💰The 5 Trends bestowing UK Sport
Cryptocurrency makes an even stronger presence in the UK whilst Sports agents start feeling the pinch!
Cade Cunningham, the #1 pick in the 2021 NBA Draft announced an endorsement deal with BlockFi this week. The press release told how his sign-on fee will be paid in Bitcoin - a trend we are seeing more and more in Professional sport.
Naturally, the American sports scene is a little more progressive than that of here in the UK.
However, with broadcasting rights increasing in size and stature, money is pouring into the British Sports Arena at an alarming rate.
This leads to innovation and progression and a shifting tide in the economic landscape of our country.
Today, we explore the 5 trends which will bestow British Sport in the coming years.
- 💸 1/ CRYPTO BECOMES MORE PROMINENT
This is a 2-way trend. Two weeks ago I reported that Premier League Football Club Watford have a portion of their shirt sponsor paid in Cryptocurrency. These types of deals will rapidly increase in size and stature over time as orgs like FTX, Stake.Com and Crypto.com throw their cash around.
Similar to Cade Cunningham, players will begin to take sign-on fees and/or a portion of their salaries in cryptocurrency. We have seen this in the US with Trevor Lawrence and Russell Okung. I had a search for the first public case of this in the UK and my searches returned little. Stay tuned, for SURE.
- 💼 2/ PRIVATE EQUITY CREEPS INTO BRITISH SPORT
COVID has ravaged some sports clubs across the globe.
Clubs need cash and they need it fast.
Private Equity houses are like wolves waiting to pounce on undervalued assets. Recently, I told you of a CVC striking a pivotal deal in Spanish Football.
CVC also have significant presence in English Rugby.
Ares Partners own 34% of Atletico Madrid.
With clubs as big as Barcelona feeling the effects of the last 18 months, you can expect more and more leagues and clubs fielding calls from PE houses notorious for injecting cash quietly and effectively.
- 🕵🏽♂️ 3/ PLAYERS DO-AWAY WITH AGENTS
A month ago I wrote that Kevin de Bruyne negotiated a very lucrative new contract at Manchester City without the use of an agent.
Typically, an agent can take anywhere from 3-8% from their clients deal meaning the lucrative four-year £80m deal that Kevin signed may be worth an extra £4m to him than it would normally.
Typically, this type of move is reserved for an elite player who has a much higher chance of securing a lucrative contract without the need for 3rd-party “assistance”.
Infact, we pause these trends as this exact thing is happening in the NBA right now…
Elsewhere in the 🌏 of Sport:
🏀 Joel Embiid, popular player for the Philadelphia 76ers signed a 4yr/$196m SuperMax extension this week. For those astute at maths that equates to an average of $942,307 per week over four years! Similar to Kevin de Bruyne in the UK, Joel did NOT use an agent to negotiate it. I’m telling you, this will become increasingly popular. It’s happening already!
🏏 BT Sport are close to renewing their deal to be the UK broadcaster of the home international matches for Cricket Australia. This deal includes the Ashes this winter as well as the popular Big Bash League. BT paid £80m for the deal between 2016 and 2021. Figures for the renewal have not been revealed yet.
🇷🇼 <— Rwandan Flag fyi. Arsenal Football Club have the most lucrative sleeve sponsor in the Premier League. This week Football London announced that they have renewed their shirt sleeve sponsor with Visit Rwanda. The deal which pays £10m per season has been extended for another four seasons, despite the President of Rwanda criticising the club!
Now, back to those trends…
- 🕵🏽♂️ 4/ PLAYERS BECOME OWNERS
in 2014, The class of 92’ (David Beckham, Ryan Giggs, Gary Neville, Nicky Butt, Paul Scholes and Phil Neville) formed a consortium which sought out to take-over Salford Football Club in the North of England. Each of the above own 10% of the club, with business partner Peter Lim owning the rest.
In 2019, Zlatan Ibrahimovic bought a 23% stake in Hammarby Football Club - one of the largest clubs in Sweden.
The barrier to entry for investments of this nature is usually quite high - especially in larger clubs.
For perspective Sportico reported that the average value of a Premier League football club is £942m ($1.29bn), a figure which has likely increased in the 2 years since that report was written.
However with the sheer size of player contracts now the wealth accumulation of sports stars is higher than ever.
Giannis Antetonkoumpo, 2-time MVP and one of the highest paid players in the NBA recently announced a minority ownership stake in the Milwaukee Brewers - a Major League Baseball team… at 25 years old.
Jadon Sancho recently signed a 5yr contract at Manchester United rumoured to be worth £250k/week… at 21 years old. If Jadon enjoys a prosperous playing career which spans 15 years he will likely accumulate well over £100m by time he retires - considerably more than the Class of ‘92 did at this stage of their careers.
You can bet your bottom dollar that Jadon, or others in his peer-class become owners of sports teams within the decade.
- 🕵🏽♂️ 5/ THE CORD IS CUT
Amazon currently have a deal with the Premier League to show 20 Premier League games a season, a deal they secured in 2019.
Amazon execute this by showing all 10 matches in a Premier League gameweek, twice, across the PL season.
In 2019, Amazon reported that their first gameweek set records for the most new sign-ups since the company launched its Prime subscription service in the UK in 2007!
The success of this venture with Amazon has prompted other large entities to explore broadcasting rights to increase their market share and explore the Netflix-ication of sports broadcasting.
Facebook recently entered the bid to win the rights to the IPL. DAZN have launched their streaming service in the UK partnering with Eddie Hearn’s Matchroom Boxing. Eleven Sports, a streaming service owned by Leeds United owner Andrea Radrizzani control the rights to La Liga in the UK.
Streaming services will inch away at the BSkyB mainstay slowly-but-surely increasing their exposure into the sports arena.
It would not surprise me if the sports fan, who typically pays BSkyB a sum of money for their viewing experience will be diverging smaller amounts to more providers to get their fix of entertainment.
As always, it’s a question of who goes first.
I’m Jordan, I enjoy bring you these articles every week.
🐦 This week, I leave you with:
Brilliant graphical journalism from Swiss Ramble.
That “Total Revenue” Graph for 2021 will be very interesting.
See you next week.