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Year End

Year In Review: Media, Club Investment On The Rise In Europe

In Europe, the media landscape shifted in '17 amid proposed takeovers and the impending surge of digital broadcast coverage of the continent's largest competitions. Money was also a common theme throughout the year at the club level, as top-flight sides in addition to former European champions garnered a rash of investment from financiers around the globe. But despite the positive attention received as the result of large TV rights deals, new competitions and increased investment, the sports world was not void of wrongdoings, as England's national women's football team manager was sacked following allegations of racism and Bundesliga side Borussia Dortmund's bus was attacked by an assailant allegedly seeking monetary gain. With the money motif encompassing '17, it may only be a sign of things to come in '18.

MEDIA PLURALITY: A proposed blockbuster media deal elicited widespread coverage and attention throughout '17. Government regulators endeavored to reach an outcome that would satisfy proponents of 21st Century Fox's £11.7B ($15.7B) bid to take over the 61% of Sky that it does not currently own while also considering the competitive implications of such an acquisition. The Rupert Murdoch-owned company in March formally notified the European Commission of its intentions. In '11, Fox made a similar play for Sky but that deal was rejected on competition grounds, an assessment that campaigners at the Media Reform Coalition and activist network Avaaz argued should still apply. However, in a ruling, the EC said, "Based on the results of its market investigation, the Commission concluded that the proposed transaction would raise no competition concerns. Fox and Sky are mainly active in different markets in Austria, Germany, Ireland, Italy and the UK. They compete with each other only to a limited extent." The deal must still be approved by Competition & Markets Authority, which will prolong a final decision into '18. In September, U.K. Culture Secretary Karen Bradley called for a six-month investigation by the CMA into the deal's effect on media plurality as well as the Murdoch family's commitment to broadcasting standards. Prior to Bradley's decision, 21st Century Fox CEO James Murdoch said, "We remain confident our transaction will be approved."

SAMPSON SACKED: England women's national football team Manager Mark Sampson was sacked in September following a months-long saga during which he was accused of inappropriate behavior and discrimination, with the FA allegedly attempting to cover up his actions. Following England's disappointing showing at Women's Euro 2017, it was revealed that the FA paid £40,000 to striker Eni Aluko to resolve a complaint involving bullying and harassment. The FA conducted an independent review which did not yield evidence upholding Aluko's claims. However, in light of the settlement revelation, a parliamentary inquiry was staged during which senior FA execs were required to respond to allegations such as the one made by the Professional Footballers' Association that the review was "a sham which was not designed to establish the truth but intended to protect Mark Sampson." During the ensuing investigation, England midfielder Drew Spence came forward with similar claims of racism against Sampson, who was subsequently fired amid further allegations dating back to his days as a club coach at Bristol Academy. In the aftermath of the scandal, U.K. Sports Minister Tracey Crouch warned FA Chair Greg Clarke and CEO Martin Glenn that she would withdraw funding if the governing body failed to take measures to ensure such public embarrassment does not happen again. The FA has since announced plans to create a senior position to address diversity concerns.

CLUB TAKEOVERS: European clubs saw a raft of takeovers in '17 as ownership changed hands at Serie A side AC Milan, Premier League club Southampton and League One's Portsmouth, among others, with an expected sale of EPL outfit Newcastle on the horizon. In April, seven-time European champion AC Milan was sold to a Chinese-led consortium headed by Li Yonghong for €740M. However, several of Li's investors have since reneged on the deal, prompting him to seek new partners to lessen his financial burden and avoid defaulting on a €300M loan he received from U.S. hedge fund Elliott Management, which must be repaid by October. In the U.K., an 80% stake in Southampton was purchased by real estate magnate Gao Jisheng and former Disney CEO Michael Eisner acquired a majority share in Portsmouth for £6M. Jisheng's purchase, which was a year in the making, brought the total number of European clubs under Chinese ownership to 28, six of which are based in Great Britain. Eisner received overwhelming support from the Pompey Supporters' Trust during his bid to obtain Portsmouth, and in return, promised to protect the club's name and colors while preventing relocation anywhere more than 15 miles from the city's center. Deals are not expected to wane in '18, as financier Amanda Staveley has offered £300M for Mike Ashley's controlling interest in Newcastle, with both sides hoping for a deal to be completed before the close of January's transfer window.

EPL RIGHTS: The U.K.'s "Big Six" -- ManU, Liverpool, Arsenal, Chelsea, Tottenham and Man City -- were outvoted by the EPL's smaller clubs in October as they sought a larger share of overseas TV revenue, which would more accurately reflect what they believe to be their contribution to the league's popularity. The clubs that opposed the proposal argued that competitive balance, not global brands, was the reason behind the league's acclaim. Of the current revenue-sharing agreement, football finance expert Rob Wilson of Sheffield Hallam University said, "All the data we have on European leagues has the Premier League coming out top in terms of competitive balance. It is not an equal distribution system. but it is a relatively equal one. It means the smaller clubs can invest in the transfer market and then can compete against the top six and put a good game on. There is a spectacle there and that is what the broadcasting companies pay for. If I am brutal, the top clubs have forgotten about that." The popularity of the league will be championed during upcoming TV rights negotiations. In December, the Premier League released a new tender document to interested bidders for the three-year cycle from '19-22, which will include 200 televised games, as it seeks to increase its current £5.14B ($6.87B) deal. While traditional broadcasters such as Sky and BT will attempt to remain in the mix, new digital entrants such as Amazon and Twitter could drive up the cost of the rights during bargaining in '18.

T20 TRIUMPH: On the heels of the success of Australia's Big Bash League, the England & Wales Cricket Board approved an eight-team, city-based Twenty20 competition that will begin in '20. Initial resistance from county cricket clubs broke down following ECB's promise that each club will receive a £1.3M ($1.74M) annual share of the tournament's revenue for the first four years. The new competition will involve eight new teams that will operate independently of their county clubs. In July, the ECB agreed to a £1.1B ($1.47B) broadcast deal with Sky and BBC. The broadcasters will be involved in the decision-making process to determine where the eight teams competing in the T20 tournament will be based. ECB Chair Colin Graves: "Each of our members will benefit and, critically, so will the whole game. We can now move on with building an exciting new competition for a new audience to complement our existing competitions."

BUS BOMBING: A bus carrying Borussia Dortmund was damaged by three explosions en route to a Champions League match in April, resulting in the hospitalization of center-back Marc Batra. The match against Ligue 1 side Monaco was postponed just one day, with heightened security efforts in place, despite unrest at such hasty rescheduling by UEFA. Following the attack, club CEO Hans-Joachim Watzke stated that the team contemplated withdrawing from the tournament. Watzke: "I briefly considered whether we should not just leave the competition completely. But then it would have been a victory for the perpetrators." After an investigation, it was alleged that the attack was orchestrated by a German man with dual Russian citizenship who planned to profit from a fall in the team's share price following the bombing. He is currently facing 28 counts of attempted murder and causing an explosion.

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