Dana Blankenhorn

The Coming Disney Breakup

Walt Disney Co. is in play. (I remember getting one of these sent to me after the Disney Channel's launch in 1980.)

CEO Bob Iger fired his replacement and can’t find another one. The company is killing its streaming service by reducing content and raising prices. Its deal with Penn Entertainment, directly running a sportsbook, means ESPN is now incompatible with the main company’s business model. The resorts business is tanking, thanks mainly to climate change.

My guess is that the entertainment company will be sold to Apple, probably within a year. ESPN, ABC, and the parks will be spun out as separately traded companies. It might happen all at once.

The only reason to keep the whole thing together was “synergy.” A bad year for one division might be offset by a good year in another. The combination would then be a better investment than the parts.

But that’s not working. The movie business is dying. Disney is doing all it can to hasten that by refusing to bargain with its unions. If management and labor aren’t partners, you can’t do business.

The TV business was dead years ago. This includes cable.

The resorts business is increasingly divorced from the rest of the company.

The Internet is doing to the streaming business what it did to print. Paywalls take away 90% of your audience. Advertising rates keep declining because there’s too much free content. Live sports are viable but the billionaires who control teams and leagues keep pricing fans out of the market. If it’s all just about money, the players will gravitate to whoever offers more of it.

Speaking of Sports

The most interesting economic story right now, verging on the political, involves sports.

Two business models are colliding.

The European business model is built on the club. Clubs organize into leagues, but government interference or subsidy is prohibited. The result is capitalism red in tooth and claw. There are haves, and there are have-nots. But there is some social mobility. A bad club loses money when it drops down the national pyramid. A good club can make money as it rises.

The American model is based on the franchise. Leagues control franchises, much like McDonald’s controls its franchisees. Government subsidy is actively encouraged. Most college teams are controlled by state governments.

The Tragedy of Herschel Walker

There are many tragic figures in the politics of 2022.

For me the most tragic is Herschel Walker.

Democrats don’t see it this way. More’s the pity. That’s because Walker represents the apotheosis of Jim Crow 2.0, a system of institutional racism that has been making its way across the south since I moved here in 1981.

It’s like this. Give blacks some places. Give them their own places, like Atlanta. Use thinly veiled racism to maintain white discipline and control in the suburbs. Use state policy to ghettoize the places with black majorities and encourage corruption. Meanwhile, take some with exploitable talent and raise them up. Coddle them, make them think they’re as good as white, so they become the new system’s avatars, black faces on a white system.

See, we’re not racist, look at X. Whose idiocy justifies the racists’ instincts.  

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.

Home of the Brave

My local baseball team is in the World Series. The Atlanta Braves are playing my former local baseball team, the Houston Astros.

It feels strange. When I moved here this would be a midweek series between two low-rated NL West rivals. I could have gotten into the old Fulton County Stadium for a fiver and brought a book. Or I could have listened to Skip Carey call the game from this same desk in Kirkwood.  

The Braves have been in Atlanta since 1966. Before that they were in Milwaukee. My late mother was a Braves fan. They were in Boston. (Locals will tell you they made another move, leaving the city for Cobb County in 2017, after the local Republican machine gave them “incentives” (taxpayer giveaways) worth $1 billion. (Democrats won the next county election.)

The name goes back to 1912 when a New York businessmen named James Gaffney, affiliated with the Tammany Hall machine, bought what had once been the Boston Beaneaters. (Tammany members were called Braves.) The team was one a National League original. In fact the team predates the league.. The new name was meant to appeal to working class Democrats. My mom was an O’Donnell.

Anyway, the name is even more politically incorrect now than it was then. What to do, what to do?

Bottom Rail on Top

It’s a fight as old as the century. (There's a signed copy available at Amazon.Com.) 

Cable operator doesn’t want to pay too much for programming, lest they be forced to raise prices and lose customers. They play hardball with the cable programmer, who tells cable viewers they’re about to “lose access to your treasured programming” should a deal not be made.

Sometimes a deal is not made. Sinclair Broadcasting, now running the regional sports networks it bought from Fox and renamed Bally’s, has lost a lot of these deals. If I want to watch Atlanta United home games, I either take MARTA to the stadium or go to a bar.

It happens a lot with sports. That’s because sports programmers overpay for their rights, then jack up the price they’re charging operators (thus you). If MSG, which has rights to New York teams, can’t get a new deal from Comcast by September 30, for instance, you may miss the New York Red Bulls’ playoff push.  (It’s going nowhere, by the way.)

So, you have the big, bad cable operator against the poor, beleaguered programmer. Comcast is a meanie, you say.

But what if it were Comcast that was doing the begging? That’s happening right now.

Comcast has owned NBC Universal for a decade. It bought the asset from GE. (This was covered extensively on the documentary series 30 Rock.) It’s a sweet deal. Programmer NBC negotiates with operator Comcast for the best possible deal, then Comcast moves money from one pocket to the other.

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.

Slaves of the News Cycle

The most common mistake consumers of news make is being a slave to the news cycle.

It’s true on every beat. Business, technology, entertainment, sports, and politics. You focus on what’s happening right now and you miss the longer term trend. It’s the longer term trend that will make you, that will make your career, and that will make history.

When it comes to business and finance, my current beat, the dumbest thing you can do is to obsess over the day-by-day changes in the stock market. Traders are paid big bucks to follow the daily gyrations. They will get in ahead of you on any move. They’ve got you outgunned.

But the daily moves tend to even out. What you want to find are companies that are market leaders, in trends that last for years, with bosses who understand that long term. Just accumulate them. Let time work for you. Then, sell on your schedule, when you need the money, preferably on a day when the market is rising.

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.

Speaking of Sports

Let’s change the subject.

Atlanta media can’t cover soccer for shit. I don’t think they want to.

But they need to because Atlanta United is selling out all their games while the baseball Braves play to empty seats in their new Cobb County ballpark.

The season started well, but then went pear-shaped. The media has interviewed a few players, but Coach Tata Martino’s first language is Spanish so they haven’t asked him.

I’ll explain it.

There are two main problems. One, they’re not scoring goals. Two, they’re letting too many in.