Year-Ender 2019: Top 10 International Sports Business deals

Sports Business,International Sports,Sports Deals,Sports Business News,UEFA Champions League

Sports World in the year 2019 has seen new records being created off the field with commercial deals running into billions of dollars. While some partnerships created headlines for their grand monetary volume, a few others were discussed for their impact on the sports industry.

As a happening year in sports comes to an end, InsideSport.co brings to its readers Top ten headlines of global sports business as well as some more impactful deals.

  1.   NBC Universal-LA 2028 Olympics Organizing Committee landmark deal

Finally, as the year approached its conclusion, there was a landmark deal for the Olympic and Paralympic movement as NBC Universal and Los Angeles Olympics 2028 organizing committee announced a partnership for combined US media and sponsorship sales covering the 2021-2028 cycle. The first-of-its-kind deal affords brands access to intellectual property, product marketing, local activation, and NBC Universal’s Olympic coverage in the US. The IOC contribution as stipulated by the Host City Contract is $1.8 billion and has the potential to exceed $2 billion according to the evaluation of the L.A. bid committee when taking into account the estimated value of existing sponsor agreements to be renewed and potential new marketing deals.

Also Read: Five Sports Business trends that will dominate 2020

  1.  UEFA Champions League rights’ $1.5 bn deal

UK pay-TV broadcaster BT Sport retained exclusive UK rights to the Uefa Champions League until 2024 in a deal worth $1.5 billion. BT had to see off interest from rival Sky Sports, with commercial network ITV, DAZN and even public service broadcaster BBC also all apparently making bids. The deal, which is said to have cost £400 million per year and commences in 2021, gives BT the rights to all 420 games from the Champions League, Europa League and the new Europa Conference League for a further three seasons.

  1.  Real Madrid’s $1.2 billion extension deal with Adidas

Spanish football giants Real Madrid also did some tidy business as they confirmed a US$ 1.2 billion contract extension with kit manufacturer Adidas. The deal runs through 2028 and is the most lucrative in soccer history. “This agreement will help us to achieve our mission to be the best sports company in the world. It also underpins Adidas’ leadership in the football category,” the firm’s chief executive, Kasper Rorsted, said in a statement. Real club president Florentino Pérez said: “It is a natural step to extend our successful deal until 2028. Together we will continue to build this strategic alliance that helps us set a benchmark and remain leaders in football. Adidas is an ideal sponsor for us.”

  1.  Manchester City’s 10-year kit deal with Puma

Manchester City and their stable of sister clubs have signed a new 10-year kit deal with Puma worth £650 million ($ 860 mn). It is understood the contract with Puma will earn the City Football Group (CFG) up to £650 mn ($ 860 mn) a season over the next decade. The partnership will commence in July 2019 and represents a huge hike on the existing agreement with Nike, who currently pay the Premier League champions around £20m ($ 26 mn) a year. “Puma’s partnership with City Football Group is the largest deal that we have ever done – both in scope and ambition,” Puma Chief Executive Bjorn Gulden said. “We are very excited to partner with City Football Group, whose success, ambition and drive for innovation has seen them set new standards, on and off the field”, he said.

  1.  Discovery new exclusive OTT player for CYCLING

The first major coup of 2019 came just nine days into the new year as Discovery purchased a 71% controlling stake in cycling digital media company Play Sports Group. Eurosport, Discovery’s pan-European broadcaster, has long been affiliated with the sport’s major events and is now in the process of developing a new cycling dedicated over-the-top (OTT) platform which promises to be more than just a media platform. Instead, it is aiming to be a digital hub for a fan-base which is traditionally very participative. This is Discovery’s second OTT player in the sports space after the grand launch of exclusive GOLF destination.

Also Read: Stars Sports business a work in progress: Uday Shankar

  1. ESport Industry’s first $100 Million deal

The first half of June delivered what was labelled as the first $100 million deal for the eSports industry, as Immortals Gaming Club (IGC) completed its purchase of Infinite Esports from Texas Rangers co-owners Neil Leibman and Ray Davis. That was one of two major mergers announced in competitive gaming that month, as Philadelphia 76ers owners Harris Blitzer Sports & Entertainment (HBSE) purchased a majority stake in Clutch Gaming, the team owned by rival NBA franchise the Houston Rockets.

  1. IOC’S $500 million sponsorship deal with Airbnb

The International Olympic Committee (IOC) was also busy, adding travel platform Airbnb to its TOP sponsorship program in a deal reportedly worth around $500 million. The deal covers the next five Olympics starting with next year’s in Tokyo, and including the subsequent winter and summer games in Beijing, Paris, Milan and Los Angeles. The five cities are among Airbnb’s biggest markets for private accommodation rentals worldwide. “In the past, people have travelled to the Olympics on Airbnb, of course,” said Joe Gebbia, Airbnb’s co-founder. “But we have never been able to officially market to host cities or potential hosts about the opportunity of taking visitors. Through this partnership, we actually can.”

  1. DAZN’s continued expansion in 2019 with multiple deals

DAZN was one of the most talked-about platform in the sports arena in 2019 as the OTT player was in news for multiple deals. Kazakhstani boxing star Gennady Golovkin confirmed a rumoured six-bout partnership with DAZN, which saw the two-time world middleweight champion’s own boxing promotion company, GGG Promotions, reportedly secure eight figures per fight. The deal was pertinent as it appeared to open the door to the third meeting with rival Canelo Álvarez, who is also on DAZN’s books.

 

Also DAZN Group selling of its Perform division to Vista Equity Partners, which then merged its new property with sports data specialists STATS. The sale saw DAZN receive a combination of cash and a significant minority stake in a newly formed Stats Perform but also indicated that the focus for Len Blavatnik was increasingly in the sports broadcast space.

Meanwhile, DAZN also struck a major distribution agreement with media and entertainment giant Discovery, making Eurosport 1 and Eurosport 2 available to its subscribers in Austria, Germany, Italy, and Spain. Perhaps more intriguingly, as DAZN continued to be linked with a bid for domestic Bundesliga rights when they are next up for grabs, the streaming service inked a separate, exclusive sublicensing agreement with Discovery for 45 games from German soccer’s top flight per season in Germany and Austria.

  1. Tottenham Hotspur-AIA Group $396 million deal

In other football business news, the 2019 Uefa Champions League finalists Tottenham Hotspur secured a mega shirt sponsorship extension with life insurance company AIA Group Limited, which agreed to pay a whopping £320 million ($396 million) to secure the inventory until the end of the 2026/27 Premier League season. The UK£40 million (US$49.5 million) a year figure, reported by various UK media outlets, puts Spurs in line with the likes of Liverpool and Chelsea in regards to their shirt sponsorship, adding around UK£5 million a year to the previous extension signed in 2017.

  1. Wanda’s $100 Million deal with World Athletics

The International Association of Athletics Federations (IAAF), the sport’s world governing body, has named China’s Wanda Group as the title partner of the Diamond League series in what it describes as the biggest commercial partnership in athletics history.

The ten-year agreement, which is reportedly worth more than $100 million and runs from 2020, forms a strategic collaboration between IAAF and the Beijing-based company’s sports asset management and events firm. The contract includes provisions for a new annual Diamond League meeting in China organized by Wanda Sports.  “Wanda shares our vision for the future of athletics and this partnership will be fundamental in helping our sport grow over the next decade, both in China and around the world,” said World Athletics president Sebastian Coe.

There have been numerous other multi-million deals in international deals that caught the eye in 2019.

  •      Naomi Osaka dumps Adidas to sign up with Nike

Nike shook up the women’s tennis picture when it persuaded world No. 1 Naomi Osaka to abandon her deal with Adidas in order to jump ship for the swoosh. Fresh off winning two Grand Slams, SportsPro’s 2019 Most Marketable athlete had previously been rumoured to be renewing her deal with the German sportswear brand. Speaking about the new partnership, Osaka said: “Nike has a legendary track record of writing history and I look forward to being a part of those moments for many years to come.”  Her first official competition in Nike gear was the WTA Event in Stuttgart, April 2019.

  •      $75 mn deal for 19-year-old NBA star Zion Williamson

The only thing that generated more intrigue than which franchise NBA draft prospect Zion Williamson would sign for was which brand of shoe he would slip into for his maiden season. The 19-year-old had been tipped to make as much as $100 million from his first shoe deal, but ended up having to settle for a reported fee of just US$75 million in his eventual agreement with Nike’s Jordan Brand – still US$12 million short of the US$87 million contract LeBron James signed with Nike in his debut season.

  • Lagardère announces 75% sports business sale

French agency Lagardère confirmed plans to sell 75% of its sports division to private equity firm HIG Capital. The deal with the Miami-based company values Lagardère Sports at around €110 million ($122.6 million). Also in the investment space, Bruin bolstered its portfolio of companies after acquiring marketing and data agency Two Circles. Bruin took control of the London-based company from advertising firm WPP, which will continue to hold a minority stake.

  •      PSG’S Record Deal with Accor hotels replacing Emirates

French football champions Paris Saint-Germain were also adopting the finer things in life. The Ligue 1 giants announced a multi-year sponsorship with the French-owned hotel group Accor as its principal sponsor starting with the 2019-20 season. Accor replaces long-standing sponsor Emirates Airlines. This deal saw them upgrade their €30 million (US$34 million) a year contract with Emirates for a new €50 million (US$55.57 million) a year deal with the multinational hotel chain.

  • Liverpool FC’s Nike deal

The Reds’ contract with New Balance expires at the end of the season, and after a High Court case ruled against the Boston-based manufacturer in October, the club are set to move on. Nike will take on the duties, supplying kits and other merchandise around the world, for support which continues to grow due to the success under Jurgen Klopp. It was initially reported that Liverpool were seeking a considerably bigger deal when their agreement with New Balance ends, the belief was that this would come close to Man United‘s English-record £75 million-a-season ($ 100 mn) contract with Adidas.

 

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