Good morning. This is the second year-end special edition of The Signal. We launched The Playbook, a weekly newsletter on the business of sport and gaming, in October 2022. It now reaches about 10,000 subscribers. As regular readers are aware, Jaideep Vaidya, who wrote this newsletter until last month, had to take a break because of personal reasons. Adarsh Singh and Venkat Ananth stepped into his shoes and hit the ground running. 

Now, this year was somewhat of a watershed in the business of sport. The Playbook has diligently kept abreast of sports broadcasting, sponsorships, investments, and much more. This special edition unpacks the major developments of 2023 while also offering insights into how 2024 will shape up. Plus, four must-listen daily podcasts we produced this year and, to keep you updated for the day, The Signal FYI—today’s breaking news. So sit back and grab a pint. 

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Programming note: This week we are publishing special editions capturing the major events of 2023 that we covered in our weekly newsletters. Also a peek into what we expect in 2024. The regular edition of The Signal and The Signal Daily will return on January 3. 

Broadcasting goes for a toss

2023 was a year marked by churn in the world of sports broadcasting. Traditional giants such as Disney, Warner Bros. Discovery, etc. went through bouts of losses and cost-cutting, which was reflected in several broadcasting deals as well. Topping the list was the English Premier League, which saw a mere 4% increase in broadcast fees. At the same time, streaming companies slowly but surely warmed up to sports. 

First, it was Apple. The Cupertino-based company has been investing in sports as a major attraction on its streaming service. Its bet on Major League Soccer (MLS) reached an important milestone with Lionel Messi moving to the US. Apple will now look to build on that. 

The OG streamer Netflix had a change of heart in 2023. After years of denying any interest in sports, it started the Netflix Cup, a celebrity golf tournament derived from its sports franchises Drive To Survive and Full Swing. That experiment is now set to continue with a… tennis match (The Netflix Slam) between Rafael Nadal and Carlos Alcaraz in March 2024. While these aren’t exactly full-throttle events, they give Netflix the chance to progressively test its live-streaming capabilities. 

Rival Amazon is also expanding its sporting portfolio. It snapped up a partnership with the International Cricket Council (ICC) for rights to its events in Australia and is now buying Diamond, a regional sports broadcast network in the United States. With the NBA rights up for grabs next year, it seems that the battle between tech firms and traditional media giants is only beginning.

In India, unsurprisingly, cricket hogged the broadcasting limelight. Not just because of the sport’s popularity but also because of the growing rivalry between Disney-Star and Reliance’s Jio. The two broadcasters were pitted against each other for viewership of the Indian Premier League, in two contrasting mediums (digital/streaming and linear TV). The two invested in different formats (vertical feed, multi-cam streaming), deep analysis, and of course, free broadcasting. 

The intense battle exhausted both, which is why they are reportedly trying to join forces with Reliance, which is set to buy a 51% stake in Disney’s India operations. If the deal goes through, sports broadcasting in India would be looking at an unprecedented monopoly. While the deal would make the average viewer happy in the short term, it might not bode well for the business of sport.

Sued into oblivion

That was the fate of a string of startups in the world of real-money gaming. Dream 11, the poster child of real-money gaming and sponsor of the Indian cricket team, was slapped with an indirect tax notice of ₹25,000 crore ($3 billion) by authorities. Cumulatively, the industry got a tax notice of ~₹55,000 crore ($6.6 billion). 

Almost all these companies have gone to court, albeit separately and in different parts of the country. The Centre wants the Supreme Court to club them all into one suit and have integrated hearings. Meanwhile, the Board of Control for Cricket in India is proactively shunning these companies in sponsorship deals. 

In England, the Fantasy Premier League (FPL) was put in the spotlight by public broadcaster BBC. It found an unholy mix of gambling ads and FPL being promoted by influencers. While the Premier League on its own didn’t take any action, it has riled several Members of Parliament in the UK. 

For real-money gaming companies, the gamble is whether they will survive the next year. With big-ticket events such as the Paris Olympics and T20 World Cup on the calendar, expect a lot of legal/regulatory drama and pushback in this space.

Gaming’s big year

2023 has to be one of the major years for gaming. The industry got a big shout-out from the Olympics, with an e-sports week organised by the association. While the industry might’ve hoped for an Olympic berth, the Olympic Committee hinted that the door’s still not completely shut.

Aside from that, the year also saw big money moves. The ~$75 billion Activision-Microsoft deal finally got approved. Then, Activision settled a lawsuit for $54 million. Sony posted record sales for its consoles and games. The Japanese multinational sold its 50 millionth PS 5 console in 2023. It was sued for $7.9 billion for unfairly pricing digital games and add-on content in its PlayStation Store. Nintendo registered a great awakening of sorts, by cashing in on its Mario and Legend Of Zelda IP. Its console, Switch, is still finding buyers, with the company expecting to sell 15 million Switch consoles in the current fiscal year.

More importantly, this and the next year will be marked by inroads non-gaming giants made in the industry. Netflix has increasingly invested in mobile gaming and has added key properties such as GTA to its stable. The company expects to add more games in the future, with a focus on steady growth. Disney on the other hand is expected to shake up the industry. After suffering from major duds at the box office this year, the next year is supposed to be the one with a focus on gaming. Rumour mills suggest it might be looking to acquire EA Sports and even developing a gaming console. 

The higher they bid

This has to be the best year on record for sportspeople. Thanks to Saudi Arabia and big American corporations, money was no hindrance in sport. In baseball, the Los Angeles Dodgers broke several records and then some more. The club will spend (a staggered) $1 billion on the Japanese superstar pairing of Yamamoto Yoshinobu and Shohei Ohtani in long-term contracts that tie the duo to 12 and 10 years respectively. The question, then, is how do they recover the same? Some answers here.

The NBA also witnessed its biggest contract in history, with Jaylen Brown extending his stay with the Boston Celtics for another five years. Brown’s contract is worth $304 million, surpassing the $276 million extension signed by the Denver Nuggets’ Nikola Jokic. Closer home, IPL team Mumbai Indians broke the bank for Gujarat star Hardik Pandya. See this edition of The Playbook for details.

There’s every reason to believe that the demand for players will continue in 2024. Manchester United finally got the deal through for INEOS’ Sir James Ratcliffe to part-own the club. That deal is expected to help the club arrive at the next transfer window with bulging coffers. With the merger of PGA and the Saudi-backed Liv Golf Tour still in the air, expect more transfers there as well. Overall, the age of high-value player contracts and big egos are here to stay.

Big-time cricket goes to the states

Twenty years after the Twenty20 format came into existence, the US got its first taste of franchise-based league cricket in 2023. The Major Cricket League, which saw participation from existing owners of the IPL (Kolkata Knight Riders, Mumbai Indians, and Chennai Super Kings), and other high-profile additions such as Microsoft’s Satya Nadella, finally took off in 2023 and featured current and past cricketers. While Mumbai Indians’ New York franchise prevailed on the field, the league helped dipstick interest off it—beyond diaspora audiences.

In 2024, the four venues in the US will see big-time cricket being played, courtesy of the Twenty20 World Cup, which the country will jointly host with the West Indies. Being the host, its national team has automatically qualified for the event—with four venues in Dallas, Fort Lauderdale, Morrisville, and New York playing hosts to international cricket. The Guardian reported that New York has been allotted the high-eyeball India vs. Pakistan clash.

The US’ emergence as a key market for cricket’s expansion comes at a handy time too, particularly with its induction into the 2028 Olympics, where Los Angeles will play host. 

Beyond sportswashing

If 2022 was dubbed as “the year of sportswashing”, in 2023 sport became serious business for the Saudis, or as some might say, the new oil. 

Saudi Arabia’s ambitious Vision 2030 plan is quietly engineering a tectonic shift in sport, its vector for a broader economic and cultural impact. In a recent interview with BBC, Saudi sports minister Prince Abdulaziz Bin Turki Al Faisal estimated the country’s investment in sports at £5 billion (~$6.33 billion) over the last two years.

Its clubs went on an unprecedented shopping spree in football’s transfer market in 2023, splurging a record $957 million in gross spending, per Deloitte. To keep its momentum, Saudi Arabia is also set to host the 2034 FIFA World Cup, which, analysts say, could significantly boost the country’s GDP. Prince Mohammad bin Salman, Saudi Arabia’s ruler, claims that sport has already added 1% to the country’s GDP, and it was aiming to add another 1.5%.

Saudi Arabia has been scoring big on the freeway too with the LIV League. While the world number three golfer Jon Rahm’s $300 million contract with LIV headlines its most recent development, there’s also a high-profile merger with the PGA Tour staring at a year-end deadline. There’s more coming in gaming, where it has spent a whopping $8 billion over the past 18 months.

It is only fair to expect more of this sort in the coming months, with newer sports to invest in. As it turns out, the IPL, Bloomberg reported last month, is one such candidate for a possible $5 billion infusion.

For Your Ears Only

In which we handpick the best episodes of The Signal Daily podcast.

Victoria’s Secret is Inclusive Sexy

For the longest time, Victoria’s Secret (VS) claimed that it sells the world's sexiest lingerie. But in the post #MeToo world, the premium brand faced backlash for promoting unrealistic beauty standards, and consequently, it appeared that VS was trying to be more inclusive in its campaigns. So tall, white, and skinny supermodels in angel wings were out, and diverse women of varying ages, races, and sizes were in. Except this rebranding exercise never took off, and the company’s sales continued to dip. In this episode, we discuss in detail how VS tried—and largely failed—to overhaul its image, and why it has now decided to return to its sexy roots. Bonus story: Elon Musk wants to paywall X/Twitter. 

AI Is Coming for TV’s Saas Bahu Serials

We still can’t believe that we are living in a world where AI has taken over India’s saas-bahu soap operas. It sounds baffling but it is true. Zee, one of the biggest media companies in India, has deployed an AI script-writing assistant called ScriptGPT to generate story ideas and character arcs for its popular TV soaps. Zee’s ScriptGPT was reportedly trained on 42,000 episodes from Zee’s Hindi general entertainment channels. In this episode, we discuss what AI in general has in store for Indian TV writers and showrunners. Shameless self plug: even Spotify recommends this episode. 

Netflix & Prime Video Are Backpedalling on Bold, Provocative Films

In India, Netflix and Amazon Prime Video have slipped into the confines of self-censorship, tiptoeing away from controversial themes—be it politics, religion, or caste. The streamers have even abandoned a great number of finished films they’d commissioned, leaving them to languish unseen. In this episode, we explain whether such caution will affect Netflix’s and Prime Video’s ability to make popular content. We were joined by our senior editor Soumya Gupta, who argues that self-censorship is not new to India. Bonus story: the world is hungry for more instant noodles.

What’s Up With Alibaba and Jack Ma?

Shein, Temu, and TikTok Shop are the most successful Chinese e-commerce exports. But at a time when they are aggressively going global, the fortunes of the OG posterboy of Chinese e-commerce, Jack Ma’s Alibaba, are on the decline. In fact, last month, Alibaba surrendered its crown as China’s most valuable e-commerce company to relative upstart PDD Holdings. In this episode, we talk about Alibaba’s woes and dissect what went downhill for the Chinese giant. 

FYI

Skyrocket: The 30-share BSE Sensex closed above the 72,000 mark for the first time ever. The benchmark index has now gained nearly 15% in two months.  

Nosedive: Private equity and venture capital funds invested $27.9 billion in Indian companies in 2023, 40% less than the $47.62 billion they invested in 2022. 

Red flag: Indian refiners are rushing to buy West Asian crude to avoid high risk premiums on the Red Sea route, which is threatened by Houthi rockets and drones. 

Talent war: Infosys has joined Wipro in accusing rival Cognizant Technologies of poaching senior executives from its team. Wipro has sued executives who left to join Cognizant.  

Mammoth & minnows: At $38.9 billion, JPMorgan Chase cornered 18% of all bank profits in the US in the first nine months of 2023. Meanwhile, rural community banks in the US are drowning in bond losses.

That’s not done: The New York Times has dragged OpenAI and Microsoft to court for allegedly profiting from using millions of its articles without permission to train their generative AI models. 

Arms race: The order books of big weapon makers are overflowing as conflict rises globally. The Financial Times reports that 15 defence companies’ order backlog grew more than 10% in two years to $777.6 billion in 2022. It stood at $764 billion in the first six months of 2023.

Want to read more about the business of sport and gaming? Subscribe to The Playbook. If you like it, please share it with your friends, family, and colleagues. Write to adarsh@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space.