In this edition of Scoreboard, we explain why a deadlock in bailout talks for lower-league clubs could cost the English Premier League more than just cash, how Liverpool FC and Boston Red Sox owner John Henry is flexing his own Moneyball muscle, what an uptick in women’s football transfer activity means for pandemic-era trends, and more.
Impasse: England’s football leagues toil over bailout
English football is in a bind. Failing to resolve the crisis could cost more than just money.
The pandemic was an unwelcome catalyst for change. Every month without fans costs clubs £100m, threatening the existence of smaller clubs.
But many of the problems are structural. The Premier League’s riches have distorted the game. Its broadcast revenues barely trickle down to the English Football League, which runs the three divisions below the top flight, widening the gulf between them.
Little wonder EFL chairman Rick Parry wants to stop teams in the Championship — the division below the Premiership — from irresponsibly chasing promotion by spending more on wages than what they make in revenues.
The problem for Parry, who happened to play a leading role in the formation of the Premier League in 1992, is that his plan leaked a week ago, causing immediate uproar.
Under Project Big Picture, the Premier League would share 25 per cent of its annual revenues with the EFL, ending its reliance on gate receipts, with £250m to be advanced immediately.
Except the Premier League didn’t know about the plan, which was the product of separate talks between Parry and England’s two most successful clubs: Liverpool and Manchester United.
It was soon dubbed Project Power Grab because of the quid pro quo that would have handed special powers to an elite group of six also consisting of Arsenal, Chelsea, Manchester City and Tottenham Hotspur, sparking fears of a “closed shop”.
United and Liverpool quickly backtracked as Premier League clubs “unanimously” rejected the proposal and offered a £50m package to clubs in Leagues One and Two. The EFL rejected the proposal because it excluded the Championship.
What next? Gary Neville, the Sky pundit, co-owner of League Two side Salford City and former Manchester United defender, doesn’t think football can reform itself.
He’s backing another proposal that would introduce an independent regulator and a levy on the Premier League to redistribute its billions.
Oliver Dowden, the culture secretary, warned earlier this week that a “closed shop” approach could force the government to bring forward a planned fan-led review of football governance.
The government’s message is clear: fix this crisis or we’ll fix it for you.
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The mastermind behind Fenway Sports Group
It’s a deal that, if struck, would jolt both sides of the Atlantic: John Henry, owner of Liverpool FC and the Boston Red Sox, is in talks with RedBall Acquisition Corp about taking the holding company that owns the clubs public.
The deal would be structured as a reverse merger of Henry’s Fenway Sports Group with a special purpose acquisition company helmed by Billy Beane and former Goldman Sachs banker Gerry Cardinale.
The potential listing might exacerbate concerns about American influence in Premier League governance, as well as set an unusual precedent for US sports owners, very few of whom list top-flight franchises on the open markets.
Why now? The search for an answer begins in the book and subsequent film Moneyball, which made Beane a household name.
In one pivotal scene Henry pushes Beane, an executive at baseball’s Oakland A’s, to move to the Red Sox but is rebuffed.
Beane may be the most famous quant in sports, but Henry earned his bona fides in crunching numbers, too: he made his fortune of $2.8bn, according to Forbes, pioneering data analytics in commodities futures at a self-started firm.
As a club owner, he ended an 86-year drought of World Series trophies at the Red Sox, and a 30-year Premiership drought at Liverpool.
Friends and associates tell Scoreboard he’s a math whizz who, after decades of fame stewarding teams to championships, is flexing his financial muscles once again.
The talks with RedBall value FSG at $8bn, according to people familiar with the matter. While the firm includes other assets, such as a regional sports network and a Nascar team, it reflects a significant appreciation of the prices Henry paid for the Red Sox and Liverpool: $660m and £300m, respectively.
“He’s a financial guy. If he can get an outside financial return, he will”, said one adviser who is close to Henry. But assuming a deal between RedBall and FSG is reached, it isn’t clear if Major League Baseball, which historically keeps ownership closely guarded, would approve a listing of the Red Sox.
Case in point: the belaboured efforts by once-disgraced hedge fund titan Steve Cohen to buy the New York Mets is now being vetted by the League.
That makes a listing for Liverpool more likely. But regardless of the outcome of the talks, one thing is certain: Henry has taken two prestige clubs, returned them to winning form, and is actively following the money.
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Women’s football: where marquee signings aren’t big money
An influx of US World Cup winners should bode well for women’s football in England.
Alex Morgan joined Tottenham Hotspur, Manchester United signed Tobin Heath and Christen Press while local rivals Manchester City bought Rose Lavelle.
And if it felt like there was a flurry of activity in the recent — and extended — summer transfer window, that’s because there was, according to Fifa’s latest report on the transfer market.
The global football governing body’s data showed that the number of international transfers in the women’s game rose by more than a third to 552 players and the value of transfers jumped by 80 per cent to $821,000.
At less than a million bucks, that’s a pittance next to the $3.9bn spent on the men.
Still, Fifa said the women’s game seems “less affected” by the coronavirus pandemic than the men’s, where total value spent fell by 30 per cent.
That narrative doesn’t extend far beyond the transfer market.
FifPro, the players’ union, has warned that the pandemic poses an “almost existential threat” to the women’s game, which risks losing momentum built up during the 2019 World Cup and deals such as Barclays’ £10m sponsorship of the Women’s Super League in England.
As FifPro pointed out, women in football already put up with “less established professional leagues, low salaries, narrower scope of opportunities, uneven sponsorship deals and less corporate investment.”
Fifa saved the crucial detail for the end of its report. Only 18 female players who were signed up were subject to a fee, a grand increase of two on the prior year period.
When a male player runs down his contract, he can often negotiate a higher salary in recognition of the fact his new club doesn’t have to splash out on a fee. The reality for women is that short-term contracts are common practice, according to FifPro, and that’s a big reason for the exiguous transfer fees.
Moreover, the exodus of top American talent could bode poorly for the US National Women’s Soccer League. Owners and officials say the burgeoning league’s top asset is its concentration of elite talent, a fact that helped the League sell new sponsorships and reach ratings records during its abridged summer season this year.
Alex Morgan and her World Cup teammates are household names in the US but without them playing domestically it could diminish interest — and sponsorship — in the sport.
There is one thing all stakeholders agree on: pay for women footballers needs to improve. Project Big Picture, the collapsed plans for English football reforms, called for an independent women’s professional league to be developed and, more importantly, funded.
But the capital just isn’t there yet.
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CVC Capital Partners and Advent International, the private equity firms, emerged victorious in the bidding to take a stake in Italy’s Serie A. The duo, in conjunction with Italian investment fund Fondo FSI, beat late competition from US investment firm Fortress to pave the way for a €1.6bn deal for a 10 per cent stake in an entity that manages the league’s broadcasting rights.
The organiser of the first ever Vietnam Grand Prix has cancelled this year’s race due to the pandemic, in a blow to Formula One and owner Liberty Media, the US group controlled by billionaire John Malone, although it was not part of their revised schedule for 2020.
Alan Kestenbaum, who owns a minority stake in the Atlanta Falcons, a team in the National Football League, is looking to raise $200m for a new special purpose acquisition company that will look to make acquisitions in sports, media and entertainment.
Dubbed the world’s poshest bookies, Fitzdares Club in London’s Mayfair is bucking the trend to bet online in the £15bn UK gambling market. “Fewer clients. More care, and more knowledgeable intervention,” CEO William Woodhams told the FT.
“I truly think sport can move the world,” fashion designer Stéphane Ashpool told the FT. His colourful community basketball courts stand out in major cities across the world, whether in Beijing, Paris or Mexico City. Take a look.
Daryl Morey is leaving the Houston Rockets after 13 years as general manager of the NBA team. Though Morey never brought a championship to Houston, he may be best remembered for a tweet — later deleted — in support of pro-democracy protesters in Hong Kong that prompted China to cut ties with the Rockets in 2019.
Gerry Cardinale, the founder of RedBird Capital Partners, has hired Andrew Gordon, former Goldman Sachs partner, to lead the investment firm’s office in Los Angeles.
British Gymnastics chief executive Jane Allen is stepping down after an “extremely difficult” final few months in the role, during which the organisation has been criticised over its handling of an abuse scandal.
David Baldwin is stepping down as chief executive of the English Football League just four months after taking up the job. The League insisted the decision was not linked to the uproar surrounding chairman Rick Parry’s Project Big Picture proposal.
LeBron James won his fourth NBA championship and fourth NBA Finals MVP trophy this week after his Los Angeles Lakers defeated the Miami Heat. But his winning may not end there: if a deal to take Fenway Sports Group public goes through, King James would stand to gain as a minority holder in Liverpool. How much his stake will appreciate isn’t yet clear, but he answers other questions in this 2012 Q&A with young Reds.
Scoreboard is written by Samuel Agini, Murad Ahmed and Arash Massoudi in London, Sara Germano, James Fontanella-Khan, and Anna Nicolaou in New York, with contributions from the team that produce the Due Diligence newsletter, the FT’s global network of correspondents and data visualisation team.