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The rise and rise of Major League Soccer

Rapper Yo Gotti's recent investment in DC United highlights the continued growth potential of MLS franchises as values go higher and higher. This week's newsletter takes a closer look at why.  

Photo Source: Vincent Carchietta USA Today Sports
It was reported last week that Rapper Yo Gotti is investing in DC United at a valuation of $730m, which places it among one of the highest prices ever for an MLS team in a transaction. So, what is behind the continued rise in valuations? Well, here's a quick overview. 
 
Firstly, demographics favour the MLS. The league has a younger, more diverse fanbase – with a particularly large share of Hispanic fans – than the other major American leagues. Experts estimate that the proportion of Hispanics in the US population will rise to over 28% by 2060. This means ‘soccer’ will likely grow with it…
 
The popularity of the sport is also likely to be turbocharged by the FIFA World Cup, which returns to North America for the first time since 1994 – an event which first prompted the launch of the MLS. The league is expecting a similar ‘step up’ in terms of the fans, the excitement, the clubs, and the media deal.
 
The media deal is an area where, unlike other major men’s professional sports leagues, there is huge potential for explosive growth. The MLS currently nets only $90m per year from its current agreement. That’s almost half what NBC pays to broadcast the Premier League in the US. With a massive TV contract, MLS teams could in theory become billion-dollar assets.
 
Lastly, the structure of the league itself gives MLS owners a level of security uncommon in European professional sports. There is no risk of relegation, making team owners’ investments much safer. Furthermore, the league’s single entity setup (owners technically buy a stake in the league and then are given rights to run a particular club) mean that the risk for any one MLS club is reduced even further.
 
Reducing the risk of investment was at the heart of the plans for a European Super League. If owners continue not to get their way, there is a distinct possibility that they turn their attention and resources to the MLS. If this happens, Yo Gutti will have bagged himself a bargain, even if he did buy at a record high. 
By Andy Marston and Marcel Blijlevens 
PODCAST
In Episode 4 of Sports Pundit Explains… Sponsorship, Andy and Murray are joined by Craig Santicchia, Founder of Wolfpad Gaming and Co-Founder at Karta, to debunk myths around the commercial world of esports, why Gucci got involved with Fnatic, and advertising in the metaverse.
THOUGHT FOR THE WEEK 
Photo Source: GIPHY
Yesterday LaLiga announced that it has created a logo and brand identity for ElClasico, the match that pits FC Barcelona and Real Madrid against each other each season, "with the aim of giving one of the most iconic and popular sporting showdowns on the planet a unique and highly recognisable visual identity." 

While at first glance, it would seem that this move simply reinforces the idea of favouritism towards Real Madrid and Barcelona, LaLiga has stated that it is working more closely with clubs to promote the competition and its most iconic matches, including not only ElClasico but also El Gran Derbi, El Derbi de Madrid, El Derbi Vasco, among others.

While derbies are a constant focus of the fixture calendar for fans and broadcasters, there are very few examples where a league has jumped onboard and aimed to internationally brand specific fixtures. 

The jury is out on whether this is innovative and value adding or if it simply reduces the appeal for other LaLiga fixtures. 

With the branding being rolled out for ElClassico in October, this may give us the first gauge of the campaign's success. However, given the absence of Leonel Messi, measuring any success is likely to be relative. 

What do you think? Let me know by replying to this email. 
WEEKLY ROUND UP 
Here's a few of the top articles that I've come across this week. I hope you enjoy!
Personal
  • I've just taken a new role as the Chief of Staff at Antourage. I'm thankful to Johan (CEO) and Roger (Chairman) for the faith they've shown in me, and to Giancarlo (New Partnerships Director) for making the appointment newsworthy for SportBusiness.
  • If you have any interest in learning more about what I'm going to be up to, or want to understand what Antourage do, please feel free to reach out to me at andy@antourage.com
Photo Source: Instagram/ Emma Raducanu
Broadcast and Media
  • Amazon have pledged to invest the 7-figure rights fee received from C4 to show Raducanu's US Open final victory into British women’s tennis.
  • Nickelodeon is set to air a weekly primetime kids-focused NFL highlight show. 
  • Digital giant Amazon is the front-runner for the NFL's out-of-market ‘Sunday Ticket’ broadcast package, according to CNBC.
Photo Source: Getty Images
Governance and Finance
  • Mutual fund company Ariel Investments has increased its stake in Manchester United to 13.8%. 
  • Arctos Sports Partners have agreed to buy a 17% stake in the Sacramento Kings in a deal that values the NBA franchise at $1.8bn.
  • Prominent futsal players urge FIFA to change ‘deeply discriminatory’ women’s policy by introducing a Women's Futsal World Cup
Photo Source: Getty Images
Sponsorship and Marketing
  • Castore has sealed a multi-year deal to become the official kit supplier of the England Cricket men’s and women’s national teams.
  • PSG has signed a three-year $30m deal with Crypto.com that will make the company their official crypto platform and provider of its first NFTs.
  • Report: Socios ‘fan tokens’ – what they really are and how they work, by The Athletic
Photo Source: FIFA 2022
Technology
  • Wrexham AFC, the soccer team co-owned by Ryan Reynolds, is coming to FIFA 22 under the 'Rest of the World' section. 
  • Sports NFT sales plunge, but the overall NFT market is surging, with $7 billion in sales
  • Digital health and fitness company WHOOP has expanded its wearables into smart clothing
NETWORKING
For the latest edition of the Sports Pundit Networking Series, I caught up with Marcel Blijlevens, a communications director at Publicis Groupe who is aiming to make the switch into the sports industry after 25 years in advertising.
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Quick ask. It takes me hours each week to put these newsletters together so if you enjoyed this edition, it would mean a lot to me if you could share on social or forward to friends and colleagues! Thank you. 

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