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Good Thursday Morning. Bringing you a “snack size” version of SBP this week.

#1: Apple taking the inside track for F1?

🗯️ My thought bubble: This follows the news last week that F1, the Apple-developed blockbuster film, had a massive opening weekend and is expected to generate a healthy return for the tech giant. The timing is purely serendipitous, but it is a fun coincidence that Apple is reportedly now the one out in front on the media rights in real life. Assuming this goes through, a few big things I’m thinking about:

• The $150-$200m Apple would reportedly be paying annually is just below sports that receive comparable viewership (i.e., NHL on TNT — $225m), and given the buzz around F1, it feels like a steal.

• That being said, there are more and more rumblings that the sport has begun to plateau in the U.S. in terms of domestic viewership. The hypothesis is that the pandemic craze around Drive to Survive has worn off, and casual viewers have moved on to the next trend. There are likely elements of truth in this take, and I’ll be interested to see what F1/Apple do for shoulder programming and race experience to both develop new fans and cultivate current ones.

• Two notes on F1 streaming:

  • What happens to Drive to Survive given it’s on Netflix? Does it stay as is and there is content on both streaming giants, or does Apple require it —or a similar version of it — to be exclusively on their service given they own the media rights.

  • What does this mean for F1 TV, F1’s current paid streaming option? It will be interesting to see if it continues only internationally or if they leverage Apple’s global platform to provide the one-stop shop for all viewers

#2: Classy move by Liverpool in the wake of a tragedy

#3: This chart on NBA valuations since 2020 blows my mind

🗯️ My thought bubble: This is a combination of investors recognizing the opportunity for an American game with the most global reach, the power of locked-in media rights, and the general froth around sports investments right now.

The league has a lot of momentum on the business side, but it is also benefitting from the inertia of the number of team sales that have reset the market — Mat Ishbia buying the Suns in 2023 for an unheard of $4 billion at the time, the Celtics selling for $6.1 billion earlier this year, and now the Lakers going for $10 billion just last month. As for why this matters: private investments usually rely upon a comparable-based approach, and the fact that a series of similar assets out of a group of 30 are continuing to sell for more inevitably creates a “rising tide lifts all boats” scenario.

The big consideration for future buyers, though: the NBA’s soft cap, which can result in homegrown players staying on the original rosters and competing for championships, but it also potentially means exorbitant contracts that push the team into the first or second spending limit levels (“aprons”) and can lead to nine-figure tax bills in some instances (i.e., the Celtics would have faced a penalty of over $500 million if they had not reworked their roster this offseason). This is an extreme example, but if an owner is looking at these clubs as an investment in addition to winning (or if you’re a private equity firm that holds a minority stake, for example), it’s a consideration.

The aprons and contract structures will likely get reworked in the next CBA, but that’s not until the end of the decade. Until then, we’ll see a tightrope act between teams investing to compete but not setting themselves up to take a massive tax bill on the chin.

#4: Ben Shelton using his platform for good: bullying his sister’s employer on national TV into giving her time off to watch him at Wimbledon

#5: The Phillies made a hype video for their bat boy to get voted to go to the All-Star Game

Until next time, sports fans!

-Alex