Even Apple would be bankrupt within days if they received no funds from outside the company.
How does Euro soccer successfully have big league teams in small towns?
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Yukon Joe
Registered User
I can't believe nobody has mentioned the Green Bay Packers.
Green Bay, Wisconsin is a population of 107,000, yet they regularly fill Lambeau Field which has max seating of 80,000.
So the way Green Bay does it, and the way it works for English Soccer, is two-fold.
1. Most of their revenue comes from TV. Ticket sales are a nice, but a lot of their revenue comes from TV and other league-wide sources. Green Bay is actually a nice example because they have to release financial statements. The Packers earned $374 million in "national" revenue last year, compared to $235 million in "local" revenue.
2. Teams are regional. Fans can come to Blackburn from all over England - it's a really small country. Similarly Green Bay is really the home team for all of WIsconsin (including Milwaukee), and travelling to a once-per week game played mid-day is quite doable.
And so you can see the difference with hockey. Teams earn a nice sum from TV rights, but it's nothing in comparison to what the NFL or EPL earn. Which means teams are very much dependant on ticket sales.
And then due to when the games are played it's hard to travel just to see a game. If there's a game Tuesday night you can't really drive 2+ hours just to watch a game then go home. So fans are much more local.
Tawnos
A guy with a bass
That's more of a cash flow question though. They generate like $20-30B in net income every quarter. Apple pulls in investment from those looking to make money off their investment. The football clubs are getting sponsorships and investment from companies who don't care if they get a positive ROI. It's a totally different proposition.
Nizami Ganjavi
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WarriorofTime
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The World's Most Valuable Soccer Teams 2023
The world’s 30 most valuable soccer teams are worth an average of $2.17 billion. A year ago, we valued 20 teams, which had an average appraisal of $2.53 billion. In contrast, this year’s top 20 teams have an average value of $2.89 billion — 14% higher.
www.forbes.com
NHL Team Values 2022: New York Rangers On Top At $2.2 Billion
Hockey team owners are scoring big, with the average NHL team value now at $1.03 billion, topping $1 billion for the first time and 19% more than a year ago.
www.forbes.com
While Soccer has some heavy hitters, the 18th most valuable soccer team in the world is about as valuable as the 18th most valuable hockey team in the NHL.
That is pretty crazy to think about considering the relative popularity of the two sports. A consistent mid-table finisher in the English Premier League in Crystal Palace is less valuable than a small market hockey team in the Sunbelt, the Nashville Predators.
Really speaks to the open/closed system and how different they are and why there was that push for a Super League from some of the big clubs a few years ago.
Why would private companies pour money into a football club they neither own nor control if not because they considered the investment worthwhile?
Tawnos
A guy with a bass
Because it's not about a direct return on dollars. Investing in the community your business is in has other benefits that aren't about monetary return.
You get ads with great visibility and a good spin for your brand, as well as hospitality services. A corporation like Voith can take business partners to their factory and after that to the stadium which is quite something in a town like Heidenheim. It's not just charity, but cooperation that reliably benefits both sides and is therefore sustainable.
Tawnos
A guy with a bass
My point is… all of those things are the same benefits as if they’d owned the team outright. I’m not criticizing the arrangement, I just don’t think we should mistake the team for a self-sustaining venture the way that Bayern Munich is. It works, but there’s a distinction between that arrangement and the implication of the word “successfully” on the business forum, IMO.
You’re right, it’s not charity… but it’s still dependent on the good will of a third party.
I thought I recall reading somewhere that in LaLiga(Spain) Real Madrid and Barcelona get a lot more than a 1/20th(or however many teams are in top league) of the TV money. there was a big dispute when negotiating contracts I thought. There may have been a third team with this favored status.
Thing is, in the EPL for example, it really wasn't that long ago Manchester City was a club that had to fight relegation on a semi-regular basis. And the past two years have not been kind to Everton, who I believe have never been relegated. Things do change.
Yukon Joe
Registered User
La Liga: Atletico Madrid is sometimes lumped into the top, but I thought it's usually Real Madrid and Barco as the top two. La Liga has a formula in dishing out TV money which means those top three teams get more, but not dramatically more: 50% of TV money is split 20 ways, while the other half depends on performance.
Man City is a weird story though - it's owned by Abu Dhabi who have spent ridiculous sums in order to get the team to the top.
Which is essentially a way to guarantee RM and B a larger share. Gotta think there is a reason they are still (last I heard unless it has completely died) in on the Super League stuff.
Is Man city that strange though? A lot of squads are owned by Middle East or other foreign money and have been showered with cash, no? Leicester won the title for pete's sake.
Yukon Joe
Registered User
From what I understand there's still rumblings about the Super League, still some ongoing court cases, but it seems fairly dead (at least for now).
Man City is that strange though. Yes, tons of teams are owned by foreign money - but Man City is basically owned by the Abu Dhabi Royal Family, and they have just an order of magnitude more money then a Stan Kroenke or Shahid Khan (who are both billionaires in their own rights). The only thing like it is Newcastle being purchased by the Saudi Public Investment Fund in 2021.
Chileiceman
Registered User
I'd say it's somewhat rigged because the more successful you are the more prize money and you get a higher portion of TV revenues. For example, Madrid and Barcelona get way more money from La Liga TV rights that the other clubs. Furthermore qualification to the Champions League is a huge revenue boost. Once you have success, it becomes entrenched. Your higher revenues aren't just to do with more money from ticket sales/merch, etc. It's the system itself that keeps you afloat.
Contrast that with the NFL, where all teams get the same share of the TV money (even though the Dallas Cowboys draw more eyeballs than, say, the Titans), and if you are bad you get to pick higher in the draft.
edog37
Registered User
KevFu
Registered User
This is a great point. Our friends across the pond frequently have their mind blown by our college sports, but it's really the "mid-point" between the European soccer model and USA/Canada pro sports....
The local/community/tribal aspect of European soccer is present, little bit in (American Tackle) football, but even more so in. basketball. Most people like the big state school(s) in your state; but where you go to school turns you into a die-hard for your school, much like how the people of Wrexham are all about a 5th division team (when the show started, 4th now).
The basketball NCAA Tournament is very much like the FA Cup, but also with a dynamic of UCL. All the conference champions and 32 best non-conference champs against each other (Kentucky, Kansas, UCLA are in different conferences like Man City, Barcelona, PSG and Bayern Munich are in different leagues), but you get that David vs Goliath aspect of early round upsets and Cinderella runs like the FA Cup.
PCSPounder
Stadium Groupie
The Premier League does not have equal media revenue sharing. 33% might be done that way, but a substantial portion is based on finishing position, the higher finishers getting more, much like La Liga.
UEFA’s more recent financial regulations cut down on the amount of money teams can lose in any given season, but it’s toothless enough to only slap Man City on the wrist.
The playoff game to promote “the third team” from the 2nd level will sometimes be referred to by the announcers by the revenue difference between levels, so now they’d call it the “£85 million game.”
Someone talked about Blackburn? Look at Burnley. Supposedly, they were a town of 70,000 when they visited Portland in 2009 as they toured America after getting into the Premiership, and they’ve been down and up a couple times since then. Maybe 120,000 live in town according to latest numbers?
More soon.
UEFA’s more recent financial regulations cut down on the amount of money teams can lose in any given season, but it’s toothless enough to only slap Man City on the wrist.
The playoff game to promote “the third team” from the 2nd level will sometimes be referred to by the announcers by the revenue difference between levels, so now they’d call it the “£85 million game.”
Someone talked about Blackburn? Look at Burnley. Supposedly, they were a town of 70,000 when they visited Portland in 2009 as they toured America after getting into the Premiership, and they’ve been down and up a couple times since then. Maybe 120,000 live in town according to latest numbers?
More soon.
PCSPounder
Stadium Groupie
This is apples and oranges. This is partly because the imposition of a closed system in England would prompt the FANS to torch the places of business funding the change and the homes of the perps. Perhaps more importantly, there is the issue of supply, so to speak.
I watched Sunderland ‘Til I Die because I have been to the Stadium of Light for a derby, I have followed Sunderland to Old Trafford, and had a time of my life in that community. So I at least have a sense of the lay of the land, the conditions under which it operates, aka know enough to be dangerous and little else.
Sunderland is part of the “census designation” Northeast England. This runs generally from Newcastle to Middlesbrough. And this came to mind back when Portland announced an effort to go to Major League Soccer. The comparisons in 2008 were interesting.
Both Northeast and the Combined Portland-Salem metro area were about 2.5 million in population in 2008. The shape of Northeast and the populated shape of essentially the Willamette Valley and the Columbia extended north were similar.
In 2008, Portland had the Blazers, the Timbers were in USL, so this whole region only had the 19,500+ multipurpose stadium and the >20,000 Moda Center. (Corvallis and Eugene are to the south of this)
At the same time, Northeast England had three Premier League teams after Sunderland had bounced back up. Newcastle has the 52,000-seat St. James, Stadium of Light held 49,000, and “The Riverside” (a name that has changed more than once since, but the sponsors can stick it) holds 35,000 or so. Hartlepool had dropped to League Two and may have already dropped again by 2008. There were another 6 teams in the 4th-7th levels at that point…
…including Darlington. Darlington ended up with a new owner just before then who decided to build a 25,000-seater, went for the cheap tickets/make money off concessions tack, while harboring Premier League ambitions, and eventually bankrupted the club between doing that and maybe a little light money laundering. A newer version of Darlington exists at a small local rugby stadium while the bigger stadium is used by a third level rugby club.
I’m only mentioning the 8th through 10th levels for the fact that, besides cool names like Horden Community Welfare and the sadly folded Norton and Stockton Ancients, that level has close to the number of clubs that relate to the number of larger Portland area high schools.
Basically, England- and the rest of Europe- is loathe to regionalize the way the American cartel/leagues are structured. The valuations follow that steadily.
