It’s Friday, rejoice.
This has been the busiest media week of my life and I don’t think we’ve even seen anything yet because the new book comes out on September 25th.
That week I will have a daily national radio show, a daily national TV show, and a national book release all happening in the same week. I will be doing a ton of additional national television as well.
I’ll certainly write about it more then, but I’m not sure how many people, if any, have ever even done this before in sports media history — release a book at the same time that you’re doing daily national radio and daily national television.
Maybe Colin Cowherd and Tony Kornheiser have done it? Otherwise, it’s an incredibly small list.
And, hell, I might be the first.
So I’m just trying to survive here during a wild and crazy September.
And while I’m working harder than I ever have before, but I also want to take a minute at the top of the Friday mailbag to thank all of you for helping to spread the word about what I do and what Outkick does.
I really do think I have the best jobs in America and I appreciate all of you for helping to make that happen.
Now, if you’d be so kind, please go buy a copy of “Republicans Buy Sneakers Too.”
I can’t wait for this book to finally be out.
Okay, here we go with the mailbag.
“Holy shit, man. I am continually mind blown when people come after you accusing you to be a Trump supporter and waving your MAGA flag. You and I are very similar, I feel, in our thinking and how we feel in today’s climate. I do NOT consider myself political at all – but I did vote for Trump because I sure as hell wasn’t voting for Hillary.
Between my Twitter feed and my print subscriptions to the New York Times and the Wall Street Journal — I also have a digital subscription to my local Nashville paper, The Tennessean — I don’t find myself lacking for more sports opinion or analysis.
It’s interesting, the reason I got a Wall Street Journal subscription a few years ago was because I found myself trying to click on their articles to read what they were putting out on a regular basis.
I haven’t found myself doing that with “The Athletic.”
Now, that’s just me.
Many people, such as yourself, obviously disagree and like the content they provide.
But I do think it’s hard to get large numbers of people to sign up for subscription models. For instance, we’ve got the Outkick VIP and it has several thousand subscribers now. For $99 you get a full year’s subscription, an autographed copy of my new book, a VIP phone line to call into the radio show, access to our VIP events, early gambling picks, and assorted other things over the course of the year.
That seems like a pretty good value to me.
That’s a good and growing aspect of the Outkick business, but it’s not my entire business model and if it disappeared tomorrow it wouldn’t impact us very much. I do national radio, national TV, and every article we publish on the main page of the site is and always has been 100% free for readers. The Athletic’s entire business model is predicated on the subscription model.
And so far no sports media company has managed to crack that business model other than fan message boards for college.
And what was the secret sauce of those sites?
The diehards of the diehards could follow recruiting in a way that wasn’t being covered by other media sources. Recruiting obsessives were the secret sauce of the Rivals and 24/7s of the world.
What’s “The Athletic’s” secret sauce? What are they providing that I can’t get elsewhere? I’m not convinced there’s anything.
I think the subscription business model is really tough to manage and the success of Netflix, for instance, has convinced people that it isn’t that hard. The reality is, Netflix is a unicorn. And the most amazing thing about Netflix isn’t even the success it has now — because the company has so much new, original and unique content to drive subscriptions — it’s that Netflix worked when all it was doing was repurposing other people’s content. In other words, it’s not surprising to me that people are willing to pay for Netflix now, it’s surprising how many people were willing to pay when their content was available elsewhere and wasn’t new or original.
There’s also an interesting angle here, people love Netflix because you choose what you watch. People hate say, ESPN, because they only put one thing on television at a time. If you hate Stephen A. Smith or Michelle Beadle, you have no other option to watch while they’re on. If you hate Ozark, you can watch something else.
You never have to watch something you don’t like, which I think is hugely positive for the brand value of Netflix as opposed to say, ESPN.
Even insanely popular sports content, like the NFL Sunday Ticket, only has a couple of million subscribers a year. If only a couple of million people are willing to pay for NFL Sunday Ticket, how big is the market for The Athletic is there? I can see it working really well if they provide coverage to a niche sport that people love and is undercovered — hockey, for instance — but are there really that many people in Nashville who feel like they aren’t getting enough Titans news, for instance?
I have my doubts.
Everyone is trying to be the Netflix of sports, but in order to pull that off I think you have to have the original content. The Athletic isn’t making new content they are writing about content that other people produce. That’s a level of remove.
The Netflix of sports is tough also because sports is all best viewed live. Everything Netflix carries is already taped and has a long shelf life. Tonight’s Braves or Astroes or Dodgers game is gone forever and probably will never be watched again.
Now maybe I’m wrong about this and maybe the market is huge. Maybe I should put all of Outkick behind a pay wall. Are there 20,000 people out there that would pay $99 a year for everything I write on here?
Maybe there are and maybe I’m leaving money on the table by making my articles available to everyone and selling ads to advertisers.
I’ll certainly monitor the market, but my belief is there aren’t that many people who are going to pay for sports media subscriptions as a percentage of the overall marketplace.
So the best way to have a subscription model is to make it part of a larger business, which is mostly free.
But this goes into my larger question about podcasts too, are we blowing it in the radio industry by giving away podcasts of our radio shows for free? I don’t know, it’s a fascinating question.
As is the question of whether The Athletic will become a big business.
“Clay what is your game plan for when Nike reports earnings on 9/25? I’m sure you have some tweets drafted if earnings don’t beat and sales have dropped. Have you considering buying any puts? Personally hoping for a bad earnings so I can watch you defend your stance.”
My Twitter feed has gotten blown up over the past couple of days because Nike stock is up and so many people are Tweeting me about it, but my thesis here remains the same — I think Nike will experience reduced sales because they signed Colin Kaepernick.
I believe there are a lot of people like me who will choose not to buy Nike products for themselves and their kids over the next several months and I don’t think people like me will be cancelled out by people who love Kaepernick buying more product.
That’s my theory.
Could I be wrong?
Certainly, I’ve been wrong before. You’re reading a guy who lost $50k selling pants.
But I don’t think we will know about the impact, if any, until well after the first of the year when holiday sales numbers and quarterly earnings are announced. (It’s also possible, by the way, that the economy is so good everyone will be buying more gear so the impact is negligible either way.)
Regardless, despite what you will read on Twitter, which will trumpet these earnings to the high heavens if they are good, these earnings being announced in September are for the quarter that ended in August, before Nike announced the Kaepernick advertising campaign.
So there will be zero impact on the company’s quarterly earnings ending in August from Kaepernick.
That’s why I say it will take until after the first of the year before we see any impact, positive or negative.
“Regarding the Nike stock price, as a licensed financial professional, I think you’re half way there on the Nike stock price debate. When companies are in the spotlight they trade much more frequently on emotion and momentum, so when Nike came out and clearly took a liberal stance, who were the first people to react? The everyday conservatives who own Nike in their portfolio flocked to their advisors and demanded they sell the stock because they’d rather have their money elsewhere. They didn’t mind selling at a 2-3% loss because they don’t believe in the company’s beliefs. That led to the drop the day after.
Now here’s the place that I think you’re missing it. When the stock dropped 3% in one day, what do most professional traders and fund managers think? Fundamentals and financials of the company haven’t changed and I can buy it back on a 3% discount? Sign me up, even if it’s a short-term play, I can make a profit. So you have a bit of a ‘dead cat bounce’ from people buying back in at what they perceive as a discount. Combine that with the recent reports of “increased online purchases since the announcement” (which is ridiculously vague by the way and won’t be known for sure until their next earnings announcement), and the rise in the market as a whole over the past few days, and the stock price has hit ‘an all time high’. So LeBron and the people in your mentions are dancing in the streets on a short-term price pop as the people who actually disagree the most with this stance (the very affluent) are profiting. Sounds a lot like most of this world, doesn’t it? The rich are rich because they sit there and watch the dog and pony show that is what Nike is doing with the Kaepernick Ad and they figure out a way to make money off it.
Now you’re absolutely right about not knowing what is going to happen with the effect on the stock price for months. The run up in my opinion is inflated due to money pouring it from people buying it back at a discount and optimistic, if not uneducated, articles being written about how great the online sales business is. In the next year or so we’ll be able to see how the financials look and if there’s a long-term net positive or net negative effect on them for ostracizing a portion of their clientele. My belief: overall this will have a negative effect. Going against your shareholders in support of a controversial issue has never been a winning business mindset, and I think this will be part of Nike’s legacy every time someone goes to purchase their products. They’re sacrificing some of the conservatives they sell to for the alt-left that will buy their products just because they have Kaepernick. It’s a math game at that point and I just think there’s more conservatives that they’ll lose than liberals that they’ll gain.
Sorry for the rant, big fan. Think you’re onto something huge.”
This is well said.
These are also the kind of emails I get all the time, which is why I think it’s so funny when people with tiny audiences online try to attack my audience as made up entirely of redneck idiots.
“Hey Clay, my Sunday social media timeline was full of liberals and conservatives alike all posting that they were not watching or interested in the NFL this season.
“It seems most of the tweets/instagram posts I encountered on social media the past months from New Yorkers were vehemently endorsing Cynthia Nixon, but Cuomo easily beat her in the primary 65% to 35%. Do you think it’s because liberals are shouting but not voting or because social media is not an accurate portrayal of real life?”
My answer is always going to be that social media isn’t an accurate portrayal of real life.
Some liberals are voting — there have been many progressive upsets this primary season — but I think the general rule is don’t use social media as an accurate barometer of the real world.