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What college football cancelations mean for TV networks

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College football fans across the country—especially those in the Midwest and on the West Coast—are still reeling from this week’s announcement that the Big Ten and the Pac-12 are postponing their fall football seasons due to the coronavirus pandemic.

As two of the major “Power 5” collegiate athletic conferences, the moves mean that fans of universities including Ohio State, Michigan, USC, and Oregon will have to wait until spring at earliest before seeing their favorite teams back on the field.

While the three other Power 5 conferences—the SEC, ACC, and Big 12—currently plan to proceed with their fall seasons, the absence of some of the sport’s biggest institutions will have major economic consequences for the multibillion-dollar industry that surrounds college football.

But one group of stakeholders that should manage just fine, despite having considerably fewer games to show, are the broadcast networks. While the likes of Disney, Fox, and ViacomCBS have invested billions of dollars for the rights to air the nation’s premier college football contests, analysts at Bank of America said this week that a slimmer slate of games should be “relatively digestible” for those media giants and their shareholders.

One reason is the exposure that all three have to the NFL, which plans to begin its season as intended next month. BoA analysts cite the “potential for the NFL to fill in some of the programming gaps” on college football Saturdays—though there may be some regulatory hurdles to overcome before that’s possible.

There are also potential benefits to saving some college football for the spring, assuming the Big Ten and Pac-12 are able to resume their seasons then. “If some games are played in the fall while others are played in the spring, ratings could improve on a per-game basis due to scarcity, while also creating a more attractive spring slate for advertisers,” BoA analysts wrote.

And while fewer games in the fall will lead to a “meaningful” decline in revenues for broadcasters, due to “lower advertising dollars and certain affiliate rebates,” the networks will also likely be spared significant expenses associated with their college football slates. They would be “unlikely to pay [broadcast] rights fees” to the conferences—which often amount to hundreds of millions of dollars annually—or would receive rebates or compensation, perhaps in the form of “contract extensions for lost value” if games do not take place, according to BoA.

Of the major media conglomerates, Disney has the most exposure to college football. Through ESPN, it holds the rights to the end-of-season College Football Playoff, majority ownership of both the SEC Network and the ACC Network, and the rights to games across all of the major conferences.

ViacomCBS, meanwhile, currently pays around $60 million annually to be the SEC’s flagship broadcaster. Should the SEC reverse course and decide to cancel its season, the company will face a negative EBITDA impact of around $50 million this year, according to BoA analysts—though that could be “partially offset by replacement programming.”

Fox currently pays roughly $550 million per year for the right to air games across the Big 12, Pac-12, and Big Ten (including majority ownership of the latter’s Big Ten Network). Interestingly, BoA notes that the broadcaster “would likely see profitability improve” if all of its college football games were canceled, as TV affiliate revenues “would still accrue despite lower expenses.”

From a stock market perspective, the size and scope of all three broadcasting companies means it’s unlikely that any college football cancellations would hurt their bottom lines considerably, according to TG Watkins, director of stocks at Simpler Trading.

“I think these publicly traded companies are probably big enough that they’ll still do fairly well,” Watkins tells Fortune, citing Disney—which derived the largest chunk of its revenues in its last fiscal year from its Parks division (37.7%)—as an example. “Obviously it’s a big deal, but they’re well-diversified enough that they can pivot and look to provide content wherever they can.”

But while may be alright regardless of what happens, college football fans are left to wait and see whether they’ll be able to watch their favorite teams in action—be that this fall, next spring, or at all.

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Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Trump approves TikTok deal involving Oracle, ending international standoff

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Donald Trump approved Oracle’s bid for the U.S. operations of TikTok “in concept,” a deal forced by the president’s orders last month declaring the popular video-sharing app a national security threat.

“I have given the deal my blessing. If they get it done that’s great. If they don’t, that’s OK too, ” Trump told reporters Saturday as he left the White House for a campaign rally in Fayetteville, N.C. “I approved the deal in concept.”

The new company, which will be called TikTok Global, has agreed to donate $5 billion to an education fund, which Trump said would satisfy his demand that the government receive a payment from the deal. “They’re going to be setting up a very large fund,” he said. “That’s their contribution that I’ve been asking for.”

Under terms of the deal, Oracle and Walmart will control 20% of the new TikTok Global, according to a person familiar with the matter. Sequoia Capital and General Atlantic, already investors in TikTok’s Chinese owner ByteDance, are also expected to take stakes in the new company, the person said.

TikTok said in a statement that it was “pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the U.S. administration and settle questions around TikTok’s future in the U.S.”

The company confirmed Oracle will host all its U.S. data and secure its computer systems. TikTok said it is working with Walmart on a commercial partnership and it, along with Oracle, will take part in a TikTok Global pre-IPO financing round in which they can take as much as a 20% cumulative stake in the company.

The deal was forced by a pair of bans Trump issued in August citing national concerns over TikTok’s Chinese ownership. The Commerce Department on Saturday delayed by a week a ban that would have forced Apple Inc. and Alphabet Inc.’s Google to pull the TikTok video app from their U.S. app stores on Sunday.

TikTok Global will likely be headquartered in Texas and will hire “at least” 25,000 people, Trump said. TikTok will need to hire thousands of content moderators, engineers, and marketing staff that were previously located in China and around the world.

To sweeten the deal for Trump, TikTok promised to hire an additional 15,000 jobs more than the 10,000 positions the company already pledged to fill earlier this year. It’s unclear if there’s a timeline to achieve that target, or any guarantees that it will follow through. Facebook Inc., the largest U.S. social media company, employed about 45,000 people in 2019, while Twitter Inc. employed only 4,900, according to data compiled by Bloomberg.

Trump is ramping up pressure on Chinese-owned apps in the weeks before the Nov. 3 presidential elections, citing national security concerns about the data U.S. citizens provide to them and the potential for Beijing to use them for spying. The president is trailing his opponent Joe Biden in polls and has sought to portray himself as tougher on Beijing than the Democrat.

While the Chinese government must now sign off on the transaction for it to go forward, as of earlier this week, ByteDance was growing increasingly confident that the proposal would pass muster with Chinese regulators, people familiar with the matter told Bloomberg.

Under the terms of the agreement reached early in the week, ByteDance would retain a majority of TikTok’s assets and control over the algorithm, with Oracle and other U.S. investors taking minority stakes.

Trump seemed to contradict that on Saturday. “It will have nothing to do with China, it’ll be totally secure, that’ll be part of the deal,” he said. “All of the control is Walmart and Oracle, two great American companies.”

Trump spoke with Oracle Chairman Larry Ellison and Walmart Chief Executive Officer Doug McMillon on Friday, telling them he still expected the U.S. government to receive a cash payment as part of the transaction, according to people familiar with the matter. They agreed to the educational donation as a way to satisfy Trump’s demand, one of the people said.

The new U.S. company intends to hold an initial public offering in about a year, according to people familiar with the matter. TikTok plans to use the proceeds from the listing for the $5 billion educational grant, one of the people said.

Oracle will get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data or to spy on the video-sharing app’s 100 million American users, according to people familiar with the matter.

The deal came together last weekend, the result of high-level negotiations between ByteDance, Oracle and top Trump administration officials after ByteDance rejected a bid from Microsoft Corp. and Walmart to buy the U.S. TikTok service outright.

Beijing has signaled it would greenlight a deal as long as ByteDance doesn’t have to transfer the artificial intelligence algorithms that drive TikTok’s service, Bloomberg has reported.

The Treasury Department said the deal is subject to a security agreement that requires approval by the Committee on Foreign Investment in the U.S., or Cfius. The term sheet that’s been negotiated between Cfius and the companies will now have to be formalized in a document that details the mechanics for implementing the terms of the deal.

That document would likely include requirements related to the establishment of the new company, arrangements governing its relationship with ByteDance, whether an IPO is part of the deal, whether ByteDance will have to divest its entire stake in the IPO and what would happen if for some reason the IPO doesn’t occur, said Aimen Mir, a lawyer at Freshfields Bruckhaus Deringer LLP and a former deputy assistant secretary for investment security at Treasury.

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Trump Says He’s Approved Oracle Deal For U.S. TikTok

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Trump Says He’s Approved Oracle Deal For U.S. TikTok(Bloomberg) — Donald Trump said he’s approved Oracle Corp.’s bid for the U.S. operations of TikTok “in concept,” a deal forced by the president’s orders last month declaring the popular video-sharing app a national security threat.“I have given the deal my blessing. If they get it done that’s great. If they don’t, that’s OK too, ” Trump told reporters Saturday as he left the White House for a campaign rally in Fayetteville, N.C. “I approved the deal in concept.”The new company, which will be called TikTok Global, has agreed to donate $5 billion to an education fund, which Trump said would satisfy his demand that the government receive a payment from the deal.“They’re going to be setting up a very large fund,” Trump said. “That’s their contribution that I’ve been asking for.”TikTok Global will likely be headquartered in Texas and will hire “at least” 25,000 people, Trump said.That figure could not be immediately verified. Facebook Inc., the largest U.S. social media company, employed about 45,000 people in 2019, while Twitter Inc. employed only 4,900, according to data compiled by Bloomberg.The deal is the result of Trump’s orders last month over national security concerns about TikTok’s ownership by ByteDance Ltd., a Chinese company.The Chinese government must now sign off on the transaction for it to go forward.Trump is ramping up pressure on Chinese-owned apps in the weeks before the Nov. 3 presidential elections, citing national security concerns about the data U.S. citizens provide to them and the potential for Beijing to use them for spying. The president is trailing his opponent Joe Biden in polls and has sought to portray himself as tougher on Beijing than the Democrat.Under the terms of the agreement between the two companies, Bytedance retains a majority of TikTok’s assets and control over the algorithm, with Oracle and other U.S. investors taking minority stakes.“It will have nothing to do with China, it’ll be totally secure, that’ll be part of the deal,” Trump said. “All of the control is WalMart and Oracle, two great American companies.”Trump spoke with Oracle Chairman Larry Ellison and WalMart Inc. Chief Executive Officer Doug McMillon on Friday, telling them he still expected the U.S. government to receive a cash payment as part of the transction, according to people familiar with the matter.The new U.S. company intends to hold an initial public offering in about a year, according to people familiar with the matter.Oracle, Tiktok, and Walmart didn’t immediately respond to requests for comment.Oracle will get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data or to spy on the video-sharing app’s 100 million American users, according to people familiar with the matter.The deal came together last weekend, the result of high-level negotiations between ByteDance, Oracle and top Trump administration officials after ByteDance rejected a bid from Microsoft Corp. and WalMart to buy the U.S. TikTok service outright.WalMart remains interested in investing in the deal and could land a board seat on the new company, according to one person familiar with the matter.Beijing has signaled it would greenlight a deal as long as ByteDance doesn’t have to transfer the artificial intelligence algorithms that drive TikTok’s service, Bloomberg has reported.(Updates with company comments in 14rh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


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4 Free Tips to Get Your Business to Show Up on Google Maps

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If your business profile isn’t complete, has inaccurate information and doesn’t have any photos of your business, you probably won’t show up.

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