Sports Media Values Soar; A New President for the CPA; New Approaches for Women's Sport; More Saudi Sport Buys; On-Going Cavendish Soap Opera

Key Takeaways:

·         Value of Sports Media Rights Continue to Explode

·         Who Will Be the Next CPA President?

·         New Models for Women’s Sport

·         Will the Cavendish Soap Opera Ever End?

·         Saudi Arabia’s Play for International Sports Dominance

Front Office Sports reported that sports media rights could surpass $60 billion globally by 2024. Indeed, they reached a level of $55 billion during the year just ended, thanks to expensive new contracts with both the American NFL and with the new Indian Premier cricket league. In 2021, the NFL finalized media rights deals with CBS, NBC, Disney, FOX, and Amazon worth a collective $113 billion over 11 seasons. (Amazon received exclusive rights to “Thursday Night Football” — the first time a tech company has held exclusive NFL rights.) Meanwhile, a joint venture secured the Indian Premier League cricket streaming rights for $2.6 billion over five years. The numbers just keep getting bigger.

Over the last year the emerging rider’s group, The Riders Union, has been in the news more than the long-time CPA rider’s association, as it has attempted to build up its membership and level of influence in the sport. However, in a long (and self-congratulatory) press release, the CPA recently summarized eleven different projects and gains which the organization has made over the past decade under the leadership of Gianni Bugno.  The claim include progress on safety, prize money, women’s racing, improvements in the Joint Agreement and post-career transition assistance. Going largely under the radar thus far is the fact that Bugno is retiring from the post, and a new election for the office will be held March 17, on the eve of Milano-San Remo. We do not know of any riders who have publicly announced their candidacy for the office, but rumors suggest that former riders Adam Hansen of Australia and Steve Morabito of Switzerland are among those throwing their hats in the ring.

A new report from Play the Game summarized the extent and underlying objectives of Saudi Arabia’s recent expansion into global sports – including the purchase of the Newcastle United English football team, the highly controversial LIV Golf initiative, and the recent signing of Cristiano Ronaldo to a Saudi football club. Just this week, the country’s Public Investment Fund (PIF) – the actual vehicle through which all of these acquisitions have been made – is emerging as the buyer for World Wrestling Entertainment (WWE). PIF controls about $620 billion in assets, and is chaired by the Kingdom’s controversial crown prince, Mohammed bin Salman. The Saudi acquisition spree in sports looks like it may only just be beginning.

Miguel Angel López, who was fired by Astana last month, after the team allegedly discovered links to a key figure in a performance-enhancing drug trafficking ring, won a national-level event back in his home country of Colombia while riding for the Continental-level Medellin EPM team. This win should raise questions regarding the ethics of López continuing to race, after Astana deemed him too risky – especially considering that he will be competing against mostly amateur-level riders looking to gain a foothold as professionals. If a rider is likely to have broken doping rules at the sport’s top division, it seems pretty indefensible if they are allowed to simply step down a few levels and beat up on lesser opponents. Add to this the fact that López will apparently be racing against his former teammates and WT peers in Argentina next week, and it looks increasingly bad that the UCI (and doping authorities) haven’t taken action regarding López’s apparent links to a major doping figure – and don’t appear likely to.

The issues of women’s sports governance, economics, and talent development converged last week on multiple sporting fronts, with implications for cycling. Former champion runner Lauren Fleshman’s memoirs, Good for a Girl, provides a poignant analysis of the challenges she faced being trained and coached with techniques derived from men’s development programs. Her observations provide an understanding as to why so many women are dissuaded from entering sports, and why talented women often exit sports too early. She identifies ready-to-implement supportive structures that could rapidly change the context for women to succeed in sports, many of which would lower barriers for participation, increase talent retention, and ultimately change socio-cultural constructs about how women athletes are perceived.

Attention to Fleshman’s observations might have helped the National Women’s Soccer League (NWSL) avoid its current abuse crisis. Four coaches were permanently banned by the NWSL last week in a sweeping response to an independent report that uncovered widespread sexism, financial manipulation, emotional and physical abuse in some of the league’s best teams. The league’s quick response confirmed its commitment to change and reinforced fan trust. That fan base is driving the league’s strong financial outlook which includes raising the salary cap for its players, adding two new franchises, and preparing to upsell its broadcast rights.

Women’s cycling has also had its issues with abuse, many of which were mitigated but not resolved by the rapid adoption of the UCI’s Women’s WorldTour model. As sports like soccer – and now cycling – move towards privatized youth talent identification and development models, ever-younger male and female athletes are being drafted directly into professional programs. Many of these programs lack clear integration with national federation oversight standards. Hence, it is imperative that the same forces which Fleshman identified as detrimental to athlete development in running (and which impaired the NWSL) remain clearly in focus for cycling. One program which has been successful in this regard is Team Twenty24, and one to watch is newly minted Cynisca Cycling women’s team – a joint venture between private backers and USA Cycling.

What is going on with Mark Cavendish and Astana? The sight of the veteran British sprinter being picked up by an Astana team car at a Spanish airport in advance of a training camp this past week seems to confirm the rumors that a contract is in place. The only question remaining now is: why has there been no announcement about one of the most significant free-agent acquisitions in years? One theory suggests that a small disagreement between Cavendish’s personal sponsors and the team’s own partners is holding up an announcement. A potentially more substantial roadblock is that the team doesn’t have room to sign both Cavendish and his hand-picked 2023 lead-out man, Cees Bol. Cavendish, aware that Astana has almost zero pedigree winning major sprints, knows he needs to bring some handpicked support if he wants a chance to break Eddy Merckx’s all-time Tour de France stage win record. If Astana can’t come to an agreement to send one of their current riders home for the season (probably with a nice buyout), it isn’t impossible to imagine that Cavendish might still walk away from the deal and head elsewhere with Bol in tow. For example, Israel-Premier Tech has a guaranteed invitation to the 2023 Tour de France, a much stronger roster and an available roster spot.

The US bike manufacturer Specialized announced last week that it was laying off 8% of its employees, or some 125 people. This comes just a few weeks after discontinuation of its ambassador program. While severe economic challenges have impacted companies both across the bike industry (Outside, Zwift, Wahoo, Strava, Pearl Izumi, The Pro’s Closet, etc.) and the wider economy in recent months, Specialized’s pullback signals a significant retrenchment from their early COVID-era aggressive expansion plans, which included purchasing and opening their own retail network and even starting a consumer-direct sales pipeline. Outside of the simple fact that the era of cheap capital is over, this retreat confirms that the COVID bike boom was an aberration that pulled future years of consumption forward. The initial misread of the trend by the industry’s major brands, and ensuing production bottlenecks and product shortages triggered a whiplash effect where there are now too few customers and too little money chasing too much product. Ironically, the industry has come full cycle: the next few years will likely look a lot like the landscape before COVID hit in early 2020.

Cycling’s increasingly app-connected training ecosystem also received a major jolt last week as Strava found itself publicly defending its price increases – up to double the current monthly rate for many users. Essentially doubling the monthly fee for paying users is extremely risky in an uncertain economy and is unlikely to convert free users into paying accounts. The more likely outcome is a mass exodus of paying customers back down to Strava’s free tier – or to other tracking platforms supported by device manufacturers like Garmin and Hammerhead, or to Zwift, or to coaching platforms that already provide excellent value to consumers through customized personal improvement programs. Even Netflix could benefit, as it recently announced a new on-line fitness program in conjunction with Nike. This story will undoubtedly get more attention as the price hikes take effect, and it may force further scrutiny on subscription model analytics for privately-funded connected fitness tech platforms – and whether or not investors are being led astray similar to the very public Peloton implosion in 2022.