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FootBiz newsletter #51: DAZN's losses, Man United, el clásico and Champions League denouement
The Swiss format reaches its dramatic crescendo this week, but has Europe's premier club competition improved or just expanded?
Ed Malyon & Matt Hughes
January 28, 2025 • Estimated Reading Time: 18 minutes
This week sees the final matchday of the Champions League’s new league phase, and we anticipate it being entertaining, chaotic and full of drama.
You can expect supporters of the new format to hold up this week’s fireworks as its ultimate vindication, but in reality this blistering crescendo brings to an end a league phase that has struggled for a feeling of definition. Results have been happening since September without a feel for what any of them actually mean.
As Rory Smith described it quite neatly, the format itself "has been, by turns, both too predictable and too forgiving.”
Treating the latter critique first, the elite club most at risk of going out of the competition is Manchester City. That said, if they can just beat Club Brugge at home on Wednesday night then they are into the knockouts despite drawing at home with Inter and Feyenoord and losing at Sporting, Paris Saint-Germain and Juventus. Winning just three of their eight games is enough to go through.
Forgiving barely covers it, and assuming City make it through then the cast list of knockout teams is going to have a very predictable look to it too.
There are 11 teams below Man City in the 36-team league table right now and they are: the Croatian champions, the Ukrainian champions, the Czech champions, the Serbian champions, the Austrian champions (and runners-up), the Slovakian champions and the Swiss champions. Girona and Bologna, first-time Champions League qualifiers from two of Europe’s elite leagues, are there too after being pillaged by richer clubs in the summer and struggling to deal with the sort of fixture congestion they are ill-equipped for at this stage in their development. Thanks for making up the numbers, lads, but is this any different to the old format except for the bonus TV money?
So when Smith says it’s predictable, that’s because every team in line for a bye is from one of Europe’s four elite leagues - and all of the qualifiers will come from Europe’s big eight with the old ‘pot four’ teams going home. I’ll quickly define those below using UEFA’s own coefficient.
UEFA coefficient ranks:
Tier 1: Premier League (100.4)
[12-point gap]
Tier 2: Serie A (88.4), La Liga (82.4), Bundesliga (79)
[14-point gap]
Tier 3: Ligue 1 (65.7), Eredivisie (61.2), Primeira Liga (58.5), Pro League (52.7)
[10-point gap]
Of course, as one cynical executive notes, the main aims of the expanded group stage were those two extra fixtures (and the money they bring in) as well as a few more meetings between the competition’s biggest brands. On that front, mission complete but those meetings (Real Madrid vs Liverpool, Bayern vs PSG, Arsenal vs Inter) were, again, somewhat diluted by nobody knowing what the impact of the result would be to the overall picture. Now we’re near the end it seems clearer - the impact is precisely as small as it felt at the time.
This isn’t just anecdotal either. Or vibes. TNT Sports’ ratings for Champions League games are down this year, despite the new format supposedly giving fans more of what they wanted.
Perhaps there will be a surprise to cap off the league phase. Maybe Club Brugge do hold City to a draw and sneak through, eliminating the Premier League giants. Perhaps Dinamo Zagreb shock a Milan team that are already through and nick a playoff spot for one of Europe’s ‘other’ leagues.
There will be drama this week in a micro scale, but whether the macro picture has changed at all is very much up for debate.
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DAZN financial results
DAZN are now entrenched as one of the biggest players in global sports streaming, but their accounts for 2024 reveal widening losses of $1.4bn (up from $1.2bn) on revenues of $2.7bn (up from $2.2bn). They paid out $3.1bn in rights fees alone over the same period.
The streamer recently agreed a monster deal to buy Australia’s FOXTEL, taking out a loan of $1.8bn to finance the transaction. Add in those revenues next year and income will be around $6bn but losses would, presumably, increase in parallel even though DAZN claim they should be profitable in 2024 and are already profitable in several key markets.
Owner Len Blavatnik has made a humongous bet on his OTT platform becoming the global home for sports streaming, pumping in nearly $7bn of his own money over the years to help build a moat that would keep potential competitors at bay.
The London-based billionaire put $827m more into the company via his Access Industries vehicle last year to take his overall contribution to $6.7bn.
SURJ, a unit of Saudi Arabia’s sovereign wealth fund, is close to investing $1bn in return for 10% the streamer which will be the home of this summer’s Club World Cup.
Steidten out at West Ham
In newsletters 45 and 46 we mentioned that West Ham’s technical director Tim Steidten was not safe in the wake of Julen Lopetegui’s departure.
The German is now leaving the club, with the Hammers negotiating a compensation settlement that is expected to also gag him from speaking about the behind-the-scenes tumult. The former Werder Bremen sporting director was brought in by owner David Sullivan to improve the club’s recruitment but struggled to find alignment with former coach David Moyes who questioned and even vetoed some of his market moves.
In the wake of Moyes’ departure, Steidten gained more power but used it to recruit poorly last summer, headlined by the panic buy of 31 year-old Niclas Fullkrug for nearly £30m. Lopetegui was very much his hire, so the Spaniard’s struggles severely damaged Steidten’s credibility, and allied with a slew of disappointments in the transfer market it became increasingly likely he would need to find absolute and immediate alignment with new coach Graham Potter to remain in place.
Steidten last week had his access to the club’s network revoked, signalling there was no future for him in east London after West Ham brought Potter’s favoured recruitment analyst, Kyle Macaulay, over from Chelsea as the new head of recruitment.
Old Trafford regeneration gets funding
One thing most billionaires seem to grasp is that government money is the best money.
For many, including a South African-born troll determined to be the main character of the internet, that means building businesses that have huge government contracts to pump up your ARR.
For others, particularly in American sports, that means getting local city or state authorities to help pay for your sparkly new stadium project. For example, the Buffalo Bills are contributing just $350m of the $1.4bn for their new NFL stadium with the majority of the rest coming from taxpayers.
Inspired by such tales, Sir Jim Ratcliffe last week secured the news he needed as the British government pledged to help fund the regeneration around Old Trafford as he looks to upgrade Manchester United’s stadium into ‘the Wembley of the north’.
Chancellor Rachel Reeves announced that she will support the regeneration project, which will also include new residential, commercial and public spaces as a “shining example of the bold pro-development model that will drive growth across the region”.
United are understood to be leaning towards a demolish and rebuild of the existing stadium after studies found it would only be possible to expand the existing structure to 87,000 seats, though nothing is set in stone yet.
Reeves and the Labour government are keen to invest in the north after a decade-plus of under-investment in major projects and infrastructure by the previous administration.
Manchester mayor Andy Burnham is pushing for the Old Trafford project as part of a wider regeneration scheme that would be the biggest sports project on British soil since the 2012 Olympics in east London.
“We’re already bucking all the national economic trends – our growth and productivity are above the UK average,” said Burnham.
“But with the backing of government and private investors, we can do even more and add an extra £13bn a year to the UK economy.”
Despite Reeves’ surprise statement last week, details remain very sketchy on what the government’s commitment will be. Independent research commission by United has forecast that a rebuild or redevelopment of Old Trafford could create 90,000 jobs and generate £7.3bn annually for the UK economy, but given the scale of the project government funding will be required to assist with improvements in local infrastructure.
Away from Old Trafford, American Man United fans hoping to watch their trip to Fulham on Sunday were greeted by a surprise when they turned over to USA network to find a low-level college basketball game instead.
That doesn’t look like Craven Cottage
USA, which houses most of the Premier League games broadcast on cable Stateside, was broadcasting Duquesne University’s regular season tilt against Fordham when it overran.
18 minutes in, the football eventually appeared.
Deloitte Money League round-up
There were several significant trends revealed in the publication of the 28th Deloitte Football Money League last week, beyond the headlines of Real Madrid becoming the first club to generate over €1bn in revenue, and the ongoing dominance of the Premier League. (For the record there are nine English clubs in Europe's top 20 money makers and six in the top 10, split evenly between the the north west and London.)
More detailed analysis is available from the excellent Kieron O'Connor in his Swiss Ramble blog, but in short the clearest takeaway is the strong probability that the financial advantages of the elite clubs are set to continue growing, particularly those in England.
The increasing importance of commercial revenue, which now makes up 44 per cent of the income of Europe's top 20 clubs at £4.12bn compared to 38 per cent from broadcasting (£1.76bn) and 18 per cent from match-day, plays to the strength of the biggest brands.
While it remains by far the smallest of the three revenue streams the biggest growth came in match day income (up 38 per cent), driven by higher prices and the redevelopment of stadia, not least Real Madrid's expanded Bernabeu.
Real Madrid’s renovated stadium has boosted matchday income
This trend also benefits the bigger clubs, with fellow members of the top 10 Barcelona, Manchester United, Arsenal and Chelsea all planning major stadium redevelopments or even new builds.
In contrast the overall size of the top 20's broadcast pot was unchanged at £3.6bn, but even this stagnation benefits the Premier League, where a new four-year domestic TV deal starting next year will give the English clubs a minor four per cent increase and overseas deals continue to bring in double-digit growth. In the rest of Europe only La Liga has managed to increase the value of its (much smaller) domestic deal, while those of Serie A and the Bundesliga have fallen, and as we have discussed extensively Ligue 1's has halved (and will reduce even further if DAZN succeed in negotiating a rebate.)
With at least five English clubs set to qualify for next season's Champions League due to the strength of their European performances this season, the Premier League will also benefit disproportionately from the additional £372m prize money to be distributed by UEFA this season.
While Real Madrid's lead of £175m over second-placed Manchester City looks unassailable, the rest of the predominantly English chasing pack are not going anywhere either.
The rich get richer.
Nou problems
While all those clubs chase the economic boost that comes with renovation or construction of new stadia, there are also a ton of associated headaches.
Following on from last week’s news about Barcelona pushing back their Camp Nou return yet again, there is concern in Spain over the clásico scheduled for May. With the Rolling Stones due to play at Montjuic on the date of the game, the margin for error has disappeared for Barca and all alternatives are being discussed.
Per local reports, Barca are “convinced” the game can take place at their renovated new/old home, and what a glorious opening of the glammed up stadium it would be.
However, those same reports also note the back-up plans being lined up. First would be to bump Mick Jagger and his chums, which would require some compensation for the operators of the Olympic Stadium. Another option would be to play at Girona, though the 14,600 seats wouldn’t even be enough for all season ticket holders to attend. Espanyol’s stadium in Cornella has 40,000 seats but whether fans on either side of Barcelona’s footballing divide would be happy with the arrangement is another matter entirely.
Which led to the idea of playing the game outside Spain. SPORT mentions Lyon and Marseille as possible venues, both counting on large stadiums renovated for Euro 2016 but requiring negotiations between the Spanish and French federations.
The outside chance is a move to London, Miami or Saudi Arabia, according to the report but given La Liga’s difficulties in moving much smaller fixtures to the United States, it isn’t an eventuality that would come easily or without obstacle.
With the three promoted clubs facing relegation once again, Rob Draper looks at the wider picture of Premier League money and how it is distorting competition.
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Inter Miami drama
There is some debate over whether Raul Sanllehi being removed from all sporting decisions at Inter Miami was a “pre-planned” move as per the club’s version of the story, or related to the fierce argument that broke out with him and Lionel Messi a week or so ago.
But a report from longtime MLS correspondent Tom Bogert has linked Messi’s “exchange of words” with Sanllehi’s apparent demotion.
In perhaps related news, Sanllehi’s duties have been re-assigned to the club’s academy director Guillermo Hoyos, a long-time confidant and former coach of Messi who has been credited with ‘discovering’ Messi in the Barcelona B team many moons ago.
Also of note, Inter Miami’s sporting director and head of scouting have both left the club since Sanllehi was hired last July. Hoyos has a lot of holes to fill.
M&A Murmurs
As we discussed here last week Chelsea have held talks with Monarch Collective, a US-based investment platform focused solely on female sport, about selling them a stake in their women's team.
The dominant Women's Super League club, who have won five successive titles and have a nine-point lead at the top of the table this season, were separated from Chelsea's men's team last May and their ownership was transferred to a sister company of the club's holding group, BlueCo 22, the following month.
Several sources with knowledge of the sales process have privately disclosed that the two developments are intimately connected.
Chelsea's transfer of ownership, which took place two days before the end of the Premier League's 2023/24 Profit and Sustainability Rules accounting period last June, has yet to be signed off as having taken place at fair-market value, a process conducted on behalf of the Premier League by Nielsen Sports.
Sources involved claim that Chelsea's aim is to use the sale of a small stake to external investors to validate the valuation of the women's team in their 23/24 accounts. FootBiz has been told that Chelsea have held talks with eight interested parties, including Monarch, regarding a partial sale based on an overall valuation of between $150m and $175m. For context, their revenue for 2024 was $14m but a 12-15x revenue multiple didn’t shock some experts consulted by FootBiz given Chelsea’s success and the deluge of money pouring into the women’s game.
"It’s a revenue multiple higher than what we’ve seen for NWSL clubs of recent, but it reflects Chelsea’s global brand value and the growing interest in women’s football at large,” said Camryn Novak, co-founder of women’s football consultancy Rexana Ventures, adding that these groups are enticed by “double-digit growth projections, rising engagement across broadcast, live events, and social media, and the unique sponsorship opportunities women’s football provides”.
Monarch are run by American venture capitalists Kara Nortman and Jasmine Robinson, who raised a $150m fund to invest in women's sport two years ago. Nortman was one of the co-founders of Angel City, along with Serena Williams and Natalie Portman, and since completing the $150m raise Monarch have invested in two other NWSL clubs, San Diego Wave and Boston Unity.
Sixth Street, the majority owners of NWSL outfit Bay FC, are broadening their horizons and plan to acquire other teams as part of a multi-club group.
The ‘Bay Collective’ promises to invest in ‘premier women’s football clubs’ around the world and is being led by Kay Cossington MBE.
Cossington was previously women’s technical director at the FA and will be head of global women’s football for Sixth Street in addition to being CEO of Bay Collective.
Michelle Kang’s Kynisca Sports and Mercury/13 are the most prominent multi-club investors in the space, but are seemingly certain to face more competition.
A messy coaching move
Threats of lawsuits and getting FIFA involved continue but the acrimonious move of Martin Anselmi from Cruz Azul in Mexico to take over at FC Porto is confirmed.
The Liga MX side pushed the nuclear button when Anselmi, the Argentine coach, didn’t turn up for training last week after agreeing a deal with the Portuguese giants.
Anselmi insisted that the clubs had agreed to a compensation deal but that the Mexicans then reneged. The clubs are still warring over the terms of his departure, with Cruz Azul claiming Anselmi breached contract by not turning up to work.
They are holding out for the €5m clause in his contract (plus taxes) while the manager’s camp believe the issue will be settled closer to the €3.5m mark.
That FC Porto presented him as their new coach before this was all resolved has riled the management in Mexico who are determined to fight for every last penny.