Fifa and Netflix: sport’s next power couple?

{"text":[[{"start":null,"text":""}],[{"start":6.68,"text":"The World Series began last night, with two relative minnows facing off to be crowned best team in US baseball."}],[{"start":13.28,"text":"The Milwaukee Brewers, owned by credit trader turned sports team owner Mark Attanasio, are featuring in the World Series for the first time in 44 years. They are taking on the Tampa Bay Rays, owned by property developer Patrick Zalupski. The two rank 19th and 28th out of 30 teams respectively in payroll size, yet have outplayed deep-pocketed rivals that have an inherent edge in MLB’s capless system. Moneyball, after all, was a baseball story."}],[{"start":41.4,"text":"Attanasio also owns Norwich City in English football’s second tier, where the data-driven approach has not yet paid off. The Canaries sit 21st in the league table, a single point above the relegation zone. While Brighton and Brentford have successfully turned analytics into points, others are finding it far harder to reproduce the same results."}],[{"start":61.18,"text":"This week we explore why Fifa and Netflix could be a match made in media rights heaven. Plus, a chunky M&A deal in Spanish football. Do read on — Josh Noble, sports editor"}],[{"start":null,"text":""}],[{"start":73.12,"text":"Fifa looks to cash in on US momentum"}],[{"start":75.88,"text":"For all the drama behind the scenes, Fifa’s World Cup this summer was a commercial blockbuster. The tournament capped a four-year cycle in which football’s global governing body brought in more than $15bn of revenue, while the sport itself garnered record-smashing audiences in the US."}],[{"start":91.74,"text":"The iron is still hot, and Fifa wants to strike. This week it launched the rights tender process in the US for the 2030 (and potentially 2034) men’s World Cup."}],[{"start":102.56,"text":"These rights haven’t been out to tender in nearly 15 years, much to the benefit of Fox. Its sports channel carried English-language coverage in the US this summer, having paid less than $500mn. The US rights for Spanish coverage fetched $600mn."}],[{"start":116.94,"text":"Romy Gai, chief business officer at Fifa, wouldn’t be drawn on how high he thinks the rights will go for next time. On a call with journalists this week, he said they expected a big number of interested parties and that Fifa was hoping to bundle English and Spanish-language rights together."}],[{"start":131.36,"text":"The 2030 World Cup will be in Spain, Portugal and Morocco, making the timezone less favourable to the US audience, especially on the west coast. Fifa’s own budget projects increased TV income of $800mn over the next cycle, but that is a global figure and includes other tournaments, such as the women’s World Cup and the Club World Cup. Expect the increase in US rights alone to be significantly higher than that figure."}],[{"start":157.9,"text":"And what about potential bidders? After the commercial success Fox had this summer — thanks in part to the new mid-game “hydration breaks” — we can expect all the major networks and streamers to look at it closely."}],[{"start":169.44,"text":"But it presents an interesting opportunity for one in particular: Netflix. The streamer is in the midst of a major internal shake-up as it looks to reverse a sliding share price and get back to growth."}],[{"start":181.56,"text":"While it has been reluctant to dive headfirst into live sport, its gravitational pull and ability to deliver quick wins may prove irresistible. And tournaments, rather than annual competitions, fit the bill much better for Netflix, which wants brief, attention-grabbing tent-pole moments, not weekly appointment viewing."}],[{"start":200.4,"text":"The Netflix-Fifa relationship is slowly beginning to bear fruit, both in the US and ahead of 2030. Netflix has already secured the domestic rights in Spain for the next World Cup, and agreed to carry next year’s women’s World Cup for viewers in the US and Canada. So it will already be producing coverage of the tournament, and it will have experience delivering live football in America by then. Bagging the 2030 rights in the US looks like a natural next step."}],[{"start":226.32,"text":"There’s a catch though. The next World Cup is four years away. In the modern media business, that is a long, long time. Netflix needs to find some hits sooner than that."}],[{"start":237.04,"text":"Valencia CF: a bet on Spanish real estate"}],[{"start":null,"text":""}],[{"start":240.36,"text":"Valencia won both the Spanish league and the Uefa Cup in 2004, an achievement that propelled the team’s then head coach Rafa Benítez all the way to Liverpool."}],[{"start":250.8,"text":"But glory has eluded the club ever since, with form dropping off sharply in the past decade under the ownership of Singaporean palm-oil billionaire Peter Lim."}],[{"start":259.48,"text":"Now, perhaps, a new chapter is opening. On Friday, the club announced that a consortium of US investors, including the family offices of KKR co-founders George Roberts and Henry Kravis, had agreed to buy a 42 per cent stake valuing Valencia at €1.25bn. The group, which also includes the owners of the Denver Broncos NFL franchise, will inject €100mn of working capital too, helping the team buy players and improve the training ground."}],[{"start":290.44,"text":"Despite previous success, Valencia are well past being at European football’s top table. The team sits 19th in La Liga at the moment, while the club generated annual revenue of just €103.7mn in its most recent accounts. Brentford, which sits 30th in Deloitte’s rankings of clubs by revenue, brought in twice that amount, yet sold a minority stake last year that valued the Premier League team at £400mn."}],[{"start":315.88,"text":"Meanwhile Bayern Munich, ranked third in Deloitte’s list, sold a sliver of equity this week at a valuation of close to €4bn, despite revenue around nine times higher than Valencia’s."}],[{"start":328.08,"text":"So what explains that lofty valuation for the Spanish club? The most likely answer is real estate. The team is finally expected to move to a new stadium next summer, almost 20 years after work began on the 70,000-seater Nou Mestalla. The incoming consortium is gaining exposure to one of the newest and biggest football stadiums in Europe."}],[{"start":348.88,"text":"What’s more, the club’s current ground, the Mestalla, sits in the centre of Valencia. Once the team makes the switch, the old stadium will be knocked down for redevelopment. This is also a bet on prime downtown land in a city that hosts some of Spain’s biggest companies, including Mercadona supermarkets and CaixaBank."}],[{"start":368.2,"text":"This is the second big takeover deal in Spain this year, following Apollo’s €2.5bn purchase of Atlético Madrid. That too had a major real estate project attached, albeit one tied to a team that is almost guaranteed Champions League money each year. Valencia are currently flirting with relegation, not European qualification."}],[{"start":387.52,"text":"Instead the two deals reinforce the view that the most attractive investment opportunities in European football aren’t necessarily about football at all."}],[{"start":388.02,"text":"Final Whistle"}],[{"start":null,"text":""}],[{"start":397.6,"text":"It’s against the rules for a player to take their shirt off during a football match. It results in a yellow card. But what if an opponent takes it off for you? We nearly found out when Crystal Palace travelled to Besiktas for a Europa League tie this week."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":411.8,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792906415_9864.mp3"}