Rory Sutherland on Ryder Cup ticket prices; The London Super Bowl myth; Tier 1%; Rich people are boring; The Boca Juniors Question; And1 Mixtapes; Laggy indicators; See you at Sportel
Overthinking the sports business, for money
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What IS capacity btw? Pt2
See previous thread: Won’t anyone think of Julian Alvarez?
Interesting to compare the quite different receptions given to the 2025 FIFA Club World Cup and the NFL International Series.
Two big global rights holders are seeking to expand in to new territories with the aims of growing the game, building new audiences and carving out new rights.
This is a business newsletter, so we’ll jump to the money bit: In a sea of flat revenue lines for sport’s traditional inventory, new product is the holy grail of growth: the hallowed step-change in revenue.
What happened?
The NFL is about to make another billion quid. This is hardly news. Commissioner Roger Goodell long ago put out a target of $25billion by 2027, so this is part of that.
What’s interesting though, is the source of this new income: London. OK, also Munich, São Paulo, Madrid and Mexico City. But the proof of concept for international games has been built in London over time.
Goodell has suggested the International Series will ultimately 16 games in foreign cities—up from five this year and eight next season. A London Super Bowl has been floated...
This is part of a broader rehaul of media inventory which sees the regular NFL season expand to an 18-game regular season.
Patrick Crakes told Front Office: “I think they’ll move fast. Maybe in a year or so? … Think they’d ask for at least $1 billion to $1.5 billion for 11 to 13 international games.”
As Murray Barnett puts it in The Bundle: There’s no league better at conjuring new, lucrative media rights out of thin air than the NFL.
Compare and contrast
Meanwhile, FIFA’s Club World Cup rumbles from one bad news story to another.
Each constituency - players, leagues, club owners, TV rights buyers, FIFA’s own sponsors - has their own particular gripe about Gianni Infantino’s new, new thing.
Btw, a shout out to another top quality piece of reporting from the team at SportBusiness, this time Imran Yusuf with some great details.
FIFA has been forced to drastically reduce its revenue targets, from estimates of $1.5bn (€1.37bn) in commercial revenues, half of that ($750m) from media rights fees.
That number is now $500m for media rights according to Sportbusiness
Several sources say the governing body will struggle to reach this number under current circumstances.
FIFA received no acceptable bids from this summer’s tenders
Target market for most revenue is US; bids from Fox and NBC rejected. Sources say FIFA is seeking around $100m in rights fees for the CWC in the US. Bids from NBC and Fox fell far short of this number.
All interesting stuff. Look out for tomorrow’s episode of The Bundle for Murray Barnett and Yannick Ramcke’s analysis.
Three Builds:
The Boca Juniors Question
FIFA’s best argument is using the CWC to highlight the structural inequality suffered by the myriad clubs that sit outside the UEFA Champions League walled garden. These are great brands which have atrophied due to the player exodus to Europe. The FIFA Club World Cup is a six week tournament so won’t remedy this structural problem. But FIFA is doing the right thing to flag it. It’s fun/easy to knock governing bodies and assume machiavellian political motives behind the decisions of their leaders. We all do it. But two things can be right at the same time.
Goodell’s control of the players is about money, but not just money
Roger Goodell always gets what he wants, that’s the cliche. The NFL is a money generating machine. Each game is the most valuable few hours on American television.
So if he wants to expand, he will. And the players will agree, in the end. The Collective Bargaining Agreement will be tweaked to keep the athletes sweet. Note: This is something Gianni Infantino can’t replicate in the same way, see FIFPro’s high profile campaign around player burnout.
The players acquiescence is about money, obvs. But there’s another thing.
Have a look at the details in the NFL CBA from the last expansion of the regular season in 2020.
I keep reading this next quote and asking, why does the NFL Player Association want a relaxation in drug testing rules? And why do the NFL owners agree to that request?
Changes to the drug policy include a reduction in penalties for players who test positive for THC (eliminating suspensions solely based on positive tests), an abbreviated testing window (from four months to two weeks at the start of training camp) and a significant increase in the threshold for a positive test (nanogram limit rises from 35 to 150).
The sports rights market is too laggy
See previous: At what point does the quality of the product impact on the demand for rights?
Too many games…tired and injured players…where do you draw the line?
What IS capacity? What is the relationship between tired players and media revenue?
This last question gets to the real problem.
The money doesn’t care
The media and sponsorship markets are too laggy to be good arbiters of the quality of the sporting product. It’s too blunt an instrument.
So bad decisions go unpunished, global expansion plans get waved through, CEOs go un-sacked.
See also: La Liga expansion in US
Expected Goals
Checked out Unofficial Partner’s women’s football business spin off? It’s where the conversation is.
Tier 1%
Ryder Cup ticket prices for next year’s event in New York were announced.
Spoiler: They are astonishingly expensive.
$750 a day. A 581 percent price increase from the 2019 event in the US.
A few points:
Rich people are boring. Their very presence ruins a sport, music or cultural event for everyone. If they are the only ones there, it’s the end of Rome. Rich people pay for access to poorer people getting drunk, painting their faces, singing and creating what the sports marketing industry monetises as ‘atmosphere’.
Cultural relevance is a slippery, intangible attribute that might be best measured by Justice Stewart’s great 1964 definition of pornography: I know it when I see it. Golf has sacrificed relevance for money over several decades, a slide that was hidden from view by Nike’s marketing of Tiger Woods. The Ryder Cup is the one time every two years golf can lay claim to a broader constituency. 750 quid tickets and the people that price is aimed at attracting will quickly end it.
When’s a volunteer not a volunteer? Buried in the ticket announcement was a note saying that Ryder cup volunteers will be charged $350 for the honour of helping the PGA of America put the event on - keeping the Porsches from scratching each other in the car park, telling people to stop filming on their iPhones and being the PGA’s first line of defence against at pissed and entitled Wall St hedge fund managers. The ‘volunteer package’ includes an event uniform, a drawstring bag, a Ryder Cup pin, food during the shift and a tournament credential.
Patrick Cantlay watches the news too. Don’t be surprised if the players and their agents note the ticket price hikes, and the amount of money being made by the PGA of America from the event, and demand some of it. The Americans have long wanted a slice of the cake and this week’s announcement won’t change their minds. And again, one of the Ryder Cup’s key selling points ‘they play for the honour of representing country/continent’ etc, is undermined, and longer term brand value is jeopardised for short term cash.
Tiers for souvenirs. “We view ourselves as a Tier 1 event,” Ryder Cup director Bryan Karns told SiriusXM. “That’s on-par with a World Series or with an NBA Finals game 7.”
So, reframing.
Don’t compare us to a golf tournament, think Super Bowl.
This brings us neatly to Rory Sutherland, who talked at Leaders last week and was great as usual.
In particular, he is the master of reframing.
Rolls Royce and Maserati stopped selling their cars at car shows, because they look really expensive when they’re at a car show. They started selling them at yacht and aircraft shows, because If you’ve been looking at Lear jets all morning, a £300,000 car is an impulse buy.
Ryder Cup tickets as an impulse buy.
Sutherland was an early UP guest, hear What Rory Sutherland Thinks About When He Thinks About Sport:
What did volleyball do right?
Redtorch’s annual SportOnSocial media report dropped this week. Always an interesting read for anyone working in the International Federations of Olympic World.
Like any league table, the eye is drawn to the top and the bottom.
This year, an Olympic year, the best performing IF was Volleyball’s FIVB.
What went right?
For someone who hasn’t played volleyball since the second year of school, and never watched a whole game on television, I get served a disproportionate amount of the sport on TikTok.
Much of it about featuring a Ukranian woman called Yuliya Gerasymova, who is filmed flirting with a weird bloke on the other side of the arena.
So, what proportion of FIVB’s social presence is driven by this clip?
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First they came for the podcasters, and you said nothing
(With all due apologies to Martin Niemöller).
Sport England released a new white paper this week.
If you don’t want to read it, listen to it via Google’s new NotebookLM podcast AI (thanks Nic Coward).
Link here. It’ll never catch on.
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Not as surprised about Volleyball's performance. It came out as 4th most popular sport at the Olympics to bet on across our Global Betting brands. 1st. Basketball, 2nd Football, 3rd was Tennis https://www.entaingroup.com/news-insights/latest-news/2024/olympics-2024-record-interest-in-betting-on-the-olympics-for-entain/