AFTER THE BELL
Why Elon Musk actually should buy Manchester United
You have to hand it to the British football commentators. Summing up the extraordinary game between Manchester United and Brentford – which the West London club won 4:0 – one commentator said ‘Manchester United: played two, lost two and humiliated too’.
It’s only the second game into the season, and one of the British Premier League’s most storied clubs has been beaten by a side which only graduated to the top level earlier this year, where they have only been once before – in 1946.
The league now has an odd symmetry about it, with Manchester City on top and Manchester United at the bottom. Not what you would call a dream start for the new Dutch manager, Erik ten Hag.
When you are at the bottom, it seems like it’s impossible for things to get worse. But I know from personal experience that at exactly the moment you think it’s impossible for things to get worse, they somehow miraculously find a way to get worse.
And how could things get worse for Manchester United? Enter Elon Musk. Right out of the far, far left field, Musk tweeted that he intended to buy the club. That’s not such bad news, I hear you say. And neither did the market think so, since United’s share price shot up 17% in premarket trading.
But then Musk stuck the knife in just four hours later, denying that he intended to buy the club, saying “ … this is a long-running joke on Twitter. I’m not buying any sports teams.” But, he said, if he was going to buy a club, it would be Manchester United, his favourite team from his boyhood. Gwaard.
That’s a bit like inviting you on a date, cancelling the date, but saying if you did want to go on a date, it would be with you. What are you supposed to make of that? I’m just guessing here, but I think the prospective date would be pissed.
Interestingly, the club’s share price dropped after the denial, but is still higher than it was before Musk’s intervention, by about 4%, and that is worth thinking about.
Because football clubs are tightly held, the price discovery process is poor. But in the background, there are good reasons to suspect that the sports market is in an interesting spot right now, and the reason is an odd confluence of events, both regulatory and technical.
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An analytical website called safebettingsites.com released figures today on the size of the global sports betting and lottery markets, which grew from $172.89-billion in 2020 to $194.63-billion in 2021. The analysis suggests it will rise further to $231-billion in 2022.
That would be surprising, because it would suggest that unlike lots of other entertainment sectors, the boost the Covid pandemic provided to online sports betting is holding. What happened is that during the pandemic, bricks-and-mortar betting facilities were hit by capped public gatherings. So everybody went online, and with more people staying at home, sports betting increased. That has now turned into a habit.
There has also been one huge regulatory change. Not too long ago, the US Supreme Court found that the federal ban on sports betting was illegal, and left it to the states to decide what to do. Over the past six years or so, US states have been considering the issue, and over a third have decided to permit sports betting – with a whole bunch about to change their laws. Sports betting has been legal in the UK for ages, and the global trend is to allow it.
What about the tech? There are lots of possibilities here, and they include the full gamut of tech clichés, which is impressive because, as we know, there are a lot of those.
The Internet of Things is improving the efficiency of the betting process. Augmented Reality, which at its simplest level is goal-line tech, will help make the interpretation of how the game is played more precise and interesting. And Virtual Reality could make watching a game just frighteningly immersive – better than being there and better than television. And blockchain tech could help improve the transparency and efficiency of the betting prices.
I remember reading somewhere about technological confluence: some things only take off when multiple conditions are right. Take YouTube, for example. The website was around for ages, and was doing okay. But then three things happened simultaneously: movie cameras on phones, faster networks and global connectivity.
Sometimes, innovation does not originate in a single breakthrough, but in a combination of breakthroughs in different spheres. And when it does – boom!
Right. I’ve just convinced myself. Musk should buy Man United. BM/DM