Golf royalty leads tech-charged fightback against LIV
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Like a game show contestant who got some basic questions wrong, FC Barcelona will be walking away from this year’s Champions League lamenting missed opportunities. The club spent big this summer in the hope of making it to the latter stages of the lucrative competition, only to falter at the first hurdle.
European success was key to making Barcelona’s high-risk financial revamp work. Now Barca — along with fellow European Super League rebels Juventus — will have to make do with a shot at the Europa League instead. Outright victory in that competition nets the winner just under €40mn in prize money, less than half the potential winnings of €84mn for those still hoping to triumph in the Champions League. Failure will be felt in the finance department as well as the dressing room.
This week we’re looking at the latest move to shake up the world of golf — this time led by Tiger Woods and Rory McIlroy. They’ve signed up a roster of big name backers for a new competition partly played on a simulator. We also run through some early potential bidders for the Washington Commanders — in what is likely to be the biggest sports deal in history.
Do read on — Josh Noble, sports editor
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What Tiger Woods’ golf revolution means for sport
Tiger Woods and Rory McIlroy are the not-so-secret weapons in the US PGA Tour’s fightback against the Saudi-bankrolled LIV Golf. Now, the golf duo are using their pull to attract deep-pocketed investors to the company behind their revolutionary golf league.
In fact, the fight over the future of golf is the subject of our latest Scoreboard video: you can watch it here.
With former NBC Sports executive Mike McCarley, Woods and McIlroy are the co-founders of TMRW Sports Group. Its first project is TGL: a new golf league in partnership with the PGA Tour.
Look beyond the headline-grabbing big names such as Mercedes Formula 1 driver Lewis Hamilton and tennis great Serena Williams, and you’ll find some of the world’s richest sports investors are backing TMRW. They include John Henry’s Fenway Sports Group, owner of Liverpool FC, and Philadelphia 76ers co-owner David Blitzer. TMRW didn’t disclose financial details of the fundraising.
In an interview, McCarley told Scoreboard that TMRW sought out investors who “share our vision for how technology can help make sports more accessible and culturally relevant to new and different groups of fans, and most importantly, young fans”.
Just as LIV is shaking up golf with a shorter format based on teams and 54 holes instead of 72, TGL plans to tear up the rules as well. The idea is to take golf away from the open grass in favour of a technology-enabled arena that will incorporate virtual play and shorter-range shots. Or, as McCarley says, a version of the game in which “you don’t have to worry about sunsets and weather delays”.
The TMRW co-founder says golfers will start play by hitting balls into a virtual course, followed by shorter-range shots and putting in front of a live crowd and television audience. It’s easier to picture by taking a look at the concept.
The league intends to stage 15 matches, from January 2024, on Monday nights, crucially allowing players to compete in PGA Tour events at the weekend while also avoiding a clash with the regular NFL season.
McCarley, a former television executive, told Scoreboard that it is vital to grab a rare primetime slot that can reach mainstream audiences. The show should also appeal to younger fans, he said, by cramming the action into roughly two hours down from four days for a regular European or US golf tournament.
That said, McCarley said TGL isn’t seeking ranking points, in contrast to LIV’s approach.
As much as TMRW is betting that it can change golf with Woods’ enduring appeal and McIlroy’s rise to world number one, the group are also looking to other sports as industry executives continue to experiment with new technology and formats to reel in younger viewers.
Golf is not the only sport exploring leaner formats to reach younger views. Formula 1, the global car racing series, is adding shorter “sprint” races to its calendar and cricket increasingly revolves around condensed T20 models instead of five-day Test matches.
With backers from F1 teams, NFL, Major League Baseball, basketball, football, tennis and hockey, TMRW could ultimately become a laboratory for the future of sport.
Add to basket: Jeff Bezos and Jay-Z eye up an NFL mega-deal
Why does Jeff Bezos want to buy the Washington Commanders with Jay-Z? The answer may be quite simple: sports businesses are highly valuable, particularly during uncertain times. When many other assets are depreciating, the value of blue-chip teams on both sides of the Atlantic keeps going up.
Amazon’s founder and the billionaire rapper are preparing a bid worth as much as $6bn, which would mark a new high for a sports team, overtaking the existing record set by Rob Walton, the billionaire heir to the Walmart fortune, who acquired the Denver Broncos for $4.6bn earlier this year.
Bezos certainly knows the ropes: Amazon is paying $1bn a year for exclusive streaming rights to the NFL’s Thursday night football. And Jay-Z understands the sports business — his RocNation talent agency represents some big names across the industry.
Thanks to mammoth domestic broadcast deals, American football teams command the highest premium in the sports industry, but leading US franchises of the National Basketball Association and top English Premier League football clubs are also fetching feverishly high valuations.
What makes assets such as the Commanders so valuable?
Scarcity is a major factor in asset appreciation. This is especially true for US franchises given that leagues are closed shops with a limited number of teams, unlike European football where you can buy cheap in the lower leagues and play your way up.
“There just aren’t that many of these teams, I think people want to end up owning them,” Marc Lasry, the billionaire investor and owner of the Milwaukee Bucks basketball team, said at our Business of Sport conference last month.
Lasry also said that the increase in the value of sports franchises reflected what’s going on in the media landscape. “It’s one of the few things you need to see live,” Lasry said. “I think people want to still be part of the experience.”
The co-founder of Avenue Capital, which has about $12bn of assets under management, added that owners don’t buy teams to make money in the short term as they have to invest a lot to grow the franchise.
But over time, thanks to the huge interest for media rights as well as sponsors, merchandise, and ticketing sales the value trends up. The Bucks are currently valued at $2.3bn, according to Forbes data, up more than 300 per cent since Lasry acquired the team in 2014 for $550mn.
The entry of buyout firms has also helped push up valuations. Colin Neville, a partner at Raine Group, the tech, media and sports-focused merchant bank, said that private equity deals for minority stakes had established values for sports assets that were previously hard to determine because trades happened so rarely.
Will Bezos’s entry to the game mark the peak? The answer is probably not yet.
Poor treatment of foreign labourers is casting a shadow over this year’s Fifa World Cup in Qatar, the smallest host in the history of the football tournament.
LeBron James, Kim Clijsters and Tom Brady are among the stars investing in one of the fastest-growing sports in the US: pickleball. Played in a smaller area than a tennis court, the racket sport may offer returns to investors who can cram more players into city clubs. It may also work well in a country with an ageing population.
The head of British Cycling has quit just weeks after the governing body’s sponsorship deal with Shell triggered a backlash from campaigners and members.
Here at Scoreboard we don’t mark the retirement of just any athlete. But Gerard Piqué, Barcelona defender, is a footballer to keep an eye on. Piqué won everything from the Spanish league title and the Champions League to the World Cup. But he is also the founder of Kosmos, which runs the tennis Davis Cup and owns Spanish football team FC Andorra. With the end of his playing career, his influence in the business of football is set to grow. In his retirement video, which incorporates footage of Piqué as a boy, he hints at his future ambitions at Barcelona: “I will be back.” Watch it here.
Culers, us he de dir una cosa. pic.twitter.com/k3V919pm1T
— Gerard Piqué (@3gerardpique) November 3, 2022
Scoreboard is written by Josh Noble, Samuel Agini and Arash Massoudi in London, Sara Germano, James Fontanella-Khan, and Anna Nicolaou in New York, with contributions from the team that produce the Due Diligence newsletter, the FT’s global network of correspondents and data visualisation team
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