Discover more from Uncorrelated Interests
The Quest to Overtake the NFL
My attempt to fundamentally restructure English soccer to unlock its final form of scale.
Today we conclude an impromptu three-part series exploring the business of the English Premier League, and more specifically charting a path for the EPL to overtake the NFL as the most lucrative “football” league in the world.
In Football vs. Football, I laid out the challenge – the NFL currently earns about $17B per year, the EPL just under $7B, so we have to close a $10B delta if this is going to become reality.
In Growing the Premier League Empire, I offered a number of changes that the Premier League could and should make today, eschewing any major structural changes that would most certainly rankle the most ardent supporters. In doing so, we managed to find ~$5B between the seat cushions – a great start, but only half of our stated goal.
Now it's time for some hardcore rankling. We’re going to take aim at many of the structural mainstays of the EPL today that, in this exercise at least, fundamentally restrict the League’s ability to maximize its earnings.
The Complexity and Challenge of Professional English Soccer
Compared to the monopolistic simplicity of the NFL and other American sports, English soccer is an organizational nightmare – a sprawling set of four professional divisions, one semi-professional(!) division1, and another 10ish additional amateur divisions. These 15 or so leagues are governed by three different organizations, each of whom have a relatively tenuous relationship with one another:
The English Premier League (EPL) runs the (now) top division in English soccer and most popular in the world.
The English Football League (EFL) runs the next three divisions of professional sport, as well as the League Cup tournament.
The Football Association (FA) was the original governing body of soccer in England, and today still largely oversees the “sanctity” of the sport itself while also governing the 5th to nth divisions of mostly non-professional sport.
I should point out that almost none of the divisions outside of the top two make any real revenue, and the EPL itself represents the lion’s share. Let’s state plainly that modern English soccer divisions would not survive without significant subsidization by the EPL. I mentioned in the last piece that the most recent deal between the EPL and EFL stands at $1.9B over three years!
The structural complexity that I’m largely glossing over here is the result of more than 100 years of addition without subtraction. It is a structure that would never be purposefully designed if started today, and though there is tremendous tradition captured within the preponderance of leagues, the lack of consistent culling has directly led to the present state of the sport – in which nearly all clubs, and all divisions, are one calamity away from insolvency, and none of whom would really persist without the continued growth of the EPL itself.
I’m not just some random Yank calling for widespread structural reforms. The EFL’s own Chairman, Rick Parry, has decried for “a complete rethinking regarding the funding of English professional football [that] predates the Covid-19 crisis.”
And that’s what we’re going to do here – offer a fundamental, completely uncontroversial restructure of professional soccer in England.
Consolidate Governance of League Teams.
The existence of two separate governing bodies for the four professional divisions is far from ideal, as it necessitates a quasi-adversarial relationship from the jump, especially as it pertains to media rights negotiations. This is a bit self-serving, I’ll admit – the only way that the more drastic changes I’m suggesting below can go forward necessitates a consolidation of governance.
So our first move here is to abolish the EPL and EFL and rebuild a singular entity focused on the commercialization of the sport. The Football Association (FA) will and should remain, as it focuses more heavily on the preservation of the “beautiful sport” itself; maintenance of this cultural export should not be understated for the UK’s global relevance. But the FA is not an effective commercial body and as such should leave these duties to its new, singular governance partner.
This looks a bit like John Malone’s oft-quoted truism “everything is bundling and unbundling” – the EPL effectively “unbundled” itself from the EFL 30 years ago, but this schism, necessary as it may have been at the time, is no longer optimal.
Let’s not stop there – if we’re consolidating governance of the sport within England, why not expand these efforts to the whole of the UK? Yes, I am indeed suggesting that the Welsh and Scottish (and to a lesser commercial extent, Northern Irish) leagues also be brought into the fray.
Such a country-level consolidation has a couple obvious commercial impacts. First, it brings all of the top country’s top teams into one structure. Here I’m specifically looking at Celtic and Rangers, arguably the two most known and valuable clubs outside of English football that would immediately become amongst the largest clubs by matchday revenue:
The benefits here are bidirectional, because although they have tremendous fanbases that trigger these top-tier match-day revenues, their total monetization rates are quite poor because of the absence of strong media rights:
Second, consolidation of clubs across the country would increase total viewership and media rights value for our new “English Professional League” (nEPL), which is, as I’ve argued, the most important step for closing the revenue gap with the NFL.
So that’s the first step in our 100% uncontroversial master plan to grow the Premier League – first abolish it, then consolidate all of the UKs leagues under a new, singular structure2.
Restructure the Divisions
With all UK clubs now operating under one governing body, we have an opportunity to fundamentally improve the positioning of professional soccer in the country. Let’s at least for now say that a shift to a single, dominant, “closed” league akin to traditional American sports is neither feasible nor desirable for the time being. As such, a multidivisional structure including (revised) relegation will continue.
As I articulated last week, a major challenge for the current EPL is that 20 clubs simply aren’t enough, and this is especially true now that we’ve expanded the total pool. Conversely, a total of 200 “professional” clubs simply isn’t tenable for a country of 67M (more on this in a second). So our target here is to both expand the size of the top divisions and (unfortunately) contract the lower divisions.
Let’s say that the nEPL contains 60 clubs across just two divisions. This number is not completely random – in the EPL’s 30 year history, 50 clubs have featured in the league, and thus by increasing to 60 we have enough capacity to capture most of these clubs plus a smaller number of non-English clubs we’d expect to be of similar quality (starting of course with Celtic and Rangers)3.
1+1 = 3
It’s important to note that the Championship (England’s second division) is already “the wealthiest non-top-flight football division in the world, the ninth-richest division in Europe”, and by ELO ratings, it is effectively tied with the Portugal and Netherlands first divisions as the 6th best league by club quality (which effectively makes it the highest quality outside of the “Big 5”). It also has the third-highest total attendance in Europe (10th highest by average), above La Liga(!), but it monetizes only 9th best because of its less lucrative media rights deal.
By combining the #1 and #9 leagues into a two-division mega-league, we should be able to increase the value of both the EPL (moderately) and the EFL (a ton) to create a far more lucrative deal than the two independent bodies were able to negotiate previously.
More Total Games
But we’re not standing pat – by increasing the size of our top two divisions by 50% each, we’re enabling a greater total number of matches that the league can monetize. This is not to say that we should increase the total matches by 50% – one reason the EPL plays so many today (38) is because it dogmatically tied itself to the idea that all clubs MUST play all other clubs twice per season, one Home and one Away. While this creates nice symmetry, it also creates a schedule with too many games per club, especially when considering the additional tournaments in which top clubs compete (more on this later).
At present, there are 380 total matches each season in the EPL. In our new structure, we could decrease the number of matches per club from 38 to 32 and still increase the total number of League matches to 480, growth of about 26%. This match growth will certainly enable a larger media rights deal, but also provides an additional benefit…
Better Lineups = Better Product
Managers must constantly “load manage” their players throughout the season because there are simply too many matches, and fatigue plus injury probability increase substantially when too many matches are concentrated. By lowering the total number of matches per club, injuries may diminish and managers will be more likely to start their best players more often, increasing the quality on the pitch and, with it, improved viewership.
As I opined last week, Rush Hour Laws are the biggest barrier to revenue maximization for the league, and the historical rationale for their persistence was to drive foot traffic to EFL matches. Well, in this new world, the EFL has been consolidated into a larger, singular governing body, and thus this body can optimally coordinate scheduling of its (now) 480 matches throughout the week.
Rebuild the Professional Club Divide
It shouldn’t be too controversial to suggest that an expanded “top tier” would lead to a significantly improved foundation for growing media rights value. But the ramifications of such a move are certainly controversial, in that they require us to fundamentally rewrite the line between professional and non-professional clubs. By focusing our attention on “just” 60 clubs, we are necessarily asserting that the remaining ~140 professional clubs across the UK be reclassified as, well, non-professional.
Ignoring the cultural history for a moment, the numbers are unassailable – an adult population of 47M simply cannot realistically support 200 professional clubs. There are 43 “professional” clubs within 90 miles of Manchester alone! Even our nEPL total 60 is likely too many, but it’s at least a more reasonable starting point for our consolidation efforts.
Why does this formal reclassification matter? Two major reasons:
Relegation would remain within the professional divisions but be cut off from the non-professional divisions. Put differently – the 60 professional clubs would be fixed, and there would no longer be a mechanism for a non-professional club to enter the top divisions.
Revenue subsidization from the professional league would cease. I’ll discuss a potential remedy here shortly, but for now, non-professional clubs would be required to self-sustain or they must close.
I can hear the criticisms already – what about the history? What about the impacts to local communities? These concerns are totally valid! Football clubs are not simply businesses but cultural talismans for so many communities across the UK (and Europe). And yet…they are still businesses, and businesses that cannot self-sustain must necessarily close.
And just to be clear – the vast majority of clubs are today nearly insolvent. The UK government itself acknowledged this with its recent white paper outlining the hellscape which is football club financials. But whereas the government is attempting to claw back influence by dangling false promises of maintaining the current structure mostly as it is, what these clubs actually need is acknowledgment that the old system is gone, and survival requires fundamental change, NOT maintenance of the status quo.
Formally Tie Professional and Non-Professional Clubs
If smaller clubs are already nearly insolvent, and if we’re cutting off any subsidization from the singular professional league, how are small clubs expected to survive? Is “demonstrate that you can stand on your own” just a euphemism for “you will cease to exist within n years?”
If the system were redesigned today, there is a zero percent chance that this many clubs would actually exist. And while I wholeheartedly believe there are too many clubs, they do in fact exist in this reality, and with their considerable history they provide cultural value at the very least. How might we preserve this cultural value without impairing our revenue generating capacity?
Man City CEO’s has previously proposed that EPL teams be allowed to own “B teams” in the EFL.
“Soriano has talked openly about his desire for Premier League clubs to have B teams in the EFL and the resistance to that has been another factor in CFG’s more recent determination to bring in clubs to help them develop and/or sell players.”
In our current hypothetical this isn’t feasible because, well, I just disbanded the EFL. But what if we adjusted the concept, perhaps adopting something more akin to the “minor league” system common within North American leagues? By this I mean formally aligning smaller clubs with the 60 professional clubs of our new unified professional league. This provides a number of potential benefits:
We remove the begrudging revenue-sharing subsidization system and replace it with formal, club-level stewardship.
Professional clubs would have a separate mechanism for developing talent beyond their academies.
Leagues are still played and championships are won, but for the glory of the championship rather than the promise of promotion.
These benefits have mostly focused on the revenue side of the P&L, but there’s another clear advantage to professional/non-professional team alignment: stadium capacity.
At present, effectively every club has its own stadium. This necessarily means that (a) most stadiums are tiny, (b) many are in rough shape, and (c) there is no financial means by which these stadiums can be improved/grown. The reality is that many of these stadiums should be razed, but this can’t happen while clubs remain independent.
By formally aligning non-professional clubs with much wealthier professional clubs, non-professional playing environments (not to mention the environment for supporters) can massively improve via one or both of two pathways:
Schedule permitting, non-professional clubs would gain access to the owner club’s current stadium, or even their practice facility pitches, which will in almost all cases be a massive upgrade.
Professional clubs may also decide to lessen costs by building communal stadiums intended to be shared by 2+ clubs in a given geographic region.
One final unfortunate truth of this new “professional<>non-professional ownership model” – there are simply too many clubs than the model can support. I don’t think there’s any path forward that combines healthy, sustainable scaling without a loss of a proportion of clubs. In this scenario, the remaining clubs would have two options:
Merge with 1+ other clubs4.
Shut down entirely.
Maximize Tournament Value
Thus far we’ve focused our efforts solely on the league itself. But European soccer is composed not just of these domestic leagues, but of tournaments – and here again we have an opportunity to improve the revenue generating capacity of our nEPL.
Rethink the Domestic Tournaments
Because there are currently three soccer bodies, each runs its own “cup” (i.e., tournament) to goose up revenues. Not only does this create hyper-confusing branding (what does each actually represent?), it further complicates the schedule, thus diminishing the optimal revenue generating capacity of these tournaments.
By consolidating governance, the new league can rethink its approach to tournaments. I already suggested one new addition last week: the relegation/promotion tournament. This is much easier to structure now that a single organization is running it, and with 60 total teams across both divisions, we can now expand it beyond 6 to perhaps 12 teams each season, further expanding the total value it can create.
The singular organization can now also rebuild and rebrand the “League Cup” (formerly known as the Carabao Cup) – the tournament that historically pitted all clubs from the EPL and EFL against one another. This new tournament would be refactored in order to maximize its value as a complement to the regular season:
With our consolidation efforts, we’ve downsized from 96 professional clubs managed by two different organizations to 60 professional clubs managed by a single organization. In the old model, all 96 clubs competed against one another to crown a winner, and similarly, our revamped version would see all 60 professional teams participate.
When It Occurs
International soccer is quite whacky in that the regular season is interrupted constantly by at least three different cups/tournaments. For my American eyes this is absolute madness, a hodgepodge of confusion that harms the regular season product (by forcing managers to rest players), and harms the tournament product by (a) incentivizing managers to play second-tier squads and (b) diminishing the excitement by stretching out the tournament over months.
We’re going to fix all of these issues in one fell swoop – the new “professional cup” will instead be scheduled in a single, two-week period to kick off the winter transfer period. What does this solve/improve?
By stripping these matches out of the regular season, managers can play their best lineups more regularly within the regular season AND field these lineups within the tournament.
By scheduling it at the start of the winter transfer window, we further incentivize managers to play their best players in this more grueling format because they will immediately be rested thereafter.
The tournament also represents a fantastic lead-in for the additional monetization of the transfer window itself that I suggested last week.
And because we already shortened the regular season by 6 matches, there is space on the calendar for this tournament without actually elongating the season.
Most importantly, it maximizes attention and excitement, and thus revenue potential, by concentrating it into a continuous, focused period.
There’s another reason to schedule this mid-season rather than end of season – our now even more powerful professional league will attempt to convince the other major governing bodies of soccer to shift its own club tournaments.
Better integration with non-league tournaments
The Champions League represents, inarguably, the finest soccer played in the world. Period. The Champions League final is watched by more people than the Super Bowl. And yet – it represents a massive unclaimed opportunity to be a truly global cultural force every single year, and why? Like the League Cup, its current organizational structure fundamentally undermines its potential value:
It is similarly stretched across many months, with so many early matches squeezed in between national league matches.
There is a lack of cohesion in that its participants qualified from the previous domestic league season, many months prior.
As with the League Cup, we’re going to fix this issue by rebuilding the Champions League as a focused, continuous tournament held each summer at the conclusion of the national league season. This accomplishes a number of things:
The concentrated calendar, independent of any other soccer played at the time, enables maximum attention for this tournament (just as the World Cup garners).
The timing follows the American model a bit and capitalizes on the momentum of each regular season to “finish” with the playoffs (in the form of the Champions League).
This direct sequential scheduling also eliminates the confusion around why certain teams are participating – we’ve drawn an immediate connection between the final table of the domestic league seasons and the tournament.
The tournament can likely be restructured to have fewer total matches by being held – again, World Cup style – in revolving, neutral locations, to do away with the two-match “home and away” requirements of the early stages.
And because this tournament represents the final soccer that will be played before the long summer break, managers are incentivized to play their best squads.
That’s all fine, but how exactly does this benefit the EPL itself? This is, after all, a series not about maximizing European soccer value but English soccer value. There are two primary benefits I see here:
Most obvious, and one that I’ve discussed ad nauseum, is cleaning up the national league calendar. With fewer matches each week, it is far easier to focus customer attention on these domestic clashes.
Less obvious, and far more challenging to pull off, would be a strategic partnership between the new English professional league and UEFA.
What might this look like? By directly tethering the regular season of the EPL to the “playoffs” of UEFA’s Champions League, we initially build a bridge that encourages the two sides to cooperate. Contrast that to today, where there is a constant clash for pieces of the calendar coupled with passive aggressive sniping in the trades:
“Richard Masters [CEO of the EPL] pointed out that these clashes are almost impossible to avoid, particularly when world governing body FIFA and its European equivalent UEFA keep adding new teams and matches to their competitions. “It isn’t domestic competitions or leagues that are adding dates to the diary,” he noted.”
This partnership would see, at worst, a larger formal marketing partnership, especially during the EPL season, in which the EPL would continually promote that the fight for the top 4 leads to inclusion in the Champions League. In return for such promotional efforts, UEFA would agree to a share of Champions League revenues. And lest this just become an even larger revenue wedge between top and bottom teams, this shared revenue would be distributed across all EPL teams, not just the participants.
Would I like to see much of this actually implemented? Yes, of course. Do I think there’s a non-zero chance of much of this actually being implemented in the next, I dunno, 30 years? Yes…but only because I don’t assign zero percent probabilities to any social events. Such massive structural upheaval takes courage above all – and given the current sclerotic nature of the sport, I’m more skeptical than I’d like that greater changes would even be considered. Nonetheless, the likelihood of implementation changes nothing about the validity of the changes.
This is where Wrexham resided until their promotion last season.
Yes, this does start to sound a bit like conquering Westeros, and so it is.
For now I'm purposefully avoiding the HOW in selecting these 60 clubs. This is a much more arduous task that unnecessarily complicates our revenue-focused endeavors, and there's no doubt that the selection would be highly controversial given the further changes I recommend later.
There's precedent for this, albeit In Belgium - Sporting Lokeren and Temse merged into K.S.C. Lokeren-Temse.