February 2006 Edition

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headlines:

It's official: Wembley Stadium will not be opening in time to host the FA Cup in May 2006.  Neither will it be able to generate income from a series of planned high-profile concerts including Bob Jovi and Take That.  So it's back to the drawing board with the latest (or earliest) opening date in and around August.  Looking back at some of the previous stories, the movie Murderball has been nominated for an Oscar for Best Documentary. Scot, Andrew Murray lifted his tennis game following a few setbacks, to win his first title by beating Lleyton Hewitt in the SAP Open (2-6 6-1 7-6).  John MacEnroe also returned to the pro circuit and at the same San Jose tournament he captured his 78th doubles title - and all in the name of promoting the doubles game.

spotlight on Brand Becks

There is no question that it the associated brands that enhance a sport's credibility. Money through sponsorship, media rights, endorsements and much more define its value - and the amount often defies the sum of the individual parts.  Real Madrid topped the 2004/5 revenue table earning an income of around US$300 million, thereby pipping the likes of Manchester United to the winner's post.

Real Madrid's achievement of doubling its revenue in the last five years has been accomplished through a combination of good luck and good decisions. Good luck - because Manchester United has seen a recent period of instability that has devalued the brand in combination with a significant quantity of criticism from some loyal supporters with respect to the club's new owners; and good decisions - in particular when the club acquired a global brand for a bargain US$30 million.  David Beckham (the brand) is so huge in parts of the world where football (soccer) is not the national sport that is defies imagination. As a result, Real Madrid has the ability to develop new revenue streams through a partnership program that places them at the top of their game in more ways than one.

hot spot the Asian invasion

The importance of media rights to any sport can make or break that sport; and as new economies flourish and start to wield their commercial powers, many established 'players' in the industry will have to rethink their game.

In the sports world, India has taken its national sport of cricket and 'taken control of the media distribution rights.  The Indian Cricket Board's decision to sell these rights to an Indian marketing company for the sum of US$612 million for a four-year deal has shaken the business side of the game to the core. The deal ranks as the highest price ever paid for cricket rights anywhere in the world.

Broadcasters wishing to show the matches in their various markets (and used to paying bargain basement prices)- including the India v. England Test Match which starts in March 2006 - will now have to dig deep into their pockets and possible pay five times as much as they have in the past. By the time you add in sponsorship and other rights, it is likely that the Indian Cricket Board's earnings will exceed US$750 million over the next four years.  As a result Nimbus Communications  - now proud owners of the broadcasting rights of their national sport - have thrown down the gauntlet asking for equal recognition. And despite the fact that the Indian players do not earn anything close to the same as some of their counterparts from other countries, the gloves are off as; they will likely be demanding substantial pay rises! And with a large number of Asian-Indians resident in the USA subscribing to pay-per-view/premier DTH/cable programming, etc. the future looks particularly rosy for Indian cricket.

hot shot

There are always some ‘mad dogs and Englishmen’ determined to catapult themselves into the record books by taking on the elements. Sponsored by Virgin, a recent attempt by 61-year-old adventurer, Steve Fossett to fly the fastest single-handed flight around the world failed in the final moments; but this is just a drop in the ocean for Richard Branson and his meteoric plans for space travel.  Virgin Galactic will be going head-to-head with Space Adventures whose track record includes putting the first three space travellers into orbit - including Greg Olsen who flew just a few months ago.

When US corporation, Space Adventures, Ltd., recently announced plans to develop a commercial spaceport in Ras Al-Khaimah (UAE) at an estimated cost of at least US$265 million, Branson took up the challenge and announced a spaceport near Roswell, New Mexico, US.

Space Adventures followed up with a further announcement for a Spaceport in Singapore which will send tourists into sub-orbital space from 2009 for a mere US$102,000.  

Interest in these projects is enormous.  Funding - for example in the case of the UAE spaceport includes shared investments by Space Adventures and the government of Ras Al-Khaimah.  To facilitate the program, His Highness Sheikh Saud Bin Saqr Al Qasimi of Ras Al-Khaimah, alongside the UAE Department of Civilian Aviation, have granted clearance to operate suborbital spaceflights in their air space.

Branson has some catching up to do - as he is charging twice as much as Space Adventures for a similar trip.  But never to be beaten on price the question is "Will the low cost expert start the first space travel price war? 

sidelines...... out of choice or necessity?

The Formula 1 story continues its twists and turns; and - as ever - money lies behind the latest drama.  The organizers of F1 are demanding that the competing teams commit beyond 2007.  If they do not - and there are five major carmakers under threat - they may be sidelined when it comes to the profit sharing deal with the organizers.  The BMW, Honda, Mercedes, Renault and Toyota teams run the risk of missing out on their share of an 'incentive scheme' which can provide substantial payouts (totalling upto around US$100 million).

Under the new ownership of CVC Capital Partners, Bernie Ecclestone still rules the roost in his capacity as Chief Executive. But it is the head of the sport's governing body who is behind the plan to redirect these funds into the coffers of the less wealthy and often smaller and independent teams.

Meanwhile, without the big brands in place for the long term, the future of Formula 1 remain under the microscope and on the front pages.

fashion icon...... footwear

Nobody can deny the strength of the brand and in the case of sportswear it is - in particular - what you wear on your feet that can make or break a reputation. 

Rivalry between Nike and Adidas has never been greater.  The recent acquisition of Reebok by Adidas for a cool US43.8 billion has upped the ante; and case in point, Nike has recently filed a suit in a Texas court against its German competitor. 

And it's all about 'SHOX'.   

For those who may be unaware that they are proud owners of shoes with SHOX, SHOX are the stubby columns on the soles of your shoes that are designed to absorb impact on the heel.

Nike claim that Adidas infringed the Nike patents when it launched its latest brand of footwear.  No doubt the lawyers will be 'rubbing their souls' with glee!

home and away

Have you ever wondered what happens to the huge sums of money involved in football player transfers?  These days most clubs' players look more like a League of Nations than the home grown variety.  While talent continues to be sought from almost every continent around the world, large amounts of money changes hands during the transfer season.  As you would expect, not all of the cash ends up in the hands of the players.  The agents - of course - take a piece of the action; and in recent weeks transfer fees and the term 'bung' have gone hand-in-hand.

Although many of us may not have understood the precise meaning of this term in the past, we are now very clear that it effectively can be defined as 'illegal payments in transfer deals'.

The Premier League - following a meeting of the chairman of 20 top clubs in London this month - have decided to take action after key figures in the football industry raised the alarm.

An investigation of all transfers since January 2004 will be underway, once a very scrupulous person has been found to head it up.

'Bungs' still may be a new addition to your vocabulary but in simple terms it means that in the world of transfers ‘greasing palms'; 'giving back handers' – or whatever you may chose to call it may have been 'de rigeur' in the world of soccer where it is often the big bucks that speak the loudest.   Details of the fallout to follow!

sport culture or sports/culture?

There’s no stopping destinations making everything they can out of hosting major sporting events. For example: Leipzig in Germany (a failed bid city for the 2012 Olympics) raised its game (profile and visibility) when it hosted the World Cup 2006 Draw.

Now host of the 1984 Winter Olympics Lillehammer has become the location for the somewhat unconventional British TV Car show's spoof Winter Olympics. The Top Gear presenters traveled to Norway and took the event to a new level by competing in cars of all shapes and sizes in events including speed skating (car versus human); ice-hockey (blue cars v. red cars); biathlon in 4x4s, and the ski jump (in a rocket injected driverless Mini).

Destination Lillehammer looked more like a ski resort than its real counterpart Torino in Italy which was struggling to keep its winter sport profile as snow machines were bathed in sunshine. As critics described the Winter Olympics as a major event for competing countries whose athletes benefit from a lot of local snow, there is something to be said for holding a Winter Olympic Games in any country with mountains and the ability to manufacture - on demand - enough of the white stuff!

starting blocks....

Every athlete – especially those who do not have sizeable sponsorship deals – values a good working relationship with a major brand.   But nothing could be more disappointing than to find yourself in the middle of a world class event equipped with ineligible 'kit'.

And that’s exactly what happened when Britain's best female racer was disqualified in Torino at the Winter Olympics after officials found that the athlete's skis contravened regulations. Having measured Alcott's boots and found that the width below the boots was narrower than permitted by a small matter of millimeters, she was given her marching orders.

Ironically, manufacturer Fischer gave Alcott her new set of skis after she finished 11th in the women's downhill.  Having made use of her new skis in the first of the slalom runs in the combined event, her Olympic medal hopes for this event were brought to an abrupt end; but Alcott will still return to the UK wearing a badge of honour: the best British female Olympic skier in recent record books.

life after..... a facelift

Ascot has been home to may of the greatest horse racing events in memory (and some of the best hats).  The official opening of the redeveloped racecourse (track and grandstand) takes place on the first day of the Royal Meeting June 20-24, 2006) As one of the biggest races on the international calendar returns home after a £200 million and 3 year venue makeover, many will give a sigh of relief that the Berkshire location has met its opening deadline and will showcase not just a fabulous new world-class sporting facility but also (and like so many others) a multi-purpose entertainment venue.