The proposed takeover of pay-television broadcaster Sky by media giant 21st Century Fox is a significant development in the media market, but while this is where the major impact will be felt, it has other far-reaching implications, including the future of Sky’s involvement in professional road cycling.
Will the successful Team Sky become Team Fox, or would a
takeover bring an end to the team in its current guise?
Go deeper with GlobalData
Both Sky and Fox are sponsors in the team’s portfolio, but are also the joint-owners, Sky owning 85 per cent and 21st Century Fox the remaining 15 per cent. It is understood that this set-up is due to run, at present, to 2020, coinciding with the end of the current bike and helmet supplier deals, with Pinarello and Kask, respectively, and the ‘2020 Vision’ plan outlined by team management in 2015.
Rupert Murdoch’s Fox has agreed a deal worth £11.7 billion ($15 billion) to acquire the 61 per cent of Sky it does not already own, and has already received the approval of the European Commission’s competition authorities. Ofcom, the UK’s media regulator, submitted its public interest report on media plurality and broadcasting standards objectives to the UK government on 20 June, and this week, in an apparent blow to Fox’s hopes of receiving early approval for the plan, Karen Bradley, the UK’s culture secretary, said that she was “minded to” refer the case to the Competition and Markets Authority.
At the head of all of this is Murdoch who, with fingers in more pies than you would find at a pie-eating contest, is often the focal point of controversies relating to his business interests
Aside from the market-related hurdles Fox faces, in USA the company
has been dogged in recent months by a series of allegations of sexual harassment
and discrimination that have led to high-profile executives losing their jobs.
At the head of all of this is Murdoch who, with fingers in more pies than you
would find at a pie-eating contest, is often the focal point of controversies relating
to his business interests.
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By GlobalDataWere the takeover to go through, it could create the unusual position in which both brand and product might lack the confidence to continue the relationship. From Fox’s point-of-view, it would become the sole owner of the team, and with television and film operations covering all six continents and a globally recognised brand, the necessity for a pro-cycling team might not be a significant priority. Although cycling has a devoted core fan-base (as well as representing a worldwide mode of transport), the professional sport pales in significance to other globally popular sports.
Meanwhile, over at Sky, Murdoch’s son James, the company’s chairman, has found himself dragged into the scandals that have engulfed the team in the last eight to 10 months. Following three separate incidents relating to the team’s anti-doping stance, independent investigations are continuing. James Murdoch gave his full backing to the team he helped to create, but the allegations will have undoubtedly been a strain and brought unsolicited and negative publicity.
Cycling sponsors have travelled a rocky road because of the long shadow doping has cast over the sport, which has led many to back away. Once the investigations into Team Sky by the UK Anti-Doping agency and the UK parliament’s Culture, Media and Sport Select Committee are complete, the role Fox wants to play will become clearer but in view of the already choppy waters it is navigating, it would be no surprise if it decides to lighten the load.
Recent scandals at Fifa and the IAAF, the world governing bodies for soccer and athletics respectively, have shown that if a sponsorship deal puts a brand’s image in jeopardy, it will pull the plug no matter how big the product
Recent scandals at Fifa and the IAAF, the world governing bodies for soccer and athletics respectively, have shown that if a sponsorship deal puts a brand’s image in jeopardy, it will pull the plug no matter how big the product.
There is also an interesting alternative possibility in this process: that the decision not to continue sponsoring might be taken out of Fox’s hands. Given the ethical and reputational issues facing Fox, it would not be a surprise if those involved in the day-to-day running of Team Sky, already under fire, push for a disassociation with the media organisation to avoid even more unwanted scrutiny. To do so would effectively mean not just finding a new sponsor, a challenge in itself in the world of cycling, but finding a new backer. This would say a lot about Fox’s and Murdoch’s image, considering the predicament Team Sky finds itself in at the moment.
There is other evidence to suggest the partnership might be crossing the finish line. Sky ended its eight-year association with British Cycling, the national governing body, in 2016. The deal had been worth under £10 million ($13 million) for the first four years and roughly the same for the last four. Part of the rationale for Sky’s involvement in cycling was to drive grassroots participation, and mass-participation initiatives such as Sky Ride certainly helped with this. Having removed itself from the national sphere, and after achieving professional success, including (at the time of writing) four Tours de France, the logical next step might appear to be to end all involvement.
Whether or not it had always been planned for Sky to end its backing of the team after a decade in 2020 remains uncertain, but if a takeover by Fox goes through it could be the catalyst for the process to start and for both parties to have an amicable break-up and go their separate ways, focusing on new goals. Team Fox doesn’t quite have the same ring to it.
