Goliath vs Goliath: Premier League takes aim at Man City

It’s Super Bowl weekend, when Americans gear up to gorge on wings and nachos and bet an estimated $16bn on the big game, which would be a new national record. The fixture for the National Football League title — or as some refer to it, the sporting event that bookends the Rihanna halftime show — kicks off tomorrow in Arizona between the Kansas City Chiefs and the Philadelphia Eagles.

Remarkably, it is the first Super Bowl to feature two black quarterbacks, Patrick Mahomes and Jalen Hurts, a measure of progress amid a season of challenges for the league. Data released this week shows concussions increased 18 per cent during the 2022 season, an uptick that NFL commissioner Roger Goodell attributes to improved diagnostics. Looking ahead, he acknowledged there is more work to be done on both diversity and player safety, two factors we’ll be watching even more closely than the Super Bowl score.

Do read on — Sara Germano, US sports business correspondent

New names added for the FT’s Business of Football Summit

Premier League chief executive Richard Masters, Everton majority shareholder Farhad Moshiri, Newcastle director Amanda Staveley, and Kieron O’Connor, author of the widely followed football finance blog ‘Swiss Ramble’, have all joined our speaker roster for the Business of Football Summit on March 1-2. This is your last chance to save up to £350 on your digital or in-person pass. Register today.

Premier League vs City: implications for investors

Without warning — or even a press release — the long running legal wrangle between the Premier League and Manchester City blew up this week. The world’s richest football league accused the sport’s wealthiest club of breaking financial rules over a number of years, and then refusing to co-operate with the ensuing four-year investigation.

City, which denies wrongdoing, has been here before. It reached a settlement with Uefa over similar allegations in 2014, and was then given a two-year ban from the Champions League in 2020 — a decision that was later overturned.

All this comes at a crucial moment for the Premier League, with a new independent football regulator due to be unveiled soon, against the backdrop of two of England’s biggest clubs — Manchester United and Liverpool — up for sale. For would-be buyers, what are the implications of the Premier League’s charges against the English champions?

Investors backed by sovereign wealth, like the Saudi fund that owns Newcastle, might wonder if new financial guardrails in the form of more aggressive enforcement will make their lofty ambitions harder to achieve. Uefa’s new financial sustainability rules, due to come in next season, should also blunt the ability of super-wealthy owners to funnel cash into their teams.

But for professional investors — such as US private equity — the idea that economic restraint might be coming to the Premier League could be enticing. The league’s revenue has soared over the past decade thanks to bumper broadcast deals and lucrative sponsorship. But costs have gone up just as fast, in the form of transfer fees and player wages. Any sign that football’s inflation problem is being tamed could transform the economics of elite football. A push to enforce existing financial rules — as seen this week by the Premier League — would be a start.

“I would expect investors to welcome it to a certain extent”, said Stephen Taylor Heath, head of sports law at JMW Solicitors. “It may potentially encourage people to invest in Premier League clubs if they know it’s going to be properly regulated.”

Others think a lot more would need to happen for costs to stop rising. Dariusz Mioduski, president of Legia Warsaw, complains that all the extra money coming into the game still goes straight back out in wages and agents’ fees.

“Until there are some concepts like a salary cap, this is a spiral that has no end,” he says.

LeBron James: Hitting highs on and off the court

By now you’ve likely seen on your screens or maybe you were a member of the star-studded crowd at Los Angeles’s Crypto.com Arena on Tuesday — that LeBron James has broken the all-time record for most points scored in a National Basketball Association career. It was a once-in-a-generation achievement by an athlete many consider to be solidifying his case as the best man to ever play basketball.

It feels cheap to measure any milestone of James’s against something as singular as the all-time points record (38,390 and counting after Tuesday’s game), though true to his hardworking spirit, The King was busy off the court this week as well.

Sources exclusively tell Scoreboard that James and longtime business partner Maverick Carter are in talks to expand their equity stake in Fenway Sports Group, the holding company of football’s Liverpool FC, baseball’s Boston Red Sox and ice hockey’s Pittsburgh Penguins. James and Carter have been investors in Liverpool since 2011 and have since expanded their initial investment.

It’s just one of many endorsements, investments, and strategic decisions James has made over the course of his twenty-year pro career, the subject of an FT deep dive this week. Advisors, associates, and executives who know him describe James as someone whose sharp intellect and dealmaking instincts paid dividends — literally.

One such example was an offer during the mid-2000s from the late Bob Sillerman to buy the rights to half of James’s off-court marketing deals — Sillerman had also purchased an 80 per cent stake in the company that controlled name, image, and likeness rights to boxing great Muhammad Ali. The deal for James, then in his early 20s and not yet an NBA champion, would have given the basketball phenom a cash injection of “well over nine figures”, according to a person familiar with the matter.

James reviewed the offer and asked associates around him: by signing this deal, would he be able to prevent Sillerman from repackaging or selling his rights to a third party? When told no, James refused the advance. “Why would I bet against myself”, he asked, according to a person who was present at the time.

Since then, James has won four NBA titles, secured a lifetime endorsement from Nike, launched a media and entertainment company worth $725mn, taken equity in Fenway along with fast-growing pizza chain Blaze, started a public school and community centre in Akron, Ohio, among many other endorsements and activities. Forbes last year estimated his net worth at $1bn, becoming the first active basketball player to achieve billionaire status.

It’s just one example of James’s remarkable ability to see the entire playing field, a skill that’s served him well both on and off the basketball court.

Highlights

• Adidas said it may face an operating loss of up to €700mn this year after its ill-fated tie-up with Kanye West left the group with unsold Yeezy sneakers. Shares have been hit.

• Uefa warned this week that multiclub ownership risked distorting the transfer market and posed a “material threat to the integrity of European club competitions”.

• NFL quarterback Tom Brady and basketball star Steph Curry are among a host of celebrities who bought into FTX, many of whom got shares in return for promoting the now failed crypto exchange.

• The president of the body that governs Formula 1 will step back from day-to-day involvement in the sport. FIA boss Mohammed Ben Sulayem updated teams after F1 owner Liberty Media warned that he had made “unacceptable” comments about the valuation of the racing series.

• LIV Golf, the Saudi-backed breakaway tour, has made almost no revenue since it started last year, according to recent legal filings. The competition has been bankrolled by $2bn from the Saudi sovereign wealth fund, but has struggled to attract sponsors and broadcasters.

• The NFL and sports broadcaster DAZN agreed a 10-year deal that will give fans outside the US the ability to watch every game live.

Final Whistle

WHEN THE KING OF SH?!HOUSERY GETS SH?!HOUSED 💩🏠

Lucas Moura & Emerson Royal taunt Richarlison with his own dance after scoring on him in FIFA. And he looks… not pleased. 😂😂😂pic.twitter.com/dWTXlB6eib

— Men in Blazers (@MenInBlazers) February 7, 2023

Brazilian forward Richarlison loves to bust out his famous pigeon dance when he scores. At the Qatar World Cup, he even tried to teach his compatriot Ronaldo (the retired one) how to spread his wings and flap the Pombo. But, it seems, he doesn’t always see the funny side. During a recent game of Fifa, Richarlison found himself on the wrong end of the scoreline. Tottenham teammates Lucas Moura and Emerson Royal decided to give him a taste of his own medicine. He didn’t love it.