Yahoo Finance Sports Report is developed and produced by Lauren Pokedoff.
Welcome to Yahoo Finance Sports Report, a unique look at the business of sports brought to you by Yahoo Finance and Yahoo Sports. I’m your host, Joe Pompeiano, and I’m here to coach you through the financial game. We’ll look beyond the headlines, analyze all the latest sports news, the teams, trades, and billion dollar deals, so you and your portfolio will win big. This.We’re talking about Lionel Messi’s contract extension with Inner Miami, a potential salary cap in Major League Baseball, the WNBA’s newest superstar Paige Beckers, and so much more. I’ll also be joined by LA Golf founder and CEO Reed Dickens to discuss the business of LA Golf and the brand’s recent partnership with Pre the Shambo. Let’s huddle up and get right into it.All right, it’s time for this week’s Poms playbook. Why take a look at some of the biggest headlines in sports that you and your portfolio need to know? Let’s start with the NFL’s record breaking revenue from this past season. According to a report from Sports Business Journal last week, the NFL generated over $23 billion.Revenue for the 2024 league year. As a result, each NFL team will receive a distribution of $4160 million from the league for shared income from broadcast, sponsorship, and licensing deals. That’s a 9% increase from 2023’s distribution of $382 million.The league’s more than $23 billion in revenue shows that the NFL’s business continues to thrive under Commissioner Roger Goodell, as revenue has now grown over 250% since Goodell became commissioner in 2006. The NFL is also well on its way to meeting Goodell’s goal, $25 billion in annual revenue by 2027, which he publicly declared in 2010 when the league revenue was only $8 billion. And the NFL still has many levers it can pull to improve its bottom line in the coming years. It’s almost a certainty that the NFL will opt out of its current media right.Steals that pay more than $11 billion to the league annually in 2029 to renegotiate for an even bigger TV package from broadcast partners. The league is also looking to increase its regular season schedule to 18 games in the next few years and expand its international slate of games to 16 per season. And if there’s one thing Roger Goodell does well, it’s finding unique ways to make more money for the NFL. Next up, I’m talking about an impending contract extension between soccer legend Lionel Messi and his MLS club Inner Miami. David Ornin of BF.reported last week that Inner Miami and Messi are in advanced talks for a contract extension to keep the eight-time Ballon d’Or winner in Miami past 2025. Messi’s current contract, which he signed in 2023 and expires at the end of the current MLS season, is one of the most unique contracts in sports. The contract is worth $150 million includes revenue sharing agreements for new MLS season pass subscribers on Apple TV Plus, and apparel sales from Adidas, and has an option for a limited ownership stake in inner Miami upon retirement.The Messi deal has been huge for MLS in inner Miami, which has seen its franchise value grow 100% from $600 million in 2022 to $1.2 billion today, according to Forbes. Inner Miami has also more than tripled its revenue from $56 million in 2022 to an MLS leading $180 million last year. Now, a contract extension would ensure that Messi helps open Inner Miami’s new 25,000 seat Miami Freedom Park Stadium in 2026, which has been a public goal of team owner.Jorge Moss, because even at nearly 40 years old, Messi’s presence on the team will drive multiple sellouts at Miami Freedom Park in 2026, and that means even more revenue for Inner Miami. To round out POM’s playbook, I’m looking at a potential salary cap in Major League Baseball. CNBC sources confirmed in a report last week that MLB owners and league commissioner Rob Manfford are privately discussing the addition of a salary cap to the new collective bargaining agreement next year. The CNBC report said that the new financial structure would include a salary cap.And a salary floor for MLB team spending on players. But as I previously discussed on our March 6th episode, the MLB players Association is strongly against the salary cap and is prepared to fight the proposition in CBA negotiations. MLB’s current CBA expires on December 1, 2026, and if the league can’t come to a new agreement with its players by that date, then a lockout will likely happen. A shift to a salary cap model would end MLB’s historic policy of limitless team spending coupled withLuxury taxes and revenue sharing for low payroll closes. Calls from LLB owners for a salary cap have heated up recently as the gap between the league’s top and lowest spending teams continues to grow. For example, when factoring in luxury tax payments, the LA Dodgers are spending over $500 million on their roster this season, whereas the Miami Marlins are spending just $67 million on their roster. I’ll be following this story closely as we could be on the verge of a massive shift in the economic structure of Major League Baseball.This week for the deeper dive, where I give you a play by play analysis of news in the sports world and its significance to your bottom line, we’re talking about the UFC’s next media rights deal. The UFC’s exclusive negotiating window with ESPN for a new media rights agreement ended on Tuesday, and the two parties left without a deal. Now, this doesn’t necessarily mean that the UFC won’t stay on ESPN.It just opens the door for the UFC to begin negotiations with other companies like Netflix, Amazon Prime Video, and Warner Brothers Discovery. This is a massive deal for not just the UFC but all of sports. You see, the UFC dominates the 18 to 34 male demographic, which is the most important audience for TV advertisers and therefore TV networks. This domination has skyrocketed UFC’s valuation from $4 billion in 2016 to roughly $12 billion today.And the MMA giant has a massive opportunity to further boost its value through its upcoming media rights negotiation. Now, the UFC’s meteorites are a bit complex. They have multiple deals with ESPN that account for free to watch events and pay per view options. These deals currently pay about $500 million annually, and everyone knows that the UFC and Disney’s bundle offering are the only things that have enabled the ESPN Plus to add 25 million subscribers since its launch in 2018.With this, it would be wise for ESPN to renew the UFC rights to help launch its flagship direct to consumer athlete this year. However, it’s also not shocking that the UFC wants to test the market with sports hungry streaming providers. My guess is that the UFC will have plenty of options. They own 90% of the market share in MMA by revenue today, and streaming providers make a ton of sense because the UFC has a ton of content year round. A young audience that is used to streaming sports.Ready and a global platform that companies can stream internationally. Multiple reports say that the UFC wants $1 billion annually on its next meteor rights deal, and I think they will get it. I don’t expect ESPN to pay that number alone, so don’t be surprised if the UFC splits up its rights like the NFL or NBA to maximize value across multiple partners. TKO CEO Ari Emanuel is known to drive a hard bargain and will look to maximize revenue while maintaining an appropriate amount of.Reach for the UFC brand. TKO also already has a relationship with Netflix through its deal for WWE’s Monday Night Roll, and the world’s largest streaming platform would be a valuable partner if the UFC doesn’t want to keep negotiating individual deals with every international country that it airs fights. So as negotiations begin, we’ll sit back and watch the UFC’s biggest fight in history unfold, a billion dollar battle between streamers and networks that will take place outside the octagon.We’ve made it to the one on one, a conversation where I get to break down news and sports with the key player in the industry. This week, I’m joined by LA Golf founder and CEO Reed Dickens. Reed, thank you so much for joining the show. I think the most logical place to start is just what is LA golf and what do you guys do?
So LA golf is uhWe are a maker, a manufacturer of equipment, uh, and apparel, uh, but really we’re more of a contrarian mindset. Uh, we’re kind of a pro player, anti-establishment, uh, mindset that that I think the industry hasn’t seen in a long time. I, I had a company in baseball called Marushi Sports that I co-founded, where we, uh,Took down Louisville Slugger, Easton and Rawlings in about a 6 year period because the industry hadn’t innovated in 40 years, and I think golf is, that’s where you see golf, and so when we sold Marucci, I met Bryson DeShambo, and he had a bunch of uh ideas that were all rooted in data, uh, and, and kind of contrarian to the uh the the.The thinking of the industry, uh, really excited me, and so we’ve managed to create more IP, uh, and I think a more compelling brand in 4 years than the major companies have done in the last 40 years. Yeah,
so a lot of these golf manufacturers obviously, you know, decades.to this point and have established brands and and a lot of sales. So I’m curious why you think they haven’t done some of the things that you’re doing, right? Is it just because it’s not profitable for them? Is it they’re too rude in their ways? Like, why do you think there was that in for you guys to go and use more of a data-driven approach?
Well, so, listen, uh, I just, it’s, it’s actually very profitable for them because they’re betting on the fact that people don’t know any better, right? Uh, so there’s only a few golf equipment reviewers in the industry, and they make all their revenue. Uh, my golf Spy, for instance, makes all their revenue from tailor-made Calloway and idlers, and then they lie about it and say they’re independent. Um, so the industry is exactly where baseball was 15 years ago. So the reason why there’s an opening is that since the Big Bertha in 1995, no one has innovated.In materials or design structure in 30 years, right? Uh, so in every other industry, material sciences are advancing exponentially fast, right? Scotty Cameron has repainted the same putter that he copied from Ping Answer for 40 straight years, right? Uh, and, and they have a $2 steel shaft in it that’s unstable, that wiggles on it, deflects on impact outside of 10 ft, uh, and those steel shafts that 80% of the industry use in their irons and their putters were designed before the internet. Uh, so if you look at the industry.There’s been no innovation, right? So if you have a business model, I, I had an opportunity to be a part of groups that were trying to buy tailor-made and Calloway in the last few years, uh, and I got to see out of the hood, and what you see is businesses that managing manage quarterly earnings down to the penny every quarter. Uh, they repaint, they basically make 1% incremental improvements and repaint the same products every year. Uh, you go, OK, this year I’m gonna go buy the tailormaid, this year I’m gonna go buy the Callaway. Uh, they really make all their money on the fact that they convince you, it’s like it’s like the pharmaceutical industry, right?If they convince you that they’re trying to innovate, when really they make all their money from not ever currying your slice or hook or making any improvement in how the golf ball rolls or flies. So what Bryson showed me was, he had some big ideas from how we designed our shafts to the how the ball rolls off the putter face to actually how the ball flies off the driver, and nobody would listen to him. Well, what we found out, what’s more exciting than how good our driver turned out, right? Our driver is the first driver ever made with a shaft to match the head. Think about that. No one in the industry makes fully.Simple golf clubs. That would be like Ferrari not making the engine, right? That would be like car companies not making an engine, right? It’s, it’s absurd. Um, so what we found out was Bryson said if you make the curvature of the face proportionate to swing speed, it’ll reduce sidespin. Well, what we found after 3 years is that it reduces sidespin by 50%. To put that in perspective, Taylor-made spent over $500 million marketing twist space over a decade, and it doesn’t reduce sidespin at all. And what we found out in the making of this driver, uh, Bryson talked to the head.of R&D for tailor-made, Cowboy and all these companies, and off the record they shared with him, they don’t even have the equipment or robots to test off the toe and heel, where almost every ball strike for amateur is off the toe or heel. So it’s not just that we made a better product. I think what makes LA Golf so interesting is we’re not just saying, hey, we’ve got a better driver, we’re telling people almost everything you’ve been told for the last 330 years is wrong. And that’s a pretty tough message for an industry full of successful rich guys.
We’ve got to take a quick break, but we’ll be back with more of my conversation with Reed right after this.Welcome back to Yahoo Finance Sports Report. I’m your host, Joe Pomliano. I’m here with LA Golf founder and CEO Reed Dickens. So is LA golf, uh, it, it obviously sounds like it’s certainly a more custom product for the golfer, but are you guys specifically targeting, uh, kind of your better professional golfers, or is this for the average golferalso?
No, that was the exciting thing about Bryson’s big idea, and that’s why he was so frustrated that the major companies wouldn’t design this driver for him, is that it works for every swing speed. Uh, it’s actually the opposite, so people always ask us that, are you guys just making golf clubs for elite players, whatever, it’s actually the opposite. Tailor-made Calloway, Tideless ping and Cobra, they only test at 95 and 105 miles an hour, right? It, it would be like if McLaren only tested their car parts on minivans, right? It doesn’t make any sense. They don’t test off the tow or heel, and they only test it.Mediocre speeds, then they try to modify those for the better players, which is why Rory and Tiger and John Lam get so furious every time Taylor may try to make them change models, right? Or Callaway. And so, no, we’re actually our driver concept if the bulge at the curvature of the face is proportionate, we patented this. So if you have an 85 mph swing speed or a 130 mph swing speed, the bulge is proportionate and it actually reduces sidespin based on that proportionality. So this uh this driver is actually more exciting if you’re an 18 handicaps with, you know,100 mile per hour club speed, uh, that even for a pro, but but it’s pretty exciting either way. And not to mention that uh when you put Tailor-made and Calloway design their driver heads on a CAD model on a computer without a shaft in it, and when you stick a shaft in it, no matter how expensive, it moves the center of gravity where the sweet spots not in the center of the face. So you’ve got an industry where you go pay $600 for a tailor-made driver or Callaway, and then you go have to pay, then you find out, oh, if I want to optimize my distance in this version, I’ve got to go pay $400 for an upgrade.Shafts. I’ve got to pay $300 for someone to put it together. Then I’ve got a $1300 driver and 12 months later they say, oh sorry, that’s the old model, right? And so it’s a really, uh, bait and switch industry, right? So we’re, we’re very excited that Bryson came, you know, we partnered with Bryson several years ago and he helped us design the first ever shafts made from the midsection out. Uh, we, our irons and driver obviously come our drivers out, our irons come out this summer. Uh, and then our putter face is the ball rolls 50% off sooner off the face than any other.Butter and we also make zero torque, just like lab, right? They’ve convinced everybody that everyone needs a zero torque putter when actually only 10% of people need a zero torque putter. Uh, so the industry is just full of misinformation, and Bryson is very driven by data, and so we’re excited to make golf, uh, you know, more fun for the average player. I say every day in every interview, the USGA wakes up every single day and tries to figure out how to make golf less fun and more difficult, right? And so we, we actually think that the Bryson is so alone, golf.Golf shouldn’t be this difficult, so we’re trying to make it more fun.
Yeah, and I’m curious what it’s like working with Bryson. I think this goes hand in hand with sort of the design process overall, right? I think Bryson at this point is known for exactly what you were just saying, using data to improve, uh, obviously his equipment, but also his swing and everything else off of that. I mean, the guy hit 1000 balls on the practice range at the Masters.Past weekend, the previous masters, he made headlines by saying that he was using 3D printed irons that he just had approved by the USGA and others. So I’m curious, like, is it you guys just go into a range and working with Bryson, seeing exactly what he wants out of the golf club and then designing something in the CAD system for him?
Well, he’s on a constant journey for repeatability, right? Uh, and so he’s got a 00 plane swing, so everything he does is about being repeatable. Uh, and so, yeah, Bryson calls us with big ideas, uh, whether it’s the curvature of the face or a descending loft putter face, or a shaft built from the midsection out, we test it. Uh, he’s got more R&D equipment in his home in Dallas than most of these major companies have at their R&D centers. So yeah, Bryson, people always talk about him. I heard the Golf Channel, guys, this is so funny, when you listen to these commentators, these blow.Parts. I heard these guys say, well, Bryson, I, he said, I talked to the head of R&D at Tidalist, and he said that all this bulge and roll stuff Bryson’s doing is not even necessary. That’s the dumbest thing I’ve ever heard someone say, right? The bulge and roll has reduced sidespin more than they have in 40 years, right? And so, Bryson’s not a tinkerer. He’s not a hobbyist. He talks to my engineer every morning for over 1 hour, probably 7 days a week. Uh, he designs tad models himself, so no one’s designed golf equipment that they want to major with really since Ben Hogan.
Yeah, I heard that on the Golf Channel this week, uh, when they, when they were talking about some of his putting stuff. I thought that was uh very funny also, but I’m curious just your outlook on golf, right? You talked a little bit about the USGA and obviously, you know, the, the professional golf ecosystem is divided right now. I don’t think that’s any secret, but there’s obviously been a rise in YouTube golf.and amateur golf and professional golf in general, uh, the sport of golf is a unique sport where the amateur level has grown a lot over the last 4 or 5 years since COVID where the professional level really has, and in some cases the ratings have declined. What do you think the future of golf looks like from an audience perspective and how has YouTube and what Bryson’s done there really impacted that?
Yeah, so I always say that disruption benefits everyone all the time except those currently in power. So everyone’s gonna benefit from disruption, whether it’s at the tour level, all the way down to Top Golf, gamifying golf, right? I think over 55% of customers last year at Top Golf had never played real golf on a golf course. So the the game is growing, it’sExpanding, it’s exciting. And so the disruption is going to to bring in new people, younger people, more people, less athletic people. So disruption, again, I think it’s great for everyone except for the people currently in power, which is why you see people at the PGA Tour and the USGA level desperately clinging to like old traditions and hiding, hiding behind traditions, right?
Yeah, what did you learn from your time building Meriuchi that uh was helpful with this business so far?
That the players could be real partners, like, like the major brands in golf, they pay Tiger and Rory, you know, X amount of dollars for 10 number of hours to put on pajama Christmas pajamas for a photo on social media, right, or come to come to the driving range and hit a few balls with golf clubs that have already been developed for 3 years. Um, we actually have the players write checks, and we don’t pay players Marruchi, and same thing in LA Golf. The players actually cut checks and invest. They’re involved in every aspect of the development of our products, not just the marketing. So that was my biggest takeaway from Marushi. And then number 3.that when I said we were gonna be the #1 bat in baseball, everyone rolled their eyes and said, Louisville Slugger has been #1 for 100 years, and Easton’s, you know, controls every Little League World Series in college, and then within 7 years, we were the #1 bat in baseball from Little League to major league, and I think golf is right for disruption just like baseball was. It’s harder, adoption is slower in golf because every guy thinks they know everything about equipment, right? So golf golf is a lot harder and slower adoption, uh, but the industry is ripe for disruption because no one’s been, no one’s innovated in decades.
So it sounds like the the plan is to raise money, use that money to build prototypes as you work with the players to develop the product, have those players use the product and sell those products to amateurs. Is that fairly accurate?
OK. And I’m not even worried about how many pros use the product. But when you have someone like Bryson Deammbo, one of the best players in the world, designing and using the product in major championships, I don’t believe you need much more tour validation than that. Uh, what we’re trying to do is make golf equipment that modify that it can be modified.Proportionally to make it easier and more fun for amateurs, right? And so that that to me, the most fun thing about golf is that you shouldn’t have, you shouldn’t have anxiety walking to the first tee in golf, right? And athletic person should be able to keep it in the fairway. Uh, so we’re trying to make equipment that makes golf more playable and more fun. Uh, we did it in baseball, like I said, golf is gonna take longer, uh, the establishment is more entrenched in golf, uh, but it’s, it’s just, it’s an exciting time in golf, cause I think change and disruption is good for everyone.
Yeah, obviously the toe in the heel stuff can make a big impact for an amateur or someone who’s maybe not as good as the PGA Tour level, but for someone like Bryson, uh, and other professionals on the PGA Tour and live golf, how, uh, how much of a difference do you think equipment can make?
It’s, it actually makes a big difference because um Bryson is a good example. The bulge on his driver face, uh, he said when he hits when he has a toe strike, which even PGA Tour players have toe strikes, right? Rory had several of them, which made the day very exciting on Sunday. When you have toe strikes or heel strikes, Bryson said with his tailor made in Callaway, he tested, which by the way, they don’t even test their own product off the toe and heel. He said that he was losing 35.Yards left and right off the tailor-made and Callaway driver. On the same strike on the LA golf driver, he lost 7 runs. Well, that’s the difference between the first or second kind of rough and the and the out of bounds, right? So I think it makes a huge difference, especially at higher swing speeds.
It’s goingto be fun seeing how you guys develop these products over the next few years. Bryson’s obviously a great person to partner with on this stuff, given his reputation and his performance, but thanks for joining us today, Reed.
Thankyou so much for having me on. I appreciate it.
The clock is running down here, but we have just enough time for some final buzz. So let’s talk about WNBA number one draft pick Paige Becker. Last Monday, fresh off her NCAA national title victory, former UConn guard Paige Becker was selected by the Dallas Wings with the #1 overall pick in the 2025 WNBA draft. Now, Becker is a massive star in her own right, with over 2 million followers on Instagram, but her four-year rookie scale WNBA contract, which isby the WMAA’s collective bargaining agreement doesn’t match the star power that she brings to the league. Becker’s rookie WNBA contract is worth about $350,000 over four years and will only pay her $78,000 in salary her first year. This low pay scale is the main reason why the WNBA Players Association decided to opt out of its current collective bargain agreement after the 2024 season and renegotiate in 2025. As I’ve covered here.Before these negotiations could result in a lockout of player demands for higher salaries are met by the WNBA. However, Becker’s is coming into the league with a few safety nets. She had multiple NIL deals throughout her time at UConn and has endorsement deals with massive brands like Nike and Gatorade today. Becker’s also has a safety net in the form of unrival, the upstart 3B3 Women’s basketball League that recently concluded its inaugural season with $27 million in revenue.As a reminder, Unrivaled wasn’t created as a WNBA competitor. Rather, it’s a US based league that players can be part of during the WNBA offseason instead of playing overseas. Unrivaled signed Becker early to an NIL deal before her senior season last year and gave her equity in the league, and multiple reports say that Becker’s salary with unrivaled will be more than $350,000 in her first year, which means she’ll make more money in that one season than her entire W.NBA rookie contract. With Becker’s joining the ranks of other players and unrivaled, her deal could put even more pressure on the WNBA to establish a new CBA without a work stoppage. However, as I’ve mentioned on our show previously, the WNBA’s economics are complicated and make a new deal with substantially higher player salaries really difficult, but that doesn’t seem to bother Paige Becker, and she is already using her star power to turn up the heat on CBA negotiations with her new league.We’re all out of time, so it’s officially game over for this week. Thank you so much to Reed and for all of you for joining us. Please make sure to scan the QR code below to follow Yahoo Finance podcast for more videos and expert insights and catch us every Thursday wherever you get your podcasts. I’m your host, Joe Pomliano. See you next time.
This content was not intended to be financial advice and should not be used as a substitute for professional financial services.