Cash is king, especially at a time when sports properties are being hammered by the pandemic. And if there’s one thing that Saudi Arabia’s wealth fund, led by Crown Prince Mohammed bin Salman, has, it’s plenty of cash, which is why the sovereign investment fund is on the hunt for various sports assets.
Recently trading at $43, Live Nation’s stock price is 44% below its 52-week high. The company is suffering from having to cancel concerts and from offering people who had bought tickets credits for future shows at 150% of the value of their original tickets.
A little over a month ago, it was reported that Saudi Arabia’s public investment fund was looking to buy the French soccer team Olympique de Marseille, which competes in France’s Ligue 1, for €250 million ($280 million). Yesterday, the team’s president, Jacques-Henri Eyraud, was quoted as saying the team is not for sale. But who knows how long owner Frank McCourt wants to hang on? For the 2018-19 season, Marseille lost €91.5 million ($101 million), and the team may face sanctions from UEFA if it fails to meet the financial targets set last June in an agreement with the Club Financial Control Body (CFCB) of European soccer’s governing body.
French soccer is also struggling because of the pandemic. In early May, it was reported that the 40 clubs in Ligue 1 and Ligue 2 had agreed to ask for a state-guaranteed loan, believed to be worth as much as €225 million ($246 million), to compensate for lost television income.
Soccer’s television rights are also suffering. A week ago, it was reported that Germany’s Bundesliga would award its domestic broadcast rights for the four seasons starting with 2021-22, with the value likely to decline from the previous agreement. The German Football League said that the new four-season contract for 2021-25 was worth about €4.4 billion ($4.95 billion) over four years, down slightly from the €4.64 billion ($5.22 billion) in the previous deal.
With the value of the Bundesliga’s rights apparently depressed, guess who is interested in buying. That’s right, the Saudis. The body that runs German soccer’s top division is in exclusive talks with beIN Sports to renew the Qatar-based network’s $250 million five-year deal to screen matches across the region, which runs out at the end of this season. Last week, it was reported that Saudi Arabia had approached Germany’s Bundesliga over acquiring the football league’s television rights in the Middle East.
My money’s with the Saudis.
My mentors were James Walker Michaels, Geoffrey N. Smith and William Baldwin. I started out in the statistics department of Forbes in the mid-’80s then transitioned to
My mentors were James Walker Michaels, Geoffrey N. Smith and William Baldwin. I started out in the statistics department of Forbes in the mid-’80s then transitioned to writing. I mainly wrote about high-priced stocks that I believed were doomed. Example: my story on CUC International pointed out how the company’s aggressive accounting was masking a cash-flow problem. CUC’s stock subsequently crashed and the CEO was convicted of fraud. My CUC story is the focus of a chapter in the 2004 book: Forbes Greatest Investing Stories (John Wiley & Sons) by Richard Phalon. I even wrote an Earnings Quality newsletter for Forbes for a brief period (I think it peaked at about 150 subscribers). These days I like to take lots and lots of numbers and turn them into proprietary concepts and multi-platform content. Three of my longstanding publishing creations: the valuations of sports teams, ranking actors and movie studios on bang for the buck (ROI) and the Forbes Fab 40 (the most valuable sports brands). My most recent non-sports idea was Names You Need To Know, which broadened my concept of list creation to include direct input from our audience. My latest creation was the “SportsMoney Index,” which ranks the most valuable athletes, brands, teams and sports agencies based on a combination of their individual values, and value of the top athletes, brands, teams and agencies they do business with. I also have a passion for economics (my MBA thesis at Long Island University was an empirical study on the cause of inflation in which regression analysis showed a significant correlation between the general level of prices and the money supply). Besides being an Assistant Managing Editor at Forbes I also have a gig as co-host and Managing Editor of the four-time New York Emmy award winning Forbes SportsMoney on the YES Network and Fox Sports 1 with my buddies at YES, co-host Bob Lorenz and producer David Alfreds, both of whom have taught me a tremendous amount. One of my favorite affairs is being a guest every few weeks on Larry Kudlow’s radio show on WABC Saturday mornings. Larry has been a great mentor and friend. My brother in arms is Kurt Badenhausen, whom I have worked with for many years and knows more about sports numbers than anyone.