Two things to start…
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Late Friday, Manchester United said it had reached a deal with Juventus to acquire Cristiano Ronaldo, returning the Portuguese football star to his former English Premier League club after more than a decade. Personal terms of the arrangement were still being finalised, though the transfer highlights his enduring commercial appeal.
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Mark your calendar: next Saturday the FT’s Simon Kuper and Scoreboard’s Murad Ahmed will host a discussion on the state of FC Barcelona as part of the FT Weekend Festival. Join us then.
It’s late summer in the US, which on the sports calendar here means one thing: college football. Traditionally, that involves tailgating, marching bands, and an abundance of school spirit from university quadrangles in the South to watering holes in Manhattan, where young alumni tend to gather at devoted bars to individual colleges to watch games.
I didn’t personally attend a “big football school”, but I have fond memories of tagging along with friends to Wisconsin Badgers and South Carolina Gamecocks bars (note to first timers: there is a lot of Sandstorm). These days, the Delta variant is putting a damper on big indoor gatherings, but no matter: the real action will take place off the pitch.
This will be the first season in which college sports stars can sign sponsorship deals. Agents and lawyers I spoke to this week for a column on the new era of athlete influencers say they’re very interested in how quickly big playmakers will be able to translate touchdown highlights to endorsements.
Less secure in their upwards earning potential are the commissioners of college sports themselves, who are redrawing their alliances in a rapidly changing industry. Do read on — Sara Germano, US sports business correspondent
Power struggle in the Power Five as college football season kicks off
This week marks the start of a new era in US college sports. As the new football season begins university sports administrators are scrambling to assess the combined impact of a groundbreaking Supreme Court ruling and the relaxation of name, image, and likeness (NIL) rules for players to get paid.
On Wednesday, commissioners of three of the so-called Power Five college sports conferences effectively broke away, declaring a new nebulously structured alliance between the Big Ten, Atlantic Coast, and Pac-12 leagues. The fissure marks the most serious strife to date within the organisers of college sport, which schedule matches and negotiate lucrative media contracts to broadcast football, basketball, and other games.
“We understand the financial piece and it usually is the driver of a lot of decisions”, said Jim Phillips, commissioner of the ACC conference whose member universities include Duke, the University of Miami, and Clemson. The three breakaway conferences boasted combined 2019 revenues of $3.8bn, according to data from the Knight Commission on Intercollegiate Athletics, but individually they each lag behind the richest division in college sports, the Southeastern Conference, known as the SEC.
Over the summer the complicated web of college sports governance underwent radical change, following the landmark US Supreme Court ruling which blasted the National Collegiate Athletics Association’s business model as violating antitrust law. That and a growing patchwork of state laws forced the NCAA’s hand to permit individual athletes to take sponsorship pay, simultaneously giving athletes more agency in the business of university sport and weakening the authority of governance bodies, who are now redrawing their alliances.
“This was a time that we felt we had a responsibility to stabilise a volatile environment, to focus in on the things structurally that we have to do if we want to see college athletics not only survive but also excel”, Phillips added.
It wasn’t immediately clear when or how the Big Ten-ACC-Pac-12 alliance would solidify — the commissioners said they signed no formal paperwork — but the three executives pledged to work together on game scheduling not only for marquee sports like football and basketball, but Olympic sports like athletics, gymnastics, and swimming.
“We are fortunate to all have great media partners”, said Kevin Warren, the Big Ten conference commissioner, adding that “with the changing climate and the media landscape on linear television and from an [over-the-top streaming] standpoint there will probably be some unique opportunities” for new programming.
The power struggle is at least an attempt to consolidate negotiating leverage among the three, after the SEC recently poached two marquee schools, Texas and Oklahoma, from the laggard conference among the Power Five, the Big 12. The combined 2019 revenues from the Longhorns and Sooners, more than $387m, accounted for nearly 40 per cent of the Big 12 top line, according to Knight Commission data.
As the current football season unfolds, a major sticking point will be a long-running debate about the proposed expansion of the college football playoff from four participating schools per year to twelve. A governance committee for the organisation has yet to finalise such plans, which would theoretically expand bonus payments for qualifying universities worth millions.
For this season, the battle in the boardroom may be even scrappier than the one on the gridiron.
How football’s leagues stepped up . . . and why it might not be enough
It’s hard to imagine CVC Capital Partners, the Luxembourg-based private equity firm, lending to any individual club in the Spanish second-division. But Javier Tebas, president of Spain’s La Liga, negotiated a deal this month that will see roughly €2bn from CVC redistributed to clubs across the top two tiers in the form of interest-free loans in exchange for a slice of La Liga’s TV money.
In recent months European football leagues have shown that they can borrow on behalf of clubs to obtain finance that smaller teams would struggle to obtain from mainstream lenders.
The investment management arm of US insurer MetLife was willing to provide a £117.5m borrowing facility to the English Football League, which runs the Championship and two other divisions below the elite Premier League, allowing clubs to meet certain tax liabilities.
“As a collective, the security within football is a lot stronger than it is on an individual case by case business,” said Ian Clayden, a partner at consultancy BDO. “It is what a number of clubs are telling us, they would welcome the opportunity to access some sort of growth or development fund.”
But some club executives and advisers are cautious. They say deeper reforms are needed to change the behaviour — overspending on players to win games — that left clubs ill-prepared for the coronavirus cash crunch.
As Tracey Crouch MP reviews UK football finances and governance, the EFL is pressing for more meaningful change, advocating for changes to the way TV money is distributed. It also wants cost controls to keep player wages in check. Stepping back, European football’s governing body Uefa, led by president Aleksander Ceferin, is considering new curbs on player wages and transfer fees.
“It’s very easy to be sustainable,” said Simon Hallett, the owner of Plymouth Argyle, which plays two levels below the Premier League. “You just stop spending so much.”
Highlights
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Financial watchdogs rejected suspicions of insider dealing in shares of carmakers Aston Martin and Daimler after examining trades, including by Mercedes’ Formula One racing chief and team shareholder Toto Wolff. Wolff, who acquired less than 1 per cent in Aston Martin last April from Canadian billionaire Lawrence Stroll, rescued the British carmaker and competes in F1 as the owner of the Aston Martin racing team.
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Michael Holding, the West Indian fast-bowling legend, sat down with Scoreboard’s very own Murad Ahmed for a Lunch with the FT, talking about everything from cricket to racism and “white privilege”.
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Footballco, which is backed by US private equity firm TPG Capital and owns football media website Goal.com, acquired CalcioMercato.com, Italy’s leading digital football news provider. The deal expands Footballco’s coverage of a key European football league and highlights growing consolidation in the continent’s sports media.
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Fifa, world football’s governing body, will be compensated with more than $200m for money lost to corruption, the US Department of Justice announced. The compensation draws a line under the regime of Sepp Blatter, Fifa’s former president, who stepped down after the 2015 scandal.
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English Premier League clubs refused to allow footballers to travel to 2022 World Cup qualifier matches in countries that are on the UK’s quarantine red list. Gianni Infantino, president of Fifa, which organises the international tournament, wrote to UK prime minister Boris Johnson to find a way to allow players to compete.
Transfer Market
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Legends International, the premium hospitality business that has worked with football clubs including Spain’s Real Madrid and England’s Liverpool, promoted Martin Jennings to become managing director of its UK business and head of global planning for its international arm. The company said its new MD for central Europe is former Sportfive agency executive Jens König.
Final Whistle
The Tokyo Paralympics got under way this week with New Zealand’s wheelchair rugby squad opening their first match of the tournament with a rousing Haka. The traditional Maori posture dance is a fixture for the All Blacks across sport, and this year’s para rugby team gave it a new spin before their match against defending silver medallists, the US. Check it out.