John Kosner Spoke with Ira Boudway of Bloomberg About TV Viewership for the NCAA Women’s Basketball Championship

April 5, 2024 KM

Original Article: Bloomberg, by Ira Boudway, April 5th, 2024

In this issue:

We look at one of the few decent sports broadcasting deals around. Congrats ESPN.
We talk to former Phoenix Suns vice president and co-owner Andy Kohlberg, who owns Spanish football club RCD Mallorca along with Steve Nash and Steve Kerr, about what it’s like taking a team to the cup final.
We round up who is winning the Bloomberg Brackets for a Cause. Hint: swipe right.
And check out our chat with RedBird Capital's Gerry Cardinale, who has his hands (and a lot of money) in everything from AC Milan to the United Football League to Fenway Sports Group. The former Goldman Sachs partner joins The Deal with Alex Rodriguez and Jason Kelly to talk about shaking up the sports media landscape and advising the late George Steinbrenner.

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Clark Delivers (and Then Some)

Hi, it’s Ira. I was in Albany, New York, on Monday night watching the Iowa Hawkeyes play LSU in the NCAA women’s college basketball tournament. At the risk of sounding corny, the game was a reminder why we watch sports in the first place. One of the hazards of this job is that you become jaded. You start to see sports as an industry. Teams become tax dodges for the mega rich. Leagues become legalized monopolies designed to exploit the talent of their players and monetize the devotion of their fans.

But for two hours on Monday night, I got carried away in the spectacle.

A rematch of last year’s championship, the game promised high drama and delivered beyond expectations. Caitlin Clark, Iowa’s sharpshooting superstar, sought revenge after LSU stifled — and taunted — her last time around. This time, with a Final Four appearance on the line, Clark was magisterial, scoring 41 points, including nine threes, in a victory. But LSU, led by Angel Reese and Flau’jae Johnson, kept it close until the final minutes in a fast-paced, back-and-forth game.

Afterwards, as I stood watching Iowa players celebrate, a fan came down to the sideline. He wanted something, anything, to keep as a memento. (Hope he liked the stat sheet I handed him.)

“Americans understand the difference between a regular event and a big event,” says John Kosner, a sports media consultant and former executive with the NBA and ESPN. “That game was tied at halftime. I think everybody was calling their friends and saying: ‘Are you watching this?’”

As it turned out, 12.3 million people watched on ESPN, the largest audience ever for a women’s college basketball game, breaking the record set by the same two teams in last year’s championship.

It’s a big number for any sporting event beyond the NFL — more than the audience for any game from last year’s World Series and all but one game of last year’s NBA Finals. And it’s more than any men’s college basketball game over the weekend, save one: N.C. State’s upset of Duke on Sunday evening, which had the advantage of being on CBS, a broadcast network in many more homes than cable.

NCAA March Madness Weekend TV Viewership

Women's games (highlighted in gray) drew record highs for ESPN/ABC.

Source: Nielsen

Clark has provided a huge lift to the women’s game. Five years ago, in 2019, the women’s final between Baylor and Notre Dame drew 3.7 million viewers, which, at the time, seemed like a good number. This year, Clark and Iowa drew more than 3 million for a first-round blowout of Holy Cross and nearly 5 million for their second-round matchup with West Virginia.

On Friday, Iowa eked out a win against UConn — the winningest program in the sport — to set up a showdown on Sunday with undefeated South Carolina in the title game on ABC. Drawing 20 million viewers is not out of the question.

Which brings us back to the cold business side of the Clark phenomenon. In January, ESPN agreed to a new 8-year, $920 million deal for the right’s to the women’s March Madness tournament, along with 39 other NCAA championships across a variety of men’s and women’s sports, including volleyball, gymnastics, and tennis. At an average annual value of $115 million, the agreement more than triples the value of the previous deal with ESPN. Yet it still may be undervaluing women’s basketball.

In 2021, after Sedona Prince, then playing with the Oregon Ducks, posted a viral video juxtaposing the pathetic “weight room” provided to players for that year’s women’s tournament with the elaborate setup for the men, the NCAA commissioned an independent equity review. Kosner and his colleague Ed Desser wrote the media analysis for that review and argued that the NCAA and ESPN were failing to unlock the full value of the women’s tournament.

The following year, at Kosner and Desser’s recommendation, the NCAA extended the March Madness branding to the women’s bracket for the first time, an obvious move that should have been made years ago. But the NCAA did not follow the pair’s recommendation to sell the tournament separately from other championships. According to their analysis, women’s March Madness alone could fetch between $81 and $112 million per year.

ESPN, however, likes the bundle for the extra programming to spread across its networks. So instead of breaking women’s basketball out, the NCAA sold them an even bigger bundle. Women’s March Madness, by the NCAA’s estimate, accounts for 57% of the value of the new deal, or about $65 million per year. CBS and Warner Bros. Discovery, by way of contrast, are set to pay a combined $1.1 billion per year for the rights to the men’s tournament beginning next year.

While Clark won’t be around next year when ESPN’s new deal also kicks in, the network appears to have scored a bargain. “She has established a higher base of interest for women's college basketball,” says Kosner. “Next year, I expect ratings will be down from these historic heights, but I still think that they will be at levels that we hadn't seen before.”

ICYMI

College hoops star Jack Gohlke’s three-pointers helped Oakland University upset a college basketball behemoth. Now, he’s helping his school as it prepares to tap the bond market.
EuroLeague, the top tier of men’s professional basketball in Europe, is exploring raising capital through the sale of a minority stake.
Scotty Cameron’s custom clubs are solid investments, objets d’art that attract a whole other level of devotee. Are they worth the love?
The bid to build a $2 billion ballpark and surrounding entertainment district in Kansas City faced a surprising opponent.
Tottenham Hotspur is in talks with potential investors over a stake in the London football club, marking another Premier League club hunting for cash after a boom in sports team valuations.
Billionaire Steve Cohen said he expects that more businesses will move to a four-day work week, one of the reasons he’s made investments in golf. Obviously.

Brackets for a Cause: Crunch Time

The annual Bloomberg Brackets for a Cause competition is getting tasty. Among the 58 participants, each person pledged $20,000 to pool a total of about $1.1 million dollars to be donated to various charities split between the top three brackets in both the men’s and women’s tournaments.

Leading the men's pack so far is Whitney Wolfe Herd, the founder of dating app Bumble. Herd has been a top performer in previous years, coming in second in 2022. Whatever the connection between building a successful dating algorithm and picking brackets, I want to know. Herd's got UConn beating Purdue in the final.

For the women's bracket, two private equity bosses are topping the table, with Dynasty Equity co-founder and CEO K. Don Cornwell drawing with Peter Weinberg, co-founder of Perella Weinberg Partners. Cornwell is picking South Carolina, a team that has been picked by 69% of participants to win it all. Ventas Chairman & CEO Debra Cafaro and Weinberg are the only two people who have UConn winning it all which is surprising given the program is arguably the best in women's college basketball history. — Aysha Diallo

An American in Mallorca

The Spanish football cup final — the Copa del Rey — is set to be played this weekend between Athletic Bilbao and RCD Mallorca, so we asked co-owner Andy Kohlberg what it’s like for an American owning a football team based in Palma de Mallorca, the largest city of the Balearic Islands, a sunny archipelago off the Mediterranean coast of Spain.

Pretty nice, I guess?

A Phoenix Suns vice president, Kohlberg bought Mallorca in 2016 with Robert Sarver, his former boss at the Suns, and gained a majority stake last year. Basketball coaches Steve Nash and Steve Kerr also own minority stakes. It’s been a rocky few years to say the least.

In 2017, the team was relegated to the non-professional third division, but has managed to claw its way back to the top tier, where it now sits just above the relegation zone.

“When we bought the club, we did not plan to go up and down; it’s difficult when it happens,” said Kohlberg. “We’re just trying to build a good foundation, invest in the academy, invest in the stadium, invest in the practice facilities and weather the storm that way.”

Some US owners try to replicate American sports franchises. Focus on stuff outside of football. Build a business. Increase revenue. Repeat. Which is great when you don’t get relegated and have the stipend of broadcasting rights to fund your franchise ad infinitum.

For Mallorca, who’s fighting to keep its place in LaLiga, relegation would imply slashing its budget to about €10 million ($10.8 million) from this season’s €70 million, of which about 60% comes from TV broadcasting rights.

But focusing on work off the pitch has its success stories. We’ve written about how Venezia FC’s owner Duncan Niederauer, the former chief executive officer of the New York Stock Exchange, has turned the club into a viable business in part via a high-fashion rebrand of club merchandise. A similar plan is underway at FC Como.

Mallorca has a million inhabitants, and last year the Balearics were visited by about 14.4 million tourists.

“Maybe they are not the real Mallorca fan, maybe they’re from Germany and a Bayern Munich fan, but want to come for a unique football experience,” said Kohlberg. “Having different VIP areas for different levels of fan experience is something that the American sports have done quite well.”

The goal isn’t changing the culture of Spanish football, but rather “trying to broaden the choices that people have while still maintaining the core of the culture and the integrity of Spanish football and Majorcan football,” he said.

To be sure, that implies dealing with profound business differences, and “that’s hard,” said Kohlberg. “We tried to learn and take a few things from the NBA, but you can’t try to copy what you do there.”

The club already invested €30 million to revamp its 23,000-seat stadium, following the injection from CVC Capital Partners of €1.37 billion into LaLiga’s clubs. The refurbishment eliminated the running track and moved the stands closer to the pitch, created a tunnel with glass walls to see the players ahead of games, an exclusive 50-seat stand behind the benches and facilities including restaurants, clubs and a gym. That helped boost annual revenue to €64.4 million, more than tripling in the last three seasons. The club is even profitable, something rare among European football clubs.

Playing the cup final this Saturday it's “very unusual,'' said Kohlberg. “We're very proud, very happy and also very surprised.'' — Thomas Gualtieri

Kosner Media