The unlikely alliance between Real Madrid and Barcelona

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Scoreboard is coming to you this week from Wimbledon, where star names are dropping out faster than a John Isner serve. Serena Williams, Emma Raducanu and Andy Murray all exited by day three, while 2021 runner-up Matteo Berretini had to drop out after catching Covid. Those swift departures will do little to boost disappointing attendances at the Championships. Average crowds are down 10 per cent on 2019 so far, while even the hallowed Centre Court has been plagued by a sea of empty green seats. Roger Federer’s absence is being keenly felt.

This week we’re looking at Spanish football, where the fallout from the ill-fated Super League has forged an interesting new alliance between the country’s two biggest clubs. And we look at how the golf establishment is circling the wagons in response to the arrival of the Saudi-backed LIV Golf tour. Do read on. — Josh Noble, sports editor

The unlikely alliance between Real Madrid and Barcelona

Real Madrid: heading off financial opponents © Reuters

The rivalry between Real Madrid and FC Barcelona is one of the fiercest in sport. Their fixtures are so intense they’re simply called El Clásico. Their supporters historically stand at odds not only over the pitch but ideologically, politically, and culturally.

This week, however, the two sides found some unlikely common ground: negotiating new investment in Barça’s media rights. On Thursday, the Catalan club announced that US private investment firm Sixth Street Partners has taken a 10 per cent stake in its broadcast revenues over the next 25 years, worth just over €200mn. The deal adds to Sixth Street’s growing sports portfolio, which includes a minority stake in basketball’s San Antonio Spurs, while it also injects Barcelona’s troubled balance sheet with fresh capital.

The driver of the Sixth Street-Barça tie-up? None other than Spanish brokerage Key Capital, which earlier advised on a €360mn deal between the San Francisco-based firm, Legends Hospitality, and — wait for it — Real Madrid for a refurbished Santiago Bernabéu stadium and events series.

Madrid and Barça are solidifying an awkward union of sorts against other commercial interests in Spanish football. They were founding members of last year’s flame-out European Super League, and in December moved to thwart an investment by CVC into Spain’s LaLiga, on the principle that the two most successful clubs could negotiate a financially superior deal. The private equity group eventually reduced its agreement with the league’s other clubs after the arch-rivals refused to join.

As one person briefed on the transaction told Scoreboard, Sixth Street’s investment in Barcelona when you compare it to CVC is a “no-brainer”, adding that terms of the agreement amount to a capital gain of €268mn for the cash-strapped club. A rash of player transfers had generated mounting short-term debt obligations, and Barcelona was eager to add fresh capital before the close of its fiscal year on June 30.

In the near term, Barcelona has permission to sell an additional 15 per cent of its long term media rights and up to 49 per cent of its merchandising and sponsorship arm, following a general assembly vote of its members this month. Whether those stakes get sold, and to whom, remains to be seen.

For the moment, Barça and Madrid are further solidifying their common economic interests. If extracting the maximum institutional investment is the priority, then the enemy of thine enemy is thy friend.

Why golf has a problem with Saudi money

Rory McIlroy and the European tour: LIV Golf opponents © AFP via Getty Images

As Saudi Arabian cash continues to pour into sport, just why has its arrival in golf been so controversial?

There’s more to it than Saudi Arabia’s poor record on human rights, the murder of journalist Jamal Khashoggi and accusations of “sportswashing”.

European Tour chief executive Keith Pelley explained just why he’s so opposed to the arrival of LIV Golf.

Bankrolled by Saudi’s $620bn sovereign wealth fund, LIV threatens the established order in golf. For decades, the PGA Tour has dominated the sport, its history entwined with legends such as Arnie ‘The King’ Palmer, Jack Nicklaus and Tiger Woods.

Under Pelley’s leadership, the European Tour has formed strong ties to the US circuit. This week, the circuits put on a show of unity as more of their members leave for LIV.

Yet for weeks, it was rumoured that Pelley was actually considering whether to join the Saudi-backed group. In a video call with PGA Tour commissioner Jay Monahan, Pelley shot down the gossip.

His objection to collaborating with LIV, he said, was rooted in Saudi Arabia’s decision to “play outside the ecosystem”. In other sports, such as Formula One car racing and English Premier League football, Saudi invests “inside the ecosystem”.

Pelley doesn’t appear to object to Saudi cash in and of itself. He’s on the board of the Ladies European Tour, which hosts competitions in the kingdom and earns sponsorship income from state oil company Aramco. Moreover, the Saudi International was part of the European Tour from 2019-21.

“I’ve been consistent that if in fact they are interested to play inside the ecosystem and not launch a rival tour that I think is detrimental to the game at large, then I personally . . . would be open, and they know that, to having a conversation,” said Pelley.

As Monahan has noted, there’s no outspending LIV. So this week, he and Pelley faced the media together to talk up their latest move: the PGA Tour is increasing its stake in the European circuit’s media production company to 40 per cent, building on an existing 15 per cent stake acquired for $85mn in 2020.

Pelley and Monahan also unveiled a 13-year joint venture partnership, vowed to grow commercial revenue and prize money, and continue working together on staging events.

“We are better working together than separately,” said Monahan. “The game of golf is rallying.”

Highlights

Emma Raducanu: winning sponsors © AP
  • Tennis is the perfect target for match fixers. Underpaid players, the rigours of the tour and myriad points, games, sets and matches all explain the phenomenon. Here’s a tale of a reformed match-fixer, his fall and redemption, as part of the FT Globetrotter’s series of articles on the sport.

  • Emma Raducanu made an early exit from Wimbledon, a blow to the bevy of corporate backers that sponsor the US Open winner. British Airways, HSBC, Porsche and Vodafone are among her biggest sponsors.

  • Amazon snapped up the rights to 17 Champions League matches in the UK, as it gradually expands its footprint in live sport. The value of the traditional TV rights, however, fell quite sharply.

  • The FT’s data visualisation team has a detailed analysis of how England men’s Test cricket team has transformed their fortunes.

  • Greater China is one of Nike’s most profitable markets. But, says the FT’s Lex column, the world’s largest sportswear maker is suffering from the country’s lockdowns, exacerbating the problems of a strong dollar and higher freight costs.

  • In a colossal shake-up of US college sports, USC and UCLA have agreed to join the Big Ten Conference beginning in 2024, a move which suggests the more than $14bn industry is headed towards a conference duopoly. The two powerhouse Los Angeles universities will likely shake up broadcast rights, especially for college football, and devastate their current conference, the Pac-12.

Final Whistle

Nick Kyrigos: talkin’ about practice

Aussie tennis antihero Nick Kyrigos is a self-described Boston Celtics “superfan” who rarely missed a game of this year’s National Basketball Association runners-up. Joining the Tennis Channel on Thursday at Wimbledon following his second-round victory at the All-England Club, Kyrigos gave would-be opponents on Celtics game days a hint about the level of performance they can expect from him. Check it out here.

Scoreboard is written by Samuel Agini, Josh Noble and Arash Massoudi in London, Sara Germano, James Fontanella-Khan, and Anna Nicolaou in New York, with contributions from the team that produce the Due Diligence newsletter, the FT’s global network of correspondents and data visualisation team

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