MarketLine Blog

Posts about Sports

Sky high golf equipment prices counter-productive

MarketLine

Sales of golf equipment have fallen noticeably in recent years, with the sport’s traditional markets of the US, Europe, and Japan particularly affected. Falling participation levels are driving a fall in equipment sales as people baulk at the price of golf and slow play issues make a sport for which many simply do not have time in a society that demands people spread themselves thinly hard to access. This has impacted manufacturers with TaylorMade-adidas in particular experiencing severe problems. A constant churn of new equipment has led to a need… Read more

Bernie Ecclestone departs F1

MarketLine

The business model utilized in Formula One under the regime of Bernie Ecclestone and the ownership of CVC served the purpose of making shareholders rich. Yet, this was achieved at the expense of the sport. TV audiences have been in decline for a long time, several teams are struggling to survive, races are leaving traditional areas of support and the fans are unhappy. New owner, Liberty Media, must address these problems if Formula One is to regain impetus and become sustainable for all interested parties in the long term. For… Read more

Football spending – Driven on by TV revenue and relegation fear

MarketLine

Headline grabbing transfer fees, staggering sums paid to agents, and a record-breaking total summer transfer spend by English Premier League clubs has prompted questions over how far football’s extravagance can go. In response, Mino Raiola, agent to Manchester United’s world record signing Paul Pogba, stated that he expects to see the first £200m ($305.6m) transfer fee paid within three to four years. With the new deal to broadcast Premier League games coming into play this summer, clubs have vast financial resources available to them, with an estimated £2.78bn ($4.2bn) flooding… Read more

Nike: England sponsorship deal in jeopardy

MarketLine

In modern sport, funding is a large key to success and in no sport is that more apparent than football, the ultimate game of the haves and have nots. International football has not escaped the phenomenon with England plowing in money as if it is an endless resource while Ghana’s players insisted on cash only payments at the 2014 World Cup amid fears that they would not be paid otherwise. Wembley Stadium, world-leading salaries and a state-of-the-art football center do not come cheap and the money has to come from… Read more

UK Bookmakers hedge bets with consolidation

MarketLine

July 25 2016 saw the latest move towards consolidation in the UK gambling industry as online bookmaker 888 Holdings Plc (888) and casino operator The Rank Group Plc (Rank) approached longtime incumbent William Hill Plc (William Hill) about a potential merger. The merger would create one of the largest gambling groups in the world and the share prices of all three protagonists responded well to the announcement. UK takeover rules dictate that 888 and Rank now have until August 21 2016 to submit a formal offer. This is somewhat of… Read more

Sports Direct: Working conditions scandal fallout must be managed to minimize damage

MarketLine

Recent revelations about Sports Direct’s working practices have been largely made via exposé reporting from The Guardian. Secret filming in the company’s Shirebrook warehouse led to claims of a culture of fear, pay of less than the national minimum wage, unpaid after-hours work, and questionable punitive practices. This was then followed by written reporting and interviews with workers, both from the warehouse and from stores. Although terminology like ‘Victorian workhouse’ and ‘Gulag’ is sensationalist and unwarranted, Sports Direct was forced to respond to the claims in a bid to limit… Read more

UK Bookmakers hedge bets with consolidation

MarketLine

July 25 2016 saw the latest move towards consolidation in the UK gambling industry as online bookmaker 888 Holdings Plc (888) and casino operator The Rank Group Plc (Rank) approached longtime incumbent William Hill Plc (William Hill) about a potential merger. The merger would create one of the largest gambling groups in the world and the share prices of all three protagonists responded well to the announcement. UK takeover rules dictate that 888 and Rank now have until August 21 2016 to submit a formal offer. This is somewhat of… Read more

Corporate Sponsorship: Companies hypersensitive to damaging controversies

MarketLine

When a company is giving serious thought to sponsoring an event or club, or signing an individual to a costly endorsement contract, it takes several factors into consideration. The benefits that a company is seeking by entering into such arrangements are namely revenue growth, an improved corporate image, and increased brand equity as a result of greater consumer awareness. This is a double-edged sword however, as scandals involving sponsored celebrities or organizations can reflect badly. In many instances, there is no obvious link between the sponsor and the sponsored party…. Read more

WWE Inc: the NXT big thing?

MarketLine

WWE is the largest wrestling promotion globally, and listed on the New York Stock Exchange. Its recent financial performance has seen revenue and net income grow, with growth across most segments. In physical figures however the company’s TV ratings and live event attendance is down, with its key demographic of older males alienated by the company’s ham-fisted approach to mainstream appeal. One way the company has won back some wayward fans is the NXT brand, available exclusively on the WWE network. The successor to the Florida Championship Wrestling developmental territory,… Read more

The Olympic Stadium and West Ham’s deal of the century

MarketLine

The Olympic Games was held in London in 2012 much to the joy of the majority of the British public. After an arduous bidding process, the London delegates overcame the bid from Paris and scenes of jubilation from famous sports personalities and members of the royal family were filtered around the world. The Olympics is viewed as a festival of sporting accomplishment and it requires a huge investment from the government, and in turn, the people of the nation in which the event is being hosted. Once the bid was… Read more

BT Sport and UEFA: Poor European football viewing figures continue to cause concern

MarketLine

BT turned up the pressure on its rival Sky in November 2013 when it announced that it had acquired the rights to become the exclusive UK broadcaster of the UEFA Champions League from 2015. The Champions League is the pinnacle of European club football and the presence of clubs such as FC Barcelona, Bayern Munich, Manchester United, and Real Madrid ensures that there is great global interest. The competitions final is now the worlds most-watched sporting event, attracting a global TV audience of around 180 million in 2015. By way… Read more

Under Armour issues new shares, underlying concerns persist

MarketLine

On March 16, 2016, Baltimore-based performance apparel giant Under Armour announced it was to issue new stock in the form of new Class C shares. The new shares, which do not carry voting rights, became ‘live’ on April 8, effectively halving the share price. These shares are traded under the ticker UA:C, while the Class A shares continue to float under UA on the NYSE. Both classes of these openly-traded shares exist alongside the company’s Class B shares, all of which are beneficially owned by founder and CEO Kevin Plank,… Read more

Adidas and Manchester United: Top of the merchandise league

MarketLine

As explored in the MarketLine case study adidas AG: Bumpy road on Route 2015, adidas invested significant funds to become Manchester United’s official outfitter and merchandiser and so far, it looks a shrewd investment as sales of this season’s kits have broken all records. In July 2014, adidas announced that that it had signed a deal to become the official outfitter and merchandiser to English football club Manchester United, believed to be the best supported in the world. The deal, worth £750m ($1,235m) over 10 years, more than doubled the… Read more

Shimano Inc.: Tour de France ends with another Shimano victory

MarketLine

The bicycling and fishing components giant has had another fantastic year in 2015. With Team Sky’s win for Chris Froome in the sport’s greatest grand tour, comes another win for Shimano, who supplied the team with its top of the range Dura Ace Di2 components for Sky’s hugely successful Pinarello Dogma race bike. This is rather a coup for the company as the exposure from the world’s biggest public race rarely fails to trickle down to direct sales for those companies that have sponsored the most successful teams. With the… Read more

Spieth Masters win great news for Under Armour

MarketLine

Jordan Spieth’s record-laden charge to Masters victory has made front and back page news and Under Armour is basking in the 21 year old Texan’s reflective glory. On his way to a joint tournament record 18 under par, Spieth broke record after record: best 36 and 54 hole scores in Masters history; most birdies ever recorded at one Masters; only man to ever reach 19 under par at The Masters; first wire-to-wire winner since 1976. The list goes on. If Spieth was the happiest man in the US on Sunday… Read more

Earning its stripes: the success of Sports Direct International

MarketLine

Sports Direct International Plc. has been one of the outstanding financial successes in UK high street retail over the last 10 years. The sports apparel and equipment retailer has grown rapidly, hastening the demise of former market leader JJB Sports into bankruptcy in 2012, and entering the FTSE 100 in September 2013. The business is often considered to be unconventional, principally due to its bold retailing strategy and the role of founder and controlling shareholder Mike Ashley. Nevertheless, its unprecedented growth to become the market leader in UK sports retail… Read more

Record deal reinforces confidence in Manchester United’s global brand

MarketLine

The news that Nike would not be extending its kit manufacturing deal with Manchester United may have come as a disappointment to some fans, but the blow was softened by the swift announcement of a record-breaking new deal with German manufacturer Adidas, starting in the 2015/16 season. Nike has supplied United’s kit for the previous 13 seasons, and some had pointed to their reluctance to extend the deal as evidence of a slump in United’s brand power after a less than impressive showing last season. Indeed, in a statement Nike concluded that… Read more

Nike and Manchester United: end of an era?

MarketLine

As explored in the MarketLine case study “NIKE, Inc.: Building a diverse business“, the US sportswear giant has established itself as a major provider of equipment and apparel in a number of sports including basketball, golf, soccer, and tennis. One of the strategies Nike has used to achieve its goal is to enter individual sports markets on the back of a highly successful individual (think Michael Jordan in basketball or Tiger Woods in golf), or team (Brazil national soccer team). In 2002, Nike furthered its interest in soccer by signing… Read more

David Moyes Sacked as Manchester United Manager

MarketLine

On April 22nd, Manchester United finally brought an end to the unhappy and unfruitful 10 month reign of manager David Moyes. Moyes took over from Sir Alex Ferguson in June 2013 after the Scot had led the club to its 13th Premier League title, but in truth looked overawed by the size of the job from day one. Moyes struggled to cope with the intense media scrutiny and the expectation levels at one of Europe’s elite clubs. While the playing squad undoubtedly needs a major overhaul, Moyes must take some… Read more

England’s new football kit: Fans react with disgust

MarketLine

Yesterday (March 31st), the FA and Nike proudly unveiled the new football kit that will be worn by the England national team at this summer’s World Cup in Brazil, but fan reaction was not what they had been hoping for. The new all white kit, so proudly modelled by Premier League superstars such as Wayne Rooney, Jack Wilshere, Steven Gerrard, and Raheem Sterling, is the second England team strip manufactured by US sportswear company Nike, which pays a reputed £25m (approximately $39.6m) for the privilege of being the team’s exclusive… Read more

Can BT Sport challenge Sky’s dominance?

MarketLine

On August 1 2013, BT launched its sports TV offering, BT Sport, a flagship service broadcasting out of London’s Olympic Park. By paying vast sums of money to acquire the rights to a wide range of sports including Barclays Premier League football, Serie A football, Bundesliga football, Aviva Premiership Rugby, UFC, and MotoGP, and by poaching well-respected sports presenters like Jake Humphrey and Clare Balding, BT has shown that it is serious about rivaling Sky when it comes to sports broadcasting. Sky’s previous competitors, Setanta and ESPN, ultimately failed to… Read more

BT’s offering unlikely to dethrone Sky from the Sports TV market

MarketLine

BT launched two new channels aimed at carving a lucrative pound of flesh from the incumbent Sky for the sports television market, although it is unlikely to seize the throne under its current plans. BT has invested £736m in 38 Premier League games and exclusive of coverage of the Aviva Premiership rugby season, with over 500,000 customers signed up. Other offerings include UFC, MotoGP, and Women’s Tennis. The company claims that its channels will be free to its broadband customers, although this is a half truth. Tablet, smartphone and computer… Read more

Coconut Water Consolidating Growth in a Burgeoning Segment

MarketLine

Coconut water has experienced a lot of initial success in the US due to its unique taste profile and sports nutrition benefits. Now is a pivotal time to further consolidate and grow the market, lest it be dismissed as just another ‘fad’ category. The myriad of health benefits associated with consumption means that a natural positioning for coconut water has been a healthier alternative to sports nutrition drinks. This has particular appeal to athletes who have become reticent in recent times to consume some of the more commercially popular sports… Read more

Manchester United: Number 1 on and off the field

MarketLine

As the 2012/2013 Premier League season draws to a close, it looks very much like Manchester United is going to regain the right to call itself the best team in the land. Surely not even the club that loves to make things hard for itself can throw away a 13 point lead with only 5/6 matches remaining? The club’s success is not, however, limited to the field of play with financial data related this week showing that the club is by far and away the Premier League’s number one when… Read more

BT buys ESPN’s UK and Ireland channels

MarketLine

BT is proceeding full steam ahead on its mission to rival BSkyB as the UK’s leading sports broadcaster and today announced an agreement to buy the ESPN and ESPN America channels. The deal, the details of which remain scarce, will allow BT to significantly increase its live sports coverage, with ESPN currently holding rights to show FA Cup, Scottish Premier League, Uefa Europa League, and German Bundesliga matches. The deal is expected to complete in July this year and if all goes to plan, will coincide perfectly with the planned… Read more