Bloomberg

(Bloomberg) — Kevin Mayer, the former chief strategy officer for Walt Disney Co., said sports TV rights in Europe have been “flat to down in every major market” because consumers pay directly for the leagues they want to watch. That model may eventually come to the U.S., Mayer said.

“In the U.S., sports rights defy gravity,” Mayer said. “Europe, where people have to pay for sports rights, that’s really dampened the upward trajectory of sports rights.”

Mayer, who is currently chairman of Europe-focused sports streaming service DAZN, said consumers in the U.S. will eventually pay directly only for the content they want, as they currently do in Europe.

“It’s inevitable that the same dynamic will happen in the U.S.,” he said.

DraftKings Inc. Chief Executive Officer Jason Robins said sports NFTs need to be more than just collectibles, they need to have utility, such access to a video game or online content to make them more valuable.

“My kids love Pokemon cards,” Robins said. “They just like the cards. Other people might want to use it to play a game. The more we tie utility to these things the more there’s long term value to it. It isn’t just a collectible.”

Atlanta Falcons owner Arthur Blank weighed in on the controversy surrounding former Miami Dolphins coach Brian Flores, saying minority hiring levels in the National Football League, particularly among coaches, are “not acceptable.”

The billionaire co-founder of Home Depot Inc. said Friday that while the league has added more women and minorities in some roles, only three of its 32 teams have a minority as head coach. By comparison, people of color make up 75% of players. 

The NFL needs to particularly focus on hiring minorities for offensive coordinator and quarterback coaching positions that can lead to head coaching jobs, he said, noting “this is a quarterback-driven league.”

Blank, 79, has been an advocate for people of color in the front office serving on the league’s social justice committee. Last year, the team hired its first African-American general manager, Terry Fontenot. 

Read more: Blank Discusses Changing the Overtime Rule

Mayer, Robins and Blank all spoke at the Bloomberg Power Players conference in Beverly Hills, California on Friday.

Luminaries from the worlds of media and sports are gathering in Los Angeles for the Super Bowl this Sunday, a battle between the hometown Los Angeles Rams and the Cincinnati Bengals, gunning for their first-ever victory in the big game. 

ESPN President Says He’s Interested in Sunday Ticket (6:57 pm NY)

Jimmy Pitaro, chairman of sports broadcaster ESPN, said the Disney-owned channel is interested in acquiring the rights to the NFL’s Sunday Ticket offering currently held by DirecTV.

“I don’t where it’s going to net out,” Pitaro said. “That is a product that was made for a digital platform.”

Pitaro said his network produces content for social media sites including Instagram, TikTok and Snap, because that is where younger viewers are, but the content has to be customized for them.

“It’s not just taking what’s on linear TV and cutting it up,” Pitaro said. “It’s got to be native. We have dedicated teams who are creating different content.

Pitaro said he was rooting for the Bengals because he has a personal connection to quarterback Joe Burrow. Investor George Pyne, also on the panel, said he’s rooting for the Rams.

Mayer Says He Misread Demand for Home Fitness (6:21 pm NY)

DAZN’s Mayer, who also sits on the board of the BeachBody Co., said at-home fitness companies, including Peloton, have struggled because “people are going back to the gym.” Another challenge at-home fitness companies have faced is privacy changes by Apple that made it harder to target people with online ads, he said. Such companies rely on digital media to find new customers.

“That’s really made customer acquisition costs skyrocket,” Mayer said.

Amazon Calls NFL Deal a ‘Gamechanger’ (6:00 pm NY)

Marie Donoghue, Amazon’s vice president of global sports video, called the company’s purchase of NFL rights “a game-changer for us and the industry.” She said Amazon had spent several years earning the NFL’s trust, particularly when it successfully streamed the Premier League in Britain.

“That was very important to the NFL because they saw we could do it,” she said. “We weren’t putting the fan experience at risk.”

Amazon will broadcast Thursday night NFL games exclusively for the first time next season.

Focus Was Behind WWE Deal with Comcast (5:50 pm NY)

Stephanie McMahon, chief brand officer for WWE, said the professional wrestling company licensed its streaming service to Comcast Corp.’s Peacock last year because it didn’t want to be responsible for the technology problems that often come with streaming live events.

“We’re content producers and that’s what we want to focus on,” McMahon said.

She said WWE plans to announce more international licensing deals “soon.” McMahon added that WWE is trying to grow its audience through video games. About 85% of WWE’s audience self-identifies as gamers. McMahon said her 13-year-old daughter, for example, often plays minecraft.

“That’s how she comes together with her friends,” she said.

FanDuel Says Betting Boosts TV Viewers (5:45 pm NY)

“It is changing the engagement from a viewership perspective,” FanDuel CEO Amy Howe said, saying people are more likely to watch games if they’re betting on it. She also predicted in the future there will be multiple telecasts of games, with less talk of betting odds if you’re watching games with your kids, and betting odds changing in real-time on others.

As more states look to legalize sports betting, FanDuel is educating state regulators “because it’s new.” She also said more states should legalize sports betting because it generates revenue for local governments and protects consumers from the black market.

Crypto.com Wants to be Nike or Apple (5:35 pm NY)

Kris Marszalek, CEO of Crypto.com, said he wants to make cryptocurrency mainstream and striking deals in the sports industry has helped.

“Sports is a canvas on which you can paint a strong brand message that resonates with consumers on a global scale,” he said. “We want to be a top 20 brand along with Nike and Apple.”

Marszalek added that cryptocurrency “is the ultimate level paying field” and startup founders in that industry don’t need to be based in the Bay Area to get funding. He said his company has a “half billion dollar venture fund.”

“Ping me on Twitter,” he said. “We’ll fund you.”

Robins Says NFTs Are Future of Memorabilia (5:23 pm NY)

DraftKings CEO Robins said NFTs, or non-fungible tokens, allow athletes or celebrities to continue making money on secondary sales of their memorabilia because they can be tracked. He likened it to TV show creators gettingpaid when the program is sold into syndication.

“They don’t have to continually give that away for free after the first transaction,” Robins said.

The market will be volatile, he added. “Every market goes up down,” he said. “Just because it goes up or down doesn’t mean there isn’t long term value.”

Monique Brown, chief executive officer of The Amer-I-Can Foundation For Social Change and wife of NFL great Jim Brown, said NFTs allow fans to “not only have a signed football but have ownership of an experience.”

Cowboys Brand Chief Recalls Her Owner-Dad’s Advice (4:37 pm NY)

Charlotte Jones, chief band officer for the Dallas Cowboys, said that when her father first bought the team it was losing money and he asked her to help. “I said, ‘I don’t know anything about running an NFL team. He said, neither do I.”’ 

Jerry Jones’ other advice to his daughter: “Stop losing money. Whatever you do, don’t tarnish the star.”

Commanders President Discusses Team Changes (4:18 pm NY)

Jason Wright, president of the Washington Commanders, said he couldn’t address sexual misconduct accusations against the team’s owner, Daniel Snyder. 

He said the team has “tangible and real momentum” for diversity and has front office that “looks like the fricken United Nations.” He said the Commanders have the most diverse team leadership in the NFL and its all happened in the past year and a half.

It’s a matter of “showing that leadership that doesn’t look like classic leadership.” Then employees start to get over some of that subconscious bias that might exist about: “Are they really as smart as everybody else? Can they really drive revenue like everybody else?’ Yes we can. And I think there’s a little bit of showing and proof on us to be able to do it.”

Read more: How NFL Rules Hold Back Black Owners 

Andrew Hawkins Talks About His MBA (4:00 pm NY)

Former NFL player Andrew Hawkins, who now runs sports tech firm Status Pro, said for him it was hard to gain respect on the business front, so he went to school to be seen as a businessperson. More athletes are getting involved in business than ever, especially while they’re still playing full time, he said.

“Now we’re seeing a renaissance,” said Hawkins.

He reached out to people early, when he was still playing, to establish business connections. Status Pro, a sporting training technology company, said “We’re always saying we’re democratizing what it’s like to be an athlete.”  

Carli Lloyd, two-time Fifa World Cup champion, said “a simple hello in a one or two minutes conversation may translate into a business opportunity down the road. For me its about building relationships.” She said women’s soccer need more sponsors. “We need support from TV deals.’

Lloyd, who won two World Cups and two Olympic gold medals during her career, said young athletes are starting to get distracted with all the noise around social followings, sponsored posts and endorsement deals as they start getting courted by brands more than ever.

“When we step in between those lines we’re there to win,” said Lloyd. “You’re seeing some of that being skewed a little bit. It’s becoming more about: how can I build my brand up?” 

Here’s some more of our recent sports coverage:

• NFL Evaluates Rooney Rule With Teams Criticized on Diversity
• NBC’s Winter Olympics Ratings Are Heading Toward a Historic Low
• Betting Apps Want You to Come for Super Bowl and Gamble Forever
• For Serena Williams, Tonal Super Bowl Spot Is More Than an Ad

 

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(Bloomberg) — Coinbase Global Inc., the largest U.S. cryptocurrency exchange, resumed operations of a recently launched advanced trading feature that was halted earlier when an unverified Twitter user warned of a possible vulnerability. 

A Coinbase spokesperson said the company is in touch with the Twitter user to learn more about the issue. Coinbase Chief Executive Officer Brian Armstrong also replied to the Twitter user, saying that the company would investigate. 

Armstrong later tweeted to the Twitter account, “you’re awesome – a big thank you for working with our team.” And just after 6 p.m. New York time, Coinbase tweeted that retail advanced trading had resumed and customers’ funds “remain safe.”

Last November, Coinbase launched the advanced trading functionality on Coinbase.com to a small number of customers. The feature is intended for more experienced traders and enables them to interact directly with the order book, according to the company’s website. 

Coinbase shares closed down 5% on to $194.53 on Friday, outpacing losses in the S&P 500 index. 

(Updates to show retail advanced trading was restarted.)

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(Bloomberg) — The U.S. Treasury Department indicated that it plans to spare crypto miners and stakers from rules that would require digital-asset brokers to turn over information on their clients’ transactions to the IRS.

The decision, which was included in a letter sent to a group of senators Friday, is a big initial win for the industry in a battle that’s been brewing since last year when the reporting requirements were enacted as part of the bipartisan infrastructure bill. 

In the letter obtained by Bloomberg News, Treasury Assistant Secretary for Legislative Affairs Jonathan Davidson said the department’s view is that “ancillary parties who cannot get access to information that is useful to the IRS are not intended to be captured by the reporting requirements for brokers.” That language signals that people who use mining or staking to validate crypto transactions, as well as software and hardware providers, will be able to avoid the demands.

The broker tag is important because it will force firms to collect and disclose detailed information on customers, including names and addresses, gross proceeds from sales, and any capital gains or losses. The industry has argued that certain groups, such as miners and stakers, don’t have access to that kind of information, making compliance difficult — if not impossible — if they were swept in.

Treasury intends to issue proposed regulations in the future that reflect its thinking on the broker definition, Davidson said. The letter aligns the department’s views with comments that have been made by senators, including Virginia Democrat Mark Warner and Ohio Republican Rob Portman. 

Treasury’s clarification may help ease some of the concerns that have been raised by executives at crypto companies, like Block Inc. (formerly Square Inc.) and Coinbase Global Inc., and industry groups, such as the Blockchain Association and Coin Center. 

Several senators, including Warner and Portman, pushed to change the broker provision during the legislative process. An amendment seemed imminent when they reached a last-minute deal with the Biden administration, but the effort ultimately failed because it required the support of all 100 senators and Alabama Republican Richard Shelby objected because of an unrelated dispute over military spending. 

Since then the pressure to clarify the reporting requirements has shifted to Treasury, which is tasked with interpreting the law through regulations. 

Davidson said there are other issues Treasury is still considering, including “the extent to which other parties in the digital asset market, such as centralized exchanges and those often described as decentralized exchanges and peer-to-peer exchanges, should be treated as brokers.”   

Senator Pat Toomey, the top Republican on the Senate Banking Committee who was involved in last year’s push to amend the infrastructure bill, said in an e-mailed statement Friday that he was encouraged by Treasury’s letter but still wanted lawmakers to pass legislation to codify the clarifications. 

“This interpretation can always change, which is why Congress should act,” he said. 

(Adds comment from Senator Pat Toomey beginning in 10th paragraph.)

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(Bloomberg) — Activist investor Legion Partners Asset Management is preparing to nominate a slate of three directors to the board of SurveyMonkey parent Momentive Global Inc. as opposition mounts to its takeover by software company Zendesk Inc., according to people familiar with the matter. 

Momentive has a so-called staggered board, which means only three directors — one of whom is the company’s chief executive officer –will stand for election at this year’s annual general meeting. Los-Angeles-based Legion intends to put forth a slate to replace all three because it believes the Zendesk takeover is likely to fail and the Momentive board breached its fiduciary duty by agreeing to the terms, the people said, asking not to be identified because the matter is private. 

A representative for Legion declined to comment. A representative for Momentive wasn’t immediately available for comment.

The three Momentive board members whose terms expire this year include Alexander Lurie, who has been the San Mateo, California-based company’s CEO since 2016. Former Intuit Inc. CEO Brad Smith and Dana Evan of Icon Ventures are also up for election, according to a company filing.

Williams, Sandberg

Tennis star Serena Williams, who joined the board in 2017, isn’t up for re-election this year. Neither is Meta Platforms Inc. Chief Operating Officer Sheryl Sandberg, whose late husband Dave Goldberg was the CEO at SurveyMonkey when he died in 2015.

It’s the latest twist in a dramatic 24 hours for Momentive’s deal with Zendesk. Earlier Friday, two prominent shareholder advisory firms, Institutional Shareholder Services Inc. and Glass Lewis & Co., urged Zendesk investors to reject the transaction. While Glass Lewis recommended Momentive shareholders also vote down the deal, ISS said they should support it because of the downside risk of rejecting it. 

Those reports followed news Thursday that Zendesk itself had received and turned down a takeover offer from a group of private equity firms, saying in a statement that the proposal undervalued the company. Hellman & Friedman, Advent International and Permira made up the group that made the offer, Bloomberg News reported.

Zendesk agreed to acquire Momentive in an all-stock deal in October that was valued at about $4 billion at the time. A dramatic sell-off in the shares of both companies followed, sinking the value of the transaction to about $3.4 billion prior to Zendesk’s announcement Thursday of the takeover approach.

‘Clearly Flawed’

Legion, which owns a 1.4% stake in Momentive, had pushed the company last year to explore a sale. It immediately came out against the Zendesk transaction after it was announced because of questions about the deal’s structure and “serious concerns” about the review process that led to what Legion called Momentive’s “clearly flawed decision.”

Momentive later disclosed in a regulatory filing that it had interest from at least two other buyers who were offering cash rather than shares. According to the filing, one the parties was offering $27 a share for the company, and was open to bumping its offer by 25 cents. Instead, the company decided to pursue an all-stock deal with Zendesk valued at about $28 a share at time, which is now valued at about $25.89 a share. 

Permira was also one of the potential suitors for Momentive, Bloomberg News reported at the time.

(Updates with directors in fourth paragraph)

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(Bloomberg) — Apple Inc. is bumping the pay of many U.S. retail employees in the face of a tightening tightening labor market, inflation woes and complaints from some staffers about working conditions during the Covid-19 pandemic. 

The iPhone maker announced the pay increases this week during store briefings and individual meetings with employees, according to people with knowledge of the matter. The increases are catered at least in part to employees who have worked at the company prior to the pandemic’s start in 2020 and are designed to better align veteran staff with more recent hires.

The raises, which have ranged from 2% to 10% depending on store location and role, are going to salespeople, Genius Bar technical support staff and some senior hourly workers, said the people, who asked not to be identified because the matter is private. The increases don’t apply to all employees, and not all stores have been notified of the changes yet.

A representative for Cupertino, California-based Apple declined to comment on the raises, which are set to take effect this month. The increases are separate from the company’s normal annual raises, which typically take place in October to coincide with the end of its fiscal year.

The move is Apple’s latest attempt to placate its retail staff during a challenging year. Already, the company is adding a range of benefits for part-time and full-time employees. Apple plans to offer paid vacation time for part-time employees for the first time in April, as well as more sick days and new child- and elder-care benefits, Bloomberg reported earlier this week.

Businesses across the U.S. have struggled to find workers as the economy rebounds from the pandemic. Inflation has added more pressure. The government’s consumer price index rose 7.5% in January, the fastest annual pace since 1982. In Apple’s case, some retail employees have complained about the world’s most valuable company — with a cash hoard of more than $200 billion — being slow to boost its compensation.

With the new raises, one salesperson saw compensation rise by about $2 to $25 an hour. Another worker who handles repairs saw an increase of about $3 to $24 per hour.

Though it’s rare for Apple to give raises across its retail chain, the company handed out $1,000 one-time bonuses last September to store employees hired before March 31, 2021. It also gave $500 bonuses to workers hired after that date. The company has tens of thousands of retail employees across the globe and over 500 locations.

Corporate employees have gotten their own perks. At the end of last year, the company paid as much as $180,000 in stock-based bonuses to key engineers to prevent defections to Meta Platforms Inc. and other Silicon Valley rivals. 

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(Bloomberg) — TikTok Inc. has signed a lease for more than 125,000 square feet of office space in Texas’s capital city, according to the Austin Business Journal.

The video platform, owned by ByteDance Ltd., will occupy the top six floors at 300 Colorado St. in downtown, the newspaper reported, citing unidentified people familiar with the matter. The company had 96 online job listings for Austin as of Feb. 11, the report said.

TikTok would join other tech behemoths with a sizable presence in downtown Austin, including Meta Platforms Inc. and Alphabet Inc. Austin posted the nation’s fastest population increase among large cities during the decade through 2020, driven by a booming tech industry and migration from more expensive coastal cities.

The building at 300 Colorado was completed in 2021 and has about 353,000 square feet of space in total, the Austin Business Journal said.

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(Bloomberg) — Zendesk Inc.’s plan to acquire SurveyMonkey parent Momentive Global Inc. was dealt a blow with two prominent shareholder advisory firms arguing the software company’s investors should vote against the deal. 

Glass Lewis & Co. urged investors in both Zendesk and Momentive to reject the deal so that the companies could pursue other alternatives. Institutional Shareholders Services Inc. also urged Zendesk investors to vote the deal down. But in light of the potential downside risk of rejecting the transaction, ISS said Momentive shareholders should vote in favor of it. 

“A fair read of the primary materials suggests Zendesk entered Momentive’s process late, completed diligence over a questionably brief period and offered a wealth of undervalued equity,” Glass Lewis said in its recommendation Friday.

Zendesk agreed to buy Momentive in October in an all-stock deal valued at roughly $4 billion at the time. The transaction was met with a dramatic sell-off in both companies as investors balked at the merits of the tie-up. The deal was valued at $3.4 billion on Thursday prior to Zendesk acknowledging it had been approached about a potential takeover.

A representatives for Zendesk wasn’t available for comment. Momentive said in a statement it was pleased that ISS urged support from its shareholders for the deal and the process that led to it.

Takeover Offer

Zendesk acknowledged an unsolicited offer from a group of private equity firms, that was rejected by its board, according to a statement Thursday. The firms included Hellman & Friedman, Advent International and Permira, Bloomberg News reported.

Glass Lewis said in light of the inbound interest and the sell-off of Zendesk’s shares after the deal was announced, it appeared investors could “benefit from a path forward that does not involve a combination with Momentive.”

ISS argued that the projected benefits of the deal were limited for Zendesk investors, as were the details for how those synergies would be achieved. 

“The shareholders publicly opposing the transaction have raised valid concerns that are bolstered by the market’s sharply negative reaction to the transaction’s announcement and a solid standalone narrative,” ISS said.

‘Wrong Path’

Activist investor Jana Partners called on Zendesk’s board to abandon the deal in a letter this week arguing it was the “wrong path for the company.” Another large Zendesk investor, Janus Henderson Group Plc., also opposes the plan. 

Legion Partners Asset Management has called on Momentive to terminate the deal, arguing the company neglected its fiduciary duties. The activist investor said it was prepared to nominate directors for Momentive’s board if the company didn’t walk away from the deal.

Glass Lewis argued that Momentive’s management has made “unconvincing” arguments about the merits of the transaction, and urged shareholders to oppose the deal in favor of a “structural reset.” It said from there, the company could reconsider its path forward, including as a standalone entity. 

ISS disagreed. “In light of the potential downside risk of rejecting the transaction, and the potential upside of owning 22% of the leading pure play cloud customer support company,” it makes sense to support the acquisition, it said. 

(Updates with Momentive’s comment in fifth paragraph)

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(Bloomberg) — A conflict between Ubisoft Entertainment SA and many of its employees over a plan to adopt crypto technologies in the company’s video games intensified this week.

The French publisher, which makes popular titles such as Assassin’s Creed, outlined its thinking on the use of blockchain technology in a message to staff on Thursday. The announcement on an internal message board prompted hundreds of negative comments from employees posted for all of their colleagues to read.

One person said it was a “deeply embarrassing day” to be an Ubisoft employee.

The company has faced criticism from fans and employees since announcing Ubisoft Quartz, a platform that allowed players of the shooter Ghost Recon to buy and sell certain equipment as nonfungible tokens. The company held a staff meeting in December to defend the plan and has since continued to move ahead despite internal uproar.

In a statement, a Ubisoft spokesperson said the company will “take the encouragement as well as the concerns to heart,” but that it wasn’t pleased the messages had been made public, adding that “sharing confidential information, including from internal forums, is a violation of our employment agreement, and, more importantly, a violation of the trust that team members place in each other to be able to freely express themselves and have candid, productive discussions.”

NFTs, which rely on blockchain technology, are controversial in the video game industry. Some game companies like Ubisoft, seeing a potential for big profits, have experimented heavily with blockchain in their titles. But many fans and game developers are opposed because of the environmental cost of mining cryptocurrencies and the sense that NFTs are full of scams and make games feel less fun and more like jobs. Several game companies have announced plans to invest in NFTs and then swiftly backtracked following harsh responses.

After posting the memo to “answer key questions about blockchain and communicate as clearly as possible,” Ubisoft updated the message with a promise to also address “current limitations and risks.”

That didn’t stop the scathing comments from pouring in.

“Are we competing with EA for the ‘Most hated Game Studio by the public’ title? Because this is how you do it,” wrote one.

“I think the kids call this entire comment section ‘being ratioed,’” wrote another. “Seriously, our confidence in management was already shaken by the handling of harassment cases, and now this?”

Some people, using their real names, even took shots at Ubisoft’s lineup. “You know what else makes a lot of money? Making fun spectacular groundbreaking blockbusters. Why don’t we focus on that instead?”

(Updates with company’s comment in fifth paragraph.)

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