Regarding the valuation, I think is like comparing movie studios in Hollywood vs Bollywood. Bollywood produces more movies and they sell more movie tickets than Hollywood, yet Hollywood crushes Bollywood in revenues, because of the price points that Hollywood can collect. MLS may have less fans overall but the revenue per fan on dollar value is probably higher. There is a reason on why the Mexico national team plays more friendlies in the USA than in Mexico. The average mexicanAmerican fan has more disposable income than the average Mexican fan.
Here is where you are wrong, we are not talking hard core fan, but casual fan. Does a casual fan want to watch Ajax vs (insert low table team here) or Real Madrid vs Man U. The casual fan in the Netherlands vs the casual fan in Morroco. TV availability has done that, now the kid in Morroco may still get his fix of local games, but has access to big teams on tv, with on demand stream he can watch only what he wants.
So this benefits England when they leave the EU. And China, the USA. Too much travel, USA and China have the money, EPL the history, but the travel would be brutal.
How? They form a league under these bylaws. If this league includes nothing but clubs with strong support, who is there to object? Each team could sell their own game rights, each offer a stream of home and away matches. they also could split the revenue. When they jettison the low to no interest sides for the international audience, each game has the potential for a bigger payout. Each of the sides that would be in such a league has already shown the power to draw throughout their home nation, and throughout Europe, and, really, everywhere.
Well, how about form a league with other like minded super clubs who consent? I'm sorry, but much of these impediments you describe seem like a legal version of the Maginot Line. Digital distruptors think outside the box and they won't respect these constraints. They will simply drive around these barriers IMO.
That's a great observation. Consider what "Association Football" -- the term applied to the game that distinguished it from other codes -- really means. An association is a form of partnership. And the cornerstone of any effective partnership is that each partner must make a valued contribution. In the most recent edition of the Deloitte Money League, Southampton -- Southampton -- is ranked as the 18th richest club in the world. Look closer, and 79% of its revenue comes from shared broadcast revenues. Okay, put yourself in the shoes of one of the Big Six in the Premier League -- why are you giving money to Southampton to such an extent that they are the 18th richest club in the world? How much of the global audience do they contribute? That's the problem. Partnerships where financial reward is so disparate to contribution seldom last.
This is exactly correct. I would prefer that it be really wrong, and that the Prem clubs (manU, Ars, MCity, Chels pool and, maybe, tot) at the top of that list look at West Ham, LCity, S'hampton and Everton and say, gee, I'm glad we could give you a leg up, we should all compete on a level field. But the reality is that broadcast revenue is falling. The top clubs believe and are getting stronger each year in their belief that they could actually be increasing their viewership revenue by direct streaming. It is a matter of time before they could cut the rope and stop hauling up clubs who don't attract a global audience. Of course, there are practical problems with a super league. It's not a super league if it has 10 English clubs, 3 Spanish, 3 German, 3 Italian and 1 French clubs in it as right now the deloitte list would suggest. Germany and France have higher per capita income than the UK. which only means there's more money to be made in other places, so you want those markets, etc. And, a combo of the Deloitte and social media lists would hint that there really aren't more than 10, maybe 12, super clubs. In cash, number 10 Juv at €405m dwarves Southhampton at 18, but it's already down to Tot's €356m at 11 and Bdort's €332m at 12. Look at social media and 10 is MCity at 49.3m while BDort at 11 is down around 24m. Get down to 17 and Everton has 5.4m followers. As we've talked about, the digital world moves at a speed we are not used to, and this could all change overnight, but I would think there is room for 8 more super league clubs, and it would be a good idea for anyone wanting to share in the future of top level footie to be positioning themselves right now.
What you are not considering, and what the law clearly does not address, is that the existing contracts divide the TV spoils in a wildly uneven manner. In Germany, Bmunch last season took in €96m, and while Bdort was close at €86.5m and Schalke at €78m, by the time we get to midtable the other Bund clubs were taking home less than half Bmunch's take. Or consider Spain, where the gaps have been actively addressed in recent years, yet Barca and RMad are over €140m while by the time we get to number 4 they're less than half, and the bottom feeders are a quarter. It's the same in England and Italy. These are deals leagues made to keep their biggest clubs from leaving to form a super league. Your argument seems to assume these super clubs will continue to play their smaller, domestic brethen. They might, in domestic cups, but the numbers right now would seem to say the super clubs will soon be leaving their domestic leagues, and taking all of the global viewership and a massive chunk of the domestic TV revenue with them. By soon, I mean within a decade.
First of all, for Bayern it isnot about tv revenues in the first place. They are the best run football club in the world that as the only one really is a profit making football business. They have the advantage over the other non German superclubs and that advantage is based on the German league. There are only 3 clubs in their class, Barcelona, Real and Manchester United. https://bleacherreport.com/articles...rfect-working-model-of-a-modern-football-club "First, Bayern in 2012 generated 22 percent of its revenue—€81.4 million—from broadcasting, the lowest total and percentage of any club in Deloitte's top five. This is not entirely troubling, as The Guardian writes: Broadcasting revenues, particularly for more performance-volatile teams…can fluctuate considerably from one season to the next, tied as they are to performance levels and tournament participation. Thus Bayern's place in the rich list is less dependent on television contracts. As such, Bayern is in a more stable financial position than other elite clubs, who depend more heavily on fluctuating TV contracts. Commercial Empire Second, Bayern generates the greatest share of its revenue—55 percent, or €201.6 million—via commercial interests. This indicates Bayern has a strong, committed network of sponsors and a dedicated fanbase that is willing and able to spend significant sums of money on the club. “Bayern are in a unique position to attract mega-sponsors as the undisputed largest club of Europe's largest economy, Germany," Goal.com wrote in 2011. "They are also the only German club with a genuine worldwide profile, increasing their attractiveness to potential sponsors.” Deloitte expanded on the theme in its 2012 report: Merchandise revenue increased by €13.5m (31%) to €57.4m, whilst revenue from sponsorship and advertising grew by €10.4m. This relentless commercial growth was underpinned by an eight year extension to the club's long-standing relationship with equipment supplier Adidas, who still hold an interest in the club, reportedly worth €25 million per season through to 2020. The club continues to benefit from the strong German corporate market, adding Imtech to its portfolio of premium partners and extending its relationship with Samsung and local brewer Paulaner during 2011/12." The red high lighted remark is the same I made a few times, as a SL isnot going to be different from a "normal" league with clubs that simply cannot compete for the prizes apart from Leicester City flukes.
The question was posed if there really is judicial founding for my remark about "portrait rights". I proved that with my link. The law is about whether a person/pro footballer image can be used in a sports broadcast or not without his consent. The answer is very clear, NO. When there is agreement, however skewed the distribution in total may be in our eyes, the law is also clear, there is consent so yes.
4. Bayern Munich — €587.8 million (£505.1 million or $719.8 million). Deloitte says Bayern Munich generates “the most commercial revenue of any football club globally.” Last season, commercial revenue accounted for £295.1 million of the club’s total revenue. The German team won the Bundesliga championship for the fifth consecutive season but its failure to reach the Champions League semi final impacted its overall revenue.
In an eat-what-you-kill ESL, eventually you'll be saying that about Liverpool, Dortmund, and Napoli. Domestic success is what would put them in contention for an ESL. If you replace domestic success with international beat downs, their support will fade away. On the flip side, an ESL would be equivalent to the NFL in the sense that it would effectively have a monopoly on the elite teams and talent. There's no reason *not* to have spending controls at that point, because nowhere else in the world can afford to pay what you're paying anyway. Introduce parity mechanisms to protect your league's brands and to put some downward pressure on wages. You can still set things up so the big clubs can pocket a ton of cash, just like the Cowboys do in the NFL today. Do you stick with 20 teams, though? Do you give England six of those? Manchester two of them? I have a hard time thinking 20 is enough.
Here is where the yanks behind all this SL stuff go into the swamp that will drown them. In those US sports leagues it's either the league having all the power to force the clubs into things or the owners have that power. For a SL, as was mentioned before you cannot have 10 English clubs with American/Asian owners as the main component. There have to be at least German, Spanish, French and Italian clubs too. But then the problem begins. The German and the Spanish clubs arenot clubs with owners. These are something the Yanks donot understand as it's completely alien to them, these are clubs run by membership votes. And the even more disruptive thing is that it's exactly these German and Spanish clubs the people wanting to run a SL, cannot control in financial sense as these clubs are on the global scale the mammoths when it is about sponsorship, merchandising etc. Without them the SL is dead, so these clubs have the upper hand. So the most important clubs, apart from ManUnited and ManCity, are beyond control for those investors. In fact it will be these German and Spanish clubs that will dictate that SL the terms under which they will join, which then will mean for most EPL clubs it isnot worth while to leave the comfort of the epl. The most powerful clubs in the bunch have no owner that can stear the club into the SL investors wanted direction, but a chosen president that has to answer to the members.
I suspect this will work itself out -- it would evolve and find its level, just like every other league has done. For now, for MLS teams (and others with ambition which are in a larger market) I think NASCAR rules apply. Try to stay to the front of the second tier and draft from the leaders. https://en.wikipedia.org/wiki/Drafting_(aerodynamics)
Allow me to introduce you to the Green Bay Packers football club: https://en.wikipedia.org/wiki/Green_Bay_Packers Owned by the fans, run by the fans and celebrating its 100th anniversary as a professional organization (although the club is even older than that). My "share" of stock in the Packers proudly hangs on the wall, but they pay no dividends and I cannot transfer it to a "for profit" buyer. While the Packers are unique in U.S. professional sports, it was not always so. In the early years of professional football there were a number of community owned teams, but they disappeared long ago. In the modern era, the Packers survive thanks to salary caps and shared television revenue, but they exist to enjoy those benefits because they wedged their way into the top league and did whatever was necessary to remain there with the wealthy teams from New York, Chicago and Los Angeles. Of the clubs you mention, Forbes indicates only Real Madrid, Barca and Bayern Munich are worth more than the Packers. https://www.forbes.com/sites/kurtba...t-valuable-sports-teams-of-2018/#52e7bb556b0e So, forgive me, but far from being an alien concept, this is a topic that Packer fans understand very, very well. Which brings me to the Spanish and German clubs' willingness to join a "super league." Despite the fact that Spain has only modest wealth -- the 14th highest GDP in the world behind Australia and just ahead of Mexico -- Real Madrid and Barcelona sit near the top of the rich list preciously because they understood the need to become global clubs early on. I am not sure much persuasion is needed. Real Madrid's Florentino Perez had called for a super league since at least 2009: https://www.telegraph.co.uk/sport/f...z-reveals-European-Super-League-ambition.html He's hardly a traditionalist. Last month, Perez approached the National Basketball Association about having Real Madrid join the U.S. basketball league: http://www.sportspromedia.com/news/real-madrid-nba-florentino-perez-move While they will certainly want attractive terms -- control over their broadcast rights likely high on that list -- there is every reason to believe that Real Madrid will join a super league IMO. And if they join, Barca will join. You may be correct that the German clubs may be more hesitant, at least at first. After all, the German clubs rely less on television revenue and only Bayern and Dortmund have large numbers of social media followers -- Schalke is a distant third at 45th in the world. http://digitale-sport-medien.com/global-digital-football-benchmark-summer-2018/ So if the German clubs don't join a super league, they don't join. They are hardly critical from an economic perspective in the digital world. Which, I suspect, is precisely why they will join.
If I recall from your last thread, you pointed out the MLS operators share less of the general revenue the NFL owners. So while the league may have a single entity legally, in practice it seems to be less collective than the NFL. Furthermore, the MLS haves (Atlanta, Toronto, Galaxy) seem to be separating more from the have nots. If your hypothesis that digital streaming money goes to the select few, it seems the trend will only accelerate? Galaxy can certainly make an argument that other teams are hugely benefiting from their spending on players like Beckham and Zlatan, and as such should be getting more revenue. Your argument that since MLS has a structure to compensate losing owners through SUM it should have be easier to do than in other leagues. The devils advocate argument is that single entity may actually make it more difficult because the weak sisters will instead use single entity to hold things up to gain a greater share of future profits. So whether it hurts or helps will likely really depend on the nature of those at the negotiating table.
That's a fair concern. As operators, the "owners" are essentially running a company owned store and the money they keep is part of their bonus compensation for doing so. Obviously, some do better financially than others. Teams like Kansas City and Portland may be in smaller markets, relatively speaking, but the Forbes data suggests they are quite profitable. If they get left out of a combined Liga MX/MLS super league, those operators will feel especially aggrieved IMO, understandably so. But the flip side is that if MLS splits off 8 teams for a super league and leaves 16 or more behind in "MLS Classic", assuming attendance holds up the revenue drop the excluded teams experience may not be all that severe. The super league revenues all MLS owners will share in should make up the difference, and MLS could also add a league cup involving all of its teams to preserve traditional rivalries and further close the revenue gap for operators with teams in MLS Classic. In other words, MLS would have a means to compensate those operators who experience a drop in income. In the most challenging cases, MLS can also buy back the operating rights of some teams, much as the league did with Chivas USA and the Miami Fusion. I agree it won't be an easy sell, but at least with a single entity structure the operators of teams that aren't included in the super league would still have some financial upside. And if all else fails, limited promotion and relegation of MLS teams between the super league and MLS Classic may make some sense to at least give all of the operators some prospect of further advancement. (Note, I am not suggesting pro/rel of MLS teams outside of an MLS league, so let's not go down that rabbit hole here.)
I don't understand the whole idea of digital streaming meaning that fans will no longer pay for games they don't want. Most people that paid the extra $10/month for the sports package on cable bought it only to watch their favorite team. This means they were willing to pay $10/month for that team. In a digital world, they are still going to sell the rights to that one team for whatever price will maximize their revenue. That means it's probably going to be pretty close to that $10/month, once everything is all sorted out, because that's what consumers are willing to pay for it. I understand that digital disruption has affected every industry to some extent. But people don't use their local newspaper, or blockbuster video, or their bank, as an avatar for themselves online. They may buy jerseys which sponsors have paid to be on, but they buy the jersey and they wear it because their club represents something about them. Being a fan of a sports team is not something that most fans are going to change just because the other club has a slightly cheaper streaming deal. The Chinese fan that follows Ronaldo on social media might become a Juventus fan, but that fan is probably not going to pay very much to stream Juventus games at 3AM every week, and they're probably buying knockoff jerseys which the teams don't get a cut of anyway. The other thing that's different about sports is that it's the only industry I can think of which REQUIRES cooperation between the competitors. Amazon or Netflix would be perfectly capable of and happy to control the entertainment or shopping needs of everyone in the world and destroy all their competitors tomorrow, but that's impossible for sports teams. As far as Liga MX and MLS needing to combine to compete with a Euro League, how much are they really competing now? Let's say both leagues right now are somewhere between 8-20th in the world. All of the best players already play in the Champion's League clubs, and fans know this, but that doesn't stop them from watching their local club, because it's the one their parents watched, they can go to the games in person, they like going to the games with their buddies, maybe their kids play on the academy team or played against one of their current players, etc. Now, suppose the Euro League happens, and the average player salary on those teams goes to $50 million instead of $10 million, or whatever it is now. Liga MX and MLS could still be 8-20th in the world without paying a single extra dollar, and without losing fans. In fact, the salaries of the non-elite players would probably come down [think more like the difference between the salaries of the top 20 tennis/golfers in the world, and everyone else], so MLS could become more profitable than they are now without doing anything. It's true there is a possibility that they could make more money if they combined and tried to truly compete with Europe, but that's not the model MLS owners bought into, and it's a much riskier proposition, so I don't think it's inevitable by any means. And let's not forget that some of the owners in MLS would also be owners in the Euro Super League. Do Kroenke or City Football Group really want MLS to start competing with the Super Clubs? The Euro Super League only really becomes attractive to those teams if they come to some sort of agreement on controlling spending. Otherwise, many of them would likely end up becoming less profitable, even if they increase their revenues a lot. So, in a Euro Super League with a salary cap, would those owners want to compete with a North American Super League that is not subject to that agreement? I don't know how it will all play out, but it's certainly an interesting discussion, and this has been one of the best threads I've seen on BigSoccer, so thanks to Triplet and everyone else for your contributions.
Thanks for the kind words and thoughtful reply. As this thread expands were are getting a couple different conversations within the larger discussion, so let me see if I can focus and reset the main thesis. Most soccer teams rely on three sources of revenue: match day (that is, primarily attendance), broadcast and commercial. The broadcast revenue appears to be most at risk to digital disruption, but to understand why, we have to consider the economic structure of sports broadcasting. The disruption to the broadcast revenue has started not with the teams, but with the broadcasters who have bought the rights to televise the games. In the United States and elsewhere, pay-TV service providers/platform operators like Comcast or Directv pay carriage fees to broadcasters like ESPN to re-transmit their channels. The cost of those carriage fees are passed on to the customers in their monthly bill. It varies from provider to provider, but the basic service might include 50 or so channels, each paid a carriage fee. Individual customers may watch some of the channels frequently, others seldom or not at all -- but they pay for all 50 channels nonetheless. It's been this way for years. Unless you were willing to watch over the air channels exclusively or do without, you paid your fee for all 50 channels. Then along came Netflix and Amazon and Youtube and suddenly it became possible to bypass the providers, at least for some of the content people like to watch. The providers have responded by offering streamlined packages which don't include more expensive channels or are more tailored to specific interests. With that, the number of subscribers a network like ESPN has is dropping, as is its carriage fee revenue. The numbers are eye popping. From a high of 100.12 million in 2011, ESPN has lost 13 million subscribers in six years. ESPN remains incredibly popular and commands the highest carriage fees, but even so estimates indicate that 53% of its remaining 87.3 million subscribers don't care to have the channel. That's an additional $4.5 billion of revenue a year that is at risk for ESPN if those customers cut the cord or move to other provider packages that don't include the channel (and generate carriage fees). This bears repeating because I think some people are missing the crucial point: ESPN may have 87 million subscribers paying $8.11 a month for ESPN/ESPN2, but that doesn't mean if it streamed its channels and gave people the choice 87 million people would still buy them. Remember, over 46 million of ESPN's subscribers would prefer not to have their channels at all. And herein lies sports' broadcasters like ESPN's Achilles heal -- their business model was built on paying huge sums of money to broadcast sporting events and charging customers that didn't want the channel in the first place for the content. Now that customers have more choice in what channels they buy, sports broadcasters like ESPN are faced with huge potential declines in subscribers, which means they likewise face huge declines in revenue. To balance the books, sports broadcasters will have no alternative but to reduce fees paid to leagues and teams. The broadcasters like ESPN are in a tough spot. Without live sports, in a world of increasing choice even fewer people have reason to want their channel, but they cannot afford to pay the teams what they have been paying. Their only hope is to reduce the fees they pay the leagues, with the leagues their customers least prefer taking the biggest hit. What does this mean for sports teams? There are exceptions, but most teams market their games cooperatively, meaning the league sells the broadcast packages and the teams divide the money. Some leagues like the NFL divide the money equally among the teams, others have formulas where the biggest teams or better teams get a bigger share. Now, assume you are a big club and the value of your league's TV package has dropped, as the domestic packages just did for the EPL. How do you avoid a drop in your own revenue? Basically you have two choices, you can either demand a bigger piece of the smaller pie -- take more from the little guys in the league and let them absorb the loss -- or you have to figure out a way to broaden the audience. And the big clubs are aggressively pursuing both options. Again, a few months after the domestic auction disappointment, the Big Six EPL teams demanded a change in the formula to get more of the foreign broadcast revenues. We'll see more of this in the years ahead. As the saying goes, when the pie gets smaller, people's table manners seldom improve. Expanding the broadcast audience is the better long term strategy, but it isn't easy. To attract more eyeballs, leagues need to appeal beyond their domestic base to a more global audience. Streaming makes that possible, but its a crowded field. To distinguish themselves from the others, leagues need good teams with top players and attractive games. But how do they do that if the revenue needed to attract and retain the better players is declining? Once again, the logical choice is to concentrate the money on the best, most attractive teams with the largest fan bases -- potential customers to buy the games. The big clubs with global followings will demand no less. Even if the big clubs get most of the broadcast money, however, the little guys are going to still be a drag on league revenues, but in a somewhat different way. If they get only a tiny share of the broadcast revenue, the small clubs simply will not be competitive, and because they aren't competitive, they will generate little global audience. The domestic audience of die hard supporters may tune in every week to watch Man City beat down a minnow, but the more global audience with more casual fans seems less willing to shell out money to see weekly drubbings. Not if more compelling options are on offer. For the Big Six Premier League, partnership with the Watfords and Southamptons and even Evertons that rely on shared broadcast money for much of their revenue are simply no longer affordable. Not if Real Madrid and Barca and Bayern are playing by different rules and building revenue streams that are not fully shared with their domestic partners (such as Bayern's previously mentioned huge commercial revenue that it keeps for itself.) Which is why, in the end, the big clubs will have to cut the little clubs loose and form leagues of equals -- super leagues -- or they will be passed by other big clubs who do. Once the super leagues form, the clubs may elect to market the games cooperatively and share the revenue, or keep what they have to themselves. Assuming their revenue broadcast generation is roughly comparable, it really doesn't matter. What's critical is that every team in the league must pull its own weight -- meaning they must appeal to a broad audience. That's the argument. I appreciate that this sounds harsh, but it really depends on your point of view. Sports teams have gotten rich on television broadcast deals paid for by consumers who did not wish to do so, but had little practical choice in the matter if they wished to watch other television channels they did value. The digital revolution has changed that. For sports fans that remain, they'll want more choice too. To me, that's not a bad thing.
Just out of curiousity, among us, who still uses cable, or satellite, versus who is now using a an internet based service (Roku, Amazon, Google, apple, etc)? The last year I had a cable, i realized that after also picking up Roku, I never used the cable stuff (it was thrown in for free with the internet service, so I kept it for a year, but it was worthless so when they wanted to charge I canceled). I don't see going back, and as a middle aged sports fan, I am far from being the cable cutting target audience. None of my kids have traditional TV, and very few of their friends do. In the last office I worked in, the number of younger (25-40) workers who hadn't cut the cord was almost zero. I get the sense we're just about to the point where vinyl becomes shiny discs, or cell-phones become smart phones. As one of the world leaders in cell phone production, Nokia, learned, it didn't have to look like it was over, it was just totally over.