Prof Dr Uğur Erdener appointed as the new President of SportAccord

Prof Dr Uğur Erdener, the President of World Archery, has been appointed unanimously by the Executive Committee as the new President of SportAccord, the global sports event organisation that is governed by stakeholders representing Olympic and non-Olympic International Federations (IFs).

Prof Dr Uğur Erdener has served as President of World Archery since 2005 and has been an IOC Member since 2008. A widely-respected physician, President Erdener is the Chair of the IOC Medical and Scientific Commission and is also a member of the WADA Executive Committee, a member of the board of the ITA and Vice President of ASOIF. Since 2011, he has been President of the National Olympic Committee of Türkiye.

Erdener, who will serve a four-year term as SportAccord President, will be supported by his seven colleagues on the new SportAccord Executive Committee, the composition of which was confirmed during yesterday’s General Assembly (in alphabetical order by organisation):

Ingmar De Vos (BEL) – ASOIF representative
President, International Equestrian Federation (FEI)

Uğur Erdener (TUR) – ASOIF representative
President, World Archery (WA)

Petra Sörling (SWE) – ASOIF representative
President, International Table Tennis Federation (ITTF)

Einars Fogelis (LAT) – AIOWF representative
President, International Luge Federation (FIL)

Beau Welling (USA) – AIOWF representative
President, World Curling Federation (WCF)

Anna Arzhanova (RUS – SER) – ARISF representative
President, World Underwater Federation (CMAS)

Riccardo Fraccari (ITA) – ARISF representative
President, World Baseball Softball Confederation (WBSC)

Stefan Fox (GER) – AIMS Representative
Secretary General, International Federation of Muaythai Associations (IFMA)

General Assembly also ratified new statutes under which SportAccord will operate according to a revised governance structure whereby all of the IF umbrella bodies will be represented, as reflected in the new composition of the Executive Committee above. The new statutes also bring the association into line with best practice corporate governance, clearly defining roles and responsibilities between the Executive Committee, the General Assembly and the Secretariat.

New SportAccord President Prof Dr Uğur Erdener said: “I am gratefull for the confidence of my colleagues and I am looking forward to serve SportAccord as President over the next four years. I am grateful to my friend Ivo Ferriani for all the work he has done in transforming SportAccord over the last two years and also for the work accomplished by his Executive Commitee colleagues Ingmar De Vos, Francesco Ricci Bitti and Luc Tardif.”

Erdener succeeds International Bobsleigh and Skeleton Federation (IBSF) and AIOWF President Ivo Ferriani at the helm of SportAccord, who said: “As my term comes to an end, it is with spirit of service and a mission accomplished that I hand over the baton to Uğur Erdener. I offer my successor the very best wishes in building, starting from this solid base, a prosperous future for SportAccord and sport as a whole.”

SportAccord is currently hosting the IF Forum 2023, which takes place from 13 to 15 November at the Olympic Museum in Lausanne and gathers hundreds of leaders, experts and decision-makers from across the global sports movement. Under the theme of ‘Sport (R)evolution’ the IF Forum covers topics including the use of new technology to build fan engagement and optimise the monetisation of IF assets, the strategies that have succeeded in revolutionising women’s sport, climate action and other topics that are transforming the environment in which IFs work.

Also attending the IF Forum is a delegation from the host of SportAccord’s next major event, the World Sport & Business Summit, to be held from 7 to 11 April 2024 in Birmingham and the West Midlands, UK.

Sponsorship Propensity Index: Sectors Rights Holder Should Target To Maximise Chances Of Success

When it comes to selling sponsorship, rights holders want to know which sectors they should prioritise to give themselves the greatest chance of success. In other words, where is the probability highest? caytoo’s latest Propensity Index does just this.

caytoo’s Propensity Index answers this question of probability for various factors such as what sport you’re in or what rights package you’re selling (such as on kit or naming rights) but for this issue we’ll focus on the key benefit you offer sponsors in terms of why brands say they undertake sponsorships.

In particular, we’ll look at the three most popular reasons why brands say they undertake sponsorships. This is based on our analysis of 2,730 deals around the world during the first 10 months of 2023.

1. Brand awareness: this is about brands doing sponsorship deals to generate or maintain awareness.

This accounted for 28.2% of all deals so any sector in which brand awareness accounts for more than 28.2% of deals over-indexes on this reason (i.e. a higher probability) and any sector below 28.2% under-indexes (a lower probability).

Top of the pile is Consumer Services with an index of 1.33 (brand awareness accounts for 37.4% of Consumer Services deals divided by the 28.2% average). In other words, rights holders promoting brand awareness are 1.33 times more likely to attract a Consumer Services sponsor than the average across all sectors, so this is the sector to prioritise.

This is primarily driven by gambling firms, who are 1.86x more likely to do deals based on brand awareness. This is because the sector is highly competitive with low product differentiation, so the focus of marketing is to maintain top of mind awareness among consumers. This is illustrated by the sector’s heavy use of TV advertising which is seen as the most effective tool to help maintain awareness.

This is a similar characteristic to the other sectors that over-index most on brand awareness – Automotive, Food & Beverage and Travel & Tourism – all highly competitive sectors who are major users of TV advertising.

2. Social Impact: this is about brands doing sponsorship deals because they want to be seen to be doing good.

Utilities over-index most on this reason by a huge margin, being 2.59x more likely to do a deal based on this versus the average (45.3% divided by 17.6%). This is driven by energy companies (2.66x more likely) who, being inextricably linked with the damage they cause to the environment, need to generate positive PR to offset this.

Financial Services (1.45x) is the next most likely sector for rights holders to fish in to maximise the chances of a deal if you’re pitching social impact-related sponsorships. This is driven by Insurance, Banks and Investment/Trading firms. In the case of Insurance firms, it tends to be around doing sponsorships to promote the benefits of good health and active lifestyles. For Banks, it’s more focused about helping certain communities around financial accessibility and literacy.

When it comes to Investment/Trading firms, the motive is similar to Energy firms in the need to improve public perception. In Investment/Trading’s case, it relates to the inherent risk and association the sector has with potentially losing people’s money. This has become increasingly prevalent due to the rise of online trading firms that promote a more short-term, and risky, view of accumulating wealth compared to the traditional longer-term, ‘safer’ method practised by wealth management firms.

3. Values Alignment: this is about brands choosing rights holders to showcase and promote desirable values or characteristics that both parties share.

Health & Wellbeing brands over-index most on this reason, being 1.64x more likely to do a deal based on this versus the average (22.5% divided by 13.7%), so this is the sector to primarily focus on if you’re pitching a deal based on the strength of your values. This is led by Health Services – such as private medical services and orthopaedics providers – due to the obvious links they share between playing sports and the associated health and wellness benefits.

The Automotive sector is the next most conducive to pitch around Values Alignment, with an index of 1.37. This is driven by Auto Components such as tyre and engine oil brands (mostly using motorsport) who play on the shared characteristics of performance and engineering. Probably, less obvious is how much Auto Retailers also play on aligning values between themselves and the rights holder. This is usually around the different stages of the car-buying process (e.g. being smooth, efficient) or what the rights holder is looking to achieve beyond the playing field (e.g. investing in the future).

If you’re interested in learning more about Propensity when it comes the other factors mentioned – such as what sport you’re in or what rights package you’re selling (e.g. on kit or naming rights) – contact info@caytoo.co.uk

FIBA 3×3 World Tour to make debut in Bahrain

The FIBA 3×3 World Tour is set to make its highly anticipated debut in Manama, Bahrain, as the world’s best 3×3 players descend on the Harbour North on 16-17 November 2023.

The 16th FIBA 3×3 World Tour stop in 2023 will see 12 of the best 3×3 men’s teams in the world, from Ub Huishan and Vienna (AUT) to Antwerp TOPdesk (BEL), Lausanne Sports LS (SUI) and Amsterdam HiPro (NED), compete in the Kingdom for the very first time.

Hosted in cooperation with the Bahrain Ministry of Tourism and GFH Financial Group, fans of the world’s number one urban team sport will enjoy a combination of family entertainment and thrilling 3×3 action at the iconic Harbour North on the shores of Manama, the capital of Bahrain.

“We couldn’t be happier to bring the world’s best 3×3 stars to Manama, the capital of Bahrain, for the first time ever as part of the FIBA 3×3 World Tour in 2023,” said Shaikh Issa Bin Ali Al Khalifa, Undersecretary Ministry of Cabinet Affairs and Vice President of the Bahrain Olympic Committee. “The iconic waterfront location of the Harbour North will provide the ultimate 3×3 showcase in a vibrant city home to a growing community of passionate basketball fans.

“We are incredibly excited to welcome the FIBA 3×3 World Tour to Manama – the first time this prestigious tour will be held in Bahrain,” said Shaikh Issa Bin Ali Al Khalifa. “Hosting this major international event on the beautiful shores of Manama will no doubt inspire the next young generation of basketball stars in Bahrain and underline our ability to host major international sporting events. Outside of the action, we welcome the players and fans to take time to enjoy the rich history and culture our beautiful city has to offer.”

Scuderia AlphaTauri signs NEFT Vodka as official team partner

Scuderia AlphaTauri has signed a new Official Team Partner, NEFT Vodka.

This long-term deal will break cover at the next round of the Formula 1 World Championship in Las Vegas from 16 to 18 November, when the NEFT logo will appear on the halo, wheel spray deflectors, and top headrest of our AT04 cars driven by Daniel Ricciardo and Yuki Tsunoda.

These are exciting transformational times for Scuderia AlphaTauri and NEFT, two companies who share Austrian roots, with the rapidly expanding vodka producer seeing Formula 1, through our team, as the ideal vehicle to promote the NEFT Vodka Brand and expand its global footprint.

Quality, innovation and sustainability are at the heart of this global ultra-premium vodka Brand; concepts that it shares with Formula 1 and our team. Its two key tenets are sustainability and giving back. NEFT’s sustainability efforts are focused on minimizing its environmental impact throughout the entire production process via methods that are aimed at preserving the environment for the sake of generations to come.

NEFT’s packaging is as innovative as its product delivered in a recyclable, heat resistant unbreakable barrel that not only keeps its contents cold for several hours, even in warm temperatures and climates, and can also be taken places where glass is forbidden.

The award-winning vodka is the result of NEFT’s founder, Ekaterina Kuzmina’s, vision to produce a spirit made with two super-clean ingredients: non-GMO rye and Austrian crystal-clear spring water, with no additives; applying sustainable choices while aiming to raise environmental consciousness in its industry – all of which aligns perfectly with the pinnacle of motorsport and Scuderia AlphaTauri’s net zero goals.

Fabian Wrabetz, Scuderia AlphaTauri Director of Marketing and Communications: “Much like the sport of Formula 1, NEFT Vodka believes in the power of extraordinary and remarkable moments. Scuderia AlphaTauri is delighted to welcome this ambitious and ultra-premium brand to our growing portfolio of partners during this incredibly exciting and transformational period in the sport. We can’t wait to share this collaboration with the world in the years to come.”

Jeff Mahony, NEFT Global Inc CEO, “Scuderia AlphaTauri are the perfect partner for NEFT Vodka, as we enter the next era of our global business. Scuderia AlphaTauri provides the ultimate global stage to show the innovation and unrivalled taste of our ultra-premium vodka. We’re honoured to be an official partner of the F1 team during this pivotal time in both of our dynamic businesses. We couldn’t be more excited about what we can achieve together in the years to come”.

October Success for the Confederation of African Football: New Sponsorships and Partnerships

In this week’s View From Africa piece Cynthia Mumbo, CEO of SportsConnect Africa pens down how October has witnessed a series of significant milestones for the Confederation of African Football (CAF), with the announcement of crucial sponsorships and partnerships that promise to transform African football and have a broader impact on the global soccer landscape.

1. IMG: Official Sales Partner for CAF’s 11 Competitions

In a significant development for the Confederation of African Football (CAF), IMG has been appointed as the official sales partner for CAF’s 11 competitions. IMG will provide marketing intelligence, data analysis, and consultancy services to CAF, helping to maximize the commercial potential of its competitions and generate new revenue streams.

The appointment of IMG is a significant coup for CAF, as it is one of the world’s leading sports marketing and media companies. IMG has a proven track record of success in helping to commercialize sports competitions and events, and its expertise will be invaluable to CAF as it seeks to grow its reach and revenue.

2. Visa: Official Payment Partner for CAF Competitions

In another notable development, CAF has chosen Visa as the official and exclusive payment partner for several of its competitions, including the next two Africa Cup of Nations and Women’s Africa Cup of Nations.

This partnership represents a significant win for Visa, as it provides the company access to a massive audience of soccer enthusiasts throughout Africa. CAF competitions are among the most popular sporting events on the continent, presenting Visa with an ideal platform to promote its payment services to African consumers.

The agreement also reflects CAF’s growing commercial ambitions as the organization actively seeks more sponsorships and investments. The Visa partnership is a significant stride in this direction.

3. PUMA: Official Technical Partner of CAF

In a groundbreaking announcement, CAF and the renowned sports company PUMA have established a new partnership that designates PUMA as the official technical partner for several CAF events, including the TotalEnergies CAF Africa Cup of Nations Côte d’Ivoire 2023.

This collaboration, effective from November 1, 2023, will see PUMA supplying the official match ball for CAF tournaments and providing referees’ kits. Moreover, PUMA will engage in various marketing opportunities both inside and outside the stadium.

CAF President Dr. Patrice Motsepe expressed his delight in welcoming PUMA as a partner and highlighted how the agreement would aid in the development and growth of football in Africa. Johan Kuhlo, General Manager EEMEA Distribution at PUMA, emphasized PUMA’s commitment to working with CAF to create exciting products tailored specifically for African football.

4. Visit Saudi: Main Sponsor of the New African Football League

In a major development, the tourism board of Saudi Arabia, Visit Saudi, has stepped up as the primary sponsor for the recently established African Football League (AFL). This sponsorship agreement, initiated by CAF, encompasses the league’s inaugural season and holds the potential for multi-year extensions.

The partnership marks a significant achievement for Visit Saudi, aligning its tourism brand with one of Africa’s most prestigious soccer competitions. The AFL is set to attract fans and players alike, offering Visit Saudi an excellent opportunity to promote Saudi Arabia as a top travel destination.

This move also underscores Saudi Arabia’s burgeoning interest in soccer, with the country having already hosted several high-profile soccer events in recent years. It’s clear that the Saudi government is eager to position the nation as a key player in the global soccer landscape.

These recent sponsorships and partnerships achieved in October are encouraging developments for both CAF and the organizations involved, setting the stage for an exciting future in African football.

Streaming Leaders Post Subscriber Gains But Profitability Remains Elusive

Carlo De Marchis, ‘a guy with a scarf’ pens down this month’s business index.

Overall our index sees more positives than in the past months but the Sports category is the one doing less well. We want to focus our attention on the media and streaming sector with Netflix seemingly doing the right things in the current scenario and is up nearly 15% on the month alone. That’s a big move and continues a strong performance as Netflix is up around 50% this year vs the S&P 15%. . 

Another notable winner is Draftkings but that we will cover in the next episode.

The latest quarterly earnings reports from major streaming platforms offer crucial insights into the state of the industry. By analyzing subscriber, revenue and profitability data, we can assess which players like Netflix and Disney are leading the pack. Streaming’s transition continues, but these financial results help gauge progress monetizing users amid economic uncertainty. Though challenges remain, the numbers reveal how media giants are adapting their business models to gain dominance as consumer behavior shifts. The earnings spotlight key inflection points in streaming’s competitive evolution.

What we learned: 

  • In brief we were surprised by subscribers numbers going up and in many cases beating estimates
  • Price hiking has not scared too many customers
  • Password sharing restriction has not scared too many customers
  • The hybrid AVOD/SVOD/FAST model is in the works, too early to judge

Major streaming platforms Amazon, Disney, and Netflix reported third quarter earnings this month, highlighting ongoing subscriber momentum amid intensifying competition for market share. However, turning streaming to profit remains an uphill battle.

Netflix remains the leader in the streaming space with impressive Q3 subscriber additions showing its continued momentum. The company added 8.8 million global paid members, ending the quarter with over 247 million total subscribers. Growth was fueled by hit content like Stranger Things and Virgin River as well as new initiatives around advertising and account sharing. Netflix also posted improved profitability driven by price hikes and subscription monetization. However, the company still faces rising competitive threats as deep-pocketed rivals like Disney, Apple and Amazon ramp up investments in exclusive original content.

Though Netflix retains pole position for now, its content costs remain extremely high at over $17 billion per year. As economic conditions tighten and consumers reel in spending, Netflix will need to judiciously balance content budgets and regional strategies to maintain growth. Profitability gains are encouraging but larger challenges loom to defend its streaming dominance worldwide in the years ahead. Overall, Netflix remains the giant to beat, but its long-term trajectory will be shaped by how well it can evolve its business model and avoid missteps against hungry competitors.

Amazon also posted robust ad sales of $12 billion, up 26% year-over-year. This sets the stage for the retail giant to introduce an ad-supported version of Prime Video in 2024, further diversifying revenue.

Disney+ grew subscribers 12% to 152 million, but at a slowing rate of just 4 million adds last quarter. High content and marketing costs continue to weigh on profitability. Disney’s direct-to-consumer unit posted a $387 million loss for Q3.

Results underscore streaming’s transition pains. Subscriber gains highlight platforms’ growing scale and demand for on-demand video. Amazon and Netflix in particular showcased their ability to monetize engaged users through ads, price hikes and account policies.

But turning a profit remains an uphill battle, especially for Disney. With economic uncertainty ahead, financial discipline and savvy spending will determine which players emerge on top in the streaming wars.

For now, Netflix and Amazon look best positioned given their subscriber monetization progress and ad capabilities. But Disney’s unmatched brands and IP present an opportunity to play catchup if the company can judiciously rein in costs.

The path ahead will test streaming’s leaders as consumer budgets tighten. But quarterly momentum underscores these giants’ pole position as cord cutting accelerates. Where streaming’s profit puzzle will ultimately land is still coming into focus.

Looking into the categories

Streaming:

  • Divergent trajectories with players like Netflix and Paramount+ adding subscribers but also facing cost/profitability pressures.
  • Roku growing accounts and revenue signaling advertising rebound.
  • Pay-TV providers like Dish and Altice continue to lose subscribers to cord-cutting.

Media/Content:

  • Traditional media firms face growth struggles compared to digital/streaming.
  • Ad measurement provider Comscore saw modest revenue decline.
  • AMC Networks grew streaming revenue but overall company under pressure.

Tech:

  • Cloud services firms like Akamai saw solid enterprise security revenue but media delivery lagged.
  • Apple saw iPhone sales growth but slowdowns in other units like Mac.
  • Vimeo struggled with bookings/pipeline especially among SMB customers.

Overall themes:

  • Streaming services and digital media outperforming traditional media.
  • Economic uncertainty creating churn – winners adapt and highlight value.
  • Cost control and financial discipline critical in turbulent environment.
  • Choppy conditions persist but opportunities exist for firms able to execute.

AOB – Crypto back in fashion?

It will be very interesting to see if the momentum gathering in the crypto markets has any effect on areas of the Index. For those not watching Bitcoin (that tends to be the wider barometer) it has pretty much doubled this year and has steadily risen all year. It’s been out of the news and is it a coincidence that Roblox has also been very strong recently? One to watch….

Here’s the full index:

iSportConnect Welcomes EXL As New Partner

iSportConnect are pleased to announce EXL, a company that specialises in helping businesses to make sense of data and leverage AI to drive business growth, as the latest company to become an iSportConnect Advisory partner. 

EXL, a publicly listed company (Nasdaq:EXLS), is an established leader in data and analytics and a global professional service provider. They hold a leading position in the sports analytics industry and work with several leading sports leagues and clubs, leveraging cutting-edge analytics to drive growth. 

Besides sports, media and entertainment, EXL works with over 800 clients worldwide across a variety of industries including insurance, health, banking and financial services. They are bringing vast experience from these dynamic and hugely challenging verticals into the world of sport to help fuel sports’ digital and business transformation.

Anuroop Talwar, Vice President – Sports, Entertainment & Retail Analytics, EXL Analytics commented: “We are ecstatic to partner with iSportConnect to expand our reach within the global sporting community. We are looking forward to having the expert guidance of the iSportConnect team members in helping us build new and meaningful connections within sports”

Welcoming EXL as iSportConnect’s newest Advisory partner, Sandy Case, CEO of iSportConnect said, “A key component of working with any of our Partners is around both their product and their people. EXL are genuinely doing world class work with world class clients and our first meetings with the team reinforced the opportunity across the sport industry. We look forward to being part of the next stage of EXL’s growth in sport.” 

iSportConnect Advisory

iSportConnect’s Advisory service works to help our clients grow – through commercial development, marketing and communications, global sports market entry and business strategy. Our global consultancy clients have included the likes of LaLiga, ITF, Vindicia, IAAF, Tata Communications, ITF and InCrowd among many others.

About iSportConnect

iSportConnect is all about helping organisations grow in the business of sport. Whatever the organisation. We launched in 2010 with the aim of bringing together sports business professionals around the world in a networking community enabling them to meet one another, find information and obtain access to a wide range of relevant services. The platform is now the largest global private network of sport business executives, where membership is exclusive and follows a strict door policy.

Topgolf Callaway acquires BigShots for $29m

Topgolf Callaway Brands Corp. has purchased certain assets from Invited, Inc. (“Invited”), the largest owner and operator of private golf clubs in the US, related to its BigShots Golf (“BigShots”) business.

The acquisition adds the BigShots brand and certain locations to the Company’s portfolio of U.S. venues, expanding its leadership position in off-course golf. The acquired BigShots’ portfolio includes four domestic venues, comprised of one owned venue and three franchise venues, as well as certain other development rights for other potential venues. Concurrent with this transaction, the Company has also entered into a preferred vendor agreement with Invited in which Topgolf Callaway Brands’ products and merchandise will be featured at Invited’s more than 140 golf and country clubs.

The purchase price for the initial closing is approximately $29 million. The Company expects the acquisition to be nominally accretive in its first year and contribute to scaling economics thereafter. The transaction is viewed as both financially and strategically attractive to both sides.

Chip Brewer, President and CEO of Topgolf Callaway Brands, said, “This acquisition will benefit all three segments of our business. We are essentially purchasing an additional off-course venue and the royalty stream from three franchise venues, including the option to convert those to Toptracer technology in the near future, as well as further building out and strengthening our future venue pipeline and growing our partnership with an important golf equipment and apparel partner, Invited – all for the price of approximately one Topgolf venue. This deal is a great example of the synergies associated with our portfolio of brands and its leadership position in Modern Golf. It is also just the beginning of what’s possible when two great brands combine their resources and creativity to develop programs that foster growth and further fuel the momentum in our game.”

San Francisco 49ers signs deal with Foliatti Casino

The San Francisco 49ers have announced a new partnership with Foliatti Casino, a Mexico-based casino brand with more than 15 years of market leadership.

The collaboration marks the first of its kind across the league and underscores the team’s ongoing commitment to bringing the team closer to its Mexican fanbase.

As part of this unique partnership, Foliatti Casino will serve as the presenting sponsor of 49ers Lucky Six via the team’s Spanish-language website, 49ers.com/esp. The free-to-play game will enable Spanish-speaking members of the 49ers Faithful to compete each week for the opportunity to win prizes such as official merchandise and casino credit. Furthermore, in the coming months, Foliatti Casino will be the presenting sponsor of an official 49ers Watch Party event for 49ers fans in Mexico.

“Our collaboration with Foliatti Casino represents an exciting milestone as the first partnership of its kind,” said Ryan Connors, Senior Director, San Francisco 49ers. “We’re thrilled to be pioneering this path with an authentic Mexican brand like Foliatti Casino, and grateful that it will enable us to engage with new communities in Mexico and provide unique experiences for 49ers Faithful across the country.”

As one of the most popular NFL teams in Mexico, this announcement represents a continued expansion of the 49ers brand into the Mexican market. Just last season, the organization hosted several events ahead of the NFL International Game in Mexico City, including fan rallies, watch parties, and a youth camp hosted by the 49ers Foundation.

“American football is one of the most followed sports in Mexico, so this is an exciting opportunity to connect with one of the most iconic teams in the league,” said Pamela Loman Huerta, Operations Director, Foliatti Casino. “The 49ers Faithful are remarkably passionate, and we look forward to showcasing our state-of-the-art casinos with them, while creating new joint experiences for our players and VIPs.”

Time To Face Reality: Why The Major Football Leagues Need To Get Used To The New Dynamics

Ian Whittaker, Twice City AM Analyst of the Year pens down why the major football leagues need to get used to the new dynamics.

We are truly into the flow of renegotiating the top tier football rights in most of the major European markets (except for Spain). So far, the picture does not look particularly pretty. In Italy, DAZN and Sky Italia have extended their hold on the Serie A rights up until 2029 and, while the headline price is only slightly below the current levels by low single-digits, once the inclusion of features such as archive rights (once bought separately) is factored in, then the decline is closer to 10%.  

However, Serie A has got off lightly compared with the disaster of the Ligue 1 rights where the LFP (France’s footballing body) has scrapped the auction process and faces a potentially significant decline in revenues. It highlights how major football rights holders need to change their mindsets to reflect the growing economic reality of their traditional buyers. 

To recap, the LFP was targeting €1 billion in revenues from the sale of the rights, a figure originally promised by Spain’s Mediapro in 2018. The hope was a familiar one namely that the entry of Tech giants would offset the relative decline of the power of the traditional Pay-TV platforms such as Canal+ and the sports-focused beIN and DAZN. After all, both Amazon and Canal+ already held the rights under the existing deal. 

However, the LFP appears to have made two fatal flaws in its thinking. The first is a fundamental misunderstanding of why companies invest in rights. The second (and related) is to be caught in a mindset where it believed it could dictate the value of the rights to the market.

Commercial organisations are not charities. They buy rights because they believe – ultimately – they will make money from showing them. Timeframes may differ – Sky has an established subscriber base while DAZN may be thinking of the longer-term economics. Routes to profitability may also differ. A Canal+ may be thinking about how many subscribers and / or how much ARPU it can grow / keep but Amazon may be thinking more about the overall value from a consumer relationship such as additional retail sales. However, the need to make money (eventually) is the fundamental driver. 

I mention what should be an obvious point because the clear reason why the bids did not attract the asking price was because economics for buyers simply do not make sense. Amazon may hold the rights now – only because it stepped in – but it could not make the numbers work. Canal+ may still be smarting over been passed over in 2018 for the rights but it will be monetary, not pride, factors that drove its decision. Ditto for beIN and DAZN.

It should also have been obvious if one thought about the wider dynamics. The traditional Pay-TV operators in Europe are seeing structural stagnation and / or decline in the numbers, impacted in part by streaming but also other factors (see below). Demographic trends – particularly around household formation – are less positive than they were. Interest rates, even if they remain elevated, are unlikely to come down to the levels they were which will constrain funding. Everyone is even more mindful of their financials in the current environment. 

However, the key point is there is not enough scale in each of the five major markets in Europe to justify mass investment, particularly from the Tech giants. Amazon, Apple and Google have made major investments in US sports rights because the scale of both the advertising and subscriber bases are huge. That is not the case in Europe, including the UK. The advertising / demographic dynamics are smaller and the TV market is different. 

That leads onto the second point. In economics, the phrase ‘producer capture’ relates to organisations that are run for the benefit of their employees or ‘producers’ not the end consumer. A similar dynamic seems to have built up amongst major football rights holders over the past few decades, fuelled by what had been until recently fierce competition for rights, with infusions of new money from sources such as the Middle East and Private Equity. The leagues got into the habit of believing they could dictate the price to the buyers. It feels like they are still stuck there to some degree at least.  

Yet that will not work anymore. Publicly listed companies are beholden to shareholders who have made it clear they do not see the upside from aggressive bidding for rights. Moreover, as interest rates have risen and the flow of free money ended, the focus has shifted from growth to cash conservation. Even for sovereign-backed Middle Eastern buyers, their changing strategic priorities suggest buying European football content rights is not a core priority, even if they are buying the clubs. 

What does this mean for the rights holders? For a start, they need to understand better the structural dynamics of their customers (who buys the rights) and the wider market and macro trends. They also need to face an uncomfortable reality. The days of European Pay TV companies growing as they did 15 years ago have gone and the Tech companies either don’t see sports as a priority (Netflix) and / or do not see the economics working (Amazon / Apple). Meanwhile, the specialist sports platforms (eg DAZN) are financially constrained. It is not an attractive message – but it is one that needs to be said. 

As usual, this is not investment advice.