In this week’s edition of Scoreboard, we explain how a decision by UK Prime Minister Boris Johnson to keep stadiums closed has plunged British sport into a financial crisis, assess the performance of Formula One chief Chase Carey set to leave the global motor racing series, explain the importance of legal cases into athlete abuse in US Olympic sports, and more.
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The desperate plan to save British sport
The shock was palpable.
Earlier this week, UK Prime Minister Boris Johnson announced a “pause” on plans to allow fans back into stadiums from next month, as part of a broader effort to tackle the rising number of Covid-19 infections across the country.
The decision to extend restrictions, most likely for six months, surprised British sports executives at a time supporters were beginning to return to events in countries such as the United States, Japan, France and Germany.
The Premier League, the top tier of English football, said it expects to suffer a revenue shortfall of £700m if spectators can’t return to stadiums.
The fiscal hit will hurt less well-off sports most. The British Horseracing Authority said racecourses face a shortfall of between £250m and £300m this year and it said the entire industry is “under severe threat.”
Bill Sweeney, chief executive of Rugby Football Union, the national governing body of rugby union, said combined losses across all levels of the game would be worth close to £250m with the “danger of clubs . . . disappearing forever.”
UK sports bodies have launched a two pronged approach to tackle the crisis.
First: demand a bailout.
A group of 100 sports bodies, including British Cycling and the England and Wales Cricket Board, have cosigned a letter sent to the prime minister demanding “investment, tax incentives, and regulatory reform” similar in scope to the £1.5bn package created for the UK arts and culture sector in July.
Government officials said they are working towards a rescue package for most sports. But it is unlikely to extend help to the wealthy Premier League or the professional football divisions below, according to a person familiar with ongoing discussions.
Second: force the government to reverse course.
For weeks, sports clubs created complex social-distancing protocols to allow the reopening of grounds. They developed measures, such as allowing fans to order food and drink in seats and creating one-way systems around stadiums to prevent mixing.
Darren Childs, chief executive of Premiership Rugby, the top tier of English club rugby union, told the Financial Times last week that stadium restrictions should be enforced on a “location-by-location, game-by-game basis.”
The Premier League said it believes guidelines created by scientists and government advisers means attending its matches will be as “safe or even safer than at any other public activity currently permitted.” That is a pointed reference to less stringent social-distancing demands on diners in restaurants or passengers on aeroplanes.
Oliver Dowden, UK Culture Secretary, has suggested creating technological solutions to allow fans in stadiums sooner. Johnson expresses hope a coronavirus vaccine will be available in the coming months.
Those are long term solutions. In the meantime, British sport faces a long, hard winter.
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Grading Chase Carey’s performance at Formula One
So long Chase Carey.
The magnificently-mustachioed Texan is set to be replaced as Formula One chief executive by Lamborghini CEO and former Ferrari team boss Stefano Domenicali.
Carey was an outside pick to run F1 by US group Liberty Media after its $8bn acquisition of the sport in 2017. Those who know him admit Carey is “not a petrolhead.”
He was, however, considered a safe pair of hands, a trusted lieutenant of Rupert Murdoch at 21st Century Fox with a stellar reputation in the media industry.
Scoreboard has gone back into the FT archives to look at what Carey and Liberty Media promised they would achieve with F1 after their takeover. Have their grand ambitions come to pass?
Expansion in the United States
Nope. Talks to launch new street races in Miami and Las Vegas have floundered. Austin, Texas remains the only US Grand Prix. Nascar is still America’s motorsport of choice.
Create digital streaming deals, build a bigger audience
Sort of. F1 has launched an online subscription offering to watch live races which is available in a few countries. In January, it said the cumulative global broadcast audience stood at 1.92bn, representing a third year of viewer growth.
New sponsorship deals
Not really. New deals with UK-based marketing agency Interregional Sports Group and technology group Amazon Web Services have not filled the gap left by the loss of global sponsors such as German insurer Allianz and banking group UBS. Carey has previously admitted the sponsorship market has been “slower and probably harder than I would’ve expected”.
Expand the race calendar
Yes. Before the spread of coronavirus disrupted the 2020 season, there were a record 22 Grands Prix on the calendar, including new races in Vietnam and the Netherlands. If plans to put on 17 races this season can be completed despite the pandemic, it will be considered a considerable achievement.
Level the playing field
We’ll see. Carey has concluded a new Concorde Agreement that governs how F1 shares revenues with racing teams. The deal includes a $145m budget cap on teams, designed to avoid the richest teams outspending the rest of the grid. Whether that will lead to more unpredictable racing remains to be seen.
A mixed performance in the driver’s seat, then.
F1’s revenues in 2019 were $2bn, up from $1.8bn in 2017, but that was before the coronavirus hit, so expect big losses this year. It will be up to Domenicali, an Italian executive steeped in motorsports, to locate more substantial growth.
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Are sports governing bodies at fault if athletes are abused?
While the ongoing pandemic has become the foremost challenge for most sports, pre-coronavirus issues haven’t disappeared. Among them: determining who is responsible for abuse within the competitive world of Olympic sport.
An ongoing court case in California may well set a precedent for whether large sports governing bodies, such as the US Olympic and Paralympic Committee, can be held liable for instances of abuse of athletes within their programmes.
The outcome could put such organisations at risk for untold hundreds of millions in damages if similar suits are filed and prevail in its wake.
The case, Brown et al. vs USA Taekwondo et al., deals with sexual abuse suffered by three young former Olympic hopefuls in taekwondo, whose coach was convicted and sent to prison in 2015.
The athletes allege in the suit that their abuse was enabled by USA Taekwondo and its parent governing body, the USOPC.
A ruling from a lower court in 2019 dismissed the USOPC from the case, which the athletes are now appealing.
This week, the case gained new prominence when the National Collegiate Athletic Association filed a brief in support of the USOPC, writing that, as a large sports governing body, it “does not have the ability — with its few hundred employees — to police the day-to-day conduct” of the thousands of coaches and athletes within its system.
The NCAA declined to comment on the case, and the USOPC didn’t respond to questions.
A lawyer for the plaintiffs told Scoreboard that both organisations “are more worried about the bottom line [than] their duty to protect athletes”.
In recent years, allegations of various types of abuse — sexual, behavioural, and otherwise — have rocked several Olympic sports.
The most famous such case was former USA Gymnastics doctor Larry Nassar, the now-convicted sexual abuser whose victims include Olympic champions Simone Biles and Aly Raisman. In 2018, Michigan State University agreed to pay $500m to settle hundreds of suits with victims of Nassar, who was employed by the school.
As sporting organisations around the world resume competition amid the risks of the ongoing pandemic, the question of athlete wellbeing has never been more vital.
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Highlights
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With the Indian Premier League cricket tournament under way, foreign venture capitalists including Sequoia Capital and TPG are pouring hundreds of millions of dollars into fantasy sports start-ups in India, as a cultural taboo against the pastime is waning.
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In another big week for Michael Jordan, the hoops legend bought a Nascar racing team charter and hired Bubba Wallace to begin driving next season. His hit mini-series, The Last Dance, also won an Emmy for outstanding documentary.
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Nike said its online sales nearly made up for slower foot traffic in traditional stores, as the world’s largest sportswear company exceeded Wall Street expectations in its latest quarter and rebounded from steep losses in the spring.
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A week after the Big Ten announced it will resume an autumn American football season, the Pac-12 said it too will follow suit, marking a return to play for each of the five most lucrative US college sports conferences.
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Hollywood actors Ryan Reynolds and Rob McElhenney are considering buying a stake in Wales’ oldest football club, Wrexham. The fan-owned club said the actors known from the Deadpool films and sitcom It’s Always Sunny in Philadelphia were interested in investing £2m.
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In a revealing “How to Lead” interview, renowned German football coach Ralf Rangnick told the FT about how radical strategies he introduced at Red Bull football clubs, the “envy” of fans over the rise of RB Leipzig, and why the signing of Zlatan Ibrahimovic made him the wrong choice to manage AC Milan.
Transfer Market
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John Capriotti, the longtime head of running sports marketing at Nike and widely considered among the most influential people in global athletics, is retiring from the company. Famous for playing hardball in negotiations with top track athletes, Capriotti will move into consulting, according to the Oregonian.
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Pete Bevacqua was promoted to chairman of NBC Sports Group, with oversight of the US network’s broadcasts of the Olympics, National Football League, the English Premier League, and other top sports. He joined the network in 2018 after stints at the PGA of America and Creative Artists Agency.
Final Buzzer
So far, the story of the NBA Eastern Conference Finals has been the en fuego Miami Heat. Jimmy Butler has established himself as a lucrative coffee entrepreneur in the bubble, and born-in-the-year-2000 (really) rookie Tyler Herro was the hero of Game 4. It was clear the team was gelling as early as December, as seen in Butler, Herro and Bam Adebayo‘s delightful joshing in this video from Slam Online.
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 produce the Due Diligence newsletter, FT’s global network of correspondents and data visualisation team.