Sports Ticker (9 November 2021) - Valve's NFT ban, new IPL teams and FaZe Clan going public
During a fortnight which has seen England shine in the T20 World Cup and Glover Teixeira become the oldest first-time champion in UFC history, the Ticker's 50th edition features Valve's ban on NFTs and cryptocurrencies, FaZe Clan's public merger announcement and news of two new teams joining the IPL. We also look at former rugby league players' legal action against the RFL and whether it is the end of the road for the iconic FIFA, EA Sports partnership.
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.
Final whistle for FIFA and EA Sports partnership?
In a move which would shake up the esports status quo, reports suggest it is increasingly likely that the partnership between FIFA and EA Sports will end after the 2022 World Cup following the expiration of their existing licensing arrangements. The relationship between FIFA and EA Sports, which spans almost three decades, has reportedly led to sales of over 300 million copies of the FIFA football game, netting EA Sports over $20 billion in sales. In recent weeks, both parties have signalled that their arrangements won't be seeing any added time. Electronic Arts' Executive VP has said the games developer is "reviewing our naming rights agreement with FIFA", while FIFA has announced that "the future of gaming and esports…must involve more than one party controlling and exploiting all rights". With financial considerations likely to factor heavily into the parties' decision-making, time will tell whether the final result will be one that benefits only the rights holders themselves, or truly leads to an enhanced experience for football and esports fans. Read more
Two new additions to the IPL party
Private equity firm CVC Capital Partners and Indian tycoon Sanjiv Goenka have acquired two new teams in the Indian Premier League, which will be established in the Indian cities of Lucknow and Ahmedabad next year. An omnipresent investor in the sports industry (See Tickers 14, 34 and 40), CVC is the first western private equity group to take outright ownership of an IPL team, seeking to profit from the cricket competition’s rapid rise and valuable media rights deals. BCCI president Saurav Ganguly said “It is heartening to see the inclusion of two new teams at such a high valuation, and it reiterates the cricketing and financial strength of our cricket ecosystem,” and added that the presence of bidders from outside of India was testament to the “global appeal” of the IPL. The deals are the latest by investors and private equity groups seeking to buy into leading sports competitions with large international audiences. Read more
FaZe Clan going public through SPAC merger
LA-based gaming lifestyle and esports company FaZe Clan has announced it is going public by merging with a special-purpose acquisition company (SPAC), which will reportedly value the company at approximately $1 billion post-listing. Best known for its 10 competitive esports teams which compete in popular video games such as Call of Duty, the company aims to hit the NASDAQ next year with the ticker symbol FAZE. Structuring the listing of a private company via acquisition by a SPAC – or so-called "blank-cheque firms" - is becoming increasingly common given its comparative speed and efficiency in bringing a company to market. The developing metaverse is providing fertile ground on which investors can exploit and we see no signs of investment in this space decelerating. Read more
Dementia diagnosis sparks legal action from former rugby league players
The Rugby Football League could soon be facing legal action from 10 former players who are planning to issue a claim for negligence following early-onset dementia diagnosis, including Bobbie Goulding, Paul Highton and Jason Roach who each suffer from chronic traumatic encephalopathy - a brain condition which is caused by repeated blows to the head. The players have written to the RFL setting out their allegations, including that the RFL "owed them, as individual professional players, a duty to take reasonable care for their safety by establishing and implementing rules in respect of the assessment, diagnoses and treatment of actual or suspected concussive and sub-concussive injuries". The RFL has since commented that player welfare is crucially important and player safety is taken extremely seriously. These claims will not be the first brought by former players against sports leagues (see Tickers 27 and 28) but it is likely they will expedite further debates around concussion in sports. Read more
Valve bans NFTs and cryptocurrencies on Steam
Valve, which runs video games distribution giant Steam, has changed its guidelines – banning any apps that "issue or allow exchange of cryptocurrencies or NFTs". This has the potential to cause concern for the various esports games on Steam, given that both traditional sports and esports organisations are increasingly embracing cryptocurrencies and NFTs. By way of example, Canadian blockchain developer Dapper Labs has recently partnered with the NBA, the NFL and LaLiga to create platforms for fans to collect and trade NFT-based 'moments' and, in esports, developers are broadening their revenue streams through selling a wide range of NFTs – such as in-game weapons, player skins, digital artwork and other collectibles. While the decision to ban blockchain-based valuables from Steam may be a short-term solution whilst technology is evolving, Valve may need to be more open to cryptocurrencies and NFTs in the future to avoid excluding themselves from a large portion of the esports market. Read more
…and finally, the latest budget included promising news for British sport with Rishi Sunak announcing £30 million of state funding to prepare the British bids to host the women's Rugby World Cup in 2025 and the 2026 Tour de France, Grand Depart. Further, the Chancellor of the Exchequer pledged a further £11 million for the UK and Ireland's bid for the 2030 men's FIFA World Cup. In commenting on the announcement, the Chancellor expressed excitement "at the prospect of bringing more world-class sporting events to the UK" and said "Britain is world-beating in both rugby and cycling, and bringing these events home will allow thousands of people to see the next generation of British sporting heroes." Fingers crossed for success in all three bids!