FIFA's 'goldmine', Real Madrid's space-age stadium, and the $100M football game

Your inbox is already crammed full of newsletters. Subscribe to Yet Another and dispense with the rest!

Then click the button to share the gift of (sports business) knowledge!

🇮🇳 INDIA: FOOTBALL’S NEW ‘GOLDMINE’?

FIFA's Chief of Global Football Development Arsene Wenger, was recently in India, visiting the All India Football Federation.

Whilst there, Wenger declared FIFA’s ambitions “to make India a great footballing nation."

He also described the nation as a “gold mine [that] is not completely explored.”

I’ve covered previously how FIFA needs to start better monetising its properties (currently it is only really profitable once every four years).

And it makes sense that India is a focus – with 1.4Bn people, it’s the world’s most populous country. It also has (by some distance) the largest number of Facebook users.

Football is catching up with cricket in India

Cricket is still the most popular sport in India, but football is closing the gap.

According to Nielson’s, football is the second most popular sport in the country, with 56% of the population being interested (vs 73% for cricket).

This is up from just 30% in 2013.

If India can be built into a nation with a strong grassroots and a competitive national team, it presents massive opportunities for talent development, broadcast rights, and sponsorship deals.

It may also be an interesting test-bed for different revenue streams, including the much-fabled FIFA/EPL D2C play.

And it's not just FIFA - City Football Group Mumbai City FC, and RB Leipzig, Rangers, Atletico Madrid, Borussia Dortmund, and Watford all have partner clubs in India.

🏟 THE NEW BERNABEU – ONE OF A KIND?

If you haven’t seen it yet, Real Madrid’s revamped Bernabéu is a site to behold and an marvel of engineering.

It’s quite possibly the best football stadium in the world.

The rennovations, which increased the stadium’s capacity to 85,000 people, cost over €1 billion.

Apart from the retractable roof, wrap-around cladding, and 360 interior screen, the most remarkable feature is the retractable pitch, which requires 6 climate-controlled underground levels to accomodate.

Youtube construction channel B1M did a great video explaing all of this:

The whole premise of the development is to monetise the arena on the days that Real are not playing – the development features a huge shopping mall, and already has agreements for a Taylor Swift concert and at least one regular-season NFL game. Expect more sporting events, concerts, and conferences to follow.

All this is not dissimilar to what Tottenham are doing with their stadium. Or what US sports teams have been doing for years.

All these developments are expected to add at least €150M in additional annual revenues for the club.

And in what is either great timing or great luck, the whole project was financed with long-term fixed-rate loans at around 1.5% interest.

In today’s market, you’d be lucky to get financing for such a build at 5%, which may mean that it’s a while before we see anything similar. Will this help Real to cement their pre-eminence both on and off the pitch?

If you like videos, here is another great explainer, this one from Athletic Interest:

🏓 PADEL - AN INVESTMENT OPPORTUNITY?

When the Financial Times says something is an investment trend, it’s worth listening.

So when the Naom Chomsky’s favourite news source published not one but TWO articles on the growing appetite for investment in UK-based Padel courts in the space of a week, you get the sense this is going to be something big….

Over the last year Padel, a kind of cross between squash and tennis that is easier for beginners, more sociable, and reqiuires less space than either of the aforementioned, has boomed in popularity.

There are estimated to be more than 100,000 players in the UK, but only around 350 courts.

And according to booking platform Playtomic, the number of people looking to book has more than trebled since this time last year.

This means long waits and high fees (£60+ per hour in London).

The trends are expected to continue – Tom Murray, the head of padel at the UK’s Lawn Tennis Association, expects to see 1,000 courts and 600,000 players in the UK by the end of 2026.

And whilst the UK is seen as having both high potential and low current development, the global value of the Padel industry is expected to triple in the next 3 years, with the number of courts expected to double, according to Playtomic and Deloitte’s Global Padel Report.

A indoor padel court can be constructed for around £25,000.

Given a typical rental rate of £25/hr, and occupancy rate of around 50%, a single court could be expected to bring in revenues in excess of £60,000 per year.

Of course that is before land and many other costs. And it is the availability of land, as well as the difficulty of gaining planning permission, that makes opening a court in the UK so difficult.

And there are other concerns too – Sweden enjoyed a frantic padel boom during the pandemic, with the number of courts surging from around 500 in 2019 to more than 4,000. But courts are now closing in their hundreds due to oversupply, and almost 90 padel-related companies have filed for bankruptcy in 2023, according credit reference agency Creditsafe.

There’s also the question of demand – is this just a fad? And even if it isn’t, will prices for courts hold up when there are twice as many courts available?

Nevertheless, it‘s an interesting area. And if you are interested in investment, hit me up. I’m thinking of building my own padel centre (serious!).

🗞 IN OTHER NEWS…

• 📺 Watch out broadcasters: Amazon, who spent $100M to broadcast a single NFL game (Black Friday’s Miami Dolphins vs the New York Jets), look set to invest further into live sports. Jay Marine, Amazon’s global head of sports, indicated that Amazon would be interested in bidding when the NBA’s much-anticipated rights package comes us for renewal next year. Amazon’s Thursday Night Football has so far been a success, averaging 12.5M viewers per game.

• 🎽 Slowing sportswear sales: Sports apparel manufacturers are enterting the holiday period in the midst of a funk, amidst disappointing North American sales – Nike, Under Armour, Adidas, Peloton, and Puma have all suffered disappointing earnings announcements, and Foot Locker is expected to add to the list when it reports earnings on Nov 29.

• 🏟 Big, white, expensive elephants: Countries are becoming increasingly less interested in hosting huge and costly events such as the FIFA World Cup or the Olympics.

• 🏎 Peak of the market? Formula 1 team valuations are soaring, triggered by the rising interest in the sport in the US, as well as the introduction of spending caps in 2021, which has increased the profitability of individual teams.

• 👜 Smooth operator: England and Real Madrid start Jude Bellingham is supposedly in line for a lucrative endorsment deal with Louis Vuitton

🗓 UPCOMING EVENTS

• SportsPro Madrid – 28-30 November (Madrid, Spain)

• World Football Summit Asia – 12-13 December (Jeddah, Saudi Arabia)

SHARE THE GOOD NEWS

This newsletter is a labour of love. Please do tell your friends and colleagues how amazing it is, and get them to subscribe too!

You can also follow me on Twitter or connect on LinkedIn. Let’s chat!