THE MAGAZINE OF SPORTS MARKET INTELLIGENCE ISSUE 17 | WINTER 2018

BURST AMBITIONS

PLUS EUROPEAN CHAMPIONSHIPS REVIEW • JEFF FOULSER • WORLD CUP AUDIENCES www.sportcal.com WINTER 2018 Sportcal Insight 3

Contents

The Big 10 04 The top sporting deals, controversies and moments of the year (part 2)

World Cup TV audiences 06 Why traditional TV viewing is not dead yet

European Championships 08 An innovative (and successful) addition to the multi-sport calendar

Jeff Foulser 12 The Sunset+Vine chairman on wins and losses in the production game

Cover feature 18 Analysing MP & Silva’s financial implosion, the rights surrendered and the lessons to be learned from its plight

Numbers Game 24 A snapshot of Sportcal Media research and insight

Index 29 Key information on the major The Absent Agency events and summits on the horizon There will be a large, noticeable A Sportel Monaco veteran remarked void in the Grimaldi Forum as the to me on the sidelines of last year’s media rights industry makes it annual jaunt convention that “it’s a bit boring this to the Principality for the 2018 Sportel year… there’s no gossip, nothing really Monaco Convention in late October. going on.” MP & Silva’s collapse has been I’m sure his thirst for gossip will be described in newspapers as “the biggest suitably quenched this year. fail in sports marketing history.” While MP & Silva’s bubble may have The demise has certainly been quick. burst, linear TV’s remains very much afloat, There’d been talk in the market that the despite its much predicted death. CAS/DAS in Sports Law agency and its Chinese owners had been The Fifa World Cup in Russia proved in dispute for much of 2018, principally that, for big-ticket sport, there’s still over the levels of investment, but it wasn’t nothing better than the big screen, and the until July that its troubles were publicised. numbers prove it. A couple of high-profile rights losses Elsewhere in this market-focused edition accentuated the problems and once word of Sportcal Insight, Jeff Foulser, chairman was out, the domino effect ensued as of Sunset+Vine – the production firm

- 200 lucrative contract after contract was torn seemingly intrinsically linked with sailing 120 up amid missed instalment payments and in recent years – talks us through plans to - - - key executives exited. diversify the client base. - MP & Silva’s plight is expertly Foulser has spent decades in the media Jonathan Rest 3300 + deciphered by Martin Ross in our cover industry, and says to survive you need to Editor story, posing the question of where does have a “strong chin.” One of a kind in Siterland Launched in 2017 Sportcal Insight the downfall of one of the industry’s heavy For MP & Silva, it seems the knockout hitters leave the sector’s balance of power? blow was fatal. [email protected]

TALK DIRECT 4 News The Big 10 of 2018 www.sportcal.com WINTER 2018 Sportcal Insight 5

NORWAY — GERMANY — Norwegian administrator Anders Besseberg stepped down as president of Allianz, the German insurance giant, the International Biathlon Union amid a will become one of the International prosecutors’ probe in Austria and his home Olympic Committee’s elite TOP sponsors country into allegations of doping, fraud and in an eight-year deal starting in 2021 that corruption involving Russian athletes and also includes an extension of its global officials. Nicole Resch, the IBU’s secretary partnership with the International Paralympic general, was also provisionally suspended by Committee. Allianz will cover the IOC and THE BIG the IBU’s executive board. local organising committees of the Olympic Games, with the aim of expanding this to national Olympic committees, their teams OF 2018 and athletes.

MALAYSIA —

CANADA The Asian Football Confederation — accepted an offer from Wuhan DDMC Canada will host matches at a men’s Fifa Culture Co., the Chinese sports and World Cup for the first time in 2026. The entertainment firm, and Fortis Sports, country was part of a three-way bid along a special purpose vehicle set up by with USA and Mexico that defeated Morocco former Team Marketing senior executives by 134 votes to 65. It will be the first Patrick Murphy and David Tyler, for its tournament to feature 48 teams. Canada and commercial rights over an eight-year Mexico will stage 10 games each, with 60 period. The deal runs from 2021 to 2028 10 and includes rights to the Asian Cup held in USA. and AFC Champions League, the top national teams and clubs competitions, respectively.

USA — Discovery, the US-based media giant that owns Eurosport, agreed a blockbuster 12-year deal to acquire the international SAUDI ARABIA rights for golf’s PGA Tour, in a $2-billion — agreement set to kick in next year. The A number of sports organisations deal covers TV and online rights and the and broadcasters joined BeIN development of an OTT service, covering Sports in the fight against the more than 140 tournaments a year, beoutQ pirate network active including about 40 PGA Tour events. in the Middle East and North Africa. Arabsat, the Riyadh-based satellite provider in which Saudi Arabia is the largest investor, denied claims that its satellite frequencies were being used by beoutQ.

ITALY — FRANCE Games from Serie A are being shown live in BRAZIL — a number of territories on an over-the-top — TF1 registered an average audience of 19.3 subscription service developed by IMG, the Jose Maria Marin, the 86-year-old former SPAIN — million viewers and an 82.2-per-cent viewing agency that holds the international media president of the CBF, the Brazilian soccer share as France defeated Croatia 4-2 to rights to the Italian top flight for the next federation, was jailed for four years for LaLiga, the top soccer league, entered into win the 2018 Fifa World Cup in Moscow. three seasons. The ‘Serie A Pass’ service went corruption, the latest development in a 15-year joint venture with Relevent Sports, The figures for the game, which kicked off live in time for the start of the new season the long-running ‘Fifa-gate’ probe into the organiser of the International Champions at 5pm locally in France, represented the on 18 August, showing all live games, match allegations that bribes and kickbacks were Cup, the multi-continent pre-season best audience of the year in France and replays, magazine and archive programming. paid for media and marketing rights to exhibition soccer tournament, which will the seventh-biggest audience in French TV soccer competitions across the Americas. involve a regular-season game being played in USA. The initiative was promptly opposed history. by AFE, the players’ union. 6 News Analysis www.sportcal.com WINTER 2018 Sportcal Insight 7

Russia 2018 injects life into linear TV

No-one watches that box in the corner of the living room anymore.

By Jonathan Rest

Or so we’re told. But for one month in June and July, the remote control was dug out from the bottom of the sofa, mobiles and tablets were put to one side – still within easy reach though – as, worldwide, the Fifa World Cup emphasised the enduring power of linear television when it comes to broadcasting live, big ticket sport. According to early estimates from Fifa – a deep dive analysis is not expected until the fourth quarter – the total number of unique viewers of the 2018 World Cup in Russia is expected to exceed three billion across all viewing methods. More than one billion are projected to have watched France crowned World Champions with a 4-2 win over Croatia on 15 July. Eurodata TV Worldwide believes 10 per cent of the global final audience Lucas Hernandez of France hands the trophy to teammate Florian Thauvin as they came from 19 European markets, fuelled celebrate victory after the 2018 FIFA World Cup Final between France and Croatia at by the presence of France, England, the Luzhniki Stadium on July 15, 2018 in Moscow, Russia Belgium and Croatia in the final four. As Yassine Berhoun, sports director at Eurodata TV Worldwide, puts it: “This platforms, an organisation record, while a 14.3 million peak for Telecinco, the clearly shows once again that even at 4.3 million people tuned in for the semi- highest audience of the year so far in the age of mobile devices and non- final against Croatia via the ITV Hub, Spain for an event on a single channel. linear viewing, major sports events are creating a new streaming record for the Audiences will continue to fragment the only shows capable of gathering commercial broadcaster. and the gap will no doubt shrink by the such large audiences in front of a TV It is just that the gap between the time Qatar kick off the next World Cup set.” linear and digital audiences was bigger on 21 November, 2022, but linear is still It’s not that the digital audiences were than many would have envisaged. alive and kicking. not there. The main ITV channel registered Josh Smith, director of Fifa TV Fifa says that around 22 per cent an average audience of 24.3 million Services, tells Sportcal Insight: “With of the total tournament viewership viewers for England-Croatia, the highest TV viewing considered to be in decline watched out of home or on computer/ football audience on a single UK overall, people look towards the mobile devices. channel ever. enduring power of live sport to bring Indeed, TF1 reported a record 1.9 A total of 26.1 million people in together large TV audiences. million live visits to its digital platform France watched the World Cup final “It’s clear that the Fifa World Cup during France’s quarter-final win over once around 5 million of out-of-home brings people together around a Uruguay, while in USA the tournament viewers were added to the 19.3 million television screen in a way that is almost delivered the top three authenticated on TF1 and 1.6 million on pay-TV’s BeIN unparalleled. If you put the event in streaming events in Fox’s history Sports., according to Médiamétrie. the context of proliferating devices, (830,000 for Croatia v England; 657,000 Germany disappointed on the pitch, shorter attention spans, and greater for France v Belgium; 615,000 for Brazil but at-home audiences were strong, competition for people’s time, the v Belgium). averaging 26.3 million across the Fifa World Cup becomes even more In the UK, a unique total (not an three group games on public-service valuable in bringing together a massive, average audience) of 3.8 million people broadcasters ARD and ZDF. diverse, global audience around a single streamed England’s quarter-final win Spain went one game further, and the live event with 64 matches that are each over Sweden via the BBC’s online penalty shoot-out defeat to Russia drew like a final.” 8 Opinion European Championships: TV Gold? www.sportcal.com WINTER 2018 Sportcal Insight 9

EUROPEAN “THE CONCEPT ALSO KEEPS THE HOSTING BURDEN DOWN FOR CITIES AT A TIME WHEN EUROPEAN CHAMPIONSHIPS: CANDIDATES ARE NOT EXACTLY TV GOLD? THROWING THEMSELVES FORWARD By Martin Ross TO STAGE MULTI-SPORTS GAMES.”

2.7 million viewers for mixed triathlon on a Saturday evening. Frankly, not the kind of audience you could attract by shifting coverage of a standalone championships online or hiding it behind a red button. Such figures left TVE in Spain’s decision to programme action on sports channel Teledeporte to look retrospectively baffling. Coverage from an early-evening swimming session that produced a Spanish silver medal netted just 93,000 viewers (a 1-per-cent share). An exception to the rule, though, as the ‘strength in numbers’ of seven different sports and a tightly-packed schedule designed to retain the interest of the impatient millennial sparked improved audiences. The broadcast reach was one sponsor (SmartScoring) but heads into Rowing certainly felt the impact, a “concession to Glasgow.” The EBU, that the rival European Games has come negotiations over 2022 unwilling to receiving approval for a cable cam disappointed by the strength of the field nowhere close to matching. make the same compromise. Issues that to cover the last 250 metres with (not aided by the clash with the US PGA Indeed, the exposure generated will can be overcome, of course, especially 90-degree images. The graphics and Championship), has put a marker down, August’s inaugural event was “THE BROADCAST leave would-be sponsors bemoaning with the smaller federations having now logo also looked slick, as you might warning that “the 2022 entrance card created with the mission statement a missed opportunity (just Spar and reaped the benefits of piggybacking on expect given the involvement of a can only be the quality of the athletes.” of combatting dwindling viewing REACH WAS ONE THAT Strathmore signed up as Glasgow 2018 the popularity of other sports (not how former TEAM Marketing man and an German broadcasters have already figures for Olympic sports in Europe by THE RIVAL EUROPEAN top-tier commercial partners). they’d put it). There will always be some ex-Uefa marketing director (event co- cited beach volleyball as a possible amalgamating standalone European GAMES HAS COME The unravelling of the sponsorship level of compromise over commercial founders Paul Bristow and Marc Jörg). addition (and the EBU is keen on Championships and enabling each sport NOWHERE CLOSE TO matrix proved – alongside the schedule inventory or primetime scheduling to Given its success, other sports will “another team sport or a modern urban to feed off the multi-sport concept. MATCHING.” – one of the biggest headaches for keep the big boys happy. surely target 2022. But the strength of sport”). While they won’t make the So was it a success? In short, yes. The Atos - but the event concept emerged stakeholders. Visiting the different So what of the benefits on different the concept is that it is compact and decision, surely the broadcasters’ voices European Broadcasting Union heralded stronger following its premiere and venues, aquatics events were typified sports of the top-level uniform host does not jump from event to event will be listened to. audiences “beyond its expectations.” left other small- and mid-sized sports by generous room for LEN sponsors (a broadcast undertaken by the EBU’s haphazardly (a risk at an Olympics). It The European Championships debut Athletes revelled in the additional looking on enviously. scenario that irked some broadcasters Eurovision? can only be a certain size. The concept wasn’t perfect. Certainly some of the media interest on-site, Glasgow’s Convincing the bulk of the EBU on site). The 220 cameras deployed at also keeps the hosting burden down printed media failed to convey the reputation was cemented as a sports members to showcase action on their Indeed, you could feel the LEN the Glasgow events (including 32 for cities at a time when European feeling of a combined event and more city that delivers gold-standard sports main channels proved crucial in driving influence – be it the swimming for mountain biking) as part of the candidates are not exactly throwing could have been done outwith the presentation and ticket sales, like viewer sizeable ratings and audience shares confederation’s generous ticket £8-million ($10.4-million) production themselves forward to stage multi- host cities to market (and explain) the interest, gathered momentum during that comfortably hit two figures. In allocation, the army of LEN blazers contract generated stunning images, sports games. championships in the lead up. the 11-day event held in Scotland and Poland, the rowing audience tripled or the crackdown on any illicit video although the likes of gymnastics and But could golf free up a slot? Quite But these are minor grumblings that Berlin. compared to the sport’s standalone filming. swimming are already accustomed to possibly. shouldn’t detract from a bold and novel It wasn’t without its glitches - notably 2017 European Championships. In the UEG, the European gymnastics body, high standards for their events (at least ZDF, the public-service broadcaster concept that captured viewers’ interests those from scoring and timing provider UK, the BBC trumpeted an audience of had to forego any exposure for its major when held in major markets). in Germany, bemoaned its inclusion as and is surely here to stay. www.sportcal.com WINTER 2018 Sportcal Insight 11 HOSTING WINNERS

Sport Event Denmark is celebrating 10 Years! With numerous World Championships and European Championships in Denmark, we are proud to welcome the World of Sport. In the coming years Denmark will host many more world-class events.

Starting in 2018 including: Sailing World Championships for all Olympic classes, ITU Multisport World Championships Festival and IIHF Ice Hockey World Championship.

See you in Denmark! 12 Interview The Producers www.sportcal.com WINTER 2018 Sportcal Insight 13

THE PRODUCERS Sunset+Vine, the UK-based sports production company that has 35 years’ experience in its field and can boast leading broadcasters and federations among its clients, has recently diversified into new areas, while seeking to expand its international footprint.

But it’s not all been plain sailing. “You have to take it on the chin and Simon Ward reports. move on,” says Foulser.

The competitive and changing nature of the host broadcasting and “We’ve done a production business means that firms in the sector need to be inventive and lot of taking it resilient if they are to be successful. That is the view of Jeff Foulser, the on the chin over long-standing head of Sunset+Vine, which has worked on a wide range of the years. You do major leagues and competitions for the likes of UK broadcasters BT Sport, need a strong chin the BBC, Channel 4 and Channel in this business. 5, and with federations such as the International Cricket Council and World You need to Sailing. Its recent experience includes be able to pick prominent international events such as the Commonwealth Games, Olympic yourself up.” Games, Paralympic Games and IAAF Sunset+Vine has demonstrated World Championships. resilience and flexibility in landing Speaking to Sportcal Insight commissions for new sports, recently at Sunset+Vine’s headquarters in being appointed as host broadcaster Hammersmith, west London, Foulser of the second season of Super League claims that these associations have Triathlon, the Singapore-based helped Sunset+Vine to build “a good professional series that mixes five new reputation” around the world, and race formats. that it is perceived as “innovative and This, together with deals to act as creative and [a company that] always the host broadcaster of September’s delivers what we say we’re going to World Equestrian Games in Tryon, deliver, so we work very well with North Carolina in USA, and next clients.” March’s European Athletics Indoor However, he acknowledges that some Championships in Glasgow, Scotland, major contracts have been lost along helped to compensate for missing the way: the upshot, he argues, of out on the production contract for operating in an unpredictable and, at Channel 4’s coverage of the Tokyo times, fickle sector. 2020 Paralympics.

14 Interview The Producers www.sportcal.com WINTER 2018 Sportcal Insight 15

Sunset+Vine launched in 1983, and events, claiming that landing the host the next Paralympics, especially after “We had nearly 80 cameras in the The production company will be Ireland, Scotland, Wales, Italy and Foulser joined from ITV as an executive broadcasting contract for the 2014 winning awards and plaudits for its role stadium and 25 cameras on the road responsible for 1,200 hours of content South Africa, in a three-year deal that producer in 1989, rising to become Commonwealth Games in Glasgow was in the broadcaster’s ground-breaking races. It was very successful as an event per year under the extended contract, amounts to 200 hours of live coverage managing director in 1995. In 2003, “a big turning point.” presentation of the London 2012 and because the British people always and, while BT Sport is known to have per season. he became chief executive of parent He adds: “The majority of what we do Rio 2016 games. support those sorts of things, so it driven a hard bargain in negotiations Sunset+Vine arguably made its company The Television Corporation, is centred around big, live sports events. After what it described as “a rigorous looked great in terms of crowds, and I as it sought to cut costs across its name in cricket as the producer of and, when the business was acquired That’s what we’ve tried to concentrate and competitive tender process” think we did a really great job and the businesses, Foulser welcomes the Channel 4’s innovative live coverage by Tinopolis in 2006, moved back to on over the last 10 years or so: targeting Channel 4 instead plumped for Whisper broadcasters were delighted. financial security it provides, while of the sport between 1999 and 2005, Sunset+Vine as executive chairman. federations or broadcasters with big Films, a company in which it has a “But bizarrely the IAAF has done a stopping short of dependency. and remains involved in the sport as Last October, Tinopolis, the events.” minority stake, and which produced the joint venture with ITN which nobody He says: “They’ve been a fantastic the host broadcaster of all ICC cricket Wales-based international television Sunset+Vine reprised its network’s coverage of the 2018 winter can quite understand. They’re totally client for us. We were in at the events through to the end of the 2019 production and distribution group, was Commonwealth Games role for the Paralympics in PyeongChang. new to it. You’ve immediately lost all the beginning in 2013, and we’ve re-signed Cricket World Cup in England and the subject of a management buyout 2018 event in Gold Coast, Australia and “When you lose things you’re always experience and understanding of how with them now for another four years so Wales, continues to produce highlights that ended nine years of ownership by is optimistic about staying on board in upset, but honestly we’ve put so much to run that event so when they come to there’s a good feeling of trust between of England matches shown on Channel private equity firm Vitruvian Partners. 2022 given that the games of that year into Paralympic sport,” says Foulser. Qatar next year, it’s like starting again. them and us. We’ve been good for 5, and is the production partner of the Sunset+Vine employs around 200 will be held on home soil, in the English “We won broadcast awards over the “I’m not saying we’ve got a God- them and, clearly, they’ve been good for Pakistan Super League and Caribbean full-time staff, including 150 at two sites city of Birmingham. previous two games and basically given right to keep on doing things, but us. We helped establish them instantly Premier League. in London, with the remainder split However, Foulser insists that the transformed the way people view para if you’ve got something that’s worked as a credible sports broadcaster.” As it has targeted more lucrative between regional offices in Cardiff, company now sees itself as “a global sports. We now employ a lot of disabled so well, and the broadcasters said it was Foulser admits that the BT Sport opportunities in other sports, sailing Wales and Glasgow, Scotland and in operation” and more than capable of people in the business, it’s opened our the best-handled and covered world contract initially accounted for half of has become less important, but, as the Dubai and Singapore, as it seeks to competing with major players like IMG, eyes to that side of the community, athletics event they’ve ever been to, Sunset+Vine’s revenues, adding: “It’s host broadcast and distribution partner, spread its wings outside the UK. Infront’s Host Broadcast Services and and we put our heart and soul into why would you then throw all that out of never good to rely too much on one Sunset+Vine enabled the recent Sailing The company’s main client remains the International Olympic Committee’s developing it. the window by going with someone else client. That was probably too much. World Championships in Aarhus to be pay-TV operator BT Sport, which Olympic Broadcasting Services for big “You can say we don’t have a divine who’s never done an event before? It’s a If we lost it now it would be pretty the most widely distributed ever, with accounts for around a third of the contracts. right to get it, but they’ve given it to strange one.” devastating, but it wouldn’t kill the 38 broadcasters for the live medal races company’s annual turnover of £60 He says: “They hate us coming in and Whisper who are 25-per-cent owned by Sunset+Vine’s relationship with BT business. It was important that we re- and 59 for the daily highlights. million ($78.1 million), and for 70 pitching for stuff, they really do. [But] Channel 4. Now they say it’s got nothing Sport began with the launch of the signed with them.” It had a similar role at sailing’s 2011 employees based permanently at the anyone can come in and do anything. to do with that and they made the best network five years ago, and entails The company is also producing and 2014 World Championships, broadcaster’s headquarters at the People pitch against us all the time. bid. Well, fine. But I promise you we production of coverage of soccer’s Channel 4’s nine live Heineken and has worked on four editions of Queen Elizabeth Olympic Park in east That’s life, that’s competition, get on made the best presentation document Premier League, Europa League Champions Cup rugby matches and the Volvo Ocean Race, including the London. The contract was recently with it. and the best pitch we’ve ever done for and Scottish Professional Football rival Channel 5’s five Premiership Rugby 2017-18 edition, while producing extended by four years, until 2022. “If you’re good and you produce anything. League, rugby union’s Premiership games, and has teamed up with Premier the BBC’s sailing coverage at the last Foulser cites Sunset+Vine’s good pictures for the right price, you’ll “They said it was a really tight Rugby, Heineken Champions Cup and Sports after the pay-TV broadcaster three Olympic Games and BT Sport’s “reputation for delivery and quality” get the business. If not, we might nick decision. Fine. But wasn’t there a little European Rugby Challenge Cup and landed the UK rights to the PRO14, coverage of the 2017 America’s Cup. as the reason it has been able to something off you. What’s wrong with bit of loyalty left over from what we’d Australian cricket. involving provincial rugby teams from diversify into new sports and global that? Competition’s great, it’s been done previously? Clearly not. There’s no good for this business.” loyalty in this business sadly.” Sunset+Vine has itself come out on Foulser is also disappointed the wrong end in tenders, often when that Sunset+Vine will not have the circumstances are beyond its control, opportunity to follow up the 2017 IAAF according to Foulser. World Championships in London, for He says: “The difficulty we have really which it was the host broadcaster, with is because we’re perceived as high- the next edition in Doha, Qatar in 2019. end, and I think to a degree we are. The IAAF has instead gone in a You always get people who are going different direction by launching a joint to come in and undercut you. That’s life venture with ITN Productions, the and sometimes we lose things because production business of the UK-based we won’t do things we don’t think we television news and content provider, as can do a decent job on and make some it seeks to take greater control over the money. way its major events are presented. “We’re a business and we have to IAAF Productions will deliver host make money for the shareholders and broadcasting of IAAF World Athletics we need to make money to pay the Series and World Indoor Tour events, staff. There are companies out there plus all the organisation’s non-live that will do things as loss-leaders just to production requirements, including get into the market. That does happen magazine and feature programming, from time to time, but I don’t think digital and branded content. that’s a long-term sensible plan for any Foulser says: “The frustration with business.” something like athletics is we did a Even taking into account the vagaries fantastic job [on London 2017], we had of the industry, Sunset+Vine was hurt over 80 broadcasters on-site. It was by its failure to secure the production a massive event, it doesn’t get much remit for Channel 4’s coverage of bigger. 16 News Analysis www.sportcal.com WINTER 2018 Sportcal Insight 17

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Then they started challenging the Silva, who co-founded the agency on numbers. Decimated rights portfolio the back of a co-operation with Media “They couldn’t bring any value. They At the time of writing, the agency is Partners, the Italian rights agency, on didn’t know our market. But I don’t think still not insolvent, given a healthy eight- the sale of Serie A broadcast rights on they ever had any intention to put more figure sum it has had in the bank. But a club-by-club basis, is now focused on money in. They thought they would milk clearly there is no viable business left, the likes of his Miami FC project and the cow forever and get an €80-million with the rights catalogue ravaged and a minority shareholding in AC Milan. [$94-million] Ebitda every year for all key staff, including chief executive Radrizzani is also a club owner now eternity. In their mind they thought they Seamus O’Brien, having exited stage after taking over Leeds United through were buying Serie A forever, or that MP right. A ‘showdown’ board meeting his Aser investment vehicle, which also & Silva owned the IP to Serie A.” in London at the end of July yielded houses the Eleven Sports subscription A savage assessment perhaps, but a no positive result, yet the Chinese broadcaster. common one when talking to those at ownership hadn’t appointed an As one former leading executive at a the agency or close observers. administrator, much to the bemusement rival agency tells Sportcal Insight, the Indeed, wind back two years and of rights-holders owed money. cooling of a close relationship with beIN it was already apparent that the new The former executive observes: “It’s Sports – one also enjoyed by Mediapro owners were far from au fait with the become a political decision for them and Pitch International – was one factor sports industry. I sat in attendance [Everbright]. Whoever will decide that that appeared to interrupt some of at Monte Carlo’s Hôtel Hermitage as the company is going bankrupt, it might MP & Silva’s momentum. He surmises: Baofeng CEO Larry Feng laid out his affect their political career.” “MP & Silva had been heavily buoyed vision of the ‘Baofeng Beetle’ and, as It’s safe to say that the jury at the by beIN [Sports] given its relationship he reeled off recycled stats around the 2016 TMT Finance World Awards which with them. Going back a few years, as sports industry and China’s longing to voted the Everbright/Baofeng takeover beIN went in one direction, which was win the World Cup, Sportel veterans as ‘Media M&A Deal of the Year’ might purporting to be a global dominator, rolled their eyes. Beyond the talk of wish to quietly reallocate the prize. MP & Silva was one of the agencies that investment in VR and apps (which never Those critical of MP & Silva’s got left behind.” materialised), just what added value valuation at the time of the takeover At the height of its powers, MP & were the shareholders bringing? point to the paucity of long-term rights Silva was, compared to its rivals, much The executive continues: “There were signed up. They also raise questions “riskier in terms of its targets and the many mistakes... they didn’t know what over a company that had lost the day- aggression with which it handled the they were buying. They paid a lot of to-day involvement of Silva and fellow marketplace,” according to the agency money without many restrictions. They co-founder Andrea Radrizzani, along source. “Sometimes they were paying never did decent due diligence.” with a stranglehold on the market as it double what other agencies were willing went into tender processes. to pay.” The reasons for the financial deficit The demise of one of the industry’s heavyweights, asked those who casually plans for sports technology investments, facing MP & Silva (which so alarmed leading players shone a light on China’s follow the agency sector? The company had shed 90 per cent of its share value its new owners) extend to more than hesitancy to continue investing in sport that kicked off its investment search since 2016. just the loss of Serie A international worldwide, but also poses questions for boasting of its profitability, $750-million There were attempts by co-founder rights, the iconic business on which the the agency rights sales model. Martin turnover and zero debt? The very same. Riccardo Silva to recapitalise the agency agency had been created. MP & Silva Ross takes a look. The response has been different at the start of 2018, as MP & Silva faced was also mired in arbitration with Fifa among those agency executives who up to a deficit of around 10 per cent of over payment for a World Cup media At the start of 2015, I sat down with followed the 2016 takeover of MP & the $700 million paid by Everbright and rights deal in Italy, a contract covering the management of (then privately-held) Silva by an arm of the state-owned Baofeng for a 65-per-cent stake, and the 2018 tournament, which the ‘Azzurri’ MP & Silva and asked about a possible investment group Everbright and following some high-profile contract failed to qualify for, and the 2022 sale. Chief executive Marco Auletta technology company Baofeng Group. losses and ill-judged rights investments edition. claimed the agency was turning down Eyebrows were raised at the size of by the agency. Those attempts met The agency also faces a potentially “weekly proposals from investment a deal valuing the agency at over $1 with resistance from the owners, who hefty fine from the AGCM, Italy’s companies and equity funds” and billion despite the brevity of its rights showed no appetite to cover the losses. antitrust body, in a probe into alleged wanted to continue harnessing catalogue. The ensuing Chinese MP & Silva’s PR take at the time collusion between itself, B4 Capital the advantages of speed and self- government crackdown on foreign of the sale promised the provision and IMG over the sale of Serie determination that independence spending in sport served up more of “additional financial resources to A international broadcast rights. affords. ammunition for the doubters. accelerate the growth of the business.” Further burdens included a deficit in Fast forward three and a half years News of the gravity of MP & Silva’s In truth, this was never forthcoming. The its Bundesliga media rights sales in and the agency has switched from being predicament first broke in July as it new owners shied away from plugging Scandinavia. able to pick and choose from a queue of emerged that the agency had been at the gap, thus preventing a restructure of Despite its aspirations to become a investors to the verge of collapse under loggerheads with its Chinese owners the business. full-service agency like rivals IMG and Chinese ownership, amid newspaper for most of this year, having been As one former MP & Silva executive Infront, MP & Silva has lived and died headlines decrying “the biggest fail in prevented from signing off business tells Sportcal Insight: “When they by the success of its margins on media sports marketing history.” plans and having missed instalment started getting reports with the MP & Silva co-founder Riccardo Silva rights sales. There were no heavyweight Can this be the same MP & Silva payments to right-holders. Everbright numbers, the Chinese got concerned (right) at the Globe Soccer Awards, an sponsorship sales to fall back on, no that established itself alongside IMG had effectively taken charge after about the results. We knew back in June event he has invested in dependable host broadcast business and Infront as the industry’s three Baofeng, which had initially hyped up its 2017 that we needed a cash injection. or even production facilities and 20 Cover story Riches to Rags www.sportcal.com WINTER 2018 Sportcal Insight 21

equipment that could be sold. MP & on China. The deficit that Everbright Questions will also be raised about haemorrhaging of key people at MP & Silva’s dramatic rise was characterised and Baofeng were asked to meet the decision to sell to the two Chinese Silva became increasingly concerning. Ari Emanuel, chief executive of Endeavor, by profitable media rights deals was MP & Silva’s doing. Power games entities, even if MP & Silva’s former Roberto Dalmiglio, chief commercial the agency giant that houses IMG and talented sales and acquisitions behind the scenes led by former owners owners had felt initially reassured by the officer, resigned at Sportel 2016. executives. These are factors that made served to destabilise, as various parties government involvement at Everbright. Suhyeon Cho, his replacement, left Everbright and Baofeng’s apparent backed various candidates for the chief The Italian-Chinese marriage never just four months after being promoted failure in 2016 to look beyond the term executive position eventually taken seemed a particularly harmonious to the position. Other key commercial of the agency’s then portfolio, and to by Jochen Lösch. The presentation or efficient one, with MP & Silva’s staff left and were not replaced and, in replace the talent as it exited, all the of Radrizzani as the face of Baofeng’s management repeatedly left frustrated keeping with the theme of upheaval, more disastrous. sports operation shortly after the by delays and a lack of answers from new CEOs were unveiled ahead of Not that the blame for a fall from takeover also surprised and irked Beijing. successive Sportels (Lösch in 2016 and grace rivalled in sports agency terms some at MP & Silva’s plush Mayfair While a turnover of staff is always O’Brien in 2017). only by that of ISL can be placed solely headquarters in London. expected after a takeover, the The MP & Silva source notes: “We never invested in people. We were expecting to make some hires. Since the SUMMARY OF MP & SILVA’S MAIN MEDIA RIGHTS AGREEMENTS takeover by the Chinese they didn’t put a dime into the company. There was a PROPERTY TERRITORIES WHERE CONTRACT VALUE / CONTRACT STATUS short-term loan that was paid back.” RIGHTS HELD LENGTH Arsenal TV Worldwide distribution of 2014-15 to 2018-19 Terminated. A new agency landscape? international programming block So where does the downfall of one of the industry’s heavy hitters leave Bundesliga 34 countries in Europe and Central €40m per year Terminated. Rights taken back by Bundesliga the sector’s balance of power? In the Lagardère Sports, at one time at offerings, IMG’s Serie A Pass being the Asia (including the Balkans, Bulgaria, 2017-18 to 2020-21 International and direct deals signed before short term, IMG and Infront have the forefront of media rights trading latest case in point. Greece, Nordic countries, Portugal, 2018-19 season. Romania, Russia and Turkey) swallowed up some of MP & Silva’s (through predecessor Sportfive), shows The agency executive notes: terminated contracts in deals for LaLiga signs of a willingness to take on some “Agencies need to be more discerning Copa America Worldwide 2019 tournament Terminated. Rival agencies, including Dentsu, rights (in Eastern Europe) and the sizeable minimum guarantee payments in their approach. They have to be pursuing the contract. Scottish Professional Football League’s again - although this is perhaps as more targeted in the rights they look international rights, respectively. Other a precursor to a sale, as it looks to to acquire and there are only a few Copa Libertadores and Asia-Pacific region $2.25m per year Terminated. Broadcasters advised to contract Copa Sudamericana 2015 to 2018 with FSA Media instead. rights-holders, such as the Premier compensate for the loss of its Asian things that differentiate the successful League, Bundesliga and French Tennis Football Confederation agreement, and unsuccessful players: relationships, EHF Champions League Worldwide €8m per year Terminated. Rights being sold in-house Federation, opted to take back the arguably the juiciest part of its experience, business acumen and & EHF Cup 2013-14 to 2019-20 by EHF Marketing and existing deals with rights and sell them in-house (see table business. Mediapro, also under Chinese careful targeting. broadcasters honoured. opposite). Lagardère Sports has also ownership in the shape of private “As we move forward, agencies will Fifa World Cup Italy 2018 and 2022 Payment subject to arbitration. taken on the International Handball equity fund Orient Hontai Capital, has have to be more and more mindful of Federation’s worldwide rights after prioritised its investments in soccer, the intricacies of the financial side of Formula 1 World Middle East and North Africa, 2014 to 2019 N/A MP & Silva’s €150-million contract was including rights to Ligue 1 and LaLiga the equation: SPVs [special purpose Bulgaria, Poland and Romania (2015 to 2019 in Bulgaria) Championship annulled. (plus a collapsed deal for Serie A). vehicles] and financial modelling; French Tennis Europe (excluding France) 2018 to 2021 Terminated. Rights being sold in-house and From a wider perspective, the clear The business models of single- structuring minimum guarantees in Federation existing deals with broadcasters honoured. winners are IMG and Infront (even client agencies CAA Eleven and Team such a way that it makes sense. These if the finances of the latter’s owner, Marketing remain watertight, so long have to form a much bigger part of the Worldwide Terminated. IHF finalised a new agreement IHF World Handball €150m total, plus €20m China’s Wanda Group, remain under as they continue to represent their agency model moving forward if there is Championships on production with Lagardère Sports (2019 to 2025). 2019 to 2025 the microscope). The Endeavor-owned contracted Uefa competitions. Fortis to be one, and mitigated by the growth IMG has made some high-profile soccer Sports, a company set up by Patrick of the major OTT players and until such LaLiga Albania (and Kosovo), Bulgaria, Czech €6.5m per year Terminated. Rights re-tendered by LaLiga and rights additions in the last 18 months, Murphy and David Tyler, teamed up time as complete aggregation takes Republic and Slovakia 2018-19 to 2020-21 acquired by IMG and Saran. including an unlikely $1.4-billion with DDMC, the Chinese sports and place.” (2018-19 to 2022-23 in alliance with Perform for Conmebol entertainment firm, to land the AFC In the cut-throat agency world, Albania and Kosovo) club competitions and the €1.1-billion, rights from 2021 to 2028, a contract that the fall of MP & Silva has no doubt Ligue 1 Europe (excluding France) €19m per year Terminated. three-year deal to replace MP & Silva as MP & Silva bid aggressively for under been welcomed by some, after other 2018-19 to 2020-21 Serie A’s international rights distributor. O’Brien’s leadership in an attempt to agencies frequently lined up to criticise An IPO is still predicted for the agency reverse its fortunes. O’Brien’s arrival the way it went about its business. 42 territories in Europe (including Terminated. NFL had been signatory to NFL $6 million per year in due course, while Infront has steadily was coupled with high expectations of The presence of squads of glamorous France, Italy, Netherlands, Poland and 2015 to 2019 contracts and took back control of selling. Russia) retained business. regaining the AFC business he originally models at the agency’s Sportel parties The former leading agency executive built up at World Sport Group, bringing was seen as tacky, and tactics in rights Premier League 29 territories in Asia-Pacific (including 2016-17 to 2018-19 Terminated. Rights taken back by Premier argues: “IMG is in pole position as they in various ex-colleagues in the process tenders were regularly questioned by Japan, Korea, the Philippines, Taiwan League and direct deals signed before 2018- can afford to overspend and hoover up and leading onlookers to surmise that rivals. and Vietnam) 19 season. rights that it might otherwise not have he was “betting the house” on winning However, as and when the death knell Scottish Professional All territories outside EU (plus £2.1m per year Terminated. Infront subsequently hired by had access to because it would have that race. finally sounds, the industry will arguably Football League agreement with rights-holder Sky to 2014-15 to 2022-23 SPFL to sell international media rights. lost them to MP & Silva overpaying. So The leading agencies are no longer be the poorer for it: particularly the sell in Europe) it plays into their hands. merely rights traders, with the margins rights-holders bemoaning reduced “The gap between the big players on deals increasingly squeezed as savvy competition in an agency sector that World Boxing Worldwide (excluding USA and 2017-18 to 2019-20 N/A and the small players is widening and it rights-holders (or agencies themselves) has been left to analyse how it now Nordic countries) Super Series possibly leaves a gap in between.” go direct to consumer with OTT reinvents itself in a digitally-focused era.

Source: Sportcal 1012603504, Marc Atkins, 1021804440, Alan Crowhurst, 1027975154, Julian Finney, 1025875346, Alex Livesey, 1020814822, Philip Brown, 1015717980, Alexander Hassenstein, 1023761270, Mark Thompson

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5.35 70m 4.95 4.49 4.20 60m 4.00

50m 3.50

40m

30m

20m

10m

0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2012 2013 2014 2015 2016 2017

AUSTRALIAN OPEN (TENNIS) MENA PAY-TV SUBSCRIBERS Tennis’ Australian Open generated a combined A$200 The pay-TV market in MENA has suffered as a direct result million in domestic media rights fees for the most recent cycle of the political unrest, causing subscribers to drop by 21 per (2015-19). Following the recent auction for the tournaments cent in 2017 to 4.2 million, according to economic marketing 2020 to 2024 cycle, income will rise 50 per-cent to A$300 research company IHS Markit. IHS estimates that BeIN may be million, with a rise in international rights fees expected to looking at as much as $200 million in lost subscription revenue bring in further revenue for event organiser Tennis Australia. due to the diplomatic row.

1,400

1,200

1,000 32,200 15,313 16,299 Combined total posts Combined total posts Combined total posts 800

NUMBERS 600 21,109,880 160,085,810 96,222,403 Combined total Combined total Combined total 400 interactions interactions interactions 200 2,682,163 11,654,317 2,850,832 Combined total new Combined total new Combined total new 0 followers followers followers 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 -09 -10 -11 -12 -13 -14 -15 -16 -17 -18 -19 -20 -21 -22 -23 -24

PYEONGCHANG 2018 LIGUE 1 Twitter was the platform most used during the games with France’s top-tier Ligue 1, Coupe de France and Coupe de la half of all posts (among athletes, organisations and partners); Ligue generated a combined €766.9 million in the most recent GAME however, it generated only 7 per cent of all interactions. It was campaign (2017-18). Following the recent auction for Ligue 1’s Whether it’s rights deals, revenue dashboards, media Instagram that proved by some way to be the top platform for 2020-21 to 2023-24 cycle, with two packages still to be sold, landscapes or media analysis, Sportcal Media has it covered. engagement, generating 53 per cent of all interactions from income will be more than €1.17 billion per season between Here’s a snapshot of some of the research and insight just 24 per cent of posts. Moreover, Instagram managed, from the league and the Coupe de France, with Coupe de la Ligue conducted over the past few months. half the number of posts, to generate over four times more rights from 2020-21 to be sold at a later date. new followers than Twitter.

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For up-to-the minute information on events, the people and the deals driving sports business. visit www. sportcal.com and subscribe to Index one of our packages. Sports calendar DATE SPORT EVENT LOCATION TV DISTRIBUTOR ORGANISER

6 – 18 Olympics Youth Olympic Games Buenos Aires, IOC Buenos Aires 2018 Argentina

19 – 21 Table Tennis Liebherr Men’s World Cup Paris, France ITTF, Lagardère Sports FFTT

OCTOBER 21 – 28 Tennis BNP Paribas WTA Finals Singapore, WTA Media WTA Singapore

9 – 24 Cricket ICC Women’s World Various, West Star India ICC Twenty20 Indies

11 – 18 Tennis Nitto ATP Finals London, United ATP Media ATP Kingdom

NOVEMBER 15 – 18 Golf DP World Tour Dubai, UAE European Tour European Tour Championship Productions

1 – 9 Floorball Floorball Men’s World Prague, Czech Broadreach Media Czech Floorball Championship Republic

7 – 9 eSports ESL Pro League Season 8 Finals Odense, Denmark ESL Gaming ESL Gaming 12 – 22 Soccer FIFA Club World Cup Abu Dhabi, UAE FIFA FIFA DECEMBER 13 Dec – Darts William Hill World Darts London, United Matchroom Sport PDC 1 Jan Championship Kingdom

5 Jan – Soccer AFC Asian Cup Various, UAE Lagardère Sports AFC 1 Feb

10 – 27 Handball Men’s World Handball Various, Lagardère Sports Danish Handball Championship Denmark & Federation & German Germany Handball Federation JANUARY 14 – 27 Tennis Australian Open Melbourne, Tennis Australia Tennis Australia Australia

1 Feb – Rugby union Six Nations Championship Various, Europe Pitch International Six Nations Rugby 16 Mar

5 – 17 Skiing FIS Alpine Ski World Are, Sweden Infront Are 2019 Championship

19 Feb – Skiing FIS Nordic World Ski Seefeld, Austria Infront Seefeld 2019

FEBRUARY 3 Mar Championships

25 Feb – Bobsleigh & BMW Bobsleigh & Skeleton Whistler, Canada Infront IBSF 10 Mar Skeleton World Championships

STAY UPDATED. DAILY CALENDAR UPDATES www.sportcal.com/calendar. 30

JUN MAY MAR MAR DEC NOV OCT Conferences Index 24 -26 05 28 -29 5 -10 19 -21 01 -09 30 -31 10 -11 08 -10 05 -06 Dec - 02 30 Nov 28 -29 20 -21 15 -16 09 -10 05 -07 02 -11 29 -31 22 -24 DATE conferences, andforumsatwww.sportcal.com/conferences exhibitions ONLINE: Free-to-access majorcongresses, databaseofall CONFERENCE Smart Cities &SportSummit Smart Cities SPORTEL Monaco Hashtag Sports FIFA Congress The Spot SportAccord 2019 Convention CSTA SportsEventsCongress OCA GeneralAssembly SpoBiS AsiaConferenceMass Participation FINA World Convention Aquatics SportsConvention International BoardIOC Executive Meeting ANOC GeneralAssembly Host City Soccerex USA EOC GeneralAssembly (IF)Forum2018 Federation International World AnnualConference Sailing 2018 receives OlympicCommittee. International supportofthe full the AIOWF, ARISF, AIMS,AssociateMembers, andOfficial only. Partnersbyinvitation TheIFForum membersfrom sportsfederation knowledge. Theeventisopentointernational GAISF, ASOIF, and afocusonsharingbestpractices with sportsfederations and non-Olympicinternational TheIFForumtargets andassociatesinattendance. Federations specificneedsofOlympic the the Membersfrombe ofspecificvalueto GAISF, Sports ofInternational the GlobalAssociation offer (IF)Forumwill Federation The International three sessionsdesignedto daysofthematic from widersportsindustry the andgrowFederations network,share their experiencesandlearnfrom their world-classexperts 40+International uniqueopportunitytomeetwith havethe Summit.Theywill the to attend More 300representatives than from regions cities, sizesare andcountriesofall expected audience. the with interaction forum,debatesandinterviewstoenhancethe questions shortersessionsandmore abrand-newformat,including with alive with topicstobediscussed, effectively beuplifted 2018will Afterfouryearsofsuccessfuleditions, connectsportandcities. andSportSummitisaprestigiousThe SmartCities conference focusedonsmartstrategiesthat Market moves Market www.smartcitiesandsport.org www.sportelmonaco.com hashtagsports.com www.fifa.com www.thinksport.org www.sportaccord.com www.canadiansporttourism.com ocasia.org www.spobis.de massparticipationasia.com worldaquaticsconvention.com iscgeneva.com www.olympic.org www.anocolympic.org www.hostcity.com www.soccerex.com www.eurolympic.org www.sportaccord.com www.sailing.org WEBSITE Lausanne Monte Carlo New York Paris Lausanne Coast Gold Ottawa Bangkok Düsseldorf Singapore Hangzhou Geneva Tokyo Tokyo Glasgow Miami Marbella Lausanne Sarasota CITY

Switzerland Monaco USA France Switzerland Australia Canada Thailand Germany Singapore China Switzerland Japan Japan United Kingdom USA Spain Switzerland USA COUNTRY

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WINTER 2018 from making)anydecision. upon byanypersonin making(orrefraining adviceand shouldnotbereliedconstitute datadoesnot Thepublished publication. of statedtime atthe author(s), or the possessedbySportcal best information herein andisthe ingoodfaith ispublished errorsfor the or omissions.Dataincluded cannotacceptliability author(s), and the care istakentoensure accuracy, Sportcal Whileevery author(s). by Sportcalorthe canbeaccepted publication material inthis or refraining from asaresult action ofany for lossoccasionedtoanypersonacting permission ofSportcal.Noresponsibility the written youshouldfirstget publication, redistribute materialinthis anyofthe (Sportcal). Ifyouwanttoreproduce or Ltd Sportcal GlobalCommunications herein are notnecessarilyshared by rightsreserved.All Theviewsexpressed Ltd. © SportcalGlobalCommunications Pictures credit: Images Getty UKbyStephens&GeorgePrinted inthe [email protected] Whistle Sportcal Insightisproduced by twitter.com/sportcal [email protected] +44 (0)2089448786 LondonSW195DX Village, Wimbledon House,25HighStreetAllington Ltd, Sportcal GlobalCommunications Designer Ben Hennessy Art Director Mark McClintock Editor Rest Jonathan

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