Premier League Nixes $459M Deal – Front Office Sports

The crypto winter has hit the Premier League’s balance sheet.

The popular English soccer league signed a deal with blockchain company Sorare — replacing a more lucrative one with Consensys.

• Sorare will provide the Premier League’s NFT digital collectibles for $34.5 million annually.
• The league’s previous NFT deal with Consensys was for a reported total of $459.3 million. Consensys beat out Sorare, Dapper Labs, and Candy Digital for the contract.
• The Consensys deal fell apart in September amid falling cryptocurrency prices.

In September 2021, Sorare raised $680 million in a round led by Softbank that valued the company at $4.3 billion.

Sorare, best known for its blockchain-based fantasy soccer game, also has licensing deals with Serie A, La Liga, Bundesliga, and MLS.

Winter is Here

Leading cryptocurrencies bitcoin and ethereum each lost more than 60% of their value over the last 12 months. Other crypto assets have seen a similar plunge, with Luna and connected stablecoin TerraUSD collapsing in May and wiping out $40 billion in value.

In all, the crypto industry’s market cap has dropped from $3.2 trillion to under $1 trillion.

Dapper Labs’ NBA Top Shot, which helped ignite the NFT craze, has seen diminishing activity since topping $200 million in sales in both February and March of 2021, per Cryptoslam. 

This year, Top Shot has seen decreasing sales volume nearly every month since recording $59 million in January activity. In October, Top Shot earned $2.7 million in sales.

Negotiations around the coming sale of the Phoenix Suns are being complicated by the close relationship between two people on opposite sides of the bargaining table.

Controlling owner Robert Sarver is being advised by Moelis & Company banker Navid Mahmoodzadegan, who is reportedly close to Suns’ minority owner Jahm Najafi — who publicly called for Sarver’s ouster following a report of racist and sexist behavior.

• Mahmoodzadegan has also advised Najafi — which reportedly has potential buyers and their advisers concerned that the latter might influence the sale in favor of someone to his liking vs. the highest bidder or best fit. 
• Sarver reportedly selected the bank because it is based in Los Angeles and that founder Ken Moelis and Mahmoodzadegan would personally work on the deal. 
• Sarver isn’t concerned about the latter’s links to Najafi.

Moelis also advised on the $5.3 billion sale of Premier League club Chelsea to Los Angeles Dodgers, Lakers, and Sparks co-owner Todd Boehly and Clearlake Capital.

Najafi also holds stakes in McLaren Racing and the X-Games.

Mega-Deal

The sale of the Suns could approach the NBA’s largest ever: Joseph Tsai’s $2.3 billion purchase of the Brooklyn Nets in 2019.

The team was valued at $2.7 billion by Forbes in October, a 50% increase over the previous year.

The Ottawa Senators are on the market.

The family of the NHL team’s late owner Eugene Melnyk — who purchased the team for $92 million in 2003 to save it from bankruptcy — has reportedly hired Galatioto Sports Partners to explore a sale of the franchise. The bank is also involved with the Los Angeles Angels sale.

Melnyk died in March and left the team to his children, Anna and Olivia, who are less than 25 years old. 

• The team is currently run by a three-person board. 
• Forbes last valued the Senators in December at $525 million — a 22% year-over-year increase but still ranking 28th in the 32-team league. 

It’s unclear how high a price the team could command.

Moving Forward

In June, the Senators reached a memorandum of understanding with the National Capital Commissions and a group of partners for an arena in the LeBreton Flats area downtown. 

The project still needs to clear a few hurdles, but the NCC aims to reach a long-term land-lease agreement by the fall of 2023.

The team’s last season at the Canadian Tire Centre, which is around 16 miles from the city’s downtown center, had the lowest average attendance in the league. This season, the team is averaging 15,017 — 26th in the league.

The gaming industry hasn’t been immune to lower demand caused by high inflation and a lack of new titles — and one of its biggest players is feeling the crunch.

Electronic Arts lowered its full-year net bookings forecast following its earnings report for the fiscal second-quarter ending Sept. 30.

The California-based company known for titles like “Madden NFL” and “Apex Legends” generated $1.9 billion in revenue in Q2, compared to $1.8 billion for the same period a year prior. But expects net bookings to range between $7.65 billion and $7.85 billion in FY2023, down from a previous projection between $7.9 billion and $8.1 billion. 

FIFA ended its long-term licensing agreement with Electronic Arts in May with “FIFA 23” — but early returns imply that the last EA title to carry the governing body’s name could leave a big void. 

• “FIFA 23” was the best launch in series history with 10.3 million players in the first week.
• Earnings per share reached $1.07 in Q2, compared to Wall Street estimates of $1.35.
• Full-year revenue is expected to range between $7.5 billion and $7.7 billion.

Electronic Arts kept its ties to soccer in August by extending its licensing and sponsorship deal with MLS, which has worked with the video game company since 1999. Electronic Arts also has deals with the Premier League, Serie A, and Bundesliga. 

Iconic Deal

In October, Electronic Arts secured a deal with Marvel Games to develop “at least three” action adventure games for consoles and PC. The deal kicks off with an “Iron Man” title developed at Montreal-based Motive Studio.