Where Do the Dollars Go? My analysis of our Soccer GDP.

A while back I started a thread asking if anybody knew what the Professional Soccer GDP (for lack of a bettter term) was in this country. Specifically, I wanted to know how much money was spent on the rights to broadcast soccer and how much was being collected at the gate of soccer matches around the country.

I had a few related reasons for seeking the answer to this question as follows:

1. I wanted to understand how the sport of soccer compared economically to other sports in this country. MLS does not compare apples-to-apples with other major sports leagues in this country because it is competing on an international scale. One could argue that hockey and basketball also face international competition but the NHL and NBA have the luxury of being the oldest professional leagues in their repsective sports and are thus are so dominant over other leagues that the winner of those leagues is the defacto club champion of the world. Not that I agree with this 'world champion' notion in those leagues but it is an indication of the gulf between them and the competition.
   
   
2. I wanted to understand what percentage of our Soccer GDP (SGDP) is being lost to foreign sources and thus what percentage of our soccer dollars stay within our borders and grow the sport here
   
   
3. I wanted to understand how much of that SGDP can one reasonably hope to move into the domestic column over the next ten years due to the willful choice of fans to abandon their commitment to foreign leagues or supplement their commitment to foreign leagues with commitment to domestic soccer.
   
   
4. I wanted to understand how those lost dollars are hurting the growth of the sport domestically (this one is for a much broader discussion).

Since there was no answer readily available I decided to try to pull together as much information as I could to come up with a number. The number I present here is, I'm sure, inaccurate. But I have tried to always use what I would call naively low estimates so that the overall estimate for SGDP is conservative and, to a lesser extent, the impact of interest in foreign teams and competitions (expressed as a percentage) is minimized.

In all cases where broadcasting fees were available, I used the most recent agreement available. For example, I am using the global FOX- Bundesliga deal which starts in 2015 to estimate the dollar figure for the US broadcasting rights. Also, for tournaments which do not occur every year, I have annualized the deals rather than, for instance, show a spike in World Cup years.

I would appreciate constructive feedback on any of these line items as I'm sure some of them could use with adjustment.

I will also point out that there are some critical pieces missing at this time such as: revenue from sale of licensed gear, revenue from some of the non-domestic sources which ultimately becomes domestic revenue (USSF gets some portion of FIFA revenues, CONCACAF revenues and revenues from foreign friendlies held within the US). There might be other sources of such conversion as well.

My estimates are as follows (Note that for certain domestic cup competitions, I have listed the rights fee as $0 as it seems the rights may be tied to the broadcast rights of the domestic leagues).

Total TV Broadcasting Rights: $708.75 million
--FIFA Competitions(World Cups, Club World Cup): $151 million
--UEFA Competitions(CL, EL, Euro, Euro Qualifying, WC Qualifying): $61.5 million
--CONMEBOL Competitions(Copa America, Copa Libertadores, WC Qualifying): $17 million
--CAF Competitions (African Cup of Nations): $2 million
--AFC Competitions (AFC Asian Cup, AFC CL, AFC Cup, East Asian Cup): $7.25 million
--CONCACAF Competitions (CL, Gold Cup): $15 million
--Foreign National Sides: $11 million
----Mexico: $3 million
----Spain: $2 million
----Germany: $2 million
----France: $2 million
----England: $2 million
--Foreign Leagues and Cups: $350 million
----Liga MX: $50 million
----Liga de Ascenso: $5 million
----Liga Nacional de Futbol de Guatemala : $3 million
----Costa Rican Primera Division : $3 million
----Salvadoran Primera Division : $3 million
----Liga Naciaonal de Futbol Profesional de Honduras : $3 million
----English Premier League : $83 million
----English Football League Championship : $10 million
----English FA Cup : $10 million
----Football League Cup : $5 million
----La Liga : $50 million
----Copa del Rey : $5 million
----SuperCopa de Espana : $0
----Primera Divison de Argentina: $3 million
----Campeonato Brasileiro Serie A : $3 million
----Copa do Brasil: $0
----Serie A : $20 million
----Coppa Italia: $0
----Ligue 1 : $10 million
----Coupe de France : $0
----Bundesliga : $70 million
----Eredivisie : $1 million
----Scottish Premier League: $3 million
----Portuguese Liga : $5 million
----Hyundai A-League : $1 million
----J-League: $1 million
----Russian Premier League: $3 million
--Domestic Leagues and Teams: $94 million
----MLS: $90 million
----NWSL: $1 million
----USMNT/USWNT: $3 million

Total Gate Proceeds: $274.25 million
--Matches between two foreign clubs: $46.5 million
--Matches between two foreign national sides: $7 million
--Gold Cup: $17.5 million
--Matches with one foreign club and one domestic club (foreign share): $21 million
--Matches with one foreign club and one domestic club (domestic share): $21 million
--USMNT matches: $1.5 million
--USWNT matches: $0.75 million
--MLS: $150 million
--NASL: $5 million
--NWSL: $4 million

Total SGDP: $983 million:
--Non-Domestic: $706.75 million
----FIFA: $151 million
----CONCACAF: $32.5 million
----Other Confederations: $87.75 million
----Foreign Leagues, Cups and Teams: $417.5 million
----Foreign FAs: (National team tv rights and gate proceeds): $18 million
--Domestic: $276.25 million
----MLS: $240 million
----USMNT/USWNT: $5.25 million
----NASL: $5 million
----NWSL $5 million
----Domestic Share of International Club Friendlies: $21 million

A few thoughts about the numbers (and I hope to hear the thoughts of others as well).

--The $708 million in TV rights fees is about 3.5 times the NHL's deal with NBC for US broadcast rights. Even if you look only at broadcasting rights for leagues and cups, the total is 125% higher than the NHL/NBC deal. It's not exactly apples to apples though as NHL teams are probably able to command a bit more for regional broadcasting rights than are MLS teams.

--$708 million in TV rights is respectably close to the Big 3 leagues – though behind all three to varying degrees.

--The numbers presented highlight one of the problems facing MLS. Given the current state of affairs, if growth of interest in the sport resulted in $100 million in monetization, MLS would likely only see about 25% of it. Meanwhile, roughly 50% of it ends up in the hands of foreign teams (and or their confederations/federations). No other major sports league in the United States faces that sort of obstacle.

– Please consider this a work in progress. I am posting the details here with the hope that others can contribute to refining these numbers where possible. If you feel I am missing something or that you can add to the conversation in any way, please let me know.

 

blacksun, those are some great sources of info. Thanks!

What I am going to do is get all of this into a Google doc once I've updated the domestic dollars based on the info you have provided. In that doc, I will list the broadcaster (for TV deals), sources of information and methodology where I've made estimates.

Admittedly, some of the estimates are just spit-balling. And this is why I'm hoping others will join in. There are lots of examples in the world where a group of spit-ballers can actually come up with reasonable estimates (see the delphi method and Francis Galton's study of the county fair ox weight guessing contest).

Regarding the two TV deals you brought up: I'll show the following reasoning in the spreadsheet but if you want to provide feedback in the meantime, feel free. For La Liga, I admit that could be high but I figured that if there is one league (aside from MX) that is going to command big dollars for Spanish language broadcasts, it is La Liga. Additionally, I am pretty sure beIN is owned by Al-Jazeera and so there are some deep pockets behind those channels. I know that I've seen highlights from the el classico's shown on other stations (ESPN?). But you are probably right. And for the time being that my estimate is high. For the time being, I'll cut the estimate in half.

As for the Championship, my thinking was as follows. First it is a natural 'second league' for people who follow the Prem (for obvious reasons). Second, due to its 46 game schedule it has a number of match days when the big boys are not in play -- so it is probably an attractive property for a network looking for content. Finally, that contract includes the promotion playoffs for The Championship, League One and League Two. These are decent events which hold interest even for people who don't follow those particular leagues.

You might be right that 10 million is high. But personally, I doubt it's going for less than five. Just my opinion.

 

Sorry it has taken so long, but I finally pulled all of this into a Google Doc for easier review and commenting (you can comment on the doc itself or here in this thread if you wish). The doc I've linked below has two tabs -- one for TV revenue and one for gate revenue.

I was able to find a really nice resource (although it seems to be about four years old) which breaks down a lot of the numbers I was after (though not all of them). I can't tell for sure but it looks like it might come from some sort of internal MLS Powerpoint presentation or other sort of document. In my 'rationale' columns in the linked doc I refer to it as the MLS Powerpoint.

I have sorted the TV Revenue sheet by dollar amount because fixing big dollar mistakes will have a greater overall impact on the total than will fixing small dollar mistakes.

I hope there is still some interest in this subject. I look forward to your constructive criticisms and assistance that you can provide in refining these numbers.

Google Doc: https://docs.google.com/spreadsheets/d/1CCa1wKEWHD5e-YvDbtaqZXs1M3b_GFPQVvBozsUm54g/edit?pli=1#gid=0

MLS Powerpoint: http://assets.sbnation.com/assets/1125802/MLS_portion_of_soccer_dollars_in_US.jpg

Article where I found MLS Powerpoint (deep discussion on some of these points): http://www.rslsoapbox.com/2012/5/18...it-is-all-about-the-numbers-tv-attendance-and

 

OK, I didn't realize that sharing the doc as above exposed my identity. I redid the doc in an account that isn't quite me:

https://docs.google.com/spreadsheets/d/1CCa1wKEWHD5e-YvDbtaqZXs1M3b_GFPQVvBozsUm54g/edit?usp=sharing

(Unless I'm missing something, there is no edit feature. Perhaps a mod would be willing to put this link in my last post to reduce confusion).

 

Thank you, bigredfutbol. I appreciate the assist.

For those following, I've updated the spreadsheet to try to put some method behind the madness for the domestic league estimates. Also, as requested, I reduced the estimated value of the Championship (and I also reduced the value of the League Cup). I also decided to indicate that the 'pure' estimates were basically guesses (hopefully I'll get some feedback on the perceived accuracy of those guesses). Finally, I added four new rows to the TV Revenue table.

1) International Friendlies
2) International Club Friendlies
3) Primera Division Peru
4) Primera Ecuador

For the enhanced estimates, here is what I did.

I used the LigaMX deal as a baseline and then used a few assumptions (some of them cultural -- and I apologize if these assumptions seem overly general) to develop estimates of the value of the broadcasting rights here in the states. Some of the assumptions I used are as follows:

I. There are two primary attributes which will drive viewership/interest in a particular league: 1) The size of the domestic population which identifies its cultural heritage with the league in which that country plays and 2) The overall quality of the league.

II. Hispanic-Americans are more likely to follow the domestic league of their national heritage than are Americans of European decent (with the possible exception of Russian-Americans). As a concrete example, I assumed that a Honduran-American is more likely to take an interest in the Honduran league than a Swiss-American is to take an interest in the Swiss league. I realize such an assumption might not sit well with some but I think it's probably accurate simply because, relatively speaking, a greater percentage of Hispanic immigration to this country is 'recent'. Additionally, the commonality of the Spanish language has permitted a cultural continuity among Hispanic cultures. (Note I'm reluctant to get too deep into these sorts of assumptions because invariably they won't apply to everyone. I also hope that any discussion of this methodology does not descend into a debate about cultural assimilation etc.)

III. Hispanic-Americans are more likely to have an interest in soccer than the American population as a whole.

IV. Non-sports cable stations which cater to Hispanic-Americans are less widely distributed than other cable stations.

V. In terms of quality, the Russian Premier League and LigaMX are competive/close to equal

Using the above assumptions, I was able to come up with all of the estimates that are now highlighted in red on the spreadsheet. For strength of league I found a few (admittedly old) calculations of CONMEBOL and CONCACAF coefficients. Fortunately, the CONMEBOL included Mexico (which I guess was playing in the Copa Libertadores). I then combined those coefficients with another source which calculated CONCACAF coefficients to fold the Americas into one coefficient ranking. I then used the Russia Premier League ~= LigaMX assumption to pull in European leagues as needed.
For Latin American leagues I tied the value of the contract much more tightly to the size of the immigrant population here in the states (based on the above assumptions) and for European leagues the main determinant of value was the quality of the league.

Some comments on the updates:

To my eye, the following values look fair: The Netherlands, Russia, Argentina, El Salvador, Guatemala, Peru, Honduras, Uruguay, Australia, Japan, Costa Rica, Switzerland

But these ones seem a bit high to me: Portugal, Brazil, Ecuador

Meanwhile, the Scottish Premier League might be low given that it is on FS+.

As always, hoping for feedback.