Premier League sportsbiz

Is the Premier League doing something wrong?

November 30, 2023

We all rave about the Premier League but look a little closer and is it it really underperforming?” Sandy Case, iSportConnect CEO looks at the alternative view from a wider International aspect.

I spotted these two charts from our friends at Sportico. I’ve always been interested in people’s views from different countries as we in the UK, tend to put the Premier League (PL) on a pedestal as this wonderful league that everyone should envy. Now much of the PL’s positioning has been brilliantly executed and no one can doubt the absolute success since its inception in 1992.

Interesting to note that on the Franchise Value chart, the Top 6 sides aside, the EPL valuations are below pretty much all the US major sports and F1 teams – and on a par with the MLS and most of the IPL franchises (which seem to sit in and around the $1bn level from the latest Forbes valuations.

If you look at estimated fanbases (appreciating this can be tricky to measure) but according to Betsperts 18 of the Top 25 are Football/Soccer teams and the others are all NBA with the best of them, the Lakers coming in at 12th. The EPL occupy most of the top half of the table yet still have (relatively) low valuations and profits. Something isn’t right surely. Imagine if NFL teams had the global fanbases that some of the Top EPL teams had. Kerching…..

Now the obvious reason for the valuations is around the traditional jeopardy of relegation. The Top clubs aside all have a realistic chance of being relegated and this clearly is built into their valuation. 

Michael Broughton wrote this interesting piece that talks about the unexplored opportunity 

So the question is whether PL teams are getting value from these fanbases and it would appear they aren’t. So is the structure wrong and what might the League do about it

One story that is gathering momentum is that the Premier League is looking at the possibility of implementing a rather American concept: a team salary cap.

They already have Financial Fair Play which is designed to ensure financial stability for clubs, but introducing a cap would be revolutionary 

Crystal Palace chairman Steve Parish said  “I think there is change afoot. UEFA squad-cost caps are one idea. Maybe something that is a bit more rigid than that, with a hard cap at the top but as far as competitive balance people need to be bold

“There are really positive conversations going on about it. We also have to be very careful because there are also unintended consequences,” he added. 

A key impetus behind the Premier League efforts is the marked disparity in team payrolls. Manchester United’s $249.8 million  payroll this season is around x9 greater than Luton Town (according to Spotrac)— a far bigger discrepancy than is seen in any major U.S. sport.

The Premier League table has also been more predicatble at the top in recent years, with top-spending clubs such as Manchester United, Manchester City, Liverpool, and Arsenal all regularly occupying the lead spots. Things may need to change as other leagues are gaining traction, specifically the Saudi Premier League and the MLS which continues to grow and is becoming one of the best stories in sport with attendance smashing previous records. Of course Lionel Messi’s arrival and Apple’s media deals have helped but there have been further franchise expansions and attendance are growing across the league. It was commented that MLS commissioner Don Garber remains one of the most underrated figures around.

The PL has some work to do to increase value and protect the brilliant position it has achieved in the last 2 decades

Premier League sportsbiz