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SBD Global/March 29, 2013/FinancePrint All
The FA stands to miss out on as much as £26M ($39.5M) in income if England fails to qualify for next year’s World Cup, according to Simon Hart of the London TELEGRAPH. Additionally, the FA "could also be left in a seriously weakened position" when it comes to negotiating new sponsorship deals at the end of the '13-14 season. England's 1-1 draw in Podgorica on Tuesday has left Roy Hodgson’s men "with an uphill task" to secure its place in Brazil next summer. Aside from the "national humiliation," failure to reach the World Cup finals for the first time since '94 would have "serious implications for the FA’s bank balance." Just by making it to Brazil, the FA would be guaranteed £8M ($12.1M) in prize money. The figure rises to £16M ($24.3M) for reaching the quarter-finals, a "reasonable expectation for England based on past tournaments," and £26.5M ($40.2M) for winning the World Cup outright. It is safe to say that the FA will not be factoring the top prize into its forecasts, though it would "certainly be expecting a financial bonanza" from the dozens of licensing agreements it would sign with retailers and manufacturers. A source closely involved with the FA’s licensing deals said that the governing body "could expect to make at least" £10M ($15.2M) from the demand for merchandise, principally from the royalties it would receive on replica England shirts. The source said, “The FA will get a royalty on every shirt sold, so put that together and you get to a pretty big number." World Cup elimination would also have a knock-on effect on the wider U.K. economy, with retailers "missing out on the surge in sales in beer, food and televisions that normally accompanies England’s qualification for championship finals." The FA works in four-year World Cup cycles when it comes to signing England commercial deals, which means its current contracts with Vauxhall, Umbro, Mars, Carlsberg, Lucozade, Nivea and Marks and Spencer "all expire at the same time at the end of the World Cup" (TELEGRAPH, 3/28).
The Bahrain-based owners of League Championship club Leeds United "have announced the sale of a 10% stake in the club" to another Bahraini investment fund, the Int'l Investment Bank, according to David Conn of the London GUARDIAN. The sale follows the revelation that "there are contradictory intentions stated for Leeds" between Gulf Finance House and its subsidiary, Dubai-based GFH Capital, which concluded the takeover of Leeds in December. GFH Capital, not GFH, was "repeatedly cited" in the announcement as the owner of Leeds, and as the entity which agreed this 10% sale, of which it said: "IIB is the first strategic investor to come into the club in line with GFH Capital's long-stated plans to strengthen the club's overall shareholder base. Others are expected to join as GFH Capital creates the ownership structure which will provide the club with sound long term finance." Leeds supporters "were given almost no detail about IIB in the announcement" and now must "acclimatise to another institution previously unknown to them becoming a significant shareholder at Elland Road." The price paid for the 10% stake was not disclosed (GUARDIAN, 3/28).
TEAMING UP: The London TELEGRAPH reported IIB CEO Aabed Al-Zeera "will join the Board of Leeds City Holdings Limited." Int'l Investment Bank B.S.C. "was launched as an Islamic Investment Bank" in Oct. '03. On its website, IIB stated the ''core business activities of the Bank include investing on its own account and investment, underwriting and placement in real estate and private equity in conformity with Islamic Shari'ah'' (TELEGRAPH, 3/28). REUTERS reported Leeds, who "suffered financial problems and dropped down the leagues" after reaching the '01 Champions League semifinals, are 10th in the Championship and "retain only slim hopes of making the playoffs for a place in the lucrative Premier League" (REUTERS, 3/28).
Andy Murray has taken on two business advisors as he tries to "enhance the portfolio of interests that has struggled to keep pace with the grand-slam tournament champions whose company he shares," according to Neil Harman of the LONDON TIMES. Indian doubles specialist and entrepreneur Mahesh Bhupathi, who is retiring from the ATP Tour at the end of the year, and Italian agent Ugo Colombini are joining XIX Entertainment, the company that signed Murray in '09. The decision to employ Colombini "is especially sensitive" since he is the long-time manager of world No. 7 Juan Martín Del Potro, one of Murray's leading rivals. It is understood that Bhupathi and Colombini "will have special responsibility for Murray’s commercial and marketing deals" while he remains at XIX. IMG and Lagardère Unlimited "had wanted to prise Murray away" from the parent company, but the U.S. Open champion has "a strong allegiance" to XIX founder and CEO Simon Fuller and "was not willing to move elsewhere" (LONDON TIMES, 3/29)