Sports Ticker: Microsoft warns of cyber risks at sports events and ESPN enters sports gambling market – a speed-read of commercial updates from the sports world

Published on 24 August 2023

In a fortnight which saw the Lionesses suffer a gut-wrenching defeat in the World Cup Final and the start of the World Athletics Championships, we bring you updates on Microsoft issuing a warning on the risk of cyberattacks at sports events and ESPN entering the sports gambling market. We also feature stories on La Liga making an official complaint about Qatar's funding of PSG and Barcelona's new content creation website.

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.

Microsoft warns sporting events could be vulnerable to cyberattacks

Microsoft's latest Cyber Signals report offers guidance for safeguarding large sporting events and their attendees. With rising interconnected networks and devices at venues, the report notes how threat actors exploit vulnerabilities in IT systems, potentially accessing valuable data. The report comes at a crucial time given that the UK's National Cyber Security Centre (NCSC) has revealed that 70% of sporting organisations it surveyed suffer at least one cyberattack per year. Such cyberattacks could compromise personal and financial information, often accessed through companion apps, wireless hotspots, and malicious QR codes, with the report noting that even sports teams' performance data is at risk. Microsoft have previously aided cybersecurity efforts at the 2022 FIFA World Cup, which highlighted the unique challenges of temporary networks and privacy considerations. The report concludes by recommending multi-layered protection, including firewalls, encryption and regular audits, and emphasises the need for collective vigilance.

ESPN places bet on sports gambling in $2 billion deal

Disney's ESPN has signed a licensing agreement with casino company Penn Entertainment a sports betting brand, aimed at audiences in the USA. Penn will rebrand its current sportsbook to "ESPN Bet" in the 16 US states where it is licensed. The rebrand will include a mobile app, website, mobile website and certain mutually agreed retail locations, all to be operated by Penn. Under the terms of the deal, Penn has agreed to pay $1.5 billion in cash over 10 years and grant ESPN options to buy $500 million of Penn stock, in return for access to ESPN's talent, name, promotional tools and marketing. The partnership is ESPN's latest foray into sports gaming, with the company already hosting daily multiplatform betting-focused shows, running odds on its website and TV programmes and covering the gaming industry on its website and social media channels for years. The American Gaming Association has estimated that across America, $93.2 billion was bet at sportsbooks during 2022, an increase of 63% on the previous year.

La Liga lodges complaint with EU on Qatari funding of PSG

The top-tier of Spanish club football has made an official complaint to the European Commission on the activities of Paris Saint-Germain. The complaint focusses on the Qatari state's funding of PSG, which La Liga alleges is a breach of EU laws on competition. This arises from a new EU regulation, the European Regulation on Foreign Subsidies Distorting the Internal Market (the "Foreign Subsidies Regulation"), which came into force on 12 July 2023. La Liga argues that PSG is in breach of the regulation as it has received foreign subsidies from Qatar, which have “allowed it to improve its competitive position, thus generating significant distortions in several national and EU markets”. La Liga has expressed a hope that the new regulation will empower the European Commission to address these alleged distortions. It remains to be seen how the Commission and PSG will respond, including in respect of how this may have significantly broader implications for international investment in European football.

Paris 2024 head says budget is ‘under control’ with one year to go

The Paris Olympics, set to take place from Friday 26 July 2024 – Sunday 11 August 2024 is forecast to cost €4.38 billion in operational budget. The event is expected to bring in €10.7 billion in economic benefits and create some 250,000 jobs. It will feature high-profile partnerships, for example with luxury goods group LVMH marking the first time they have sponsored at group level rather than at a brand-level. However, the budget has increased by 10% due to inflation and a costly opening ceremony which is to be held on the Seine. Ticket prices have sparked further criticism, with opening ceremony tickets costing between €90 to €2,700. Despite this, the president of the organising committee, Tony Estanguet, stated that the operational budget is “under control”. He cited that 96% of the organisational budget comes from the private sector, for example through licensing, the Games ticket office and the International Olympic Committee.

Barcelona set up new content creation website

FC Barcelona is planning to list a new $1 billion content creation business named Barca Media, by merging it with a special-purpose acquisition company (SPAC), in its latest bid to explore novel revenue generating streams after it narrowly escaped a financial crisis in 2021. The merger will form a new digital business which aims to pioneer audio-visual sport content creation. The deal is spearheaded by the soccer club's re-elected president Joan Laporta who has managed to line up a string of sponsors including investment funds LIBERO Football Finance and NIPA Capital who have stakes totalling 29.5% in the existing media brand Barca Vision's holding firm, Bridgeburg. Members of the club and shareholders of the SPAC are yet to approve of the merger however, the deal is expected to be completed in the latter half of this year, with Barca Media being set to start trading on Nasdaq following the Securities and Exchange Commission's approval. Existing shareholders of Barca Vision will retain 80% of the shares as long as additional capital is not injected into the business and the SPAC's shareholders do not cash in on their shares.

Extra time...

...and finally, Under Armour, in its latest campaign, has used ChatGPT to craft the "Ultimate team talk". The sporting brand has unveiled an advert where actor Ashley Walters delivers the 90-second locker room speech. Under Armour has said its mission was to create the “most inspirational team talk of all time”. The team identified factors that contribute to motivation, inspiration and optimal performance; consulting sports psychology literature and interviewing prominent European footballers – this information was fed in to ChatGPT along with various directions informing the style of speech and the type of language to be used. The campaign concluded that AI can inspire but not replace humans' deep understanding of consumers' hearts and minds and that Under Armour will move forward in using technology to improve the brand and put athletes first.

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