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≡ ATHLETICS AND MONEY ≡
Amid the chaos of the failed “FIFA Forward Enterprise,” questions are being raised elsewhere about commercial interventions in others sports as well.
Like track & field.
Whispers heard this week about the formation of a separate company to handle the commercial rights for World Athletics, funded by private equity interests, are not true.
Well-placed sources told The Sports Examiner that there is no agreement, nor a term sheet or even an outline of any deal has been circulated or presented – let alone approved – by the World Athletics Council, or its appointed business and governance Executive Board advisory panel.
However, there have been serious planning sessions and continuing discussions about the future, and this was confirmed.
Reached for direct comment, a World Athletics spokesperson explained the timetable:
”At the end of 2029, most of World Athletics’ commercial contracts and broadcast relationships will come to an end, as will our current contract with Dentsu, who has owned our commercial rights since 2014, and we will be in a position to sell our own rights from 2030 onwards.
“With that in mind, our Executive Board has spent the last 18 months looking at the commercial structures we need to create and determining the best way to increase revenue so we can accelerate growth in our sport over the coming years.
“We are making consequential progress in an area that obviously requires detailed consultation throughout our organisation and across our sport.”
That’s an understated way of saying major change is coming:
● Japanese ad giant Dentsu was granted a 10-year extension in 2014 of its existing exclusive marketing agreement for the then-IAAF, from 2019 to 2029, under the presidency of the later-dishonored Lamine Diack (SEN).
● The deal named Dentsu as the “worldwide commercial partner of the IAAF for the IAAF World Athletics Series,” including the World Athletics Championships, World Indoor, World Junior, World Relays, World Cross Country, World Half Marathon and World Race Walking Team Championships, along with two other events no longer held.
● The agreement included “all marketing and licensing rights worldwide and all media rights worldwide outside of Europe and Africa,” with Dentsu providing guaranteed income and a portion of sales above a specific level.
● According to the IAAF’s 2018 financial statements – the first ever to be reported publicly and revealed exclusively by The Sports Examiner – “The new agreement calls for a minimum guarantee over the 10-year period of US$ 130m” from Dentsu. Also, “The agreement with Dentsu also included a profit share income. During 2018, there was a payment of US$ 8.396m received from Dentsu as profit share for the period of 2010-2017.”
● For 2024, the last year for which World Athletics statements are available, broadcast rights totaled $16.667 million, sponsorships were $13.000 million and the Dentsu profit share was $13.845 million. That’s $43.512 million not including in-kind ($6.735 million) revenues, which brought the total to $50.247 million.
(For comparison, total commercial revenues for 2019, including in-kind were $43.855 million; that a very modest 14.6% total growth over five years, with the Covid-19 pandemic affecting 2020-21.)
The upcoming World Athletics Ultimate Championship, to be held in September and announced in June 2024, was specially designed to be outside of this agreement. World Athletics stated in 2024:
“World Athletics has also appointed Infront to lead the charge on international media rights sales for the World Athletics Ultimate Championship, working in true partnership with World Athletics on a new and coordinated approach to market this made-for-TV event.”
So, the question is: can World Athletics do better with a different arrangement, possibly selling its own rights, possibly setting up a separate entity, possibly in concert with outside investors?
While FIFA’s badly-conceived, badly-released and badly-explained investment scheme was dropped, this concept has succeeded elsewhere, notably in volleyball.
The International Volleyball Federation (FIVB) entered into a ground-breaking agreement with CVC Capital Partners in 2021, which invested $100 million into a new, commercial company, Volleyball World, and worked to expand volleyball’s profile worldwide and profit at the same time.
The company is 67% owned by the FIVB and 33% by CVC and splits profits in those percentages. According to its 2024 statements, the enterprise generated handsome payments to the FIVB of CHF 50.21 million in 2022 and CHF 37.33 million in 2023 (CHF 1 = $1.22 today).
CVC has invested, but faired less well in rugby and has done very well in Formula 1 racing.
Sources with current knowledge of discussions within World Athletics noted that unlike FIFA, which has more money than it knows what to do with, an infusion of cash into track & field could be seriously helpful. More money for athletes, more meets and more flexibility working outside of governments who have been supporting the sport, such as Hungary for the 2023 Worlds, Japan for 2025 and China for 2027. Government guarantees are a key part of the applications for the 2029 Worlds.
A separate commercial entity might perform better than having a single, ironclad partner in one country, selling worldwide. World Athletics also does not have clear control of the meet calendar, as most events are staged either by national federations or private interests. That’s certainly true of the first-tier Diamond League series of 15 meets which are mostly privately held; World Athletics is a minority partner in the Diamond League AG organization.
Oh yes, the Diamond League title sponsorship of China’s Wanda Sports Group, also ends in 2029.
Britain’s Sebastian Coe will finish his third and final term as World Athletics President in 2027 and a new president will take over. For Coe, who has a deep background in sports marketing as well as being a champion athlete, the clock is ticking to help figure out the best way forward for the financial of not only World Athletics, but the sport worldwide.
Things are heating up, but nothing is at the boiling point yet.
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