June 22, 2022

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For the LPGA Tour, a 300% raise is a step in the right direction. The LPGA, PGA of America, and KPMG announced [[link removed]] that they’re doubling the prize money for this week’s Women’s PGA Championship at Congressional to $9 million. The winner will take home $1.35 million.

Crypto Companies Hit Brakes on Sports Deals Amid Crash [[link removed]]

Ron Chenoy-USA TODAY Sports

Cryptocurrencies have crashed in value since late last year, and the fallout is impacting sports sponsorships.

Two high-profile deals between teams and crypto exchanges have reportedly fallen apart [[link removed]] due to the value drop, according to the New York Post.

In the past few weeks, FTX suspended talks with the Los Angeles Angels on a jersey patch deal.A patch deal between a crypto company and the Washington Wizards was also scuttled. With crypto companies spending heavily on lobbying, the Wizards, who play in the nation’s capital, are considered especially valuable real estate.

The prices of bitcoin and ethereum, the two most valuable cryptocurrencies, have respectively dropped by 69.1% and 76.7% since their November peaks.

Shopping Spree Stopped

The pullback comes after a period when crypto companies poured billions into sports sponsorships.

FTX and Crypto.com both inked high-profile arena naming rights deals, with FTX securing the Miami Heat’s home in March 2021 in a 19-year, $135 million deal, and Crypto.com landing the arena of the Los Angeles Lakers, Clippers, Kings, and Sparks, in a reported 20-year, $700 million deal in November.

Crypto.com would reportedly have to pay $385 million to pull out of the naming rights deal.

In the 2021-22 NBA season, crypto companies jumped [[link removed]] to the second-biggest spenders — with $100 million to $150 million in sponsorship deals — after placing 43rd the previous season.

Sports Betting Operators Struggling With New York’s High Tax Rate [[link removed]]

Danielle Parhizkaran/USA TODAY NETWORK

New York’s mobile sports betting laws have forced gambling operators to cautiously watch spending on marketing and promotional offers to combat ongoing financial losses.

New York got off to a hot start with an official handle that totaled [[link removed]] more than $1.62 billion in January — topping the single-month record for any state despite only six mobile operators.

A few of those operators, including DraftKings and Flutter Entertainment’s FanDuel, have requested [[link removed]] New York legislators to change laws regarding current sports-betting tax rates.

Each operator is required to pay a 51% tax rate to the state for 10 years.The average sports-betting tax rate in the U.S. is 19%, per Morgan Stanley.

New York’s current tax rate for mobile sportsbooks has led to huge profits thanks to more than 20 million residents in the state, making it the largest online sports betting market in the U.S.

Gov. Kathy Hochul’s budget plan reportedly expects $357 million in sports betting tax revenue in FY2023.

Double Tax

Operators in New York are also taking a step back due to promotion revenue that is taxed by the state, which has made it “untenable to run a business,” according to the Tax Foundation.

As a Bloomberg report notes, if bettors receive and lose a free, promotional bet, it’s still counted as gross revenue for the sportsbook — even though no money changed hands.

The tax rate as a percentage of revenue could be more than 77%, including federal tax.

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2020 Summer Olympics Cost Tokyo $10.5B [[link removed]]

Yukihito Taguchi-USA TODAY Sports

The cost of the 2020 Tokyo Olympics has fluctuated since the city was named the Games’ host, but on Tuesday, the organizing committee released its final number: $10.5 billion, or 1.42 trillion Japanese yen.

Tokyo was awarded the Games in 2013, and at that point, the bid committee initially projected [[link removed]] total costs would land around $7.3 billion. In late 2019 — even before the games were postponed due to the pandemic — that estimate was pushed to $12.6 billion.

After the Games were postponed and then closed off to fans, organizers lost [[link removed]] $800 million from ticket sales alone. One of the biggest bills was the construction of National Stadium, which cost $1.4 billion.

At the conclusion of the Games last year, organizers expected the total cost to be $15.4 billion, but lowered the number to $13.6 billion four months later.

The public paid [[link removed]] about 55% in total expenses — around $7.1 billion in Japanese taxpayer money.

The organizing committee contributed $5.9 billion.The IOC covered $1.3 billion.Local sponsors spent $3.4 billion. Exchange Rate

When looking at the final figure, it’s important to note the shift in the exchange rate between the yen and the U.S. dollar. Today, $1 buys about 135 yen. Last year, it bought roughly 110 yen.

Under the exchange rate about one year ago, the $10.5 billion number would have totaled around $13 billion. Leading up to the games, the organizers reportedly often used 107 as the exchange rate, which would total $13.3 billion as a final price tag.

Naomi Osaka Launching Media Company [[link removed]]

Jerry Lai-USA TODAY Sports

Naomi Osaka is getting into show business.

The tennis star is launching [[link removed]] media production company Hana Kuma [[link removed]] with her agent Stuart Duguid, in partnership with LeBron James and Maverick Carter’s The SpringHill Company.

The company, whose name means “flower bear” in Japanese, intends to produce:

Scripted and unscripted television seriesDocumentariesAnimeBranded Content

Hana Kuma’s first named credit will come on a New York Times op-doc project on Patsy Mink, the first woman of color to be elected to Congress. It is also working on a project with Amazon-owned cable channel Epix.

Evolving Portfolio

Hana Kuma is the latest venture from the 24-year-old, four-time Grand Slam champion.

Last month, she launched an agency, Evolve, with Duguid. The company signed [[link removed]] Australian player Nick Kyrgios as its first client on Monday. She also has a skincare line, Kinlò, which launched in September and struck a distribution agreement with Walmart in April.

Carter noted that The SpringHill Company is in talks with other star athletes about similar partnerships.

“Naomi can just plug into what we have built,” said Carter.

Osaka made $57 million last year, per Forbes, mostly through sponsorships including Nike, Beats by Dre, Nissan, and Mastercard.

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The Future of Women in Sports

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To celebrate this historic moment, Front Office Sports will host a virtual summit [[link removed]] featuring intimate conversations with some of the most influential female athletes and business leaders. Discussions will include:

What It Means to Be Bold and Brave: A Candid Conversation with Allyson Felix: Olympian, Activist and Entrepreneur NIL and the Road to Equity for Women in College Sports Trailblazing Pros on Breaking Barriers UCLA’s Reilyn Turner on the Collegiate Athlete Experience In the Huddle with Bucs’ Coach Lo

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Conversation Starters Last week, Ohio State’s NIL department tweeted [[link removed]] that the school’s athletes have disclosed more than 1,000 deals, adding to its January count of 608 deals with $2.98 million in earnings. Kansas City mayor Quinton Lucas says [[link removed]] Arrowhead Stadium will receive $50 million in improvement ahead of the 2026 World Cup. The Phoenix Suns have officially introduced [[link removed]] Morgan Cato as the team’s assistant GM and VP of basketball operations, making her the first woman of color in NBA history to become an assistant GM. As professional sports teams and leagues have begun to adopt crypto in recent years, athletes have capitalized on the freedom and opportunities it provides as well. Hear firsthand from Jewell Loyd, star of the Seattle Storm, in lesson 5 of our latest course [[link removed]] to learn more.*

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Today's Action

MLB

07:40 PM

Guardians (+130) at Twins (-150)

Bet Now [[link removed]]

NHL

08:07 PM

Avalanche (-110) at Lightning (-110)

Bet Now [[link removed]]

MLB

02:10 PM

Mets (+110) at Astros (-130)

Bet Now [[link removed]]

*All times are EST unless otherwise noted.

*Odds/lines subject to change. T&Cs apply. See [[link removed]] for details.

Question Of The Day

Are you surprised cryptocurrency firms are leaving their sports deals?

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

Tuesday’s Answer

46% of respondents regularly watch soccer.

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Written by Owen Poindexter [[link removed]], Justin Byers [[link removed]], Abigail Gentrup [[link removed]] Edited by Matthew Tabeek [[link removed]]

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