Dana Blankenhorn

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.

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.

It’s All Biden’s Fault

I have a friend who is mad as hell at Joe Biden right now.

There’s a job waiting for him overseas. He’s fully vaccinated. But he can’t prove it to his new employer’s satisfaction. Even if the host country lets him in, he’ll have to be in quarantine for 2 weeks, at great expense, before he can start work.

How can this be, he asks? Why hasn’t the President mandated vaccine passports?

We all overestimate what a President can do. The media treats him as magic, the final authority, the one person responsible for everything.

But the President’s powers are severely circumscribed. Especially in this case.

There is no national medical database. There’s no federal control over health insurance. Under the McCarran-Ferguson Act , passed in 1945, health insurance is a state function. Even the decision upholding the Affordable Care Act held that states didn’t have to take its Medicaid expansion. Many still don’t.

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.

Political Secrets of Madison Avenue

Next time you see an ad, any ad, look closely.

It’s telling you which way the wind is blowing.

Advertising is a psychological mirror. It offers images of what we think ourselves to be. It must do that to do its job. We see the people in an ad, we identify with them, and through that we identify with the product or service being sold to us. If we don’t identify with those people, we don’t buy the product. Thus, ads can’t make mistakes.

Look at the history of advertising, and you’ll see that clearly. You will see it in cleaning products, in cooking products, in cars and insurance ads. It’s why Aunt Jemima and Uncle Ben were beloved brand names for a century, until we saw the racism inside them. It’s why Toyota ads never change.

In 2021 ads are shouting one word. Diversity. They’re showing mixed-race couples far more often than you see them on the street. They’re showing same sex couples in the same way. Most spokesmen are now spokeswomen. An ad for VMware shows Cyrina Fiallo wearing sneakers and casual clothes  telling viewers to “welcome change.” What’s striking about the new Verizon ad with Kate McKinnon is that she’s wearing heels. Then again, Verizon is a conservative company.

Tech’s Democracy Problem

Somewhere in the Caribbean, there’s a 12-year old kid poised to control the fate of a trillion-dollar company.

Google has what’s called a “dual-share” structure. There are GOOG shares, which supposedly convey ownership. Then there are GOOGL shares, which hold most of the voting rights and convey control. This was put in place by co-founders Sergey Brin and Larry Page. Through GOOGL they control the company in perpetuity.

This is tech’s democracy problem. The democracy in corporate governance is disappearing.

Alibaba came public in New York first, rather than China, because it had this dual-share structure. You can’t buy Alibaba except through Jack Ma. China had to relent on this before Alibaba would list in Hong Kong. Yes, China’s market was (it isn’t now but it was) more democratic than America’s.

In a democracy it’s one man one vote. In a corporation it should be one share one vote. Increasingly it isn’t. The whole thing became a comedy in the mess around WeWork. Softbank’s Masayoshi Son sent billions to WeWork under the mis-named “cult of the founder.” He structured the deal so that founder Adam Neumann couldn’t be ousted. When it became apparent that Neumann was an idiot or perhaps worse, it cost WeWork billions to get rid of him. The same thing happened at Uber with Travis Kalanick.

This idea that founders should control their companies indefinitely arose in tech during the 1980s. Wall Street was able to oust Apple co-founder Steve Jobs, installing “adult supervision” that nearly wrecked the company, before Jobs was asked to return. Even after that, Jobs’ stake in Apple remained a minor one. His estate left nearly as much value from his Walt Disney shares, from Pixar, as from Apple.

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.

TV’s Last Stand

Michael Wolff and I have been covering the Web for about the same time, which is since it was spun in 1994.

The difference is he’s famous and I am not. This is fine by me. I have a great life, and anonymity is a precious commodity, as anyone who is really famous will tell you.

Fame can also turn your head. You see yourself on TV often enough and you start to think that’s more real than life. It isn’t. It’s less so. TV isn’t real at all. It’s just another file format, one that over time is becoming cheaper-and-cheaper to move around.

Barcelona Atlanta

One of the most important sports stories in decades is unfolding just miles from my home and hardly anyone is covering it. No one is covering it right.

That story is the Atlanta Hawks, our local basketball team. There are NBA fanatics who know the team is having a grand season so far, the “Beast of the East” at the regular season’s halfway point, with just 8 losses.

But when I went to New York this week and asked folks about the Hawks, they just shrugged their shoulders, insisting the team will “come back to Earth,” implying they’re doing it with mirrors. Maybe, one “expert” said, they will make the conference finals this year.

Potemkin Markets

Think of this as Volume 18, Number 14 of the newsletter I have written weekly since March, 1997. Enjoy.

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When the business day begins, thousands of well-off people turn on their TVs to Squawk on the Street or Opening Bell, its Fox Business equivalent.

They think they're learning how to get rich. They're thinking they're learning what money is doing.

They're wrong.

What they're seeing is a TV studio surrounded by displays for what is, in the end, just the very tip of the financial market iceberg.

Trading does not really happen on the New York Stock Exchange – TV happens there. And the stock market represents only a very small portion of the financial market.