Why the NFL shouldn't be an economic model for the Champions League
The Champions League revamp announced this past August, with Europe's four top-ranked leagues guaranteed 16 of the 32 spots, caused many to complain about polarization, greed and the one-percenters sticking it not just to the little guys (that happened a long time ago), but to the game's middle classes as well.
UEFA were caught between a rock (Europe's big clubs wanted even more allowances from wild-card entries to games on weekends) and a hard place (if they didn't get what they wanted, some were ready to boycott the competition entirely and revisit the idea of a non-UEFA controlled breakaway European Super League). They thought they negotiated the best deal they could, given their lack of leverage, and at least through 2021, this is what we've ended up with.
Of course, most of the clubs who drove these changes have tended to keep a low profile. Nobody wants to own up to being driven by greed and profit maximization. Nobody wants to be linked to changes that, while good for the bottom line, are profoundly unpopular with many supporters, especially those who aren't fans of the chosen elite.
Nobody, that is, but Juventus president Andrea Agnelli.
Whatever else you think of him or the proposed changes, you can't accuse him of hiding. He was blunt and direct in outlining his feelings. It left little doubt that, in his mind at least, football is part of the media entertainment business. Generating money (to "innovate" and "evolve") is more important than "solidarity." At least he's honest. He has shareholders (mostly his own family, who own 63.8 percent of the stock) and he has a responsibility above all to increase shareholder value. That's capitalism. That's free markets. That's how it works. Gordon Gekko would approve.
From Agnelli's perspective, it makes sense. From the perspective of others, there are tons of counterarguments. Like the fact that maybe football isn't just a branch of the entertainment industry but rather a social trust, a deeply-embedded aspect of our culture that can't be driven by market forces alone. Or the fact that in the current set-up, accidents of geography -- for example, Burnley will likely earn twice as much in broadcast revenue as the entire Belgian league combined simply by virtue of the fact that they are in England and play in the Premier League -- give certain clubs enormous advantages.
But that's fine. He fights his corner. I wouldn't want Agnelli to be saying things like "not about solidarity" if he were the UEFA president, but he isn't. He's looking out for his interests and as a stakeholder, he has every right to do just that. The problem arises when he appears to say things that are misleading, self-serving and an obvious case of apples and oranges.
A particular favorite of his (he has repeated it more than once) is pointing out that the National Football League earns twice the revenue of the Champions League despite having a far smaller global audience. Implied in this is that UEFA are leaving money on the table because they don't maximize revenue as well as the NFL.
Yes, the NFL does generate slightly more than twice as much money as the Champions League. But there are so many factors in play, and so much wrong with the implication, that you're not sure where to begin.
But let's have a go, shall we?
1. The NFL has more games
There are 125 matches in the Champions League from the group stage to the final. There are 267 NFL games in the regular season and playoffs. The NFL can charge more because it physically sells more games.
2. Seriously, they have more
If you include the preliminary rounds of the Champions League, the number goes up to 219 matches. Of course, we're getting into serious "apples and oranges" territory here. Broadcasters aren't really paying for Dudelange vs. Qarabag or Flora Tallinn vs. Lincoln Red Imps. If you want to include preseason games and the Pro Bowl, the total for the NFL goes up to 331. That's still 50 percent more.
The NFL can charge more because even when you include the dross, they still sell you a lot more stuff.
3. An NFL game is longer
A football match lasts 90 minutes. Throw in half-time, time added on for injuries, teams walking on and off the pitch and the UEFA anthem and you maybe stretch it to two hours. An NFL game lasts an hour in terms of what the clock says but in reality, it takes up a good three hours of programming. In other words, it fills 50 percent more of a broadcaster's schedule. The NFL can charge more because it provides more hours of air time.
4. You can only show so many commercials
A football match has limited opportunities for commercials and sponsorship. You can have a couple of ad breaks at half-time and something immediately before and after. But that's it. NFL games have many more interruptions during which they can serve ads: half-time, after the first and third quarter, changes in possession, timeouts, two-minute warnings.
Folks joke that it's a three-hour advertising fest interrupted by smatterings of live action and replays, but it's not entirely far off. The NFL can charge more because it offers many more opportunities to sell ads and it doesn't take a genius to figure out that more opportunities to show ads equals more ads, which equals more revenue for the broadcaster, which equals more cash spent to acquire the rights.
5. The NFL happens on better days and times
The Champions League plays on Tuesday and Wednesday in prime time. The NFL plays on Sunday during the day -- when most people are off work -- and on Sunday night, Monday night and Thursday night in prime time. The NFL can charge more because it offers more prime-time nights of content and because its other games are on Sunday when it can attract a mass audience.
6. There's only one NFL
The Champions League competes to sell rights with hugely established domestic leagues who play their games on weekends, when there is a bigger audience. If you love your club and want to watch them play, you can choose between the Champions League, their domestic league and their domestic cup. The NFL doesn't compete with other tournaments featuring those same NFL teams. If you want to watch Cam Newton play, it has to be in the NFL. If you want to watch Lionel Messi, you can see him in the Champions League, La Liga or Copa del Rey with Barcelona and with Argentina in friendlies and World Cup qualifying.
The NFL can charge more because access to their superstars is exclusively through them.
7. NFL viewers have more disposable income
Football -- and the Champions League in particular -- does have an enormous global audience. The problem is that sponsors care as much about how much disposable income said audience has as they do about how big it is. The NFL's core audience in North America tends to be wealthier and have more disposable income.
Per capita, Gross Domestic Product in the U.S. is around $53,000 and the population is nearly 320 million. It's true that the European Union (at just over half a billion) is bigger, but its per capita GDP is more than 20 percent less, at just over $40,000.
It's true that there are plenty more folks in Asia, South America and Africa who also watch the Champions League. But fans in Asia have to wake up at 3 a.m. on a work night to watch. Those in South America are usually at work -- and yes, folks who have money and are coveted by sponsors, tend to have jobs. And while Africa does have friendly time zones, most of the continent has a per capita GDP that's less than $10,000 (actually, more than half is less than $3,000) which means sponsors are willing to spend less to reach that audience. So the NFL can charge more simply because its viewers tend to be better off and more appealing to sponsors.
8. The NFL audience is easier to find
Football's global audience is spread out and has different interests. The NFL has an audience that is, on the main, far more homogenous. There aren't that many global brands out there. It's easier to sell to the NFL's audience because there is far more data on them and they tend to have access to the same range of brands.
With football, there are brands that simply don't exist in certain markets. So while, say, an insurance company will gladly pony up to sponsor some aspect of the NFL because it knows most of the NFL audience can buy its services, the same isn't true of an insurer in football because they might only operate in certain countries. The NFL can charge more because its audience is more monolithic and less heterogenous.
9. The NFL will always have the same teams
Football is based on sporting merit. You have promotion and relegation (well, except for Major League Soccer and a few others) and you have to actually qualify for the Champions League. The NFL is a closed, franchise-based system. What that means is that there is no guarantee a particular club -- who may be appealing to sponsors -- will be in the Champions League but when the NFL sells rights it can be sure that, say, the Dallas Cowboys will be part of the package. The NFL can charge more because it can assure broadcasters and sponsors about exactly what they're going to get.
10. The NFL feels fairer
Football has historically been about big clubs and little clubs. In recent years, the polarization has only increased. The NFL is entirely geared toward parity and has mechanisms like revenue-sharing, the draft, free agency and the salary cap to ensure that bad teams have a shot at getting better (and, in fact, they often do.) As a result, dynasties are rare in the NFL. The NFL can charge more because over time, everybody feels as if they have a legitimate shot, certainly far more than in football.
These are just the first 10 reasons that came to me. The bottom line is that these are entirely different economic models borne out of entirely different sporting traditions. Comparing one to the other is disingenuous, maybe even dishonest.
Are there things football can learn from the NFL? Sure. Should football be using the NFL (as Agnelli seems to be doing) as some kind of benchmark of what can be commercially achieved?
Absolutely not. In fact, it's not even apples and oranges. It's apples and aardvarks.
Gabriele Marcotti is a Senior Writer for ESPN FC. Follow him on Twitter @Marcotti.