The Premier League’s £6.7bn payday

Saudi-backed LIV Golf’s awkward détente with the PGA Tour just got more awkward.

The oil-rich Gulf state’s $700bn Public Investment Fund has armed LIV with all the resources needed to hollow out the US tour by taking some of the best-known names and brightest talents.

But on Thursday LIV confirmed that it had recruited Jon Rahm, 29, third in the world rankings, the reigning Masters champion and a key player in Europe’s victory against the US in the Ryder Cup this year.

Wearing a LIV bomber jacket and presumably hundreds of millions of dollars richer, Rahm said he was “proud” to be part of a league that’s “bringing growth” to golf.

That’s quite the turnaround from a man who once pledged his “fealty” to the PGA Tour and voiced his “belief” in commissioner Jay Monahan.

But that was before Monahan struck a secret deal with the PIF to end the LIV-linked litigation in June. Players were kept in the dark. Loyalties were tested.

And Rahm’s change of heart comes as the Tour and PIF face up to their own deadline to strike a deal before the end of the year that would have the Saudi sovereign wealth fund invest in a new entity to house the commercial business of golf.

In the meantime, LIV isn’t sitting around. “We are continuing to invest and build aggressively,” LIV operations chief Lawrence Burian said. “Our league is not slowing down.”

From cold war to hot peace, golf keeps delivering fresh drama.

Continue reading for our take on the Premier League’s £6.7bn media rights payday, and we have a dispatch on the frenetic finale to this year’s Brazilian football league from Michael Pooler, our correspondent in São Paolo.

Do read on — Samuel Agini, sports business reporter

Premier League bags home win with UK rights deal

In the first domestic rights auction since 2019, the English Premier League got the headline it wanted. Annual income from the TV deal rose over the previous deal, albeit by a measly 4 per cent. The new arrangement with Sky and TNT Sports will net the league £6.7bn over four years, compared to the current £5bn over three years.

In a period of high inflation, this is treading water. But for EPL chief executive Richard Masters, this looks like a good result.

Just look at how European rivals are faring. Serie A was forced into taking lower offers than its current deal for the next domestic cycle, while the French league failed to attract a single bid at its reserve price. Ligue de Football Professionnel is now talking directly to potential broadcast partners, but club executives are increasingly nervous about their prospects.

The Premier League had a lever to pull: more games. The previous deal offered up 200 games to broadcasters, including a bespoke package designed for online retailer Amazon’s streaming platform. This time the league went for higher volume to bulk out the topline, making 270 matches available, and ditching the so-called Amazon pack.

The result is that Sky is getting a lot more for its money. Under the current deal, which ends in 2025, each live Premier League game cost the company £9.3mn. Now they will be paying £5.9mn. That amounts to 70 per cent more football for just 7 per cent more money, according to Enders Analysis.

It’s a formula that is working for other football rights holders, despite complaints from players. Uefa’s latest UK broadcast deal also saw the headline income figure go up, but the number of games being offered went up much more. Fifa’s plans to increase the number of World Cup matches from 64 in Qatar to 104 when it is held in the US, Mexico and Canada in 2026 should have a similar impact on revenue.

For Premier League clubs, this week’s deal is likely to be celebrated. It secures their financial dominance over the rivals, and provides four more years of certainty during which the league can try to squeeze even more juice from international rights. The rest of Europe will look on with envy.

But with income essentially stagnating, efforts to bring in new rules to limit spending look increasingly well timed.

Box office finale offers lessons in Brazilian football

Brazilian football has a saying: “There are some things that only happen to Botafogo”.

So it turned out once again for the Rio de Janeiro club now owned by serial soccer investor John Textor, after its dreams of a first national championship in nearly three decades were dashed.  

Despite leading the top flight for much of the season — the team held a 13-point advantage at one stage — a spectacular collapse in the latter half of the campaign resulted in a fifth place finish.

Instead, Palmeiras were this week crowned champions of the Serie A, or Brasileirão, for the second year in a row. It must be a bitter pill to swallow both for Botafogo supporters and Textor, who purchased a 90 per cent interest in the team last year. 

The acquisition was among the first of a handful of Brazilian clubs to be bought following a new law designed to attract investment into the sport and restructure debts. Textor is also the proprietor of Olympique Lyonnais, Belgian outfit Molenbeek and has a minority stake in Crystal Palace.

The American businessman has sought to overhaul Botafogo’s shaky finances and professionalise the business side of the operation, while delivering an exciting spectacle to fans.

After riding high, a turning point this season was a 4-3 home defeat to Palmeiras in November. Botafogo held a three-goal lead in the first half, but after having a player sent off capitulated in the dying moments.

In a pitchside interview afterwards, Textor alleged “corruption”. He was handed a temporary suspension from attending matches and fined. A sports court this week rejected Botafogo’s request for an investigation into refereeing in several of this season’s ties. 

There was also drama at the other end of the table on the final day, with the late legend Pelé’s old club Santos relegated for the first time in their history. Angry fans set cars and buses on fire. 

Despite the disappointment, Botafogo will now play in the qualifiers for the Copa Libertadores, South America’s most prestigious club tournament — not bad for a side only promoted back to the Brasileirão two years ago. 

Even if there’s an element of truth to the notion that singular events tend to befall Botafogo, its rollercoaster season showcases the potential and perils of investing in the Brazilian game. 

Highlights

• The Qatari owners of Paris Saint-Germain agreed to sell a minority stake to US investment firm Arctos Partners, which has accumulated passive positions in teams across sport. The French football club was valued at more than €4bn in the deal.

• Luton Town are one of English football’s fairytales — the club sank all the way into non-league and almost went out of business, before being rescued by local fans. Now back in the top tier, Luton’s Kenilworth Road stadium will this weekend host the richest club in football: Manchester City. The game is a showcase for the Premier League’s efforts to make sure every team can compete.

• Dotcom billionaire Mark Cuban is selling control of the Dallas Mavericks NBA franchise to the Adelson family. So what comes next for this serial entrepreneur? Read our profile to find out.

• As investors recognise sports as an asset class and valuations boom, the deals are becoming increasingly complex. That can only mean one thing: the lawyers are all over it.

Final Whistle

Remember when Meredith Whitney predicted almost a year before the 2008 credit crunch that Citigroup was in trouble?

The financial analyst has a new theory. And it’s got to do with the rise of sports betting in America.

“Retail spending has been down all year, restaurant spending, travel, services, leisure,” she told CNBC.

But the research she’s looking at suggests that “the fastest growing leisure spend is fantasy sports and online sports betting”.

“The negative impact is that it’s all young men. I dovetail that with Pew Research, which says that 63 percent of young men are single, and that’s the highest it’s ever been.”

Apparently, half of those young men “have no interest in dating” and 30 per cent “have not had sex in over a year and don’t seem to care”.

“Young men who’ve grown up with gaming are used to doing everything on their phone, and now they can do all sorts of betting on their phone.”

Noting how much young women love songwriter Taylor Swift, Whitney’s worried about the possible impact on the housing market as the older generation looks to sell their big home.

Not all of Whitney’s bets have come off. In 2011, her theory was that municipal bond markets could crash due to a combo of highly indebted cities and rising pension obligations. It didn’t work out.

Watch Whitney explain her thesis here.