The NBA focuses on broadcast enhancements for next season, Peloton cruises with optimism for growth, sports are driving video game advertising impressions, and Sinclair Broadcasting struggles as platforms drop RSNs.
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Gary A. Vasquez-USA TODAY Sports
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With the NBA aiming for a pre-Christmas start to its next season, the league will look to amp up its broadcasts. Virtual signage, holograms and virtual reality are just some of the offerings the league will look to enhance, bolstering revenue streams even after fans return to games.
As COVID-19 cases rise, hopes of having fans back in the stands for the start of the season seem to be on the back burner. Pandemic or not, however, “99% of fans never step foot into an NBA arena,” representing the long-term importance of an exciting at-home experience.
Additionally, a December start will allow for prime broadcast dates — like Christmas Day — for NBA partners ESPN and Turner. The shortened season will also conclude prior to the start of the Summer Olympics, allowing select players the ability to compete with USA Basketball.
New 2020-21 Season Plans:
- 72-game season
- Play-in tournament
- Potentially no All-Star Game
- Oct. 30 deadline for CBA modifications
- Financial allowances to help make up for loss of fan revenue on game days — up to 40% of league revenues
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As Peloton seemingly keeps pacing the exploding at-home fitness and wellness industry, its chief financial officer, Jill Woodworth, has plenty of optimism for its future. Last month, Peloton reported its first-ever quarterly profit — $89.1 million on $607.1 million in revenue.
Gyms are struggling through the pandemic, but more than 180 million people still pay monthly fees to physical workout facilities. Compare that to the 3.1 million paying Peloton members and Woodworth sees a quick path to more growth.
Peloton will continue to expand its offerings on its connected-fitness platform and look to smart TV integrations — like Apple TV — to attract even more users. Along with expanding offerings beyond cycling and running, Peloton is working on getting more accessible: nearly 50% of bikes sold in the 2020 fiscal year were to households making less than $100,000.
Peloton’s Shifting Consumers:
29% of Peloton member households made under $100,000 in 2014.
46% of Peloton member households make under $100,000 in 2020.
16% of Peloton members were younger than 35 in 2014.
31% of Peloton members are younger than 35 in 2020.
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Video game advertisements are heating up as the holiday season nears and next-gen console releases are on the horizon. More than 1.54 billion impressions were generated by gaming industry TV advertisements from Sept. 16 to Oct. 15, largely driven by sports programming.
The NFL accounted for 247.8 million impressions, with the NBA postseason making up 131.6 million. Sony, Nintendo and EA Sports were the top three companies benefitting from the ad impressions.
While sports are aiding gaming ads, gamers are pushing products more than ever before.
Gamer’s Star Appeal:
$120 million — Earnings by the top 10 esports players in 2019
$20 million — Tyler “Ninja” Blevins’ multi-year deal with Microsoft’s Mixer before it shut down
7.46 billion — Gaming views on Twitch, YouTube and Facebook in 2020 Q3
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Denny Medley-USA TODAY Sports
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Sinclair Broadcasting Group is losing platforms for its regional sports networks quickly. Hulu is the latest platform to drop the RSNs — which include regional Fox Sports networks and YES — joining DISH, FuboTV and YouTube TV in the trend.
Much of the fleeing can be attributed to the high costs of carrying the RSNs. Comcast did agree to extend its deal with Sinclair, with CEO Chris Ripley saying 85% of subscribers are tied in for at least two more years.
Still, Sinclair’s stock has plummeted — down 41% year-to-date — and its sports business, Diamond Sports Group, is working on a possible restructuring of an $8 billion debt load. Diamond’s revenue was down 38% year-over-year in the second quarter to $616 million.
Notable Earnings Reports This Week:
10/27 — Big 5 Sporting Goods, Microsoft
10/28 — Six Flags Entertainment
10/29 — Activision Blizzard, Alphabet, Amazon, Apple
10/30 — Under Armour
This article is sponsored by Public.com. This is not investment advice. See Public.com/disclosures.
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