Can a watchdog fix English football?

Some partners just go hand in hand. Think Rolex and Wimbledon, Coca-Cola and the Olympics, or Adidas and German football.

Think again on that last one. US sportswear maker Nike has swooped in to break up a partnership that has defined German football since 1950. The deal was so important that Nike chief John Donahoe was in Germany for the pitch. The swoosh will replace the three stripes in 2027, but the fallout will run and run.

Sports marketer Tim Crow says Adidas will now “move heaven and earth” to win deals with German national team players. But the big target could be Adidas’ deal with Fifa, the organiser of the World Cup. The duo have been an item since 1970. The current partnership lasts until 2030.

“Lose Germany? Painful, very painful, but manageable,” Crow says. “Lose Fifa? Checkmate.”

In this week’s Scoreboard, we ask if a new regulator for English football will do anything to fix the game’s financial woes. And we look at why a bankruptcy case in the US is becoming a test case for live sports TV distribution.

Do read on — Samuel Agini, sports business reporter

Will England’s football regulator root out bad owners?

Rishi Sunak, Britain’s beleaguered prime minister, used cheesy memes to celebrate the advent of English football’s new independent regulator. The government introduced legislation to parliament this week, bringing the new body a big step closer.

The key stated aims of the imaginatively titled “Independent Football Regulator” are: “To improve financial sustainability of clubs, ensure financial resilience across the leagues and to safeguard the heritage of English football.”

But can it really do any of the above?

One area where it hopes to make an impact is through tougher tests for would-be owners and directors. A new licensing system will come in too, to help keep existing owners in check by setting minimum standards on various metrics, such as fan engagement. On paper, it all sounds good.

But in practice, the legal and regulatory experts we’ve been speaking to are unconvinced. For a case study on all these issues, you can read our deep dive into the situation at Reading FC in England’s third tier.

For one, raising the bar for new owners does nothing for those already in the game. Second, the bar might be moved higher, but it will probably equate to things such as “Is this person a convicted criminal?“, rather than “Do they know how to run a football club?”

And thirdly, circumstances change. A new owner may arrive with bulging bank accounts and the best intentions, but a downturn in their core industry — say, the Chinese property market — could quickly erode their ability to keep a club afloat.

What about rooting out “unsuitable” owners, as the legislation for the IFR has promised to do, through an ongoing licensing system? Again, it appears great in theory. But how would it really work?

Let’s say a club owner had repeatedly overspent on players, then failed to pay the bills and racked up huge amounts of debt. Would a football regulator be able to force the sale of what is a private company? Would the British government be willing to take control of a club while it searches for a buyer? And would the British taxpayer be on the hook for player wages in the meantime?

Even if the regulator was willing to step in as an owner of last resort, it could fall foul of global rules. Simon Leaf, head of sports law at Mishcon de Reya told Scoreboard: “One suspects that any such move by an independent regulator may also raise eyebrows within Fifa — particularly given the strong regulations that it has with respect to state and outside interests interfering in club affairs.”

It’s very early days for the UK government’s attempt to get a grip on football’s bad habits. Perhaps it will help nudge owners in the right direction when it comes to balancing the books.

But without a fundamental rethink of football’s basic business model, right now it is hard to see how regulation can change the score.

What a bankruptcy case tells us about the future of US sports media

The Major League Baseball season opens next Thursday, after one of the wildest off-seasons in recent memory. Headlines have been dominated by the record contract for Dodgers star Shohei Ohtani, and then a developing story in which Ohtani’s interpreter was suddenly fired for alleged gambling.

But one problem bedevilling front offices for months has been the question of how and where some clubs’ games would be televised. 

MLB, along with the National Basketball Association and the National Hockey League together had dozens of their clubs’ local broadcast rights contracted to Diamond Sports Group, a subsidiary of news distributor Sinclair Broadcast Group. Diamond declared Chapter 11 bankruptcy last year.

According to people familiar with the matter, Diamond had reached agreements to wind-down its operations in December, until a surprise, eleventh-hour deal struck with Sinclair and Amazon to restructure the company was announced in January.

The manoeuvrings of this particular bankruptcy case have become a proxy war for the future of live sports in the US: leagues, clubs, distributors, and financiers are trying to answer the question of whether live broadcasts will ever skip linear television entirely and go straight to streaming.

We explore the broader parameters of this fight in our weekend read on the Diamond bankruptcy here.

For MLB, the Diamond bankruptcy created an opportunity to test out something new: take back the rights of some local clubs from a cable distributor and begin to centralise its own direct-to-consumer option, potentially through streaming.

That plan will now be realised for two MLB clubs that previously had contracts with Diamond: the 2023 National League champion Arizona Diamondbacks and the San Diego Padres.

A person familiar with the league’s thinking said that MLB’s move to centralise the local rights of the two clubs was not proactive but reactive to the Diamond bankruptcy. The league declined to comment.

After Amazon stepped in, three other MLB clubs — the 2023 World Series champion Texas Rangers, the Cleveland Guardians, and Minnesota Twins — opted instead to sign year-long extensions to have their games aired on Diamond-owned channels for the 2024 season.

How and whether Diamond’s business of regional sports networks emerges from this year remains an open question. But as other distributors — like Disney, Fox, and Warner Brothers Discovery — aim to pool resources for their own sports streaming service, each stakeholder in North American sports is looking for leverage.

Highlights

• Magnus Carlsen and promoter Jan Buettner set out plans for a multimillion Freestyle Chess Tour, with the pledge to emulate the commercial success of sports events such as the men’s tennis ATP Tour and Formula 1 racing.

• Google DeepMind and Liverpool are bringing artificial intelligence to football tactics. TacticAI, which was created by the technology company and the Premier League club, won over human experts with advice on player positioning at corner kicks, although it is more challenging to apply the system to open play because of the wider range of variables.

• Lewis Hamilton hit out at the governing body of Formula One, the racing series owned by US group Liberty Media. “With the FIA, things happening behind closed doors, there is no accountability and the fans need that,” the seven-times champion said.

• The Premier League charged Leicester City with an alleged breach of its financial regulations and for “failing to submit” audited financial accounts”. The 2015-16 champions, who were relegated to the second-tier of English football last year, hit back at the league and warned that it will “defend itself from any unlawful acts by the football authorities”. The allegations follow charges against Manchester City, Everton and Nottingham Forest.

Profile: the man guiding Ukraine’s top football team through a decade of crisis

Serhii Palkin arrived at Shakhtar Donetsk on what he thought was a six-month placement to the finance team. More than two decades later, Palkin — now chief executive — has enjoyed the highs of winning the Uefa Cup and the opening of a glitzy 52,000 stadium. Then came war. Yet still Shakhtar has managed to score memorable wins over top clubs and produce highly-coveted talent. So how has he done it?

Transfer Market

• McLaren Racing chief Zak Brown has extended his contract as chief executive until 2030. The former sports marketer steadied the Formula One team owner following former boss Ron Dennis’ departure in 2016. Brown is widely credited with steadying the team and attracting blue-chip partners, including Google, Goldman Sachs and Coca-Cola.

• JPMorgan set up a new sports investment banking coverage group led by Eric Menell and Gian Piero Sammartano, according to an internal memo reviewed by Scoreboard. The US bank, which was forced to apologise for backing the failed breakaway European Super League, has advised a range of movers and shakers in the industry, from Formula One owner Liberty Media to Manchester United shareholder Sir Jim Ratcliffe.

Final Whistle

Georgia and Luxembourg aren’t exactly giants of football. Neither side has played at a major tournament before. But Georgia is one step closer after a 2-0 win in Tbilisi in the Euro 2024 playoff semi-final on Thursday.

The former Soviet republic will face Greece next week in the final, and Georgia’s home support look confident about their chances of making it to Germany for the championships this summer. Watch here.