In this edition of Scoreboard, we discuss why Japanese companies are struggling with the activism of tennis star Naomi Osaka ahead of the Tokyo Olympics, explain why Formula One needs to go green to attract sponsors, analyse the viral marketing plan behind Hollywood actor Ryan Reynolds’s takeover of Wrexham football club, and more.
Will Japanese sponsors embrace Naomi Osaka’s athlete activism at the Tokyo Olympics?
Amid the cascading upheaval of 2020, many athletes have used their platforms to advocate for social issues. LeBron James. Marcus Rashford. The players of the Women’s National Basketball Association.
But few have had an impact as profound, and as globally resonant, as tennis ace Naomi Osaka.
The three-time Grand Slam champion made headlines around the world in September when she took the court at the US Open wearing face masks honouring black shooting victims, including Breonna Taylor.
Her support for the Black Lives Matter movement cemented a growing shift among largely western brands to embrace athlete activism.
But in her native Japan, Osaka, at age 23, is revolutionising what it means to be a high-paid celebrity. Her actions sparked emergency meetings among senior executives at two of her Japanese sponsors, people familiar with the discussions told the FT.
The issue, executives say, is whether the Japanese advertising industry — which tends to favour non-controversial personalities — can maintain its sense of control in a field increasingly influenced by westerners.
It’s worth your time reading about “the Naomi effect” in the FT Big Read here.
The timing for this marketing revolution couldn’t be worse for big Japanese corporates, which are already on tenterhooks about the fate of the postponed Tokyo 2020 Olympics.
This week, International Olympic Committee president Thomas Bach visited the city to check in on preparations for the Games, now scheduled for July 2021.
The IOC says it is committed to staging an Olympics “fit for a post-corona world next year”, but there is still reason for caution: this week Japan set a new daily record for Covid-19 cases.
That’s worrying news for big brands like Toyota and Panasonic offering financial backing to Tokyo 2020, which at $3.1bn is expected to be the most heavily sponsored sporting event ever. With next year’s ad budgets coming due, many firms want clarity — and soon — on whether the Games will go ahead.
Few firms have as much at stake as Dentsu, Japan’s largest advertising agency and most influential company — and the gatekeeper for dozens of brands signed up to market the Tokyo Games. That roster includes two of Osaka’s corporate partners, leading national airline All Nippon Airways and instant-noodle purveyor Nissin Foods.
Even before the pandemic, and the galvanising influence of Osaka, Dentsu was under fire for turning the screws on Japanese brands to sponsor the Games. Now, the temperature is only getting hotter.
Formula One: gas-guzzler or eco-warrior?
Lewis Hamilton, the seven-time Formula One world champion, is an unlikely eco-warrior.
Flying around the globe in private jets to race fast cars racks up a huge carbon footprint. Still, the vegan driver’s green message is resonating within F1, which wants to clean up its act.
This is not an entirely altruistic effort. Shedding the gas-guzzling image could help F1 to win vital sponsorship money in a market hit by the pandemic-induced economic downturn.
Increasing sponsorship was key to Liberty Media’s $8bn acquisition of F1 in 2017. This week, however, at his final investor conference as F1 chief executive, Chase Carey said sponsorship had “lagged” expectations, still at 15 per cent of $2bn of annual revenues in 2019.
Meanwhile, Formula E, an electric car racing series founded by Spanish businessman Alejandro Agag, has successfully wooed sponsors away from F1.
Next year, Agag plans to launch Extreme E, an off-road competition for big cars to race in the Amazon and other parts of the world hard hit by humans’ environmental carelessness. Hamilton won’t race, but he will enter a team.
Stefano Domenicali, the former Ferrari racing boss recruited from Lamborghini to succeed Carey as chief executive in January, will be responsible for F1’s plan to go carbon neutral by 2030. That target doesn’t include the impact of fans attending races, which takes F1’s emissions up to 1.9m tonnes.
The racing series spits out 256,000 tonnes of carbon dioxide in a normal year. Complicating Domenicali’s task are F1’s plans to expand its calendar to a record 23 races next season. F1 plans to add more in the coming years.
He must also work out the future of the sport’s engines following Honda’s decision to quit at the end of 2021. The Japanese automaker decided to redeploy resources to electric technology. Convincing sponsors that F1 takes the environment seriously is tough as the sport has no plans to make the switch to electric engines yet.
“The single biggest threat that Formula One will be facing in the next few years will be the relevance to society, not just the fans but the people who finance the sport,” said Cyril Abiteboul, managing director of Renault Sport.
“That in my opinion is the main single biggest item on Stefano’s agenda when he comes.”
For further analysis, read the FT’s deep dive into F1’s business dilemmas here.
Ryan Reynolds’s viral content play at Wrexham football club
“Nothing says I’m thinking about you and your horse, as much as Ifor Williams trailers,” intoned Ryan Reynolds this week in what starts as a surprising advert.
Then the Deadpool actor reveals he is promoting the little-known Welsh company that makes farmyard transportation as it is the team sponsor of Wrexham football club.
And Reynolds and Rob McElhenney, the creator of US sitcom It’s Always Sunny In Philadelphia had just won approval for their proposed acquisition of the Welsh side that plays in the fifth division of English football.
The unlikely narrative was swallowed up by global media. Wrexham supporters told BBC Radio they expect to fly up the divisions as a result of the £2m the Hollywood pair have pledged to invest into the club. And the new owners’ rib-tickling video to announce the takeover went viral — as they surely intended.
Plenty of US investors have flooded into football in recent years, attracted by the huge worldwide interest in the sport and its multibillion-dollar broadcasting deals.
These huge TV contracts rarely trickle down to Wrexham’s level. When Texas millionaire Kent Teague poured his fortune into lower league side Leyton Orient two years ago, he told the FT that he fully expected to lose money, but that the investment was mainly for him to have fun.
By contrast, Reynolds and McElhenney’s takeover, brokered by New York-based Inner Circle Sports, appears to be a serious attempt to make money.
The pair are tapping into the insatiable appetite for media content in a different way. The men have begun filming a documentary about their trip into football club ownership.
This follows the likes of Tottenham Hotspur, Leeds United and Sunderland, which have been the focus of major behind-the-scenes shows in recent years. Apple has backed Ted Lasso, a sitcom about a hapless American coach at a fictional English football club — a show inspired by a promotional video that went viral.
As Bloomberg’s Alex Webb explains, a Netflix-style series on Wrexham could make enough cash for the new owners to recoup their investment, while ensuring the club turns a tidy profit. The free media earned by the takeover is further brand building for Reynolds and McElhenney, a boost for whatever comedic project they move on to next.
Perhaps the deal is a win-win for all concerned. Yet such a plan puts the cart before the horse, the show ahead of the football. If the team doesn’t achieve as much success on the pitch as the Wrexham documentary does off it, fans will not see the funny side.
The National Basketball Association’s draft finally took place after a five-month delay because of coronavirus. According to Forbes, top pick Anthony Edwards is set to earn $43m over four years with the Minnesota Timberwolves, which is owned by Glen Taylor, the billionaire owner of the Star Tribune newspaper.
Spain’s La Liga revealed the spending limits it enforces on the league’s teams was cut by €600m this season in response to losses caused by the pandemic. The changes help to explain the fire sale of players at clubs such as FC Barcelona, which moved this summer to offload veterans such as Luis Suárez and Ivan Rakitic.
Fifa, football’s global governing body, proposed female players get at least 14 weeks of maternity leave, during which they should receive at least 66 per cent of contracted salaries, as part of new measures to support the women’s game.
Rugby union will take almost half of the £300m bailout package put proposed by the UK government for English sports, with the Rugby Football Union, the governing body, and Premiership Rugby clubs particularly hard hit by the pandemic. Horseracing will receive £40m.
Pep Guardiola signed a new two-year contract at Manchester City, committing him to the English Premier League club until 2023. The Catalan is seeking City’s first Champions League trophy, after it overturned a ban from Europe’s most prestigious club competition in July.
UBS has started a financial advice unit to look after the needs of athletes and entertainers, appointing former National Football League player Adewale Ogunleye to lead the business. He joined the Swiss bank last year and has an MBA from George Washington University.
Theo Epstein resigned as president of the Chicago Cubs, having steered the Major League Baseball team to win the World Series in 2016, breaking a drought going back to 1908. He previously won acclaim for steering the Boston Red Sox to the World Series in 2004 and 2007 through the “Moneyball” techniques made famous by Billy Beane at the Oakland Athletics.
The NBA Draft took place Wednesday, which like all sporting events this year was refashioned in the age of coronavirus. That meant no stadium for the spectacle, and more consequentially, no venue for chronically depressed New York Knicks fans to boo literally whoever the front office selected. Here, a compilation of some of their most recent senseless outrage, including against eventual franchise star Kristaps Porzingis. Ironically, the team might have pulled off some smart picks for once.
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.