Larry David's crypto bubble; Breaking America, the siren call of the sports business; Betting against relegation; Disney will win; Messi business; WFH, WTF; #BoycottAdidas; The Kevin Roberts legacy
Overthinking the sports business, for money
End of bubble predictions
What happened?
The fall in crypto markets has slashed digital marketing budgets of the prominent trading platforms. (From The New York Times).
Both firms have recently more than halved daily digital ad spend: Crypto.com spent $109k per day in March, down to $24.7k in May.
Cue a rush to predict the end of the bubble (btw, I like looking at cryptobubbles.net)
Since the 2007 banking crisis, there’s an industry devoted to calling the top of any market.
This goes from Premier League media rights, Super Bowl half time ad spots, the housing market and all things tech, including crypto currencies.
Think of the children
The NYT story goes in search of people to blame, and lands on Matt Damon, Reece Witherspoon, Larry David and Gwyneth Paltrow, each of whom got paid millions to plug ad campaigns and have now gone very quiet.
It suggests these celebrities should be more responsible how they employ their own influence. A study from the University of Chicago found that younger, lower-income groups are more likely to believe in the promise of crypto.
This is a valid argument, and it’s a small jump from Larry David to Liverpool FC.
It poses the sport as business question.
Do sports teams, leagues and tournament holders have a particular responsibility to their audience, or are they just another media buy?
Why so big? Sponsorship as power signal
Digital ad spend is famously volatile, and can be turned up and down at short notice.
Sponsorship is a much slower moving beast.
The initial brand building phase saw trading platforms buying up sponsorship real estate.
FTX and Crypto.com were the big spenders, seeking mainstream validity, which is an expensive commodity to buy on the open market.
So the high price of the deals is an important part of the story being told.
FTX paid $135m for the Miami Heat arena; Crypto.com splurged $700m on the Staples Centre and became a FIFA partner ahead of Qatar 2022.
So the signal that the crypto bubble has burst won’t come from a downturn in Facebook advertising.
It will be when the first of the big stadium or team naming rights deals fall over.
UEFA finals: A Hunger Games for middle aged blokes
SportBusiness’ global news editor is a Rangers fan, who knew?
Memories of Sean Singleton’s heroic quest to Madrid in a Renault Scenic: "The fan zone was like The Hunger Games for middle aged blokes"
Starts with the line: I’ve been a Spurs season ticket holder since the late 1990s, so I know a thing or two about suffering.
Cynics have pointed out that what links the experience of both Martin and Sean is their teams lost.
Specificity: Disney+ is a great strategy. For Disney.
A great piece by Mike Darcey, former Sky exec.
Discovery was the king of traditional pay TV, but threw it away for voguish DTC. Can a botched strategy be rescued by football?
For football, read BT Sport…
Market pressure has led Discovery to abandon a model to which it was well suited, from which it was one of the greatest beneficiaries, and switch to a model which works far less well for them. Now, having walked lemming-like off the cliff, can Discovery find a parachute?
‘I went to see that new Sony movie last night’, said absolutely nobody, ever.
There’s an argument to say that Disney is the only real brand in the studio space, which gives them unique strategic advantages when it comes to building a relationship with real people, in their front rooms and on the monthly credit card bill.
The argument for Disney is stronger because their merchandising, parks and games lines of business mean they had more to gain from direct customer contact than any other studio
Add in ESPN, which the CEO was touting yesterday, and it becomes a genuine sport and entertainment offer under a famous brand that has the upside of not sounding like a law firm.
WarnerMedia Discovery BT Sport is a different thing.
Sport is not a new idea for Discovery, who bought Eurosport (in stages between 2012 and 2014), a chastening episode for Sky who had earlier tried to buy the business but failed to persuade TF1 to sell. Eurosport was relatively weak, built around second and third tier sports, often with non-exclusive rights, and my expectation at the time was that Discovery would invest and build Eurosport into a genuine pan-European sports powerhouse. But then nothing happened, as if they got bored or lost interest, or just did not know how to follow through.
More recently, Discovery invested heavily in Olympic rights but, in Europe, this is high risk but delivers little because they are compelled to sub-license significant rights to free to air channels to meet listed events requirements. And GCN is great for the most serious of cycling fans but does little for the majority. None of these have been touted as a great success, even by Discovery itself. They seem to think sport might be important, but they don’t quite seem to know what to do.
See also: Disney CEO: Full ESPN Streaming Service Is Coming, Will be ‘Ultimate Fan Offering’
Beware the siren call: Cricket in the US
Major League Cricket is a good idea in theory: The diaspora argument is compelling; the ICC 2024 Men’s T20 World Cup has games in the US; a T20 league league would allow the IPL franchises somewhere to grow beyond India.
These arguments have encouraged Microsoft’s CEO to put money in, which led the coverage of this week’s capital raise.
But the running of the game in the States is a mess and the C suite boardroom has a revolving door.
See also:
Btw: The best analysis of cricket in America came in a novel, Netherland by Joseph O’Neill.
Also enjoying: That Will Be England Gone: The Last Summer of Cricket by Michael Henderson. Not for fans of The Hundred.
Beware the siren call pt2: European football clubs
Patient capital is a phrase used by bankers to counter their reputation for short termism. It’s got a few airings this week as several clubs under US multi club ownership were relegated.
Moritz was right on Messi
I’ve referenced this FT comment piece by Michael Moritz a couple of times previously, but it’s oddly prescient given this week’s Le Parisien story about Lionel Messi buying a stake in Inter Miami - since denied.
If leaks of Messi’s contract are to be believed, Barcelona paid Messi €555m between 2017 and 2021….Imagine if every football club set aside about 25 per cent of its equity for player compensation, requiring that players sell their shares upon leaving the club. If Barcelona had compensated Messi with a combination of 50 per cent cash and 50 per cent equity, both he and the club would be far better off today.
had it been adopted by the management of Barcelona, today they would not need to beg for money to pay for the maintenance of the graveyard they created.
Counter: the problem with player ownership is shown by the ATP, which exists to serve its members and is revealing this inherent conflict of interest by playing a truly awful game when it comes to Ukraine and the Russia problem.
Do sponsor boycotts ever work?
The anti-Glazer brigade is going after Adidas.
#BoycottAdidas started trending.
See also:
WFH, WTF
Dominic Cummings suggests Boris Johnson is lobbying on behalf of newspaper proprietors on the issue.
Meanwhile, Big Tech is wrestling with the same issue.
Apple just lost it’s director of machine learning to Google’s DeepMind, with the suspicion WFH played a role in his decision.
Take the story macro:
Workers, more than ever, are willing to ditch their companies over workplace flexibility. According to an April ADP report, nearly two-thirds (64%) of U.S. workers served said they would consider looking for a new job if they were forced to return to an office full time.
Sport is an out of home thing.
Or more specifically, it needs a certain number of people to go to the event for TV to remain interested and so for media money to be realised.
I’ve never seen anything on the link between WFH and sporting attendances. Anyone got a graph they’d like to share?
The Kevin Roberts Young Journalist Programme
A brilliant initiative in memory of a wonderful bloke.
SportBusiness Group is looking for an ambitious, enthusiastic young journalist to join our editorial team in London on a 12-month, fixed-term contract as part of the Kevin Roberts Young Journalist Programme.
Created in memory of SportBusiness Group’s late editorial director Kevin Roberts, the programme provides high-quality entry-level journalism roles at SportBusiness for recent university graduates, talented school-leavers and dedicated self-publishers looking to break into the world of sports and business journalism.
Candidates are not required to have prior professional experience in the journalism industry or any formal qualifications beyond A-Levels or their equivalent. The hiring process is designed to provide a level playing field for candidates to demonstrate their ability, knowledge, and enthusiasm.
The position offers a salary of £22,000 across the 12-month term, paid monthly. Full employee benefits will be provided including 25 days of paid holiday.
HOW TO APPLY
Interested candidates can apply by submitting a feature of no more than 1,500 words on a sport/business topic of their choosing, or a feature built around one of the following topics:
How can sports clubs, leagues and federations adapt to keep Generation Z interested in live sport? Should sporting bodies look to create shorter formats of their sports to keep young people engaged?
What were the commercial reasons behind the failure of the European Super League project? Why did a project promising more money for Europe’s elite football clubs fail? How could a similar project succeed in the future?
Why are TikTok sponsoring sports events such as Euro 2020 and the Six Nations? What are the benefits for TikTok? What kind of commercial and marketing benefits are there for sports federations and leagues?
Why does the NFL command so much money from broadcast rights compared to the Uefa Champions League?
What is the future of gambling sponsorship in sport? What would be the commercial impact on sport should gambling sponsorship be outlawed?
Applications should be sent to callum.mccarthy@sportbusiness.com. The closing date for applications is Monday, June 13, 2022.
The earliest start date will be Monday, July 4.