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In this edition of Scoreboard, we explore the failure of a blank-cheque “Spac” deal for the owners of Liverpool and Boston Red Sox, explain how social media marketing is hurting the Super Bowl’s $450m advertising market, examine the case for Netflix to buy a league of its own, and more.

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It would have been the biggest deal in transatlantic sports, but talks for a public listing of the ownership vehicle behind Liverpool FC and the Boston Red Sox have ended, people briefed on the matter told the FT this week.

The prospect was tantalising. Oakland Athletics manager Billy Beane, of Moneyball fame, was among those behind a new “Spac” — a shell company that seeks to raise money in a stock-market listing, then uses the cash generated to make acquisitions.

Beane formed his “blank cheque” company, RedBall Acquisition Corp, alongside Wall Street veteran Gerry Cardinale, seeking to raise $575m to buy a sports franchise. Their ideal target? Fenway Sports Group, the owner of Liverpool and the Red Sox controlled by self-made billionaire and former commodities trader John Henry.

But that deal has fallen apart. So what does this mean for “Spac-mania” in sports? And what does the failure of negotiations mean for FSG and its two world-renowned clubs?

People briefed on the talks said the trickiest element of negotiating the Spac deal was agreeing a valuation. Initial talks valued FSG at around $8bn, but lining up investors in public markets was proving difficult, one of the people told Scoreboard.

Part of that difficulty was attributed to the timing of the talks. Sports leagues are hurting during the pandemic due to the loss of gate receipts.

Major League Baseball derives the lion's share of its more than $10bn in revenues from tickets and concessions. For the 2020 season alone, the Red Sox are projected to have lost $338m from the dearth of games, according to Team Marketing Report.

Despite winning its first English league title in 30 years last season, Liverpool’s annual revenues fell by more than £40m to £489.9m, according to data from Deloitte released this week. Spac-fever is based on the idea that there is fast money to be made for the backers of any blank-cheque company. But perhaps not in the ailing sports industry.

It's understandable that sports owners are seeking fresh capital in these challenging times, though. Lately, new money has come from selling stakes to institutional investors. That seems to be where FSG is headed instead, seeking to sell a minority stake to Cardinale’s RedBird Capital, a firm that manages $4bn in assets, including French football club Toulouse FC. Even at a valuation of less than $8bn, which people familiar with the talks say is likely for a private stake, the sale would lessen the financial risk for Henry. It would also provide some return on his investment — a reward for his trophy-laden stewardship of both clubs.

But with new investors set to join the clubs’ ownership group, Liverpool and Red Sox supporters may soon be entertaining the question faced by other sports groups with private equity stakes: will professional money-managers pursue profits at the expense of fans?

It's the biggest American football game of the year, but thanks to the pandemic, the Super Bowl is not a must-win commercial event for some of the biggest global advertisers.

Several top brands, from Budweiser to Coca-Cola to Hyundai, are sitting out this year's National Football League championship game, which airs on February 7.

The reason — like most disruptions over the last year — is the pandemic, as brand executives and agency consultants explained to the FT this week.

It is ultimately too soon to say whether the abstention of big brands from the big game — a $450m marketing event last year — will become a lasting trend or a quirk of the current crisis. But industry experts believe this could be a lasting shift in the ad world: the democratisation of marketing.

Social media and digital campaigns are nothing new, but the pandemic has made them a more attractive bet for companies to deploy their reach.

Spending on paid social media and digital marketing reached $15.5bn, or 47 per cent of all measured marketing spend in the US during the second quarter of 2020, according to Kantar Media. That levels the playing field for smaller brands or individuals when competing with big multinational companies.

Even before the pandemic, there were indications that the balance of power was shifting, Creative Artists Agency’s global co-head of brand consulting Seth Jacobs told Scoreboard.

Case in point: another marquee event, the Olympic Games, has long fought to protect commercial interests of its highest-tier corporate sponsors through a bylaw known as Rule 40, which restricts ambush marketing by non-sponsors. But in 2019, the German and US national Olympic committees began relaxing their enforcement of the rule.

In other words, Jacobs said, marketing trends "were already starting to shift to allow athletes to make money and to benefit from the power and appeal of the Olympic Games….we see with a lot of these trends, Covid is just accelerating them."

At the same time, the price of entry to the most prestigious commercial spots, like those for the Super Bowl, is only getting more expensive. Rates for a 30-second slot airing during the Super Bowl are expected to reach as much as $5.6m this year, an all-time record according to Kantar.

Bottom line? Big sporting events may still be a big advertiser draw, but they're no longer the only cost-effective way to make a splash.

When Kabaddi hit television screens in the 1990s, the Indian sport appeared to have changed little from its ancient origins: an elaborate game of tag played by bare-footed, bare-chested men on dusty pitches.

Then in 2014, Star Sports, the Indian television network founded by media mogul Rupert Murdoch and since acquired by Disney, made a bet on the new Pro Kabaddi League — a juiced up format, staged in dazzling arenas with players in bright uniforms.

Star Sports went from screening the league, to buying a controlling stake in it. Kabaddi has been a hit, recently beating broadcast ratings in the Asian country for important international football, and even, cricket matches.

This success has led FT media editor Alex Barker to ask: why don’t more media companies just buy competitions outright? And more to the point, why doesn’t the industry’s new giants, streaming services like Netflix, just buy leagues?

There are precedents. Kerry Packer formed World Series Cricket after being blocked from acquiring the TV rights to Australian test matches in the 1970s. The competition disbanded after Packer was eventually sold traditional cricket rights.

Disney-owned ESPN controls X Games, the extreme sports contest it launched in 1995 in an effort to reach younger audiences. But mostly, leagues keep control of their business by selling just the rights to show their matches to broadcasters.

It’s unclear how sustainable this model is. Short term, the pandemic has led to advertising losses at pay-TV companies. Longer-term, “cord-cutting” with millennials switching to streaming services is killing the business model.

ESPN, struggling to retain subscribers, is now seeking to sell the X Games, according to The Information. Meanwhile Disney is increasingly focused on growing its Disney Plus streaming service in a bid to take on Netflix.

Disney Plus has grown rapidly since its launch

For leagues, the hope is new streaming services will simply replace traditional broadcasters and buy their screening rights.

But Netflix is yet to spend a cent of its $17bn annual content budget on live sport. Amazon has acquired the rights to screen the National Football League in the US and English Premier League in the UK, but without paying the hundreds of millions of dollars that pay-TV groups have regularly shelled out over the past decade.

Sports leagues could end these rights auctions altogether and sell themselves to big streaming services instead. That would involve taking a large sum now, with both sides then incentivised to grow their competition and share the proceeds. That, according to Barker, would be the “smarter long game.”

Read Alex Barker’s “Inside Business” column here.

For American fans of the Super Bowl, the tradition of the big game commercials needs no explanation. For everyone else, they're pure theatre: multimillion-dollar ad rates result in quality, humour, and star power.

Super Bowl spots are entertainment in and of themselves. Last year, Vogue compiled a list of the best such ads of all time, including this 1993 McDonald's bit featuring Zubaz threads, Larry Bird and Michael Jordan.

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Scoreboard is written by Samuel Agini, Murad Ahmed and Arash Massoudi in London, Sara Germano, James Fontanella-Khan, and Anna Nicolaou in New York, with contributions from the team that produce the Due Diligence newsletter, the FT’s global network of correspondents and data visualisation team.