A note to start: Congratulations Liverpool, champions of the English Premier League. Earlier this week, the Financial Times published a statistical analysis to show how Jürgen Klopp’s men secured the team’s first league title in 30 years. On Friday, we also reported on the club’s economic impact on the city it represents. Those stories — here and here — are worth your attention.
In this week’s Scoreboard briefing, we look at why Saudi Arabia is challenging Qatar for football broadcast rights, explain the financial crisis hitting US collegiate sports in the coronavirus pandemic, interview the new chief of the Formula E electric car racing series, and more.
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A new playing field for Middle Eastern rivalries: football media rights
What is Mohammed bin Salman, Crown Prince of Saudi Arabia, up to?
The FT revealed this week that representatives of the Saudi state approached Germany’s Bundesliga about acquiring the football league’s media rights across the Middle East.
The Gulf kingdom has spent big to bring heavyweight boxing, motor-racing events and top European football club matches to the country. The Public Investment Fund, the Saudi sovereign wealth fund, is leading a £300m takeover of Newcastle United (a deal that awaits approval by the English Premier League).
Why are football broadcast rights next on the agenda?
Prince Mohammed is following a playbook written by Gulf neighbours Qatar and the United Arab Emirates. They were first to invest heavily in sports, in an effort to diversify their economies away from a reliance on petrochemicals and project soft power around the world.
Saudi efforts to break into sport also stem from a regional rivalry, particularly since 2017, after Riyadh and three Arab allies cut diplomatic and transport links to Qatar.
One target is beIN Sports, a Qatari broadcaster owned by Nasser al-Khelaifi, who is also president of France’s Paris Saint-Germain and sits on the powerful executive committee of Uefa, European football’s governing body.
Last week, the World Trade Organization ruled that the Saudi government “infringed” international trade agreements due to involvement with beoutQ, a pirate network that has been streaming sports content rightfully owned by beIN.
The Saudis have always denied they are behind beoutQ. Sports organisations have strongly backed the Qatari broadcaster’s claims. Commercial considerations explain this support. The primary way Europe’s football leagues make money is TV rights. BeIN is often their biggest overseas broadcaster.
The Saudi approach to the Bundesliga is an attempt to gatecrash the German league’s talks with beIN about renewing its deal to screen matches across the Middle East. BeIN’s five-year contract, which runs out at the end of this season, is worth $250m.
That indicates just how much cash the Saudis need to spend to dislodge beIN and press ahead with long-rumoured plans to set up a TV company capable of winning important football broadcast contracts.
Sure, there’s business logic in becoming a major player in the global media market. But the real match is Saudi Arabia vs Qatar.
Get behind the story:
Restarting US college sports, America’s multibillion-dollar amateur industry
US college sports, technically an amateur affair, are big business.
So commercialised is the annual March Madness men’s basketball tournament, it has official scissors and ladder sponsorships. Millions of viewers tune in to collegiate American football games, such that you can now watch end-of-season matchups at the TaxSlayer Gator Bowl and the Chik-fil-A Peach Bowl.
In 2017-2018, National Collegiate Athletic Association sports departments in the most elite regional conferences raked in $8.78bn combined, from a mix of ticket sales, alumni donations, media rights and game revenue, among other sources — even though athletes themselves are compensated only through scholarships and stipends. By comparison, the English Premier League made $7.3bn (£5.8bn) the same year.
Unlike professional sports leagues, which tend to be centrally managed, the NCAA is a regulator of dozens of sports played at hundreds of universities across all 50 US states, organised into regional conferences and tiered into three divisions by size.
The decentralised leadership has made navigating the coronavirus emergency a major headache for the multibillion-dollar industry.
The NCAA has already realised its worst nightmare. Lockdowns in the US forced the cancellation of March Madness, the association’s crown jewel and largest revenue driver by far at more than $800m per year.
That wiped out more than 60 per cent of planned distributions for 2020 from the NCAA to its largest member schools, Division I, from $600m to just $225m.
Hopes to salvage the autumn collegiate sports season are off to an uneven start, as Covid-19 is spreading among athletes in summer training.
At Louisiana State University, home of the reigning American football national champions, a quarter of the team were recently quarantined, imperilling the football-focused sports department worth $157m last year.
Failure to get games back on could spell misery for universities that depend on sports teams to drive fundraising and marketing. Salvaging the gridiron season is crucial. In 2018-19, those football bowls generated $549m in payouts to schools.
Get behind the story:
Formula E races with higher purpose in motorsport’s changing climate
When Jamie Reigle joined Formula E as its new chief executive in September, he did not know he would be tasked with growing the nascent electric car-racing series in the backdrop of a pandemic.
The Canadian already knew it would be a challenge to build revenues to resemble anything like the billions commanded by the world’s top sports leagues.
Manchester United, the football club where Reigle worked for a decade until 2017, has 142 years of history underpinning its ambitions. Formula One, the world’s biggest motorsport, is celebrating its 70th anniversary this year. Formula E is in just its sixth season.
“We can’t replicate [it] with a magic wand,” Reigle tells Scoreboard. “They have history and heritage.”
What the event retains is plenty of sponsors, such as the Dutch beer maker Heineken and Saudi Arabian Airlines, which are keen to be associated with the sport’s environmental agenda.
Even Hollywood has taken note, with the recent release of And We Go Green, a documentary about Formula E produced by Oscar winner Leonardo DiCaprio, whose involvement in the series began with co-founding the Venturi racing team but those ties have since ended. These days he is on Formula E’s sustainability committee.
Boosted by sponsorship deals, Formula E reported its first annual profit in 2019 after increasing revenues to more than €200m. Sponsorship contributed half the total after a 25 per cent jump.
The pandemic has forced the racing to stop, which is likely to stall revenue growth.
Formula E is trying to ease the financial burden on its teams, including this season’s debutants Mercedes and Porsche, by cutting costs and returning to the track in Berlin this August.
“Formula E is a sport but it also has this higher purpose if you will in terms of looking to inspire people to adopt electric vehicles,” says Reigle. “We’re here to stay, we’re very well funded but there’s still a lot of growth to come. We’re not an established sport.”
Get behind the story
Highlights
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David Beckham, the former England footballer, is backing Guild Esports, a start-up that is looking to raise £25m, in a bet that interest in competitive video gaming will continue to rise.
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Major League Baseball and its players’ association reached a deal this week to start a pandemic-delayed 2020 season in July, after weeks of a bruising pay dispute.
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Nike, the world’s largest sportswear maker, is preparing to cut jobs after swinging to a $790m loss in the fiscal fourth quarter. Revenues slumped nearly 40 per cent as growth in its ecommerce business failed to outweigh the closure of physical stores during the pandemic.
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Washington Redskins, the NFL franchise, faced renewed calls to change its mascot and name, considered a slur against Native Americans, amid dialogue over racial inequality in the US. Sports marketing experts said a change could lead to $10m in associated costs.
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Fifa awarded the 2023 Women’s World Cup to Australia and New Zealand, which beat a rival bid from Colombia. Japan dropped out of the running for the football tournament this month.
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The 2019 Rugby World Cup, hosted in Japan, boosted the country’s economy by £2.3bn, created 46,340 jobs, and attracted 242,000 international visitors, according to EY.
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LeBron James, the LA Lakers star, and business partner Maverick Carter have raised $100m as they aim to grow SpringHill Company, an entertainment business, into a media empire.
Transfer Market
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Clare Connor has been named the next president of Marylebone Cricket Club, which is based at Lord’s in London and is an ancient body that retains huge influence in the sport. The former England captain will be the first woman to hold the role in the MCC’s 233-year history.
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Sheila Ford Hamp succeeds her mother, Martha Firestone Ford, as principal owner and chairwoman of the NFL’s Detroit Lions.
Final Whistle
There’s no tradition quite like American college students showing up on the set of ESPN’s weekly university football pregame show, College GameDay, wielding signs to troll rival teams. If you’re new to the art form, you can’t go wrong with “[opposing team/player/coach] likes Nickelback”. Relive the highlights with this historical review.
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Scoreboard is written by Samuel Agini, Murad Ahmed and Arash Massoudi in London, Sara Germano, James Fontanella-Khan, Anna Nicolaou in New York, with contributions from the team that produces the Due Diligence newsletter, FT’s global network of correspondents and data visualisation team.