC is back as the main broadcast partner and will dedicate three hours of primetime television air time tonight to the Red Nose Day fundraising effort. The special program begins at 8 PM Eastern tonight with Kelly Clarkson and Blake Shelton among other stars that will highlight a two- hour block of coverage dedicated to raising awareness of childhood poverty. This includes a short film comedy sketch routine, and an appeals film by Milo Ventimiglia from “This Is Us”.

The network will close out the night from 10 PM to 11 PM Eastern with a special edition of “Hollywood Game Night” for Red Nose Day. Please tune in tonight to NBC for this important event.

Walgreens returns as a key sponsor of this event and the drugstore chain has sold 40 million of the iconic red noses since 2015 across their over 9,000 US locations. The healthcare retailer has made Red Nose Day a major event through store signage and advertising campaigns.

Mars Confectionary Company and their ubiquitous American brand, M&Ms have again donated $1 million to Red Nose Day in 2019. The company also raises additional money and support for the program through a month of events across their corporate locations aimed at raising awareness, funds, and volunteer hours across several communities in America.

The Bill & Melinda Gates Foundation is among the most well known in the world. Their mission is focused on children, and they provide funding and programming support for the donations raised from the event and how they are utilized to provide the maximum benefit to children in poverty.

We live in the wealthiest nation in the world. We all can do something within our means to help support Red Nose Day. The amount of children living in poverty in America is staggering 15 million, or 21% of all children in our country live in poverty according to various census related sources. The need is great both here and in underdeveloped areas of our world in Latin America, Asia, and Africa.

We can help children, who cannot help themselves, to have their basic needs met. Please support this important event today by going to www.rednoseday.org and by following @RedNoseDayUSA on Twitter, Facebook, and Instagram. Please share this with your friends and family.
The eradication of childhood poverty is the goal of Comic Relief USA and is shared by the sponsors of this event. I think we all need to share that goal, and each do our part to help this important event to succeed. Thank you all for your support of Red Nose Day 2019 and may God bless you for your efforts to help children in need.

(Background information courtesy of RedNoseDay.org, NBC.com, Walgreens.com, and the 2010 US Government Census Department)

Content Wars: Disney Gains Full Control Of Hulu

The content wars in the media landscape, a frequent topic of past articles on this site, took a surprising turn on Tuesday with the news that Disney has obtained what the press release deemed as “full operational control” of streaming service giant, Hulu.

The analysts and other media experts had predicted that Comcast would try to oppose ceding full control of Hulu to Disney, especially given their contentious recent bidding wars for Sky TV and 21st Century Fox. Comcast owns 31% of Hulu through their subsidiary business unit, NBCUniversal.

The deal announced Tuesday between these two media goliaths is a “put/call”. The terms of the deal translate to provide mechanisms to both sides. Comcast could by January 2024 initiate the mechanism that would require Disney to purchase their 31% stake at a market valuation determined by independent analysts.

Furthermore, Disney could require Comcast to sell their stake if certain market factors are realized in the future. It depends upon the performance of the service and reports state that Disney has committed to a minimum value of $27 billion. Disney stock jumped Tuesday to over $130 per share and is nearing an all-time high based on the Hulu acquisition news.

The agreement also includes that Comcast will continue to stream Hulu over the X1 set top box and that Comcast has extended the rights to their NBCUniversal content to be streamed through Hulu for another three years. However, the fine print of the deal also allows for some of that content to be pulled in a year to be streamed through a Comcast streaming service at a later point.

The timing was very good for Disney as they needed to gain full control of Hulu at this point in time with the planned launch of the streaming service known as “Disney+” by the end of this year. Some analysts have predicted that the Hulu platform is where Disney will put some of their “non-family” content, which would make sense.

The deal makes sense for Comcast because the advertising revenue and the subscription bases for Hulu and Hulu Live TV services will both grow exponentially with the trend toward “cord-cutting” in the next four to five years. They will also have options on whether they want to pull their NBC and Universal based content in the future, once their streaming service is optimized. In the meantime, they will get a deal for sharing that content with Hulu from Disney. Comcast is going to get a big check from Disney in five years.

Disney has now stated that they plan to position a future offer to customers that “cord-cut” from cable and satellite a package to buy two or all three of their streaming services: Disney+, Hulu, and ESPN+ for a bundled rate. That is an interesting approach and signals the way of the future for television that is becoming increasingly customized and internet streaming reliant.

The agreement today puts pressure on the other players in the industry, especially CBS, which has to figure out how they will grow to compete in a world that is being dominated by Disney and Comcast. The DirecTV Now service is losing subscribers already to Hulu Live and You Tube Premium because DirecTV changed their packages for channel offerings and increased prices.

These changes alienated long-time customers and drove them to seek alternative service providers with better rates and packages. This deal today is only going to strengthen Hulu and their tiered offerings: $5.99 per month for commercials, $11.99 per month for commercial-free streaming, and $44.99 per month for Hulu Live television service which is a 60 channel package.

Disney took another step toward dominating the relatively new industry space of the subscription streaming services. It remains to be seen how the rest of the industry will respond, how it will impact the NBCUniversal streaming service set to launch in 2020, and what Comcast will do with the money it will receive for their stake in the “put/call” arrangement they made in five years.

One thing is clear: times are changing in the television programming industry.

(Some industry background information courtesy of: Fox Business, USA Today, and CBS Market Watch)

XFL 2020 Announces Broadcasting Deal

The XFL reboot of the professional football league founded by Vince McMahon of World Wrestling Entertainment (WWE) fame, also known as XFL 2020, announced today a major broadcasting deal.

The burgeoning league will broadcast games on Saturday and Sunday primarily on both network television and cable television outlets. The XFL agreed to terms with ABC/ESPN and FOX on a three- year contract on Tuesday. The networks will broadcast the eight-team league with four games each weekend: two on Saturday and two on Sunday.

The Saturday games will be back-to-back and start at 2 PM Eastern and the Sunday games will be in the afternoon hours as well. The broadcast partners will feature games on broadcast television on ABC and FOX nationally and will broadcast on ESPN and FS1 as the primary cable outlets. However, the press releases seemed to indicate that some games would also air on secondary cable outlets ESPN2 and FS2.

The opening game of XFL 2020 will be held on February 8, 2020 and the season will span 10 weeks with two weeks of postseason games. The top two teams from each four-team division will move into the playoffs. The championship game will be broadcast on ESPN.

The scale of this broadcasting deal is impressive for a new league and will certainly help grow the interest in the league by having regular time frames for games and two highly visible broadcast partners. It will be easy for fans to access the games and to ultimately drive the excitement around this new league.

Some people, myself included, were very surprised that the XFL was able to leverage a broadcasting deal that was so extensive with network broadcasts of games on major networks such as ABC and FOX. This is especially profound given the recent failure of the AAF (Alliance of American Football) which had a broadcasting deal in place with CBS, Turner Sports, and NFL Network.

The AAF folded and ceased operations before the end of their first regular season. The ratings for the broadcasts were abysmal. The risk is certainly there for the broadcast partners of any new league, but the “ x factor” no pun intended, in this deal is McMahon who is seen by many as an outstanding marketer and businessman.

The XFL Commissioner, Oliver Luck, is also a mastermind of marketing the sport of football. The league chose larger media markets than the AAF as well. The AAF went with small markets that had no NFL presence. The XFL took on the approach of being in large markets to grow the game and reach a larger audience.

The rebooted XFL will have teams in: Dallas, Houston, Tampa Bay, Washington D.C., New York/New Jersey, Los Angeles, St. Louis, and Seattle. Those locations all make sense from a strategic business sense and from the fan base perspective. The sport of football has a tremendous amount of support in states such as Florida and Texas. The New York, D.C., and Los Angeles markets make sense from a media and population/demographic perspective.

The St. Louis market makes sense because they lost their NFL team to relocation, and Seattle is a great sports city that gives them a major market in the Northwest. The broadcasting agreement today also indicates that with the trends in media moving toward the importance of content, live sports content is still so highly desirable for the networks. It is especially important in reaching the key demographics of men age 18 to 34 and also for men in the 25 to 54 and over 55 age demographics.
These groups of men tend to spend more money than the other demographic groups as well as demonstrated the willingness to be more likely for an impulse purchase. The broadcasts of the XFL games will most certainly feature sponsorships with heavily male product areas.

In a personal note, I remember the first XFL iteration which debuted back in 2001. I recall the night of the inaugural game and watching that game with my father. I remember all my buddies were watching it too. The first XFL failed because they tried too many gimmicks.

I also recall watching the New York Hitmen who played at the former Giants Stadium in the Meadowlands complex in New Jersey, and they drew a good-sized crowd to those games. The league back then just had too many trick plays, off the wall rules, and they did not have enough star players.

Commissioner Luck has stated that XFL 2020 will not have the gimmicks and they will provide a highly visible platform for players who are looking to make the leap to the NFL especially at positions where real-time game reps are what is needed for scouts to evaluate their talent.

The XFL 2020 took a big step forward today with this broadcasting deal. The team names, uniforms, and schedules will be the next big news from this new league. It remains to be seen if McMahon is a great salesman or if the product on the field will back up the expectations being set for this reinvented football league.

(Some background info courtesy of Fortune, Wall Street Journal, and ESPN.com)