FIFA v UEFA: Saudi Spending Spree Could Tip Balance ⚽️
Plus, What could the FIFA Club World Cup's ascent mean for football investing globally? and, Should professional sports leagues consider becoming minority investors in ESPN?
Welcome to Sports Pundit, where getting up to date with sports business news is as on point as a Lionel Messi free-kick ⚽️
In today’s email;
The knock-on effects of Saudi’s spending spree ⚽️
Will there be a new (football) world order? 🤔
ESPN discusses offering equity to sports leagues 🏈
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TOP STORY
FIFA v UEFA: Saudi Spending Spree Could Tip Balance ⚽️
Real Madrid and Al Hilal: The two most likely future destinations for PSG’s want-away Kylian Mbappe, a player touted by many as the world’s best.
The two clubs were also opponents fighting it out to be crowned the world’s best at the FIFA Club World Cup Final (in February) - a competition which has often been treated by European clubs with similar vigour to their pre-season tours to Asia and the US happening at the moment…
That, however, is about to change.
Heading to the US in 2025 as a prelude to the North American edition of the men’s World Cup, FIFA President Gianni Infantino has described his ambitions for the competition to be the “pinnacle of elite professional men’s club football,” once it debuts its expanded 32-team format.
Alongside Mbappe’s potential suitors, Chelsea FC, Manchester City FC, Palmeiras, and Flamengo are among the others that have already secured their place in the US.
As Martin Liptrot, former Interim Chief Communications Officer for the Saudi Pro League (SPL) has written in a recent blog post, “the idea of a European Super League was floated, fans hated it, and it retreated, though it was never formally killed. What if that idea were to return with a set of global clubs competing?”
While some (Europeans, mostly) have suggested the idea that Saudi Arabia may buy its way into the UEFA Champions League, the more likely scenario – and the one that FIFA will be hopeful of – is an elevation of this previously immaterial event.
As Liptrot points out, the new format of the competition has the potential to provide SPL clubs, and the star-studded rosters which they are assembling, the ability to compete with the best that Europe has to offer.
“In a decade’s time, who is to say that this tournament won’t be the pre-eminent football competition in the world – not only surpassing the UEFA Champions League but maybe eclipsing the national team version of the FIFA World Cup.”
Sports Pundit says
🤔 Living in the UK, I know that this suggestion will feel implausible to many, particularly the pundits who are paid a wage by broadcasters who have spent significant sums securing the rights to the Champions League.
However, there is a need to look beyond our own microcosm – as Martin has done here.
Sure, a Liverpool fan born in Merseyside is less likely to switch allegiances to Al Ettifaq or any other SPL club, but what about the “billions of football fans in Asia and Africa without a local team to follow [- who] may align with an Al Nassr, Al Hilal or Al Ahli because their favourite players are there and, for little or no cost, they can follow their fortunes[?]”
The opportunity for the SPL is immense, and only further fuelled by the timing of FIFA’s club competition reform. All the while, the challenge for European clubs becomes even greater. Without a monopoly on the world’s best talent, there is an even greater need for clubs’ commercial teams to find ways to connect with their global fanbases in creative ways - and likely boost their physical presence within key markets (See: Premier League opening an office in New York).
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OPINION (CONTINUED)
A New (Football) World Order? 🤔
If you believe the thesis above could be true and that the European hegemony could be over, what does that mean for the world of football finance?
There’s a lot of in teams in Europe competing in uncompetitive domestic leagues, propped up by the income they secure through Champions League qualification.
If the Champions League is no longer the prized asset and it becomes instead the FIFA Club World Cup, clubs previously disenfranchised in markets such as South America, Oceania, and particularly Africa (who’s confederations have a number of allotted spaces each), suddenly become attractive propositions as cheaper, more attainable routes of entry.
A new African football league is even about to launch later this year (October 20), with the help of FIFA.
Could this see a reassessment of where private equity (PE) invests and where weight of resource is focused among established MCOs? I wouldn’t bet against it.
HIGHLIGHTS
Formula 1 and the all-female F1 Academy have announced that, as of the 2024 season, all 10 F1 teams will have one driver and their livery on one car 🏎
The Hundred and T20 Blast could be replaced by new competition which would allow for private investment as part of a shared ownership model 🏏
Apple has passed on the opportunity to bid on the Premier League media rights because the company only wants global deals (like it has with the MLS) 📺
Serie A has delayed a decision on its domestic rights deal as the bids failed to reach the €1 billion (£858m) sought by the clubs for the five-year period from 2024-2025 ⚽︎
London is apparently ‘standing ready’ to host the 2026 Commonwealth Games after the Australian state of Victoria pulled out 🏟
The NFL has adopted a rule prohibiting the giving of equity in the franchise to players or other employees 🏈
SKIN IN THE GAME
Channel Change: Sports Leagues Discuss Equity with ESPN
According to a CNBC report, ESPN has initiated preliminary discussions with the possibility of involving professional sports leagues as minority investors, including the NFL, NBA, and MLB.
The development comes in the wake of an interview with Disney's CEO, Bob Iger, who revealed the company's pursuit of a strategic partner for ESPN in preparation for its transition to a streaming platform.
While the specifics of how this partnership might look were not fully disclosed during the interview, Iger mentioned that a collaborative alliance could bring added value through enhanced distribution and content offerings. He also indicated that selling a stake in the ESPN business (of which Disney currently holds 80%) was on the table.
For ESPN, a partnership with the major sports leagues, who have extensive streaming experience (See: NFL Game Pass, NBA League Pass, MLB TV), would appear a smart strategic step as they move away from the traditional cable subscriber model.
In theory, a jointly owned subscription streaming service involving multiple leagues could also open-up exciting possibilities for consumers, such as new game packages and innovative content delivery methods.
Sports Pundit says
🤔 Similar to European football leagues, the likes of the NBA, NFL, and MLB currently secure lucrative, fragmented media rights deals with multiple partners such as NBC, Fox, Amazon, and Paramount, who help make the leagues billions of dollars by participating in bidding wars for their rights (when things go as planned).
If any were to pursue a minority investment in ESPN, there is a potential risk of upsetting the apple cart – which could be disastrous for said league’s revenue potential IF not properly compensated for in some other meaningful way (of which the equity they receive, or an agreed upon revenue share model, may do).
Secondly, competition breeds innovation. Going all in on one broadcast partner reduces the incentive of all the other channels to promote and tell that league’s stories in their own unique ways. Over time, could this impact the total audience that the league can reach?
Questions, among many others, that I'm sure the leagues are mulling over.
JOB BOARD
Marketing Director - Dallas Mavericks (Dallas, US)
Communications Manager (Europe, Middle East) - NBA (London, UK)
Communications Manager (Men’s and Academy) - Chelsea FC (London, UK)
Senior Digital Channels Manager - LIV Golf (New York, US)
Manager, Sports Marketing Operations - Nike (Beaverton, US)
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