Olympics Could Cost China $38.5B – Front Office Sports

February 1, 2022

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Grambling State University will reportedly announce an NIL deal providing income for all of its athletes, which would be the first of its kind. The HBCU currently has commitments from Urban Edge Network and Athylt to provide income.

The Beijing Olympics could have been a logical ingredient in China’s recipe to grow its sports industry to $773 billion by 2025. But according to a new report, the Winter Games may have provided a much greater financial burden than originally thought.

The 2022 Winter Olympics may cost China more than $38.5 billion, according to Business Insider — 10 times higher than the nation’s previous estimate of $3.9 billion.

• China reportedly didn’t count “dozens” of expenses, as many were classified as “capital improvements” rather than official costs. 
• For example, a $9.2 billion bullet train was apparently not counted.
• The nation also allegedly neglected to include the costs of safety measures for its notoriously strict COVID-19 bubble, as well as environmental costs.

This estimate would easily top that of several other Olympic Games. Tokyo paid about $13.6 billion for the 2020 Summer Games. London spent about $15 billion in 2012.

Though it would still rank lower than the price tag for China’s Summer Games in 2008, which cost a whopping $42 billion.

Additional Complications

The report comes, of course, on the heels of several other controversies that threaten the Games’ reputation in addition to its bottom line.

COVID-19 already contributed to fewer media and no fans — and now, cases are reportedly rising. Several nations have organized diplomatic boycotts over China’s human rights violations. And fears of technology-based surveillance on Team USA have grown.

Tom Brady may or may not be retiring following mixed reports on Saturday that his run as the GOAT could be ending. But even if Brady’s time is up on the field, he will walk away as the NFL’s all-time earnings leader.

The seven-time Super Bowl champion has reportedly made $293 million just from playing contracts during his 22 years in the NFL, according to Spotrac. Brady added another estimated $160 million off the field.

Peyton Manning, the NFL’s previous all-time earnings leader, retired in 2015 with a projected $400 million in career earnings — more than $50 million less than Brady. Brady, the No. 9 highest-paid athlete on Forbes annual list, made a record $45 million off the field just this season

Brady has endorsement deals with Fanatics, FTX, Hertz, Under Armour, Subway, and others.

Brady’s Bunch

The three-time league MVP has a footprint in a variety of industries.

• Brady co-founded nutrition company TB12 and NFT platform Autograph, which recently raised $170 million.
• The soon-to-be Hall of Famer also owns the media company 199 Productions and unveiled his own apparel line — BRADY — earlier this year. 

If Brady isn’t ready to hang up his jersey, he could earn $27.3 million in salary and bonuses next season, plus the leftover $15 million of his $20 million signing bonus. He would also be guaranteed his entire salary on Feb.18. If he does retire, the Tampa Bay Buccaneers could retrieve up to $16 million of the bonus total and his salary would be voided.

Cryptocurrency exchange FTX has raised $400 million in a Series C funding round, valuing the company, which has leaned heavily on sports and gaming, at $32 billion. 

The round included SoftBank’s Vision Fund 2, Tiger Global, Temasek, Paradigm, and Lightspeed Venture Partners. FTX will use the fresh capital for mergers, acquisitions, the development of new products, and to invest in companies in gaming, NFTs, and the metaverse.   

The latest round follows a $420.7 million raise last October, valuing the exchange at $25 billion. To date, FTX has raised $2 billion but has spent nearly $1 billion on acquisitions. 

FTX has displayed a willingness to invest in sports and gaming companies to expand its reach. 

• The exchange purchased the naming rights to FTX Arena, home of the Miami Heat, in a 19-year, $135 million deal. 
• It teamed up with Solana Ventures and Lightspeed Venture Partners to launch a $100 million gaming fund called GameFi.
• Esports team TSM rebranded to TSM FTX after signing a $210 million partnership with the exchange.
• It secured naming rights to the field at California’s Memorial Stadium — home of the California Golden Bears — for $17.5 million. 

More Games to be Played

Earlier this month, FTX established a $2 billion fund to invest in crypto startups, with a focus on gaming and security companies. The exchange could allocate all of the funds by 2023.

FTX Ventures is entirely funded by FTX and 29-year-old founder Sam Bankman-Fried.

Sports betting and gaming company Entain announced a new $133 million innovation lab on Monday, Ennovate, which will focus on developing sports and entertainment experiences in the Metaverse.

The lab is slated to launch in March in partnership with Theta Labs, Verizon, and telecommunications company BT. Ennovate plans to fund start-ups and develop applications for NFTs, VR, and AR.

Roughly $53.8 million of the total will be reserved for the UK, and products will be tested in VR arcades by consumers.

Global Operations

Entain owns UK online casino Ladbrokes and Austrian betting brand Bwin, with licenses to operate in at least 27 countries. In January, Entain and MGM Resorts International invested roughly $450 million in sports betting app BetMGM.

• Entain and MGM share equal ownership of BetMGM.
• In October, DraftKings pulled its $22.4 billion bid to acquire Entain reportedly due to complications introduced by MGM.
• In January 2021, MGM bid $11 billion to acquire Entain, which it rejected.

Entain reportedly plans to invest in its first esports betting business this year, and expects BetMGM to turn profitable in 2023.

The company raised the low end of its earnings guidance last month, citing “strong growth” in its online markets.