One thing to start: we want to hear ways to improve Scoreboard and would be grateful for your input by completing a survey here. All responses will remain anonymous.
In this edition of Scoreboard, we discuss what the new Narendra Modi cricket stadium reveals about Indian business, explain how a refereeing row imperils a key broadcasting contract for Turkey’s indebted football clubs, talk to the Thai entrepreneur behind Asia’s answer to UFC, and more.
Narendra Modi cricket stadium also a monument to India’s tycoons
India’s cricket politics were on global display this week when the country’s national team hosted England for the first-ever match at the Narendra Modi Stadium, writes the FT’s Benjamin Parkin from the newly built ground in Ahmedabad.
The game itself was over in two measly days, the quickest Test match since 1935. But the world’s largest cricket stadium, named after the prime minister, will stand as a monument to how Indian politicians have for decades used the country’s favourite sport as a launch pad to greater power and influence.
And the venue also highlights the parallel role that India’s corporate titans have played in shaping the country’s cricket.
Stands at the ground are named after Mukesh Ambani’s Reliance Industries and Gautam Adani’s eponymous conglomerate, India’s most powerful industrialists whose close ties with the prime minister have faced intense scrutiny.
This proved immediate fodder for Modi’s critics. “Wonder whether Modi-ji prefers to bat from the Ambani end or the Adani end,” Prashant Bhushan, an anti-corruption lawyer, wrote on Twitter.
Tycoons have for decades thrown money at Indian cricket. But their sway has grown exponentially — and all the more controversially — with the arrival of the money-spinning Indian Premier League tournament in 2008.
While supporters argue this helped fund grassroots development, critics say the swirl of money, sports and dealmaking leads to conflicts of interest. Cement magnate Narayanaswami Srinivasan was forced to step down as president of the Board of Control for Cricket in India, the sport’s national governing body, in a damaging scandal in 2015.
India’s business leaders have long been cricketing patrons. After independence, sprawling conglomerates such as the State Bank of India and Tata Group hired dozens of promising players, providing a steady income.
The commercialisation of Indian sport has only increased its appeal. No corporation has loomed as large over Indian cricket in recent decades as Ambani’s Reliance, an energy-to-telecoms conglomerate.
It sponsored the 1987 Cricket World Cup, the first held in India, famously hosted shareholder meetings in a cricket ground and owns the successful Mumbai Indians IPL franchise. It is also an owner of the fledgling Indian Super League, a football tournament.
Adani’s involvement in sports has thus far been comparatively limited. The company is, however, rumoured to be among those interested in buying a new IPL team after the BCCI in December approved adding new franchises to the league.
Were that to happen, Ahmedabad-based Adani Group would find at least one world-class ground in its neck of the woods: the Narendra Modi Stadium.
Read the FT analysis of how Modi is harnessing cricket to remake India here.
Fenerbahce vs beIN Sports: refereeing dispute spills off the pitch
A fight between Turkish football club Fenerbahce and broadcaster beIN Sports has spilled off the pitch — and on to players’ jerseys, writes Ayla Jean Yackley in a special dispatch for Scoreboard from Istanbul.
For months, Fenerbahce has complained of bias at the Qatari TV company, which owns the broadcasting rights for the Super Lig, Turkey’s top football division.
The club has accused beIN Sports of using selective camera angles to negatively influence the video assistant referee (VAR) in reviews of controversial plays. BeIN denies the claim. Some industry figures argue that the row distracts fans from the team’s recent lacklustre performances.
The latest salvo came last weekend when Fenerbahce players, including former Arsenal star Mesut Ozil, mocked the broadcaster by using its logo to brandish “beFAIR” on its T-shirts.
The TV company responded by starting legal proceedings against Fenerbahce in an Istanbul court for allegedly violating its intellectual property by misappropriating the logo. The club did not immediately respond to requests for comment.
“Why would we deliberately try to disenfranchise one of the biggest clubs in Turkey?,” a beIN executive told Scoreboard. “It doesn’t make any sense, commercially or otherwise.”
The row could have wider ramifications, imperilling a key source of revenue for Turkey’s heavily indebted football clubs.
BeIN Sports acquired Turkish satellite network Digiturk in 2015, and two years later won a five-year contract worth an annual $500m with the Turkish Football Federation and its clubs to show league matches.
It renegotiated the sum down to $420m for the 2019-2020 season as the country’s economy stumbled and the Turkish lira suffered a sharp depreciation. This season, the coronavirus pandemic forced the figure even lower to $370m.
That’s still a sizeable sum at a time when Turkish clubs have seen other revenue streams dry up in the pandemic.
Nihat Ozdemir, head of the TFF, has said debt at the country’s top four clubs stands at a combined TL14bn ($1.9bn). Fenerbahce’s most recent balance sheet from November said its total debt and liabilities were TL3.29bn ($442m).
Ozil’s signing has sunk the club deeper into the red. His three and a half-year contract will earn him at least €9m and a further signing bonus of €550,000. The club is betting that the player will sell more merchandise while taking the club to a league title — and, with it, lucrative Champions League qualification.
BeIN Sports’ contract with the TFF expires next year. The row with Fenerbahce is devaluing Turkish football rights and could even make beIN Sports think twice before bidding again, said a person close to the TV company’s thinking.
As for Fenerbahce, the “beFAIR” protest ahead of last Sunday’s match did little to improve its performance at home against 10th place Goztepe. Fenerbahce lost 1-0.
Can One Championship beat up the UFC?
Chatri Sityodtong does not lack ambition. The Thai entrepreneur’s aim is to build the mixed martial arts company he founded into a $100bn global sports platform, writes Stefania Palma in Singapore.
One Championship, Asia’s answer to the Ultimate Fighting Championship, is reportedly valued at $1bn after raising $346m from investors including Sequoia Capital, GIC and Temasek.
Founded in 2011, One Championship says its MMA competition is broadcast to more than 150 countries. But Sityodtong has bigger goals.
“We are more than prepared to invest a minimum of a billion dollars into what we believe is a $100bn long-term opportunity,” he told Scoreboard.
The Singapore-based company is considering an IPO in markets including the US, as well as a merger with a special purpose acquisition company to raise funds after receiving inbound interest starting late last year. Private capital is also an option.
“There is a good chance of a fundraise happening in the next 18 months, maybe even as soon as this year,” said Hua Fung Teh, group president at One Championship.
Investors must determine whether fighting talk stacks up to a strong business.
The pandemic forced the company to suspend live events — one of its biggest revenue sources — for three months last year. It cut approximately 20 per cent of its staff last June.
Yet even before Covid-19, the start-up had registered losses of S$130m (US$98m) in 2019, up from S$82m a year prior and S$34m in 2017. This was coupled with cash burn almost doubling from S$78m in 2018 to S$137m in 2019.
Sityodtong said the cash burn rate in 2020 “dropped dramatically” and would continue to fall, while revenues would hit a record high this year.
“I don’t think any $100bn or $200bn company was built off burning, like, 100 bucks a month,” said Teh.
One Championship is now building its entertainment arm. Its first project is a TV series The Apprentice: One Championship edition — a spin-off from the American franchise once fronted by former US president Donald Trump.
Filmed in Singapore last year, the show will air first in Asia next month. The trailer — featuring rock music and glitzy skylines — shows 16 candidates doing physical and business challenges to win a $250,000 pay cheque to work with Sityodtong.
“You bombed, you bombed and you bombed!” he shouts in the trailer. Sityodtong is determined his company steers clear of the same fate.
Amanda Staveley, the financier who tried to orchestrate Saudi Arabia’s takeover of Newcastle United, lost her court battle against Barclays over the UK bank’s 2008 emergency fundraising. The judge ruled that Barclays was “guilty of serious deceit” but did not award damages to Staveley because PCP Capital Partners, her investment firm, could not prove it would have obtained debt funding for a deal.
The International Olympic Committee has chosen Brisbane as its “preferred partner” to host the 2032 summer games. It is the first step in a new selection process, with the IOC beginning non-binding talks with potential host cities rather than undergoing an expensive and competitive bidding process.
RedBird Capital is nearing a deal to pay $750m for a roughly 10 per cent stake in Fenway Sports Group, valuing the ownership vehicle of Liverpool and the Boston Red Sox at more than $7bn, according to Sportico. The FT previously reported the two sides were in talks for a minority stake purchase, after a different deal between FSG and a blank-cheque company helmed by RedBird’s Gerry Cardinale fell through.
Under Armour slashed its sponsorship commitments in half in 2020, after the US sportswear company pulled out of contracts with the likes of UCLA and Cal, two prominent American collegiate sports departments. The company is on the hook for some $362m in sponsorship contracts from 2021 onward, down from $679m before the pandemic.
Inter Milan’s owner is selling a $2.5bn stake in one of its subsidiaries ahead of looming debt repayments. Suning, the Chinese conglomerate part-owned by Alibaba, has also been looking to raise $200m to strengthen the Italian club’s finances.
Tiger Woods was rushed to hospital for surgery after he seriously injured both legs in a car accident. The golf legend was already recovering from his fifth back surgery, which has kept him away from competition.
The new documentary on the career of Brazilian great Pelé strays from the football pitch to ask whether sport can ever break free from politics, according to the FT’s chief film writer Danny Leigh.
Kevin Mather resigned as president and chief executive of the Seattle Mariners after taking aim at two players’ English language skills and claiming one veteran was “probably overpaid”. John Stanton, chairman of the Major League Baseball team, said there was “no excuse” for Mather’s comments.
Retired MLB great Cal Ripken Jr is the latest celebrity athlete to join the board of directors of sports-wagering platform DraftKings, joining Michael Jordan, who was added to the board in September. Ripken Jr played 21 seasons with the Baltimore Orioles, where he earned the nickname “Iron Man” for his streak of playing 2,632 consecutive games.
What do the Toronto Raptors, “Bring it On” and that beguiling Kombucha girl meme have in common?
They’re all part of the savvy, succinct TikToks compiled by social media personality Ashley Docking to recap each game by the Canadian National Basketball Association team. She offers sophisticated analysis of the Raptors’ performance, spliced with movie clips and funny quips, such as by comparing Kyle Lowry‘s game to bitcoin.
Scoreboard is written by Samuel Agini, Murad Ahmed and Arash Massoudi in London, Sara Germano, James Fontanella-Khan and Anna Nicolaou in New York, with contributions from the team that produce the Due Diligence newsletter, the FT’s global network of correspondents and its data visualisation team.
Toyota faces Thai bribery probe over tax dispute
Toyota is under investigation in Thailand over allegations that consultants hired by the world’s largest carmaker tried to bribe local officials in a tax dispute, according to Thai authorities, court documents and a person with knowledge of the matter.
The probe followed a filing last month in which Toyota revealed that it had reported “possible anti-bribery violations” related to its Thai subsidiary to the US Department of Justice and Securities Exchange Commission.
Toyota is one of the biggest foreign investors in Thailand, where it makes a large range of cars, vans and pick-up trucks for the local market and for export. The country is Toyota’s biggest manufacturing hub in south-east Asia. Prior to the Covid-19 pandemic, car sales had been strong in a market, where it has a 31 per cent share.
This month, Thailand’s Court of Justice said in a statement that it would take action against any of its judges found to have taken bribes. The statement, which the court described as a move to “clarify facts” in a news report on a foreign website, directly referenced a tax dispute involving Toyota.
“If the Court of Justice has received information or explicitly found that any judge committed an act of corruption to their duty, whether it is about bribery or not, the Court of Justice will resolutely investigate and punish any action which dishonours judges, undermines the neutrality of the court, or causes society [to] lose faith in the Thai justice system,” it said.
According to the court, the case involved a tax dispute worth Bt10bn ($320m) between Toyota Motor Thailand and tax authorities over imports of parts for its Prius hybrid model.
The affair dates back to 2015, when Toyota’s Thai subsidiary was accused by local customs authorities of understating taxes by claiming that the imported Prius vehicles were assembled from completely knocked down kits, or imported parts that were later assembled in Thailand.
CKDs would have been subject to a discounted tax rate under a Japanese-Thai free trade agreement, but if the cars were fully assembled before being imported they would have attracted a much higher rate.
Toyota appealed against a decision by customs authorities to impose a higher duty in 2015, but lost.
Thailand’s Court of Justice has said that it had accepted a petition to review the case, but had not yet begun hearing it.
In its regulatory filing last month, Toyota warned that the US investigations regarding its Thai subsidiary could result in civil or criminal penalties, but the company has not disclosed any detail on the allegations.
In a statement, Toyota said it was co-operating with the investigations and declined to comment on the tax dispute in Thailand. “We take any allegations of wrongdoing seriously and are committed to ensuring that our business practices comply with all applicable government regulations,” it said.
The SEC and the DOJ declined to comment.
Boris Johnson cancels India trip after Covid cases surge in country
UK prime minister Boris Johnson’s trip to India this month has been cancelled as the country battles a new variant and a surge in coronavirus cases that is overwhelming hospitals.
A joint statement by the British and Indian governments said the decision to scrap the visit scheduled for next week was prompted by the “current coronavirus situation”.
The trip, during which Johnson had hoped to discuss the prospects of a closer trading partnership with India, was initially planned to run for four days but had been scaled back. The two leaders will speak remotely instead, with plans to meet in person later this year.
The cancellation came as India’s capital city region has been put under lockdown and authorities have prohibited the use of oxygen except for essential services, as the country battles a surge in coronavirus cases that is overwhelming hospitals.
India continues to set single-day records of coronavirus cases, reporting more than 273,000 new infections and 1,619 deaths on Monday, with the number of new cases growing by an average of 7 per cent a day, one of the fastest rates in any big country.
The surge is believed to be linked to a new B.1.617 variant that was first discovered in the country.
British health officials are investigating whether the variant should be reclassified from a “variant under investigation” to a “variant of concern” following the discovery of 77 cases in the UK.
“To escalate it up the ranking we need to know that it’s increased transmissibility, increased severity, or vaccine-evading, and we just don’t have that yet, but we’re looking at the data on a daily basis”, Dr Susan Hopkins, a senior medical adviser at Public Health England, said on Sunday.
Officials in Delhi announced it would impose a strict lockdown for a week, following Mumbai and other cities that have already placed curbs on movement.
States are running short of beds, drugs and oxygen, leading the central government to restrict use of the gas. “The supply of oxygen for industrial purposes by manufacturers and suppliers is prohibited forthwith from 22/04/2021 till further orders,” the central government said.
Arvind Kejriwal, chief minister of Delhi, said “oxygen has become an emergency” in the region because its quota had been diverted to other states. He warned there were “less than 100 ICU beds” available.
The new restrictions have been imposed even as Prime Minister Narendra Modi and his ruling Bharatiya Janata party have hosted huge political rallies and allowed religious festivals attended by tens of thousands of maskless people in recent weeks.
Amit Shah, India’s home minister, told the Indian Express newspaper that he was “concerned” about the variant and the “surge is mainly because of the new mutants of the virus”. But he was “confident we will win” over the disease and said there was not yet a need to impose a national lockdown.
Bed shortages in India have forced authorities to re-establish emergency coronavirus hospitals in banquet halls, train stations and hotels that had been shut down following the previous peak in September. Crematoriums in the state of Gujarat and Delhi are running 24 hours a day, while cemeteries are running out of burial spaces.
Coronavirus patients have also been struggling to access medicines. More than 800 injections of remdesivir, an antiviral drug commonly used in India as part of Covid-19 treatment, were stolen from a hospital in Bhopal, Madhya Pradesh, at the weekend.
India is also facing a vaccine supply crunch and has frozen international exports of jabs to meet domestic demand. New Delhi pledged on Friday to increase monthly production of Covaxin, a vaccine made by Indian manufacturer Bharat Biotech, to 100m from 10m by September. The government also said last week that it would fast-track the approval of foreign vaccines in an attempt to boost supply and cleared Russia’s Sputnik V for use in the country.
The majority of the more than 120m Indians that have been vaccinated have received the Oxford/AstraZeneca jab manufactured by Serum Institute of India, the world’s largest manufacturer. The Serum Institute has struggled to increase its monthly capacity of more than 60m doses a month due to a fire at its plant earlier in the year and equipment supply shortages from the US.
Additional reporting by John Burn-Murdoch in London
The limits of China’s taming of tech
The record fine handed out this month to Alibaba, the Chinese ecommerce giant, was a welcome step toward combating anti-competitive behaviour. The $2.8bn penalty put Alibaba and other tech companies on notice that creating siloed fiefdoms designed to trap customers and merchants within their ecosystems will not be tolerated.
It was addressing a longstanding problem. Many of China’s ecommerce companies operate “walled gardens” that prevent interactions with rival platforms. For example, Alibaba’s Taobao ecommerce app keeps users from paying for goods using the payment app of rival Tencent. Tencent’s social media app, WeChat, prevents clips from being shared directly from ByteDance’s video-sharing app.
Last week China’s internet and market regulators signalled the seriousness of their intent. They gave tech companies one month to fix anti-competitive practices, telling them to conduct “comprehensive self-inspections” and “completely rectify” problems, following which they would need to publicly promise to abide by the rules. The aim is create a commercially open and competitive internet.
It is tempting to argue that regulators in the west could take a leaf out of China’s book. But to hold China up as an example of competitive best practice would be to ignore the elephant in the room. Although Beijing is giving its monopolistically-minded internet companies — which are almost all private enterprises — a rap on the knuckles, it shows no sign of applying the same standards to vast swaths of the economy that have been dominated by state-owned giants for decades.
The market dominance of these behemoths of state capitalism is an issue that affects not only domestic competitors but also foreign multinationals that operate in China. A trenchant joint paper last week from the European Council on Foreign Relations, a think-tank, and the Rhodium Group, a consultancy, took aim at the increasingly unfair advantages that this system gives China.
While it is true that China has opened up sectors such as financial services to foreign capital in recent years and allowed foreign brands to win market share in luxury goods and pharmaceuticals, broad sectors of the economy remain fully or partially closed or to overseas investors.
Often the barriers erected to block or stymie competition are informal. Authorities can deliberately favour domestic companies in public procurement, are more ready to grant approval for licenses, subject foreign firms to arbitrary inspections or require them to re-engineer products to meet idiosyncratic domestic standards.
Such drawbacks are not new. But they are taking on an extra urgency as Chinese companies become leaders in an increasing number of industries and the country’s technological prowess draws level with the US and Europe in a list of industries. The key problem now, says the ECFR/Rhodium report, is that Chinese multinationals are using the advantage of a protected home market to build up resources that they then deploy in competition with western counterparts abroad.
This sets the scene for friction. China should extend its anti-monopolistic scrutiny from its own privately owned internet companies to several state-dominated sectors of its economy, taking care to open to foreign multinationals as much as domestic competitors. If it decides against doing this — as is likely — it will be furnishing Europeans and Americans with ammunition to argue against extending access to Chinese corporations in their own markets.
Taiwan seizes chance to host foreign reporters kicked out of China
ExxonMobil proposes carbon storage plan for Texas port
Oatly’s US IPO prospectus highlights risks to its Chinese backer
Italy’s government in crisis as Renzi ministers resign
Macron’s war on ‘Islamic separatism’ only divides France further
US allows sales of chips to Huawei’s non-5G businesses
Europe3 months ago
Italy’s government in crisis as Renzi ministers resign
Europe6 months ago
Macron’s war on ‘Islamic separatism’ only divides France further
Emerging Markets6 months ago
US allows sales of chips to Huawei’s non-5G businesses
Europe4 months ago
European truckmakers to phase out diesel sales decade earlier than planned
Emerging Markets7 months ago
Mexico’s Supreme Court approves referendum on presidential trials
Company6 months ago
Most investors now expect the U.S. stock market to crash like it did in October 1987 — why that’s good news
Markets6 months ago
Two top Morgan Stanley commodities traders lose jobs over use of WhatsApp
Emerging Markets6 months ago
Arrest of Mexican general in US shakes López Obrador at home and abroad