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BFD Expert Voices - Media Deals

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Apple is quickly becoming a player for major sports rights after deals with Major League Baseball and Major League Soccer, as well as a potential NFL deal, Tim writes. 

Why it matters: Competition for sports rights has never been greater, and now legacy media companies have to contend with digital natives like Apple and Amazon.

Driving the news: Apple stunned everyone yesterday when it announced that it signed a 10-year rights deal with Major League Soccer that begins in 2023.

The deal will see Apple create a new streaming service for MLS games that will be exclusively housed within Apple TV. It will feature every single game, meaning there are no local blackout rules. 

Certain games may also become available on linear TV, and a source tells Tim that ESPN, MLS' current rights holder, is still in talks for some of those games. 

While Apple declined to comment on the deal terms, it is reportedly for $250 million a year (up from the current $90 million per year it got from its expiring deal). When you factor in subscription revenue, the agreement is worth more than $2.5 billion for the soccer league.

Be smart: This arguably gives Apple greater control over a sport it carries compared to every other rights holder.

"No fragmentation, no frustration — just the flexibility to sign up for one convenient service that gives you everything MLS, anywhere and anytime you want to watch," Eddy Cue, Apple's SVP of services, said in a statement.

The big picture: Apple and Amazon are fighting over sports supremacy in the streaming world. 

The two are seen as the biggest contenders for the NFL's Sunday Ticket package as well as a stake in the league's media business. 

Amazon is already in business with the NFL. It's paying $1 billion a year to carry "Thursday Night Football" starting in the fall.

Disney, Paramount and Warner Bros. Discovery are looking to give their in-house services ESPN+, Hulu, Paramount+ and HBO Max a sports boost as well.

What's next: A slew of major rights will come up for renewal over the next few years, including the Big Ten and Pac-12 conferences from the NCAA, as well as the NBA. 

At this point, especially given Apple's prior interest in the Pac-12, we can't count Tim Cook and his deep pockets out of any deal. 

1 big thing: Apple's budding sports empire 

Illustration of Apple’s logo painted on turf. 

Kaleidoco, a web3 entertainment company that specializes in augmented reality, raised a $7 million seed round that values it at $24 million, its founders tell Tim.

Why it's the BFD: The AR and VR space has been looking for something that would break it out from being just a fad among technophiles.

Investors include Animoca Brands, GameFi Ventures, Gemini, Jane Street, Adit Ventures, Merit Circle, Nexo, Hex Trust, SuperChain Capital, and The Seelig Group (TSG).

Details: Kaleidoco will use the funds to accelerate growth and add more staff as it continues to build and release products.

The company debuted its Particle Ink Metaverse during Ted2022 in April and has a live installation in Las Vegas. It also has a demonstration planned during the Annecy Festival on Friday.

"We're driving revenue through gameplay, through NFTs, through ticket sales and live portals, e-commerce and, potentially, advertising branding situations as well as live events," says founder and co-CEO Jennifer Tuft. 

Tuft adds Kaleidoco also has a tech platform where it's developing its own proprietary technology that uses machine learning. "That will be later on, licensed out to other types of content and other types of verticals like education, retail or health care."

What's next: Kaleidoco hopes it's uniquely positioned to take advantage of Hollywood's growing obsession with the metaverse. 

"We've already been contacted by certain people within the Hollywood realm to say 'Hey, we love what you're doing. We want to somehow see if we can work with you to implement this technology into our own types of content,'" fellow founder and co-CEO Cassandra Rosenthal says. 

2. The BFD: Kaleidoco's $7M seed round

Illustration of a collage featuring three smartphones and pieces of money.

Data: Yahoo! Finance; Chart: Kavya Beheraj/Axios

Trillerverz, the company behind short-form video app Triller, and video software company SeaChange International ended their $5 billion reverse merger yesterday, Kerry writes. 

Why it matters: It's yet another withdrawal of a media company's plans to go public amid market volatility, but interestingly, Trillerverz still wants to enter the public market. 

By the numbers: SeaChange's stock dropped 40% following the news and dipped to an all-time low of $0.38 yesterday. The stock was trading at $0.52 around 10:30am ET today.

Details: Trillerverz said yesterday it will pursue a direct listing and plans to be listed on the Nasdaq by September under the ticker "ILLR," upon Nasdaq and SEC approval. 

"The current market demands clear and disciplined thinking," CEO Mahi de Silva said. "A Triller IPO is a cleaner transaction, allowing us greater control of our destiny."

Trillerverz said it was "responding to higher than expected demand for its convertible debt offering and a clear preference to go public via a direct listing from its current and future shareholders."

SeaChange's press release noted that it was "no longer possible to complete the merger prior to its termination date of June 30" and that the companies "decided not to seek an extension." 

Of note: Trillerverz reported a $769.7 million net loss for 2021, per an SEC filing.

B2B comprised about 98% of its total 2021 revenue. De Silva told Insider that the company expects its B2B business to be its biggest revenue driver going forward. 

3. Triller kills reverse merger, pursues IPO

Baidu is in talks to sell its controlling stake in iQIYI, which could value the streaming service at about $7b, per Reuters. http://axios.link/0Vh2

Imagine Entertainment's $700m acquisition talks with London-based investment firm Centricus Asset Management have cooled, per TheWrap. http://axios.link/9jdQ

Pono Capital Two, a Japanese tech SPAC, filed for a $100m IPO. http://axios.link/k85o 

VersusGame, a San Mateo, Calif.-based mobile gaming platform, raised $25m in Series A funding. Investors include APEX Capital, Brightstone Capital Partners, Feld Ventures, Gaingels and Kombo Ventures. http://axios.link/mHKQ

Tubi signed multiyear deal with Lionsgate to be the exclusive ad-supported VOD streaming service for 30 films, and it will add more than 200 Lionsgate titles to its free library. http://axios.link/Vr0F

The NFL has partnered with Chicago-based nonprofit The HistoryMakers to include two years of funding and use of their production services, as well as the donation of archival footage from NFL Films. http://axios.link/z0nK

Little Caesars has replaced Pizza Hut as the NFL's official pizza sponsor. http://axios.link/Bn2H

4. Deal flow

DNEG promoted Erika Burton, its president of VFX Production, to co-president. http://axios.link/SArc

Jerry Bruckheimer Television promoted KristieAnne Reed to CEO. http://axios.link/kG7P

Maria Zuckerman is leaving as president at Topic Studios. http://axios.link/prga

Network Entertainment USA promoted Brian Gersh to president. http://axios.link/eciA

Paramount Global promoted Syrinthia Studer to EVP of international productions. http://axios.link/vtAr

Paramount Global promoted Shauna Phelan and Zack Olin to EVP and co-heads of Nickelodeon and Awesomeness live action series and film. http://axios.link/VDDB

Paramount Global said international boss Raffaele Annecchino is "on leave." JC Acosta, Maria Kyriacou and Mark Specht will serve as interim heads. http://axios.link/aFdg

Sony Music Entertainment named Vanessa Picken CEO of Sony Music Entertainment Australia and New Zealand. She was most recently managing director of [PIAS]. http://axios.link/bjJj

5. Movin' on up (or out)

Comcast has been awfully quiet. Are Brian Roberts and Jeff Shell itching to make a deal? (Variety)

"In recent weeks, Shell has told confidants that he'd love to buy Netflix, which has become more digestible thanks to its recent stock slide, losing some $185 billion in value amid concerns about its subscriber defections. But some insiders believe that the NBCUniversal chief was talking theoretically," Brent Lang and Matt Donnelly write. 

Bela Bajaria on how much Netflix is rethinking its business model: "We're not doing some radical shift" (THR)

"When we make a great show, like 'Stranger Things,' people watch it and talk about it. The idea of watching television and streaming on the Internet works," Bejaria said during the Banff World Media Festival.

Media deal rankles Latino Republicans (Axios) 

"In a letter to the FCC, which must still approve the acquisition, U.S. Sen. Marco Rubio (R-Fla.) and other lawmakers wrote the group 'led by partisan operatives with zero experience in broadcasting' may work to silence certain political viewpoints," Russell Contreras writes. 

'We have to be ready': Steady and calm Joe Kahn takes charge of the turbulent NY Times (Vanity Fair)

On Day 1 atop the masthead, the new executive editor talks social media controversies, digital transformation and meeting the hyperpartisan political moment. "The idea that the Times is stuck in some 1980s paradigm of both-sides journalism," Kahn told Joe Pompeo, "is pretty factually false."

6. Channel surfing

Illustration of a pair of sunglasses with lenses that look like tv screens.

🗣️ Quote of the day: "We've done $25 million in loans against monkey pictures. That's what NFTs look like today," Arcade founder and CEO Gabe Frank told Decrypt.

@tim_bays: "Toy Story 3" on Disney+. Getting ready to cry all over again at that ending to get ready for "Lightyear." 

@kerrymflynn: "Guy's Grocery Games" on Food Network. This show offers so much joy and a few cooking tips. 

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June 15, 2022

1 big thing: Apple's budding sports empire