November 15, 2023

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The Netflix Cup went off largely without a hitch last night, as Ferrari driver Carlos Sainz and PGA Tour star Justin Thomas defeated their competitors to win the event. Aside from a few minor audio/microphone issues, Netflix showed it can successfully broadcast a live sporting event as the streamer explores getting more involved in the rights deals.

— David Rumsey [[link removed]]

Andretti’s F1 Bid Gets Boost As GM Will Build Engines [[link removed]]

Matthew O'Haren-USA TODAY Sports

As Formula 1 descends on Sin City for its highly anticipated Las Vegas Grand Prix, Michael Andretti’s bid to launch an expansion team continues to gain momentum.

The influential American racing figure had already sealed a partnership with Cadillac [[link removed]] for his potential F1 team, and now the brand’s parent company, General Motors, has decided to build F1 engines for the team.

GM announced that it formally registered with the FIA as a F1 power unit manufacturer starting in the 2028 season. Coming on the heels of Andretti’s bid being approved [[link removed]] by the FIA, the expansion process can now move on to the final stages.

If F1 owner Liberty Media gives Andretti the final green light to join the grid in 2025 or 2026, his team will need to partner with an engine supplier until 2028. But having its own engine could be an important long-term achievement, as the team won’t have to rely on its competitors’ product.

Power Supply

Developing championship-caliber engines can cost automakers north [[link removed]] of $1 billion.

Mercedes supplies its own team, plus Aston Martin, McLaren, and Williams. Ferrari supplies itself plus Alfa Romeo and Haas. Red Bull and sister team Alpha Tauri have a power-unit support deal with Honda. Alpine uses engines from its parent company, Renault.

In 2026, Red Bull will transition to using Ford [[link removed]] engines.

PODCAST

🎙️ They Said What?

“Three or four years ago, it was baseball, football, and basketball that we were worried about. Now, we got two other big players to the stage [in F1 and soccer].”

— Former NHL player Shane O’Brien on how the growing presence of soccer and Formula 1 is affecting hockey. To hear more about all things NHL, check out our latest episode of FOS Today.

🎧 Listen and subscribe on Apple [[link removed]], Google [[link removed]], and Spotify [[link removed]].

Roger Federer-Backed On Is Growing While Others Stumble [[link removed]]

Jasen Vinlove-USA TODAY Sports

Roger Federer enjoyed monumental success during his professional tennis career — but one of his most impactful decisions came off the court.

In 2021, Federer invested in Swiss athletic apparel company On, founded in 2010. Terms were undisclosed, but various reports have estimated his stake to be around 3% at a purchase price somewhere near $200 million.

This year, On is turning out to be a bright spot in an otherwise disappointing market for similar athletic brands. In its third fiscal quarter, On saw net sales increase 46.5% from the previous year to $540.2 million.

The most important increase came in the Americas region, which saw sales of $292.2 million — a 60.5% boost. Asia-Pacific sales were up 71.5 % to $46.8 million, while Europe, Middle East, and Africa grew 19.9% to $161.9 million.

A Major Outlier

Unlike On, many top athletic brands have had trouble making gains recently:

Nike missed [[link removed]] revenue projections for the first time in two years. Under Armour saw sales decline [[link removed]] in its most recent quarter. Adidas reported a revenue dip [[link removed]] of 6%. Puma had a weaker-than-expected third quarter [[link removed]].

Weeks before On’s latest earnings report, the company laid out an ambitious plan [[link removed]] to double annual sales to $3.85 billion by 2026. This year’s second quarter brought $486.85 million of net sales.

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This innovative approach [[link removed]] has transformed the traditional season-ticket into a more flexible and valuable opportunity.

In partnership with Ticketmaster, the Orlando Magic continuously strive to understand their fans’ preferences and provide an unforgettable experience for season-ticket holders.

Discover [[link removed]] how you too can revolutionize your season-ticket offering and elevate your fan experience by partnering with Ticketmaster.

German Soccer Pushing $1.1B Rights Deal To Private Equity Investors [[link removed]]

Trevor Ruszkowski-USA TODAY Sports

The governing body of German professional soccer is reportedly mounting a third effort to sell part of its media rights to private investors for as much $1.1 billion.

The 36 clubs in the top two divisions of the German Football League are set to vote next month on whether to hold an auction for the rights, according [[link removed]] to Bloomberg.

The revived effort follows a prior attempt in May that failed [[link removed]] to garner the needed two-thirds approval, and the DFL discontinued a similar initiative in 2021.

Advocates of the plan are looking to bring in outside investors and much-needed cash, particularly as the league attempts to keep up with heightened competition from European powerhouses such as the Premier League and La Liga. Firms such as CVC Capital Partners, Blackstone and Advent International previously showed interest in investing.

But fan sentiment previously played a role in the downfall of the effort this past spring, with organized supporter groups arguing that private equity involvement would overly commercialize the sport.

Even after that failed vote, DFL co-CEO Marc Lenz continued to promote the idea, saying [[link removed]] that “external investment is not off the table.”

The latest attempt is said to be structured as a reverse auction in which private equity firms would be asked how big an equity stake they would seek in return for the investment up to $1.1 billion — with the likely condition that stake remains below 10%.

Twins See ‘Opportunities’ After Separation From DSG [[link removed]]

Brad Rempel-USA TODAY Sports

The Minnesota Twins are no longer tied to Diamond Sports Group for local TV rights, a murky situation that’s already fueling 2024 payroll concerns [[link removed]].

But there is still a meaningful upside, the club says.

By freeing itself from the bankrupt parent of Bally Sports, Twins officials said they also see a long-term potential for greater overall reach and larger average audiences through a new distribution plan, whether working with the league or another entity.

“We certainly understand the challenges. But we also over time, I think, see the opportunities that can come from expanded reach and from making sure anybody, anywhere within our television territory has the ability to watch our games,” Twins president Dave St. Peter told [[link removed]] The Athletic.

“There are certain tradeoffs on all of these options. We’re trying to find the right one for the fans, not just for 2024, but for the long term.”

Twins And Counting

Other teams that have parted from DSG, including the Arizona Coyotes [[link removed]] and San Diego Padres [[link removed]], have seen increased audiences through other methods of distribution via over-the-air, streaming, and cable coverage.

High-powered player agents have noticed that dynamic, as well. “We are out from under poor RSN contracts,” said Scott Boras during recent MLB GM meetings. “It’s opened up a panacea of revenue avenues for teams.”

DSG remains in the midst of attempting a reorganization, and the company recently struck [[link removed]] a deal in which it will return currently held NBA rights back to the league at the end of the 2023-24 season. Similar agreements could be developing [[link removed]] with both the NHL and MLB.

Conversation Starters The Premier Lacrosse League has unveiled [[link removed]] home markets and logos for its eight teams. This Vermont Airbnb has a private golf course [[link removed]] with three greens — not to mention eight bedrooms, a cottage, a pizza oven, and 80-mile views. Playfly Esports and NACE Starleague, the world’s largest collegiate esports league, saw an increase of over 50% [[link removed]] in participation from their Spring 2023 totals, welcoming more than 20,000 student-athletes from nearly 800 colleges and universities.*

BEST EMPLOYERS IN SPORTS

The 2023 Winners Are Here

The wait is over … Front Office Sports is pleased to announce the 2023 Best Employers in Sports Award winners [[link removed]].

Now in its fifth year, the Best Employers in Sports Award recognizes organizations across the sports industry that are doing the best for their employees.

Awards are based on anonymous employee survey data and analyzed by our research partner, Canvs [[link removed]], using patented AI technology — free from subjectivity and human bias.

This survey focused on five key areas, including:

Leadership Diversity, equity, and inclusion Professional development and advancement Employee wellbeing Philanthropic/social responsibility

This year’s winners represent the top 15% of all companies that participated. Check out the entire list, including multi-year winners here [[link removed]].

Editor's Picks The Dallas Stars Want to Be Part of NHL’s Mexico Movement [[link removed]]by Doug Greenberg [[link removed]]The NHL shortlisted Mexico City as a future host city. Formula 1 Las Vegas Ticket Prices Falling From Great Heights [[link removed]]by Doug Greenberg [[link removed]]Some wealthy fans have already paid exorbitant sums. NBA In-Season Tournament Gains Viewers in Second Week [[link removed]]by Doug Greenberg [[link removed]]The viewership is a 73% increase from last year’s equivalent Friday game. Question Of The Day

Do you plan to watch any of the 2024 Paris Olympics?

Yes [[link removed]] No [[link removed]]

Tuesday’s Answer

55% of respondents try to make purchases from sustainable / purpose-driven brands if possible.

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