Euro 2020 – The Power Of Money

Last week, plans were announced that the 2020 European Football Championships would he held in 13 Cities across Europe, instead of the traditional choice of single countries or pairs of neighbouring countries.

The concept is backed by FIFA Vice President Michel Platini as a way to ease the burden of the financial strain that hosting world sports events brings to a country and to provide the opportunity for smaller countries to become involved in the hosting process.

There is no doubt that hosting major sports events is a financial risk, according to Forbes, the cost of London 2012 was around $15 BILLION and the cost of preparing Ukraine and Poland for co-hosting Euro 2012 came to a staggering figure of around €20 BILLION.

This was spent on the development of stadia and building appropriate infrastructure to accommodate around 1 million people over summer.

You may wonder…why bother?

Increasing the number of tourists is high on most bidders agendas, as they are set to cash in on sold out venues and ticket sales.

So UEFA should recoop their losses from ticket sales?

Usually, they only account towards 16% of revenue but the importance of creating an atmosphere and selling out stadiums affects merchandise sales and whether people will watch. Consequently, playing a big role in determining the success of the event.

However, FSE (Football Supporters Europe) conducted a survey and found 82% of fans do not support UEFA`s plan for 2020.

Michel Platini: He just won’t listen!

Immediately, I question the support we will see in stadiums and what the atmosphere will be like.

Remember there will be no home support in this type of format and if it were to continue that way we would never see the likes of smaller countries overachieving with the support of a home crowd, take Portugal and Sweden in 2004 and 1992 respectively as examples.

Sponsors are bound to pay big money for the chance to expose themselves across Europe which is another potential deciding factor in UEFA`s plans to experiment with this format and see how much they can squeeze out of the likes of Adidas and Carlsberg.

Media rights and Broadcasting make up to 62% of the revenue generated and to put into perspective how much is made…Euro Championship football revenue has increased from €41 million in 1992 to $1.3 BILLION in 2012.

But who is going to watch a game with no atmosphere and increasingly poor performances?

All these problems stem from one issue, travelling.

Starting with fans, who can afford to travel across Europe and arrange travel, accommodation, tickets, merchandise and more to make up the number of attendees?

This makes the championship inaccessible for those on average salaries and rules out supporters who make a weeks holiday of attending the Euros in previous championships.

I predict UEFA will charge incredibly high ticket prices and take the chance on making their money back from the rich despite lower attendances, rather than selling out stadiums.

Or tickets will be mostly corporate and only limited tickets will be available to the public, creating an optical illusion of interest…similar to what was seen at London 2012.

Moving onto the players, who can expect performance levels to match those of previous championships?

Players will be travelling thousands of miles further, have less practice time and be more vulnerable to fatigue.

As I mentioned earlier, expect performances to worsen as the tournament progresses, unless coaches choose to rotate players.

This will result in either watching unknown reserves or poor first team performances later in the competition.

Both equally unwanted outcomes.

And not something problematic in previous championships…

This outlines the power of money in the footballing world and utter disregard for the good of the game on behalf of UEFA.

The game has a bad reputation when it comes to corruption and to illustrate my point Michel Platini voted for oil-rich Dubai to host the 2022 Football World Cup and of course…they won.

Several weeks later, Laurent Platini (son of Michel) was hired by Qatar Sports Investment as their European Chief.

Qatar Sports Investment are owned by the Quatari royal family who of course wanted to bring the World Cup to Dubai.

They got what they wanted and i’m sure Michel did too!

Jake Oxby – Sports Business Management Student (Carnegie)

@JakeEOxby

@SportsBizJake

The Shift In Power of US Sports – NBA/NFL/Sky Sports

This past month, Sky agreed to screen NBA games following a live game held at the 02 Arena in London between the New York Knicks and Detroit Pistons.

In recent years we have seen the BBC embrace the NFL. They began broadcasting American Football in 2007 with the SuperBowl and the increased popularity of the sport in the UK lead to the start of live weekly radio coverage on BBC Radio Five Live.

Interest in the sport hasn’t just developed in the past decade, Channel 4 were the first terrestrial channel to broadcast NFL games in the early 1980’s and the game took off in the UK. This lead to the introduction of pre-season games overseas, meaning the NFL could exploit new markets and give the chance for European fans to experience the live action.

The continued TV coverage Sky Sports provided over the next decade has lead to the NFL International Series with regular season matches being played at Wembley Stadium until at least 2016.

The progression of NFL in the UK has developed from Broadcast coverage – Pre-Season Games – Increased Coverage – Competitive Games.

In comparison with the NFL, the NBA isn’t anywhere near as popular in the UK and the amount of coverage in recent years has been limited for British viewers.

However, the NBA currently has an awful lot going for them on the British Isles.

• Basketball is a national curriculum sport in the UK and the majority of schools have some sort of basketball facilities.
• The London 2012 Olympics and Paralympics saw Basketball ranked as one of the most exciting sports of the Games along with Athletics and Cycling.
• The pool of British talent is greater than ever, with 11 players from the UK playing in the NBA including Chicago Bulls star Luol Deng and Portland Trail Blazers Joel Freeland leading the way.

I believe the NBA are trying to take advantage of the Basketball market in the UK and capitalise on the success of London 2012.

It began with the announcement in October 2012 that the O2 Arena would host the NBA’s first regular season game in London between three-time NBA champion Detroit Pistons and two-time champions New York Knicks.

A hugely successful event which sold out and dominated sports headlines in the media, raising brand awareness of the NBA in this country.

The O2 is the same venue that has previously held four preseason games since 2007 and a venue owned by the group AEG, who also own the Manchester Arena which will play host to a preseason game in Autumn 2013.

This plan sees AEG and the NBA’s strong relationship continue and aim to expand the NBA market throughout Europe and especially in the UK.

Then 2 months later comes the news that Sky Sports agrees to televise the US Sport for the remainder of the 12/13 season.

Coincidence?

I’ll remind you of what the NFL did again…Broadcast coverage – Pre-Season Games – Increased Coverage – Competitive Games.

The NBA?

Pre-Season Games – Competitive Games – Increased Coverage

Similar processes but both with the same goal of reaching out to new overseas markets and raising brand awareness.

Whats next for MLB and NHL?

Baseball and Ice Hockey have not yet reached the levels of popularity that American Football and Basketball have in the UK and for the foreseeable future I imagine this will remain unchanged.

However the importance of TV and the media’s portrayal of sports is vital in identifying what we deem entertaining and right now American Sports are rapidly gaining popularity here and with Baseball being included in Rio 2016 don’t be surprised to see it in your Sky Sports package in the future!

Jake Oxby – Sports Business Management Student (Carnegie)

@JakeEOxby

@SportsBizJake

Rory To Rebuild Nike Brand

At the tender age of 23, Rory McIlroy can boast of 2 major wins,10 professional victories, world number one status and 2 Ryder Cups, but as Nike know there is more to the boy from Holywood than just that.

Nike prides itself on being the best in whatever field of sport, previous ambassadors include Michael Jordan in the NBA, Cristiano Ronaldo in World Soccer, Roger Federer in Tennis and Tiger Woods in Golf, now McIlroy joins the elite list with a $250 million 10 year deal.

This deal is beyond the fairways of the golf course but on the shelves of Nike stores. Air Jordan, CR9, RF and TW collections proves athletes are part of the product building process and don`t be surprised to see Rory follow suit, the Northern Irishman ranks second on the list of the most marketable athletes in the world only behind Brazilian Soccer star and face for the Rio Olympics, Neymar.

In the midst of the Tiger Woods scandal it seems Nike have brought in Rory to replace arguably one of the greatest sportsmen in history as the face of Nike Golf .

Their rivalry intensifies on and off the course.

And even on the driving range…

It’s a clever move from Nike for several reasons, Rors became only the second player to win the money title on the PGA Tour and European Tour in the same year. Golf is now a global sport and having the PGA Tour and European Golfer of the Year ensures Nike have a world-renowned athlete that they can enter new golfing markets with.

The magnitude of a $250 million 10 year contract suggests Nike may play a part in determining what events Rory plays in and therefore they can aim to market the brand in countries where golf is growing and develop brand recognition.

Nike’s golf revenue dropped 2% in 2010 and 4% in 2011 following Tiger Wood’s sex scandal and the arrest of NFL Quarterback Michael Vick along with Lance Armstrong’s drug scandal has damaged the image of the company and Rory can be at the forefront of the re-building process.

Rory has that likeability factor and clean-cut image which separates him from everyone else, the way he has dealt with adversity in his career such as his meltdown at the Masters where he threw away a four shot lead going into the final day was admirable and many would have struggled to come back from such disappointment.

The question I pose is whether Nike have brought in McIlroy to be the iconic figure of Nike Golf or to reignite the career of Tiger Woods?

Unlike Gatorade, Accenture, AT&T and Gillette, Nike stood by their Billion Dollar man. Why? Because he transcended the game of golf, changed opinions, bridged racial gaps in the game and performed to a standard few have matched. Despite his current form on the course and reputation off it, Nike are well aware they have an athlete who could make one of the greatest returns to greatness in sporting history, therefore generating brand awareness, interest and sales.

Bringing McIlroy into the Nike family may be a final warning to Tiger that he needs to up his game and regain the form that has seen him become a legend of the sport in order to remain with the brand, or else Nike now have someone more than capable enough of carrying on the legacy Tiger has laid down. McIlroy may not make an immediate impact with Nike that Tiger has but he is set to be his long term successor.

Although having said that, check out this kid! Watch out Rory…

Jake Oxby – Sports Business Management Student (Carnegie)

@JakeEOxby

@SportsBizJake