October 23, 2023
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Big moves are happening in Europe’s Premier League and Serie A, as this all-soccer newsletter shows. But domestically, MLS continues to grind out solid gains year after year, forming one of the more remarkable stories in the business of sports, as evidenced by this year’s record [[link removed]] attendance of 10.9 million. While the arrival [[link removed]] of Lionel Messi certainly fueled ticket sales across the league and represented soccer’s flashiest story, MLS also used other elements such as expansion, a historic revival [[link removed]] of the El Tráfico rivalry, and attendance gains across a majority of clubs to power the overall increase. League commissioner Don Garber remains one of the most underrated figures around.
— Eric Fisher [[link removed]]
Premier League Considers Salary Cap Amid Ballooning Player Costs [[link removed]]
Manchester United FC
Grappling with rising player compensation and competitive imbalance, the Premier League is looking at the possibility of implementing a rather American concept: a team salary cap.
The league is already subject to UEFA Financial Fair Play Regulations designed to ensure financial solvency for clubs, but Premier League officials are looking at potentially going a step further with a hard cap.
“As far as competitive balance [is concerned], people need to be bold,” said [[link removed]] Crystal Palace chairman Steve Parish. “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.
“There are really positive conversations going on about it. We also have to be very careful because there are also unintended consequences,” he added.
With the notable exception of Spain’s La Liga, much of European soccer currently operates without a salary cap, making these latest comments all the more important.
The Haves And Have-Nots
A key impetus behind the Premier League efforts is the marked disparity in team payrolls. Manchester United’s $249.8 million payroll [[link removed]] this season is nine times greater than Luton Town’s [[link removed]] $27.8 million — a far bigger discrepancy than is seen in any major U.S. sport.
The Premier League table has also been fairly static 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.
DAZN, Sky Italia Land Serie A TV Rights For Nearly $5B [[link removed]]
DAZN
Italy’s Serie A remains mired in a host of ownership and facility issues but has nevertheless sealed a major piece of its media future with a set of domestic media rights deals worth $4.8 billion.
The country’s top level of pro soccer has completed a five-year pact with DAZN and Comcast-owned Sky Italia, giving the league a crucial financial lifeline amid significant change across international soccer.
DAZN is said to have offered at least $741 million per year for the rights, airing seven matches per week, while Sky Italia will pay another $212 million annually through the 2028-29 season.
The agreements, which approach Serie A’s initial goal [[link removed]] of $1 billion per year for the rights, reportedly [[link removed]] received support from 17 of its 20 clubs in the league. There’s also a possible $1.06 billion bonus [[link removed]] for Serie A if certain subscriber targets are met.
The rights deals provide some stability to a key piece of Serie A revenue as it faces a growing financial gap [[link removed]] between itself and other top European leagues, as well as the upstart Saudi Pro League.
Total revenue [[link removed]] was just $2.62 billion for the 2021-22 season, slightly more than a third of the comparable figure for England’s Premier League, and projections for the current season are similar.
On a franchise level, Juventus, the Italian league’s winningest club ever, is dealing [[link removed]] with its own revenue issues and a Financial Fair Play penalty, while AC Milan and Inter Milan abandoned [[link removed]] plans for a shared $1.3 billion stadium.
FUTURE OF SPORTS
The Sports Equity Shift
Sports has quickly evolved from a conversation about athleticism to one that encompasses concepts of equity and ownership [[link removed]] with equal levels of intrigue. Just a few years into the 2020s and we’ve already witnessed a tremendous shift.
From the rise of streaming and its effect on media deals and team valuations to the explosion of women’s sports and niche sports like pickleball and lacrosse, the sports industry as a whole continues to present new opportunities.
In our latest virtual event, The Future of Sports: Equity [[link removed]], sponsored by ISOS Capital Management, we explored these topics with representatives from ESPN, Warner Bros. Discovery, NWSL, Roku, and more of the most influential businesses in the space.
Watch on demand [[link removed]] now.
AC Milan Eclipses $400M In Revenue, Is Profitable For First Time In 17 Years [[link removed]]
Kirby Lee-USA TODAY Sports
Another sign of Serie A’s improving financial health: AC Milan has reported its first club profits since 2006.
On the heels of a critical set of the league’s new domestic media rights agreements [[link removed]], the club said it posted a $6.49 million profit for the year ended June 30 on club-record revenue of $430.5 million — up by 36% from a year ago.
Fueling the increases were a series of on- and off-field successes, including reaching the 2023 UEFA Champions League semifinals and recording meaningful gains in core revenue streams such as ticket sales, media rights, and sponsorships.
“This marks an important step in our club’s history with a return to net profit after 17 years,” said Paolo Scaroni, AC Milan chairman. “We are heading towards a new, important chapter of evolution in the development of our club.”
That chapter includes new ownership led by U.S.-based private equity firm RedBird Capital, which purchased [[link removed]] the club last year in a $1.3 billion deal also involving the New York Yankees and LeBron James, plus initial steps [[link removed]] toward a potential stadium development in the Milan suburb of San Donato.
To that end, the latest financial report includes an investment of $42.6 million “aimed at resolutely advancing the project for a new stadium.”
“Combining sports performance, global competitiveness, and financial sustainability in football, when on a virtuous path, is possible,” Scaroni said.
AC Milan’s biggest rivals, Inter Milan and Juventus, both continue to lose money.
Conversation Starters Arizona State’s new golf facility, designed by Phil Mickelson, is “the coolest in college golf.” Take a tour [[link removed]]. For the first time, pickleball has overtaken [[link removed]] tennis in participant workouts on Apple Health. Have you played pickleball? Weigh in with our poll [[link removed]]. HBO has decided which team [[link removed]] will be the subject of this year’s in-season “Hard Knocks” premiering later this fall: the Miami Dolphins. Editor's Picks Doris Burke Begins Historic NBA Broadcast Role [[link removed]]by Michael McCarthy [[link removed]]After an offseason shakeup, Doris Burke begins her role as ESPN’s first female No. 1 TV analyst for the NBA. Two-Time WNBA Champ Becky Hammon Returns To NBA Coverage [[link removed]]by Michael McCarthy [[link removed]]ESPN is also adding four-time NBA champion Andre Iguodala to its broadcast roster. Pressing Challenges Await NFL, Goodell in Next Term [[link removed]]by Eric Fisher [[link removed]]Upcoming contract period to test NFL’s ability to retain industry-leading status. LIV Golf’s Future Remains Undecided [[link removed]]by David Rumsey [[link removed]]LIV Golf concluded its 2023 season on Sunday. Careers in Sports
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