November 11, 2022

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Today’s episode of The Leadoff is a rollercoaster: Formula 1 capitalizes on its growing U.S. popularity, Amazon bounces back after record-breaking losses, the Ottawa Senators might have a buyer, and Endeavor reports Q3 results. Click here to listen [[link removed]].

FTX, Once a High-Profile Sports Sponsor, Files for Bankruptcy [[link removed]]

Shutterstock

A cryptocurrency platform has filed for bankruptcy — which could have serious ramifications for its partners across sports.

FTX announced [[link removed]] on Friday that the company, along with West Realm Shires Services Inc., Alameda Research Ltd., and roughly 130 affiliated companies, “have commenced voluntary proceedings under Chapter 11.”

Before the announcement, the fallen crypto giant — whose CEO Sam Bankman-Fried resigned on Friday — was looking to secure $8 billion after Binance backed out of a deal [[link removed]] to acquire the platform.

Valued at $32 billion [[link removed]] in January, FTX had made a name for itself in the sports industry in recent years. The bankruptcy filing raises questions about its numerous high-profile sponsorships.

Miami-Dade officials who negotiated a 19-year, $135 million contract with the platform for naming rights to the Miami Heat’s home arena hinted [[link removed]] at legal action if FTX is unable to meet its obligations.Mercedes’ Formula 1 team, which initially claimed [[link removed]] it would keep the FTX logos on its cars during the Sao Paulo Grand Prix this weekend, reversed course on Friday, suspending its agreement.

MLB, the Golden State Warriors, UC Berkeley, Tom Brady, Steph Curry, and Shohei Ohtani had also struck deals with FTX.

Crypto Collision

FTX isn’t the first crypto exchange bankruptcy to disrupt the sports world.

Voyager entered an agreement with the NWSL in December 2021 in which players would receive a portion of the proceeds from the deal in cryptocurrency — but filed for bankruptcy in July. In September, FTX won [[link removed]] Voyager’s assets for $1.4 billion.

49ers Set for Full Takeover of Premier League Club [[link removed]]

Leeds United

The San Francisco 49ers are making big moves across the pond.

The team’s investment vehicle, 49ers Enterprises, is set to buy [[link removed]] all of Premier League club Leeds United at a reported valuation of up to $558.1 million after securing sufficient funds to increase its stake.

The team was bought by Andrea Radrizzani for $51.7 million in 2017. Leeds was in the second-tier EFL Championship league at the time and was promoted to the Premier League for the 2020-21 season.The 49ers took [[link removed]] a 15% stake in 2018 for a reported $11.8 million. Their stake grew to 37% in January 2021 and up to 44% the following November.49ers Enterprises holds an option to buy 100% of the team that expires in January 2024. The transaction could be completed before then, and Radrizzani may retain a small stake.

The deal will also include Leeds’ century-old Elland Road stadium.

Promotion and a Raise

Leeds’ promotion to the Premier League had a bigger effect on its profits than the pandemic.

The team banked [[link removed]] a $30.6 million profit in 2020-21, despite playing the entire season in empty stadiums, compared to a $72.8 million loss the previous season.

Leeds received [[link removed]] $162.8 million in league distributions in 2020-21 and $133.9 million the following season.

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Xponential Fitness Raises Full-Year Outlook After Revenue Spike [[link removed]]

Xponential

The largest global franchiser of boutique fitness brands continues to grow exponentially.

Xponential Fitness — owner of companies like Pure Barre, Rumble, and YogaSix — generated [[link removed]] $63.8 million in revenue in Q3 2022, a 56% increase year-over-year. It attributed the growth to equipment installations and royalties from sales in North America.

North America system-wide sales hit $264.8 million in Q3, up 37% year-over-year.The company sold 258 franchise licenses and opened 128 studios during the quarter.Net losses reached $13.1 million in Q3 2022, compared to $8.9 million in Q3 2021.As of Sept. 30, the company had $136.5 million in long-term debt.

Thanks to the strong results, Xponential has raised its full-year revenue outlook to between $235 million and $240 million in FY2022, up from a previous guidance of $211 million-$221 million.

It expects to open 500-520 new studios during the fiscal year.

On the Market

In June 2021, Xponential filed [[link removed]] for an initial public offering after a yearlong delay caused by the pandemic. A month later, the company went public after raising [[link removed]] $120 million in its IPO.

Shares of Xponential have reached as high as $23.60 in a little over one year on the NYSE.

Conversation Starters Florida quarterback Anthony Richardson has signed [[link removed]] more than $1 million in NIL deals this season, per On3. LIV Golf has denied [[link removed]] a report that it’s preparing to replace CEO Greg Norman with Taco Bell CEO Mark King. The Gee v. NCAA wrongful death trial [[link removed]], which will hand down the first jury verdict on the NCAA’s culpability with head injuries, could go until Nov. 21 — a month after its start.

FRONT OFFICE SPORTS AWARDS

Are You One of The Best Employers in Sports?

Whether it’s great leadership, focus on diversity, equity and inclusion or commitment to employee wellbeing, the Front Office Sports Best Employers in Sports Award [[link removed]]recognizes organizations who do right by their employees.

How do we determine who wins the award? We don’t — employees do! The award is based entirely on anonymous survey results from sports industry professionals.

Responses will be evaluated in collaboration with our primary research partner, Canvs [[link removed]], using patented AI technology free from all subjectivity and human bias. There is no word count limit and you can even use slang, text abbreviations, sarcasm or emojis to complete the survey.

The 2022 employee survey is now open through November 28. Take the survey [[link removed]] and tell us why your organization should make the cut.

Market Movers

U.S. stocks were mixed on Friday. Here’s a look at how some sports-related stocks performed:

RCI [[link removed]]

Rogers Communications Inc.

[[link removed]]

$43.35

[[link removed]]

+0.21%

[[link removed]] MANU [[link removed]]

Manchester United Plc.

[[link removed]]

$13.29

[[link removed]]

+0.68%

[[link removed]] T [[link removed]]

AT&T, Inc.

[[link removed]]

$19.04

[[link removed]]

+1.06%

[[link removed]] MTN [[link removed]]

Vail Resorts Inc.

[[link removed]]

$240.39

[[link removed]]

+3.65%

[[link removed]] DIS [[link removed]]

Walt Disney Co (The)

[[link removed]]

$94.96

[[link removed]]

+3.86%

[[link removed]] ELY [[link removed]]

Topgolf Callaway Brands Corp

[[link removed]]

$21.46

[[link removed]]

+5.87%

[[link removed]] (Note: All as of market close on 11/11/22) What to Watch

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