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Soccer (Football) Leagues in the U.S. and Europe Reap Significant Revenues and Sponsorships, Business and Industry Trends Analysis

The sport of soccer (known as football outside of the U.S.) has a massive global following.  According to the World Population Review, the sport has approximately 3.5 billion fans and 250 million players across 200 countries.  There are a significant number of valuable professional leagues around the world.  Top leagues include English Premier League (which has 20 teams in the UK); La Liga (20 teams in Spain); Bundesliga (18 teams in Germany); Ligue 1 (20 teams in France); and Major League Soccer or MLS (27 teams in the U.S.).  Latin America is home many leagues as well including the Argentine Primera Division (26 teams) and Campeonato Brasileiro Serie A (20 teams).  International competition is overseen by the International Association Football Federation (FIFA), which has 211 affiliated associations and organizes championship World Cup tournaments each year.
Forbes’ 2022 top 30 list of the world’s most valuable soccer teams is headed by Real Madrid at $6.07 billion.  A major factor in the teams’ remarkable growth is significant increases in broadcasting revenue as more fans tune in around the globe.
As in American sports teams, global soccer players have reaped rewards from owners with deep pockets who are willing to write astronomical contracts for top talents.  For example, Cristiano Ronaldo, currently playing for Al-Nassr earned $136 million in 2022, including salary, bonuses and endorsements.
Wealthy teams such as Spain’s Real Madrid, England’s Manchester United and Germany’s Bayern Munich not only have the capital to pay multi-million-dollar salaries to star players, they also have the cash and the clout to form lucrative sponsorship alliances with Adidas-Salomon, Nike and other apparel manufacturers.  Barcelona, for example, has a ten-year, $1.25 billion agreement with Nike that empowers the apparel maker to handle all of the team’s merchandising on a global basis starting in 2018.
Poorer teams haven’t the wherewithal to strike such deals, and they gamble seriously by trying to play the top-salary game.  A losing season means revenue losses in the millions due to lower ticket sales and lost television revenue, as well as the very real possibility of sliding from first league status into the second league.
Savvy team owners are well aware of the challenges before them and are taking steps to safeguard their investments.  Player contracts are beginning to include clauses relating compensation to performance.  Owners have also been increasing stadium seating and adding luxury boxes to attract higher ticket prices, as well as recruiting young, international talent as opposed to established (and therefore expensive) players.  Young players can work together over time to build a cohesive team, while players from foreign countries such as China open marketing opportunities on a global scale.  For example, Sun Jihai played for Manchester City and then Sheffield United, while Dong Fangzhuo played for Manchester United, attracting hundreds of millions of Chinese viewers of televised games.  Both have since retired after finishing their careers playing for Chinese teams.
In May 2021, Britain’s Premier League signed a $7 billion renewal deal with Sky Sports, BT Sport, Amazon Prime Video and BBC Sport through 2024-2025.  This is only the beginning of the league’s broadcasting revenue since it has contracts with networks in many other nations around the world.
While European soccer (in Europe and other regions the game is referred to as “football” or “futball”) generates more than $12 billion annually in revenue, roughly 400 first division teams throughout the region are fighting for a piece of it.  Only those elite qualifiers for the two main championship tournaments at the end of the season, the UEFA Champions League and the UEFA Cup, have the opportunity to score big when it comes to revenue and profits.  According to global accounting firm Deloitte Touche Tohmatsu, teams making it to these championships can add more than $50 million to their annual revenue.
European teams are targeting fans (and revenue) in the U.S.  The Barcelona team, for example, opened a residential training center in Arizona and is planning to create a team based in California within the National Women’s Soccer League.  Billionaire Sheikh Mansour, owner of the Manchester City team, launched the New York City FC in 2015.  A number of European teams play in the U.S. during the offseason to amass U.S. fans and earn appearance fees.
In May 2022, Russian oligarch Roman Abramovich was forced to sell his Chelsea Football Club after the British government placed sanctions on his business interests in response to Russia’s invasion of Ukraine.  The team sold for a record $3.2 billion to a U.S. consortium headed by Todd Boehly, a part owner of the Los Angeles Dodgers.
In the U.S., Major League Soccer (MLS), although it has nowhere near the financial eminence and prestige of soccer in other regions of the world, is enjoying a modest success, boosted significantly in 2019 by the U.S. women’s team’s win of the 2019 World Cup.  Energy drink maker Red Bull spent $100 million to buy New York’s MetroStars and promptly changed the team’s name eponymously to the Red Bulls.  In addition, Soccer United Marketing, a commercial soccer promotion company holding promotion rights for the MLS and for other leagues, sold U.S. broadcast rights for MLS and U.S. National Team Matches to ESPN in an eight-year agreement to run from 2015 through 2022.  EPSN, NBC and Univision will collectively pay approximately $90 million per year over the period (about three times the value of MLS’ previous deals with the broadcasters).
America’s MLS has 29 teams with an overall average attendance in 2023 of 21,992 per game, up 5% from 2022 according to Soccer Stadium Digest.  The league puts complicated salary caps on each team.  In 2023, this was set at $5,210,000 per team, as the maximum amount, in total, allowed as a budget for the entire roster of a team’s 20 senior players.  A smaller, additional budget is allowed for 10 non-senior players.


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