Sports Ticker ( 20 October 2022) - Shell's cycling partnership, F1 budget breach and Wasps administration – a speed-read of commercial updates from the sports world
In a fortnight which saw Max Verstappen named F1 World Champion and amendments to ICAS' sports-related arbitration rules, we feature updates on the partnership deal reached between Shell and British Cycling, Wasps entering administration and the consequential redundancies, the £120m takeover of Bournemouth AFC and controversy over findings that Red Bull has reportedly breached F1's budgeting caps.
As always, if there are any issues on which you'd like more information (or if you have any questions or feedback), please do let us know or get in touch with your usual contact at RPC.
As a sign of increasing US interest in Premier League teams, Bournemouth AFC is set to be taken over by Bill Foley (owner of US hockey team Vegas Golden Knights). Foley is reported to have paid £120m for the team and will take over from long standing owner Maxim Demim. If the deal is approved, Foley is expected to inject new funding into the team in order to revitalise the stadium and attract new talent. Following a recent trend by other international investors such as City Football Group (Manchester City's owner), Foley is reportedly looking to acquire other teams in France and Belgium in order to form a multi club ownership model. For some of our recent press comments on multi club ownership, see here and here.
A wheely good deal – Shell partners with British Cycling
Shell has become an official partner of British Cycling, after signing an eight-year deal which starts this month. Under the deal, Shell's stated aims are to support British Cycling's goals to achieve net zero by assisting its transition to an electric vehicle fleet. Shell will also be investing in a new programme called Limitless, which aims to make cycling more accessible to disabled people. The deal has received backlash from environmental groups who have criticised Shell for alleged "sportswashing". British Cycling has stated that it sees the partnership as part of its wider ambitions to work with a greater variety of commercial partners to deliver its strategy: "Lead Our Sport, Inspire Our Communities".
Braking the rules – Red Bull breach F1 budget cap
After much speculation, Formula 1's governing body (the FIA) has found Red Bull guilty of breaking the $145 million budget cap in the 2021 season, which saw Red Bull driver Max Verstappen win the world title. The breach is currently defined as being "minor", meaning it is not more than 5% over the legal limit and Red Bull insists it followed all financial rules. The FIA have not yet specified the punishment but potential penalties range from a financial penalty to the docking of championship points. A loss of Drivers' Championship points could be significant considering only 8 points separated Verstappen from Lewis Hamilton at the end of an already-controversial season. Given the "minor" nature of the breach, likely consequences include a reprimand, a fine, limitations on testing and/or reductions to future caps. Cost caps were introduced in 2021 to encourage competition between teams. McLaren boss Zak Brown wrote to the FIA and fellow teams calling for strong sporting and financial punishments. Red Bull will appeal the decision.
LIV sets course for US broadcasting deal
LIV golf, a new competition funded by Saudi Arabia's sovereign wealth fund, PIF, is on the hunt for a major US broadcaster to air its games. The competition is – according to LIV - seeking to reimagine the sport so as to appeal to a younger audience by shortening the length of games, causing some upset in the golfing world. LIV has reportedly engaged in discussions with several broadcasters, although some of the largest broadcasters are already locked into deals with the PGA Tour, the USA's flagship golf tournament. Whilst golf does not attract the same viewership as other sports, it does attract lucrative advertising deals (not least because the events take place over 4 days, rather than 4 hours).
Following speculation as to the club's future (see Ticker 71), Wasps have entered administration, resulting in 167 players and staff being made redundant. The move comes less than 21 days after fellow Premiership team Worcester Warriors entered administration. Both teams have now been relegated. Many fans were alarmed by the decline of Wasps, given the club's pedigree as a founding member of the first national rugby union league in 1987 and a six-time winner of the Premiership. RFU chief executive, Bill Sweeney, has indicated that he wants to implement a system of "strong governance", perhaps similar to the French club system in which club finances are safeguarded by an independent regulator. Additionally, he noted that a reduction in the size of the league may "drive more value through less volume". For the time being though, the focus is on redundant players and staff. Wasp's administrators remain confident that "a deal will be secured that will allow Wasps to continue".
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Extra time...
... The unlikely world of conkers has gone bonkers this fortnight following allegations of bias when it transpired that the World Conker Championship (WCC) was judged by the father of the winner. Fee Aylmore, a long-time participant in the competition, and her father David Jakins (AKA 'King Conker'), deny any wrongdoing, with Ms Aylmore stating, "I won thanks to practice, luck and pulling the right conkers out of the bag". Mr Jakins intimated that the victory was likely due to the years spent teaching his daughter. The WCC subsequently carried out an investigation into the allegations following which it announced 'no evidence' of wrongdoing, although some critics remain unpersuaded. It is the latest in a series of cheating allegations (such as the recent chess scandal – see here).