Soccernomics, Global Leagues, TV Money and Quality

Discussion in 'MLS: Commissioner - You be The Don' started by triplet1, Aug 31, 2012.

  1. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Well Seattle, New England and DC are much bigger (then there is San Jose 11K but that will change soon). You probably mean MLS S.S. stadiums. But yes outside Red Bull Arena and Home Depot the other SS stadiums are 22K and below. (some maybe more with standing room).
     
  2. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    Don't forget that the premier league doesn't contain the 20 best supported clubs. That Wigan are there at all is remarkable really. In the 90s they were a poorly supported side by 4th tier standards. In fact in 1995, they had the lowest crowds of all 92 pro clubs.

    Clubs also have to allocate at least 2000 seats for visiting teams, and they don't always sell out, particularly at an outpost like Swansea. Wolves were rebuilding their ground last season, so capacity was reduced.

    Overall though, I'm not sure why selling out it is any kind of yardstick. Would Blackburn's 22500 average be more impressive in 23000 seat stadium rather than a 30000 seat one?

    A lot of the problems clubs have with not selling out is due to too high a capacity. It means fans can pick and choose games, rather than feeling that they need a season ticket.
     
  3. EvanJ

    EvanJ Member+

    Manchester United
    United States
    Mar 30, 2004
    Club:
    Manchester United FC
    Nat'l Team:
    United States
    La Liga has games that start 4:00 P.M. or later USA Eastern Time. That's not prime time, but it's after lunchtime.
     
  4. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    It really doesn't matter, at least as far as MLS is concerned. Again, if you look where a small EPL clubs' revenue comes from -- and will come from -- a high percentage is from TV, and that's about to increase substantially. It gives each EPL club a $100m - $150m advantage.

    Until fairly recently, the focus on Big Soccer has been on attendance and match day revenue. MLS is doing well there -- Seattle's match day income is probably every big as good as the EPL clubs you mentioned, if not better. But that dependence on a local audience -- those that attend the games -- has made MLS a local proposition. So, for those who argue that MLS will experience significant future growth because, unlike the EPL, fans can go see the games in person, you're missing the Soccernomics point. In the U.S., like much of the world, people are choosing the global teams, even if that means just watching them on TV. And the EPL is the global league. That gives them the money to buy players and attract most of the attention in countries where the domestic leagues are regarded as inferior.
     
  5. Achowat

    Achowat Member+

    Mar 21, 2011
    Revere, MA
    Club:
    New England Revolution
    Nat'l Team:
    United States
    This is just wrong. Just flat-out wrong. The NBA grew when there was the Celtics versus the Lakers. When there were battles...when there was strength on both sides of the continent. The Celtics won 10 years in a row from 1959-1969. No one cared about Basketball back then.

    And the Bulls never won more than 3 championships in a row. And they one them challenging other strong teams. The Lakers at the end of Magic, Drexler's Blazers, Barkley's Suns (during his MVP year). Payton and Kemp at Seattle, Stockton and Malone in Utah..they were dominant, yes, but competitive.

    Your comments shows a lack of understanding on how strong sports leagues are built.
     
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  6. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    Hypothetically, the EPL can do what the NFL is doing in the US, which is to show some form of its product over 14-16 continuous hours (if you consider ESPN's NFL Matchday at 10 AM through the early Monday morning highlights shows) by combining the live matches with the edited highlight and pre-game/post-game shows.

    With five matches on a Saturday and four on a Sunday, it could get into the prime adjacent hours in the US by following this rough format (all times are EST/EDT):

    7 AM - 8AM - EPL Matchday preview.

    8 AM - 10 AM - Match 1 (marquee teams for the Asian audiences)

    10 AM -12 PM - Match 2 (the least favorable pairing)

    12 PM - 1 PM - The Midday Review/Preview show with "extended"(*) highlights from the two matches + analysis + preview of the upcoming games.

    Extended ~ 20 min each. There's enough action in most games for that.

    1 PM - 3 PM - Match 3

    3 PM - 4 PM - Midday Review/Preview #2.

    4 PM - 6 PM - Match 4.

    6 PM - 8 PM - The Post-game highlights, reviews, analysis.

    That's 13 hours of EPL, more than enough for the Asian, European and American markets.

    This does not include a potential for the prime US TV time "39th" game, which - I predict - will be played somewhere sometime, if not necessarily in the US. (they could play, for example, in Canada)

    PS. Zenit St. Petersburg just signed Hulk (from Porto) and Alex Witzel (from Benfica) for about $100M combined. (I believe the breakdown is ~ $60+$40). Hulk is guaranteed ~ $44M under the current exchange rate over his 5-year contract, probably tax free.

    The Soccer Econ guys argued that the players would forsake such deals in Eastern Europe. I said then that they were wrong and the Hulk/Witzel signings prove that again.

    PPS. The greatest thread to the EPL is political, from the evil meddlers like Platini.
     
  7. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    If they'd been offered the same money in the more glamorous leagues, they wouldn't have gone to Russia.

    Although the Russian league is clearly better, it's the same reason why Didier Drogba is playing in China now. Nobody else would offer him a £200,000 a week two and half year deal.

    Certainly "lesser" leagues can attract top names, but they are going to have to pay massively over the odds to do so.
     
  8. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    That's my take too.

    Here's what is rapidly emerging IMO:

    The first tier is the Rich List. Here reside the so called "super clubs" -- essentially the top 20 clubs in the Deloitte Rich List or those very close to it with revenues to support EUR 100 million squads (or more). This group will be soon be joined by the smaller clubs in the EPL -- those that, thanks to shared TV revenue, have money to compete with the smaller clubs on the Rich List. Again, soon there isn't a club in the Premiership that can't afford a Schalke type payroll.

    This first tier is going to increasingly soak up much of the TV money in the soccer world, I think.

    The second tier is the wanabees -- the poorer clubs in other big Euro leagues or emerging clubs from other leagues. These are the clubs trying to join the Rich List, but absent a benefactor they don't have the revenue from conventional sources to do so. There isn't a single club from South America, Asia or North America with the organic revenue to join the Rich List -- Deloitte said in the most recent report Sao Paulo and Corinthians were the closest -- so most of the wanabees will remain wanabees.

    The third tier may be segmented, but it's really the clubs that survive not because of TV -- at least not enough to rival the first tier, or even the second -- but rather because of match day income. New leagues or not, this is essentially the old school -- people in the stadium support the team and are critical to its financial future. Smaller budgets, smaller clubs. That's MLS, and, really, most clubs.

    How exclusive is the top tier?

    Very.

    Again, let's say the new EPL TV deals are indeed worth $3 billion -- $150m per club. Now, they'll apply their formula and they have to fund the parachute payments, but let's assume even the lowest clubs get $125 million -- EUR 100 million, all from TV.

    Here are the non EPL clubs that at least have total revenue close to EUR 100 million. (The first number is revenue from last year or the year prior, the second is the corresponding wage bill for that year from Swiss Rambler).


    Real Madrid -- €479/€216
    Barcelona -- €451/€241
    Bayern – €321/€158
    Inter – €225/€234
    Milan – €208/€172
    Juventus – €208/€138
    Marsellie – €151/€101
    Lyon – €133/€100
    Hamburg – €129/
    Schalke -- €125/€63 (2009/10)
    Roma – €123/€101
    Valencia -- €117/€61
    Benfica – €103/
    Werder Bremen – €100/
    PSG – €101/€70
    Atletico Madrid -- €100/€64

    Close:

    Ajax – €98/ (2010/11)
    Stuttgart – €96/
    Fiorentina -- €95/€65
    Napoli -- €92/€39
    Sevilla -- €83/€57
    Lazio – €82/€38

    Again, I think starting in 2013, a club like Stoke could get as much from TV as Schalke generates from everything.

    It's incredible really.
     
  9. JasonMa

    JasonMa Member+

    Mar 20, 2000
    Arvada, CO
    Club:
    Colorado Rapids
    Nat'l Team:
    United States
    That's insane.
     
  10. Cosmo_Kid

    Cosmo_Kid Member

    Jul 17, 2012
    you totally misunderstood my post. I never said there wasn't competition. My point was that the NBA has done just fine without parity.
     
  11. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    What's really incredible is despite all the claims of the importance of being global, most of that revenue is still domestic.

    Liverpool almost certainly have more supporters in Thailand than in the UK (the place seems to be split Liverpool or Man Utd, with the rest nowhere) for example, but there's no comparison in revenue generated.
     
  12. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    Yes, but . . .

    . . . if the EPL's foreign TV contracts come in at the high end of the projection -- $1.5 billion, that's a lot of money. They'll match the domestic valuation. Half the TV revenue will be from the domestic deals, half from the foreign deals and in total they'll about match the NFL.

    Now, add in match day and commercial revenue and you're right, the majority of the revenue is still domestic. But for smaller clubs that are dependent on TV revenue, the impact of the foreign TV rights is magnified. For example, in 2008/09, 68% of Stoke's total revenue came from TV. The surge in the TV deals will likely increase Stoke's dependence on its EPL TV distribution even more in 2013/14. What's more, because the foreign money is distributed in equal shares without regard for a club's place in the table or the number of times it appear on TV, for lower table clubs they will likely get a bigger payment of foreign rights than from the domestic deals which are subject to the distribution formula that benefits the big clubs at the top of the table.

    Again, it will be about two years before we'll have the numbers to verify it, but I think it's likely that while the majority of Stoke's (or Wigan's or other small EPL clubs') revenue will be from domestic sources, the single largest source of revenue will be it's share of the EPL's foreign TV money.

    In many ways, it is the smaller EPL clubs that have been and will be the biggest beneficiaries of the league's global appeal.

    http://swissramble.blogspot.com/search/label/Stoke City
     
  13. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
  14. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    Yep.

    I'm still struggling with what it means for MLS.
     
  15. Pack87Man

    Pack87Man BigSoccer Supporter

    Sep 1, 2001
    Quad Cities
    Club:
    Chicago Fire
    Nat'l Team:
    United States
    I can't even get that far. Truth be told, I can't figure out what it means for the EPL, because in all reality, 95% of that revenue is driven by the top 10. At some point, there will have to be a reckoning, but I really don't know what form that will take. Every past movement has been the governing body bending over backwards for the big teams, in whatever guise they end up taking.

    For MLS, I think they simply need to worry about their own section of the globe first. I actually think they've got a good thing going with chasing an ever-improving Liga MX, and the two leagues together can push themselves to a height where they can begin to worry about the bigger Euro leagues. As you said before, MLS has mastered crawling, and seems to be working their way up to walking. Running simply has to wait at least until 2015.
     
  16. gsryank

    gsryank Member

    Apr 23, 2011
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    With the US market anything is possible if the sport grows sufficiently it could easily eclipse most leagues in Europe. If more Americans watch soccer there will be more playing soccer raising the quality of American players and MLS. This will result in more and more people tuning in to MLS games raising TV revenues. Considering the NHL has a salary cap around $70mil with much lower coverage than traditional american sports it would not be unfathomable for MLS to reach a similar numbers in the next 20 to 30 years. If that happens it would be much easier to acquire high quality players from other nations as I'm sure players would rather live in Chicago, Seattle or Boston rather than Liverpool or Manchester. From there international TV revenues would climb and possibly only be topped by a theoretical European super league.

    Of course all of this is hypothetical but given enough time whether it takes 20 or 60 years it is entirely possible for MLS to become the top league in the world.
     
  17. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    I do wonder if people will look at how such a redressing of tv distribution damaged Serie A, and looks to be damaging La Liga now, with it becoming ridiculously uncompetitive at the top.

    Every move in the last 25 years though seems to have been towards making it easier for the top sides to stay there. The premier league could go to a closed shop 10-16 team league, but you'd get exactly the same problems happening there as well, but with the likes of Spurs, Newcastle, Everton, Leeds maybe, seen as the struggling fodder that bring nothing to the table.
     
  18. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    Players though, professional sportsmen, would be far more concerned with the competition they are playing in than where they live. It's not as if playing for Manchester United means you have to live in council house in Burnage.

    It could be a factor, but for a player who was concerned about playing somewhere warm and sunny, Spain and Italy are more obvious destinations that Boston or Seattle.
     
  19. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    That's all possible and I've argued that myself in the not too recent past. The problem with that line of reasoning, however, is that it assumes MLS is and will remain "America's League." It is equally possible that Americans will view the EPL and the super teams like Real Madrid as their "major soccer league" -- the league that dominates television ratings and is, in Garber's words, the "most relevant", with MLS confined to a local presence that doesn't capture much of an audience beyond those attending the games. Honestly, it wouldn't take much for it to break that way IMO.
     
  20. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    With the English clubs getting this TV windfall, I think it may put real pressure on Serie A to either change its television revenue distribution formula to push more money to the top clubs, or perhaps even abandon it altogether with the next deals. With FFP, revenue is going to be all important, and if SR is correct clubs like Juve have seen their domestic TV earnings drop significantly by collective marketing, as the big English clubs surge ahead thanks to thier deals.

    I was also wondering what this is going to do to the clubs in the Championship. Even with larger payments to the clubs that drop, the revenue gap between the Premiership and Championship is about to get even larger. That can't be healthy either.

    So, it isn't just MLS that will be challenged by this. But as an emerging league, I think you are right in that it seems all of the recent changes -- financial fair play, this surge in the EPL's TV revenue, the Champions League revenue distribution formula -- are cementing the top clubs in place and cementing the EPL in place as the most watched league in the world. For those on the outside looking in, that's worrisome IMO because the revenue required to get in to the "big boy's club" is becoming so huge its not practical for most.
     
  21. Achowat

    Achowat Member+

    Mar 21, 2011
    Revere, MA
    Club:
    New England Revolution
    Nat'l Team:
    United States
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  22. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
    Realistically though, that's not an issue for the MLS for our lifetime, at minimum. Yes, we are in a "world market" for players but we aren't anywhere near competing with these types of clubs for those types of players and that type of money. Nowhere close. Our methodical approach has steadily moved us up the ladder and will continue to do so. We're a far cry from having to butt heads with the fact that THAT insane money line is where they are over there.

    I think a better look into the numbers would be comparison to our continents over here (NA - so Mexico/SA). Those are much more relevant I think.

    Honestly, I think we're seeing something that could end up being a benefit for our little domestic engine that could. European soccer is eating itself alive. There is a breaking point and it is coming sooner rather than later.
     
  23. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    People have been saying for at least 10 years that the bubble will burst etc, but those tv deals keep going up and up.

    The breaking point is more likely to come with ticket prices impacting the domestic market. Arsenal's once massive season ticket waiting list has all but vanished, for example.

    The foreign fans seem quite happy with an elite few clubs being at the top, as they don't support anyone else.

    The (il)logical conclusion to this all is a world where the game is dominated by an ever-decreasing number of top clubs. That would even happen if a european league came in.
     
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  24. Nico Limmat

    Nico Limmat Member+

    Oct 24, 1999
    Dubai, UAE
    Club:
    Grasshopper Club Zürich
    Nat'l Team:
    Switzerland
    The breaking point will result in a European Super League, possibly outside the world of UEFA and FIFA. Not sure how that benefits anyone outside the clubs involved. It would be a situation like the NHL and the IIHF. National teams would be relegated in status and the trickle-down effect of player transfer fees would reduce dramatically if not disappear altogether. Right now the NHL simply poaches players through contract breach and the European leagues receive nothing. There is no strong international governing body to regulate player transfers and compensation.

    Before that happens I would rather see UEFA run a European Super League directly.
     
  25. Emperor_Norton

    Jun 14, 2007
    Schalke made € 224m in 2011
    Dortmund made €200m in 2011

    And starting from 2013 the German league will also get more TV money.

    That doesn`t change the fact, that the PL is clearly the nr.1 - but I just wanted to add more accurate figures.
     

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