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Sports media agencies up their game


Intermediaries are never popular in any market, even though they make a market function better for all participants.   There is always a suspicion that they are increasing transaction costs and ripping off buyers and sellers (think estate agents).  

Being a successful intermediary means spotting an opportunity, seizing it and building on it.   Globalisation has created new opportunities in football.  MP & Silva, the only independent agency of the big three sports media agencies, started 10 years ago by signing deals with football clubs in Italy's Serie A.

In terms of cash flow, it's an attractive model.   MP & Silva pays the sports bodies it buys the rights off in instalments.   Broadcasters have to pay 50 per cent up front.

If the market doesn't look promising, they can always restructure it.   In Indonesia it decided that there was not enough competition between the channels to get a good price for Premiership football.   So MP & Silva created its own channels and sold them to every broadcaster to embed in their schedules.   It then sold a 50 per cent interest in the channels to Qatari sports network beIN sports.   In other words, they were laughing all the way to the bank.

Now they are trying to create a version of the Uefa Champions League in South America.  They have signed five Brazilian teams and one Argentinian one and are negotiating with broadcasters.  In their view Fifa has left the South American market open, although one would think they would need more countries involved, e.g., Chile (the most prosperous country), to have anything that looked like the Champions League.

The biggest agency is IMG, now owned by private equity group Silver Lake.  Infront Sports & Media, led by Sepp Blatter's nephew, was bought out for $1.2bn by Dalian Wanda, the Chinese conglomerate, earlier this year.   It wants to create the world's largest sports company, having bought a stake in Athletico Madrid.