UP348 The Squeezed Middle - The Valuation Question

Unofficial Partner Podcast

This is part of our Squeezed Middle series on the strategic options available to the people running professional sport.
The focus in this episode is the impact of those choices on the commercial income and capital value of sports teams, leagues and federations.
Our guests are Ben Wells and Andrew Umbers.
Ben is CEO of PTI Digital, the strategy and technology consultancy.
Andrew is co-founder and partner of Oakwell Sports Advisory, the leading strategic and financial advisor in sports and sports technology. Andrew was formerly MD at Credit Suisse and more recently, he served as Chairman at Leeds United.
You can hear the previous episodes in the Squeezed Middle series by searching Unofficial Partner in Apple, Spotify or your favourite podcast app.
What is the Squeezed Middle?
There is a small global elite of sports rights holders which are doing just fine. Billions of dollars in media revenue chases must-see content, from the NFL in the US, Premier League in England, the IPL in India through to the major quadrennial extravaganzas such as Olympics and World Cups.
Likewise, there are clubs and institutions in the lower reaches of the sporting pyramid for whom not much has changed and who cut their cloth according to the local demand for traditional revenue generators such as sponsorship, match day tickets and merchandise.
It's the middle of the market where much of the pain is being felt.
The situation was described in a recent essay by our guest Ben Wells:
'Economic crises tend to cause money to move in one of two ways: to quality or to price. Those in the middle, who are not able to compete on either front, are squeezed.

In the last 12 months, not one major Olympic NGB was able to sign a primary sponsor, with the biggest deal of the year – British Cycling’s tier-two sponsorship with Shell – bringing significant amounts of criticism. In parallel Müller ended its long-running main sponsorship of UK Athletics after seven years. UK Athletics is currently teetering on the brink of bankruptcy.

This isn’t a situation unique to athletics. Headlines in rugby, cricket and the second and third tiers of football report of similar tales of woe – the result of unsustainable commercial models – trying to grow revenues in a business built around live events, which are limited by number and venue capacity and whose cost-bases are rising with rampant inflation – are the norm."

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