Soccernomics, Global Leagues, TV Money and Quality

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

  1. BrodieQPR

    BrodieQPR Member

    Jun 27, 2010
    Michigan
    Club:
    Queens Park Rangers FC
    Nat'l Team:
    United States
    Having watched my club struggle with this, I have to say that HttK is totally right... the Premier League is a vicious environment that's basically designed to kill off everyone who isn't a super club (or in Tottenham's case, a pseudo super club). And it's now gotten to the point where clubs like QPR are spending not to win cups or try for Europe like Leeds or Pompey but to stay up to get the money to justify what they're spending. It's probably the most absurd thing I've encountered in sport.
     
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  2. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    Let's push this a bit more.

    The new Deloitte Money League is out, and the top 20 clubs now generate 25% of the revenue in European Football. England has six giants, each generating in excess of $240M per year at the current rate of exchange. From there, you get some big clubs like Villa and Newcastle, but they are well below those six.

    Here is the information for all Premiership clubs from the Daily Telegraph:

    http://www.telegraph.co.uk/sport/fo...l-health-of-the-Premier-League-laid-bare.html

    That's six clubs in England with a population of 53M. (Bump it to 56M if you include Wales).

    Or, 1 club for every 9.3M people.

    Now, let's compare the U.S. pro teams:

    25 NFL teams have over $240M in revenues (and a couple just miss it):

    http://www.forbes.com/nfl-valuations/list/#page:1_sort:5_direction:desc_search

    4 MLB teams have revenues over $240M:

    http://www.forbes.com/mlb-valuations/list/#p_1_s_d5_

    1 NBA team has revenue over $240M.

    http://www.forbes.com/nba-valuations/list/#page:1_sort:5_direction:desc_search:

    And none of the NHL clubs generate that kind of money:

    http://www.forbes.com/nhl-valuations/list/

    That's 30 giant teams in a country of 311M, and 344M if you include Canada.

    Or, 1 team for every 11,5M people. Add back in the two NFL teams that just missed the mark, the Lakers, Maple Leafs and Rangers (some of the top revenue teams in those leagues), at it's 1 team for every 9.8M.

    Maybe -- just maybe -- that's the order of things.

    Perhaps it takes about 10M people to support a giant team capable of generating huge amounts of revenue.
     
  3. BrodieQPR

    BrodieQPR Member

    Jun 27, 2010
    Michigan
    Club:
    Queens Park Rangers FC
    Nat'l Team:
    United States
    I've been reading through the thread, great stuff all around but...

    ...I have to say that, while I agree that the language isn't a barrier, there's a certain cultural synergy that has lead to the EPL's rise to a privileged position in the US and the rest of the anglosphere. Outside of places like BigSoccer, where everyone presumably is a big fan of the sport, it's quite rare to find an (serious) American fan of a non-English European side... there's your Barca/Real fans here and there and some people who really dig the Bundesliga or were born in Italy and love Roma or whatever, but by and large the overwhelming reality is that Americans default to the English league. When I was first getting into soccer after the 2002 World Cup, my friends and I decided to pick soccer teams to follow. We had no real knowledge of the comparative strength of major leagues, but that didn't stop us from all picking English clubs.

    And I think the reason for this is simple: there's enough shared pop culture between Britain and the US that England, while undeniably a foreign country, is decidedly less alien to the vast majority of Americans than anywhere else in Europe. You can find references to Manchester United in American films and TV featuring British characters going back to the 1960's. No "how did you pick your club" thread on any soccer board is complete without the requisite "I'm a big Beatles fan so I go for Liverpool" (indeed, I suspect that's a fairly significant reason for their casual fanbase persisting in the wake of their recent collapse in form) or the ever popular "X is my favorite actor/singer/historical figure and they supported Y" posts. Birmingham and Chelsea are a lot easier for Americans to wrap their head around than Bilbao and Monchengladbach. And that all comes back to language.
     
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  4. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    The more I think about this, the more I think this is really the crux of it. The most traditional of sports in the most traditional of countries is changing rapidly, and like with any major change people feel a sense of loss and nostalgia for what was.

    But the thesis of Soccernomics, the Deloitte Football Money League reports -- they all make the same point: money is concentrating in the top clubs at a rapid rate and the price of competing with these clubs is escalating dramatically.

    There are several story lines, but the differing fortunes of Villa and Man City have crystallized this for me.

    Recall Randy Lerner bought his initial holdings in Villa in 2006 for about $100M and he's reportedly spent about $150M on the club since.

    http://www.forbes.com/sites/mikeoza...old-for-980-million-to-tennessee-businessman/

    Sheikh Mansour bought Man City in 2008 for about $337M, and his investment in the club now reportedly tops $1 billion.

    http://www.arabianbusiness.com/sheikh-mansour-s-man-city-investment-set-exceed-1bn--408288.html

    As the losses mounted at Villa, Lerner put the brakes on and talked about sustainability and the club living within its means -- all sensible things. But Villa has been essentially in a regulation battle for one and a half seasons and revenue is sluggish. If they drop with the new TV revenue about to flow into the EPL next year, Villa will lose a lot of money. The loses he has taken won't have improved the value of the club.

    The losses at Man City as huge too, but unlike Villa revenues are growing rapidly as is the value of the club. It didn't get much attention, but Chelsea, which really developed this blueprint, are well on their way to actually complying with FFP. With the surging TV and other revenues, I suspect Man City will get there too before long. Villa's fortunes are far more uncertain.

    I've also linked a story above that Lerner has just sold controlling interest in the Browns for just under $1 billion. A lot of money to be sure, but that's what even a bad NFL team costs these days, and everyone who has aspirations of owning an NFL team understands that.

    Reading about the sale of the Browns it hit me: for all the complaining about Man City, I think they recognized the changing financial landscape of the sport far better than Lerner did. They understood that irrespective of what they paid for the club, turning it into one of the elite clubs that would be positioned to take advantage of the new financial reality was at least a billion dollar undertaking -- no different than buying an NFL team. Lerner didn't understand that IMO. He had no trouble seeing that his NFL team was a billion dollar enterprise, but he didn't see Villa requiring the same investment and commitment.

    And he's sinking.

    As you say Brodie, Villa can't admit that something has changed.
     
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  5. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    the problem is that the major/minor league mindset tends to try and pigeonhole clubs into major/minor league brackets in England (and elsewhere) too, as if there is a set of clubs that are major league, and the rest are minor league clubs, when the reality is that it's much more gradual.

    Yes, you can look at a club like Derby and say they have virtually no chance (in the modern world of football finances) of mounting a serious title challenge, but it's much harder to draw the line at which clubs could stay in the premier league without having to continually pull rabbits out of the hat each season.

    OK, you can say that Hartlepool and Aldershot would require miracles, but being of a size were crowds in the low to mid twenty thousands seems more or less enough opens the door pretty wide.

    The emergence of the income gap between the divisions has certainly made things much more difficult - you don't get anything like the same problem in other divisions - but Derby had the support, the infrastructure, and seemingly the basic ingredients off the pitch to thrive. It was just on it that they screwed up big time.

    There have probably actually been worse sides than Derby in terms of playing ability, but they managed the feat of having a team that was no only weak, but had no heart either.
     
  6. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    Man City, like Chelsea, weren't bought as an investment though. They are simply a rich man's toy.

    You actually see similar stories in the semi pro game in England all the time, with clubs burning brightly for a few years, before just burning as they spiral down when the money runs out. Gretna were similar in Scotland a few years back.

    Chelsea are actually making huge strides to curb their horrific losses, but the impact has certainly been felt on the pitch, and Abramovich is unlikely to ever see a return on the money he put in.


    The sad thing with Aston Villa is that they are something of a sleeping giant, who really ought to be much better than they are. Historically they are one of the giants of the English game, and were basking in the glory of being European Champions just over 30 years ago, but they never kicked on. It's easy to see why an outside investor would pick Villa, but they seem cursed never to amount to anything.
     
  7. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    But the money, at least, in the EPL and, to some extent in Germany, also makes many small clubs a lot richer than before and then the question becomes of spending wisely.

    QPR sunk ~ $50M into their 2012-13 transfers after spending $35M last season. At some point, if you can't keep a squad up on $85M - not counting the additional tens of millions in wages - then you've got a bunch of morons in charge.

    What is clear is that the owners, aside of just sitting in their sideline boxes and sipping tea, need to work on additional revenue streams. In some places where clubs are geographically close to each other, sharing new, larger grounds might be the way to go. If QPR and Fulham can put their bids together, they may go places still.
     
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  8. BrodieQPR

    BrodieQPR Member

    Jun 27, 2010
    Michigan
    Club:
    Queens Park Rangers FC
    Nat'l Team:
    United States
    we did not spend $50 million, that's all press garbage. Our record signing is £7 million. We're not anywhere in the realm of $85 million on the pitch... maybe $65 million.
     
  9. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    One thing rich new owners often fail to grasp is that it's difficult to just throw money at a team and expect them to be built from nothing. The problem is that to attract mid-level premiership players to just-promoted, let alone championship level club, you have to pay them more than they'd get at a mid-level premiership club (or why would they join?)

    In short, you end up paying way over the odds for players who have often only joined for the pay cheque, and have little desire to put the effort in. Even at Man City, it took a number of years before the club became serious title contenders.

    QPR's ground is just too small to finance the sort of ridiculous spending the club has been sanctioning over the last few years, and has picked badly in their choice of managers, who have wasted money. Even their latest manager has a track record of spending big and leaving before the shit hits the fan.

    QPR are not a big club. Before 1967 they'd only ever had four years higher than the 3rd tier. Excellent management saw them punch above their weight for around 30 years, but inevitably it caught up with them in the end, but the consequence of that is that it's produced a generation or two of fans who think the top division is where QPR "belong".

    The bitter truth these days is that there just are a lot more sides better equipped than QPR to get up and stay up. They aren't even a big club by championship standards, and without ridiculous overspending fans will just have to face up to the reality that the future will see a lot more seasons outside the top division than in it.


    It's a bit of a stretch to say they are victims of a system designed to kill smaller clubs off though. If they go down and get knackered financially it'll be the result of profligate overspending by people who only had eyes on the rewards rather than the risks.

    And it's also worth pointing out that under a franchise style system, QPR would never get a sniff of a place. Nobody trying to cherry-pick the top 20 clubs would consider QPR for a second.


    Could things change if they got a new stadium? Possibly, but not by a huge amount. If QPR and Fulham could somehow build a new 30,000 stadium between them, there's no guarantee either would fill it. Fulham would probably want something bigger than that anyway to be tempted out of Craven Cottage.

    Even worse for QPR is that because their site is so small and hemmed in, it probably doesn't have a huge value if sold. And to rub it in, they've seen two larger sites (the old White City Stadium and the iconic BBC TV Centre) within a few hundred yards sold for large sums.
     
  10. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    That's true of most professional teams in the United States. With the exception of the Packers, the NFL actually prohibits corporate ownership. Some of the teams are still owned by the original families that started them, but for the most part what you have is a bunch of rich people looking for a "trophy" asset.

    Now, I suspect most of the owners do hope that the asset appreciates in value, but very few are dependent on the annual income the teams generate.

    I think in Villa Lerner thought he saw an undervalued asset that would appreciate significantly, but he underestimated the additional player investment that would be required of him to drive that appreciation.
     
  11. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    the difference being that unlike in the NFL, the sugar-daddy owner here has a chance to be that hero, loved by the fans for his contribution, and become an integral part of that glory. It's a (very) rich man's equivalent of leading Whitby Town from the conference to the premier league title on Football Manager, but perhaps a bit less sad to be proud of.

    I think Lerner was unfortunate, but found out the hard was just how difficult it is to take a club to another level (although he may achieve that in an undesired way this season).
     
  12. BrodieQPR

    BrodieQPR Member

    Jun 27, 2010
    Michigan
    Club:
    Queens Park Rangers FC
    Nat'l Team:
    United States
    Eh, I'd say historically we're a bigger club than Fulham. We might still have more actual fans than Fulham. That they've found a way to stay up for as long as they can is the proof that anyone can find a way to do it. I also don't think we're such a small club as you claim... we could probably fill a 25-30,000 seat stadium which puts us at the high end of the Championship range.

    I wouldn't say this in a room full of hardcore QPR fans from Shepherds Bush, but the solution for QPR is to build the new stadium somewhere further west like Park Royal and reap the new fanbase that comes from establishing yourself in the large suburbs with no league sides like Ealing. That's the only way for QPR to ever grow into the kind of club that can justify the kind of expenditure it takes to be what our ownership and fans want us to be. I don't think it's impossible, though, if we stay up and get that $90+ million, we'll be debt free.
     
  13. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    Fulham aren't a big club either though, and are also just one of a stack of about 25 or so clubs sitting outside the top 20 in terms of fanbase.

    A new ground would probably see a decent QPR team getting around 18000 in the championship, but that isn't anything special these days.

    The huge risk there is losing more fans than you gain. It would take along time for people in a new area to regard a club plonked in their neighbourhood as their team, especially if they support someone else.

    You won't. You'll still have huge bills for salaries etc next season too, and there's little doubt that the extra money coming in will just go straight to the players in the form of higher wages, just as every single other tv cash pay rise has done.
     
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  14. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    I think yous fellers misundestimate the next year's and the next decade's EPL. With so much money rolling in, there'd be a slew of talented teams in the league ... to be more exact, twenty of them. Even clubs like QPR and Fulham will be able to get 30K for an average match (aside of the "big travelers" like their London neighbors, ManU, 'Pool, etc).
     
  15. BrodieQPR

    BrodieQPR Member

    Jun 27, 2010
    Michigan
    Club:
    Queens Park Rangers FC
    Nat'l Team:
    United States
    I think the London clubs will, because there will always be a tourist element in the capital (though even in this scenario, QPR and Fulham would suffer the comparisons to the other 4 London clubs with bigger fanbases and more name recognition). But I don't think you could magically turn Swansea or Wigan into a big club.
     
  16. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    That's a subtle but important distinction. The TV money pouring into the EPL will distance those clubs from all but the biggest European continental giants, however, local revenues will distinguish the EPL teams from one another.

    For that reason, while they may be able to outspend most continental clubs for better players, I'm not sure the new TV money will make the smaller EPL clubs any more competitive with those EPL clubs that have huge match day or sponsorship revenues to go along with the TV riches.

    In other words, the top of the table won't change much IMO.
     
  17. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    There was a good reminder this weekend that these challenges aren't unique to MLS. For those that missed it, the Melbourne Victory v. Sydney FC "big blue" game was on FSC. The atmosphere sizzled -- AAMI Park, built for soccer, was full and loud, the broadcast quality was first rate, and yet with all of that the game itself just struggled under the weight of misplaced passing and unforced errors. I won't spoil the ending because I haven't seen it yet -- I gave up at the half and I'll try to watch the rest later this week (preferably with a lot more alcohol). But unless the second half was very different, what could have been a wonderful advertisement for an emerging league was undone because the quality simply wasn't very good IMO, even by MLS standards.

    For someone who doesn't follow the game, I'm sure it would seem odd that big, cosmopolitan cities like Melbourne and Sydney have teams that collectively earn less than a single modest transfer fee paid by an EPL club like very small market Wigan.

    But such is the economics of television and the modern game.
     
  18. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    But the table will become much more condensed because instead of the 8-to-1 payroll difference between the top and the bottom, it will be close to 3:1 for most teams.

    IMO, though, it would be wise for the EPL administrators to throw in about $100M additionally to the promoted clubs as they will be pitted against clubs spending $50M-$100M annually for transfers for a decade straight.

    Not sure 'bout swans that live in the park, but Wigan is unlikely.

    However, there are still a few pogo sides that can do well in the Prem, once there - Leeds, Nottingham Forest, Sheffield teams, Derby, Middlesbrough, etc.
     
  19. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    It already is though -- the UEFA report even tests it. Page 70 of the 2010 report indicates that the top four clubs in the EPL spent 3x more on players than the other 16 clubs -- a fraction "better" than the Bundesliga, which was 3.1x, and light years away from Spain at 6.4x, or Scotland at 8.9x.

    Again, they are all getting a lot more TV money -- perhaps double -- but since only the international TV money is shared equally while the domestic money depends in part on table position and how many times they are televised, the top teams will still be getting more new money than the bottom teams.
     
  20. deejay

    deejay Member+

    Feb 14, 2000
    Tarpon Springs, FL
    Club:
    Jorge Wilstermann
    Nat'l Team:
    Bolivia
    Their stadiums are too small.
     
  21. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    Sadly that just isn't how it works. Crowds are driven by clubs' respective quality, not their overall quality. 14th place still feels like 14th place, even if the ability is greater than 5 years previous.

    Other leagues are getting richer too, so it really just adds up to little more than paying more for the same.

    None of the many tv cash hikes have had that impact, so it's unlikely this one will either.

    I actually agree with that, giving promoted clubs a bit of a leg-up, although the risk is they could spend the money unwisely and be hugely in the crap if they still went down.
     
  22. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    The money relating to the table is small, about $1.3M per place.

    The difference in total TV money distribution was £20M from the top (ManU) to the bottom (Wolves).

    http://www.sportingintelligence.com...gue-prize-and-tv-payments-for-2011-12-150501/

    The issue has been addressed.

    This doesn't reflect the attendance figures for the lower tier clubs like Sunderland, Southampton and Aston Villa and I doubt it would effect Leeds and 'Boro, if those were promoted.

    http://soccernet.espn.go.com/stats/attendance/_/league/eng.1/barclays-premier-league?cc=5901

    No, the other leagues aren't getting richer. Germany is doing OK. Spain is way in debt. Italy is dilapidated. France is overtaxed.


    Past hikes most definitely had an impact. When I first began following Fulham with Bocanegra and McBride, it was one half Championship-one half Premiership roster (Barry Hayles played for Fulham then ... and to call him Championship quality would be a stretch).

    Now Fulham has Berbatov, Rodallega, Petric, Duff, Ruiz, Karagounis, Schwarzer, Hengeland, Riise, Kacaniclic and Hughes, who are full time internationals (Berba may have retired) with their respective nations. The jump in quality has been tremendous and the league's TV income has reflected it.
     
  23. RafaLarios

    RafaLarios Member+

    Oct 2, 2009
    Medellín
    Club:
    Atletico Nacional
    Nat'l Team:
    Colombia
    I don't have a horse in this race.... but calling Rodallega in the same vein as Berbatov is suspect. Rodallega sucks, I still don't know what the hell is he doing in the premiership while other Colombian players are way better than him.
     
  24. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    Rodallega scored 10 goals for Wigan in 2009-10.

    Not Berba in his prime but no chopped liver either.

    And about half a dozen tiers above Barry Hayles.
     
  25. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    their crowds rise because they get promoted/do well, and fall when they go down/struggle.

    That's a result of the games becoming a more/less attractive prospect, not because of the stars of the team.


    and do you think English clubs are more of less in debt than in the past?

    Fulham overspend. They are something like £180 million in debt.

    Their team would not be as good without that overspending.

    And you miss the point that everyone gets more cash. The 10th placed club getting more cash doesn't make it easier to do well because all the other teams are getting more too.

    The popularity of the game has increased across the board. The doubling of crowds in the 3rd and 4th tiers is not a result of the quality of play at Rochdale or Orient increasing significantly.
     
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