89: Peloton's big sale, 100 Thieves free NFT, and WNBA raises $75m
Over the weekend we witnessed the magic of the cup as Boreham Wood overcame Championship side Bournemouth. The National League side are now set for a huge pay-day as they travel to Goodison Park to take on Frank Lampard's Everton in the fifth round.
Speaking of pay days...
Nike and Amazon among investors circling Peloton
Nike and Amazon are separately evaluating bids for Peloton, which has come under fire from an activist investor who has urged the board of the maker of connected fitness bikes and treadmills to sack its chief executive, John Foley and explore a sale.
Why are these brands looking to peddle a deal?
Well, insiders have suggested that the decision to look at Peloton is first and foremost opportunistic, given that the company’s stock has slumped (from nearly $50bn 12 months ago to less than $8bn). When the rumour was reported in the Wall Street Journal it sent shares in the firm surging more than 30% in after-hours trading.
Besides the opportunism, Peloton and its customer base are extremely attractive to companies like Nike and Amazon (as well as others like Apple and Disney) that are looking to boost their presence in the home, health and wellness and media spaces. This was laid out in Blackwell Capital’s letter to Peloton's board of directors.
For Amazon specifically, a Peloton deal could bolster their broad ambitions in healthcare and wellness space. In 2020, they launched a fitness band, Halo, which monitors activity and sleep patterns and have since added a second device, the Halo View. They also already offer a health and wellness subscription which includes workout programmes, recipes etc for $3.99 per month.
Meanwhile, for Nike there is a possibility to use this potential acquisition to build out an accessory and clothing business around the 2.33 million connected fitness subscribers that Peloton holds. This would align with Nike’s ambitions to grow their D2C revenues, however, it would reverse the brands decision to focus on tech software rather than hardware. Nike’s mobile apps helped to fuel sales growth during the pandemic.
A Nike acquisition would largely copy the thinking of Lululemon's $500 million acquisition of high-tech fitness brand Mirror in 2020. However, that deal doesn't seem to be paying off - Lululemon slashed its sales forecasts for Mirror in December and the increased competition and reopening of gyms have dented sales.
Meanwhile, for a brand such as Amazon, there would be questions over whether they need Peloton - as they could arguably create their own, cheaper version which would appeal to a wider mass-audience.
P.S. Peloton is due to publish its second quarter earnings today.
📚 Further Reading
Peloton cuts 2,800 jobs with even the boss told to get on his bike as sales crash - Sky News
This is the metaverse company that could save Peloton - Quartz
The rise of digital health in five charts - Morning Brew
THOUGHT FOR THE WEEK
100 Thieves last week took a different approach with NFTs. They gifted their community a free digital version of the diamond & sapphire Championship chains with they had given to their players.
The idea is that these are a “simple thank you gift” to their fans who have supported them from expansion franchise to LCS champions. The esports franchise have said that web3 will be a long-term project and convincing gamers won't be easy.
This concept provides some inspiration for other rightsholders and Rich Johnson, Head of Content at INEOS Grenadiers suggests starting with something that is free might be a good way to build up trust given scepticism in the market due to some projects being money grabs from certain short-sighted rights holders and athletes. “A really obvious entry point for many teams would be with POAPs - Proof of Attendance Protocols - a free NFT you can allow fans to mint when going to games.”
POAPs are described as digital mementos, minted in celebration of life's remarkable moments. Each POAP is a gift from an issuer to a collector, in celebration of a special shared memory. By minting these memories to the blockchain, collectors build a rich tapestry of tokenized experiences which unlock a world of possibilities. Johnson continues, "Don't force NFT's/tokens upon your audience. There is a use case but ease them in and build trust.”
📚 Further Reading
Web3 Proof of Attendance start-up raises 10m to mint shared memories as NFTs - Tech Crunch
Adidas made a very mysterious entry into The Metaverse with POAP - Highsnobiety
Free NFTs To Be Given To All Super Bowl Attendees - NFT Evening
WEEKLY ROUND UP
The WNBA has raised $75 million in funds from a group of equity investors that includes Nike, retired NBA players Baron Davis and Pau Gasol, and former U.S. Secretary of State Condoleezza Rice.
BT has entered exclusive talks with the US pay-TV firm Discovery to create a joint venture business that will include BT Sport, which has rights to sports including the Premier League and Champions League.
Top sponsors of the International Olympic Committee, which organises the Winter Games, have kept quiet on how they view China’s treatment of Uyghur Muslims, even as the Biden administration labels it “genocide” and boycotts the event.
Gaming startup ASX has launched a fantasy rugby union game based on stock exchange mechanics in time for the Six Nations Championship this past weekend. ASX's platform allows players to buy 'shares' in real-life athletes and compete in leaderboards against other users for cash prizes.
LA28 has celebrated the inclusion of surfing, skateboarding and sport climbing by unveiling 3 new emblems designed by Olympians Carissa Moore, Sky Brown, and Nathaniel Coleman.
Manchester United are set to unveil new £20m-per-year training kit sponsorship with blockchain platform Tezos. The Athletic can reveal that United have already shot promotional materials at the club’s training centre ahead of an announcement.
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