All That and a Bag of Mail

It’s Friday, which means it’s time for the Friday mailbag.

And right off the jump I am still fired up about how insanely stupid it was of the Nashville Predators to become the first pro sports franchise ever to endorse an actual political candidate on behalf of the team. So are a ton of you judging by my emails. This is a awful precedent to set and it has led to something almost unheard of an in Outkick Twitter poll — virtually unanimous disagreement with the Predators decision.

Check out these poll results.

So far over 16,000 people have voted this morning and 96% of voters disagree with the Preds decision.

Do you know how hard it is to get 96% of people to agree with anything on Twitter?

As if that weren’t enough, it also appears the Predators political endorsement violated state law.

It’s just an insanely stupid decision which further politicizes sports at a time when sports, for many of us at least, is an escape from politics.

Speaking of an escape from politics, we’re having Outkick the Weekend at the Hard Rock Hotel in Las Vegas from August 23rd to 26th. If you’re a lawyer reading this you can also get eight hours of CLE there. Sign up for the event here. And if you’re a lawyer who wants CLE credit sign up here.

Okay, let’s dive into some more mailbag questions:

Will writes:

“In light of the idiotic decision by the Predators to allow CEO Sean Henry to endorse a mayoral candidate for the franchise, I wanted to ask a question that has bothered me since the 2008 election, which was the first one I voted in. Why are newspapers allowed to endorse political candidates? I understand that a truly neutral press no longer exists, but most outlets want to keep up the facade of objectivity. Also a quick Google search showed the NYT endorsing Abraham Lincoln in the 1860 election, so it is not like this is a new trend. I remember thinking as a high school senior looking at a list of newspapers that had endorsed Obama and McCain, “how is this allowed to happen?”

I think allowed is the wrong verb here. The newspaper should certainly be allowed to do this because freedom of the press is important.

The better question to me is this, “why would a newspaper that claims to be nonpartisan in all its reporting — we can clearly see that nonpartisan isn’t true for most papers, but let’s presume it’s true here — suddenly turn around and endorse a candidate just before an election?”

That seems inconsistent with the business model.

Personally I think all the “unbiased” claptrap is just a business slogan, anyway. If you claim to be “unbiased” then theoretically your business model allows you to sell newspapers to everyone in the entire country as opposed to just people who are allied with one party or the other. Get out of here with all your paean’s to the importance of journalism, it’s the business, stupid.

Now the newspaper would say that the endorsement comes from their editorial section, which is the part of the newspaper that specifically features opinion, but I’m not sure most people really make that distinction. Especially not in the modern day when that opinion piece is likely to be read online and sections of newspaper don’t matter.

What’s more, the newspaper’s editorial page regularly features opinion pieces written on behalf of the newspaper itself as opposed to columnists. Which leads to this question: why does the newspaper editorial board need to have opinions at all these days? Why should the New York Times or the Wall Street Journal be weighing in on any political issue at all? Why not just allow individual columnists to make arguments for or against things and keep the newspaper above the fray when it comes to “official” opinions?

Personally I think that would be a good policy not just for political endorsements, which I agree with you on that they seem counterproductive to the mission of the paper, but also for all official opinions of the paper in general.

Bryant writes:

“Clay, several questions regarding the historic Supreme Court ruling on sports betting. 

1) Does this effectively save ESPN from the downward spiral? I traveled to the UK and every other ad during games are for betting sites/locations which I could see driving huge demands for ads and increasing revenue a great deal. Agree with you on gambling focus of networks is surely going to happen.
2) Does this put the Mob/Mafia nearly completely out of business, as this is a last big source of income for them? 
Love the show and site.”
I think we can look to what happened when daily fantasy suddenly exploded on the scene in 2015 as an instructive example of what’s to come. FanDuel and DraftKings ran ads during every game that fall, spending hundreds of millions to get people to play daily fantasy. At the time I argued this was all a prelude for the day when sports gambling was going to become officially legal. That is, daily fantasy was the equivalent of just the tip sex, an opportunity to barely, just for a moment, not for long, get into the gambling market while claiming you weren’t really in the gambling market.
By doing this just the tip gambling the two companies added millions of email addresses to their database and were prepared when sports gambling went legal to turn those daily fantasy players into gamblers.
On the TV front, I believe billions of dollars will roll into sports programming, driving up ad rates and ensuring that the current TV sports contracts are as profitable from a revenue perspective as possible. Now this money will eventually go to the sports leagues too because they’ll know how much more their TV partners are making and expect for rights fees to increase commensurately, but in the meantime it should be a big addition to the TV networks.
It definitely helps ESPN, but the biggest problem ESPN has is is 75% of its revenue, or more, is currently tied to subscription costs. So can that 25% advertiser portion of their revenue increase to 30 or 35% as the subscriber base dwindles? And is that enough to help save their business? I don’t know.
Here’s the other question, will the leagues and TV networks themselves actually get into the gambling business by taking a cut of the revenue or not? For instance, let’s say that ESPN has 50 million emails in their database, what if they say that instead of just ad dollars they want a a guarantee of profits plus an equity stake in whichever company they do a deal with. If I were ESPN — and Fox and CBS and NBC — that’s the deal I’d make because then you’re getting paid an up front fee and you’re gaining equity. Effectively the company is paying you to take an ownership share.
What does that company then get? Exclusivity on the site.
I had a conversation with my bosses at Fox Sports Radio about this recently. I believe all sports media companies with substantial audiences on radio, TV, and online are effectively beach front property right now. If you want a beach house there are only so many places to build, the land is limited. Outkick is a beach house, my radio show is a beach house, there are a bunch of other beach houses right now in sports media too. Well, if you want to reach the ocean and beach, i.e. the gamblers, it’s best to go where you can see the ocean/gamblers from. You have to reach your audience somehow. So I suspect as all these states start legalizing sports that you’ll see a run on prime beach front sports media properties and everyone in the gambling space, if they are smart, will start signing up the best properties with the biggest audiences to ensure they can reach those potential gamblers.
Hell, if I were running some of these gambling companies, I’d be trying to buy Outkick from me right now and use Outkick as a way to help reach my audiences. (Honestly, this is starting to happen now.)
The same could be true, by the way, of the teams and leagues. If you’re the Dallas Cowboys wouldn’t you rather have your fans betting on your games and making money off of it than just taking ad dollars? I think the answer is probably yes. (Which also raises, by the way, the fact that some sports franchises are going to be in states where sports gambling is legal and others aren’t. How impactful could that end up being on franchise values? The Utah Jazz are probably never going to allow sports gambling whereas the Las Vegas Raiders are going to be located right in the heart of gambling central. That has to impact the value of a franchise.)

Finally, if I were the networks, I’d be greenlighting a bunch of gambling focused shows to fit the advertising market going forward. I’d even be contemplating flipping an entire network to just focus on gambling. Can you imagine how cool it would be to have a station that was basically CNBC meets sports gambling, where the ticker, instead of sports news, is entirely live lines going up or down all day long. And every time a line moves, just like a stock moves, you cover it as breaking news like CNBC does?

I think the potential for a channel like that is huge.

As for the mob, there will still be a ton of “illegal” gambling going on and prostitution is still illegal. Not to mention drugs. So I think they’ll be fine.

Musa writes:

“You mentioned in your article re SCOTUS striking down the federal ban on sports gambling that you suspect there will be “rapid innovation in this space and the business behind sports gambling will have a tremendous and long lasting impact on sports…” From an investment perspective, what avenues, businesses, corporations, etc. would you recommend investing in? In other words, if you had a boatload of money to invest, what would you invest in, if anything, and what would be your strategy to maximize making money on this ruling?”

I wouldn’t pick any one company, but I’d probably buy a bunch of them and hold them in a fund. The reason I wouldn’t pick any one company is because I’d be afraid you might be right about the industry and pick the wrong companies.

Sure, there will be huge winners.

But you don’t want to end up with Pets.com instead of Amazon.com.

With that in mind, I’d consider all of these companies: Caesar’s, MGM, William Hill, Scientific Games, Churchill Downs, and Stars Group.

Just as a warning, many of them traded up on the news so you need to do your research and follow how the regulatory framework will roll out.

I’d also keep your mind open because it’s possible a disruptive company will emerge. Remember, Google came out of nowhere to own search. Could a company come out of nowhere to own sports gambling? Who knows.

W. writes:

“Huge fan and love your input daily. I’m from Memphis so TN boy like yourself. Listening to you while at work has been the light I have needed daily for years now. 
The reason why I am writing you is I’d like to know what your thoughts are on the Supreme Court ruling on sports gambling for the other side of it – not players but the house. I have operated in Memphis for 5 years and have built a very strong client base. I would say between me and my 8 agents, i have roughly 800 clients who bet weekly during MLB/NBA/NHL season and that number easily jumps to over 3k/week during football. I’m sure you know how we operate. We extend credit for a week and settle up once a week instead of how Vegas operates – pay to play. We also use offshore sites which are top of line instead of making you leave your house to go somewhere to place a wager. 
My question is, what do i do now that it is legal? Do I even have a shot at going legit and competing with Casinos and Fanduel like sites? I could continue to operate if they don’t use online sites. If they open sites and extend credit I see me going out of business. If they don’t, and make you pay up front at windows then I have a fighting chance. I know it’s really early and we do not know the regulations yet but if i have a shot at going legit then i’d love to capitalize on that. I am 6 minutes from Mississippi who will most likely be one of the first to legalize it. Will I even be able to get a gaming license with me being involved already for the past 5 years? 
You the man, Clay and appreciate any input you can provide. Also, if you happen to post this on site, please keep my name random. I can’t afford an audit LOL.” 
I need you to call into Outkick one day and just walk me through your business. This is utterly fascinating to me.
If you’re in the gambling underworld now — a bookie or an offshore — I think what you want to happen is for sports gambling to be legalized, but for most places to require you to be physically present to place a wager. This appears to be what, for instance, Mississippi is doing. (Reports are sports gambling will be legal in Mississippi by July, but you’ll only be able to place wagers at actual casinos).
I think this could actually help the bookies and the offshore sites because I don’t believe the average guy is going to drive to a physical location to place a bet, I think he’s going to want to do it from his phone. But if mobile betting isn’t allowed by a particular state then all the casinos will be doing is advertising sports gambling for you and killing the stigma of illegality. In other words, how many guys will go to a casino, spend the day in the sports book, love the gambling experience, but then not be able to go to a sports book every day to place bets?
TONS OF GUYS.
Those guys will be looking for locations to gamble and many of them will end up with bookies and offshores. Now, if the states are smart, I think what they’ll do is allow you to gamble online from your phones like Nevada does. If that happens then I think the offshores and the bookies will face a more challenging market.
So the answer is we just don’t know yet.
As for an average guy getting a gambling license in any state? I think the chances of that are low because the states will want to partner with companies with big money and big experience in the space.
Mike writes:
“As a lawyer, I was wondering how you think this sports betting decision would affect similar cases for state’s rights on marijuana? If it’s within the state’s purview to decide how it regulates sports betting, the lottery, and alcohol sales, why can’t it decide how to treat marijuana? And how would that extend to other drugs, like cocaine and MDMA?”
It’s a fantastic question and I think this sports gambling decision certainly expands state’s rights in many ways.
If you truly believe in federalism then you should want states to be laboratories for government. That is, all fifty states should experiment and find out what works and then the nation as a whole can follow their leads. So you should welcome experimental state laws. The challenge you run into is this — if drugs are legal in some states and not others then how can you have a national drug policy? That’s why federal law preempts state law when there’s a conflict. But what if, as was the case here, the federal law unconstitutionally infringes upon state’s rights in an effort to commandeer legitimate state’s rights? Well, you’ve got a mess. (Federalism jurisprudence in general is kind of a mess since many of the justices use federalism to justify whichever result they want to get to as opposed to applying a consistent legal standard).
And that’s where we are with drugs right now.
The logic could certainly apply that some of these federal drug laws are unconstitutional, but that will demand that more states challenge existing federal law by passing their own state laws. In the meantime you’ve got an untenable situation where, for instance, you can be behaving legally under state law, but behaving illegally under federal law.
As a practical matter, this isn’t that uncommon, many state laws, for instance, differ with their neighboring states. Sometimes having a federal law could even make more sense than having fifty individual state laws. Shouldn’t we have one national policy for when and how you can buy alcohol and liquor, for instance?
Let me give you one example that makes even more sense, shouldn’t we really have a national age of consent in this country instead of fifty local laws?
Today you can leave Kentucky and drive on I-65 almost all the way to the beaches of Florida on our interstates. Let’s say you are an incredibly lucky 22 year old and a different hot 17 year old wants to sleep with you in every state on your way to the beach. If you sleep with that girl in Kentucky, it’s legal because the age of consent is 16 in Kentucky. But if you stop and sleep with that girl in Tennessee, you’ve broken the law because the age of consent is 18. But when you get back into Alabama and you sleep with the 17 year old again it’s legal because the age of consent is 16. Finally, when you cross over state lines to Florida, you’re back to being illegal again because the age of consent has become 18 once more.
Doesn’t that seem kind of crazy? Especially if you were traveling with the same girl to all these places? You’d be doing the same thing, but the legality of your action would be determined entirely based on where you were located. And I don’t even know how this would work on a private jet. What’s the age of consent when you’re banging a 17 year old as you fly across multiple states in the air?
As you can see from the map, we talk a ton about 18 being the age of consent in this country, but for most states, it’s actually 16 or 17.
Anyway, here’s what I’m in favor of, I believe we need less government in our lives, period. I believe sports gambling, drugs that can’t kill you, and prostitution should all be legal.
But what do I know, I’m just a gay Muslim who is loading up all his kids and heading to the beaches now.
Pray for me.
Send your mailbag questions to claytravis@gmail.com

Written by Clay Travis

OutKick founder, host and author. He's presently banned from appearing on both CNN and ESPN because he’s too honest for both.