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Sports, Money and Politics

Episode 104

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Guest: Nick Sprague, co-owner of sports biotech and data science company, Orreco, specializing in assisting elite athletes and teams

World sports are reeling from exhausted athletes, corporate bottom lines, rampant corruption and political antagonisms. Who is really in control?

Nick Sprague, co-owner of sports biotech and data science company Orreco specializing in working with elite athletes and teams on bio-analytics and recovery, takes us on a deep dive into the global sports industry. With the recent end of Copa America and the Eurocup and the 2021 Summer Olympics about to begin, he joins hosts Peter Schechter and Muni Jensen on Altamar’s latest podcast episode to sort out the intricacies of the increasingly convoluted sports scene. Sprague has served as the Head of Special Projects for InterMiami CF and was intimately involved in the high-profile expansion of the team’s launch in 2020. He is also Chairman of the Board of Directors of love.fútbol, a global NGO that partners with impoverished communities to build safe spaces to play. Sprague has published several works on the Beautiful Game, including developing and writing the original concept of the documentary film The Two Escobars, an official selection of the 2010 Cannes Film Festival.

Sports are on the top of everyone’s minds this Summer as global sporting events came back with a bang following 15 months of pandemic-related empty stadiums. Yet, the industry as a whole is facing an avalanche of interrelated problems. There are new and resurfacing scandals of sexual abuse and corruption. The 2021 Tokyo Summer Olympics are facing logistical difficulties given spreading Covid in Japan. Pressured by teams and federations, athletes are pushing their bodies and minds beyond limits. 

Money makes the world go round, and the sports industry is no exception. Despite differences from sport to sport, the industry is seeing a huge influx of capital: money from sponsors and broadcast rights, as well as buyouts by venture capital, large corporations, and billionaires.  To top it all off, sports have become an arena for countries, companies, investors, fans, broadcasters, streaming platforms, and athletes to jostle in a global free-for-all for influence and attention. 

“Think about the English Premier League, which is the most globalized league in the world, both in terms of the nationality of its investors and in terms of its reach and how far it’s distributed. If you walk through what has been the impact of all this money, starting with Russian oligarch money and US private equity money, but then being bolstered by Chinese money, other Southeastern Asian money, either sovereign or non-sovereign money coming in from Abu Dhabi, other places in the Middle East, there’s been an undeniable impact in a positive way on quality,” says Nick Sprague. 

The sports investment boom has clearly benefitted athletes, teams, owners, sponsors, investors, and broadcasters. It has created new opportunities for success and improvement. “Once the money comes in, the first thing that the teams do is they turn around and they start spending it. So, all this influx of cash, sovereign, or non-sovereign, in the case of the English Premier League, starts getting pumped into players, coaches, and into the environment in and around those players and coaches. Whether it’s sports science, sports performance, or the quality of facilities that they’re training and playing in, the quality of their media broadcast and their marketing, all of it has undeniably created a far superior product on the field to what existed decades before, or even just a decade ago,” says Sprague.

But all this money does not necessarily bring more stability.  There is no doubt that huge inflows can change a team or a league, but when funding suddenly stops, the players and coaches are left high and dry.

“Take Chinese money in sports for example…their Number One (Xi Jinping) said soccer was going to be a priority for China…but when [Chinese] politics changed and people realized there was too much money washing offshore, they decided to reign it all in. So, a lot of the teams that were purchased or a lot of the properties that got purchased, who thought they were about to get on the money train, all of a sudden were left a little bit high and dry and are now kind of weening themselves off of it and figuring out what the next step is,” explains Sprague. 

Now it’s no surprise that COVID has also severely impacted this industry in a negative way. “Wherever you read about sports, everyone says that COVID has turned the world of sports upside down. It’s obvious that the empty stadiums were a huge change and had a huge impact. But what are some of the other consequences of the COVID era?” asks Altamar’s Muni Jensen.

“There’s so much money coming into the game through media rights, that people forgot how much money has been put into the live event part of sports. And I think COVID was a shocking reminder, even to a property like the NFL that has this $10B+ a year TV contracts,” answers Sprague. COVID has forced sports franchises to reevaluate whether to plow huge monies into live events – why improve a stadium when viewers are seemingly happy to watch or stream a game. “The truth is that so many billions of dollars, oftentimes private capital, have been put into these facilities and into technologies to support the live experience, that COVID made that abundantly clear that either we need to have an ability to flex in and out in a more agile way as to whether we’re going to be able to adapt to having fans in the stadium or not having fans in the stadium, or we need to change a little bit the focus of where we invest our time and energy and money,” elaborates Sprague.

“The flipside of the money coin is how much is generated from TV rights. There just seems to be more and more and more sports streaming and broadcasting. It’s 24 hours, in ways that I don’t even remember five years ago,” notes Altamar’s Peter Schechter. How has that transformed the way athletes and sports interact as a business?

“Now there’s too much content to keep up with,” says Sprague. “And that’s been this mix of globalization, technology, and where sports find itself in this incredibly privileged position between this sea change that’s taking place in the transition from cable television to streaming. What’s happened is that on both sides of that transition, and sometimes it’s the same people sitting on both sides of that table, they have agreed that sports is the most important property either to saving [their] business model or launching [their] new business model.” The world has managed to capitalize on sporting events by creating opportunities to stream them and host ‘watch parties’, drawing more and more consumers to participate in the events. “We’ve been in a place where every year, if it’s a quality property, media rights continue to grow up and up and up, and we don’t see that slowing down right now,” says Sprague.

But with this increased demand from consumers, what about the players on the field who are playing for global audiences’ entertainment? Who’s taking care of them? “It’s an interesting battle that’s taking place between those who are in the corner of athletes’ wellbeing and those who are in the corner of maximizing monetization opportunities for the leagues and the federations…You have a very difficult situation where the players are stuck in the middle sometimes to their benefit because they’re reaping the financial rewards, but eventually to their detriment, because physically, they’re not going to be able to keep up with the demands of all of the increased competitions and traveling,” explains Sprague.

Want to take a deeper dive into the complexities of the sports industry? Find out more by listening to the latest Altamar episode, available wherever you get your podcasts. You can download the episode here.

Image Source: Kevin Liptak//CNN//Host TV 2

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Episode 104
Sports, Money and Politics