Sport is big business. You only have to look at an NFL stadium on game day to see it. Acres of car-parks are filled with spectators who, having paid for tickets to the match, will then spend more on food and drink, and in the franchise stores where they will have their favourite players number, current or historical, placed below their own name on a replica shirt.
The thirty-two teams who make up the NFL have a combined valuation of about $150 Billion. The valuations tend to be somewhere between eight and twelve times the annual revenue. Across the franchises in the NFL the valuation of the highest team on the list is two-and-two-thirds of the lowest team.
As a fan, this translates to an average ticket for one of the seventeen regular season games costing $151. By the time you add in travel, and a hot dog and soda, the thick end of $200 for one person is not far out.
With only seventeen guaranteed games per five month regular season it is easy to understand a desire to maximise every potential revenue stream.
It also, possibly, goes some way to explain why soccer, in the form of the English Premier League (EPL), has become a draw for US businessmen. While there are only twenty teams in the EPL they play a season which - in normal years - starts in September, ends in May, and guarantees forty matches; thirty-eight league matches, one FA cup, and one League cup match. Teams who qualify for European cup matches can add another two to six guaranteed games to these.
With larger stadiums holding sixty-thousand plus fans there is plenty to be made from tickets sales, stadium franchises, and match-day sponsorships. Then, there are the worldwide television and merchandise opportunities.
And unlike American Football, Association Football - soccer - as played in the English Premier League, is a worldwide game. From tiny villages in rural Gabon, to huge cities in China people know football and the Premier League in a way they don’t for American Football and the NFL. While US youths will wear their favourite NFL or College teams top, you can see youths the world over wearing shirts from Englands EPL while playing an informal, though keenly fought, soccer match on some waste ground.
There is room for expansion in owning an English football team which is difficult to replicate with American Football.
In total the valuation of teams currently in the EPL is about $20 Billion, but that ranges from the most valuable, Manchester United and Liverpool, valuing at over $3 Billion to the combined value of the bottom six teams being about $850 Million.
The Glazers ownership of Manchester United over the last seventeen years has shown that even a heavily indebted club can produce dividends in the region of £20 Million per year. Not too shabby a cash cow for a team which hasn’t won the league in ten seasons. Of course there are more riches to be made if you don’t saddle the club with a massive mortgage.
The thing is, in the EPL, there are risks which do not exist in the NFL.
To own an NFL team is to be part of an exclusive club. Occasionally the club gets bigger by virtue of expansion, but while you own the team, you’re in the club.
That is not the case in the EPL. Every season the three teams who finish bottom of the league are relegated to a lower league, the English Football League (EFL) Championship, and three teams come up to replace them. From the Championship a team can be relegated down to Division One, then Division Two. From there, they can fall further to play in divisions which feed into the EFL.
What does this mean?
Well, the big money from sponsorship and television rights is made in that top tier, the EPL. With that comes the opportunity to charge more for match tickets and merchandise.
How big a difference is it? The bottom team last season - Sheffield United - earned £97 Million from television rights. The top team in the EFL received £2.5 million, then about £100,00 per televised game which may have been ten to fifteen, so another £1-1.5 million.
So, to finish last in the EPL is about twenty-five times more profitable than to win the EFL.
The EPL’s three year £5 Billion television deal may pale in comparison to the NFL’s massive ten year, $100 Billion, one. But with the whole world interested in watching EPL games, there is huge room for increase and the next renewal is due in 2025, not 2033 as it is for the NFL.
Currently there are nine EPL teams with complete or significant American ownership, with another in the process of being finalised*.
That would be fifty percent of the league, which gives significant leverage should the US owners decide to band together and vote in a block. This becomes a thing to consider when we look at the structure of the EPL.
According to EPL league rules each club is an equal shareholder. At the AGM, held at the end of each season, the rights of the relegated teams are transferred to the promoted teams.
At this meeting each club can propose changes to the rules of the league and, upon at least two-thirds acceptance, the rules will be changed. If US owners voted as a block, they’d only need to convince four other team owners for their changes to become operational.
An example of such changes is the size of the league. The EPL was founded in 1992/3 with twenty-two teams. In the 1995/6 season the league was reduce to twenty teams. Or, this year, we could consider the change from three substitutes to five for the 2022/23 season.
What are some things that could be appealing to owners of EPL teams who do not have an affinity for English teams borne from long years of support? How might businesses looking to sweat their investments seek to change things?
One obvious way has been suggested for a number of years, a further reduction in the size of the league from twenty teams to eighteen.
This would bring the EPL into line with other European leagues such as those in Germany, Italy, France, and Portugal and would achieve two things. The first is to reduce the humber of league games being played from thirty-eight per team per season, down to thirty-four. That may seem counter-intuitive, but with the league, two domestic cup competitions, and European competition it is possible for an EPL team to play over sixty competitive matches. Removing four league games would, in theory, alleviate the pressure on players at least. In reality it would expand time when the teams can partake in lucrative overseas trips and mini-tournaments.
Another change that could be implemented, and again one which has been mooted on several occasions, is taking league games over-seas, in much the same way the NFL successfully plays matches in London, Mexico City and, from this year, Munich.
Soccer seems to be gaining a foothold in the US which previous attempts have failed to achieve. The women’s national team is the worlds most successful, having won the World Cup four times, and been second or third in every other tournament . Major League Soccer is heading towards a quarter-of-a-century in operation and has the fourth highest attendance of any professional sport in North America. There has to be an appeal to bringing in teams from the most popular league in the world to soak up the increasing interest.
Fans at home may not be enamoured with the idea, especially season ticket holders who will feel they are being deprived of a match. This will be especially so when it’s a top tier derby game, or long-standing rivalry, or fans of smaller team missing out on the big match they were looking forward to after a hard fought promotion.
Such considerations are unlikely to sway cold hard cash based considerations. If the ledger says a game a season will bring massive financial benefits, then fans will be left to pay-to-view and hope it’s scheduled sympathetically for the home audience. If the beancounters and strategists are correct and such a match does bring in the financial rewards expected, then adding further ones will inevitably follow.
Another rule which could be changed relates to relegation and promotion. This is an alien concept to American sports fans used to leagues which expand or contract as franchises, are created, or go bankrupt. The idea that the EPL team an owner has invested good money in may fall out of the EPL could very well lead to an attempt to change rules so that teams are locked in to the league without danger.
Here’s the thing, while fans may adjust to some matches being played abroad in the same way they have got used to them not all being played on a Saturday at three o’clock, we already know they will reject the idea of a locked league.
In 2021 the European Super League was announced, a competition to replace the UEFA run Champions league. It was to have twenty teams, fifteen of which would be exempt from relegation, ever. Six of those fifteen teams were to be from the EPL.
The announcement of the new competition came on April 18th. Such was the outcry from fans that the six English teams who intended to join had rescinded their decision by the early hours of April 21st. Three of the clubs made public and private apologies to fans and staff.
To make it clear, fans did not object to the concept of a new competition. There are plenty of complaints about the various UEFA arranged competitions and some form of shake-up is constantly in the works. The issue was the idea of teams being guaranteed the right to be in the league with no penalty for failure.
Should the owners of the Premier League attempt to create a closed league, the fans will vote with their feet. There will be weeks of reports of fans tearing up season tickets and burning club merchandise. Matches will see fans of both teams united in booing and chanting, not the players or manager, but the board and whomever has the nerve to represent them at the stadium.
That doesn’t mean it won’t happen, but such a breakaway would lead to a split in football that has never been seen. It’s likely all the clubs would be sanctioned by the English Football Association, UEFA, and even FIFA. These could include removing access to other competitions run by the associations, which would remove lucrative Champions League money from the table. Players may be made ineligible to play for their national teams.
The legal fights would make the current wrangling between LIV Golf and various PGA’s seem very tame.
Owners may then consider something that happens with US sports franchises, but not with English football teams: Moving them somewhere else, to another country even.
Such was the outcry when Wimbledon FC moved from south London to Milton Keynes, that an entire new team, AFC Wimbledon, was created. Any attempt to relocate an English football team would result in governmental intervention and if the attempt was still successful there would be an instant creation of new teams to replace the old.
The breakaway teams would always retain some old supporters but the owners would have to accept the loss of many of the people they expected to pay money week-in-week-out to watch games, eat pies, and buy shirts.
Some may feel the above is needless fear-mongering, that such a thing can never happen. But where money is involved, and the EPL commands an awful lot of money, anything which can generate more will be considered. If you think otherwise you should know that the EPL itself is a league which broke away from the EFL, so its members could make more money
*Existing: Arsenal - Stan Kroenke: Aston Villa - Wesley Edens; Chelsea - Ted Boehly; Crystal Palace - John Textor; Fulham - Shahid Khan; Leeds United - 49er Enterprises; Liverpool - Fenway Sports Group; Manchester United - Glazer Family; West Ham United - Albert Smith. In process: Bournemouth - Bill Foley.
Original writing and graphics by Stuart C Turnbull. Header produced in Canva Pro.