Sadly, due to work commitments we will no longer be updating the Blog of Sport Business. Thanks to all those who supported and visited the site.
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It’s a question I think needs considering.
Recent press reports talk of the Football League asking the Premier League for a greater distribution of its wealth following record income from the sale of TV rights. The last round of rights to be negotiated (for overseas rights) was valued at £625m, bringing the total income from the sale of media rights for the Premier League to £2.1bn.
I think the Football League would gain more credibilty amongst fans if it broke ties with the PL completely. The value of the Championship would increase dramatically, from both a media value perspective and amongst supporters, and subsequently permeate throughout the FL tier. The Championship is an exciting league in itself and is very much increasingly seen as ‘the real championship’ (nothing to do with the current sponors!).
I would still allow the transfer of players from the FL to the Premier League but perhaps share the revenue from transfers above the value of £500,000 amongst all teams within the FL.
I will have more to write on this in the future including further proposals to strengthen the case, the more I think about it the more I’m convinced it is the right move for the Football League.
Filed under: football, media | 4 Comments
Now the dust has settled in the transfer of David Beckham from Real Madrid I thought it would be interesting to take a look at the more intricate parts of the deal, away from the ‘$250m man’ headlines.
So what’s in it for Beckham?
- - A move away from the tabloid spotlight of Europe, the people who built the Beckham brand are the ones who have invariably tried to break it over the last couple of years. Despite Beckham’s notoriety in Europe/UK he will enjoy a certain private freedom in the US.
- - A healthy contract, with suggested earnings of up to $250m over the next five years made up of salary and personal endorsements. Unlike at Real Madrid, where Beckham gave up a large chunk of his image rights (and subsequent income), the player will keep 100% of income generated from the use of his image. It is also reported Beckham will take a slice of ticket sales, although I’m guessing this will be chicken feed in the grand scheme of things.
- - An opportunity to ramp up activity with his soccer schools – one is based at the training facility of his new club – is seen as a big influence in the decision to move to America. With ‘soccer’ being most popular amongst young kids Beckham and his advisors will undoubtedly look to increase quickly the number of soccer schools not only in the US, but across the world
- - An ambassador role with MLS must have been attractive. He has been an icon in Europe for many years but it can be argued his star has been waning in the last 12/24 months, he will now become THE star of MLS in the US.
What’s in it for LA Galaxy?
- - Vastly increased media attention which subsequently brings in demand for season tickets and significantly increases commercial opportunities for the club.
- - Beckham’s playing demise has been somewhat overstated in the UK press, he could have easily fitted into most Premiership teams but will instead shine as a leading player in MLS. This can only benefit the team’s chances of winning.
What’s in it for MLS?
- - They have guaranteed media interest in a league which generated little attention outside of the US.
- - Beckham moving to MLS makes it a credible proposition for other marquee players in Europe to join the League
- - Commercial opportunities will increase, Beckham is a global phenomenon and brings global brands with him.
- - This is make or break time for MLS, after voting for the ‘Designated Player Rule’, esentially allowing clubs to sign one player outside of the team salary cap, means that there is a clear intention by the League to make it a truly long-term sustainable sports league.
What’s in it for AEG?
- - Anschutz Entertainment Group played a major role in Beckham’s move. They have increasingly close ties to the player. AEG own the LA Galaxy and will be his paymaster. They will benefit from the commercial clout Beckham brings to any organisation.
- - AEG and Beckham joined forces to launch the David Beckham Academy in locations across the world, based at locations owned by AEG, eg Home Depot Center and The o2 Dome. The US is ripe for high-level soccer academies
What’s in it for Beckham’s sponsors?
- - Some of Beckham’s long-term partners will use his move to the US to kick-start an assault on the youth football market.
- - Adidas, major partner of MLS and personal sponsor of Beckham, will aim to knock Nike Football off top spot in the US
- - Gillette will continue to use Beckham to appeal to young males.
- - It is not clear whether some of Beckham’s other sponsors will stick with him as he moves from the European market to the US market but we can be sure that US brands will be keen to partner with him.
Overall, nearly all parties win. In the long-term the only losers could be MLS. The Designated Player Rule is only in place for 3 seasons and many are comparing the current situation with that of the NASL of the 1970′s which imploded in a financial mess.
One thing is for sure, Beckham comes out on top.
Filed under: football | 2 Comments
New York Knicks guard Stephon Marbury has endorsed a range of basketball shoes which are retailing at well below the $150+ price point of the major manufacturers’ offerings. At just $14.98 the Starbury shoes become very affordable to millions of kids who aspire to look and play like their heroes.
Marbury will wear the Starbury ‘sneakers’ during the 2006/07 NBA season to provide some validation to the quality of the product. The press and buzz this has created will no doubt help sales, from which Marbury will make his only income for this endorsement. (It is reported he has not been paid an endorsement fee).
The line is only available through retail stores and is not availble online, somewhat limiting the international appeal. Reports suggest that the shoes are selling fast which makes it all the more interesting to see how sales of the more established and significantly more expensive products will, if at all, be affected.
At $14.98 will people really care too much about the quality, or that they may only last one summer?
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How will the 2006 Tour de France be remembered, the race that never was? Following investigations into systematic doping by authorities in Spain (Operation Puerto) and release of the legal documents by the Spanish judiciary there have been a number of very significant withdrawals from the 2006 Tour de France less than 24 hours before the race starts. Detailed background to Operation Puerto can be found here.
Much of the pressure has come from sponsors, particularly T-Mobile, who have suspended their star rider and Tour favourite, Jan Ullrich. It will be interesting to see how this develops over the coming hours and days, and how the major sponsors react to what would appear to be the unearthing of, and more importantly proof of, systematic doping within the peleton.
There is some sympathy for Tour de France organisers ASO as the investigation is coming to a head only 48 hours before the start of their race. Having been put in a difficult position it is unlikely that they will be dishing out many favours to those implicated in this affair.
We have to hope that this ‘great’ sport will be cleaned up once and for all, whatver the pain we have to go through in the interim period.
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The World Cup marketing campaigns of the big sportswear manufacturers have begun in earnest. We’ve got Joga from Nike and +10 from Adidas to name the obvious. The strangest campaign I have come across so far is Puma’s ‘Adopt-a-German’.
The idea behind ‘Adopt-a-German’ is for 12 German people to represent their city, which is a host city in the World Cup, across the rest of Europe in the Adopt-a-German Tour. Visitors to the site can adopt one of the ambassadors and follow their European tour via individual blogs, where the general day seems to be press call in the local Puma store followed by party in the evening.
It all seems a little pointless to me, I’d be happy to hear from anybody who can explain the idea behind this campaign?
Filed under: football | 5 Comments
Very surprised on reading that a significant proportion of Spanish people may miss out on being able to watch the 2006 World Cup in Germany as the company awarded the live rights by FIFA, LaSexta, have failed to increase their coverage footprint across the entire nation. The Times reports that the channel is only viewable by some 55% of people. Time for the Spanish Government to step in and sort the mess out, quickly.
Fortunately in the United Kingdom we won’t have to suffer these problems due to the World Cup having Listed Event status. Many people beleive that the World Cup will eventually go to a pay-TV broadcaster as FIFA increase the fees required for these rights but I find this increasingly unlikely as Pay-TV braodcasters come under ever-increasing scrutiny by the European Union Competition Commission.
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