Dan Roberts, Editor-in-Chief of Front Office Sports, discusses the potential impact of Trump's presidency on crypto regulation. They explore how political changes could affect the industry, referencing Gary Gensler's current role and the crypto community's reaction to regulatory challenges. Roberts goes on to talk about the future of live sports events and the impact of streaming services on the sports industry.
He shares his insights with Yahoo Finance’s and Sydnee Fried on " ." Listen to the full episode wherever you get your podcasts. Video Transcript Welcome to stocks and translation.
Our essential conversation cutting through the market, mayhem, the noisy numbers and the hyperbole to give you the information you need for your portfolio. I am joined. Sydney Fried is back here today.
Good to see you again. And Dan Roberts. Dan Roberts is an old colleague of ours.
He is currently the editor in chief of front office sports. And when Dan was wandering these Hollywood Hall Halls here at Yahoo Finance, he covered sports and crypto. Sometimes they intersected.
We're going to try to do that today. And our word of the day is Dey is the decentralized dream as it's still alive, what Trump means for crypto. And this episode brought to you by the number 76 billion.
That is the dollar value of the NB A's latest deal with Disney NBC Sports and Amazon. Why TNT and WVD are the odd ones out. All right, we want to start with crypto here and Dan, it has been a year, by the way, I know you write about sports right now, but you, when you left Yahoo Finance, you went to Decrypt, you were the editor in chief and you know, we got a h that seems like ancient history.
Those Bitcoin and ETS the spot. Bitcoin E ETS. The news has been Trump though.
Taking center stage at Bitcoin 2024 over the weekend. How do you see crypto now? Yeah, big time. Uh, political news.
And in fact, crypto always in interesting ways was really a political story. You know, what was fascinating to me was the regulation aspect. Yes, there's defi we'll talk about that.
There have been attempts at mainstream consumer apps that use Blockchain on the back end. There's meme coins. What affects all of it the most is regulation.
And people in crypto the minute you say that word, it's, it's upsetting to them, it's triggering. It's kind of an unsexy topic and yet it continues to be and has been all along and I first wrote about Bitcoin in 2011 at Fortune. So I've seen it from the beginning.
It has always been the most important thing. The shadow hanging over the industry is regulation. And the scourge of all of crypto for the past few years has been a man named Gary Gensler, that is the sec chair.
If we had some sound effects, I can imagine what they would sound like. I want, I want you to pause a second because this gets perfectly into our word. Our phrase of the day, Decentralized Finance.
Dey, let me just define it here because this ties into regulatory stuff that we're talking about decentralized finance uses Blockchain technology to offer financial services like trading, lending and borrowing without traditional banks. It operates through decentralized apps, also called debts or D apps and smart contracts allowing, allowing users to interact directly. But you know, with all the hiccups we've been talking about regulation seems like defi was maybe a pipe dream.
Does it still exist? The possibility it still exists and it's not just regulation, but in the case of defi it doesn't always work. Sometimes an entire liquidity pool gets drained and they say, oops, well, it, it's decentralized. So, you know, there's no centralized agent, there's no customer service to call when you've put your money into a defi platform and suddenly there's a hack or a breach.
Uh Of course, there's no Blockchain fed that comes in and lends blood. You know, the token lender of last resort closest thing is probably Coinbase. Although, you know, they've taken big heat for not having enough customer service.
But if you want to own a little crypto and you want to go through more of a trusted vendor, you'd probably just use Coinbase. It's publicly traded in the US. There's a little bit more trust there, although they've had their own problems with regulation.
So D I still exists. I think it's fair to call it big picture. Uh a dream, it's a big picture dream.
There's some things in DFI working. But how do you define working? And uh the big number that incites is the TV L of a certain liquidity pool or platform or Blockchain that's total value locked. But even that is kind of a misleading metric and what I always say about defi and it's been true for years.
It's still true. Sorry to all the big believers is the amount of money that is tied up in. Defi pool's total looks pretty big, pretty sizable.
But the number of actual individual humans using this stuff is still pretty small. I think it's like fewer than 5 million people. So it's still gonna take a long time and regulation affects it all.
And we can get back to Trump if you'd like. Gets interesting. Well, yeah, and I was actually gonna go back to the political part of this.
How much does it really matter for crypto that there is a crypto friendly administration? Will things change? Two big questions there? It matters. And of course, the great irony of all this and this is why the regulation story in crypto is so interesting to me. If you go back to the OGS, the true believers, the people who've been ra ra Bitcoin.
Bitcoin should be the new global Reserve currency. Yeah. It's the people who liked that.
It was outside the government that it was cutting out the middleman banks, right? And now they're celebrating an ETF a way to just let boomers buy it as a stock. I mean, that's the great irony of the excitement over Bitcoin ETS E ETS. But yes, regulation matters.
Gensler has been no friends in the industry. He has basically made clear that he believes everything other than Bitcoin is an unregistered security. And that, uh, contradicts what an EC official former at our own Yahoo Finance Summit.
You'll remember in San Francisco Bill Hinman said about eve, he said he also thinks that E Ethereum is not a security based on the famous Howie Test. Genzler hasn't come out and said this, but it's kind of clear that he disagrees with Bill Hinman s assessment. No one ever should have taken Hinman S assessment as the final true gospel for what the SEC thinks about Ethereum.
What is the Howie Test? Yeah, I, I will do it as quickly as I can. I'm not gonna do all four prongs, but I have a way of summarizing it. And by the way, I think the Howie Test don't shoot me.
Crypto Purus makes a lot of sense. I still haven't heard a better argument for how to assess what his security is. So it is a court case and we'll get the name up on your screen here.
But you give us the uh details. That's exactly right. Jared, a court case about a citrus farm, a citrus grove in Florida and it's something like 45 years old.
Maybe it's even older. It might be 60 years old. I think it was 19.
Yeah, it was the 19 sixties. So of course, people in crypto, they have a knee jerk reaction of, well, why are we using a case from the sixties to apply to a technology that's on the bleeding edge? Well, because common sense wise, it makes some sense. And the argument is this, if you buy shares in a citrus grove and you expect the shares to become more valuable based on the work of someone else in the case of Howie, the work of the Citrus grove, whoever's managing the Citrus grove, you've bought a security because the pro are you expect it to go up? It has been marketed to you either explicitly or implicitly based on the fact that your investment is gonna go up in value and that it relies on the work of others.
So if you apply that to all these meme coins, all these crypto tokens, especially at the height of the mania 2018 IC O initial coin offering madness. Bring it, bring it to the president. People were saying let's not do an IP O, let's just do an IC O.
We'll call it the Jared token and we'll raise a bunch of money. It sure looks like a security. Yeah, I, I mean, I just love the term initial coin offering.
They got away from that because it became a dirty word. And in some ways, I think NFT is headed in that same direction. Inft use the term let's talk about NFTS here real quickly because this was kind of an uh can we call it an asset class? Um, you know, it rose to prominence during an era where there was a lot of stimulus, money flying.
And a lot of people said, ok, this is one and done and then there was so much hubris that it was exploded on the way down like, oh, I can't believe you bought this ape for $2.1 million but there seems to be something there. It hasn't died off, the values went down.
Is it going to, is it going to rise again? Well, as we record this Draftkings and here's yet another example for you of the sports business and sports betting world, youing with crypto Draftkings just announced it will shutter its NFT marketplace. And meanwhile, wait a minute, I thought NFTS are supposed to be permanent. They're on chain.
They're an asset that no one could take away. The whole value prop of NFTS was think of it as way to prove on chain. I own this digital image and people who thought Nfts were stupid, said, well, look, I screenshotted your ape and I just tweeted it.
So I guess I own it too. And the NFT believers said, no, you can screenshot it but I own the image on chain. Well, so how can a company just shut down its NFT marketplace? And of course, they've said you'll still own the NFTS and you have time to transfer them out.
But boy, we're seeing the great stepping back from the NFT Madness. But you're right, Jared, they certainly still exist. And some of those high value ones board apes crypto punks are still worth when you check the value in some cases, hundreds of thousands of dollars.
This is for a static digital JPEG. I mean, I understand people who can't wrap their minds around this. But I also think you said stimulus checks.
I also would it was a big component. I also attribute the NFT mania of 2021 to the general cultural event and that was COVID the retail stock or Stonk revolution. Oh yeah, I mean, it was all happening at once.
The same people who were buying into gamestop at A MC because they thought it was funny were also buying NFTS and crypto specific specifically Dogecoin. I mean, that was the same year that Elon Musk was pumping and promoting Doge on Snl. So I view all of this as, as part and parcel of the same movement and it was the meme economy which we still see today.
And I want to tie this back to the how we test what we were just talking about because the regulatory system that we had had these things been registered, properly argued, believe there would not have been the widespread fraud there was. And so, you know, in the end, might Gensler have been just playing devil's advocate. Might he have been doing the right thing for crypto letting it fail the way it did.
He would say, of course, I'm protecting consumers. I don't want consumers and main street to lose their shirts. Now, what people in crypto say is that the claim and you nailed it.
This was the claim the sec and other officials made publicly was our door is always open. Just come to us where our door is open and, and you can register. Well, they say the registration process completely leaves us hamstrung.
We can't launch our business. We get tied up in a morass of legal papers and it takes a year or more. And there are examples of companies that played it right? Did it.
The nice guy way registered went through all the sec red tape and in most cases, it took them too long and they lost their ground to other companies that said, you know what, we'll take the risk, we'll launch the token. So now the Sec and Genzer are cutting through uh the year of tokens that launch that thought we did it, we got away with it and it's like not so fast. Now where Trump comes in is the assumption that he is not explicitly confirmed that he will boot Gary Gensler.
But what I say to crypto people as a reminder is when Genzler was first appointed sec chair, many of them thought, oh, this is great for us. This guy will be a friend to crypt Blockchain. He taught a Blockchain course at MIT.
And so people said, wow, he likes Blockchain. Well, knowing about a topic and teaching it and finding it interesting still doesn't necessarily equate to you are pro ra ra and you'll be easy on the regulation and the enforcement. So let's say Trump gets rid of Gary Genzer, who's to say the next sec chair will be a friend of crypto.
But what I will say and I know this makes me sound like a crypto crazy. But I think this is just a factual statement. There's no such thing.
Crypto will continue. Crypto will ride out pro and anti politicians. What matters in the long run is, you know AAA group of governors or even an sec chair, they can't shut down Bitcoin, they can go after individual companies, they can send you c they can say you owe a fine because you did an unregistered securities offering.
But they can't shut down this, this Bitcoin thing. That's the point of it being decentralized and they can certainly take it down a notch from being mainstream. We'll say that they do have power.
We need to take a short break here, but coming up, we're going to be talking a $76 billion NBA deal that leaves Turner in the dust. Plus we shine a spotlight on apparel stocks, two dow components gear up for a who wore it better. Battle of the ages.
This episode brought to you by the numbers 76 billion. And that is the size of the new mega deal over 11 years between the NBA and Disney NBC Sports and Amazon and uh Amazon managed to edge out a perennial sports broadcaster which is TNT Dan. Another story for your beat.
Is this a nail, another nail in the coffin for linear? Or can we extrapolate something else here? Well, you could say look at the fact that two of the other three partners are Disney and NBC Comcast owned. So Linear is OK if you look over at that, although of course, we know that cord cutting has really hit ESPN over the years. Everyone loves to, to hit that story and say ESPN is in trouble.
ESPN is dying not the case. But if you just zoom in on Amazon versus TNT, which is Warner Brothers, Discovery WBD having its own morass of problems. As we know in fact, financial Times a week ago reporting that maybe they're already looking at splitting that tie up has not worked at all.
But if you just look at Amazon versus WBD, Amazon has won, the NBA has crowned Amazon and this is a huge win and a huge signal for seeing live sports broadcasts on streaming as part of Amazon getting this NBA package. It will be the first time ever that a May your sports leagues finals series that is every game of the finals will be exclusive to a streamer. I'm talking about the W NBA.
You'll only be able to watch the W NBA finals on certain years on Amazon Prime. And this is happening at a time when the W NBA is bigger than it's ever been for years. We kept hearing this is the tipping point.
It's WNB A's time and it really wasn't now. It is now, you can't argue with it, you know, record ratings numbers. So this NBA deal news is not just NBA, but it also includes the new W NBA deal $2.
2 billion big milestone for that league big win for Amazon. Well, and Dan, I wanna ask you about that with the 2.2 billion are the dollars keeping up with those views for the W NBA.
Well, actually, well, depending on whom you ask, including Cheryl Miller, major figure in women's basketball, sister of Reggie Miller, she says it's a low ball and that should actually be more. But, you know, look, it's finally the W NBA getting its own deal separate from the NBA. Let's just, I don't want to say, hold your horses at all.
But, but it will continue to grow from here, even if it's a low ball, it's a major milestone. It's big growth for the, for the W NBA. It's yes, the Kaitlin Clark effect, but it's Asia Wilson.
It's all these other players too. And I, I'm not, I'm not a, I don't watch any sports anymore. I used to when I was younger, so full disclosure there.
But I mean, as far as the W NBA is concerned, I hear a lot about Caitlin mcclure. Has she become the entire franchise? I think that like most debates, like most things you'd see on first take with Stephen, a the truth lies somewhere in the middle. In other words, there are people who say, who are big W NBA believers and, and have been around for years.
They say, oh, welcome to the party. You're all just joining. We've been here for years.
Uh There's a great viral T shirt that was created. Everybody watches women's sports. And what they say is, of course, it's not just Caitlin Clark.
Stop calling it the Kaitlin Clark effect. It's offensive. It's not just one player.
There are a ton of stars, there's Paige Beckers, you know, I mentioned Asia Wilson. There's so many that is true, but then there's people on the other side who say, come on, look at the instant surge in numbers, look at the fact that something like eight or nine of the 10 most watched games this season had Kaitlyn Clark. How can you discount her value? And it's both, it is certainly driven by Kaitlin Clark.
If you ask me, it's being driven more by her than any other individual player. But yes, it's not just Kaitlin Clark, it's all happening at once. Um And it's also part of the larger uh surge in interest and appreciation and support for women's sports.
Look at NWSL Bob Iger and will obey, buying an NWSL franchise. Many people, even big sports fans are like, what is the NWSL? It's the national women's soccer league and that puts a big valuation on an NWSL team that by the way, of course, isn't profitable yet. So as big private equity names, as big family offices, as big individual billionaires, uh rush in to invest in, in women's pro sports.
You're gonna see a rise in eyeballs and in streaming deals for all of them. So big deal for Amazon and I'll give you one more note on TNT. They are suing because I think they think they have to look like they're fighting back.
Does it seem like they're entitled? I mean, they've had the rights for years but uh, but there's a little bit of a shot in freude right now, I mean, finger pointing. Well, there, there was going to be this reckoning moment and I think you're right, Jared that you can't assume that just because TNT has been in the NBA business for years and years, they get the luxury of continuing. And this was B A sending a shot across the bow saying we'd rather be in business with Amazon.
In fact, supposedly, financially the offer for this C package for the NBA rights from WBD was at or close to the same dollar value as Amazon's offer. But the NBA was saying we'd rather be in business with Amazon right now. So that's a major signal.
TNT is suing a lot of questions emerge. What happens to Charles Barkley? What happens to inside the NBA? The best long running, you know, we love the guys at the desk. So funny.
So many viral moments. Could they go to Amazon? Will they really break up? And then there's gonna be an awkward lame duck season where the games are still on TNT. But everyone knows that TNT doesn't have the deal anymore.
What uncut things are? Shaq and Charles Barkley gonna say during a lame duck year. Well, I want to pivot a little bit to uh sports apparel because this is another one of your beats we've seen for the most part. Uh at least sports us apparel has done not the best this year.
We're gonna talk about Nike in a little bit different capacity in a, in a few minutes. But I wanted to talk about Lululemon that stock is down significantly this year. Uh I was just mentioning Nike under armor, but then you go to Adidas, I believe I'm pronouncing that right.
Uh They're doing quite well. I'm just doing anything standing out there in these trends. Yeah, a few things I'd say.
And you're right, Audie is doing well as we record this. They just had uh good earnings in a positive quarter and they actually got to keep their estimate for the year, which was a surprise because you say they're doing well as recently as six months ago, they weren't doing so well and we could have included them in the lump of the big dogs who are all flailing. That is Nike Adidas U A of course under armor, which has been a story we've loved covering for years and years.
Right? Kevin Plank, incredible entrepreneur. He created the company. But in the past 56 years, the brand has really flailed because it's not landing anymore with consumers.
It's not landing with the US consumer, the brand of under armor and really hard to change when you've got again. So their credit to Kevin Plank's credit. Such a strong brand.
The brand was, will you protect this house? We're in the locker room, we're bros, we're dudes, we're lifting and we're wearing sweat wicking shirts that are really tight, show our muscles and now everything is headed is run clubs, lifestyle ath leisure. I wear my yoga pants all day. So we're seeing upstarts like on Hoka, I'll shout out tracks, Smith, a Boston brand that I love to run with and in person run clubs.
Supposedly, I wouldn't know but are replacing the dating app. In New York City, people are doing run clubs instead as all of this grows, it is very hurtful to you. A and, and it's a real problem.
How do you rebrand when you brand was so firmly focused on that? And then Adidas and Nike have really lost serious share to these upstarts, by the way, another name. Brooks Buffett and Berkshire own. Brooks running.
Not one of the newer upstart. It's been around a long time, but really gaining share. And I think it's because they have a smart lane, they have a niche.
They're a running brand, you know. So, I think in some ways it's almost like what we've seen in media and magazines, the only print magazines that survive anymore other than the big dogs, the ones you buy, I know you're a big, uh, buyer of print magazine focused ones. Yes.
You know, swimming and weaving Monthly. I'm getting the name wrong fish and stream hunt gather. So I see the sneaker brands and the apparel brands as being kind of similar.
You better have a focus lane and niche. If you try and do everything, you end up not doing anything well. But is it too crowd like, is the ath leisure space just too crowded anyway, even if you're, if you have your own niche? Well, 10 brands have their own niche.
Ok. How does that help? Certainly crowded. I think there's to grow again.
It's all about social, it's all about brand. We're seeing really interesting uses of celebrities and athletes and also, um, you know, endorsement deals where you're actually giving the famous endorser equity in the company or they take a figurehead position. They're the new assistant VP of our basketball business.
You know, famously when Puma tried to get into the basketball business but doing signature basketball shoes, not a great business. Performance, basketball sneakers, I should say instead, people are wearing sneakers for fashion. They're not as much anymore, buying six different types of sneakers for the six different sports they play.
So a lot of challenges in this business, by the way, that's not to say Nike's going anywhere. I mean, it's Nike, but they laid off something like 750 people in a six month period. Then hold that thought because we're going to keep talking about Nike here.
I just want to get this uh intro and then we can talk, we can wax philosophical about Disney as well, but we are rolling out the red carpet. And so we've got two dow components primping for the walk, two stalwarts of the world's oldest stock index. Disney and Nike.
Nike stock has been under pressure as we've been talking about since peaking in 2021 down 58% from its high CEO John Donahoe has been leading the turnaround effort in direct to consumer. But the board faces mounting pressure from activist investors over at Disney Bob Iger boomeranged as CEO in 2022 and the stock has suffered. It peaked under Bob Chapek in 2021 is down 53% since then.
And Disney is no stranger to uh to activist threats. Either Nelson Peltz and his married band of cost cutters been pushing for change over at the mouse house. So Disney Nike, both household names, but we want to know who's wearing the turnaround better, who's position better for the next two years? Wow, that is a big question.
Love this. This is a lot of fun. I think you summarized it perfectly.
I mean, the er, stuff is fascinating. Will he ever be able to step away? I mean, he still is uh so inextricably linked to the years and years. Let's give them credit of continued success.
The incredible run of acquisitions, Lucasfilm, Pixar Marvel win after win after win, but a lot is happening at once that you could kind of lump together as franchise fatigue, right? People are cutting the cord. So ESPN is uh struggling to find new avenues to people. ESPN plus depends what lens you wanna use to say, whether it's been an all out success or not.
Marvel. Well, the MC U has hit a wall. They did way too much in a short time.
They finally acknowledge that that's why I think they kind of took a year off. No big Marvel movie uh in the last year, but we've got Deadpool coming out, which is still kind of part of the Sony legacy. It's the first time Deadpool is being brought into the MC U Robert Downey Junior's new role.
That's very say to me and I should disclose I'm big on just disclose your biases. I love the MC U I'm a big marvel guy, but they did do way too much. They did too many marvel original shows on Disney.
Plus it got to the point where there were references to all the other movies and shows and if you had missed one, then you didn't get the joke or the reference and you can't watch them all, you can't watch them all. So I think they have reached a point where they need to do some innovating. They need to take a less is more approach on the original uh franchise.
And then let's also mention they've got some big bundle planned and oh, the irony, we saw the unbundling for 15 years now. It's the great re bundling. They're planning a sports streaming bundle with Fox and Warner Brothers and there's a lot of confusion there.
Supposedly, it's called Vu Venu. Wait a minute. How can these three businesses which also compete with each other on live rights? Do a tie up where they do a sports streaming app together and sure enough food is suing them.
And by the way, we get into these ridiculous Fubo Vu Hulu do not see the same names here. But this is gonna be a really interesting battle because what um Fubo wants not Fubu is to get an injunction against Venu, which includes three giants from launching their streaming bundle. But let's see where that pricing comes out to me.
The larger story here streaming app overload. We have finally reached peak streaming app and people are now cutting streaming subscriptions instead of loading more onto their plate. But I didn't do enough, Nike.
I guess if I'm told to vote in this segment, I give the edge to Disney again. Nike is not going anywhere. Nike is always gonna be a big company, but Nike faces a lot of problems as you correctly said about Donahoe.
It's a turnaround effort and I'd give the edge to Disney, very different companies but very important, uh, American companies. Dan. We always love having you here and we're gonna leave it there.
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