81: PlayMagnus, Mercedes F1 end Kingspan deal, and Nike acquire RTFKT
Red Bull's Max Verstappen became Formula 1 World Champion after beating Lewis Hamilton on the last lap of a controversial season finale in Abu Dhabi - which has put the FIA, F1's governing body, under intense scrutiny.
While much has been made of this event, today's newsletter will instead focus on the crowing of a different world champion, which also took place last week in the UAE...
PlayMagnus: The world champion's smartest move?
Magnus Carlsen retained his World Chess Championship title on Friday after defeating Ian Nepomniachtchi in Dubai. In doing so, he acquired an unassailable lead to seal 60% of the $2.3 million prize fund. However, this is largely insignificant compared to what the Norwegian has earned externally.
In 2013, Carlsen co-founded PlayMagnus, a company that functions as an e-learning site with book publishing and online playing arms. It currently has over 60,000 monthly paying users and had booked revenue of almost $10 million in the first half of 2021. Though Carlsen has no role in the day-to-day operations, his ideas have had an influence on the company’s acquisition strategy.
Last year, with the pandemic shutting down all in-person tournaments and the postponement of the world championship, the company decided to create its own competitions with Carlsen brought in to advise. His inclusion attracted other top players and with that also came sponsors – including Meltwater, FTX, Mastercard, and Julius Baer.
PlayMagnus recently reported that the tour had 115 million live broadcast views and 29 million hours of video watched — putting it on track to financially breaking even. Unsurprisingly, it also ended with Carlsen winning and collecting the largest share of the season’s purse. A win-win for the Norwegian.
The company has since announced that it will hold another champions tour, with nine tournaments, beginning in February. The company is also creating a regional tour in India. Their ambitions are to eventually make their tour be for chess 'what the PGA Tour is for golf'.
Our Take: For a long time, chess has lagged behind other sports when it comes to commercialization and accessibility. However, Carlsen is now demonstrating the huge opportunity that the internet provides chess – from both a streaming and gaming perspective. This is certainly a sport to keep an eye on.
📚 Further Reading
Magnus Carlsen’s world title victory proves big win for online fans - The Guardian
PlayMagnus to bring chess NFTs to market on Concordium - PR Newswire
'Chess in Slums' gets Nigerian kids playing for keeps - DW News
THOUGHT FOR THE WEEK
Last week saw Mercedes AMG Petronas F1 Team terminate their partnership with Kingspan after criticism of the firm’s involvement in the Grenfell fire.
Earlier this year Norwich City cancelled their new shirt sponsorship with an Asian betting firm after fans highlighted some questionable marketing practices at their new partner. Similarly, David Beckham has seen negative sentimentfrom some for his partnership with Qatar.
So, how far should ethics dictate how brands and sports teams partner?
Well, Tim McLoughlin, who formerly headed up sponsorships at Cinch and Hotels.com, suggests that it depends.
"The two organisations involved have to decide for themselves if their values meet and be open about any potential conflict."
McLoughlin, a previous guest on the Sports Pundit Explains... podcast, goes onto explain that, "All of this should form part of robust partnership planning for both parties. If you have a true partnership where your business goals and values align, you’ll end up with a relationship where both sides benefit. Fail to do that and you’ll have to accept risk."
He advises that, "When planning future sponsorships, whether you’re a rights holder or brand, create a simple venn diagram of what’s important to you and to your partners. Find that golden shared zone in the middle. If you do that, you can reduce risk and keep both sides happy."
📚 Further Reading
Six things we learned about sports sponsorship in 2021- SportsPro
The firms paid to delve into sport stars' social media past - BBC
Social media background checks are crucial for brands securing sponsorships - The Times
WEEKLY ROUND UP
Nike announced on Monday that it has acquired RTFKT, one of the hottest NFT companies with some of the top-selling projects on NFT markets, for an undisclosed price. The move plunges the sneaker maker deeper into the metaverse.
Everyone’s favourite Russian team, at least self-proclaimed, Spartak Moscow recently secured qualification into the final 16 of the Europa League topping Group C tied with Napoli and showed (again) why they're the coolest football account to follow.
Tampa Bay Lightning and the Minnesota Wild are nearing agreements to sell minority stakes to a private equity firm, making the NHL the latest professional sports association to embrace institutional investment as franchise valuations soar.
EA Sports is making women's teams available for the first time in its NHL video game series in 2022, making Team USA and Hockey Canada stars, among others, playable in the game.
SailGP will debut a new data-driven dashboard at the Australia Sail Grand Prix in Sydney on 17th and 18th December, claiming the second screen application will provide fans with technical insight and a greater understanding of the action on the water.
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