United Bid Wins ’26 World Cup but Revenue Projections Overstated

United 2026

The U.S., Canada and Mexico have won the rights to host the 2026 World Cup, the first with an expanded field of 48 teams, following a vote of more than 200 FIFA member nations; Morocco was the other finalist. Sixty of the 80 games will be played on U.S. soil, including all matches from the quarterfinal round onward; Canada and Mexico will each host 10 matches. The 17 U.S. cities under consideration to host games are: Boston, NY/NJ, Baltimore, Washington D.C., Cincinnati, Nashville, Atlanta, Orlando, Miami, Kansas City, Dallas, Houston, Denver, Los Angeles, SF and Seattle; 10 will be selected. The final is scheduled to be played at MetLife Stadium in East Rutherford, NJ.

Howie Long-Short: The United bid was selected because of the potential revenue (double that of the Morocco bid, $7.2 billion) and the stadium infrastructure that already exists. While all 23 venues submitted for consideration within the United bid already exist or are in the process of being built, Morocco’s bid required 14 venues to be built or renovated at an estimated cost of $15.8 billion. $14.3 billion in revenue would equate to an estimated $11 billion in FIFA profits or a +/- $50 million distribution per member country; 3x the revenue that the international soccer organization generated in Brazil in ’14.

While the tournament is going to be wildly profitable, $14.3 billion in revenue appears to be a pie in the sky figure. The United bid projected it would generate $5.5 billion in revenue from media rights, but FIFA pegs the number closer to $3.6 billion; wisely noting that the time difference prevents matches from being broadcast live (and therefore from maximizing revenue) in parts of Europe and Asia.

Attendance and ticket sale records set in ’94 (last time U.S. hosted) still remain, so perhaps U.S. Soccer Federation President Carlos Cordeiro’s prediction that six games (three opening games, both semi-finals, final) will generate ticket sales and hospitality revenue on par with the Super Bowl is accurate; but the United bid projects $1.5 billion in hospitality revenue, 10x more than FIFA anticipates. For comparison purposes, the last Super Bowl did $150 million in hospitality revenue. The bid also accounts for $1.4 billion in other activities (i.e. not games) that have yet to be announced. Even if the United bid ends up bringing in just $10 billion, it would still represent a 66% increase on the $6 billion FIFA will generate this summer in Russia.

Fan Marino: The current voting system, which makes member choices public, was implemented following the 2015 arrests of nine soccer officials (and five marketing execs) on charges of wire fraud, racketeering and money laundering. The old system, rife with corruption, called for just 22 FIFA executive committee members to cast secret ballots, explaining how Russia and Qatar managed to win the ’18 and ’22 World Cups, respectively.

For those wondering, with an unprecedented three host countries, it’s not certain that all three national teams will be guaranteed automatic entry to the tournament; however, it’s likely that COCACAF will amend its rules to ensure all three teams qualify.

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Facebook Unveils FB.gg to Compete with Twitch

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Facebook has unveiled a homepage for streaming gaming content to supplement its Gaming Creator program. The new destination FB.gg, designed to compete with Twitch (think: social network for gamers), aggregates gaming videos, suggests live streaming feeds, showcases creators (discoverability is an issue on Twitch) and enables users to search content by game title. The social media giant also announced that it would be introducing functionality offering viewers the opportunity to tip ($.01/per) broadcasters, giving emerging creators the chance to monetize their work. The Level Up program has not yet been rolled out, but a select group of gamers have been allowed to charge fans ($5) to subscribe to their channels.

Howie Long-Short: Facebook is looking to take its cut of a video game streaming market that generated $4.6 billion in revenue last year; 37% of which was controlled Twitch. The company will profit from FB.gg by taking a percentage of the transaction amount when a viewer buys Facebook Stars, the virtual currency used to tip streamers. The percentage will range from 5%-30%, depending on the number of stars included within the “pack” (more stars = lower percentage).

Back in late April, Facebook reported Q1 ’18 earnings increased +62% YoY (to $1.69/share adjusted) on revenue that grew 49% (to $11.97 billion), bouncing back strongly from the Cambridge Analytica scandal. Ad revenue (+50% YoY, avg. revenue per user was $5.53), operating margin (+5% YoY, to 46%) and usership (+13% YoY) also all rose during the most recent quarter. Shares popped 8.5% after FB posted Q1 ’18 financials and have steadily climbed since, closing Tuesday at $192.40.

Twitch was acquired by Amazon (AMZN) for $970 million in 2014. The company increased concurrent viewership +21% during Q1 ’18 (to 953,000), growing its already large lead in the game streaming market over 2nd place YouTube Gaming (GOOGL, -12% to 272,000); but, Facebook (FB, +103% to 56,000) also reported significant audience growth last quarter and will enter Q3 ’18 armed with an enhanced destination for gaming enthusiasts.

As for AMZN, they posted their most profitable quarter ever in Q1 ’18. AMZN grew revenue +43% to $35.7 billion, while net income rose 121% to $1.6 billion. Cloud computing (+49% YoY to $5.44 billion), subscription services (+60% YoY to $3.1 billion) and ad revenue (+139% YoY to $2.03 billion) all contributed to the record quarter. AMZN shares are up 7.5% over the last 3 weeks and climbed past $1,700 for the first-time last week, before closing on Tuesday at $1,698.76.

Fan Marino: ESL (think: Dota 2, Counter-Strike: Global Offensive) signed an exclusive broadcast deal with Facebook Watch, as opposed to the market leader Twitch. Why? As World Esports Association Commissioner Ken Hershman points out, in addition to being a “tremendous streaming platform”, Facebook is “a social and engagement platform.” FB’s targeting capabilities and recommendation engine have enabled the esports federation to grow rapidly, from 750,000 viewers/mo. to more than 25 million within a year.

For those wondering, .gg stands for good game.

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Wenn Digital, Oak View Group Introduce Sports Photography Digital Rights Management Platform

KodakOne

Wenn Digital and Oak View Group have partnered to bring the Image (and video) Rights Management Platform KODAKOne and its associated cryptocurrency KODAKCOIN to six U.S. sporting venues. Built on blockchain technology, the to-be launched KODAKOne platform will enable fans (+ professional photographers, teams and venues) attending games at those venues to “upload, register and share their work, as well as be compensated for it.” KODAKCoin can be used as a payment for licensing or sale and together Wenn Digital and the six Oak View Group venues will work to build a platform that facilitates in-venue cryptocurrency transactions.

Howie Long-Short: Protecting live event photography rights is a real problem. Photographers have long struggled to prove ownership of their work, have experienced copyright violations and have had difficulties collecting royalties, so KODAKOne looks to be a practical application of blockchain technology within the sports world.

Wenn Digital, which operates the KODAKOne platform and KODAKCoin cryptocurrency, licensed the KODAK brand name for the digital rights management platform and associated token. It’s been reported that KODAK will receive up to $5 million (including $750,000 in cash and $1.5 million in Wenn Digital common stock) for use of their name. On May 21st, having already closed on $10 million in pre-sale investment capital, Wenn Digital launched a Simple Agreement for Future Tokens (due to securities laws) to raise the balance of a $50 million round. As for KODAK (KODK), when the company announced it was pivoting to blockchain back in January, shares rose 272% (peaking at $11.55); though the initial excitement has since been replaced with doubt, shares are up +68% YTD ($5.20).

Back in March, private equity firm Silver Lake Partners invested $100 million in Oak View Group, the entertainment and sports facilities company founded by Irving Azoff/Tim Leiweke. Currently 27 stadiums and arenas use Oak View Group for booking, sponsorship or security services; though Leiweke envisions adding 6-8 more before the end of 2018 (so, there’s plenty of room for KODAKOne to grow with the company). The company acknowledges it’s “going through a massive growth spurt”, but insists it’s with good reason; the NFL, NBA and NHL are “at their healthiest levels ever” and concerts have become increasingly profitable. You can play KODAKOne through Madison Square Garden Company (MSG). Azoff MSG entertainment, a joint venture between Irving Azoff’s management firm and MSGhas invested in Oak View Group.

Fan Marino: For those wondering, AT&T Center (Spurs), Bankers Life Fieldhouse (Pacers), Golden 1 Center (Kings), Talking Stick Resort Arena (Suns), Xcel Energy Center (Wild) and Prudential Center (Devils) are the six venues that KODAKOne plans to launch with.

In other in-stadium news, the NBA has partnered with 15 Seconds of Fame (15SOF) to bring fans in all 29 NBA cities video of their videoboard/live TV appearances while at games. Using facial recognition software, the application identifies the fan and sends them video of the moment. 15SOF is a great idea, but the execution has been terrible. Fans don’t care about the content of the video (waving, dancing etc.), they want video showing their appearance on the jumbotron. In other words, 15SOF should be sending fans wide angle video that reflects the stadium’s atmosphere at that moment, as opposed to the video they’re currently pulling out of context. Kobe Bryant has invested in 15SOF, but there are no ways for our readers to.

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NJ Becomes 3rd State to Legalize Sports Betting, Betfair U.S. Partners with Meadowlands Racetrack

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Governor Phil Murphy signed legislation that will allow New Jersey’s 9 casinos and 3 racetracks to take wagers on individual sporting events beginning this Thursday. Gamblers 21 and over will be able to place wagers on a variety of professional and college sporting events, though betting on games involving local college teams (think: Seton Hall, Rutgers) and college games played within the state is prohibited. Initially, wagers will have to be placed in person; though, mobile betting is covered by the bill and will commence in the future (requires licensees to wait 30 days). The William Hill (WIMHY) sportsbook at Monmouth Park Racetrack will begin taking bets at 10:30a on Thursday, just in time for the start of the World Cup later that afternoon. New Jersey becomes just the third state to offer legalized sports betting, following Nevada and Delaware.

Howie Long-Short: Another one of New Jersey’s racetracks, the Meadowlands Racetrack, has found a sports betting partner in Betfair U.S. (subsidiary of Paddy Power Betfair, PDYPY). PDYPY revealed it has signed “long-term agreements for retail and online/mobile sports betting” with the North Jersey track (and Tioga Downs in New York); they plan to begin taking bets later this summer. The news comes just two weeks after the company announced it would be acquiring FanDuel, with the intention of converting their 1.3 million DFS players into true sports bettors. It’s expected that Betfair will brand their U.S. sportsbooks as FanDuel sportsbooks. PDYPY shares are up 11% (to $58.35) since word of the deal first broke on May 15th.

Fan Marino: Monmouth Park officials aren’t satisfied with SCOTUS’ decision to overturn PASPA, they’re now pursuing remuneration for damages caused by the pro sports leagues and the NCAA. The New Jersey Thoroughbred Horsemen’s Association (leases Monmouth Park) claims “the leagues acted in bad faith” fighting them in court, while simultaneously profiting from DFS and authorizing the relocation of several franchises to Las Vegas (nullifying the integrity argument). They’re pursuing +/- $150 million in “revenues we would have had” (from sports betting), between the period of October 2014 – June 2018, had the leagues not opposed their efforts. It must be noted that neither Delaware nor New Jersey included an integrity fee for the leagues in their sports betting legislation.

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MLB Partners with P.E. Firm to Acquire Rawlings

Rawlings

Seidler Equity Partners (private equity firm) and Major League Baseball (non-controlling interest) have acquired Rawlings – and subsidiaries Miken and Worth – for $395 million, from Newell Brands (NWL). The 131-year-old baseball equipment company has manufactured the league’s official game ball since 1977 and maintains the contract to supply the league with balls and batting helmets through 2021. MLB EVP for Strategy, Technology and Innovation Chris Marinak said the acquisition will give the league “even more input and direction on the production”, important with the league facing accusations that home run numbers have soared over the last 3 seasons because of “juiced baseballs.”

Howie Long-Short: Newell Brands acquired Rawlings as part of a $13 billion takeover of Jarden, back in 2013. That deal nearly doubled the St. Louis manufacturer in size ($11 billion in revenue over 1st 9 mo. of ’17 vs. $6 billion prior) but left it with $10 billion in debt, which explains why they’re shedding assets (see: Waddington Group for $2.3 billion) that don’t align with their 9 core consumer divisions (think: Sharpie pens to Crock-Pot cookware). NWL intends on using the sale’s proceeds (+/- $340 after taxes) to fund share buybacks and pay down debts.

Rawlings was considered the least valuable of the brands NWL wanted to unload. Deutsche Bank pegged the company at 8x EBITDA (+/- $360 million), so you can understand why President Michael Polk was “pleased with the agreement to sell Rawlings at an attractive multiple.” NWL shares are up +6% ($24.68 at Friday’s close) since news of the Rawlings deal broke, but remain down 20% YTD.

Fan Marino: Home run rates have unexpectedly soared since the ’15 season, with many claiming that today’s balls are bouncier, smaller and flatter-seamed – which lend them to jump off the bat and travel farther (i.e. reduced drag). There are those who argue it has more to do with the quality of today’s pitching, players altering the arc on their swings to hit fly balls and the elimination of the two-strike approach (think: plate disciple, shorter swing, avoid strikeout), but the surge in home runs is undeniable. In 2017, 14.2% of all balls hit left the yard (highest rate in MLB history) and teams mashed a MLB record 6,105 home runs (the previous record was 5,693 in ’00). The league has consistently denied there have been any alterations made to the ball.

Fun Fact: Rawlings is credited with producing the first pair of football shoulder pads.

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Fashion Labels Take Activewear Market Share, Activewear Brands Now Reside on 5th Ave

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Activewear brands and the retailers who sell their products have had a difficult start to 2018, as sales were “essentially flat between February and April.” NPD Group senior sports industry advisor Matt Powell attributes the struggles to “the proliferation of fashion brands emulating performance wear” (think: Moncler’s Grenoble collection, BIT: MONC); including high fashion labels like Isabel Marant that are now launching activewear lines. It’s not just the athleticwear labels (think: Under Armour – UAA, Columbia – COLM) that are hurting from the industry crossover though, athletic specialty/sporting goods stores are also struggling as “department stores now capture more activewear sales than the true sports channels.” Activewear is the fashion industry’s fastest growing category, expected to grow 6-7% in ’18; compared with 2-3% for the balance of the fashion and footwear industry.

Howie Long-Short: One company that has not been negatively impacted by the trend is Lululemon Athletica. LULU posted “astonishing” Q1 ’18 results, before increasing its full year financial forecast. Net income grew +141% YoY (to $75.2 million) on revenue that rose +25% YoY (to $649.7 million), with e-commerce growth (+62% YoY), new customer acquisition (+28% YoY, 30% of which were men) and a significant rise in gross margin (from 49.4% to 53.1%) highlighting the quarter. Shares popped 16% (to $122.19) following the June 1st report; they’re up 55% YTD and 135% over the last 12 months despite the February resignation of CEO Laurent Potdevin (workplace misconduct) and other public missteps (think: see-through tights). Adidas (ADDYY), Champion (HBI) and Patagonia were also all strong performers within the activewear category during the first quarter.

Fan Marino: While fashion brands are working to take activewear market share, activewear companies are taking up residency on 5thAvenue (NYC) alongside high-fashion retailers. Why? As Powell explains, “to be next to some of the most prestigious names in the industry really elevates the prestige of the athletic brands.” Adidas, Asics (TYO: 7936) and The North Face (VFC) already have stores open on 5th Avenue, Nike (NKE) and Under Armour have signed leases on space and Puma just announced it’ll be opening a 24,000 SF retail store on the street.

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Wheels Up Pays “Seven Figures” for Exclusive Sponsorship On-Board Triple Crown Candidate Justify

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Wheels Up will be the sole corporate sponsor with its logo on Justify and jockey Mike Smith, as the undefeated chestnut colt attempts to become the 13th Triple Crown Winner – and just the second the last 40 years – at Belmont Park tomorrow. The member-based private aviation company has agreed to pay “seven-figures” to place its logo on Justify’s blanket and Smith’s pant leg, turtleneck and boots, in the 150thrunning of the Belmont Stakes. It’s the most ever paid for a single race sponsorship in horse racing history. Wheels Up was among the companies that sponsored American Pharoah, when the horse became the first Triple Crown winner in 37 years in 2015. Justify (and Smith) join an impressive “stable” (pun intended) of Wheels Up brand ambassadors, a list that includes Rickie Fowler, Tom Brady, J.J. Watt, Russell Wilson and Serena Williams.

Howie Long-Short: Joyce Julius & Associates determined that Monster Energy received $6.7 million in exposure value (think: TV, digital news, social) from its sponsorship of American Pharoah in 2015. Considering that Monster wasn’t the exclusive sponsor and that the brand didn’t have placement on Smith’s pant leg, “seven figures” sounds right.

Wheels Up remains privately-held, but there is one way to play the company: T. Rowe Price (TROW). The Maryland-based investment management company led Wheels Up’s $115 million round in September ’16 and co-led (with Fidelity Investments) a $117.5 million private equity round in October 2017. Wheels Up has raised $408.9 million over five funding rounds since December 2013.

For those wondering, there is a $1.5 million purse for the Belmont Stakes. The winner will take home $900,000, 2nd place gets $300,000 and 3rd place will earn $165,00. 4th and 5th place also receive prize money.

Fun Fact: The total purse for the inaugural Belmont Stakes in 1867 was $2,000.

As for TROW, the company reported that it brought in $11.3 billion in client cash in Q1 ’18 – the second-biggest quarterly haul in company history – increasing AUM by 2.3%. There’s a reason those that seek active-management want to invest with TROWAccording to Bloomberg, the company’s Growth Stock Fund has outperformed 93% of its rivals since 2012. Shares hit an all-time high on Wednesday ($127.43) and closed at $125.22 yesterday.

Fan Marino: Justify has been posted as the 4-5 morning line favorite (from the #1 post), but the undefeated colt won’t be running against a full field. The group that owns Justify (see below), also owns Audible (finished 3rd in Kentucky Derby); and the collective has decided to pull the top contender from the race as it chases horse racing immortality. It’s an easy decision to criticize, but one I’d have likely made myself. Should Justify win, no one will remember who didn’t run; had Audible won, horse racing fans would forever second guess why ownership allowed a stablemate to tarnish a shot at history. It’s worth noting that should Justify win, he would become the first undefeated horse to win the Belmont Stakes since Seattle Slew did it in ’77.

Justify is co-owned by Winstar Farm, the China Horse Club, Head of Plains Partner and Starlight Racing. The group has already sold Justify’s breeding rights for $60 million.

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Amazon Acquires Exclusive EPL Rights, First Non-Traditional Broadcaster to Carry League Games

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Amazon (AMZN) has acquired the exclusive rights to broadcast 20 English Premier League matches per season in the U.K., becoming the first non-traditional broadcaster to carry league games. The three-year pact, set to begin in 2019-2020, represents the e-commerce giant’s most significant live sports programming acquisition to date. AMZN will live-stream games on its digital Prime video service at no additional charge to Prime members (costs $119/year). Financial terms of the deal were not disclosed but BT Sport is reportedly paying $40 million/year for a comparable package. Late Thursday, with the league’s broadcast rights through the next cycle sold, Executive Chairman Richard Scudamore announced he would be resigning before the end of the calendar year. A successor has yet to be named.

Howie Long-Short: It’s important to simultaneously recognize the significance of this deal (i.e. a FAANG company lands exclusive rights!), while understanding that 90% of the broadcast rights available to media companies within this round were sold to traditional TV providers (i.e. linear television isn’t going anywhere, anytime soon). SKYAY will pay $1.655 billion/season for its four packages (128 games/season), a 14% discount on the expiring deal; while BT got the 5th package (32 games/season) for 8% less ($409.3 million/season) than it’s currently paying for the rights. BT picked up an additional 20 games/season at a discount rate ($40 million/season), earlier this week.

EPL clubs decided to sell the last two rights bundles (Amazon’s and the BT deal signed this week) at a cut-rate price after each failed to meet reserve prices in February’s auction and having concluding that Executive Chairman Richard Scudamore overestimated the interest from non-traditional broadcasters after the first five packages were sold to the old guard.

As for AMZN, the company posted its most profitable quarter ever in Q1 ’18. It grew revenue +43% to $35.7 billion, while net income rose 121% to $1.6 billion. Cloud computing (+49% YoY to $5.44 billion), subscription services (+60% YoY to $3.1 billion) and ad revenue (+139% YoY to $2.03 billion) all contributed to the record quarter. AMZN shares are up 7% since May 22nd and climbed past $1,700 for the first time this week, closing on Thursday at $1,689.30.

Fan Marino: The EPL’s 20 clubs currently split international broadcast revenues evenly, but top clubs like Manchester City, Manchester United and Liverpool have been lobbying for a larger percentage; arguing it’s their presence within that attracts the foreign viewer. On Thursday, they got their wish – the league’s clubs decided that any future increases in broadcast revenues would be distributed according to final league position (from ’19-’20 season forward). It should be noted that the new formula ensures the league’s top club receives no more than 1.8x the amount of the lowest-earning club.

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Paddy Power Betfair Acquires FanDuel, DraftKings Launches Sports Betting Marketing Campaign

Paddy Power Betfair Acquires FanDuel, DraftKings Launches Sports Betting Marketing Campaign

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