English Megaclubs Earn Big Bucks Selling World’s Game

May 2, 2007 — -- The English Premier League in 2007 is Europe's richest and most spectacular soccer league, an athletic and economic beast, feeding on a rich diet of cable television and upmarket ad money.

But as recently as 1985, the national game was in shambles. Violence in and around the match grounds had reached crushing levels, effectively barring women and children from stadiums.

A disaster before that year's European Cup final at Brussels' Heysel Stadium killed 39 spectators and earned Liverpool, whose fans were accused of sparking the violence, an indefinite ban from international competition.

New safety requirements put into place after the Heysel disaster combined with a new approach to marketing the game -- the Premier League will be paid more than $1.2 billion for international television rights through 2010 -- have made English soccer a force in the global marketplace.

The Road to Riches

Premiership teams spent more than $500 million on players from all five continents in summer 2006. The tremendous cost of fielding a competitive side has precipitated record increases in ticket prices and new corporate sponsorships.

"Some call it the gentrification of soccer," said Simon Kuper, author and columnist for the Financial Times, "but in fact the whole [of England] gentrified. And it was reflected in soccer."

The reconditioning of the English fan came under pressure by the government and media and as ticket prices began to rise. The goal was simple. Price out the violent young males and make the venues safe for upper-class fans.

"The corporate element came out later," said Jamie Trecker, Fox Soccer's senior writer, "and what you have now is a much more highbrow game."

Dilapidated grounds and violent hooliganism have been replaced by all-seater megastadiums and a white-collar fan base. The resulting surge in revenue has made the possibility of another Heysel almost unfathomable -- clubs simply have too much at stake.

Indeed, victory in this week's Champions League semifinals, and subsequent glory in the European championship in Athens on May 23, could earn the winning club as much as 40 percent of its total yearly income, Trecker estimates.

"Liverpool netted £30.5 million -- $41.4 million -- for winning in 2005, and that doesn't even include endorsements," he said. "In terms of the difference the money can make, it's quite staggering. The Top 5 clubs in England probably made 50 times what the rest did just off playing in [European competition]."

Of the remaining Champions League clubs, three are from the English Premier League. Two of them, Liverpool and Manchester United, are owned by Americans.

The Americans Are Buying

"We are long-term sports investors and avid Manchester United fans," American Lloyd Glazer said by way of introduction in a 2005 statement to United fans. Unconvinced, the club's notoriously hostile fan base took to the streets and burned the $1.47 billion takeover in effigy.

"But everyone's forgotten about that now," said the Financial Times' Kuper. "Manchester's gone from strength to strength with no real change in club policy. The interests of the owner and fans are aligned."

Those interests, to be specific, are winning and making money and Manchester United has continued to do both in the Glazer Era. The club reported revenues of more than $400 million last year, due in large part to a new, four-year shirt sponsorship deal with American International Group, AIG, and the addition of 8,000 new seats to Old Trafford, bumping its home field stadium capacity to 76,000.

Among the wealthy Americans vying for business are Tom Hicks, owner of the Texas Rangers, who, with George Gillett, paid an estimated £218.9 million -- about $440 million -- for a controlling share of European giant Liverpool. Cleveland Browns owner Randy Lerner wrapped a purchase of Aston Villa during the summer and billionaire Stan Kroenke just weeks ago purchased ITV's 10 percent stake in Arsenal for $88.2 million, according to The Times of London.

Still wary of Glazer's treatment at the time of his purchase, and careful not to offend the sensibilities of their clubs' respective supporters -- distant cousins of the American "fan club," these groups often fight in court and in the media to oppose foreign ownership -- none of the above owners would comment for this article. Again, they simply have too much at stake.

"The policy among most EPL [English Premier League] owners is not to talk," Fox's Trecker said. "They do not have the same relationship with the press American team owners do -- and that suits the new boys from over here just fine."

The Revolution Will Be Televised

"Not until five years ago could you see soccer around the clock," Trecker said. "One of the main reasons the sport has emerged here now is satellite and cable."

Americans love sports, but their love is not blind, and it's not unconditional. For all its faults, the American sporting public is actually quite discerning when it comes to evaluating the level of play on the field or TV screen.

When genuine class and star power arrived with Pele and the North American Soccer League in the 1970s, Americans turned out for games in record numbers. When the level of play in the league fell and the stars returned to Europe, the fans tuned out.

This summer's World Cup final match, aired on ABC, attracted an estimated 17 million viewers. Games during the monthlong tournament garnered an average of 3 million viewers.

If Americans will watch nothing but the best, then their long wait is over. The class of international soccer is now at their digital fingertips. And with megaclubs like Chelsea and Arsenal looking to expand their Internet broadcast capability, the growth curve for the world's best soccer appears destined to continue in an unprecedented ascent.