Discover more from Unofficial Partner
Formula More; Who will pay for Andretti Cadillac; Skinny NGBs; Sport by McKinsey; TNT's Charm Offensive; All eyes on Gary Neville; AI IRL; The Santander Problem; Drive to Survive's Concorde episode
Overthinking the sports business, for money
This week’s podcast is with Ed Warner, former chair of UK Athletics.
It builds on recent stories concerning the financial plight of the governing body.
But there’s more to it than that.
What’s the point of a Skinny NGB?
UKA is an example of a ‘Skinny NGB’ model.
This sees the head separated from the body (the body being the pyramid of membership below the elite athletes, as is the case with say British Cycling).
Stripped of its broader remit, UKA exists to run events and get a team to the next major athletics event.
It’s a compromise. A hybrid.
And like every centrist, it is exposed to being attacked from both sides, between the private equity vision of sport as entertainment product (aka the money bit at the top) and the sport as public good lobby, who believe the body is the whole point.
Seems to me that the Skinny NGB chips away at the commercial argument.
The UKA sponsorship sales deck is a mix of medals and ‘think of the children’: Patriotic Team GB flag waving allied with the consumer goodwill that may flow toward a sponsor brand when they’re seen to be doing good things locally.
This is the deal that Muller bought and have subsequently left.
The problem is, without the body - which is run by the individual national athletic bodies not UKA - you’re left with just the medals (and the drugs, and the horribly regular coach-athlete abuse stories).
Point 1 is linked to point 2.
The Santander Problem
Warner recalls a bad morning in the UKA office, at some point in the early 2010s.
After months of negotiation, it seemed Santander were set to write the big cheque. For everything.
But then they didn’t.
The call came in.
The dreaded: ‘We’ve gone in a different direction’.
Rather than pay a big number to UKA, the bank would pay a smaller one to Jess Ennis (and Rory McIlroy and Jenson Button - you might remember those excruciating bank ads).
The bank’s agency whiteboard, or more likely the company accountants, had conjured a late switcheroo.
Athlete as brand. Ennis in her Team GB kit was a better bet than the rest of UKA put together, and far less work (not to mention cutting agency activation costs).
The Big Middle
The issue comes in a variety of guises, across almost every sport.
It relates to the middle.
The bit between the athletes and the fans.
How can it be this hard to connect these two groups together in a coherent and financially sustainable way?
The best athletes; Competitive events; A sensible calendar.
That’s what everyone wants.
We might even pay for it.
The rest is noise.
Which brings us to the final point.
Would the sports loving public notice if UK Athletics didn’t exist?
It was an intentionally provocative question.
Former chair of UKA Ed Warner’s answer was along the lines of, possibly.
Formula More: Who will pay for Andretti Cadillac?
Idea: A new American team to milk F1’s American honeymoon (q. can you milk a honeymoon?).
The favoured new entrant sees General Motors fronted by Mario Andretti’s son Michael, lending the faceless US conglomerate a veneer of F1 relevance.
(Btw, it’s that type of sentence that undermined my sojourn in to a comms career, despite the efforts of PR Week, which placed me at number 5 in their scientifically-based ‘Power List’).
Enter another high minded concept borrowed from the American sports market: greedy self interest.
The equation is simple: $900million divided by ten.
Put another way, the total season prize fund is currently split between the ten teams.
Cadillac Andretti makes it eleven. So less money for all.
Unless…they race more often - cue clutching of pearls by team principals warning darkly of the long term impact of oversupply.
Christian Horner: "23 races is a gruelling schedule for everybody on the travelling team… we are at the point of saturation."
But, what if…there’s money in it.
For GM/Andretti the cost of entry is a $200million fee.
Horner and others want that fee to rise, to nearer $600million.
But there are two teams looking more favourably on the new entrant: Renault Alpine and McLaren, who coincidentally are selling Andretti an engine and other stuff.
Coming soon: The Drive to Survive Concorde Agreement Episode
Which brings us to….
It’s that time again.
Buoyed by their American moment, Liberty Media want to fast track the new agreement.
For the uninitiated, Concorde is the deal signed between the FIA, F1 and the teams.
It’s where the money gets carved up.
And the current one is due to run to 2025.
Since the Ecclestone days, it’s always been very hush hush.
Toto Wolff, Mercedes team principal said in Miami: "It should happen in a constructive way, not maybe live-broadcasted and creating controversy"
Which runs counter to F1’s new access all areas zeitgeist.
As mentioned previously, once you let cameras in, it’s hard to say no next time.
Why do we care?
The Concorde Agreement is the blueprint for how closed leagues work in reality.
It’s the wet dream of what UP calls Sport By McKinsey.
From the Super League to rugby and women’s football, the money wants to restrict competition to a few ‘big brands’.
Sport By McKinsey is about building moats.
Rather than allowing any old team to play their way in on merit, they will erect very expensive barriers to entry, like those currently confronting Andretti Cadillac.
And not every team has General Motors behind them to foot the bill.
Alternatively, spend a few minutes to sample a different worldview:
What avoiding relegation looks like…
TNT’s charm offensive.
Warner Bros Discovery is on a charm offensive ahead of the launch of TNT Sports in the UK, scheduled for July.
Last week in London, there was an afternoon of plugging new content to media buyers, sponsors and other clients.
Rio Ferdinand and Ugo Monye were on stage, giving it the full pitch.
Which begs the question, what is TNT Sports? An exciting new entrant to the sports media landscape, or a glossy Setanta?
Given Rio and Ugo are BT Sport’s top football and rugby talent, there’s a continuity story being told here - a safe pair of hands on the tiller, business as usual blah blah blah.
This message is important, not just to ad buyers but to the rights holders.
The pair front the company’s current big rights assets - Premier League, UEFA Champions League and the Rugby Premiership.
These rights are central to getting the beleaguered sports fan to pay a sub for TNT Sports next season.
And each has a renewal coming up over the next year or two.
All of which puts a great deal of pressure on Gary Neville.
Because WBD/TNT Sports took the odd decision to dispense with long standing and award winning production company Sunset+Vine for the final year of the rights deal, and replace them with Buzz16, which is majority owned by Neville.
Buzz16 will produce the channel’s rugby output for next season, which is the last in the current BT/WBD/TNT contract, for which BT Sport paid £110m last time out.
UP hears that Neville’s company were close to landing the channel’s football coverage too, until his paymasters at Sky vetoed it. The Sky Sports star producing a rival’s football coverage was not going to fly.
The AI divide
Good piece by Casey Newton, ahead of a big week of AI announcements.
The gist: there are two, conflicting worldviews on AI.
One positive, the other that it is catastrophic to mankind.
So, are you Geoffrey Hinton or Jurgen Schmidhuber?
Meanwhile, here’s AI IRL
Limited resource? This bloke’s got a fucking cheek, talking about Sean like that.
Speaking of which…here’s (nearly) one half of UP at last week’s Sports Podge.
Job of the Week
Job: Strategy Director, MKTG, London
Blurb: As our Strategy Director, you will be at the very centre of our process – taking the objectives of our existing and prospective clients, applying your strategic and culturally-savvy approach in order to craft innovative and forward-thinking campaigns and activation work with our creative and production team.
As a bridge between our team of consultants and content creation specialists – you will take pride in weaving better storytelling around our ideas and selling them to our clients.
Put simply – you will help make our work better, from our strategic thinking to our creative ideation and ultimately through the presentation of our work.
Link: Apply here
Till next time.
Click the like button.