Podcast Alert: Randy Freer – Media Expert, Former Hulu CEO, & CEO of the Freer Company

Transcript

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Randy Freer: [00:00:00] Whether you’re the NBA or ESPN or NBC, they all have to figure out how to engage a community of people. Don’t think about a game the same way that that game was thought about 10, 15 years ago.

AJ Maestas: Hello and welcome to the Navigating Sports Business podcast. I’m your host, AJ Maestas, founder of Navigate a data-driven consulting firm, guiding major strategies and decisions in sports and entertainment. We started this podcast hoping to share the interesting stories and experiences of the amazing people we get to work with at Navigate. And even though they’re visionaries and famous, in many instances, their true stories aren’t often heard. Since they’re not on the playing field, our hope is you get to know them better [00:01:00] and learn from them as we have.

Today I am happy to be joined by Randy Freer, former CEO of Hulu, and President and COO of the Fox Networks Group, among other things at Fox. And today he’s a consultant. So thank you Randy, for joining us cause boy, the media landscape is going to be fun to talk about.

Randy Freer: Thank you for having me. Happy to be here. Just I’d like not to correct you at the outset, but during the conversation we’ll move beyond the consultant label.

AJ Maestas: Yeah. Yeah. I mean, it’s not often someone gets to work with someone, right. Who has run different networks. You’ve been in different major roles as a senior executive. You’ve been in the streaming space?

Randy Freer: Yeah, look, I think over a long career you meet a lot of people and, and hopefully you build a ton of relationships. ’cause there’s nothing more important in business than the relationships you have with a variety of people. So my longevity, I think is the best piece of value. In the business based on those relationships.

AJ Maestas: What is your day-to-day like?

Randy Freer: You know, day-to-day is always, you know, [00:02:00] interesting. I spend a lot of time working on a couple of businesses that we’ve started. One being Global Catalyst. It’s invested in a, a streaming and, and impact platform. Water Bear. I read a tremendous amount of information and kind of

learn as much as I can about the world in this process, but most of the time is spent. Trying to help water bear develop and grow and, and also create this ecosystem, and I’m calling it, or it is called the, the impact economy. When you think about all the solutions, all the challenges out there that we need to find and solve, there’s no shortage of things to do.

AJ Maestas: Yeah. And, and when you say impact economy, help me understand that a little better.

Randy Freer: Well, when you think about it you know, it’s not only documentaries and impact content that’s out there. It really is an entire economy. You have certainly have impact media that is struggling in a lot of ways that subscale fragmented lacks access to capital. And distribution in that place. But you also have over 9,000 B Corp that are currently in the world with [00:03:00] over a million employees.

You have over 1.5 million NGOs that are out there trying to do things. You have people who are all looking for things to do and how they, how they live their, their lives, and how they can do something to help the process of solutions towards some of our biggest challenges, you know, each and every day. And then you have, you know, all of the investing that’s been made, that’s being made in green tech, clean tech, food and agriculture. All of the things that are out there to try and move that forward. I think what water bearer is really trying to do is amplify all of those solutions, create optimism, create some hope that we can solve many of the world’s biggest problem. Because even today we have, there’s 75% of the technologies available today to solve a lot of these problems. It’s just the political will, the policy, the intestinal fortitude to get a lot of it done. So we’re trying to bring those issues to more people.

AJ Maestas: That’s really cool. Randy, I’m, I’m proud of you for doing that and giving back and contributing in those ways. I thought that’s what you were getting at, but I wasn’t sure, and I honestly didn’t know about all [00:04:00] this. That, that’s wonderful to help that story be told. ’cause I agree. Okay. I’m gonna transition to sports stuff. As a basketball guy, what do you think about this? A new NBA deal?

Randy Freer: It certainly provides a fair amount of, of additional capital for them to go do things with. As I said, someone, I think it will be long before you see the first a hundred million dollar player. Annually when, when you look at this, because of the increase in that and the way the revenue sharing works, I think the NBA did a really solid job. I think Adam and Bill Konick and, and all of them know how to maximize their opportunity.

You know, timing is a big part of it in the world, and they also saw the opportunity to bring new players into it in a way that will allow them to grow. And whether that’s internationally or in other audiences, I think it will be too long before they’re launching the NBA Europe as well. What that looks like. So I think it’s a really, a very good deal for them. They kept the core of what works and they were able to expand it and they were able to increase their [00:05:00] dollars threefold, I think, close to threefold. And then on the heels of that, to be able to get, which they played a role in, be able to get ESPN to accept border’s, view of the world and, and the show I think, is an added benefit that nobody expected.

AJ Maestas: Yeah. Yeah. What do you think this means for runner brothers discovery? Are you worried about their future?

Randy Freer: Well, I’m not worried about it. I’m sure others may be. You know, it’s hard to worry about any one. Particular company these days because the secular impact of all the things that are going on is across the board and, and you think about Comcast spinning out cable networks, you think about Warner doing the same, others, really trying to figure out like, okay, what does somebody like a MC do that has cable networks?

Obviously even on the sports side, the regional sports networks have seen their, seen their better days. When you think about how that was built and what that looked like over a 20 year period, and now you see the challenges it has not only from a debt standpoint, but also from a [00:06:00] presentation to the fan standpoint when everything today needs to be on a modern platform. A platform that is connected, a platform that can get people to engage in, in some way, shape or form. And you know, whether you’re the NBA or ESPN, or now I think Main Street Sport or NBC, they all have to figure out how to engage a community of people who, why don’t I say right now, don’t think about a game the same way that that game was thought about 10, 15 years ago, or maybe even five years ago.

AJ Maestas: I agree. Okay, so I love predictions. I know that they’re almost certain to be wrong, but if you were to make a prediction on what will ultimately shake out in that, right, this younger generation that doesn’t wanna watch the full form game, and I’m sure you’ve seen some of the statistics, more viewership, more minutes viewed right, but less in the games. Right? So using the NBA, since we were just talking about it as an example, here they are with this tremendous, incredible new deal. And yet the ratings were declining. And this year, right, the first year in this new world that we live in, the [00:07:00] ratings were significantly down up until Christmas. So what is the solution? What would you predict will be that new way to engage the modern viewer?

Randy Freer: Well, I guess if I, if I actually knew the answer to that, I could be the, the consultant of choice in, in this world. But look, I, I don’t think anybody knows the specific answer. And I think today you’re seeing the remnants of the old system. It’s not the new system yet as it relates to the NBA. And on one hand, I think the. We’re still kind, we’re still using 20th century measurement of what’s a rating in this thing. We still have Nielsen. You still have all those things that factor into it. It’s a view of the world that just doesn’t reflect the reality of the value of the property, the value of the, how people care about the properties.

Yes, it’s what we’ve had for a long time, but it certainly is not reflective of the engagement in the sport, and I think that’s what league’s team should care about is the engagement in their product in the sport. It’s not about who. Tunes in for an average of however many minutes it [00:08:00] is for an hour, you know, inclusive of advertising and, and it was really set up to rate and, and be able to kind of create the commercial pods so people could sell off of it. So it’s more, to me, it’s more a transactional measurement in that stand versus a really a fan engagement positioning. I think it would be better for everyone to just, you know, stop talking about what ratings were and really look at the engagement impact. And unfortunately, it’s kind of all that the journalists have to talk about these days is, is just ratings are up or down, but nobody cares.

AJ Maestas: Yeah. Well, I, I agree with that. And, and those were, there were public comments right? About Well, the BA mm-hmm. You know, has great engagement. It’s, it’s got, it has great global growth. It’s reaching a really difficult audience. You know, this younger generation, you know, is more engaged, cares more about the NBA. But, but you know how the old pay TV and free to business model work, you know, these guys are going backwards, right? So they’re writing that bigger check. Do you think they will be able to make commensurately more money or are they just holding on to a legacy business model? [00:09:00] Is this like the whole innovator’s dilemma thing, or what’s going on?

Randy Freer: I think the, the, the benefit of the system today, whether it’s entertainment, sports, news, even news from that standpoint. Is the value proposition usually ignoring to the, that’s the owner of the IP or the, the creator of the programming, where historically that was the pay TV system, cable operators.

Satellite providers or the studio system or whatever it is. And now what you’re finding is more and more of the, a larger percentage of the, the revenue is fighting its way to the IP holder. And look, the NBA their, their money certainly is not going down. The NFL’s money’s not going down. Right. We’ll see what happens with MLB and, and I was surprised, you know, even NASCAR money did not go down. The UFC, they’re talking about, you know, I don’t know, four or five x, you know, in their, in their proposition. So the IP holders are. Driving in some way, shape or form, incredible value for their product. [00:10:00] Unfortunately, the people who are paying the most for it are getting less and less out of it. And at some point that system, you know, falls apart.

And I, I, I think you can look at Sinclair with the RSNs as a little bit, as though what happens when things start to to fall apart. There’s much less margin for error. When you talk about 10 year deals, well who can determine what’s gonna happen, you know, tomorrow, three years from now, let alone 10 years in this process? So yes, it’s certainly the infrastructure that built a lot of the value increase for sports over the last 20 years is in significant and unstoppable decline. It really is a question of how do you broaden your positioning and how do you find a way to distribute and reach into your. Your audience and engage them in a way that you can create different value propositions for.

AJ Maestas: Yeah. Yeah. Well I can see how on Amazon could do that and others, right? That you know that the tech players, you know, our team in preparing for chatting with you, that, you know, they pulled. The [00:11:00] cash on hand for the FANG companies, right? All those major tech players is over 150 billion. And for Disney, Comcast, Fox, CBS, and Warner Bros. Combined, it’s 25 billion. So, you know, it’s just one silly little metric, but they have a sixth. The cash market cap is even more dramatic. So I can see how the tech players right, could extend their relationship with that consumer. I don’t know if you have a prediction or opinion around that, right? Like what this place looks like in 10 years, right? Are the tech players owning all the legacy media players, or are some of these guys gonna go away? They’re just gonna disappear?

Randy Freer: It’s an interesting question. You really think of the biggest players in media content programming, however we wanna define them today. Other than Netflix, most of them don’t make their money or their, their, their, their business is not content. It’s not ip, it’s something else. Whether it’s Amazon for product and delivery, it’s Apple for hardware, it’s Google for search. They have something else that, that all of these content businesses that, that the sports and leagues drive for them. So. Put aside that they have more cash available, the math they’re [00:12:00] doing is actually different. You have to give a lot of credit to the folks at, at Netflix and their decisions over the course of years as they drive their business and and constantly seem to evolve their thinking at the appropriate time when they need it. Whether that’s about advertising or sports or any of the other things. As far as predictions go, the companies and the leagues.

Figure out how to provide the best possible product to a consumer so that that consumer can engage with it however they want to engage with it. Whether that’s they wanna read a newsletter or whether that’s it’s about watching a game or, you know, a social network or, or highlights or whatever it might be. It really is about finding that consumer’s engagement. Methodology in point. Mm-hmm. And writing them away to, to get that. And, and you also wanna expand the geography. And I think that’s beneficial to Netflix and Amazon and Apple and, and others in this process. But it, it still comes [00:13:00] back to how does everyone evolve their core thinking.

Everybody talks about Apple. Is having all this cash and all this is, but historically they’re not culturally, you know, in a place where they actually go out and, and make big purchases someday, I’m sure they will, but in some way, shape or form, whether it’s a content company or not, I don’t know. You know, Amazon is, you know, a hundred percent in a place where it’s all consumer centric. So just they can figure out who’s gonna engage. So I think they have a huge opportunity to drive this change. YouTube and Google are figuring out still. I think they’ve done a really good job with Sunday ticket and I know they, they are in this space. It’s funny to say that YouTube is still figuring it out when it’s the largest streaming platform in the world and like, you know, some crazy, crazy numbers. Some are like, you know, just crazy numbers.

AJ Maestas: You don’t have to pay for their content. So that’s the one difference between all those folks. You know, it’s pretty hard to start paying for it when you’ve even getting it for free.

Randy Freer: Yeah, and even Disney, you can [00:14:00] argue the parts are the main revenue driver and the main economic value in that proposition. So it’s gonna be hard for anyone to compete on just a straight content basis. And I think that’s why you give so much credit to the Netflix folks.

AJ Maestas: It is pretty incredible what they have going on with such a smaller audience than YouTube. Right. And that and to your point, you know, they’re, yeah, we’re not gonna be in light of sports until they are and their timing is just so good once again. Right. Just unbelievable numbers as they test and play around and even with tech issues, it is incredible. I don’t know why I’d say fear for ’em. It’s not my problem, as you said, as you stated earlier, but I dunno if you’re using AI for search right now, but you know, the ChatGPT or Perplexity.ai, some of these folks.

It gives you an answer. You can now link through to the purchase or find the thing you would through a normal Google search. So instead of Google searching something and then hunting, and hunting, and hunting to find it, you can just get the one answer succinct, pretty clear and pretty darn accurate. That has to be a threat to at least Google. For the first time in my life, I, I could see Google [00:15:00] being displaced in search. Right now it’s dominating, right? 80% share of search or something like that. So there’s some things that could really threaten other parts of their business and suddenly have them looking at YouTube as its own business that they have to reinvest in.

Randy Freer: And, and I think the, this is another example, I don’t want to sound wacky here though, but where relationships are going to be, what drives value and going forward, companies, brands are gonna be measured in a big way based on the value, the, the depth and scale and size of, of their relationships with directly with customers. They’ll all have to become really, really good at one-on-one communication with their customers. And, and when you look at it, you know, AI in subway shape or form is, is different from search cause you can have a relationship with it. It can do a lot of things for you. You know, whether that’s find something out, answer questions, give you a real way to learn things.

It really is a very strong amplifier or productivity and, and knowledge and all those things. I wouldn’t count [00:16:00] Google out just yet. I think. If you’ve used the current version that just came out of Gemini, and I think it’s called Deep Research or Deep Knowledge, it’s pretty, I mean, it’s, to me, and I, I use, not all of them, but I use many of them. It really jumped forward from their last kind of Gemini, Gemini world. So I, I wouldn’t count them out on the. AI side and on that kind of, that tool that provides value through assistance. You know, in your daily effort. If you go back to the early, you know, 19 hundreds, I think there were over a thousand automotive companies started, and you go back to the late nineties, two thousands, I mean, every company was about con because there were thousands of them.

I think you ended up with, you know, maybe five or six or seven. And even for a few years, Yahoo was one of the big ones. And, and it’s kind of moved on to other things. And now you’re in a place where every day there’s a, a, a new AI company. And on top of that, every day companies like Salesforce and Databricks and, and Snowflake are doing their own AI as well. It’s [00:17:00] interesting cause people talk about companies. Are you a technology company? Are you not a. Every company needs to master the technology it takes to get their product from creation to consumer.

AJ Maestas: Well, I, I agree with that, and I’ll share a, it’s, it’s a dated stat, but to go back to your fortune thousand, I believe it’s 50% of the fortune thousand 20 years ago didn’t exist or were under a different name. Some of those were mergers and acquisitions. A lot of it has to do with big private equity deals that have taken what were public companies, private, but still 50% turnover. Now, again, this is about a 4-year-old fact that I was told. If I’m remembering correctly. So, yeah, it, I think we under predict change, especially in who those leaders are.

It doesn’t take long to display some of them. Well, let me pepper you with some media questions because I honestly am excited for the answer to these. You mentioned UFC earlier in our conversation, you were an early investor in UFC and a common thing we’ve heard from our clients on the property side, right? They’re trying to get on air, they’re trying to launch new leagues, new businesses are trying to expand their footprint. And then conversely, what [00:18:00] we’ll hear from the middlemen, right, the, the legacy media players. Is this sort of friction between, well, we’re building your business and this is a 4, 6, 8 year deal.

You’re going to come back and ask for more. We’re going to grow your audience and then we’re going to have to pay more for you. So I don’t know if there’s any lessons you can teach us, but I mean UFC is UFC in part from the deal you struck. Right.

Randy Freer: Look, I think UFC has done an excellent job at continuing to grow the product. I think the folks at Endeavor and, and the rest of it have helped that as well. I guess TK whatever now. Have helped move that forward and bring that back to the forefront. As far as when, when, when we did it, that was really, you know, Eric Shanks really kind of pushed that and he saw that as a real way to carve out a, a differentiating point and product for, for Fox when we were launching Fox Force One in that. And, and I think it did that in, in, you know, big ways. It is an example, the UFC came back not too long after that and, and, and I think it was three or five years, I forget what it was. And you know, the price, you know, went through the roof. We had a chance to, and we [00:19:00] participated in the auction of UFC and we, we weren’t able to win that in the process for a variety of reasons.

And you see where that goes. And you did a lot of math around, okay, we’re going to buy the rights for X over the next five years, you know, or we can pay y. And then figure out how to, how to make that work. But that math isn’t exactly, isn’t exactly right because you still have to fund a business like the UFC to make it grow, to allow it to do that, which is not necessarily. Most of these media companies, core business in that, and it is a dilemma and it is why you see leagues constantly infringing on product of their biggest vendors, right? Digital was sold separately for a long time. You know, this is sold Zeep geography, you know, all of it is, is pulled back into the league.

When you think about what MLB is trying to do around their product, they’re looking to build one platform. Where [00:20:00] somebody can come and buy and, and watch, buy, engage with everything that is baseball. That’s the right ambition, right? And then it’s really the question of how do you nuance the timing to get to that ambition and get to that place. Historically, the leasing business has been good because you could arbitrage it pretty well ’cause you saw something growing. We’re in a, we’re in a period of time where that arbitrage business is a little less clear.

AJ Maestas: Yeah, yeah. Yeah. You were the CEO of Hulu and if I’ve got the homework here, correct. You helped them attract 30 million plus subscribers in just two years. That was a 50% annual growth. I would just kill for your perspective on, you know, venue goes away, right? This idea of, you know, sports one destination, let’s bring it together. I’m sure you know, you look at what, how FUBU came out of this. They, they’re looking pretty good right now. I think someone told me today they.

Their valuation is three x. So that worked out well for them. They got a deal that they wouldn’t have expected and, and, you know, they protected themselves. Can you give us your point of view here on exactly what this does look like [00:21:00] with all this fragmentation and the streaming and what have you? Can you paint a picture for how it comes together? Again?

Randy Freer: I can certainly speculate, but I, I think beyond that, it’s, it’s anybody’s guess. I would give credit to, you know, David Gandler, CEO of Fubo. We owned a small piece of Fuo back when in, in the early Fox, well, not the early Fox in the Fox days while I was there. And David was someone who just always was able to get things done and he was able to get things done in many ways better than others for, for less than others.

He is a terrific hustler in the standpoint of just making sure that his business is going to survive, they’re going to thrive. So it’ll be interesting to see how it comes together and what it’s like for him to be well, even though he’s, he’s. Running the business to be owned 70% by the Walt Disney Company, which, you know, they have certain ways that they do things as well. So we’ll see how that adapts. It’s hard to see it all coming back together and, and making sense. The reality is, I, I think that [00:22:00] you’ll see much more price incentive going forward regardless of what the platform is. You’ll be able to buy or, or engage in anything you want to engage with. There’s just gonna be some version of incentivized pricing.

There’ll be some bundles, there’ll be some other things that, that come together. But it’s, those are all manufactured incentives in some way or another so that, you know, a consumer engages or sticks with it longer or buys something that, you know, they don’t use a hundred percent of. And I think that’s been the, obviously with the, the pay TV model worked well and that model on that assumption. Now everybody’s trying to bring that back together in some way, shape, or form. I think it’s really hard to find that the sweet spot where you can all of a sudden say, great, now we have all sports bundled together, and away you go. And it’s, it’s certainly gonna be, think about how expensive that product might be going forward is, is really crazy.

I think you’re gonna get to a point also where, particularly in the next generation who [00:23:00] are much more, much more comfortable in micropayments. Buying things, you know, one at a time or whatever it might be. And if you can come in and say, great, I’m going to, you know, spend $10 for, you know, three times during the course of the year for a college football game or a basketball game, whatever it might be, you’re gonna find those economics add up pretty quickly.

AJ Maestas: Yeah, I’ve, I’ve heard a prediction on that front too. And, and people are spending their parents’ money on a credit card half the time, right. These young people, and it’s no problem there. Habituated to this through video games, you know, through premiums and what have you, that you can get in games and it’s just in-game purchases or I’m sure you’ve seen the charts right, how it’s displacing the cost of the game, right? Like you can predict that 75 plus percent of the revenue will come from in-game purchases in the future. And, and I don’t know that to be true or not, but that’s what I’ve been told. So that would be interesting.

[00:23:52] Randy Freer: I don’t know if this is true or not either, but I was, was doing some things. I, I heard a story from, from Activision and Call of Duty and, and it [00:24:00] was that there was a particular hammer in in the game that in a micropayment, you know, in a year generated $800 million. That may be urban myth or legend or game legend, but it doesn’t surprise me that you have that. I think sometimes we lose, particularly the long term. When you think about leagues, one of the things that they have to.

Be careful of and think about more. And they do think about it. I think people running the leagues today are incredibly smart. They know their businesses, they know their vendors, they know what they need to do and they know their fans. But generationally, you can see the difference in the way I watch, the way You watch, even though we’re different generations and the way people are coming up today and how they’re engaging in these leagues and, and also from an economic standpoint, how various folks are. Looking at these leagues and engaging with these content vehicles or sports, both from a participation place, but also [00:25:00] from a fan engagement. I, there was a stat a long time ago that came out that, that, I think it was Rick Wels who, who told me this in Arizona. It was like, yeah, 1.4% of Suns fans at the time, or he was Lakers fans, you know, will ever actually go to a game.

AJ Maestas: Mm. But, but that’s actually still true to this day. About half of me Asia, if you, now this is, fan definitions are pretty loose here, right? Like someone who’s never gonna come to Phoenix, but That’s right. We worked on the RSN situation with the Suns and the new ownership group and what have you, and as far as how the league defines it with fans, 1.5% today are in Arizona. How crazy is that? Yeah. They’ll never go to a game. It’s, it’s all, it’s so global, so, yeah.

Randy Freer: And, and, and that, I think back then we were doing it based on, you know, the size of Arizona, you know, right. In that way versus the, you know, bringing China into it and the rest of it, but. Still, you think about it like the only way people engage with the product is through some, at this point, third [00:26:00] party. Whether that third party is the league or the distributor or the, you know, the brand that might be putting it out there.

AJ Maestas: Yeah, I get what you’re saying. Yeah. Like realistically attending and it’s even less likely, right?

Randy Freer: The price is, I think one of the, the surprising things that has been over the last number of years is with the lack of Dodgers distribution over the years, the assumption was that it was going to be bad for business.

It was going to be bad for attendance, it was going to be bad for merchandise, it was going to be bad for all those things. None of that, the sellouts turned out to be true. More people, more sales, more, more of that. You have to wonder where that value is really provided by some of these television vendors or radio vendors or whatever it might be.

AJ Maestas: Yeah, that’s a really good point. It’s unbelievable to sell out their attendance numbers. Of course, they’re, you just won a World series and they were, they were stalking their team full of talent. But you’re right, that’s what everyone predicted, right?

Well, you, you’ve talked about the fragmentation and all these different players and people are paying for all these subscriptions. Just this morning, Jeff Nelson, who, you know, our president. Was describing he’d [00:27:00] listed in our internal Slack channel, the number of subscriptions he has. I can’t even repeat what it was, but it was about a dozen. So if you remember, I’m on the fox lot in your office, in person. It’s pretty much the first time we had a real adult conversation. I don’t expect you to remember it, but. We were talking about that resistance to what people will pay, right? And, and at that time, we’re talking like 10, 12 years ago.

It was common for people to sort of say, we’ve reached this point of diminishing returns. There’s elastic demand for this. You know what I mean? Sports cannot occupy any larger of a percent of our total cable bill. And the cable bill is reaching resistance. Now, today, not everybody, but look around, look at the 80, a hundred, 200 million households that these different services are in, right? I’m talking about Amazon, YouTube, and then on down the line. Suddenly everyone found about twice as much money as they had before. I know there’s a bunch of people using passwords, right? And illegally streaming and what have you. But there is no doubt that the prevailing belief at that time was we’re reaching a resistance level on the share of sports content while people pay for it.

And the total cable bill, and both those things have been wow proven. Untrue. I’d love for you to sort of [00:28:00] compare and contrast to that moment in that time when we’re sitting there together and we’re still in the sort of the legacy media world to what you know today. ’cause you went on again to run Hulu. You’ve been consulting with McKinsey. You’ve been in some pretty cool projects. I, I think we both worked with the Red Sox at the same time together. Right. So you’ve been right there. I mean, can you juxtapose that day today? Is there anything you could teach us? Anything that surprised you?

Randy Freer: It was, it was just another day I was wrong. So that’s, yeah, I, I think what’s interesting in all of this is the desire to verticalize everything, you know, a consumer, a person, us, right? A human doesn’t really always think about it. I’m spending this on sports or this on music, or this on, you know, whatever. They just look at it across the board and, and I think everybody should go.

I think one of the. Big apps this year will be these apps that are coming out and really kind of trying to help you manage subscriptions. Like, I don’t want to even begin to tell you when you go through all of your subscriptions, what ours, what ours came to, when you add in the phone and Spotify and, and, and everything else that goes along with it. I [00:29:00] wonder, I don’t know the answer to this. I, I wonder if you looked at the total dollars spent on media inside a household, right? How much more they would act it would actually be, right? Yes. On a per. Product basis, prices are going up, but you’ve seen what, 10, 15 million or more people leave the pay TV side of the equation 20 million because they thought they were, they were gonna spend less.

It turns out that they’re gonna spend more, uh, a generation of people also willing to do more subscription or more street price-based things, more and more companies having subscription pricing. I, I, I will tell you that I recently found a subscription. That I’ve had since like 2007. It was for an elementary school app to help my daughters with some of the things they were, they were doing. They’re now 22, but apparently since 2007 I’ve been paid once a year, you know, like 79 99 for, for [00:30:00] this particular app and they make it that this one, that was back when they made it really hard to cancel too. So I had no idea. But I, I guess the, coming back to it, it is part of the reason why people are engaging in different ways with sports.

If, you know everything was the same price or there was a way to do it in a more efficient way, or you can buy it on a per game basis, whatever it might be. I, I think you’ll find people engaging with it in a big way. If you think about the RSNs, right, and, and our time at Boston and other places, I mean, it’s hard to sit there and say like, okay, I’m gonna spend $29 $19 a month, right?

Now think about that though. Less than parking. Yeah. Yeah. Certainly less than a ticket. You know, you could get every baseball game, basketball game, hockey game, whatever it might be for 19 or $20 a month, which is this unbelievable bargain. But the combination of, of, of distributors paid TV [00:31:00] content providers, you know, did everything we could to, you know, point out how inefficient the, the business was in this process. So. It’s, it’s a tough one and, and I think the more and more people, I think get much more price sensitive as this thing shakes out.

AJ Maestas: Yeah. Gosh, it’s my job, you know, research is one, one of the core things. Things that we do. The foundation of Navigate, and I’m, I know that I’m biased in, in even thinking this, but that subscription story you just told, right? And turnover on subscriptions is so low. I mean, this is why Wall Street and so many private equity, they just love, right. You know, the SaaS model and anything subscription based, I’m probably not thinking reflective of, you know, your average American or something like that. But the convenience factor is that I am paying more than I’ve ever paid before and I actually don’t watch that much sports, you know.

He would think for my job I better have those subscriptions I trust our young people are, are just consuming everything and I walk around ignorant. So really I’m just, just out of convenience to see the one show and I don’t turn it off. I don’t turn anything off. I’m sure I’m paying [00:32:00] triple what I paid in that prior world. I don’t know how to reconcile that with, with the incentive that everyone had to put it back together again.

Randy Freer: Well again, I think we all. We’re blessed in a lot of ways, and we walk in in different shoes from the standpoint of economic opportunity, economic ability to do all of that. And that’s another way that the world has to solve ways to bring people back together, because where sports used to be things that could bring people together, in many ways it’s gone the same way. The rest of the environment has, whereas this, this bifurcation of economic ability, whether it’s to go to a game, to buy a subscription, to do what, whatever it is, really dictates how you engage with a, with a sport or an event or whatever it might be in the process. And it is something that, you know, I’m sure that the leads and teams are thinking about. On a regular basis is how do you bring more people to the table and still have the economic model that you’re looking to, to create?

AJ Maestas: Well, that would be the advertising [00:33:00] model. What was old is new again. Is that what, is that what we’re talking about? Because there’s things that will get us, or as far as selling people’s data.

Randy Freer: I think the advertising model like, sure, but when was the last time anybody liked. A commercial, right? When you think about retail advertising, whether it’s Instagram and their feed, or TikTok or how they do it, it’s much more a product offering content kind of, you know, the old direct response world, however you wanna, however you wanna lay it out.

So I don’t know that advertising in its current form is the answer, particularly in sports. I think advertising will be a place will, will have a big role to play in sports. It will continue to increase its value as, as it has ’cause it’s really one of the few places that you actually have an audience that is big enough and you have access to that audience as a brand in order to grow your, your business, grow your, your scale of customer’s reach or whatever it might be. I think it’ll still be there, but [00:34:00] you think about, you know, sitting at home and, you know, watching, you know, a three minute break or a four minute break, whatever it might be. You think about being in an arena and one or a football stadium and wondering like, what is going on? You know? Yeah. Where’s the guy with the orange? Glove. It is something that creates a tremendous amount of friction and actually makes the product worse to the consumer. And I think brands will begin to figure out how to do a much better job at telling that story, engaging with consumers going forward and, and we’ll see if that actually makes a difference.

AJ Maestas: Hmm. This reminds me of a, a study we did for ESPN and I’m, it’s about 15 years ago. I cannot remember the date, but far predates that anyone seriously considering legalized gaming or gambling and social media was new. I wanna say oh eight, but I’m, I, it was probably 2010 or something. I’m probably wrong.

But anyway, we did this ethnography where we watched people in bars in their living rooms watching ESPN, watching college football and NFL football, and then what they’re doing in that downtime, you’re just [00:35:00] describing. Again, remember, I mean like social media is new, the iPhone is brand new or right around then, if I’m remembering correctly, and it was right down to the small screen, right down there. It was social media gambling illegally and fantasy football that was occupying most of the time. Those are the three really big buckets, so yeah, it’s a very good point. People expect frictionless entertainment content. Everyone knows this story. It doesn’t matter if it’s an elevator or airport. 90% of people looking down on their phones.

Randy Freer: Maybe. Maybe it is the, they used to actually forget an elevator or airport. The walking down the street. Yeah. You know, it’s like you have to kind of remind people look up.

AJ Maestas: Well, can I ask you just a couple of rapid fire questions to get to know you a little better? Sure. Before we let you go. Okay. Cool. Do you have a TV show or movie recommendation?

Randy Freer: I just actually, I, I just watched two movies I like. One was Conclave. Which, which is out there. And the other was a, a little movie that I don’t know, I had not really even known about until recently. It’s called Saturday Night. It’s the story of that, the 90 minutes before the original Saturday night. And it’s [00:36:00] really, it’s a very well done, well told story. And then there’s another movie out. This is a short it’s called Red, White, and Blue. It was kind of be, nominated last year. I believe it was 22 minutes long, watched the whole thing. I think it’s an incredible example of storytelling. Put aside what the topic’s about where you sit on one side or the other, just the way they told that story. You know, I, I haven’t met anyone who doesn’t walk away from that going, wow.

AJ Maestas: Okay. I’ve got some stuff to watch. Thank you. I appreciate that. Any life hack you could share with us?

Randy Freer: The one that probably do the most of is reading and reading for learning, I guess by form of meditation and in some way that, and, and it’s really is something I have focused on for years, and it gives me the opportunity to get lost a little bit from the day and, and, you know, at the same time, maybe learn something along the way.

AJ Maestas: All right. I like that. I, I really do believe and subscribe to the leaders or readers. So we’ll end this with you sharing any books you could [00:37:00] recommend. What are you reading right now and what would you recommend?

Randy Freer: I just finished, I hadn’t written in a long time. Atlas Shrugged Ayn Rand. And it’s an, well one, it’s one of my favorite books. Two, it’s an incredible story. Three, you have to be ready cause it’s, it’s, you know, I, I’d recommend the audio version cause it is long and the storyline is so connected to the world we live in today. In many ways that it just makes you, you, you, you laugh as you read it in some cases. So, as I’ve been reading that one for a while at the 1200 pages, so, so I, I would always recommend, you know, that one for people who are, are, you know, interested in and have some time.

AJ Maestas: It’s a monster, but honestly, I, I think I enjoyed reading it despite it being such a long read than any book I’ve ever read in my life. My wife is a big fan, a mentor of hers, Michael Weiss, really successful executive in the retail world, was in a book club with Ayn Rand in New York City. Can you believe that? She met all the expectations you’d want to hear. She had a boy toy. You know, [00:38:00] like everything you would picture from she, and for those who have not read this, it it’s, it’s one of the most acclaimed books in history and she came from Russia’s. You can obviously read and feel her displeasure with socialism, and you know, the power of the individual is almost a philosophy of hers.

[00:38:17] Yeah. Can you believe that she got that as a book for him for Christmas? And he said, how did you know? He was like, know what? Like in a book club with her, it’s hard to picture her walking the earth. Right. The author of this book. Yeah. Love that book. Love it. A great choice. And hopefully you have time for the fountain head as well when you’re done with the I went done with shrugged cause it’s also great.

Randy Freer: Yeah. I’m going to, I think I’m going to go through something shorter.

AJ Maestas: Maybe, maybe mix in something a little easier on the mind. It’s pretty intense. The vocabulary, the whole thing’s intense. Well, for those listening, if you have any questions or comments, I know Randy’s the kind of guy that’d be willing to answer those. So, you can, get me at, AJ@NVGT.com. You can also connect with us on my personal LinkedIn page or the Navigate page. But, again, this is AJ [00:39:00] Maestas with Navigate, and I’m being joined here today by Randy Freer. Thank you for joining us on Navigating Sports Business.

Randy Freer: Thank you. Take care.