CVC, tennis and ISL's 20 year shadow; The Euromarketing hall of fame; Coke v Tango, Nike v Adidas; Sport's poverty model; #DifferentGravy;
The newsletter of the podcast
Beware the siren call of tennis
Every generation has a plan to commercialise tennis. They often fail.
What happened?
Sky News’ Mark Kleinman broke the story that CVC was in advanced talks to create One Tennis, a new entity to house the commercial rights to both ATP and WTA. CVC would hold a minority interest.
Is it a good idea? Yes. Tennis always looks great on paper: Male and female interest, more genuinely global than most other sports, and a fair sprinkling of household names.
Bottom of the market? Those same household names - Federer, Williams, Nadal, Murray, Djokovic - are at the end of their careers.
Depending on who you talk to this is either ‘A Bad Thing’ - Can you name the next generation of players? - or ‘A Good Thing’ - Buy low, sell high etc.
Grand Slam shape v F1 shape. Every CVC sport story comes with the F1 comparison, and a whole car load of assumptions about their intended endgame. Just because they made gazillions from F1 doesn’t mean they intend to apply the same strategy to tennis, or rugby, or volleyball.
Sport is messy, and resists change. Whereas private equity likes straight lines, centralised processes and assumes that money will solve all problems (see Super League).
Tennis breaks out of its bubble four times a year. The Grand Slams are where the conversation is. The ATP and WTA is the rest. The rights market knows this and will need to be sold a compelling new vision - an F1 for Tennis anyone? But a lot has to go right in the journey from here to there.
What are the lessons of history?
Don’t overpay.
To ATP, WTA and CVC we can add another acronym, ISL.
The 2001 bidding battle for ATP Tennis rights is one of the great sports industry war stories.
Short version: ISL bid against itself to pay $1.2billion for all the bits of men’s tennis nobody watches, and the weight of the guarantees took them down, taking the FIFA World Cup rights with it. Hilarity ensued.
Together or apart? Does golf tell us anything about the value of women’s tennis?
Putting the WTA rights together with the men’s tour poses a question that is bigger than tennis. It’s the same one being asked by Women’s Super League and other major female focused sports rights holders: Are they better off alone or can they make more money by packaging their rights with those of the men’s game?
Recently, the LPGA, the women’s professional golf tour in the US, hooked its fortunes to the PGA Tour. The comms around this deal had echoes of CVC’s ATP-WTA plan. There was talk of synergies.
The reality was revealed in a deposition made to a US court, as part of lawsuit against the PGA Tour by Hank Haney.
Questioned about the NBC deal in that deposition, Monahan replied, “Given that today they have very little programming on NBC beyond the KPMG Women’s Championship, until they’re able to have more programming on it, nothing really has changed.”
Haney’s lawyer: “So it’s essentially ninety-nine point something percent goes to the PGA; is that correct?”
Monahan: “Yeah. North of 95 percent.”
Jay Monahan, the PGA Tour Commissioner countered that the 10% the LPGA got from all deals was more than they would’ve had before.
It wasn’t pretty though.
To hammer home the charge that the PGA Tour isn’t concerned about the LPGA, counsel for Haney quizzed Monahan on his knowledge of women’s golf. Monahan could not name the top golfers and said he had not attended an LPGA tournament as commissioner. (He had before his tenure.)
“Can you give me the top five ranked players playing in that tournament this week?” Haney’s lawyer asked. (The LPGA played the U.S. Women’s Open in Houston that week.) “I can’t specifically give you the top five players ranked in that tournament,” Monahan replied. Haney’s lawyer then asked, “Who is the top-ranked woman playing in the tournament?”
Monahan: “I’m not sure what the latest iteration of the world ranking is.”
Go deeper: The Athletic’s Dan Kaplan wrote the story.
Twenty (one) years in Euro footy marketing skirmishes
Euro 2000 - Coke v Tango
Coca Cola won awards for 'Eat Football, Sleep Football, Drink Coca-Cola' at Euro 96.
Tango’s response was funny at the time, and kept the lawyers in work, which is always important.
Not sure of the provenance of it, but Coke’s Kill Tango task force is almost certainly a myth.
Here it is, referenced in Campaign:
From Poking fun at an official sponsor can pay off. One of the most successful campaigns in recent years came, not surprisingly, from Tango. Its former agency HHCL and Partners parodied Coca-Cola's line 'Eat Football, Sleep Football, Drink Coca-Cola' with its own 'Eat Pies, Sleep A Lot, Drink Tango' during France '98. Two years later in Euro 2000 (also sponsored by Coke) it rubbed salt in the wounds with a campaign that declared 'Tango: officially a drink during Euro 2000'.
Coke's reaction? It held a strategy meeting among marketers called 'Kill Tango', and has put additional resources behind Fanta to target Tango.
Euro 2021 - Adidas v Nike
In The Athletic, Matt Slater has done a thing on the team kit battle lines this summer.
Q. Name the seven teams not being paid by either Adidas or Nike.
A. See below chart, from Matt’s piece.
Punishment tropes, pt4
No Euro marketing retrospective is complete without reference to Paddy Power’s pants.
What the Endeavour float looks like from the bottom of the UFC
Endeavour’s IPO was a triumph for the UFC. Last month, EDR stock opened at $24 a share, and closed first day trading up 5 percent at $25.20 a share. The opening price valued UFC’s corporate owner at $10.6 billion.
What happened last time?
Version 1 of the EDR IPO was pulled at the last moment, in 2019. The company had priced itself at around $30. The market preferred $20 a share.
Why the difference?
The market liked Endeavor’s promise to buy out the remaining 49.9 percent stake it doesn’t own in UFC, as exclusively reported by The Post in March.
Why do we care?
The UFC business model is familiar to anyone working in the gig economy. Below the very top end, fighters are self employed contractors, bearing all the risks, costs and lack of job security that are familiar to any Uber driver. (Check out tomorrow’s podcast with Jennifer McClearen, author of Fighting Visibility: Sports Media and Female Fighters in the UFC, referenced previously).
Meanwhile, the media lionises the Conor McGregor story while glossing over the reality of life in the Octagon.
Big Sport relies on poverty
It’s often said that sport doesn’t build character, it reveals it.
Similarly, sport doesn’t shape how big business works, it promotes it.
The UFC business model depends on a pyramid of willing fighters to fill its schedules at marginal cost.
This is isn’t a ‘disruptive innovation’, it’s just a version of how most people now work. Sport’s role is to sell the illusion of meritocracy, the rags to riches ideal that underpins the American Dream. Add in the purpose movement and we have a potent cocktail of bullshit.
The reality is that most jobs created since 2005 have been temporary, insecure jobs. Four in five hourly retail workers in the United States have no reliable schedule from one week to another. Instead, their schedules are set by algorithms that aim to maximize profits for investors by reducing breaks and pauses in service.
Go deeper: From What’s Wrong with the Way We Work in The New Yorker:
“Do what you love and you’ll never work a day in your life” popped up all over the place in the nineteen-eighties and nineties, along with the unpaid internship, the busting of unions, and campaigns to cut taxes on capital gains. It soon became, in Silicon Valley and on Wall Street, a catechism. “The only way to do great work is to love what you do,” Steve Jobs told a graduating class at Stanford in 2005. “If you love what you’re doing, it’s not ‘work,’ ” David M. Rubenstein, a C.E.O. of the Carlyle Group, said on CNBC in 2014. “Everywhere you look you hear people talking about meaning,” a disillusioned Google engineer told McCallum. “They aren’t philosophers. They aren’t psychologists. They sell banner ads.” It’s not pointless. But it’s not poetry.
A-Rod on the importance of ‘cost efficiencies’
Alex Rodriguez was a good enough baseball player to make it in to the 1%. Now he gives lessons on private equity via TikTok. Note his plea for cost control (a euphemism for low wages). I genuinely thought this was a spoof.
Unionisation is the big trend that never makes the trends lists
Project Spearhead attempts to create a united forum from which UFC fighters can make a case for better conditions.
This week, the world’s best swimmers formed an alliance to gain greater control over their own destiny.
Silver Lake’s buy out of the All Blacks is held up by the NZ player’s union.
And then there’s tax
ProPublica estimates that America's richest 25 people paid a "true tax rate" that was just 3.4%.
Among them are the people to whom sport’s new investor class take their lead: Warren Buffett (0.1%), Jeff Bezos (0.98%), Michael Bloomberg (1.3%), and Elon Musk (3.27%). According to Axios, for every $100 gained, Jeff Bezos paid just $1.09 while the typical US household paid $160.
What’s next? Taxing multi national platform businesses is the main topic of conversation at the G7 this week. Some of sport’s big rights holders will be looking on with interest.
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