Snapshot of why MLS follows the NFL Model over European Football
by Dave Clark on Jul 23, 2010 12:06 PM PDT
in Other Professional Soccer (non-Sound)
Email
PrintThe Forbes Sports 50/50 list just came out, and Manchester United was at the top of the list. Real Madrid and Arsenal are also in the top 10. So of course MLS should follow that model right? I mean 2 EPL teams in the top 10 and worth more than a billion dollars seems like the system is working.
Except that EVERY SINGLE NFL team is in the top 50 teams in the world for valuation. Certainly not all of that is due to the parity model. A lot of it has to do with the league wide TV contracts (4 Networks + their own), and some of it has to do with the fact that if you like that style of football there are only 32 pro teams that play it.
The Seattle Seahawks were the last NFL team to break the billion dollar valuation mark. They are nestled in-between Barcelona and Bayern Munich. There are more than a dozen NFL sides worth more than they are. So when a league that was founded by NFL owners (Hunt, Kraft) acts like the NFL realize they do so because they see a league worth tens of billions of dollars under that model.
Here's the list of soccer teams that made the 50
| TEAM | NATION | RANK |
| Manchester United | ENG | 1 |
| Real Madrid | ESP | 6 |
| Arsenal | ENG | 8 |
| Barcelona | ESP | 25 |
| Bayern Munich | GER | 27 |
| Liverpool | ENG | 41 |
| AC Milan | ITA | 43 |
| Juventus | ITA | 47 |
| Chelsea | ENG | 48 |
Teams in bold are worth more than a billion dollars. I find it notable that Italy has as many teams in the top 50 as the NBA, Spain as well, though theirs are not in the same valuation range. Germany with one, and England with 4 teams.
As I said before, the NFL has advantages that these leagues do not. Some of them are advantages that MLS has that these other soccer leagues do not. Some of them MLS can never have.
But this is a nice snapshot of WHY MLS does what it does.
40 comments
|
0 recs |
Do you like this story?
Comments
If you do a ratio of population to valuation
The European teams dominate the value/population chart.
Green Bay v any Euro team
Nearly a Billion dollars for a market how big?
I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart
But only a 1/33 share of that
ManU has a TV market in the hundreds of millions as well, exclusive to the single team.
I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart
How do you figure that?
There are only 50 million or so in all of England. Is there a secret island of Man U only fans?
ManU has broadcast contracts in China, India, Qatar, the USA, etc
I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart
Well not Broadcast
But sat./cable deals on ppv
I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart
But those are chump change compared to the rights that NFL gets
and what the EPL gets in their primary market.
EPL TV rights
So, I found a quote for EPL TV rights in British market as 1.72 billion for three years. or about 600 Million a year on a population of 65 million.
The NFL is paid 3.085 Billion a year on a population of 320 million.
$/pop ratio
EPL: 9.18
NFL: 9.6
$ per team
EPL: ~30 million
NFL: ~96 million
EPL teams are doing fine on extracting dollar per potential fan, they just don’t have the fan base the NFL has and that makes them worth less. The only teams that can make the list are the perenial Europe contenders that have access to the bigger markets and do just fine extracting value from that.
Which is a long way of saying. I don’t think the NFL has a magic wand that makes their model better. They just have access to more TV dollars and TV dollars cure all.
No one said top European teams aren't doing well
It’s that so many NFL teams are doing well.
Because if it's not Love | Then it's the bomb ... | That will bring us together
by Jeremiah Oshan on Jul 23, 2010 1:31 PM PDT up reply actions
Watch revenue sharing die
and then come back to me with how valuable the Browns or the Bengals are.
They won't kill the tv deals
Only the amount on tix and merch
I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart
You are right. That said...
It wouldn’t surprise me to see Jerry Jones try to create a Texas TV network similar to YES. Only 3 times as stupid
Isn't that kind of the point though?
Because if it's not Love | Then it's the bomb ... | That will bring us together
by Jeremiah Oshan on Jul 23, 2010 2:15 PM PDT up reply actions
Other professionals....
What else is a major draw in England? Maybe some cricket? some rugby? I wouldn’t consider them major professional sports though. No other country has as diverse a lineup of professional athletic leagues to compete against each other for viewers and dollars. New York alone has NHL, NBA, NFL (x2), MLB (x2), and MLS.
NYC is worse than you note
As it has two NBA teams and 3 NHL teams
But let’s also remember that England has 96 teams in the Football League in addition to the PL’s 20.
I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart
A bit off topic
How stupid is the upcoming strike for the NFL. Seriously, can things be going any better for the league? 4 channels paying them games and every cable/sat service paying for the NFL network. Their draft is out performing playoff games in other big 4 sports.
They have so much momentum right now I just can’t fathom why they are so set on a lock out/strike.
Goodel has barely put a foot wrong since he took over, but he will earn his leagacy in the next 18 months.
Why they might strike
Players are still getting screwed, relative to other leagues, in that they don’t have guaranteed contracts and have far shorter careers. If I was an OL, I’m not sure I’d be happy plugging along at $300k a year knowing that there’s a very good chance that regardless of the length of my contract, I can be cut, and that aside from the top 10 percent, most guys play >5 years.
Because if it's not Love | Then it's the bomb ... | That will bring us together
by Jeremiah Oshan on Jul 23, 2010 2:18 PM PDT up reply actions
I've heard said more then once
That it’s the owners that are really driving for a strike.
And that by virtue of doing what it takes top get to the NFL, you've likely cut 30+ years off your life
by Aaron Campeau on Jul 23, 2010 2:20 PM PDT up reply actions
Being an NFL player
Is basically a glorified gladiator. Definitely money to be made, but most guys a.) never see it b.) end up going broke within five years of retirement (it’s a fact, check it out) and c.) will spend their "retirement’ years in some state of disability. Most guys will be almost totally incapable of working “normal” (non-football) jobs after the NFL.
If they don’t get a better deal than they have now, they should strike. Considering my position on the MLS strike, this may sound surprising, but NFL players have been steamrolled for too long.
Because if it's not Love | Then it's the bomb ... | That will bring us together
by Jeremiah Oshan on Jul 23, 2010 2:38 PM PDT up reply actions
Which makes the lack of a real retirement plan crazy
They should have health coverage support and a retirement stipend that contains a means test (IE millionaires don’t get it). The owners should stand with the players that made their billion dollar clubs.
that would be nice wouldn't it?
Because if it's not Love | Then it's the bomb ... | That will bring us together
by Jeremiah Oshan on Jul 23, 2010 3:06 PM PDT up reply actions
It's a big part of the reason I've fallen out of love with the NFL.
These guys are literally giving years of their lives to the game and the league doesn’t seem interested in their well-being in the least.
by Aaron Campeau on Jul 23, 2010 4:52 PM PDT up reply actions
I've heard also it's the issue of safety
that the league is holding back on studies regarding long term illness and injury. It’s a hot topic between the union and league.
by chrisperry1983 on Jul 23, 2010 2:35 PM PDT up reply actions
The NFL model is a much better option for MLS, than is the model of leagues in Europe.
First, nobody is holding guns to the heads of the NFL players, they make their choices> I am sorry no tears being cried for NFL or NBA players, in life you make choices and decisions, based on those you either reap the rewards or suffer the consequences.
The reality is that the NFL dollars are generated from primarily the US market, while the EPL and LaLiga generate a big chunk of their revenue from outside of England and Spain. The US is a much larger nation than either England or Spain, but it is also a market where you have 4 major sports leagues, several large sports events, and a bunch of others all competing for the same dollars. The EPL doesn’t worry about their crowd running away to support cricket or rugby, while each league in the US is fearful that their fans will jump ship on them.
No sport in the US dominates the way soccer does in England or Spain, and never will. This means that trying you replicate that business model in a market that has different rules and competition will never work. I simply wish that all those people who think MLS should change today to be like Europe with unlimited payrolls, and relegation, would simply look at the simple fact that comparing the US market to any other in the world is simply an invalid comparison and their is no proof that trying to follow a different model in the US would do anything but fail.
"No tears being shed"
Of course not, but it’s also why NFL players shouldn’t allow themselves to be steamrolled.
Because if it's not Love | Then it's the bomb ... | That will bring us together
by Jeremiah Oshan on Jul 23, 2010 3:07 PM PDT up reply actions
It probably helps that the US's GDP is over six times more than the UK's
About 6.57 times. It’s 6.90 times the GDP of Italy and 9.84 times that of Spain.
In any case, these numbers are not at all surprising. Any industry would love to operate this way. Unfortunately for them, they haven’t convinced Congress that they should be exempt from the law, so they can’t form cartels and artificially limit the supply in order to inflate prices.
If the Hunts and Krafts believe MLS will be worth billions if they follow the NFL model, they’re making a giant mistake. What they’re missing is that, like you said, there is literally no other supplier of any significance of American Football, so the NFL effectively operates a worldwide cartel, and they have no fear that those who want to watch the sport will have any other options. The exact opposite is true in soccer. There are thousands of teams just in the first divisions of the world (low ball estimate: 150 leagues with 15 teams would be 2,250). An American soccer fan willing to spend a little money on cable can watch the very best players in the world, often live. MLS can’t offer that. MLS struggles at times to offer acceptable soccer.
For MLS, the NFL model is a route to safety and team valuations in the mid tens of millions. Unless you have an MLS team in your town to support, there’s no reason to pay any attention to MLS at all.
by CarlosT on Jul 23, 2010 10:13 PM PDT reply actions 1 recs
The NFL has no anti-trust protection
Only baseball
I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart
Then regulators are looking the other way
Because no industry outside of sports can get away with what they do.
Very well said
The NFL is making so much money because they’re spreading the wealth over 32 teams and have no competition within the sport.
For the European teams, the biggest source of revenue is TV contracts they share with a lot more teams over a smaller population, for both domestic and international leagues. For many of the smaller leagues the influx of Champions League football is so significant that it’ll give one team a financial income several times greater than the rest of the teams combined.
The issue is that Europe features a diverse number of leagues that compete with eachother. Any one league can’t go for parity because it’d mean stripping the top teams of their competitiveness in Europe – a major source of revenue and a major source of prestige, both of which are needed to attract top players. None of this plays a role in the NFL, but those are the major reasons why the NFL can have 32 teams at a high valuation why European football can’t.
Do MLS teams play in Europe?
So should they copy a European model or American?
I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart
Also, this is a different argument than you're making in the post
The argument in the post is “We’ll be rich!”, while the argument in your comment above is more like “We’re in America, damn it!”
Very different in fact
The post seems to imply throughout that the NFL system is simply “superior” rather than better adapted to its environment, and that picking between two systems for the MLS had nothing to do with sharing the same market as the NFL but rather with the system being superior. And that argument is outright false.
The argument that the MLS plays in America and thus should have an American system is true. The argument that it is purely the system and not the market and competition that makes the NFL dominate the top 50 is ludicrous.
by Thomas Beekers on Jul 25, 2010 3:35 AM PDT up reply actions
I don't know which one you should be copying
It all depends on what the goal of this league is. Is it simply making as much money as possible? Well then I wouldn’t know which model you should follow. I remain unconvinced that parity will do you much good, but I can’t think of a reason why it would fail in bringing in an audience.
However if, like European leagues, you want to create teams that can compete internationally you may be forced to step away from a parity model as parity distributes talent fairly evenly, leaving little room for a truly top side to step up.
Many European leagues have a sort of feeder system where players will mature with the bottom teams before moving on and upwards. The top talent is always concentrated in the top third or so of such a league, allowing those teams to be competitive internationally, but reducing the level of competition within the league. For the audience this is not that big of a problem. You’ll still have 3- or 4-way title fights, and if you’re supporter for a lower team the expectations are dampened. Then a game vs a top club is a chance to maybe create an upset or at least not get embarrassed, while the games with teams slotted around you become more interesting. The existence of European qualifier spots and relegation helps create more competition and tension at each position in the league table. I have no reason to believe that something like this can’t work in the US.
Yeah, well
At least we’re not communists
by Thomas Beekers on Jul 24, 2010 12:18 AM PDT reply actions 1 recs
Comments For This Post Are Closed
Secondary Sidebar
User Tools
FanPosts
Community blog posts and discussion.
Certain photos copyright © 2012 by Associated Press or Getty Images. Any commercial use or distribution without the express written consent of Associated Press and Getty Images is strictly prohibited.
