Kansas City Chiefs CEO Clark Hunt joins Yahoo Finance Live to discuss the Amazon’s first NFL broadcast amid partnership, the NFL’s shift to streaming, the valuations of sports teams, and the outlook for the team.
- Welcome back. A big night for Amazon Prime Video as it readies to stream its first exclusive Thursday Tonight Football broadcast with the Kansas City Chiefs hosting the Los Angeles Chargers. And our very own Josh Schaeffer had the chance to speak with Kansas City Chiefs Chairman and CEO Clark Hunt on the league's current push to streaming. Let's take a listen here.
CLARK HUNT: We're extremely excited about our home opener tomorrow night, Thursday night, on Amazon Prime. It really is a big shift for the National Football League. Over the last several years, the league has experimented with streaming options and we struck a great partnership with Amazon Prime to carry most of the Thursday night games this year. The Chiefs are absolutely delighted to be the first team that's on. I think it's a real statement about our fan base, about GEHA Field at Arrowhead. So we're excited and looking forward to it. And I think it really portends the future of sports broadcasting.
JOSH SCHAEFFER: You mention the future of sports broadcasting. I'm curious, what does this do for you as an operator, as a team operator? What does this moment mean as far as revenue goes and what do you sort of expect to build with from this Amazon partnership?
CLARK HUNT: Well, for a number of years we've been expecting that a large part of the broadcast would shift to streaming. And I mentioned earlier that the league had experimented with it over the last few years just to make sure that from a technology standpoint it worked. But I think you're really going to see a trend across sports where more and more leagues more and more properties end up streaming at least part of their package and certainly the NFL is taking a step there. Major League Soccer recently announced a partnership with Apple where they will be streamed almost exclusively on Apple over the next 10 years. So, I think it's really the direction that all sports are headed.
JOSH SCHAEFFER: And you mentioned Apple there, obviously, with the MLS. Amazon, these are not necessarily streaming services that people are familiar with when it comes to live sports, right? This is sort of big tech stepping into live sports for the first time. What does that partnership do for sports? Is there going to be more tie-ins that we can see with Amazon or Apple from a tech standpoint beyond just streaming the game?
CLARK HUNT: Yeah, I really think it opens up a lot of avenues, additional ways that sports properties can be promoted. I think you'll see those kind of partnerships develop as we go forward. Certainly, having a partner with the strength of Amazon Prime is great for the National Football League. And I'd like to also think that the partnership with the National Football League will be great for Amazon as well.
JOSH SCHAEFFER: And Clark, obviously these streaming deals, we've seen them pay. Amazon paid about $1 billion annually. It's going to drive up those broadcast rights that are distributed throughout the league, and therefore driving up team valuations to some extent. I know Forbes has nearly doubled your team's valuation over the last five years. The Broncos sold for over $4 and 1/2 billion this year. What have you made of how much teams are worth nowadays? Do you think that's going to keep growing or have we started to see the market sort of top off a little bit there?
CLARK HUNT: Well, I don't think we've seen the market top off. I do believe if you went back 60-plus years to when my dad founded the Chiefs, I think he would be stunned with the valuations today. And certainly the move that we've seen in the last four or five years has been a very dramatic. Part of that is being able to tap a bigger audience, and partners like Amazon and Apple are going to help leagues be able to do that. So that's part of growing not only the fan base but also the valuations of the leagues and the teams.
JOSH SCHAEFFER: As that revenue stream grows and you have more money to work with, where are you looking to spend that money? Where is that additional revenue going for you to sort of build out the franchise further?
CLARK HUNT: Well, I think for every team the first focus is the product on the field. I know that's certainly true for the Chiefs. We're in a very special period here in Kansas City with Andy Reid and Patrick Mahomes and the success that we've had over the last four or five years, making a couple of Super Bowls and hosting four AFC Championship games at Arrowhead. So certainly, that will be the first focus.
I also think long term that you'll see a continued investment in new facilities and renovated facilities. Consumers today expect more when they come to a game, whether it's an arena or a football stadium. The creature comforts continue to get better every year or so. That's something we'll certainly be looking at over the next several years. And I know a lot of my partners around the NFL will be doing the same thing.
JOSH SCHAEFFER: And when we talk about the consumer, home opener tomorrow night. I'm curious what you've seen from demand this year. We talk a lot on our program about rising inflation and where consumers are maybe cutting back. Do you expect to see that at all in the stadium, or do you think that's not carrying over to the NFL?
CLARK HUNT: To this point, we've not seen that. I'll just speak specifically from a Chiefs standpoint. We've never seen greater demand for tickets. We'll be sold out tomorrow night. Our ticket prices have increased over year over year, and I think that trend is true across the National Football League. We're certainly keeping an eye on what's going on with the economy and what's going on with inflation. We do know that a lot of consumers are really feeling that, and so it's something that we're going to pay attention to. But to this point, we've not seen anything.
- Well, we got Josh Schaeffer here right now to break some of this down. A lot of interesting comments on the back end there. Talking about ticket price inflation, not surprisingly so, but it's got to be felt.
JOSH SCHAEFFER: And another thing, too, that was interesting that we also talked about with Clark was the inflation that they're seeing when it comes to buying goods, right, and buying that burger and buying the beer and then trying to sell it to someone at the stadium and are consumers going to pay more. And I think it was interesting, he told me that they're trying to absorb that cost as much as they can and not pass it on. And it'll be interesting to see how that plays out throughout the season, because stadium beers are already pretty expensive.
- Yeah, why don't they just Jack it up to $50 for a 16-ounce mug? I don't know.
JOSH SCHAEFFER: Right? Well, it seems like-- It's crazy, though. The price of NFL tickets, to think that people aren't cutting back at all when we think about the consumer and where they're spending right now. I think it's pretty interesting to see that people are still spending in that space. And where are they cutting back then?
- Well I think that cutting back on some of the larger items that we're seeing in the retail sales numbers. I don't know. We'll be talking about this throughout the rest of the day here.