SBD Global/February 17, 2017/Finance

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  • FA Reveals Record Revenue For '16 Despite Early Euro Exit

    England’s football team "reached a sporting nadir" after being knocked out of Euro 2016 by Iceland last summer, according to Murad Ahmed of the FINANCIAL TIMES. But the nation’s "shortlived participation" in the tournament helped the FA to "achieve record revenues." English football’s governing body said that last season’s finances "were boosted by the national team competing in Euro 2016, as well as the completion of a number of deals, including the sale of broadcasting and naming rights for the FA Cup and a new kit contract with Nike." On Thursday, the FA reported turnover of £370M in the year ended July 31, 2016, an increase of £52M from a year earlier. Though the organization "did not give details on the value of its commercial contracts," it said that broadcasting income "was the FA’s largest revenue stream" (FT, 2/16). The PA's Matt Slater reported despite the increase, the FA was "overtaken" by the Rugby Football Union as the country's "largest money making sports governing institution." The rugby body raked in £407.1M from a World Cup at home. These positive figures were "partly a result" of '15-16 being a tournament year for the men's national team, "which means extra marketing and sponsorship revenue, and partly because of the FA's continuing efforts to cut costs" -- job cuts and refinancing the debt on St. George's Park and Wembley Stadium helped save more than £25M (PA, 2/16). The BBC reported the FA said that it will be able to invest "more money than ever" into the grassroots game after record turnover. It claims it injected a record £125M into "every level" of the domestic game, up from £117M in '15 (BBC, 2/16). The AFP reported the "combined worth" of the Nike kit deal and the overseas TV rights for the FA Cup will be nearly £170M ($212.5M), but those agreements do not start until '18. All the encouraging financial figures "will not ease the pressure on the FA, under-fire for both the performance of the men's side and its own governance" (AFP, 2/16).

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  • China Slowing Foreign Acquisitions As Government Attempts To Curb 'Irrational' Deals

    Foreign property investment by Chinese companies "plunged" by 84% last month, as Beijing’s capital controls "choked off the flow of foreign acquisitions," according to Gabriel Wildau of the FINANCIAL TIMES. In an "effort to curb capital outflows and ease downward pressure" on the yuan, Chinese regulators have in recent months "imposed a series of restrictions on outbound dealmaking." The curbs "came after outbound investment in non-financial assets surged" by 44% in '16 to a record $170B. The restrictions "have had an effect." Overall, non-financial outbound investment fell 36% in January from a year earlier to 53B yuan ($7.8B), the commerce ministry said on Thursday, following a 39% drop in December. Four government agencies including the commerce ministry and the central bank said in December that they would apply tighter scrutiny to "irrational" outbound deals including real estate, hotels, movie theaters, entertainment assets and sports clubs. Last month, the Chinese FA "announced new rules to limit Chinese teams from acquiring high-priced foreign players" (FT, 2/16).

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  • FIA Denies Conflict Of Interest In Approving Sale Of F1 To Liberty Media

    The FIA "denied suggestions that it acted incorrectly" by approving the sale of the Formula 1 business to Liberty Media "while benefiting from its own" 1% stake in the business, according to Adam Cooper of MOTORSPORT. British MEP Anneliese Dodds, who has "regularly voiced her suspicions about anti-competitive practices in F1," recently put an "extra focus" on the sale, by successfully calling for approval for an investigation by the European Parliament, although it will not "necessarily go ahead." The FIA responded by "stressing that it still believes that there was no conflict of interest," distancing itself from the commercial agreements between the commercial rights holder and the teams, and pointing out that it "could only withhold permission for the sale if believed that the CRH could not fulfil its obligations it went ahead." In a statement referencing the sale, the FIA said that it "has been made aware of certain declarations and comments, clearly inaccurately informed or made maliciously, relating to this process" (MOTORSPORT, 2/16). AUTOSPORT's Lawrence Barretto reported the FIA "moved to distance itself from F1's unequal distribution of prize money." Also in its statement, the FIA said, "The prize money allocated in the Formula 1 world championship is done so in accordance with the bilateral agreements that exist between each team and the Commercial Rights Holder. The FIA has no knowledge of these agreements" (AUTOSPORT, 2/16).

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  • Finance Notes: Brazilian Sports Marketing Agency Go4it Invests In Strava

    Brazilian sports marketing agency Go4it invested in Strava, a social network for athletes. The network has a presence in 195 countries and a potential int'l market of 700 million athletes. Go4it's int'l sports assets include the Laver Cup tennis event and sports technology companies Keemotion and goFlow, as well as TAPPP and Greenfly, in which Go4it invested in November (Go4it).

    Int'l broadcaster Liberty Global reported its Q4 and full year results. Liberty revealed European operating income of $683M in Q4, up 22% from $558M in '15. Full year revenue for '16 was $2.48B, up 18% from $2.10B in '15 (ADVANCED TELEVISION, 2/16).

    Golf retailer Clubhouse Golf Ltd. secured a seven-figure investment from private equity firm Foresight Group. The Greater Manchester-based company will use the £4M ($5M) boost to strengthen brand relationships and explore new int'l commerce opportunities by developing its online platform at Clubhousegolf.co.uk. Following the deal, e-retailer Kitbag Founder Richard Styles was named non-exec chair to support the business’ online growth (BDAILY, 2/16).

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