Commentary
Is making a profit everything in pro sports?
- by Ahmet Guvener @guvenersoccer, Aug 4, 2016
Forbes just published the 50 most valuable sports teams. The list is headed by a football team (Dallas Cowboys) for the first time since Forbes started compiling the list in 2011. Manchester United (2011, 2012) and Real Madrid (2013, 2014 and 2015) were the No. 1 teams over the last five years. So the reigning sport changed hands: From soccer to football. Out of the 50 teams 27 are NFL franchises. If you look at the table below this is not surprising.
Among the top 50 teams there are eight (two La Liga, one Bundesliga and five Premier League) soccer, eight NBA and seven MLB teams, which is in line with the top professional leagues by revenue list. So those leagues are the best marketed and hence “sold” leagues. There is no argument about that.
The question is, Are the teams in the top 50 also successful on the field? That is, is there are a correlation between success on the balance and score sheets. The answer is jein (The German word for yes and no). Should there be a correlation? The answer is left to the reader. For the owners the answer is definitely a NO unless good results on the field bring in extra revenues. How about for the fans? Well! Let us see.
Dallas Cowboys -- the most valuable sports team on the globe -- is worth $4 billion. That same team for the past 20 years did not play a Super Bowl game yet alone winning it. In the last five years, they had one winning season (2014) and that is the only season they went into playoffs. Clearly, they are not very successful on the field. If they were ranked No. 1 in 1996, then we could have said there is definitely a correlation between score and balance sheets. In the 90’s, the Cowboys won the 27th, 28th and 30th Super Bowls. Jerry Jones must be very happy with the $4 billion. I assume the fans who are the consumers of a non-winning team must also be happy with the current status, otherwise the $4 billion revenue would not have been realized. Dallas Cowboys are a masterpiece of what I learned years ago as a young engineer.
The highest ranked MLB team is the New York Yankees on the same list. They are fourth with $3.4 billion revenue. Their on-the-field success is a bit better than the Cowboys, but they are not as good on the diamond as the balance sheet. This relative success on the field compared to Cowboys could partially be attributable to the lack of a hard salary cap at MLB. Since winning the World Series in 2009, Yankees they did not play or win the World Series.
The New York Knicks with $3 billion in revenue is ranked 7th, the highest of NBA teams. Since losing to the San Antonio Spurs in 1998, they did not play in the NBA final and their win/loss ratio in the last 5 years is 0.45. They are losing on the floor but winning on the dollars.
If you go the other side of Atlantic and to the sport of soccer, things are a bit different. Real Madrid (Ranked 2nd with $3.65 billion) and Barcelona (ranked 3rd with $3.55 billion) of the La Liga over the last 20 years have a combined total of nine Champions League as well as 16 La Liga trophies. In Spain, there is definitely a correlation between success on the field and the cash register. La Liga has another problem, though. It lacks a real third competitor. I mean by underlined real not royal in the Spanish sense but with the English dictionary version. I call the La Liga the league with 2.5 teams. The half team is sometimes Atletico Madrid and sometimes Valencia.
The five out of the six remaining soccer teams on the top 50 list are from the Premier League. Manchester United, which was the leader in 2011 and 2012, is now the 5th with $3.34 billion in revenue. This is not surprising. United won only one Premier League championship (2012-2013) in the last five years whereas they had won five of five titles in the years prior to it. Similarly, they played four finals and won one (2007-2008) between 2006 and 2011 and they have not played or won the Champions League final for the last five years. So the drop of success on the field is reflected on the revenues for United.
Among the other four Premier League teams (Arsenal 23rd, Manchester City 28th, Chelsea 35th, and Liverpool 41st) Chelsea is the only one with on-the-field international success story, having won the Champions League in 2011-2012. In the last 20 years, Chelsea won four, Arsenal and Manchester City each two Premier League titles.
Actually, Leicester City -- the Cinderella story of this season -- is the only team in the last 20 years that won the title in the Premier League other than the four major teams. So there is a clear correlation between sports and business success in the Premier League also.
One should not forget that the Premier League is the only league in the world -- other than USA -- that has the Anglo-Saxon ownership model. This is evident with the third place standing in the sports league list based on revenue ahead of NBA and NHL. The owners of 11 clubs in the Premier League out of 20 are non-UK citizens or corporations; five of them are from USA.
It is very obvious that the Anglo-Saxon ownership model brings monetary success; the top five leagues based on revenue are all based on ownership models. Does it bring success on the field? Looking at the English Premier League model and the English national team, one cannot easily say that. Premier League teams won four Champions League titles in the last 20 years compared to nine times by the La Liga rivals. The saddening story of the English national team is not worth quoting statistics about.
The owners of teams making great business are clearly happy. Here and anywhere else. But are the loyal customers -- the fans -- happy? It depends on which side of the Atlantic you are on. The fans in England are very loyal to their clubs regardless of the performance on the field, but that cannot be said for the fans of continental Europe.
The dilemmas are: “What is success in professional sports?” “Do we have an illusion that winning is everything in sports or on the contrary making profit is everything professional sports are all about?
If we reflect those dilemmas to soccer in this country, we see the following: MLS based on revenue is ranked 18th in the world of sports leagues. Business-wise that is better than a number of soccer leagues of nations who is ranked higher than USA. (USA is currently ranked 25th on FIFA listings.) Considering that MLS is only 20 years old, the 18th-place ranking by revenue among the professional sports leagues and 13th among the soccer leagues is pretty impressive.
The other North American leagues NFL, NBA, MLB and NHL do not have any true competitors in the world, but MLS has many. MLS has chosen the Anglo-Saxon ownership model -- since there is no other option in USA -- and a league model that does not reward success on the field -- no promotion, no relegation. Recently, it was reported that FC Dallas -- the Supporters Shield leader -- is down 15 percent from its final 2015 average. Do you think that the on-the-field performance of FC Dallas makes the owners happy? The carrot for winning the league overwhelms the financial success in every country except USA.
Do not forget the tears on Cristiano Ronaldo’s cheeks when a serious injury forced him out of the Euro 2016 final in the 24th minute. Even the best-paid professional athletes in the world cry! They want to win. He definitely does not need the bonus to be paid for winning the Championship. Money is not everything, at least in soccer.
Especially when you consider the dominance of USA in all sports, we do not see any international success yet neither for MLS nor USMNT. Is professional soccer solely for profit or is winning on the field also important like in the rest of the world? That is for MLS and U.S. Soccer to decide and act accordingly.
Ahmet Guvener is the former Secretary General and Technical Director of Turkish FA. He was also the Head of Refereeing for the Turkish FA. He served as Panel member for the FIFA Panel of Referee Instructors and UEFA Referee Convention. He now lives in Austin, Texas.
