Some things and ideas: January 2022
Some things and ideas: January 2022
Some random thoughts on articles that caught my attention in the last month. Note that I try to write notes on articles immediately after reading them, so there can be a little overlap in themes if an article grabs my attention early in the month and is similar to an article that I like later in the month.
My monthly overview (Monthly recurring piece)
I consider YAVB my “empire” with four core pieces: this blog / substack (the free side), the premium side of this blog, my podcast (also on Spotify, iTunes, or YouTube), and my twitter account. You can see my 2022 vision and goals for the empire here. If you like the blog / free site, I'd encourage you to check out the pod, follow me on twitter, and maybe even subscribe to the premium site!
I try to be as helpful as humanly possible to anyone whose research / writing I enjoy. In almost every post I do, you'll notice I link to other subscription services or investors who I like. I don't get referral fees or anything for that; these are almost always organic links and highlights that I do not because I was asked to but because one of my goals with the (very small) platform I have is to shine light on other people who are doing good work and make sure they have a platform big enough to encourage them to keep doing good work!
If you're launching a subscription service, or a new blog, or you're an investor who has done some really good research and wants to get some more eyeballs on it, please drop me a line and let me know. If the quality is there, I would love to link to your blog post or subscription service or research (and if the quality isn't there, I'm happy to provide feedback! I have done so with several services and I think my advice is good / appreciated / helpful!), and I'd love to have you on the podcast to talk about all of it. I can't promise anything, but most podcast guests / people I've linked to have been very happy about the reception / feedback they've gotten (I've even been called the king of the sub bumps / almost as good as Twitter / a big sub bump, and I've generally heard from investors with LPs who come on the podcast that they're delighted by the response). My DMs are always open, so feel free to slide into them if I can be helpful!
Leveraging brands / IP getting more valuable
This month, I saw WWE licensing their IP for branded lottery games nationwide and Netflix outlining the next phase of its sports strategy.
The Netflix article is particularly interesting; it includes a note that Netflix has “left the door open to buying rights to a sport like formula One” as well as the fact Netflixt held talks with the WWE the last time their international rights were available.
Why highlight those articles? They’re interesting on a whole bunch of fronts!
Streaming services are effectively a giant CAC / LTV optimization machine. And I’ve long argued there’s nothing like sports / live programming to boost both sides of that equation. From a CAC perspective, grabbing sports rights guarantees that a bunch of highly passionate fans will sign up for your service. And, from an LTV perspective, it gives people a reason to open your app and engage on a weekly basis (as well as a platform to advertise / launch new shows). When you consider both of those, I continue to think a lot of secondary / tertiary sports rights remain undervalued (even after big increases over the past few years!),
I noted this undervaluation last September using the WWE versus the Olympics and Boss Baby 2; I’ll refer you to that discussion for more.
The other interesting side is the licensing side. People are always worried about declining ratings for sports leagues, and yes you’d rather have more people watch your shows. But as the world gets more and more fragmented, I continue to think sports teams / leagues will have unbelievable marketing opportunities from people looking to use the sports brands as “halos” to lure in new customers. WWE licensing their brand for lottery / gambling is one example, but there are plenty of others. For example, today every sports league is going to have preferred gambling partners who pay huge sponsorship fees for that promo; 10 years ago that revenue stream certainly wasn’t there. Nor was raking in huge fees from crypto exchange sponsorships. And the show / spin off potential for sports leagues is off the charts in a streaming world (WWE is incredible at this with their USA and Bravo shows, or think about all of the NFL documentary shows sprouting up at every streaming service).
PS- my friends at Daloopa have a free WWE model if you’re interested in brushing up on them; I’ll disclose I’m friendly with the team but worth checking out if you build out lots of models!
NY sports betting follow up
I’ve mentioned NY sports betting promos twice (What the Fudge is happening with NY sports betting promos and Weekend bonus thoughts: An update on NY sports betting promos). These articles proved reasonably popular (as the allure of “free” money always does), so a quick update.
But, before I do that, a reminder: I’m not a financial advisor nor a customer support specialist nor a professional gambler; so please please please read all the fine print for the offers and make sure you’re comfortable with the terms and conditions before you do anything.
The highlight is there’s a new contender on the scene. Pointsbet (sponsored by Drew Brees and has some partnership with NBCSports) is doing a $50 free bet plus ~$2k in risk free bets on sign up.
They have a really interesting “pointsbetting” offering. You can see the details here; it’s interesting because it can give you a multiplier if you’re really confident of an outcome and because it seems extremely dangerous (it’s basically margin to big outcomes; if you’re really right it’ll amplify you way up but it will amplify you way down if you’re way off!). I’m a little surprised regulators let that offering roll out, though as a free market advocate I guess I should be applauding it?
As good a time as any to remind: these free offers are juicy, and a little sports gimbling can be really fun (I generally look at it as throw $10 on a game and you’ll be way more invested in a game; it’s fun and cheaper than going to the movies!). But please be careful; I don’t want to encourage reckless gambling or anything!
A quick review of the other current offers out there:
Fanduel will give you $50 plus a risk free first bet up to $1k
Caesars is doing $300 in free bets after you make your first $20 bet, plus I believe they have some deposit matching (this is different than their former offer, which I’ll discuss later)
MGM will deposit match you up to $50 free as well as give you a “risk free” first bet up to $1k
A quick disclosure: some of these are affiliate links that will get both of us a small extra bonus (generally an extra $50 free bet).
Those offers are juicy in their own rights, but they’re often made better by free / promo bets that the apps do to encourage user activity / generate buzz. We’re coming up on the Super Bowl (which is, ironically, the Super Bowl for gambling as well) and March Madness in the next two months. I suspect that the apps will be doing lots of free promo bets around those events, so keep your eyes open for those because I suspect they could increase the payouts from all of the free bets above / provide an opportunity to increase your payoffs if you’ve already taken advantage of the free bets.
Volatility follow up
Just a quick follow up from something that’s been top of mind: last month, I noted how I love the MCU and thinking about it sometimes made me wonder if volatility was mispriced (see screen shot / tweet below). With the S&P set for its worst month since March 2020, I am both wishing that I had played that thesis a little harder and wondering if the market’s mini-meltdown in the face of very little real bad news* suggests that volatility continues to be a little mispriced.
*what do I mean by little bad news? Well, it seems most of the recent decline is just related to the markets fears of the fed tightening a little too aggressively. There are much worse things in the world than the fed mistakenly hiking five times in a year instead of four or something (to use a topical MCU example, NYC getting invaded by super villians from a different universe). If the markets are this vulnerable to interest rates going from 1.5% to 1.75%, you have to wonder how vulnerable they are to real shocks (war, supply chain disruption getting even worse, a radioactive spider biting and giving super powers to the wrong person, etc.)
And I say all of this as an anxious bull from today’s prices!
Podcasts (Monthly recurring piece)
I launched the Yet Another Value Podcast in August 2020 and provided a longer piece on my vision for the podcast at the start of 2021. They've been a blast so far.
A big update: I have created yetanothervaluepodcast.substack.com; I’ll be posting each podcast there as well as a transcript of the podcast. Would very much appreciate feedback on the site if you have any; I’m still trying to figure it out!
This month’s podcasts
Nerd Corner (Monthly recurring piece)
There’s no hiding it; I’m a massive nerd. I read 3-4 fantasy books a month, my favorite past time is playing board games with my wife and friends, and I religiously watch every new entry in the Marvel Cinematic Universe (MCU) and listen to fantasy show recaps on Binge Mode (so much so that I even did a Twitter Space talking about the MCU!). I figured a few of you are nerds like me, so I’m starting this segment to give recs of what I’m nerding out over currently, with the hope that you’ll either try it and enjoy it or recommend me similarly nerdy things that I’ll enjoy. This month’s recs:
Traveler’s Gate Trilogy: I freaking loved the Cradle series (which I recommended each of the last two months); this series is by the same author. It’s fun and has some really interesting plays on fantasy tropes, but it’s no where close to as good as Cradle IMO. If you loved Cradle, you’ll like this. If you’re not really into fantasy, probably pass!
Peacemaker: HBO series with John Cena starring. Set in the DCU universe. I’m on episode behind, but it’s awesome. Cena is hillarious, and it’s a just a ton of fun. The soundtrack is awesome. It’s not quite Loki level, but outside of that I’d put it up against any comic book style show / movie.
I also wanted to highlight some interesting things Peacemaker did. First, they dropped three episodes and then went week to week. I think that’s the ideal release schedule for new shows; three episodes lets you quickly get hooked and build into a world / story, and then week to week keeps a little tension and buzz going. Compare that to, say, Book of Boba Fett on Disney+, which has gone weekly and I think really suffered from it. Second, they released a podcast with it weekly and advertise it at the start of every show. I’m not sure why more shows don’t do this; a podcast is a really cheap extension of a show that keeps your most passionate fans engaged, can hook people in who are on he fence, and is NPV positive even if you ignored all that and just factored in some advertising revenue.
Other things I liked (Monthly recurring piece)
Open Letter #2 to Twitter leadership
Another fantastic letter in a series to a company that is just perennially undermanaged.
What keeps me up at night? Bull whip
I really enjoy Diligent Dollar’s posts and should have linked long ago (and I’m not just saying that because we have some portfolio overlap!)
Mispriced optionality (SPAC Warrants)
I like how he thinks about these and prices these out.
Gores SPAC’s high redemptions signal worsening sector sentiment
Into the JPEG jungle (looking at the market structure of NFTs)
How the rise of the celebrity intructor transformed our relationship with fitness
Watchlist investing newsletter (WIN) milestone
Congrats! I’ve enjoyed WIN; if you haven’t seen it before, some samples are available here.
An interview with Jason Kilar (WB head until the DISCA merger goes through)
Patrick Mahomes and Joe Burrow Are big time QBS with small hands
Have you read the Green Bone trilogy by Fonda Lee? If you like fantasy and a few people having super powers you'll love it. Just published book 3.
As always, loved reading the articles you linked - interesting bit in the Kilar article about his bullishness on CNN+. Thoughts on that? Personally don't see a ton of alpha in the space, especially from one of the mainstream outlets.