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The NY Times Goes All In On The Athletic
Mon Jul 10 2023Description
The episode covers the disbanding of The New York Times sports department in favor of coverage from The Athletic, the rise of streaming services impacting ESPN, the potential cultural significance of the Barbie movie and Mattel's transformation, the struggles of movie theaters and the success of luxury brands like Ferrari, Restoration Hardware, Louis Vuitton, and LVMH.
Insights
The New York Times shifts focus to bundle subscription approach
The New York Times is disbanding its sports department and partnering with The Athletic as part of its strategy to increase revenue and profitability through a bundle subscription approach.
Streaming services impact ESPN's relevance
Increased sports coverage elsewhere and the rise of streaming services have made ESPN less relevant in the industry.
Mattel aims to become an IP platform
Mattel's CEO plans to transform the company into an IP platform like Disney, starting with the potential cultural significance of the Barbie movie.
Luxury brands outperforming the market
Ultra luxury businesses like Ferrari, Restoration Hardware, Louis Vuitton, and LVMH have been outperforming the S&P 500, driven by factors such as brand loyalty and high margins.
Ferrari's transition and brand reputation
Ferrari is transitioning into electrification while maintaining its aspirational brand status. The company's cars retain their value well in the secondary market due to limited production and a strong brand reputation.
Challenges faced by Restoration Hardware
Restoration Hardware has been affected by higher interest rates, resulting in some difficulties for the company. They are investing in real estate to build an experiential brand.
Louis Vuitton's success as a luxury retailer
Louis Vuitton is one of the world's largest retailers, generating significant revenue through sales of high-end products. LVMH aims for double-digit organic growth by 2023.
The struggles of movie theaters
Movie theaters are struggling and need a blockbuster hit to attract audiences back. Efforts such as dinner theater experiences are being made to entice people back to theaters.
Ferrari's resurgence in racing
Ferrari is regaining its top three racing entity status, leading to increased sponsorship revenue and brand building opportunities.
Potential addition of Hermes to luxury goods stock basket
Adding Hermes to the luxury goods stock basket is seen as a good choice due to its similar profile and strong revenue growth.
Chapters
- The New York Times and The Athletic
- ESPN and Streaming Services
- The Barbie Movie and Mattel's Transformation
- Luxury Brands and Ferrari
- Restoration Hardware, Louis Vuitton, and LVMH
The New York Times and The Athletic
00:05 - 07:15
- The New York Times is disbanding its sports department in favor of coverage from The Athletic, a brand they bought for $550 million last year.
- The number of journalists working for The Athletic outnumber the number of journalists working for The New York Times on sports.
- The move was not surprising as there was a disparity and overlapping coverage between the two departments.
- Journalists from the sports desk will be moved to other desks like business news, politics news, and culture news to improve reporting quality.
- Subscribers will still get coverage of their teams but without the rah-rah approach.
- The Athletic has grown its subscriber base to 3 million since partnering with The New York Times and is moving towards profitability.
- The New York Times is focusing on a bundle subscription approach to increase revenue and profitability by offering access to multiple entities like cooking, puzzles, reviews, etc.
ESPN and Streaming Services
07:00 - 14:01
- ESPN is becoming less relevant due to increased sports coverage elsewhere.
- The Athletic, with support from the New York Times, is becoming a competitor in sports coverage.
- Streaming services have led to unbundling of content, requiring viewers to go to different platforms for different shows or sports.
- ESPN's recent layoffs are more related to Disney's overall problems and cable subscriptions rather than sports coverage in general.
- Sports coverage is still important but it's becoming easier to access through various platforms and services like MLB package and Amazon Prime.
The Barbie Movie and Mattel's Transformation
13:37 - 21:07
- Barbie movie is generating a lot of buzz and promotion.
- Mattel's CEO aims to turn the company into an IP platform like Disney.
- The Barbie movie has potential cultural significance and may be more than just a commercial venture.
- Mattel has other toy IPs like Hot Wheels, Uno, Barney, American Girl, Thomas and Friends, etc., which could be reintroduced or introduced to a new generation of youngsters.
- Success of the Barbie movie will determine if Mattel can become an IP company rather than just a toy maker.
- 'Barbenheimer' phenomenon where people plan on seeing both the serious Oppenheimer movie and the Barbie movie on the same day.
Luxury Brands and Ferrari
20:38 - 27:04
- The movie theaters are struggling and need a blockbuster hit to attract audiences back.
- There are efforts to woo people back to theaters, such as dinner theater experiences.
- Ultra luxury businesses like Ferrari, Restoration Hardware, Louis Vuitton, and Caring have been outperforming the S&P 500.
- Ferrari is a strong brand that generates high margins through customization and has a loyal customer base.
- Ferrari's pricing power comes from its cash generation, revenue growth, and profitability.
- The company is transitioning into electrification while maintaining its aspirational brand status.
- Ferrari's cars retain their value well in the secondary market due to their limited production and strong brand reputation.
Restoration Hardware, Louis Vuitton, and LVMH
20:38 - 27:04
- Ferrari has fallen off in recent years but is regaining its top three racing entity status, leading to increased sponsorship revenue and brand building opportunities.
- Restoration Hardware (RH) is an aspirational brand that has been affected by higher interest rates, resulting in some pain for the company.
- RH invests in real estate to build an experiential brand and has taken on debt to bring these experiences to customers.
- Louis Vuitton is one of the world's largest retailers, generating more revenue than Coca-Cola through sales of high-end products.
- LVMH has impressive profit margins and aims for double-digit organic growth by 2023.
- Adding Hermes to the luxury goods stock basket would be a good choice due to its similar profile and strong revenue growth.