Banchiero Sports Enterprises LLC

By SHANE ROMIG and MATTHEW COWLEY

BUENOS AIRES — In soccer-mad Argentina, a battle over television broadcasting rights for matches lies at the combustible intersection of politics, business and sport.

The Argentine Football Association on Tuesday canceled the existing contract with a powerful local media group, amid mounting speculation that the government will play a big role in determining who gets the golden goose.

TSC will take legal action against AFA once it has been notified of the cancellation, TyC President Marcelo Bombau told Dow Jones Newswires in an interview.

DirecTV Group Inc. owns 40% of TyC, with the remaining 60% held by an investment fund of Credit Suisse Group and two private investors, Fred Vierra and Luis Nofal, according to TyC’s Bombau. Credit Suisse declined to comment on the situation; DirecTV wasn’t available for comment Wednesday.

Argentine local media have been full of speculation for days that the government will chip in 600 million pesos ($157 million) for the rights, allowing for broadcast over the air, rather than by the more expensive cable-TV systems.

Cabinet Chief Fernandez’s office declined comment Wednesday.

Soccer is the latest industry to get caught in the middle of the tussle between the government and Grupo Clarin, which have long had antagonistic relations. Former President Nestor Kirchner, husband of the incumbent, in particular has accused Clarin of biased reporting in elections and undue influence in the media industry.

Soccer matches are an important part of Clarin’s business, and losing the rights is a blow. Clarin’s share price on the Buenos Aires stock exchange was down 1.8% Wednesday, while the broader Merval index was up 0.8%.

Argentine soccer clubs are increasingly desperate for cash. Most are heavily indebted, and this weekend’s league kickoff has been delayed because many clubs can’t make payroll. There is some disgruntlement among smaller clubs with the way television money is shared, as it heavily favors two teams, Boca Juniors and River Plate.

AFA was in negotiations with TSC over increasing the price for the transmission rights when the entire contract, scheduled to run through 2014, was canceled.

AFA had asked TSC for even more money — 500 million pesos — from the contract this year, a figure that would mean a loss for TSC, Mr. Bombau said. The government would be the only entity able to bear a loss under those conditions, he added.

AFA accused TSC of breaching contract terms, and believes it would be “heavily damaged” in financial terms if it were to continue with the existing contract, AFA spokesman Ernesto Cherquis Bialo. AFA said it, and not the clubs which it represents, would be responsible for any legal liability.

Some opposition politicians, meanwhile, have lambasted the possibility of a link between the government and soccer.

“The little money that Argentines have shouldn’t be used to finance the mismanagement of some football executives,” said Lower House Representative Francisco de Narvaez, of the Union Pro party, in a statement. “I am against this intervention, as is the vast majority of the people.”

Information Source: Wall Street Journal Online

CAA Sports has sold 14 sponsorships and more than 240,000 tickets to the World Football Challenge, its six-game exhibition featuring international soccer heavyweights Chelsea FC, AC Milan, Inter Milan and Club America.

The agency expects to sell more than 300,000 tickets to the six games, which began Sunday in Palo Alto, Calif., and end this Sunday in Foxboro, Mass., and Arlington, Texas. Friday’s game at Baltimore’s M&T Bank Stadium between Chelsea and AC Milan sold out last week and more than 70,000 people are expected to attend. The average ticket price for the games is $45, but more than half of all tickets have been sold for less than $35.

All of the exhibition games are being shown on ESPN, which is covering production costs and sharing advertising revenue with CAA.

Sponsors of the event are State Farm, Volkswagen, Bridgestone, Stanley Tools, Lucas Oil, SpongeTech, Verizon, Burger King, Aaron’s (furniture), O’Reilly Auto Parts, Logic Wireless, 7-Eleven, Anheuser-Busch and EA Sports. Sponsors receive field-board signage during games, 30-second spots on ESPN and clock wraps during game telecasts. CAA Sports executive Paul Danforth led the sales effort.

 “Ticket sales have far exceeded our expectations and we’ve been pleasantly surprised [by sponsorship sales],” said CAA Sports co-head Howard Nuchow. “We’re thrilled with how this tour is shaping up.”

Nuchow declined to say whether or not the event would be profitable for the agency but said that the games and ESPN would raise the profile of participating clubs by allowing them to reach a broader audience than the spectators in the stadium.

 “ESPN really raised the professionalism of the event,” Nuchow said. “People were able to see we had a different proposition than games. That had to do with people saying yes or no.”

 Nuchow said that CAA Sports will evaluate the event later this year and determine whether it will host another World Football Challenge.

Information Source: TRIPP MICKLE- Sports Business Journal