The Big Deal Weekly: Exclusive details on AFL's "Magic Round" SA deal, doors open for LIV golfers, money flies in for Melbourne Cup, cricket's T20 World Cup woes, Hopman Cup rebooted & more
Newsletter 8: October 31, 2022
Welcome to your weekly wrap of the big sports deals in Australia and around the world!
Before we get in to it, a quick heads up that we’ve got one of the AFL’s top list managers, Port Adelaide’s Jason Cripps, joining us on The Big Deal podcast later this week. So make sure you’re following the show on Apple Podcasts, Spotify or Google Podcasts.
Now, let’s get down to business.
IN THIS WEEK’S WRAP OF THE BIG DEALS
AFL Magic Round bound for South Australia
Visit Victoria steps up to back Netball Australia
Open doors for LIV golfers in UK
Money flying around for post pandemic Melbourne Cup
World Cup woes
Cricket back at the crossroads
India’s women achieve parity in appearance fees
Hopman Cup rebooted
Red Bull fined but rivals see red
Westpac steps into breach for NRL
Adidas gives Ye the boot
World Series? That’s the ticket!
Donald Dickie cashes in
Sports marketing is full of it - Fuller
Phoenix’s rising chances of finding a buyer
Touchdown Alana Gee
Big 12 signs for big dollars
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AFL MAGIC ROUND BOUND FOR SOUTH AUSTRALIA
South Australia is poised to get the nod to host the AFL’s first ever “Magic Round”.
But there remains one final hurdle to crystallise what would become the first time the League has played a 23-match season.
The round, borrowed from the NRL, will see all nine matches played in one state for the first time.
The Big Deal understands South Australia has won the right to host the round ahead of New South Wales in a deal set to inject millions of extra dollars into the game - if it goes ahead.
The SA Government will underwrite the round, hoping to recoup its investment in visitor dollars to the state.
But it’s understood the delay in confirming details of the extra round revolves around a hitch with one of the League’s two broadcasters, Seven and Foxtel.
Negotiations around the broadcasting of the extra round are ongoing.
If a breakthrough cannot be brokered, it remains a possibility that the round will be scrapped.
If the Magic Round goes ahead as is hoped, it will effectively give the two South Australian teams 13 matches at home next year.
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VISIT VICTORIA STEPS UP TO BACK NETBALL AUSTRALIA
Victorian taxpayers will pick up the tab after Netball Australia’s $15m sponsorship deal with Gina Rinehart’s Hancock Prospecting collapsed.
Victorian Premier Dan Andrews has announced that Visit Victoria will fill the void.
The announcement comes just 26 days before Andrews goes to the polls in an election he is expected to comfortably win.
The deal will run until mid-2027 and will see the Diamonds adopt Victorian branding as well as play more matches and hold more training camps in the state for the next four years.
They will also help promote the state in commercial campaigns.
The 2023 Super Netball grand final will also be played in Victoria.
Netball Australia’s deal with Hancock Prospecting was withdrawn after players took a stand over the company’s historical attitude towards First Nations people and in support of Indigenous player Donnell Wallam.
OPEN DOORS FOR LIV GOLFERS IN UK
The Open Championship has become the first of the majors to throw its doors open to LIV golfers, declaring it doesn’t want to miss out on any of the world’s best golfers from playing in its tournament.
CEO of The Open, Martin Slumbers, has told Golf Digest that the R & A doesn’t want to “betray 150 years of history” by “not being open”.
“We’re not banning anyone,” Slumbers said.
It means Australia’s Cameron Smith will be allowed to defend the title he won this year and lift the Claret jug again.
“I’m looking forward to seeing Cam Smith tee-up around 9:40 a.m. on the first day of the Open next year,” he said.
“The Open needs to set itself aside from what’s going in terms of disagreements and make sure we stay true to our principle, which is to have the best players in the world competing.”
The 2023 Open will be held at Royal Liverpool.
An official announcement is expected early in the new year with other majors expected to follow suit.
MONEY FLYING AROUND FOR POST-PANDEMIC MELBOURNE CUP
The money is poised to fly in all directions for the first Melbourne Cup uninhibited by the pandemic since 2019.
Australians bet $223.8m on last year’s race with that figure expected to rise again on Tuesday.
Prizemoney for the race itself hasn’t increased this year but it remains the most lucrative two-mile handicap race on the planet.
Although you could argue that given 7.3% inflation, the kitty has dwindled in real terms.
The total purse is worth $8m with $4.4m going to the winner, $1.1m to the runner-up, $550,000 to third place, $350,000 to fourth, $230,000 to fifth and the sixth to 12th placegetters taking home $160,000.
That’s not bad for finishing halfway!
Out of those cheques, a trainer will normally be paid 10% of the winnings and the jockey 5%.
To be fair though, those returns don’t seem quite as good when you consider the enormous cost just to enter a horse in the great race.
After an initial $600 entrance fee, there is more money to be paid during every stage of qualification - another $960 at first acceptance, $1,450 at second acceptance, $2,450 for third acceptance, and an eye-watering $45,375 for final acceptance.
That’s an outlay of $50,835 with no guarantee of winning a cent!
Horse racing enthusiasts will arrive from all over the country to soak up the atmosphere of the first Tuesday in November.
Some fly in on private jets from Sydney paying more than $2500 return or from as far as Perth for up to $8000 return.
And for the first time this year, Flemington’s famous and exclusive Birdcage will be open to non-members.
But you’ll need a fat wallet with a seven-course meal and drinks package on offer for $1800.
WORLD CUP WOES
Australia’s miserable October weather continues to play havoc with the T20 World Cup and it’s estimated it could cost tournament organisers up to $7m in lost revenue.
Friday night’s washout between Australia and England, part of a double header including Ireland and Afghanistan, saw 37,565 tickets fully refunded with thousands more walk-ups undoubtedly lost on the night.
The cost of GA tickets involving Australia ranges between $30 and $110 with more expensive premium packages available.
Tournament rules state that any match where fewer than 9.5 overs are bowled and the match is a “no result” entitles ticket holders to a full refund.
The Australia-England game loomed as the biggest of the tournament and the only one likely to rival the incredible India-Pakistan clash in Melbourne when 90,293 fans packed the MCG.
And while the clash between the fierce subcontinent rivals will help boost the coffers, the tournament can ill-afford many more washouts, particularly involving the hosts.
Four matches have already been abandoned or declared a no result.
Most of the tournament revenue goes to the ICC with Cricket Australia likely to receive ground rental fees along with a portion of the catering takings.
Just two weeks ago, Cricket Australia reported a $5.1m loss for the year, despite winning the Ashes at home.
COVID was largely blamed for the red ink.
CA’s problems have grown with broadcaster Seven taking it to court, seeking compensation as well as the right to abandon the last two years of its six-year $450m contract, claiming “multiple quality and standard breaches” and the right to seek Cricket Australia documents to prove it.
The quality of Big Bash matches is pivotal to Seven’s case, claiming the standard of players and matches was inferior to the IPL.
A Seven victory has the potential to devastate the home board which would have little hope of recovering a similar deal with a rival network.
With the case adjourned until July next year, it seems the cricket will remain on Seven for at least one more summer.
CRICKET BACK AT THE CROSSROADS
World Series Cricket turned the game upside down in the late 1970s and ensured a player payment revolution that catapulted the game to new heights in terms of television, marketing and media saturation.
The game could be back at the crossroads as IPL franchises consider offering 12-month contracts to players that could force cricketers to choose between club and country.
Informal talks have been held with the Sydney Morning Herald reporting that a figure of A$5m might be enough to convince some players to turn their back on playing for Australia.
The situation has been likened to the LIV golf revolution that has turned that game on its head in 2022.
While IPL franchises are unlikely to lure regular Test cricketers in the peak of their careers, you could hardly forgive fringe and older players in their sunset years such as David Warner or Glenn Maxwell to take the money and run.
The full-time contract model has already emerged for coaches with former Sri Lankan batsman Mahela Jayawardene permanently signed with the Mumbai Indians.
INDIA’S WOMEN ACHIEVE PARITY IN APPEARANCE FEES
India’s women’s cricketers have enjoyed a major breakthrough in their quest for equal pay.
They will now receive the same appearance fees as their men across all formats of the game.
That fee will be 1,500,000 rupees (A$28,165) for Tests, 600,000 rupees (A$11,265) for one-day internationals and 300,000 rupees ($5630) for T20 internationals.
Depending on the format, this represents a pay rise of between 400-600%.
Indian women's cricketers currently earn 400,000 Indian rupees for Test matches and 100,000 for both ODIs and T20s.
There still remains an enormous disparity in the value of contracts between the sexes with the huge money in TV rights on the subcontinent making India’s cricketers among the best paid in the world.
Their elite men earn 70m rupees (A$13.14m) per year while the best paid women only earn 5m rupees (A$93,800).
More money could be on the horizon for the women with plans for a women’s IPL well underway.
HOPMAN CUP REBOOTED
The Hopman Cup has been rebooted, rebranded and repolished into a new and more credible guise this summer.
It will be known as the United Cup with $23m prize money up for grabs and importantly, the offer of ranking points for the first time.
The tournament will be held between December 29 and January 8 in Brisbane, Perth and Sydney in the lead-up to the Australian Open and feature teams from 18 countries, featuring four men and four women.
The event is officially part of the ATP and WTA tours.
The Hopman Cup was held exclusively in Perth from 1989 to 2019 with the men-only ATP Cup held around Australia for the last three seasons.
RED BULL FINED BUT RIVALS SEE RED
Red Bull’s Formula One rivals are seeing red after the 2022 Championship winning team escaped the sport’s first cost cap breach with only minor punishment.
The team was fined US$7m, handed a 10% reduction in wind-tunnel testing time and had its computational fluid dynamics limits restricted for exceeding last year’s US$145m cap by fewer than 5%.
Interestingly, the penalties were reached in agreement with Red Bull, suggesting the constructor was happy to cop its lot after exceeding the cost cap by 1.6%.
The team didn’t lose any points, allowing it to retain this year’s constructor’s championship and Max Verstappen to retain his world championship title.
McLaren racing CEO Zak Brown couldn’t hide his thoughts on the outcome, declaring Red Bull’s actions “constitute cheating by offering a significant advantage across technical, sporting and financial regulations”.
Former champion Lewis Hamilton, who was beaten by Verstappen to the championship in last year’s final race said the penalty was a “slap on the wrist” and not great for the sport.
WESTPAC STEPS INTO BREACH FOR NRL
Big name sponsors have had tough times cutting through political acceptance in recent weeks.
But Westpac has been given the green light it would seem, signing a deal with the National Rugby League estimated to be between $15-20m over three years.
The bank is hoping to sell more mortgages in Sydney and Brisbane and sees the NRL as the ideal vehicle.
The bank’s logo will appear on all NRL balls from next season.
Westpac CEO Peter King hopes his company doesn’t fall foul of any negative public or player perception.
“It is something we face every day in our business, and we will work through those views as we go forward,” he said.
The deal is Westpac’s biggest sponsorship arrangement since the Sydney Olympics.
ADIDAS GIVES YE THE BOOT
Adidas has taken a massive financial hit by deciding to jettison Ye (Kanye West) and his Yeezy brand of clothing over the artist’s antisemitic rants across several platforms in the past week.
While Adidas estimated the initial impact to be a loss of around US$246m in 2022, the impact of the decision is likely to be felt much deeper.
Adidas’ sales of Yeezy gear is believed to be as much as US$1.7b annually or around 8% of its total sales of US$21.2b.
The sports apparel manufacturer released the following statement: “After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products, and stop all payments to Ye and his companies. Adidas will stop the Adidas Yeezy business with immediate effect.”
Here’s where it gets interesting. Adidas are the sole owners of the design rights to existing products so Ye can’t up and go and take his business elsewhere.
Despite the announcement, Adidas’ share price has remained steady, possibly reflecting support for the decision despite the initial negative impact on the balance sheet.
WORLD SERIES? - THAT’S THE TICKET!
The Philadelphia Phillies’ first World Series in 13 years has captured the imagination of the city with tickets selling for their second-highest price in a decade.
Fans have paid an average of beyond US$3200 to see the Phillies host the Astros in Game Three, Tuesday morning, Australian time.
They’ll also host Games Four and Five.
The cheapest standing room tickets are US$1000 on Stubhub - for the best seats in the house, you’ll need to find a cool US$17,000.
It’s much cheaper to watch the World Series in Houston where the Astros are participating for the fourth time in six seasons.
Fans are only having to part with around US$1500 to get into Minute Maid Park - maybe they fear the worst, having seen the Astros crash in 2019 and 2021.
And after the Astros gave up a 5-0 lead for the first time in their post-season history in Game One, those who stayed at home and watched on TV have been vindicated.
DONALD DICKIE CASHES IN
The AFL is full of stories of players who wasted their hard-earned money.
On the flip side, there are a few tales of those who made their fortunes off the field when their playing days were over, some after only modest careers.
Andrew Welsh was a fine player across 162 games with Essendon. But as a property developer, he’s made Australia’s top 25 rich list under 40.
Brad Moran scrambled just 21 games across five seasons for North Melbourne and Adelaide.
He sold his start-up software company last year for A$205m.
That makes him minor premier in this game.
But former Power wingman Donald Dickie hasn’t done too badly either.
He played 55 games for Port Adelaide, 41 in their first two seasons and was something of a fan favourite.
Perhaps some of that goodwill went with him into business. He and his business partner have just sold their NDIS company for $40m, having only established it in 2017.
The business is a plan management service for people on the National Disability Insurance Scheme that works with hospitals and doctors to streamline the service.
Is Donald, is good.
SPORTS MARKETING IS FULL OF IT - FULLER
Sports business guru Jaimie Fuller says sports marketing is full of it!
The CEO of eo, an Australian-based sports technology company utilising the world’s best sports scientists and engineers to help elite athletes redefine their limits, says marketing companies take punters for fools.
“Sports marketing is a joke, seriously, I’ve held this view for years and years,” Fuller told The Big Deal podcast.
“When we talk about having authentic relationships with elite athletes, I’m talking about genuine relationships and I don’t mean friends, I mean product usage and product wearing.
“We know the majority of brands work on the basis of ‘I’ll give you a million or half a million or twenty grand or whatever and not only will you wear this product or use this product but you’ll seen to be wearing it or using it.’
“We know and everybody out there knows that this shit goes on. Cristiano Ronaldo gets a photo holding a product you know, ‘use this’ and the next thing you know you take that out and put another one in. That is blowing smoke up your arse, that to me is insulting.
“That’s why our thing is about focusing on, ‘how do we create products and a brand that elite athletes want to use and want to be aligned with’.”
Fuller also talks about the growing issue of athlete sponsorship, as more and more sports fall foul of their primary stakeholders, their players, in a world where ethics has become a minefield.
Tune in to the full chat:
PHOENIX’S CHANCES OF FINDING A BUYER RISING
Former US President Barack Obama is the latest high-profile name to be linked with a potential buyout of the Phoenix Suns and Mercury.
Billionaires Jeff Bezos, Larry Ellison and Laurene Powell Jobs are also reported to be interested after former owner Robert Sarver’s one-year suspension for overseeing a workplace that used “racially insensitive language and the unequal treatment of female employees”.
Former Sun Charles Barkley, who recently signed a 10-year US$200 million contract renewal with TV network TNT, says he’s interested in getting involved if Obama comes on board.
“If Obama called me, hell yeah I’m buying in,” he said. “I got so much love and admiration for that guy.”
Even Barkley will need help to seal the deal though, with latest estimates of the sale price for the two teams running at close to US$4 billion!
TOUCHDOWN ALANA GEE
The NCAA is on the back foot in Alana Gee’s wrongful death trial on behalf of her late husband, Matthew Gee, who died aged 49 and was posthumously diagnosed with CTE, a brain injury the result of years of playing American football.
Gee’s lawyers have declared that the NCAA spent less than 1% of its budget on health and safety in the decade prior to her husband’s death in 2018.
They allege the NCAA was interested only in profits and in 1980, spent just 0.14% of its revenue on Competitive Safeguards and the Medical Aspects of Sport.
If the case is proven, the NCAA stands to lose millions with the NFL and other codes potentially implicated.
BIG 12 SIGNS FOR BIG DOLLARS
The Big 12, one of the United States’ college athletic conferences, is poised to sign a massive rights deal with ESPN and Fox reportedly worth US$2.28b to cover its basketball and football matches.
The deal, which won’t commence until 2025, is an incredible result for the conference, which was rocked just 12 months ago by the defection of Texas and Oklahoma to the Southeastern Conference (SEC).
It still however falls well short of the $7b deal signed by the rival Big Ten conference in August.
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