Ages ago, I was what you might call a sports fanatic. Football, baseball, basketball, and hockey received countless hours of dedication to facts and fandom while competitively playing three of those sports.
I’m from the generation that used to flip baseball cards and ruin our teeth by chewing wads of Bazooka bubble gum. As soon as we finished watching games, we hurried out of our houses and tried to emulate what we saw on our small, grainy black-and-white televisions. Sports was our oyster, and those of us who didn’t play at least three sports aspired to do so. Sports, for many of us, were a year-round activity.
Since those days of super fandom, sports, and sports culture have changed a great deal, and unfortunately, much of it is to its detriment. Many of these changes can be tied directly to mortgaging many elements that make professional sports engaging and enjoyable. Sports leagues and entities are willing to prostitute themselves for anything that increases revenue.
Influence of Gambling and Sponsorship
No one who calls themselves a sports fan is naive enough to deny that gambling has always played a role in major sports. Gambling was always the mistress of major sports, scorned in the light of day and pursued in the wee hours of the night. Inarguably, gambling and wagering were viewed as a much more heinous act than racism and segregation, practiced by major sports for decades, that deprived us of truly seeing the best athletes compete.
Ty Cobb is celebrated as one of the greatest baseball players of all time despite his well-documented racist behavior. At the same time, the infamous “Black Sox Scandal” led to 8 ball players being banned for life. Ironically, gambling is why the current all-time hits leader, Pete Rose, has been banned from the Baseball Hall of Fame.
The relationship between major sports and gambling has gone from occasional midnight booty calls to public marriage and love affairs. According to the American Gaming Association (AGA), the major professional sports leagues, the National Football League, the National Basketball Association, Major League Baseball, and the National Hockey League, are projected to make an additional $4.23 billion from legal sports betting. The league breakdowns are as follows:
Revenue From Fan Engagement Gaming-Related Revenue
NFL 1.753 billion .573 billion
NBA .425 billion .160 billion
MLB .952 billion .154 billion
NHL .151 billion .065 billion
Subtotals 3.281 billion .952 billion
Total 4.233 billion
Since AGA issued its report, Sponsor United, a leading global sports and intelligence platform, predicted that the NFL sports betting revenue would increase 40 percent from 2019 to 2022. Formal relationships have been formed with primary gambling operations like Caesars Entertainment, DraftKings, and FanDuel. In April, they have added Fox Bet, BET MGM, points bet, and wind bet.
Sports are quickly transforming into a vehicle and excuse for gambling. The actual games and competition are steadily losing their significance. Just like drug dealers, they want their product to be accessible. Instead of selling ounces of a drug, they sell nickel and dime bags. Betting has become so granular that you can bet who scores the next touchdown, basket, or goal. Then the kicker is they follow it with an advisory as hypocritical as the ones you see that say alcohol, drink responsibly.
The influence of foreign investment revenues poses a pernicious threat to professional sports. Leagues and organizations that preach to the masses about the integrity and sanctity of their sports have exposed themselves to manipulation and capitulation by foreign investors, especially when it involves state investors.
One of the most embarrassing and emasculating cases of sports diplomacy was an incident involving a statement made by an NBA general manager, Daryl Morey, of the Houston Rockets. Morey posted an image on Twitter that said, fight for freedom, stand with Hong Kong. This retweet set off a firestorm of shameful reactions from NBA executives and owners. The Houston Rockets owner, Hillman Fertitta, responded, “Listen, @democracy does not speak for the @Houston Rockets. Our presence in Tokyo is all about the promotion of the @nbainternational, and we are not a political organization. @espn htttps://t.co/.yNQFtwTTi.
China has been an expanding source of revenue for the NBA the last decade and, in 2019, was projected to represent at least 10% of the NBA’s annual revenues. It is estimated that there are more NBA fans in China than Americans. At the time of the dispute, the yearly income derived from China was approximately $500 million. Chinese reaction to this retweet, which nearly no one in China even saw, was to pull NBA games off the air and Chinese companies pull back their sponsorships.
The gross overreaction by the Chinese government was met with a historically underwhelming response from the NBA, in which they assumed the prone position, admonished Morey, and apologized for any harm that the statement may have done. Commissioner Adam Silver said, “I do know there are consequences from freedom of speech. We will have to live with those consequences. For those who question our motivation, this is about far more than growing our business. “
The question for the Commissioner is, if it wasn’t about the billions in television revenue in sponsorships or the estimated $10 billion NBA owners have invested in China, what accounts for their hypocritical and feeble response to China’s reaction?
Cryptocurrency
The erudite and entertaining Bomani Jones appropriately calls it “funny money,” while others call it cryptocurrency. Questions abound about what it is. Is it an alternative payment method or a form of investment? Is it currency, or are these securities like stocks and bonds? Some in the financial industry will tell you all the above and more. Potentially, it is the world’s biggest heist on record, more significant than even the Central Bank of Iraq Robbery ($920 million).
In November 2021, cryptocurrency’s value reached historic levels. It got a record high of 69,000 USD. The estimate of cryptocurrency’s estimated worth was $3 trillion. New products like Non-Fungible Tokens (NFT), ownership of digital art, and collectibles were sold for ludicrous amounts of money.
“One token, representing years of work by the digital artist Beeple, sold for $69m; another, linked to the first tweet sent by the Twitter founder Jack Dorsey, was bought for $2.9 million. Individual NFTs in the Bored Ape Yacht Club collection – the most consistently desired examples of “profile pic” NFTs, designed to be used as pre-packaged online identity – regularly sold for $1m-$3m apiece.”
The sports world and many of its athletes dived into the deep end of the cryptocurrency pool. Leagues and athletes said sign me up. In June 2021, Major League Baseball formed a long-term partnership with Futures Exchange (FTX), remember that name. They also signed sponsorships with the Miami Heat, Dallas Mavericks, and the Ultimate Fighting Championship (UFC).
Sponsorship agreements with Coinbase, the NBA, WNBA, NBA G League, and USA Basketball followed this agreement. The NFL does not permit clubs to promote digital currency but does allow sponsorship agreements for the technology used by crypto exchanges. Maybe it’s just me, but that’s a distinction without a difference. As of February 2023, there were 15 teams with sponsorship deals. Bloomberg has reported that Crypto companies have committed more than $2.4 billion to sports sponsorships.
Leagues and teams weren’t the only ones that leaped at the opportunity to profit from the cryptocurrency boom. Sports superstars like Tom Brady, Stephen Curry, Naomi Osaka, and Shaquille O’Neal invested in cryptocurrency and became spokespersons for different firms. Even Michael Jordan released an NFT collection called 6 Rings.
The fascination with cryptocurrency grew to such a feverish pitch that it dominated the Super Bowl, the crown jewel of marketing, advertising, and branding. Super Bowl LVI had so many star-studded commercials pushing cryptocurrency that it was dubbed the Crypto Bowl.
In January 2022, cryptocurrency companies were spending money like people use toilet paper. “Crypto.com spent $36.5 million, FX $36.7 million, and Coinbase $31.6 million on advertising. They added LeBron James and Larry David to their growing list of celebrity endorsements.
The world of finance and economics can be very complex and obtuse. Still, it doesn’t take an advanced degree in finance or economics to question one’s involvement in an industry where products are primarily untested, untethered, and unstable. Notwithstanding the 19 billionaires and 32,500 millionaires who made their fortunes through cryptocurrency, millions are recovering from the crypto industry crash of 2022.
According to an analysis by the Bank of International Settlements, the cryptocurrency industry lost $2 trillion, and three out of four investors lost money. Even though over $2 billion of investments by sports leagues have been lost or put in jeopardy (e.g., Los Angeles Lakers – $700 million and anyone doing business with the bankrupt FTX), the professional sports leagues have been accomplices to a grave injustice. They’ll survive their losses. The National Football League Players Association (NFLPA) (the worst players’ union) lost $41.8 million due to the crash, but they’ll survive. Tom Brady will survive the $30 million loss he reportedly sustained.
Some fans are fighting back, but there are no assurances that the class-action lawsuits against athlete spokespersons will bear fruit. What bothers me most is that the sports leagues and athletes vouching for cryptocurrency were accessories to all the damage done to the people they supposedly have allegiance to—the fans. Arthur Solomon, a former executive at global public relations firm Burson-Marsteller, believes crypto endorsements by teams, leagues, and athletes are a “disservice” because it’s unregulated investment advice.
“There are professional investment advisers who are regulated by the government to give financial advice, and I believe that the FTC and other government agencies should not permit someone, just because he can hit a home run or throw a touchdown pass, to give financial advice on public airwaves,” he said. Solomon blasts teams and leagues, saying they are “shameless” when they lump crypto into the same category as beer, liquor, and gambling commercials viewed by kids and vulnerable adults during games.
Saudi Arabia Takeover Bid of Sports
Years ago, a comedy set performed by George Carlin called “Soft Language.” The routine shows how we transform descriptive, impactful words into non-threatening expressions. It is a must-see. https://www.youtube.com/watch?v=o25I2fzFGoY
There’s a term being bandied about called sports washing. This term is used almost exclusively to describe Saudi Arabia’s efforts to purchase its way to becoming the center of the sports universe. It’s more appropriate to call this action a hostile takeover.
Saudi Arabia and other Gulf countries have unleashed billions to stake ownership and sports entities, events, and athletes. In contrast to gambling and the financial investment industry, Saudi Arabia has focused on ownership and control of the sports industry. Control of sports and the entertainment industries bestows great power and influence over cultural, social, and even political developments.
Saudi Vision 2030 is a government program created by the Kingdom of Saudi Arabia to diversify itself economically, socially, and culturally. A significant component of this plan is to invest in as many high-profile sports events and athletes as money can buy. They’ve also targeted the entertainment industry. Why is this important? Because if you can control the culture, you can control the narrative. To a certain degree, the term sports washing isn’t inappropriate.
The Public Investment Fund, PIF, of Saudi Arabia, the nation’s sovereign wealth fund, purportedly has $650 billion to implement the Saudi Vision 2030 strategy. The first sports acquisition the PIF made was the purchase of Newcastle United. Since then, they have pursued the purchase of additional European football teams like Belgium’s TV or Stingy.
With astronomical contracts, the Saudi Football League has also been luring the best soccer players to Saudi Arabia. Christian Ronaldo signed a contract for $213 million a year. Half of this is for image rights and commercial deals. Lionel Messi has a sponsorship deal, and most recently, the Saudi Arabian club has offered Paris Saint Germain $330 million to transfer the contract of Kylian Mbappe.
The more alarming development, which should be the “canary in the coal mine,” is the devourment of the Professional Golfers Association by the fledgling LIV Golf. LIV Golf was created in 2021, and it poached some of the best golfers in the world with exorbitant prizes and guaranteed purses. The first eight events had a total prize pool of $255 million, with tournament winners each claiming $4 million. Johnson gained an additional $18 million for being a season-long individual champion. Forbes estimates that the seven highest-paid LIV Golfers combined to make $499 million over 12 months.
The battle was on, and most golfers, including superstars like Tiger Woods, swore allegiance to the PGA Tour. The PGA Tour steadfastly pledged to fight and fend off LIV’s efforts to undermine their sovereignty over golf. Jay Monahan, the PGA Tour Commissioner, stated, “As long as I’m commissioner of the PGA Tour, no player that took LIV money will ever play the PGA Tour again.” That’s why it was stunning when it was announced on July 6, 2023, that the PGA Tour and LIV Golf agreed to join forces. Players who declared allegiance to the PGA Tour discovered the deal when the public did. They were incensed.
Many of the details are still undetermined, but some things are known. The PGA Tour and LIV created a new entity that combines assets and instilled Yasir al-Rumayvan from the PIF as Chairman. There initially was a non-solicitation agreement between the two entities, which is ironic because non-solicitation contracts may be characteristic of monopolistic behavior, precisely what LIV accused the PGA Tour of. They later removed it. PGA Tour members would currently hold the majority (for the moment).
The concerns about this merger not only come from players and fans, but it has also gotten the attention of Congress, the Justice Department, the Federal Trade Commission, and the European Commission. Besides anti-trust concerns, questions about the PGA Tour’s non-profit status are being raised.
Are Saudi Arabia’s actions a harbinger of things to come? In the case of the PGA Tour versus LIV, the camel has more than his nose in the tent; it’s parked entirely in the tent. Saudi Arabia virtually has unlimited funds to grow its influence and power. What will this mean for sports entities like the National Basketball Association (NBA) and the National Football League? Comments made by NBA Commissioner Adam Silver don’t instill confidence that they have the will or desire to push back on predatory investors.
To place things into perspective, the Saudi PIF recently offered Kylian Mbappe a one-year contract for more than $700 million. That same $700 million would pay the salaries of more than three NFL or four NBA teams. How many $60 million (Jalen Brown) and $52.4 million (Justin Herbert) contracts will it take before these leagues welcome PIF money? Saudis are concerned about the money that flows into more modern sports. They are about control.
One can legitimately condemn Saudi Arabia’s regime led by Mohammed bin Salman without casting aspersion on the Saudi Arabian people. Documented cases of human rights abuses, corruption, and murder should be enough to treat them like pariahs. The control of a scarce commodity and money can wash away many sins. It was a measurable disdain for the golfers that fled to LIV, but it becomes challenging to admonish them when governments, ours included, are complicit in this ethos.
Growing up, one of my mother’s non-negotiable rules included, “Don’t you bring that dirty money into this house.” It may be time for the entertainment and sports industries to consider that edict.
Sources
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https://www.americangaming.org/resources/how-much-do-leagues-stand-to-gain-from-legal-sports-betting/ – :~:text=How Much Do Leagues Stand to Gain from Legal Sports Betting%3F,-October 18, 2018&text=the Press Release-,The four major sports leagues will earn a collective %244.2,dividends for all sports stakeholders
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https://www.google.com/search?client=safari&rls=en&q=How+The+NBA+Makes+Money&ie=UTF-8&oe=UTF-8#ip=1
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https://www.theguardian.com/sport/2022/may/19/nba-owners-china-investment-analysis
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https://www.nytimes.com/2022/03/31/sports/basketball/nba-china.html
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Friday, 14/07/2023 | 11:08 GMT by FM Contributors
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15. Weighing Whether cryptocurrency sports and fans are a good combination. By Daniel Kaplan and Bill Shea
May 20, 2022
https://theathletic.com/3318870/2022/05/20/cryptocurrency-bitcoin-nfl-mlb-nba-mls/
16. FTX Crash has sports leagues, teams, and athletes running scared – Leonard Amato December 15, 2022,
https://www.forbes.com/sites/leonardarmato/2022/12/15/ftx-crash-has-sports-leagues-teams-and-athletes-running-scared/?sh=7eb6c45d38ee
17. NFLPA reportedly unable to collect $41.8 million in revenue stemming from crypto connections – Tyler Greenawalt – Wed, May 31, 2023
https://sports.yahoo.com/nflpa-reportedly-unable-to-collect-418-million-in-revenue-stemming-from-crypto-connections-163557377.html
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https://clutchpoints.com/5-nba-players-who-lost-money-because-of-cryptocurrency
19. Soccer, golf, F1, cycling and more. Saudi Arabia is buying sport – this is why – Matt Slater – 07/11/2023
https://theathletic.com/4671408/2023/07/11/saudi-arabia-sport-investment-pif/
20. Saudi Arabia’s Newest Sportswashing Strategy: Sponsorship Of Women’s World Cup – Minky Worden Forbes Magazine – February 16, 2023, 1:09 pm EST
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21. Saudi Vision 2030
Wikipedia July 22, 2023
https://en.wikipedia.org/wiki/Saudi_Vision_2030
22. Saudi Arabia Eyeing Multibillion-Dollar Sports Investment Entity – David Rumsey
July 5, 2023, | 05:13 pm
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23. Saudi sports investment “a two-edged sword,” says NBA Commissioner – Josh Sim June 9, 2023
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24. Saudi Arabia Wants To Buy More Sports Teams… Is NFL In The Future? by Mike Gunzelman July 6, 2023
https://www.outkick.com/saudi-arabia-wants-to-buy-more-sports-teams-is-nfl-in-the-future/
25. The Alliance of LIV Golf and the PGA Tour: Here’s What to Know – Kevin Draper 06/07/2023
https://www.nytimes.com/2023/06/07/sports/golf/pga-liv-golf-merger.html
26. Saudis don’t need the money that flows in modern sport, but they do crave the kudos | Kenan Malik – 07/23/2023
https://www.theguardian.com/commentisfree/2023/jul/23/saudi-arabia-sportswashing-arms-sales-uk-us
27. Saudi Money Is Supercharging Athletes’ Pay — And Shaking Up The Sports World By Brett Knight 05/16/2023
https://www.forbes.com/sites/brettknight/2023/05/16/saudi-money-is-supercharging-athletes-pay—and-shaking-up-the-sports-world/?sh=367208061214
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