Roger Federer’s lesson for Tiger Woods

One mini-scoop to start. Formula One has appointed Emily Prazer as chief commercial officer. It’s an endorsement of her work on the sport’s return to Las Vegas last year but also a sign of the car racing series’ ambitions to grow its sponsorship and hospitality revenues.

One person who has worked with Prazer, described her as a “powerhouse” who will be an asset to F1 as the series looks to capitalise on its growing popularity in the US. She will report to F1 chief Stefano Domenicali.

This week, we explain just why football clubs are investing in their stadiums and dig deeper into what’s next for Tiger Woods following the end of his Nike deal.

What Tiger Woods can learn from Roger Federer

This week Tiger Woods confirmed a long-suspected rumour on the golf circuit: after 27 years the five-times Masters champion was parting ways with his most steadfast sponsor, Nike.

The news marked the end of an era. For Nike, the Tiger sponsorship represented much more than an endorsement. For one thing, co-founder Phil Knight was a fan of Woods from his days as a teenage prodigy. 

“Here is a person of colour dominating in a traditionally wealthy, white sport”, said Rick Burton, professor of sports marketing at Syracuse University. “If Phil Knight loves anything, it’s a rebel, and Tiger embodied that”.

Their relationship ran deep. One of Nike’s most prominent buildings at its corporate headquarters was named for Woods. Knight reserved his highest praise for the golfer in his 2016 memoir, Shoe Dog. When other sponsors pared back following Woods’ infidelity scandal of 2009, Nike stood firm.

But Nike operates in a very different sportswear marketplace today than it did in 1996, when it first signed Woods. Back then, the company was in growth mode, buoyed by basketball sensation Michael Jordan. Putting a swoosh on a young golfer like Woods wasn’t a bid to sell more equipment — in the mid 90s, Nike didn’t even make golf balls, and Woods got a deal with Titelist — it was about linking the brand with an iconoclastic athlete.

Nike eventually began making clubs and balls, but discontinued the line in 2016 amid weak sales. Today, Nike finds itself in a different funk: revenue growth is slowing, other newer brands like Hoka, Lululemon, and On Running are eating into its market share, and the $51bn global colossus is cutting back its increasingly complex operations.

In other words, the upside for outfitting a generational talent in a non-core sport like golf may be waning for Nike. 

“Five, seven years ago, it was Nike and Adidas that dominated in a lot of categories. Nike still dominates basketball, but its other categories face more competition”, said John Kernan, managing director at TD Cowen. “Brands cannot be all things to all people anymore.”

Of the newer brands taking market share from Nike, On Running is particularly interesting. Started in Switzerland in 2010, the company slowly built a customer base making trainers with textured soles. In 2019, just a year after ending his career-long endorsement with Nike, Swiss tennis star Roger Federer took a stake in On, dramatically improving its visibility and helping drive a nearly nine-fold increase in sales in the past four years.

Woods has said “there will certainly be another chapter” to his career, but hasn’t yet specified if there’s another outfitting contract up his sleeve. Nike may not need Woods to keep growing, but another company could benefit greatly from his association.

Taylor Swift: playing at a soccer stadium near you

Back in the old times, a football stadium was a place where a load of men would congregate, chant rude songs and cram into undersized toilets after the game.

Times are changing. You’ll still hear foul language at a football ground, but clubs are fast investing in modern arenas that are fit not just for athletes but for megastars and a wider demographic spectator.

The modern stadium is a feat of architectural vision and engineering prowess, as we explained in this FT Big Read to kick off the new year.

The simplest improvements include heated seats for the highest-paying supporters, clean and spacious toilets for all, and fast-moving queues for half-time refreshments.

Real Madrid’s upgraded Santiago Bernabéu features a retractable roof and a pitch that splits into sections and hides itself below the surface where it’s nourished with optimal light, temperature and humidity.

And with the turf safe from harm, chances are someone like pop sensation Taylor Swift is putting bums on seats upstairs.

A stadium is typically a club’s biggest asset so it’s vital to put the thing to use when no football is being played. It’s little wonder that teams all over the world are investing billions to upgrade their facilities, whether starting from scratch or improving existing structures.

But there are risks to any real estate deal. The cost is increasing the need for richer owners with access to deeper pools of capital.

“Until that stadium opens you need to make sure you build it on time and at cost,” says Greg Carey, global co-head of sports franchise at Goldman Sachs. “Mitigating construction and completion risk is the biggest risk these clubs face.”

The other threat, which comes post-completion, is what Scoreboard will dub flatmosphere.

No club sets out to lose the advantage of a boisterous home crowd but a multibillion pound investment isn’t going to pay for itself.

New layers of hospitality seating and luxury experiences cater to wealthier types of audiences. The question is whether clubs can strike the right balance between maximising revenue and keeping hardcore fans in fine voice.

That said, the changing profile of football fans has been a contentious topic for a long time. In 2000 former Manchester United captain Roy Keane complained that “some people that come to Old Trafford . . . I don’t think they can spell football, never mind understand it”.

“Away from home, our fans are fantastic,” he said. “But at home they have a few drinks and probably the prawn sandwiches, and they don’t realise what’s going on out on the pitch.”

You can listen to Scoreboard’s very own Josh Noble explain the rationale for clubs investing in stadium upgrades here.

Highlights

• Bet365 chief Denise Coates made almost £300mn last year in pay and dividends. But does the money make up for the travails of Stoke City? The gambling group’s football club is languishing in 19th in the second-tier of English football and hasn’t featured in the Premier League since 2018.

• MultiChoice, Africa’s largest pay-TV company, struck a last-minute deal to broadcast the Africa Cup of Nations. The South African company’s 20mn subscribers had been at risk of missing out on the tournament, which starts this weekend in Ivory Coast.

• Bruin Capital, the investment group founded by former IMG executive George Pyne, agreed to sell sports marketing company Two Circles. It’s a win for Bruin, which has a strategic partnership with private equity firm CVC Capital Partners, given that the deal valued Two Circles at more than $300mn, up from around $42mn when Bruin bought its majority stake in 2019.

• The Trump family’s luxury Scottish golf resort made its first profit since the acquisition almost a decade ago. The former US president’s family paid a reported $60mn for Trump Turnberry in 2014 but its £571,000 pre-tax profit in 2022 was its first since the deal.

Transfer Market

• Two big changes in the upper echelons of golf. Keith Pelley is stepping down as chief executive of the European Tour to head Maple Leaf Sports & Entertainment, owner of the National Hockey League’s Toronto Maple Leafs, while the chief of the Royal & Ancient St Andrews golf club, Martin Slumbers, is set to depart by the end of the year. The pair had front-row seats as Saudi Arabia’s sovereign wealth fund bankrolled rebel series LIV Golf and took on the establishment.

• Sir Leonard Blavatnik’s sports media group DAZN hired former Amazon and Twitch executive Walker Jacobs as global chief revenue officer. He’s the latest in a series of hires under the leadership of DAZN boss Shay Segev, who’s growing the business and targeting profitability.

Final Whistle

Ever since actors Ryan Reynolds and Rob McElhenney took over Wrexham AFC, football clubs everywhere have been dreaming about finding their own Hollywood owners.

The fifth division Welsh side are a household name thanks to the acting duo’s Welcome to Wrexham docuseries. Rather than wait around for a stroke of luck, one plucky Scottish team is making a direct appeal to celebrities worldwide.

That’s right, Motherwell FC think they offer “real bang for your buck”.

Ever wanted your name on a walk of fame?