Dana Blankenhorn

Oligarchs are Marxists

Rich dudes all claim a capitalist back story, red in tooth and claw.

But once they got it made, all oligarchs are Russian. They divide markets among themselves to make sure no one below can get in. This is why we need strict anti-trust laws.

Don’t believe me? Look at sports.

Every American sports league is run on a communist basis. Owners are guaranteed a profit. Revenue is shared, and costs are capped. Supply is artificially limited, so that governments can be extorted for new palaces the oligarchs control.

Americans have become blind to this. But when you get to soccer, the world’s game, the blinders come off.

That’s because in most of the world, where capital is limited, and where the word competition means something, the soccer business really is capitalist. Winners get most of the money, including the TV money. Losers get drummed out of the league and (eventually) out of the business.

Sell ESPN

For all you read about how great Walt Disney CEO Bob Iger may be, the stock has gone nowhere in 5 years. It was at $101/share at the start of May 1998. It’s $102 now.

Iger got thrown into the culture wars by Florida Republicans, and while many are applauding his strategy, he wants to get out soon and needs a big win.

Selling ESPN will be a big win.

What stock analysts will tell you is that cable is dying, and ESPN is more dependent on it than anyone. It now collects $9/month from everyone’s basic cable bill whether they watch its channels or not. That’s a big reason many are canceling cable.

But there are two bigger problems looming over the company.

The first is the cost of broadcasting rights. That’s rising fast, and ESPN is losing rights auctions. It now dominates only hockey and college football. It has one-fourth of the NFL, one-half of the NBA, one-third of baseball. It has lost cricket and soccer, two huge global games. Its ESPN+ streaming service is now the home of leftovers and depends on (often crappy) local broadcasters for its feeds.

This is going to get worse because of the second problem.

The TV Content Crash

Ever since the Web was spun, over a quarter century ago, TV content providers have been getting squeezed out of the advertising market.

That’s not how it’s reported. But fewer people have cable than can watch a broadcast. Fewer still have access to streaming. What’s left of broadcasting now are mostly one-set news shows, cheap reality and game shows, endless re-runs of movies and old TV, people sitting around tables talking, or sitting in chairs yelling. Cable is evolving into the same wasteland.

Streaming is where it’s at because of ARPU. That’s Average Revenue Per User. Broadcasting is free, cable brings in very little to most channels, but a streaming subscription costs $10-15/month and the programmer only shares that with the producer.

Retire Dan Garber

Soccer has a huge opportunity to become America’s favorite sport, as it is everywhere else.

But it won’t get there with the minor league business model of Major League Soccer (MLS) Commissioner Dan Garber.

Garber’s business model was crafted in the 1990s, when MLS feared failure. All teams are controlled by the league. The season runs from the spring to the fall, and ends in a series of play-offs, just like baseball.

The league has prospered, thanks to expansion fees. New owners pay hundreds of millions to join MLS, and this gets split among existing teams. This means teams can’t be relegated if they refuse to be competitive. It makes for lazy owners and bad soccer. It means the most important games are played when they don’t draw interest.

The answers are simple, but Garber won’t consider them. He needs to go.

Once he’s out of the way, MLS should buy the minor league United Soccer League. It can do this by selling its own interest in member teams. This will create a windfall that can fund a new structure.

A Simple Plan for Saving College Football

It’s Labor Day. Put down the tech, put down the markets, put down the politics and the media.

Let’s talk sport.

Specifically let’s talk about a game that’s dying before our eyes. College football.

Football is dying because of its cost. You need over 100 players, 10 coaches, training facilities. It’s impossible, except for the small number of teams that can fill huge stadiums and get on TV every week.

As with so many things today, there’s a simple solution to the problem. It starts by admitting that colleges don’t compete with professionals. The job of a college isn’t to build NFL rosters. It’s not to be a free minor league.

It’s not the job of a college to train anyone for an athletic career. Most sports recognize this. The best soccer players leave the academic environment in high school. The best basketball players are also being directed, increasingly, toward professional training.

Virtual Staging

Right now, production for films, TV, video games, and Web sales are all done differently.

Five years from now, they will all be done in the same way, using “virtual stages” and virtual reality software.

As with everything else in tech, it’s starting at the top of the cost curve but will head down rapidly. Tools like the Unreal Engine cover the software side. Virtual stages represent the hardware side.

The cost of this gear is very high. But the gear is just the tip of the cost iceberg. You need people who can run it, you need people who can write code around it. You need people to integrate it, people who can tell stories using it, and you need big bandwidth to distribute it.

A Santa Story

Recently I woke from troubled dreams to find myself with white hair, a long beard, and a troubling impact on small children.

Little kids would look up at me, wide-eyed.

Their faces held a mixture of awe and fear.

I knew what they were thinking.

I gathered some of them together and told them a story.

The Close Season

Update: Atlanta United chose Frank de Boer as manager instead of Guillermo Barros Schelotto, who is heading to the LA Galaxy.

It has to do with playing style - de Boer's is closer to Tata's. President Darren Eales also decided that Atlanta can now recruit South America on the club's reputation, rather than the manager's. Time will tell how that works out.

The first thing de Boer must do is convince a big European club to pay Miguel Almiron starter's money in a transfer. Getting starter's money -- $15 million or more -- is a key to the whole project. We need to make a profit on turning starlets into stars. Do that often enough, build the league, and in time we'll be able to compete on salary against Europe, head-to-head.

Note that Zlatan is getting $7.5 million, which equates to a UK salary of nearly 147,000 UK Pounds a week, more than that league's top stars make, but less than many U.S. baseball shortstops make. 

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Let’s not talk about politics this week. It’s Christmas.

Let’s not talk about business, or technology, or global warming. Let’s talk about something fun and exciting.

Let’s talk about football.

The most important off-season in Atlanta sports history, the most important one in America’s soccer history, began December 8 with the sight of a sad coach losing a big game.

The New Virtual Worlds Opened by eSports

The latest technology trend is right up my son’s alley.

It’s eSports, people playing high-end video games for serious money.

I was somewhat shocked when my son insisted on buying a powerful desktop PC before heading to graduate school. I had failed to understand, from my couch in front of the TV, that gaming is now the tip of the PC spear. (No wonder I got to choose what shows to watch.)

Only video games press the power of the latest chips and systems. Every other application set, especially my own work in writing about technology, or my son’s academic work, learning about how to create new molecules, can be done with relatively low-end gear and a cloud connection.

Apple Diamond Platinum Service Launches

Apple, having made some inroads into the high-end market with the $10,000 Apple Watch Edition, today announced its entry into even higher-end luxury with Apple Diamond Platinum Service.

CEO Tim Cook explained on a hastily-called conference call that Apple Diamond Platinum only starts with products. It also provides a higher level of service than any other technology company platform has ever sought to deliver, to the most discerning customers in the world.

Any family with a net worth of $1 billion or more can tithe $100 million into a special account for Apple Diamond Platinum service. Under the plan, the customer’s homes, cars, kids, pets and wrists will all be fitted with Apple equipment, and the customer will be given quick service response on any call, no matter how strange it may appear. “There are no stupid questions,” as senior vice president of design Jony Ive explained, “only stupid people who ask questions.”

With Apple Diamond Platinum Service Apple WiFi at speeds to 1 Gigabit/second will fill your home and office, tailored to extend only to the walls and then stop. Mac Pros will be in every office, MacBooks in every living room, Apple TVs will connect to each set, the latest iPhone will be in every pocket and Apple Edition Watches will adorn every wrist. All these products will be replaced every six months, or on the day newer products are delivered into stores, for as long as the customer retains the account.

When service or support is called for, one call or one e-mail to a designated Apple representative will bring one-on-one service directly to your family member. Whether you’re trying to load an app, check the weather in Abu Dhabi or just get an advance look at the last season of “Mad Men,” Apple will be there to serve you under its Apple Diamond Platinum Service banner.

As a mark of its intention to provide only the very best in service to the very best customers, Cook said, every Apple executive with a rank of director or above has been randomly assigned to a customer placing $100 million into an Apple account for Apple Diamond Platinum service. “That’s why Jay Z missed the opening of the Tidal music service,” Cook explained. “There was a kid in Abu Dhabi having trouble with his homework, and his name came up. Fortunately it was on the history of hip-hop.”