FootBiz newsletter #28: DAZN's Club World Cup deal, Bundesliga TV rights and Premier League lobbying

This week has been a good reminder that when you are predicting the future in football, not to get too wrapped up in logic or reason.

For example, if you are launching a massive new global club competition, one of the key pieces of making that work is the broadcast rights, as we’ve covered extensively. 

News dropped yesterday that FIFA have secured $1bn from DAZN to broadcast the expanded Club World Cup around the planet, and they will do see for free (with sub-licensing for free-to-air TV networks in some territories).

Most observers had discarded this as a possibility because it makes absolutely zero financial sense.

That was their first mistake.

It doesn’t need to make sense for someone to just do it anyway. As one interested party noted, this development is “terrible for all people saying a Super League couldn’t do that.”

Which is true, right? Most people who believe the Super League can not be revived in any meaningful way are surveying the current landscape, the laws and regulations that popped up after the last attempt and the difficulty of working out the broadcast deal for that and they simply can’t see any path to a viable football business.

Well, who said it has to be viable?

We don’t live in the pre-Covid, zero-rates world anymore where capital was free and investors would just backfill losses to build a super-scale business with a competitive moat. I experienced this first-hand when The Athletic - now profitable - was heavily loss-making but being turbocharged by venture capital. Those structures very rarely happen now, but if there is enough capital, enough will and a longer-term strategic horizon?

There are still some people who can afford to pursue that model.

LIV Golf has burnt an estimated $2.5bn with a business model that never added up, where the only aim was wedging themselves into the pro golf landscape longer term. It was a success, in the end, from that perspective but a bloody expensive one that will take decades to provide ROI.

With LIV in mind, you look at DAZN spending $1bn to broadcast the Club World Cup for free and have to assume that they either have the single-greatest ad sales team on Earth to have confidence in making their money back, or they are going to receive a (long-rumoured) financial injection from Saudi Arabia.

And not to rule one of those out… but if they had the single-greatest ad sales team on Earth then they probably wouldn’t have annual operating losses north of $1bn in their most recently published accounts.

Which takes us back to the Saudi Public Investment Fund (PIF), who has already denied reports to that effect and so we will have to wait and see but there are already close links between DAZN and a number of Saudi sports properties, while the Kingdom is also now intimately tied in with FIFA for the next decade until the 2034 World Cup.

It makes too much sense for a deal to get done there.

Though, to bring us full circle, maybe we need to stop trying to make things make sense?

Welcome to FootBiz, here’s the newsletter…

Special offer extended

I meant to remind people in Tuesday’s newsletter that it was the last day of our Black Friday offer for Premium subscriptions but, to be completely honest with you, I forgot.

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This week we had:

• Monday: What you missed from FIFA's Friday news dump (premium)

• Tuesday: Newsletter #27 - the end of the blackout

• Wednesday: Infantino, Trump and MBS (premium)

• Today: what you’re reading now

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Table of Contents

• Special offer extended

• FIFA bend on Pachuca-Leon inclusion

• Fox offered just $10m for CWC rights

• Sky edges Bundesliga rights auction

• And even more DAZN news

• PL lobby parliament

• M&A Murmurs

• New dawn close for Everton?

• There’s a Big agency deal Bruin

• Lopetegui on the brink

FIFA bend on Pachuca-Leon inclusion

The Club World Cup draw is here and the big news (beyond the DAZN deal) is that Pachuca and León are both in the draw. We think.

We aren’t exactly sure how. This week we asked FIFA multiple times how this was happening and they chose not to respond, despite the rules being fairly clear on multi-club operators only being allowed one team in the competition.

Mexican media first reported that the Grupo Pachuca-owned clubs had effectively been grassed up by Club America, the Mexico City-based giants who wanted to take their place.

Costa Rican side Deportivo Alajuelense also lodged a protest, believing they would and should be next in line.

But FIFA have not budged despite reports that Grupo Pachuca had been told to sell one of the clubs by last week.

Interestingly, they are likely to have to sell one of the clubs anyway if Apollo’s $1.3bn investment in Liga MX passes a vote next week.

Fox offered just $10m for CWC rights

I didn’t know where to insert this in the intro but a fascinating tidbit from The New York Times’ Tariq Panja who reported yesterday that Fox Sports, FIFA’s broadcast partner for the men’s and women’s World Cup, offered just $10m for the Club World Cup.

Given the tournament is set to take place in the United States, that is a tiny sum but echoes what the broadcast industry has told FIFA consistently in the run-up to this tournament: you can’t expect big bucks for an experimental competition where we have no idea what interest will be like.

And yet it only takes one enthusiastic bidder to prove them wrong…

Sky edges Bundesliga rights auction

The Bundesliga’s domestic broadcast rights have finally sold, with Sky the big winner of an auction that had to start over after DAZN took the league to arbitration amid accusations of anti-competitive behaviour.

Sky secured the largest package of 196 live games per season as well as the marquee package of Saturday night games for four seasons from 2025/26.

DAZN did land a blow on their competitors though, winning the popular Konferenz whiparound show on Saturday afternoons off Sky, as well as securing the Sunday fixtures.

While financial details have only been lightly reported, the existing deal is for €1.1bn per season and the increase (or decrease) will be an important data point as investors and the wider football industry tracks broadcast rights growth (or lack thereof) in Europe.

Currently the German league has the second-biggest deal of the European leagues domestically, but make far less than the Premier League or La Liga on its international rights.

Whether fair or not, industry chatter around the Bundesliga rights has centred on whether DAZN could afford to pay all the rights they were bidding for, whereas Comcast-owned Sky are seen as a steadier hand.

And even more DAZN news

The EFL held talks with DAZN over a slightly less lucrative deal for their own TV rights last year before agreeing to extend their existing contract with Sky Sports for a further four years.

DAZN had offered the EFL a contract to buy all of the 1656 matches that take places across its three divisions each season in a move that would have required the lifting 3pm Saturday broadcast blackout, which has been in place since the 1960s.

The EFL rejected DAZN's bold proposal however, partly due to Sky's incumbency advantage, but also because of their enduring support for the broadcast blackout, which is enshrined in law in Article 48 of the UEFA Constitution. 

The EFL have always backed the blackout on the grounds that it helps boost match-day attendancs in the lower leagues and in amateur football on Saturday afternoons, which could be threatened by big Premier League games being televised at the same time.

With many Premier League owners pushing for the 3pm blackout to be lifted and every game sold for broadcast in time for the next TV rights cycle beginning in 2029, it will be intriguing to discover if the EFL continue to defend the interests of smaller clubs, particularly given their own TV deal also expires at the same time.

PL lobby parliament

The Premier League has written to its member clubs asking them to lobby their local Members of Parliament (MPs) as they seek to impose limits on football’s independent regulator.

In a letter to clubs, first reported by The Athletic, the league warns of two principal fears over the Football Governance Bill, which is currently making its way through the British parliament.

The primary concern is of overly strict financial controls, an issue that is already something of an internal warzone for the league. The other is the so-called ‘backstop’ powers that would force the Premier League to share more of its centralised income with the lower leagues.

The PL has been fighting the introduction of a regulator for years, but will ultimately lose that battle after Labour won the general election promising even stronger regulation. Recent weeks has seen a concerted attempt to attack the parliamentary bill that would introduce the regulator across multiple fronts, including West Ham vice-chair Baroness Karren Brady, who is working against the bill in the House of Lords.

This letter is another attempt to soften some of the bill’s sharper edges, urging clubs to send a template letter in an attempt to bring local politicians onside.

Parachute payments, one of the most contentious parts of the PL-EFL relationship, are cited as an example of something the Premier League deems essential “for competitive balance” but that the EFL blames for inequity and financial mismanagement.

M&A Murmurs

Dai Yongge's exit strategy from Reading remain a complete mystery following another eventful few days for the Berkshire club.

On Tuesday former Reading chairman Roger Smee revealed that Yongge had rejected his £25m bid to buy the club he once rescued from a merger with Oxford United proposed by then owner Robert Maxwell 40 years ago. 

The following day The Sun reported that former Wycombe owner Rob Couhig had launched a £10m legal claim in the High Court against Yongge, who walked away from a £30m sale to the American lawyer in September.

Couhig insists that his offer for Reading remains on the table and he wants to complete in time to help sign players in next month's transfer window, but Yongge appears to have other ideas. Reading fans fear that the Chinese businessman is more interested in doing a property deal for the land surrounding the training ground at Bearwood Park, rather than finding the best buyer for the club itself.

The Daily Telegraph also reported this week that Hull City want to speak to manager Ruben Selles about replacing the sacked Tim Walter. Given the uncertainty surrounding the club, Reading are in no position to stand in his way.  

New dawn close for Everton?

Everton will take a significant step towards securing their long-term future and ending years of financial problems later this month when they are handed the keys to the club's new stadium at Bramley-Moore Dock.

The finishing touches of the £800m construction project are on course to be completed before Christmas with builders Laing O'Rourke ready to turn the stadium over to the club.

Everton will stage three test events of increasing size at the stadium in the second half of the season before moving in officially at the beginning of the 2025/26 campaign in August. Earlier this week the club announced ticket prices for the new stadium, with adult season tickets ranging from £640 to £900 and juniors starting at £199.

The Toffees are projecting that the new stadium will enable them to grow commercial revenues from £39m during the 2022/23 season to around £60m in their first 12 months in ground, although this forecast is contingent upon them securing a naming rights deal. The club's commercial income has taken a significant hit in recent years, with revenue down from £50m in 2021/22, following the cancellation of sponsorship deals with companies owned by Alisher Usmanov, the Uzbek businessman who was sanctioned by the government due to his links to Vladimir Putin.

Everton are hopeful of securing Premier League approval for the takeover by the Friedkin Group by the end of the year.

Microsoft closing on PL deal

Keep an eye out for changes in the Premier League’s technical areas as part of a new league-wide partnership with Microsoft that is expected to be signed fairly soon.

Assuming no hiccups, the US tech giant will replace Oracle, who are currently the official cloud partner of the Premier League, but in a new agreement that boasts a far broader partnership remit and will make Microsoft the league’s official technology partner.

Those with knowledge of the deal say Microsoft has learnt a lot from its NFL partnership, which is similar in its broader scale and sees coaching staff using their Surface tablets on the sidelines among a host of other hardware and software use cases.

Despite a rocky start working with the NFL, including one time when Chicago Bears quarterback Jay Cutler publicly referred to the Surface as a “knock-off iPad”, the partnership has gone from strength to strength.

That Microsoft were so keen to dive into such a big deal with the PL tells you all you need to know about the ROI and uplift in metrics they associate with their NFL partnership and, more pertinently, what they think of the Premier League’s reach and impact.

There’s a Big agency deal Bruin

Bruin Capital is buying a quartet of player representation firms to merge and form what will immediately be one of the biggest agencies in Europe.

Nomi Sports, Position Number, Football Division Worldwide and Promoesport will all merge under the new name As1 (pronounced as-1 rather than ay-ess-1).

Per their own press release, they will have more La Liga players than any other agency on day one of operations.

The sports agency world has undergone a period of consolidation in recent years, with Base being bought by CAA, Stellar being bought by ICM (and then subsequently CAA), WME buying BDA Sports Management, Wasserman buying CSM, Excel Sports Management acquiring REP 1 Football and Octagon buying out Prosport International's rugby division.

Lopetegui on the brink

Julen Lopetegui is hanging onto his job as West Ham manager by a thread, with the club hierarchy split on whether to fire the Spaniard after just four months in charge.

A Europa League winner as Sevilla coach, Lopetegui has had a curious career after beginning with Spain’s youth teams, managing Porto and then Spain before being fired the day before the 2018 World Cup began after it emerged he had agreed to take over at Real Madrid after the tournament.

His reign at Madrid was a disaster, lasting less than four months.

Lopetegui kept Wolves in the Premier League in his next job but left in May 2023 and took a year off before succeeding David Moyes at West Ham.

Sporting director Tim Steidten’s position is also under examination, prompting questions over who would hire Lopetegui’s replacement if the club decides to move on.