Will the sports bubble burst in 2023?

This year 2022 ends in apotheosis for the world of sport! Argentina’s victory in the World Cup is a symbol of this. Outside the playgrounds, economic transactions have continued to flow, reaching record sums. Focus on the economic bubble in the sports world this year.

Sport has become a real business, very lucrative. Broadcasters continue to pay ever-increasing sums, as elite sport has over time become the only product people watch live. This year, isolated initiatives such as the Football Super League and LIV Golf have disrupted market habits. Will 2023 be a decisive year?

Read also: The ever crazier budgets of American football stadiums

December: a month rich in transactions in the world of sport

This week, three major agreements have been signed in the world of sport. Monday, December 19, American investor John Textor expanded his sports empire by buying Olympique Lyonnaiswhich now values ​​the group at 884 million euros and extends American influence over European football clubs.

On Tuesday, Dec. 20, the owner of the Phoenix Suns and the National Basketball Association’s Mercurys reached an agreement to sell his two teams for $4 billion, a record for a professional basketball franchise.

On Thursday, December 22, Google agreed to pay more than $14 billion over seven years for National Football League broadcast rights through its subscription plan. Google secured one of the largest broadcast deals ever undertaken for Big Tech.

Read also: Ranking of Ligue 1 club budgets for the 2022-2023 season

A year of record sports contracts

The end of the year was rich in new contracts, just like everything that happened economically in the world of sport in 2022. Indeed, in 2022, new record contracts were signed, in particular the sale of the club the Denver Broncos in the NFL, the most expensive for a professional club in history. This is complemented by the sale of historic football clubs in Europe such as Chelsea and AC Milan, and new records have also been set for Indian Premier League cricket rights.

Read also : The Chelsea Club sold at a record price

The emergence of new bodies in sport

Many questions have come to upset the economic habits of the sports market this year. Like the creation of the LIV Golf supported by Saudi Arabia, which upset the professional golf circuit. However, other historic leagues still have advantages, as was the case when European football’s governing body UEFA gained the upper hand in a legal battle against an emerging body promoting a European Super League.

Nonetheless, future legal battles can be expected for the economics of football as FIFA seek to extend its World Cup model to clubs. Meanwhile, investors are carefully assessing the changing economic landscape. We can undoubtedly expect further changes of ownership in the future.

If all these transactions do not go through with their terms, a number of top clubs and franchises are considering sales or investments, such as Manchester United, Liverpool FC, etc. So is it possible that the current sports transaction boom will collapse in the coming year? And what are they really worth?

Read also: The new crazy valuation of PSG

The global sports economy in the face of inflation

Sport is no exception, since the beginning of 2022, the global economy has been plagued by inflation. Rising interest rates have dampened transactions, and the wider effects of the Russian invasion of Ukraine have disrupted geopolitics, energy distribution and even sports. However, there is still optimism about the sport’s financial prospects.

According to the Financial Times, it would not be unreasonable to expect the sale of professional sports clubs for sums approaching 10 billion dollars. Industry optimists point to the rapid appreciation of sporting assets throughout downturns, including during the global financial crisis and the pandemic.

Nevertheless, complications should shake the world of sport, like the NBA which must soon negotiate all broadcasting rights in 2023. As well as the NFL which no longer hides its ambitions to move or create its own league in Europe. However, the players’ associations will have their say before all these possibilities are realized.

Read also: The budget for the 2022 World Cup in Qatar

Laisser un commentaire