Sportswear supremacy race heats up

Good morning from the US of A, where the hottest story in sports this spring is women’s basketball. In April, the national college championship drew an astounding 19mn viewers — on par with the Academy Awards, and the most-watched non-gridiron football sport in five years — and the records are already coming for the WNBA. The reason? A crop of bona-fide university stars including Caitlin Clark, Angel Reese, and Cameron Brink are now rookies in the Women’s league, and early ratings show they’re importing their millions of fans to the pros.

Tonight may be the most anticipated game of the nascent 2024 season: Clark, the top draft pick and point guard for the Indiana Fever, will host Reese and her Chicago Sky, for their first meeting in the big leagues. Their rivalry dates to the 2023 college championship, where trash talk between the two went viral. Despite impressive individual stats for both Reese and Clark, their teams both have mixed records so far, making Saturday’s 12pm ET meeting a potential catalyst for early bragging rights. 

Whether you’re a hoops fan or not, there’s an important business story coalescing around this season: how does a modern professional sport grow from niche fandom to mainstream success? How can a league convert casual fans or the sports-agnostic to regular viewers? It’s an issue I tackle with FT Life and Arts podcast host Lilah Raptopoulos in an episode forthcoming on Monday. Look out for it wherever you get your podcasts soon.

In the meantime, we’re looking at the challenger brands taking on the big beasts in sportswear, plus we look at what new shareholders Red Bull might bring to Leeds United. Do read on — Sara Germano, US sports business correspondent

On and Hoka set the pace in sportswear race

Tennis fans were treated to a memorable match in the opening days of the French Open this week, when world No. 1 Iga Świątek saw off a fierce challenge from former world number 1, Naomi Osaka.

However, nerdier viewers may have noticed a different battle taking place on the Paris clay — between sportswear behemoth Nike and young Swiss upstart On. Osaka has been tied to Nike since 2019, while Świątek signed an apparel deal with Roger Federer-backed On last year, becoming its first female ambassador in tennis.

As Nike grapples with stalling sales growth and Adidas turns to retro lifestyle sneakers to help get over its Yeezy hangover, specialist shoe brands are on the march.

Earlier this month, New York-listed On reported a 20 per cent rise in sales in the first quarter, putting the company on track to hit a full year target of $2.5bn. Then last week Deckers, owner of On’s chunky rival Hoka, said sales in the most recent quarter rose 21 per cent. You can read more on Hoka — the shoemaker favoured by US President Joe Biden — in this FT deep dive here.

Both brands are still small in the grand scheme of things. Hoka has a market share in athletic footwear of just 1.3 per cent, while On has a 1.7 per cent slice, according to Stifel estimates. Meanwhile Nike controls nearly a quarter of the market.

But neither company is aiming at a mass market audience. On co-founder David Allemann told the FT earlier this year that he saw the company’s shoes in the same way Apple sees computers, or Dyson sees vacuum cleaners: as objects of design beauty — presumably with a high margin. (Reader comments on the quality of the products are somewhat less complimentary).

A strong showing from Świątek at Roland Garros and Wimbledon should help On’s push into apparel, while the Paris Olympics offers a chance for both brands to burnish their credentials in high performance running shoes.

For now, investors seem happy enough with the track record. On stock is up 57 per cent this year, Deckers — which also owns fuzzy boot brand Ugg — has gained 62 per cent.

Red Bull brings new energy to English football

Leeds United’s loss to Southampton in the play-off final cost the club a place in the Premier League — and potentially more than £300mn in revenue over the next three seasons.

Another year in the Championship is a big blow for a team that racked up pre-tax losses of £170mn in the six seasons to 2022-23. It’s even less appealing to the club’s American owners, 49ers Enterprises, which took control almost a year ago.

But the Yorkshire side and its NFL backers have a new ally with deep pockets in the fight to restore the three-times English champions to the big time.

Red Bull will paste its famous logo on Leeds’ white shirts next season and become minority shareholders, adding one of England’s most famous clubs to a vast sports empire that includes football, motorsport and sailing.

“The ambition to bring Leeds United back to the Premier League and establish themselves in the best football league in the world fits very well with Red Bull,” said Oliver Mintzlaff, who heads corporate projects and investments for the Austrian group.

Leeds could hardly ask for a richer backer. Red Bull sold more than 12bn cans of fizzy energy drinks in 2023, pushing annual revenues up by 9 per cent to a record €10.5bn.

Sport and energy drinks feed off each other. Red Bull pulls in cash from selling caffeinated beverages and pumps it back into the marketing machine that promises to give you wings. Rinse, repeat.

It’s also a sign of Red Bull’s commitment to sport almost two years since the death of co-founder Dietrich Mateschitz.

Despite Mintzlaff’s ambitions, fixing Leeds is fraught with risk.

The club entered administration back in 2007 and sunk as low as the third tier of English football just a few years after featuring in the Uefa Champions League semi-finals, back in 2001. Under the subsequent ownership of Andrea Radrizzani, Leeds returned to the Premier League for the first time in 16 years in 2020 but that stay proved brief.

Money alone can’t fix Leeds’ problems, due to increasingly stringent rules designed to limit how much clubs can lose. But Red Bull brings disruptive experience and successful ownership of German Bundesliga team RB Leipzig and Austria’s Red Bull Salzburg. Red Bull won’t change Leeds’ name and logo, the club said.

The extent to which Leeds can benefit from a minority shareholder’s wider multi-club network remains to be seen. But if there’s a lesson to be drawn from English football, the cost of trying to reach the Premier League can be ruinous. In Red Bull, Leeds at least have an important backer.

Highlights

• Saturday’s Champions League final pits two member-controlled clubs against each other for the first time in years. Is this a sign that the power of private wealth in football is on the wane? That’s the question we mull over in this week’s Topline column.

• Michael Andretti, who is backed by Guggenheim Partners chief Mark Walter’s Group 1001, has been advised to buy an existing Formula One team rather than expect the racing series to grant him a slot on the grid.

• Weapons manufacturer Rheinmetall agreed a multiyear sponsorship with Champions League finalists Borussia Dortmund, in a sign of shifting German attitudes towards the defence industry.

• Toyota has no plans to renew its record-breaking, four-Olympic (two summer, two winter games) contract with the International Olympic Committee following the Paris Games this year. In an opinion piece, the FT’s Leo Lewis breaks down why content consumption explains the Japanese automaker’s bold decision.

• Football players could go on strike and Fifa could be subject to legal action if the world governing body and competition organiser fails to address growing concerns about fixture congestion, several top figures in the sport warned this week.

Final Whistle

As the UK election campaign gets into full swing, prime minister Rishi Sunak has been seeking to push the image of a young, dynamic leader.

That’s why he sought to show off his silky skills during a visit to Chesham United earlier this week — following a well worn tradition of British politicians in suits awkwardly kicking a football around. We’ll let you judge the results.