Soccernomics, Global Leagues, TV Money and Quality

The interesting thing is that in Germany and Holland, where clubs have (Bayern apart) turned their attention inward rather than try to overstretch themselves, the game is booming. It seems that the fans seem to care more about the matchday experience than the international stage.

Of course, it's possible that the armchair fan at home, who never pays to watch his team play, may have a different take on things. It's certainly made the German league the envy of Europe. Reading clubs forums in England, there doesn't seem to be any enthusiasm for a european league at all, even from the fans of the top clubs

 

Esperance Sportive de Tunis and Kashiwa Reysol.

For the 2012 CWC so far it's Chelsea, Corinthians, Monterrey and Auckland City.
Not that I follow it or anything.

As I've stated previously a Super League would need parity through equal revenue sharing and some kind of playoff model to keep things interesting. Personally I think it's inevitable, especially if a strong league emerges outside UEFA. The top European clubs are not going to sit idle under threat.

As for MLS the attention should really lie in the Western Hemisphere for the time being. Keeping up with the LMX and the Brazilian league will be challenging enough.

 

Well, we know that it won't be ALL teams simply because the economics in the locations won't allow it. Hell, it isn't even that way in the EPL. Even in the projections if you take away the TV monies you see the disparity.

So the cyclical question is, at the levels of the Wigan/Sunderland or bubble type teams like Wolves ... would that be enough to compete (which I don't really think is the appropriate take for our lifetime) or bring relevance to the league ?

I think it would. Having teams range from 10-30m (with perhaps 1 or 2 above that) payrolls would significantly increase the bargaining power of our league and in turn significantly increase the relevancy of the league in the eyes of the soccer fan (all types). Remember, there are plenty of other variables working in the favor of US based teams/leagues that aren't money. As our ability to simply make competitive offers improves, these variables come more into play. I think that would lead to our having teams with payrolls at the lower EPL end/upper Championship end that would actually be on par talent wise if not better. With payrolls like that there's no reason we can't poach some Mexican stars, keep some of our promising players, and start drawing the 2nd and 3rd tier Brazilian/Argentine players. Teams all over the world make a living in their leagues and in international club competitions with these guys.

The MLS rising tide will increase the other things such as the CCL. There's no other choice if the league truly wants to grow. In turn, the Liga MX will have no choice but to give a crap about it. We don't have the federation strength further down the ladder after that but having a true competition between American/Mexican club teams will absolutely be a drawing card.

It just takes that first step to get things in motion ... just look at the explosion since Beckham signed and validated the league. That first real, significant jump in payroll (which I admit will have to come from within in order to get it moving) will be that first step. I feel things will start taking shape after that.

 

NHL's average salary growth over the last 20 years:

https://docs.google.com/a/bitondola..._smeSBJsdFhydzU3OFBVdkRmUllXNzlCQWk3Y3c#gid=0

In 1990 the average NHL salary was $270k. It then exploded and went through 5 years of 20-35% growth to $892k in 1995.

 

I'm just amazed to actually see a reasoned discussion in the You Be The Don forum. Are you guys lost?

 

Pro/rel is the answer.

Pro/rel will get the USA to win the world cup in Brazil.

Pro/rel will make MLS more popular than the NFL by 2020.

Pro/rel will fix the world economy

Pro/rel is the cure for cancer

Pro/rel will make health care cost go down 20% per year.



There I fixed the thread.

 

This is not a model that MLS should try to duplicate. At least not until FIFA does something to actually increase the competitiveness and solvency of European football. The only way to reach those heights is to allow MLS teams to be run irresponsibly, as most of the top English clubs are.

A much more sustainable model would be good for everyone. All the world's talent wouldn't be concentrated in a few clubs, which would mean more competition overall.

 

Actually, I think the 15-30$M range would do it and at the very least be right there. Outside of the Chicharito's, that type of salary budget would absolutely put us in the running for top Mexican players. I also feel that would give us the Dayro Moreno's of Colombia, Mauro Boselli's of Argentina, Ronald Vargas's of Venezuela, Marcelo Diaz's of Chile, etc etc etc ...

Those guys would absolutely draw attention to our league and grow the on the field product to a very competitive level. Every educated guess we've made on these boards puts the Liga MX teams at 5-20M (tops) payroll. I have every reason to believe that that kind of cash would go much further for an American team than a Mexican one.

 

Is MLS' business model based around getting big enough to compete with the top clubs? I'm skeptical. The US/Canada is a huge market where generating $1 billion in revenues is not a big deal, relatively speaking. Growing to that level in a decade or so doesn't strike me as particularly difficult, so long as MLS sticks with an intelligent business plan.

MLS' target demographic isn't "fans who will only watch teams as big as Man U or Barca." Those guys are tools and will probably always find an excuse not to follow their local MLS team. I think the goal of becoming one of the top leagues by year X is a relatively flexible target.

 

Specially if they live in Atlanta or New Orleans

I mean fans that only watch the Galaxy or DC United will probably always find an excuse not to follow their local USL/PDL/NASL team.

Could it be argued that some people only care a little about soccer and if they have to pick only a few games to watch per week they would rather watch the best teams?

Is understandable how some people would rather watch the NFL over the UFL even if they live in Las Vegas or Omaha.

 

Kind of a follow up to the previous posts, has anyone figured out what percentage of the US/Canada can reasonably be considered to have a local MLS team?

 

So, would you define that as the number of people in the 18 media markets with teams as a percentage of the combined populations of the US and Canada?

 

Using Arbitron radio market populations for Spring 2012 for the USA only (giving the radio market numbers and names):

1. New York: 15,694,200
2. Los Angeles: 10,860,300
3. Chicago: 7,819,200
4. San Francisco (using this for San Jose): 6,131,500
5. Dallas-Fort Worth: 5,301,200
6. Houston-Galveston: 5,025,800
7. Washington, D.C.: 4,522,700
8. Philadelphia: 4,493,700
10. Boston (using this for New England, the number would be higher if I added in Providence-Warwick-Pawtucket): 4,021,100
13. Seattle-Tacoma: 3,477,300
20. Denver-Boulder: 2,362,700
23. Portland: 2,124,500
31. Salt Lake City-Ogden-Provo: 1,716,200
33. Kansas City: 1,640,300
35. Columbus: 1,523,900
Total: 76,714,600

The radio station ratings are only for people ages 12+. If you assume a life expectancy of 84 with all ages equally likely, 1/7th of the population would be under age 12 and that would make the total 89,500,367. The total 12+ population for all radio markets is 214,528,200, and 35.8 percent of that is in the markets I listed.

 

It's super, super reasonable to include Rhode Island which, for the record, is closer to the Revs than Boston proper

 

Your optimism is encouraging. However, if we accept EvanJ's 35.8% number, and that MLS revenue is largely contingent on people who show up to the games, I still find it difficult to see how the league can reach $1 billion. Yes, the market here is huge. Nevertheless, the question of how much exposure or interest MLS generates in the rest of the country seems in doubt. How much is MLS even on the radar in those areas with teams? I have no idea, but I would imagine that it would improve somewhat with better quality players. However, even with a big jump in quality, I don't think people outside the 35.8% would take much notice. All that said, I do think MLS can reach their goal of becoming a top league, it's just going to take longer that 10 years. Soccer is simply not that popular in this country. Barring massive investment from wealthy patrons to force the issue, we're probably going to have to wait for the tortoise to finish the race.

 

I think what we're missing here is how the other European leagues react to the explosion of revenues in England. As things stand, England stands to become the de facto European Super League (outside of the top clubs in a few European leagues, the number of which is definitely less than 20. What can everyone else do about it (not just MLS)?

Let's take a look at Spain. Their league (well, 90% of their league) AND their economy are in a shambles. We can fairly assume that their recession won't last forever though, so let's set that aside since we are talking fairly long-term in here.

Now, many of Spain's clubs are going through tough financial times (Atletico, Sevilla, others come to mind). This year they started fighting back to gain a more fair distribution of TV revenues.

Let's say that Barcelona and Real Madrid, seeing how quickly they are being left behind by the English league, see the light and finally give in to the collective-style TV rights that most other leagues have (keep in mind that this is going on in surrounding countries like Portugal and Italy, leagues notorious for concentrated talent, already).

I'd say that a Spanish league following the English TV distribution model and level of competitiveness becomes (or, increases the degree to which it already is) to the Spanish-speaking world what the Premier League is to the English-speaking world. They are in a position to challenge Premier League international superiority in this respect more than anyone else (there isn't much of a "German" or "Italian" speaking world).

In Asia, there's the Chinese league. I don't know much about it, to be honest, but for obvious reasons that league has huuuuge domestic potential. They could really draw a lot of talent from the rest of the world.

As for us, I don't think these developments affect MLS all too much. In the end, MLS will slowly but surely convert fans anyway, due to it being the local league. The next TV contract will probably lead to a jump in wages. MLS' primary goal is still beating Mexico and the rest of the Americas.

So right now, the most lucrative leagues on TV in America are: Champions League, Premier League, the major European leagues, MLS. In that order.

In 10 years, it could be: Premier League, Champions League (perhaps a European Super League with or without England and Spain clubs?), La Liga, MLS. If the Chinese league continues to grow as quickly as it is it could make its way on TV here in a minor role (like Ligue 1 on Fox Soccer Plus/bein sport at present).

Who are the real losers in these developments?
-Non elite European clubs, who will see themselves shut out of an inevitable European Super League and whose international TV value drops to near zero (if there was any to begin with). I predict such a league will be a large, but closed one (perhaps with more than one division) with collective TV rights. The Udineses and Bragas and St. Paulis and Besitkas of the world will be quickly left behind such a setup.
-The Latin American leagues, if the Spanish clubs do as I detailed above. On the other hand, if Barca and Real ditch the others for a European League, the Spanish clubs will have their own collective TV contract for their own league, but it will be all for nothing, since their TV contracts won't be much higher than they are now.

Everyone else ends up a net neutral. MLS will continue to grow with its sound financial policies, the rest of the leagues in the world will continue to struggle competing against the elites.

 

So Barcelona and Real Madrid will see the British teams making lots of money and buying better players and their idea will be to keep less revenue? I do not buy that.

If revenue sharing does happen in Spain it will be because it was forced upon the big two.

If by American you mean the USA, I bet Liga MX is more profitable (well the TV deals are worth more) than MLS, shit maybe even more than Europe league.

Realistically there are only 4-6 leagues competing with the élites, all others are caving out a spot for their local population. So what you end up is fans of a country say Japan or Norway or the USA following the local league for live sport, and following the top world league for quality soccer on TV (be it EPL or European Super League). In my case La Liga.

 

I don`t believe a European Super League is inevitable - on the contrary it is IMO extremely unlikely in the near and middle term. From a German point of view, I can`t see Bayern joining such a league - they are too risk-averse and exchange a near certain finish among the top 3 of the Bundesliga with a possible future as a mid-table team in a European Super League is not in their interest.

Why would only MLS continue to grow and the other leagues in the world not? The Bundesliga is growing very fast in revenue terms- and the global success of the Premier League is not an obstacle for future growth IMO. And the same could be said for smaller European leagues such as the Swiss,Austrian,Polish ones.

 

Outside of the elite leagues like the EPL, Bundesliga etc., many leagues have a fairly low ceilings on growth. Leagues in smaller countries like Switzerland or Austria don't have much room left for domestic growth (as they have saturated their local markets, to a large extent) and no real path to growing into foreign markets. Those leagues are about as big as they're ever going to get. Over time, they're going to become more and more marginal, in a relative sense, when compared to leagues that still have growth potential.

For leagues to grow in the future, they need to do at least one of the following: (a) grow in their domestic market and/or (b) grow internationally. The elite leagues like the EPL are about as big as they can get in their domestic market, but their brand is popular enough for them to grow internationally. MLS (and leagues in places like China, Australia and India) have the opportunity to grow their brand in their home markets, but their international growth is a going to be a lot tougher.

 

These numbers are a few years old but they were the latest I could find. Soccer television revenue in the US was worth $126 million in 2009. MLS got only 7% of that (9 million).

Liga MX : $50 million
EPL: $20 million
La Liga: $16 million
Champions League: $10 million
MLS: $9 million

There is a lot of television money out there but very little is going to MLS. EPL and the Champions League should get a significant bump in money here after their next contract. It will be interesting if MLS can even hold on to their 7%.

http://www.rslsoapbox.com/2012/5/18...it-is-all-about-the-numbers-tv-attendance-and

 

2009 is prior to the new deals w/ espn and nbcsports. MLS is certainly generating more revenue now.

 

If MLS could get 4 teams in the MLS to spend $20 million, it would benefit all teams despite the lack of financial parity. These big teams would be shown on television more and ratings would rise which would lead to higher revenues for the league. The difference in quality between a $20 million club and a $3 million club is huge and it would make it much more appealing to neutrals. It would also give the bandwagon neutral fans someone to get behind and root for.

Despite the lack of financial parity you would get by allowing teams to spend, I don't think it would have a negative impact on the lower revenue teams. There would still be 6 playoffs spots they could fight for. I think most fans would be happy if there team made the playoffs. It would also make the playoffs more interesting because you would get David vs Goliath match ups with the potential of big upsets. I believe the positives for allowing teams to spend far outweighs the negatives.

 

Do not forget to take into account 5-10 million that will be needed to purchase the contracts for the players making 1-3 million per year, those types of payers are much harder to come by as free agents, unless they are over 30.

To get players like Jackson Martinez, Chupete Suazo, Christian Jimenez, teams will pay a few million in transfer fees.

So Salary 20 million per year and add a transfer budget of 5 million per year, now the transfer budget could be helped with selling players on to better leagues, players that they got young and cheap or American players they got for free in the draft.