Former CBS Sports' Pilson: What Everyone's Missing About NFL Deal

They sat down with their broadcast quote unquote partners, negotiated new deals beginning a couple of years, and they're going all the way to the bank, and that includes going digital in a big way with a Thursday Night package. Let's break it all down. We can do that with Neil Pilson. He's a founder and president of Pilson Communications, former president of CBS Sports. Neil, thanks so much for joining us here. Let's start with the Amazon aspect to

this deal. Boy, it's the first time where you get a big digital player stepping up and getting a notable package, in this case Thursday Night game. What do you make of that? Well, I'm not surprised. Uh. The other networks, the broadcast networks didn't want it. They didn't have much interest in Thursday Night. It was expensive, the schedule wasn't that good. They didn't need it as long as they retained their Sunday afternoon, Sunday Night, and Monday night schedules. Uh. Frankly, Uh,

the NFL didn't have interest from from those guys. So the digital components understandable, Uh, predictable. But I think, frankly, the big story you missed. The big story is the broadcast networks and ESPN reaffirmed their permanence uh in broadcast sports for the next eleven years. I think everybody was predicting, you know, the demise of the networks, the end of living your television. Uh, the networks are going to go away. Uh. No,

the networks are here too, here for the next eleven years. Uh. That's the important story. I think the fact that Thursday Night went to digital is is predictable. Uh. It represents about I think thirteen of the total financial pie. But the fact is that on just about every major sport where uh there was broadcast television and digital television side by side, digital never got over five. So uh, you know, one day, yes, we probably will all be in the

digital format. But right now, the broadcast networks I think got to be very pleased with their packages, Neil, I mean to that to your point, cable systems must be so happy about this, because I can't think of any other reason I would stay with an the top box other than being able to get network sports. I mean, is that the only big Isn't that a huge big draw for cable? Sure, it is very important to them. The cable folks have to be very pleased with the

outcome of the NFL negotiations, no question about it. But even more pleased are the television station and the television networks, the broadcasters, because I don't think the NFL is going to be the only UH network to continue with broadcast television with its major major events. I can't see the NBA moving away. UH. The NHL just made a long term deal with ESPN, which is more UH in the broadcaster mode. UH. They're actually a hybrid because they have SPN plus, but ESPN is regarded as one of the

traditional broadcasters. UH. Then you have Major League Baseball, which basically has long term agreements with with the with the broadcasters. UH. So it's a it's a statement. The Olympics are long term with the broadcasters. I'm running through in my mind. The n c A A tournament is long term with CBS and Turner. My point is that those in the media who predicted the end of linear television, they were wrong.

There it's continuing. Uh, it's going to have to share the spectrum and share audience with digital, but linear television for the foreseeable future. And I think we're talking now about the next ten years is going to be a force. It's it's it's real. It's uh, it's not going away. Hey, Neil, I want to talk about the economics of some of these rights deals. It's just downs me here. Every time they come up from renewal, the fee seemed to double.

And I remember your former boss, Mel Karmers and at CBS when they when CBS got its package back that it had lost years ago. He famously said that an investor conference, when asked about the profitability, we will make a dollar is what he said, basically implying that's a break even business. And obviously they look at sports playing

it a little further. Okay, I was there when we lost the NFL yes with Larry Tish back in four uh, and I predicted to Larry that CBS would lose more money without the NFL then they might lose with the NFL. He didn't believe me. Well, it happened, and four years later, CBS came crawling back to the NFL saying basically, give us any package, name your price. We've got to get

back with professional football. And they did. Uh. NBC went through the same discussion because NBC had a slightly stronger network. They lasted eight years without the NFL, then they came crawling back. So, uh, it's not the issue of whether you make any money or lose any money. The issue is will you lose more money if you lose the NFL. And the answer to that is yes. And that explains the current deal. Is the is the NFL completely dominant?

I mean we have Neil international listeners who maybe you don't understand the importance of football, you know, American football in America. The word is completely and I think you

used it. Yes, it is the dominant. Uh. You know, you look at the NFL ratings on a given weekend, if you include the pregame shows and and Thursday Friday said, Thursday, Saturday, Thursday, Sunday, Monday, the NFL is getting seventy or eighty rating points every weekend, and no other entertainment property or sports property comes close to that. Uh. And it's and it's steady, it's it's almost it is guaranteed just about. So it is totally unique property, unique to the USA. But you know, you

look at World Cup ratings around the world. You look at the the ratings that the Premier League gets, the importance of European soccer, Well, this is our premier League by a larger margin than in Europe because there's so much more competition here. We have so many more professional and college sports programming in the US compared to any other country in the world. And the fact is the NFL is the dominant by far. Is anything important property

entertainment property as well? Is anything? Uh do you see any big growth anywhere? I mean, I'm living over here, so I watch, you know, Formula one religiously. Everybody watches Premier League, but it doesn't seem to have picked up in the US. Is there anything that you see as a shooting star as a big growth in terms of sports properties? Well? Uh, first of all, is the major properties occupy a tremendous amount of attention so it's very

hard to kind of grow into that stature. But frankly, uh, international soccer is growing in the US, it is doing better. International soccer gets much better ratings nationally than MLS. Uh. That's not widely known, but MLS has very strong local interest, but so far they have not cracked the national ratings. Uh.

Very well. Um, there, No, I don't. I don't see any any new sport or any sport that currently exists growing to the point where it is comparable to not just NFL, but comparable to college football, which frankly is the second highest rated programming. And then we have nine or ten other other sports. You know, we have NASCAR, we have the we have Major League Baseball, we have hockey, we have the NBA, we have college basketball, we have

tennis and golf. No other network, no other country has that level of major sports that takes up so much audience it almost prevents a new sport from from growing that quickly. It's true, It's true. I mean, Paul, you know, soccer is everything here and there really isn't a second run people watch another sport the way they do in the US. Yeah, Hey, Neil, thanks so much for joining us. I really appreciate it. Neil Pilson, founder and president of

Pilson Communications. We had the diplomats from the US and China UH beginning a set of meetings yesterday in Alaska, and apparently things did not get off on the right foot. Let's see what that means for UH future discussions and relations between the US and China. There's absolutely nobody better that we like to talk to and we talk China than Leland Miller. He's the CEO of the China based book International. Leland, what should we take away from kind

of what we saw yesterday? A little bit unusual about how you know, aggressive the rhetoric was on both sides. Yeah, I've got a real kick out of all the reporting from this because you know, the the reporting says that that this broke down into acrimony and that there was a tense exchange. You know, you know, look, both sides got exactly what they wanted out of this event. Now you know, there was never a chance of a reset. There was never desired by at least the Biden side,

to really to move on the issues. Um, this is this is the way that tract you dialogues are typically done. So if if for anyone who hasn't participated in them. You know, you have the US on one side and they sort of look sternly across the table is saying, we are America. We love democracy, we love our allies, we love the rules based order. We are America. And then on the other side of the table, you've got the Chinese who's also have stern expressions, and they say,

you know, we are China. We are strong, we also love democracy, we also love the rules based order, but not your rules. We are strong by the way you are weak. You know, we are China. And and this is how these things work on a regular basis. Now they don't have to have open, you know, sharp tones, but this is sort of the back and forth they'll be playing out for domestic audience on each side. So the fact that this didn't accomplish anything or was there was a lot of sort of loud pushback, that is

exactly what should have been expected from this. There was never going to be a real accomplishment coming from this meeting other than the two sides coming at each other saying, Okay, we're tough and we're not going to give in. The one accomplishment I thought they could achieve, and maybe they still will. Is a meeting between Biden and hijin Ping, or at least that was teased as a possibility on April. Do you think it will happen. At some point, it

will happen. I don't. I don't see why the Biden team would want it sooner. But you know, look on on the one side, these are these are the two most powerful nations in the world. The two leaders getting together makes some sense. It's simply how you know, what's the timing on this? If it does happen, I don't expect anything really to come of it, other than at some point in the first year. I do expect that

they're going to reopen a consolate or two. They're gonna let some journalists back into China, perhaps some some some goodwill gestures, But there's no desire right now on the U S side to make serious concessions or to get They don't really need anything from from from Beijing, so there's no real desire for this for this to be

a priority right now. The big priority for Biden is to not look weak on China so that his administration doesn't, you know, encounter problems in Congress dealing with its other priorities. So whether or not she in And and Biden meet in the near future, which I wouldn't expect, but who knows. I don't expect anything real to come of it anytime soon. So Leland, what is the China policy or what will be the China policy? What should be the China policy?

Do you think of the Biden administration um again towards China. Well, what they're what they're saying now, and it's it's other than you know, we're reviewing everything, is that we're going to keep most elements of the Trump tough on China policy in place, but we're going to adapt it over time to our mindset, which is we need to but more priority on consensus and bringing in allies, etcetera. Now, the problem with that is it's a process, not a strategy.

So yes, it makes a lot of sense to do that, But then where do you go with this? And they don't know yet, And I think that there's some big questions coming up with Taiwan, how we're gonna have how the United States is gonna handle handle uh relations with Taiwan, and and and certainly the tech company is a big one UH. And then of course the Shinjong situation is hang over everything because China is hosting the Olympics next year and so there will be a lot of pressure

to back out of that. So a lot of big decisions are coming out out of you know, to come out in future months. But they don't have a set policy on this yet right now. The messages we're dealing with COVID, We're getting to that later, Leland. I've watched the car industry and a couple of things necessary to build a good ev rare earths and chips are seemingly controlled by China, or at least you know, a large portion of that industry is will we move it back to the US or will we make a deal? Has

that get worked out? Yeah? I think to two issues with semi god ducts, and look, there is nothing more important than semiconductors and the semiconductor discussion right now. But I think two issues are being conflated. And the first is we've got a global semiconductor shortage, and that's due to a lot of dynamics. There are supply dynamics, UH, supply chain dynamics breaking down in COVID. There's some bad decisions by companies like car companies on the demand side

not to order more. You've got some US China trade stuff that's interfering. So you've got you've got a global semi conductor shortage and that's gonna hit GDP and that's hurting companies, and so there's just sort of a panic coming out from from from different industries to do something

about it. Separate from that is you at the you know, is US China competition at the very top of the food chain, which is you know, uh seven animetor chip fourteen animeter, chips seven five three going onto two in the future, and right now there's only there are very few companies that can produce is. Essentially Taiwan semi Conductor is the company producing this, and the US is ring fencing their production from going to China. So there's a big debate, you know, are we too reliant on Taiwan

semi conductor? Should the US have other alternatives? Yes, this is very important to discuss, but it's totally different from the global semiconductor shortage that we're seeing right now across this affecting markets in GDP. But people in industry right now see subsidy dollars, and they're like, well, well let's just talk about panic and and everything's anti China, so

let's let's get some more money findistry. The strategy is not craft out in a way where it looks like this thing is being done in a in a way to really craft out an intelligence strategy on advanced chip manufacturing. Leland, thanks so much for joining us. Really appreciate your insight. Always fun talking to you as well. Leland Miller, CEO of the China Beige Book International. All right, so Paul was just talking about FedEx. They had surging package volumes

and price gains. Those two things offset increased labor costs. But you know, for the economy, increased labor costs are good too. Let's bring in UM right now, Christina Hooper, she's the chief global market strategist for Investo. Christina, is this, you know, one of the telltale signs of an economy that is booming? Well, certainly it is, and that's what

we should be expecting. We are saying, UM, what is likely to be a very robust and inclusive economic recovery in and this is just part of of that kind of of robust recovery. And when you say inclusive, explain that, because that's definitely a buzzword these days. Is it really going to Are we going to see women come back in the labor force? Are we going to see people of color come back in the labor force and get pay raises? Well, I certainly think we're going to see

a more re entering the labor force. So when I say inclusive, I'm thinking specifically about this being um, what I would term a job full recovery recovery as opposed to a job less recovery, which is what we saw for a number of years following the global financial crisis. I think this is going to be different because we have more fiscal stimulus UM that that has been provided, and because of the nature of this recovery. This is not a confidence game. We're not trying to rebuild confidence.

We're not going to have a slow recovery. This is a situation where, um, once we get enough vaccines in people, UM, we are going to get closer to her immunity, and it's going to be off to the racist. It's going to be much more like a switch turning on. Christina, what did you make of FED chairman Pale and his comments earlier this week, he seemed to suggest that the FED is still lower for longer. What did you take away?

So my takeaway is that he the Fed really means what it says in terms of the policy framework changing, and that they're really abandoning this concept of preemptive tightening. That's really really important because that means they are going to let this economy run because and if they do see some kind of increase in inflation this year, they're going to be most uh most predisposed to treat it as transitory and sit on their hands. So this is

this is very exciting. It's a big departure from the past, and so I think it's a positive for the economy. Now. Of course, it can be a double edged sword for markets because markets are worrying about a rise in inflation, and of course that's causing or one of the reasons why we're seeing that rise in in treasury yields. But markets are only worried about a rising inflation, or mainly worried about rising inflation because they think that will move

the FED to raise rates, thus killing the recovery. Right, So if you take the FED at its word, that they're gonna let the economy run hot because they believe it's only transitory. Then you can assume that they're not going to raise rates even if we see it, right,

That's part of it. This is almost a chicken and egg conversation, right because uh, fear of inflation does have an impact on the ten year yields, and so there are concerns that if the Fed is not willing to control uh the yield curve further out, that that is going to present problems in and of itself, even if it keeps the said funds right where it is. So that can be a bit problematic, especially for the stock market, right, And that's what we're seeing on days like today and

what we saw yesterday. All right, Christina, So given what we have with this backdrop, will we heard from Chairman Powell the expectations on inflation? Um, how are you you guys at invest go where are you looking for opportunities right now? So? First of all, Um, it is still an environment that favors risk assets, especially if you have

a longer time horizon. But even if you have a shorter time horizon, this year, I think we are going to see stocks outperform other asset classes, but they're going to do that with significantly more volatility. That's just the nature of this recovery. We made huge gains in the last year. Uh, and now we're going to be coming up against a few headwinds. I think it's more a matter of digestion, that that at each new level that we hit with the ten year yield, that there is

going to be a period of digestion. But I still think that this is going to be a positive year for stocks. Uh. We're likely to see cyclicals the more value side of the stock market outperformed growth this year, but that doesn't mean to abandon growth. I think you still want exposure there. And again, Uh, this is going to be a year that underscores the importance of diversification. To really smooth out that volatility, we need to have

exposure to a variety of asset classes. Are you, I mean this conversation is focused on US assets, I guess, but European stocks have also done well, and UM analysts like European stocks, but we don't have vaccines getting into arms the same way. Is that going to be a problem. Well, I certainly think that's going to slow down the timeline for an economic recovery in Europe. Also, the effect of noss of of the vaccines being used in Europe may play a role as well. Um, But if you're a

long term investor, that's not really that important. The timeline can shift a little bit, can be delayed a little bit. Um, it's more about valuations, uh, it's more about longer term prospect and so I would say this is an environment where valuations look very attractive in Europe, but they also look attractive in Asia, especially Asia e m uh. And so so that's an area as well to be looking at. Christina,

thank you so much for joining us. We always appreciate getting your views on the markets on a global scale. Christina Hooper, Chief Global Market Strategies for Investo. They have one point three trillion with a T and assets under management. They're located in a plant. Let's talk a little bit more about vaccines right now. This is not just because I'm angry or bitter that, Um, the place I live

is so slow. Well, you know what think the word inefficient is a great word to use when talking about Germany's vaccine delivery, and the same can be true can be said. I should say about um other European countries. Terres Raphael joins us to talk about why even Switzerland has really dropped the ball compared with the efficiency of states like West Virginia, um Terres. Normally we think of Germanic people as super efficient. I guess that's just not true. Well,

in this case it seems not to be. And that's um, you know, was for me the most surprising finding when I began to question whether the problem was really all about supply, because right the narrative has been that, um, the countries that produced the vaccines and manufacturers, they're fine and vaccinating their people, um. But um. But but other places are starved to supply and therefore can't roll out the vaccine. But when you drill down a little bit deeper,

it's not just the supply issue. Obvious, the supplies hugely important, but some of the most vanted health care systems in the world UH fall down on delivery. And that's for a number of reasons. But one of the big ones I found was a lack of basic electronic health records, which you know, the World Health Organization has been pushing for a long time, and only about half of developed

countries have it. But the places that have really good digitized systems which enable them to get the message out UH, to to have an efficient booking system to track who's been vaccinated, those were places that were able to vaccine at a higher rate. And there were other factors as well, such as whether they were able to use kind of traditional UM pathways for delivering healthcare, such as in the UK with the National Health Service or in Israel with

the health maintenance organizations tryas. One of the issues that we're finding here in the United States is reluctance from some people sizeable percentage of population to get vaccines US sometimes labeled as anti vaxers. Is that a big issue across Europe? Is a very country to country. What are they finding It definitely varies from country to country. So in the UK UM we've found a really strong, robust

uptake of the vaccine. Now it's trailing off just a little bit as they get down through the age group, so they're now looking at vaccinating UH the under fifties and UH just this week we're hearing that some people are not making their appointments. Younger people are feeling not quite as vulnerable to the virus and and may not be as eager for the vaccine. UH. France has had

a much bigger problem. And you know that's that's a longstanding issue UM in France, and and it's when the government has just been really poor at trying to counter and is now trying to make up lost ground. But you know, again, if you were to rank the problems of vaccination rollout, you put supply first, but then you put delivery systems and then maybe you put vaccine hesitancy or anti vaxers at the very bottom. Why doesn't somebody

in charge here just say send them out. When we get the supplies into all uh, you know, drug stores, pharmacies, vets, nail salons, why not just get them everywhere? Yeah, I mean, that's an interesting question. And every country has is doing it differently, and in many countries, you know, Germany with the lender, Switzerland with the cantons, America with the states.

In the US, for example, the federal government has done a really good job of sending out supply to the different states, but then it's left it up to the states and the localities to decide what to do, and they have adopted a whole mishmash of UH. Different systems. So you know, someone was telling me that in a suburb of Chicago there are three or four different websites to register for the vaccine, and sometimes you couldn't get an appointment or you'd have to try different websites. They

all use different systems. Uh. You have some towns that are vaccinating out of town commuters, but not the elderly who live in the town. So there's you know, this is a huge logistical operation, and for health care systems and local authorities that aren't good at logistics or have never confronted something on this scale, they're falling down treas.

You know, before the pandemic, we used to talk to you almost on a daily basis about Brexit and you would help us, uh improve our understanding of what's going on. There is the pace of role well in the UK versus the EU being seen in the UK has a referendum on Brexit. Hey, we've made the right decision. Yeah, I don't think there's any doubt that it has, you know, reinforced Boris Johnson's message that Britain can do it better alone.

Now that may not be the case at all, because the UK could have approved the vaccines on its own without the EU, it could have ordered its own supply. But the reality is UM that that that that's the that's where the the optics are. It does show you the difference right between how Brits operate and how Europeans operate. Europeans prefer to take a heck of a long time doing things. They like to have tons of bureaucracy that makes it almost impossible to act, whereas Bridge just get

down to it and solve the problem. Well, the thing they did right here is the government realized that they had to take it out of government and they put a private sector venture capitalist with a uh, you know, pharmacy of a bio background, in charge of a task force who identified the vaccines, did the deals with the companies, and they recognize that that the rollout had to be through the NHS, which is very good at this It has the electronic health records and they get the military

involved and that just work. Now, if you know, we go back and talk to the PPE crisis or the handling of the pandemic up to this point, it's really a different story, isn't it. But when it comes to UM, you know, being able to innovate on this. You know, on this particular front, Britain was just way out ahead, and you know they deserve to be taking the credit that they're very happily, you know, happily eating up right now. Terres is the expected expectation of things are going to

improve here and over what time frame? I mean, are there are things improving across the EU in terms of getting shots and arms? Yeah, I don't think that the big supply crisis is is you know, is that um, you know, is that damning for the EU right now? I think that you're going to see a lot more supply coming in and that the target um I think of the adult population by the end of July. I mean,

that's that's that's pretty much achievable. So um, you know, I think we are going to see things getting a

lot better. And of course we also have, um, the seasonal effect on our side, but there's no question that Britain will be way out ahead and that that's going to affect travel and all sorts of other things in addition to you know, the political um knock on effects that you just mentioned, and the US is is ramping up quite rapidly as well, not because it's got great delivery systems, although some states like West Virginia that I wrote about do, but because it's got tremendous manufacturing um

power when it comes to, you know, producing these vaccines. Hey Trades, thanks so much for joining us. We love chatting with you. A great column here today, you know, kind of comparing a couple of places you wouldn't necessarily compare, uh, Switzerland and West Virginia as it relates to the vaccine rollout, well, because Berland is so rich, right, and for those who don't live in the US, West Virginia is a very poor state. So it's um the contrast is amazing, Yeah,

it is. And again we'll have to keep a track of how that's developing. In your red headline. Crossing the Bloomberg terminal, the CDC says schools can allow three feet of distance in classroom, down from six ft, so hopefully that will accelerate the reopening of schools across the US. Point thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on

Twitter at Matt Miller venty three on Fall Sweeney. I'm on Twitter at pt Sweeney Before the podcast. You can always catch us worldwide at Bloomberg Radio