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May 26, 2020

By DYLAN BYERS in Los Angeles &

AHIZA GARCÍA-HODGES in San Francisco

Good morning. 🌞 Welcome back. Markets are looking up amid optimism about a potential coronavirus vaccine.

• The weekend's best headline, ICYMI.

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Market Interview

Rachel Nichols on basketball, COVID-19 and risk tolerance

Moving the Market: Rachel Nichols, the veteran basketball journalist and host of ESPN's "The Jump," sees sports as a vanguard in society's struggle to cope with coronavirus. Just as the suspension of the NBA was a bellweather moment for public attitudes about the pandemic, people are now looking to the NBA, MLB and NFL for a sign of how soon we might return to some semblance of normalcy.

• "It's facing sports most publicly," Nichols said in an interview with the Market. "Of all the businesses, the sports leagues are the ones that have to do this on TV in front of everyone. And if someone gets sick and dies, it's going to be someone famous."

• The latest: The NBA is eyeing a plan to resume its season at Disney World in Orlando. ESPN's Adrian Wojnarowski reported Monday that teams will be asked to recall players as soon as next week; TNT's Charles Barkley, citing conversations with "my bosses at Turner," said he was "100 percent sure" the season would resume.

Nichols scrambled to get her show back on air almost immediately after ESPN shut down its studios. She now broadcasts from her home in Los Angeles — her producer runs the show from a control room she has set up in her own home — and, for one hour each day, provides impatient basketball fans with something to look forward to.

• The one thing Nichols has not been able to provide, of course, is live basketball. So the question for her since the show resumed — and the question for every ratings-starved television network with sports rights — has of course been, when will sports actually come back?

"This is really about your tolerance of risk," Nichols says. "What is acceptable risk? Because there is no 100 percent risk-free situation. If your version of safe is 99 to 100 percent risk-free, you're not playing NBA or college basketball for another year and a half."

• "The most complicated thing for the NBA, for sports and for society as a whole, is that we're being asked to make an assessment of risk all at once. ... We didn't have to make the decision all at once when it came to car accidents."

• "American sports will come back, like America will come back, with a tolerance of risk. The sports leagues' task ⁠— and this is why you're seeing them come up with 75⁠-, 80⁠-, 85-page manuals ⁠— is to figure out how they'll get on the court or on the field to play the game."

• Nichols said she agreed with NBA Commission Adam Silver's assessment that it isn't worth resuming the season unless the league has some tolerance for the virus. (If a positive test would "shut us down, we probably shouldn't go down this path," he reportedly said.)

The big picture: The NBA's return would provide a massive boost to an entire sports-media ecosystem that has weathered severe financial losses amid the coronavirus pandemic. For the television industry, it would signal the return of sustained ratings and ad revenue, and might temporarily halt the acceleration of cord-cutting.

• As Nichols points out, it could also provide a roadmap for all American businesses that are trying to balance economic priorities with safety concerns as they chart a course toward reopening.

Bonus: "Why the Sports Comeback Has Begun," by WSJ's Ben Cohen and Louise Radnofsky: "There is now real momentum behind the return of American sports. The leagues have decided that games must go on — and that means learning to live with risk."

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Offloading?

Len Blavatnik shops DAZN

Talk of TV Land: Len Blavatnik, the owner of the sports streaming service DAZN, may be looking to sell an equity stake in the company or sell it outright as he seeks to "inject new money into the loss-making business," FT's Murad Ahmed, Alex Barket et al report.

• "In recent weeks, the group has approached big media companies over a potential investment, including John Malone's Liberty Global, but as yet has received little interest in a deal, according to people familiar with the talks."

The big picture: "The global suspension of sports fixtures during the pandemic has seen some subscribers pause monthly payments. DAZN has also sought to defer payments it owes to sports leagues, citing the lack of live action."

• DAZN chief Simon Denyer told staff last month that the pandemic was the "biggest disaster to hit the sports world in 75 years and the biggest challenge our business has ever faced."

What we're hearing: A source familiar with DAZN's strategy said the company is looking to raise money but that it has been since before the pandemic. The source said DAZN had been able to stem financial losses by deferring sports rights payments and decreasing marketing spend, usually two of its biggest expenses.

Market Links

• Bernard Arnault takes a stake in Lagardère (WSJ)

• David Rogier makes the case for MasterClass (NYT)

• Ben Smith considers the 'passion economy' (NYT)

• Jim McKelvey makes a pitch to entrepreneurs (WSJ)

• Ari Emanuel takes a $5 million loss (Variety)

🎧 What's next: Joe Rogan says he "feels gross" about how much richer he's become thanks to his $100-million-plus deal with Spotify.

• *Caveat before you click: Rogan spoke to NYT's Bari Weiss, who makes a lot of inferences about the state of media that don't all check out, as NYT's Taylor Lorenz notes here and here.

See you tomorrow.