Bullingham on P/E; Cost control v Exec Pay inflation; Big decisions loom for WSL and The Hundred; The slow death of Intel Sports; Brand Nike and the end of men; Barnet FC v Heineken
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They grow up fast: Big decisions ahead for The Hundred and The Women’s Super League
The FA CEO Mark Bullingham was the UP podcast guest this week. England cricket’s chief executive Tom Harrison came on a few weeks ago.
So it’s tempting to draw parallels.
Both are sitting on potentially very valuable and important women’s sports properties: The mood music around the WSL and The Hundred is very encouraging.
And this brings decisions.
Sustainability by 2032 or 2025?
Bullingham said The FA had ‘a number of models’ for the WSL, an area in which they are working with our podcast series partners Portas Consulting.
There are questions around the optimal long-term strategy, right future ownership structure, and funding model for league and how it coheres with the rest of The FA’s commercial portfolio.
Most controversial is the ownership structure that will best support the growth of women's professional football: Should it continue to be owned by The FA, should it be integrated into the Premier League, should it be set up as an independent new company, or a combination of these?
How should the leagues be funded? Will they bootstrap it via organic revenue streams, such as media rights and sponsorship? Is there a faster route to sustainability via debt funding or, most controversially, by selling a stake in the league to CVC, Silver Lake or another private equity group.
In a previous UP/Portas podcast, Kelly Simmons, The FA Director of the Women’s Professional Game, quoted 2032 as the current target break even date, via the organic growth route - or about three media and sponsorship rights cycles.
Mark Bullingham built on this, and seems very open to using external investment as a way of speeding up the process. This is him extolling the virtues of p/e in rugby and F1:
‘We've got different models where we could get there in four or five years in terms of the league and club costs as they are now. By over investing now, improving the product now, improving the media model now, we can build the revenue streams quicker and enable us to offer a sustainable model to the clubs more quickly.
So break even in 2025 v break even in 2032.
But there’s a but. And it’s a big one.
The cost control caveat is one of the bigger caveats
Bullingham added an important dimension to the above scenario.
There is one variable in there which is player wages. Obviously, if you look at the men's game, whenever there's been any growth commercially it’s something that then drives up the cost base very quickly, from a player wages point of view. So that's the big variable in the women's game, but we think that we can still grow and we can still get to a sustainable position more quickly than 2032.
This is where a comparison to Tom Harrison and The Hundred is most relevant.
It’s to do with expectations.
The recent comms around The Hundred has been very positive. The ECB’s numbers have been taken at face value across the media.
By creating double headers - women’s and men’s games played on the same day - the ECB has been able to claim a big jump in the size of the audience for the women’s game.
This is all tremendous news for women’s cricket.
But the next phase is very delicate. Because it removes one of the basic arguments for low pay among women players, who for decades have been told they don’t deserve to be paid more because ‘the numbers don’t add up’.
Now, in its post-Hundred comms, Sanjay Patel, managing director of The Hundred, pointed out that the total of 16.1 million audience number is “more eyeballs than the men’s World Cup in 2019”.
So, the numbers do add up…and this generation of women players deserve a slice.
This is how England star Anita Shrubsole sees it:
Shrubsole: "Speaking about this country, one of the things you would say is that there is a massive difference in the crowds the men generate compared to what we get, and that reflects in salaries. In my opinion, that is how it should be. But having played in this Hundred and with the crowds we have been getting, I think the disparity is too much.
"Those bottom end salaries aren't enough, in my opinion. No-one can go 'oh, you didn't have many people at the grounds' because that just did not happen."
So, if there’s close to parity on media numbers, and ticket sales, why is there such a disparity between men’s and women’s pay.
Executive Pay v Cost Control
By anointing The Hundred a success, the ECB will now pay Tom Harrison and a handful of other top execs a £2.1million bonus (great scoop by Ali Martin in The Guardian this week).
In terms of terrible optics, it’s not exactly Jeff Bezos thanking gig workers for paying for his rocket, but I do wonder how that couple of million ‘Long Term Incentive Plan’ looks from the England women’s dressing room.
But compared to previous generations, these might be seen as good problems, yes?
See also: The Hundred’s Coronation Garden moment
For those who’ve never been to the Coronation Garden at Lords, it usually looks like this: Kids playing cricket, not so much.
The slow death of Intel Sports
It’s a story as old as the hills.
Short version: A brilliant Israeli sports media startup creates 3D replays that make Burnley-West Brom look like The Matrix. Intel buys them, with an eye on putting the tech in to VR, because the more punters use VR and 3D, the more they need powerful processors, and QED, more Intel. But a new CEO comes in and new brooms all his predecessors schemes out the door, with a back-to-basics agenda that leaves the sports tech division looking vulnerable and is then broken up. The startup founders made a mint in the buyout, their employees not so much.
Long version: Here, via Skin In The Game.
Conclusions:
Most tech investments fail.
They fail for many different reasons unrelated to the quality of the idea or demand for it.
Beware the siren call of VR. It can remain The Next Big Thing longer than you can stay solvent.
Nike’s struggle with the End of Men
Ethan Strauss thinks Nike’s creative output is in decline since its heyday of the 90s. And it’s to do with the woke culture war.
Three quotes:
Modern Nike ads will never be so remembered. It’s not because we’re so inundated with information these days, though we are. And it’s not because today’s overexposed athletes lack the mystique of the 1990s superstars, though they do. It’s because the modern Nike ads are beyond fucking terrible.
The ads are a symptom. The cause goes far deeper.
Nike’s main problem is this: It’s a company built on masculinity, most specifically Michael Jordan’s alpha dog brand of it. Now, due to its own ambitions, scandals, and intellectual trends, Nike finds masculinity problematic enough to loudly reject.
So Nike is chasing women hard, but still rely on men for sales.
And hey, women buy sneakers too. Actually, women buy the lion’s share of clothing in the United States. While women shoppers are market dominant in nearly every aspect of American apparel, the clothing multinational named after a Greek goddess happens to be a major exception. At Nike, according to its own records, men account for roughly twice as much revenue as women do.
The most 2021 sportsbiz story ever written
Short version:
Blue Owl to buy a stake in CVC Capital Partners, and an IPO via SPAC
Long version:
Bloomberg reported Blue Owl is close to buying a 10% stake in CVC Capital Partners, that values CVC at around $15 billion.
Blue Owl was formed in May through a SPAC merger that brought together Owl Rock and Dyal Capital Partners. The companies collectively had $52.5 billion in assets under management as of March 31.
Shit take: Private equity firms are bored of buying up sport, so are now buying each other.
Barnet, Heineken category exclusivity and the reality of the football business
Love this. Barnet FC chairman Tony Kleanthous gives the inside view of a week in football.
Thursday – Our usual beer delivery didn’t arrive and then the bombshell dropped, Heineken are on strike! Our supporters can forgive most things, but NO beer is a big, big problem. I spoke with their legal department who said they would allow us to purchase products elsewhere, but it would have to be a Heineken Brand so we rang around trying to get some beer, but most pubs were not selling stock as they were in a similar position to us.
The bit about New Balance not supplying the new kit is good too.
Personal Best
Sports biz people list their favourite things
This week, Jason White of LiveWire Sports takes the infamous Unofficial Q&A.
Best job in the sports biz:
Right now? The Sponsorship Directors of Cinch and Cazoo are probably having an absolute blast.
There are no bad ideas in sports PR
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