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Volume 7 No. 149

Leaders Sport Business Summit

Andrea Radrizzani said that the League Championship's model should be reconsidered.

League Championship side Leeds United Owner Andrea Radrizzani called for a Premier League Two, saying that the Championship "does not make enough TV money for the division to be sustainable, which condemns its clubs to repeated crisis and takeovers," according to David Conn of the London GUARDIAN. The Championship is "blighted," he said, by English Football League money "being too little and shared with clubs in Leagues One and Two," and the "huge gap" with clubs relegated from the Premier League benefiting from multimillion-pound parachute payments. Radrizzani, who took over Leeds in Jan. '17 and claims to have received and turned down takeover offers for the club, said that fellow chairs, who he did not identify, "agree a reconstruction is needed." He said at the Leaders Sport Business Summit in London, "I think the model of the Championship should be reconsidered, because the turnover of owners is not really a healthy system. It is not sustainable to stay in the Championship." Deloitte's analysis of Championship clubs' accounts for '16-17 found 19 out of 24 "made losses." Radrizzani also argued "a big, popular club like Leeds suffers in the Championship." He said, "We should concede that a club like Leeds that is watched by 500,00 to 600,000 people live on Sky is getting from the league only £2M ($2.65M) to £2.5M ($3.3M) [TV income] and are actually penalized, because we are more than 20 times on TV. Maybe we should reconsider the system because it doesn't work" (GUARDIAN, 10/10). The BBC's Richard Conway reported Radrizzani said that he is yet to discuss the idea of a "Premier League 2" with other owners of Championship clubs, but "believes there is a consensus for change." He said, "I think the other chairmen would love to open a conversation. The time is getting ready to consider what to do to move forward so we don't have a crisis every two years when a club go bankrupt or changes ownership every other year." Radrizzani said that he has received multiple takeover approaches for the club, but values it at "double what I invested in it." He added that he was not interested in selling and wants Leeds to become one of the "top-eight brands in the Premier League" (BBC, 10/10). The London TELEGRAPH reported in a statement, an EFL spokesperson said that the Championship "remains one of the most competitive and unpredictable divisions in world football," with attendances and revenues that "beat many top divisions across Europe." The representative also pointed out that the clubs promoted to the Premier League in '16-17 "all stayed up last season, while those relegated did not bounce back" (TELEGRAPH, 10/11).

Europe’s biggest football teams should not be forced to join the "great unwashed," according to the Chelsea Chair Bruce Buck, who said that U.S. authorities' attempts at "dumbing down" sport had a detrimental effect. Buck’s comments, on Thursday at the Leaders Sport Business Summit at Stamford Bridge in London, come amid efforts by UEFA to scrutinize options as to how to make football a more level playing field.

Buck said the 10 or 12 clubs that top European football now are likely to be the same ones that will be at the top for the near future. “The dream in England is if you support a conference team that someday you will win the Premier League," he said. "I think financial fair play has pluses and minuses, and one of the minuses is that the dream is now over. That’s not possible with financial fair play. What Chelsea did in 2003, what Man City did five years later, that is virtually impossible to do under financial fair play. In terms of competitive balance, which is always viewed in a negative way. I personally believe for the development of football, marquee clubs and marquee players are important."

Buck added that marquee players were important in developing a large fan base and attracting young players and helped big clubs put money into good causes. Buck: "I am not as a general proposition in favor of dumbing down the large clubs to make all clubs the great unwashed." Buck backed his argument by saying that moves in the U.S. to make teams compete on a more level playing field had hurt the sports. "They've done that in the U.S. over the last 20 years, and I think it's been to the detriment, particularly of baseball," he said. "I don’t think we should assume that because every club is not equal therefore it's bad."

John Reynolds is a writer in London.

League Championship side Leeds United Owner Andrea Radrizzani said that Major League Soccer has the opportunity to be one of the biggest and most popular football leagues in the world, but only if it ditches the salary cap. Radrizzani, who is also chair and founder of Eleven Sports, said, "I believe the MLS could be the biggest opportunity." The Italian, speaking at the Leaders Sport Business Summit in London, pointed to the high standard of facilities and the keen sporting culture in the U.S. but said the status of MLS was being undermined by the quality of players.

"The only thing that could close the gap is bringing in the best players," he said. He also said the MLS should scrap its salary cap, echoing calls previously made by former Juventus player Andrea Pirlo, who also played for NYCFC. Pirlo has also called for the MLS to end its restrictions on foreign players if its wants to keep pace with the Chinese Super League’s riches.

Radrizzani was on a panel with Megha Parekh, SVP & chief legal officer of the NFL Jacksonville Jaguars. The Jaguars are owned by Shahid Khan, who also owns EPL side Fulham. Parekh compared running Fulham to the Jaguars, with the former being more challenging.

Parekh: "I think that it makes the business planning more challenging when you are looking at football because there is the X factor of how will regulation affect the overall P&L? That said, we approach it as best we can to be analytical. To predict what is the probability of being relegated." She said that Khan’s execs devised business plans for whether Fulham would stay in the Premier League or be relegated.

John Reynolds is a writer in London.

Everton CFO Sasha Ryazantsev said that the side can "learn from the mistakes of rivals in building a new stadium to help bridge the gap to the leading Premier League teams," according to Christian Radnedge of REUTERS. The side last year "formally agreed a 200-year land lease at the proposed Bramley Moore Dock site." Some top-flight teams have "experienced difficulty moving to new homes." West Ham United has "endured crowd trouble and disruption" since its switch to the London Stadium in '16 and Tottenham had to delay its stadium move due to "safety issues." Ryazantsev said that Everton will learn from its rivals. He said at the Leaders Sport Busines Summer, "There's been quite a few stadium moves and some of them arguably made some mistakes and I hope we can learn from those mistakes. Sometimes it's good to be a trailblazer but when you're not first, you can learn from others' mistakes. It is a very long-term project and it will take several years before we move." He added that it was "not an easy decision to leave Goodison Park," which is one kilometer away from Liverpool, but that "ultimately it would have benefits on and off the pitch." He said, "We see it as an opportunity to close the gap on the top six and the stadium itself will create a huge amount of new life" (REUTERS, 10/11).

Leaders is moving the Sport Business Summit to Twickenham Stadium in '19. Hosted at Chelsea's Stamford Bridge Stadium since '08, the summit is relocating to accommodate the continuous growth in delegates from around the world and provide a more immersive environment for sponsors and exhibitors. The announcement was made as this year's event drew to a conclusion. The event attracts more than 2,000 speakers from over 50 countries around the world (Leaders).

From training with MLB pitchers to "bone-jangling racing" on board a Formula 1 car, technology's potential to revolutionize sport "was the hot topic as industry leaders met in London this week" at the Leaders Sport Business Summit, according to the AFP. VR Expert Michael Ludden said, "It's going to disrupt all aspects of sport that you can imagine." Ludden added that virtual and augmented reality -- together known as mixed reality -- will "transform sport for professionals, amateurs and spectators." He said, "American footballers are already using VR to better train their minds, read the field," allowing quarterbacks to "hone their skills without risking injury." Ludden: "You can train with a real baseball bat that's tracked in virtual reality against real pitchers using data from those pitchers ... giving you advanced analytics on how the swing is" (AFP, 10/11).

A quarter of a brand’s sponsorship budget should remain flexible so as to allow funding for a “super idea” which has not been budgeted, Diageo's sponsorship chief advised. Diageo Head of Sponsorship Rory Sheridan said, "What we have found out in the past obviously is when you plan things nice and officially early, the one super idea comes at the end when [there is] no money left. So we have actively tried to incorporate [planned reactive] into our plans. We know these opportunities are going to come. They are going to come externally, internally, from consumers, trade partners. And it’s [important] to be flexible enough to have budget available.”

Sheridan said most of these ad hoc sponsorship ideas were digital or social ideas. He was speaking Thursday on the final panel session at the Leaders Sports Business Summit at Stamford Bridge in London. Sheridan was joined on the panel by Marcus Kikisch, head of brand communications for Hyundai Europe, and Scott Kegley, executive director of digital media and innovation for the NFL Minnesota Vikings.

The panel were asked about how they discovered and chose sponsorship properties. Kikisch said: “It’s always good to use an agency, of course -- to use a third party. But, of course, internally a lot of stakeholders are having a say and having their own meetings. Therefore, you definitely need a kind of neutral partner from the outside." Sheridan said, “We obviously value lots of opinions, but we tend to process the clear majority of proposals and considerations directly ourselves. Only we know what we know and what we want. We do get a lot of proposals.“

John Reynolds is a writer in London.

UEFA made a “big mistake” by offering significant more prize money to teams competing in the Champions League than those in the Europa League, according to Turkish football club Fernerbahce President Ali Koc. He said, "I think UEFA is making a big mistake by putting such a big difference between Champions League rewards and Europa League. It’s going to get to a stage when it’s not exciting to watch the Champions League until the quarterfinals. To get a club like Fernerbahce with a €150M ($173.6M) economy a year to close the gap -- no matter how we manage the brand, the club, have success locally -- it’s going to be very hard to catch because the broadcasting rights aren’t there."

Koc was speaking on a panel, called "Team Ownership: Growing Your Club at Home and Abroad," on Thursday at the Leaders Sport Business Summit in London. There is a disparity between the two European club competitions in terms of prize money. The winner of the Champions League walks away with a maximum of €57.2M ($66M), compared to the Europa League champion's prize of €15.71M ($18.9M). A group stage win in the Europa League will give a team €360,000 ($417,000), while a draw will get €120,000 ($138,600) and taking part gets a club €2.6M ($3M). Winning a group game in the Champions League is worth a €1.5M ($1.74M) bonus and a draw earns a club €500,000 ($578,000), while just competing in the group stage earns €12.7M ($14.7M).

Also on the panel was Alejandro Irarragorri, the Mexican businessman who has a majority share in Liga MX side Santos Laguna. Irarragorri reiterated a call for the formation of a North American league, comprising clubs from the U.S., Canada and Europe. He said, "That would put us in place to compete with Europe. That is a game changer for us." The three nations are hoping to forge ties after the success of their bid for the 2026 World Cup. The three countries will host the event after beating Morocco with their joint bid earlier in the year. It will be the first time the World Cup splits hosting duties across three nations.

John Reynolds is a writer in London.