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Mo' Money, Mo' Problems

Mo' Money, Mo' Problems

Never miss a headline with The Sports Road

January 24, 2023

Good morning, sports enthusiasts! Welcome to the Sports Road, where we're the epitome of cool. Boring sports news? Not here. We'll make even the most mundane facts so intriguing you'll be hooked in no time.

Here's what we got for ya today:

Liberty Media, the owner of Formula 1, has reportedly rejected a multi-billion dollar offer from Saudi Arabia's Public Investment Fund to purchase the sport.
Dana White's new show, Power Slap, has created controversy
Sports brands and crypto companies partnerships shifting as market becomes more cautious after recent events.
MLB player's total compensation exceeded $5 billion for the first time

Most valuable public market sports teams

Now, onto the good stuff...

Saudi’s say yes but Liberty says no..

In a move that surprised many, Liberty Media, the owners of Formula 1, have reportedly rejected a multi-billion dollar offer from Saudi Arabia's Public Investment Fund to purchase the sport.

Formula 1's value has risen to $15.2 billion since Liberty Media's acquisition in 2017.
Liberty Media has stated that Formula 1 is not for sale, refusing offers from interested buyers.
Saudi Arabia's Public Investment Fund, known for its sports investments, submitted a bid to purchase Formula 1, but it was rejected by Liberty Media.

The PIF are on an absolute mission - they recently purchased Premier League side Newcastle United and lured Cristiano Ronaldo to its football league and are even said to said to be targeting a bid for the 2030 World Cup as well!

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Dana, Dana, Dana…

This week saw the premiere of Dana White’s new show, Power Slap. The rules of this sport are as follows:

There are three to five rounds
Each match has a ‘striker’ and a ‘defender’ - decided by a coin flip
A turn-based slapping contest, whereby, if knocked down, you are given thirty seconds to recover

Yes, you read that correctly. Essentially, the sport has two people slap each other until one cannot continue. No defence allowed, pure slapping. While we agree that there is something strangely exciting about it, the first episode has created lots of controversy.

Dana, who has recently been in the media for all the wrong reasons, has also been accused by peers for not taking his fighters’ health seriously. This comes only a few days after the release of former UFC Heavyweight Champion and fan favourite, Francis Ngannou, who has reportedly been pushing for increased health benefits for fighters. Not a good look for Uncle Dana.

Sports brands and crypto are on a break

Partnerships between sports brands and crypto companies are likely to slow and shift after a whirlwind 2022, according to industry participants.

FTX's naming rights to the Miami Heat's arena was removed last month
MLB cut ties with a collapsed crypto exchange
Voyager Digital's deal with the NBA's Dallas Mavericks ran into a wrinkle: the crypto company's bankruptcy.

Although a handful of the industry's firms are still interested in doing deals, despite dropping marketing budgets, the structures and terms of the arrangements appear poised to morph as the market becomes more cautious.

Mo' money, Mo' problems

What’s happening? Major League Baseball (MLB) players' total compensation, which includes salaries, benefits, medical costs, etc for the purposes of the league's luxury tax system, exceeded $5 billion for the first time, indicating that the league has fully exited the pandemic.

Ok hit me with the details

Luxury tax payrolls for the league in 2022 were $5,164,589,774, a significant increase of $646,127,349 from 2021's total of $4,518,462,425
Luxury tax payrolls are a significant measure of player compensation, they are used to calculate possible penalties should clubs exceed certain thresholds
A record-tying six clubs exceed the threshold for 2022 starting with the New York Mets, followed by the Los Angeles Dodgers, New York Yankees, Philadelphia Phillies, Boston Red Sox, and San Diego Padres.

Ok wrap it up for me: The penalties for exceeding the initial threshold in consecutive years remain the same as the prior labor agreement, and clubs will be taxed at varying rates depending on how high over the initial threshold they go and whether they have done so in consecutive years.

Quick bites

Randy Levine, President of the New York Yankees, joins the Board of Directors of AC Milan: five months after the purchase of a minority stake by the Yankees. RedBird Capital Partners has acquired a controlling interest in AC Milan for 1.2 billion euros.

Leagues Cup, the first-ever CONCACAF tournament, announced 15 groups of 47 clubs, 18 from Liga MX and 29 from MLS, to participate from July 21- Aug.19. Winning team will qualify for CONCACAF Champions League and chance to earn spot in FIFA Club World Cup.

SimWin Sports, a virtual sports league, has signed a multi-year partnership with Sports Illustrated. Sports Illustrated will be the presenting partner for SimWin and will become owners of American football, basketball, and football teams in SimWin's virtual leagues.