Tony Davila, IESE Norm O Reilly, Syracuse University George Foster, Stanford University. Barcelona, Spain November 24 th, :45 to 13:30
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1 Tony Davila, IESE Norm O Reilly, Syracuse University George Foster, Stanford University Barcelona, Spain November 24 th, :45 to 13:30 1
2 Introduce the Professional Sport Business Key Management Concepts Background Context (North America): Revenue generation from the NFL s Super Bowl Profitability in the Old NHL Changing reality of player s salaries in MLB & NBA Background Context (Europe) EPL Imbalanced Club Budgets EPL Changing Dynamics in TV Revenue EPL Relegation & Open Competition for Players Current Study Method, Results, Discussion 2
3 3
4 Key Business Concepts Coopetition Owner Intent & Structure (in two slides) Competitive Balance (more later) Brand Integration Industry: entertainment Important Realities Differences between Europe and North America Rapidly changing distribution channels Size discrepancies major leagues versus minor leagues 4
5 Club Owner Intent Independent Win Profit Convergence Anaheim Ducks and Anaheim Angels & Disney League Structure of Ownership Single-Entity Ownership Model (e.g. WNBA, MLS) Distributed Club Ownership Model Single Owner NA (e.g. George Steinbrenner; Jerry Jones) Europe (e.g. Chelsea) Investment Syndicates NA (e.g. Boston Celtics - Wycliffe Grousbeck, H. Irving Grousbeck, Stephen Pagliuca) Europe (e.g. Gillette and Hicks Liverpool) Publicly Traded NA (e.g. Green Bay Packers) Europe (e.g. Olympique Lyon)
6 The average estimated value of a National Football League (NFL) franchise has grown from US$288 million in 1999 to over US$1 billion in 2009 (Forbes, 2009) The National Hockey League (NHL) saw a season-long strike in that cost it a full season and redefined many aspects of the way the league is run Since Carson Yeung s purchase of Birmingham in October, 50% of EPL s 20 clubs are now foreign owned (CNN WorldBlog, 2009) Large-scale professional leagues are emerging in new markets such as the Kontinental Hockey League (KHL) in Russia and the Indian Premier League (IPL) who both began play in
7 Mega Event/Global Event IOC s 5 Rings World Soccer Cup Tour de France Major Leagues NFL/NBA/MLB/NHL Formula One/NASCAR EPL/La Liga Clubs ManU/Real Madrid/Barcelona Cowboys/Yankees Players Beckham/Ronaldinho Tiger Woods/Roger Federer 7
8 8
9 From Nadeau & O Reilly (2006) International Journal of Sport Finance 9
10 Presence of a Star Player Team Composition Local Hero* Team Style Draft Success Performance Winning Home team success Recently Winning Cup* Performance Improvement Deeper in Playoffs* Historical Cups Won* Historical Finals* Retired Jerseys* Hall of Famers* Age of Team* Expansion Phase* Nadeau & O Reilly, 2006
11 TV Coverage Radio Coverage Newspaper Coverage* Merchandise Sales* Sponsorships* Nadeau & O Reilly, 2006
12 Country of Team Market Size Market Income Market Age* Market Education* Stadium Novelty Effect Market Competition* Attendance Sellout frequency Arena Location* Government Subsidies Nadeau & O Reilly, 2006
13 Ticket Prices Arena Advertising Concessions Revenue - Parking Revenue- Past Economic Performance* Convergence Team Salary Individual Player Salaries Nadeau & O Reilly, 2006
14 Improved Performance Team Playing Style Player Investment Team Composition.206 Winning Rsq=.425 Historical Performance Market Competition Arena Location Rsq= Market Support Rsq= Regional/ Local TV Rsq=.381 Profitability Rsq= Sponsorship.193 Convergence Market Nadeau & O Reilly, 2006
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16 MLB Total Payrolls The totals include salaries and pro-rated shares of signing bonuses. Highest: New York Yankees Player: Alex Rodriquez US$33M Avg. Salary US$3.26 million, 4% increase from teams decreased Biggest Cut Padres US$30M References: USA Today (April, 2009) (Baseball) Team 2008 payroll 2009 payroll Yankees $209,081,577 $201,449,189 Mets $137,793,376 $149,373,987 Cubs $118,345,833 $134,809,000 Red Sox $133,390,035 $121,745,999 Tigers $137,685,196 $115,085,145 Angels $119,216,333 $113,709,000 Phillies $98,269,880 $113,004,046 Astros $88,930,414 $102,996,414 Dodgers $118,588,536 $100,414,592 Mariners $117,666,482 $98,904,166 Braves $102,365,683 $96,726,166 White Sox $121,189,332 $96,068,500 Giants $76,594,500 $82,616,450 Indians $78,970,066 $81,579,166 Blue Jays $97,793,900 $80,538,300 Brewers $80,937,499 $80,182,502 Cardinals $99,624,449 $77,605,109 Rockies $68,655,500 $75,201,000 Reds $74,117,695 $73,558,500 Diamondbacks $66,202,712 $73,516,666 Royals $58,245,500 $70,519,333 Rangers $67,712,326 $68,178,798 Orioles $67,196,246 $67,101,666 Twins $56,932,766 $65,299,266 Rays $43,820,597 $63,313,034 Athletics $47,967,126 $62,310,000 Nationals $54,961,000 $60,328,000 Pirates $48,689,783 $48,693,000 Padres $73,677,616 $43,734,200 Marlins $21,811,500 $36,834,000
17 NBA Team Salaries Team Payroll 1. New York Knicks $96,643, Dallas Mavericks $94,830, Cleveland Cavaliers $90,833, Portland Trailblazers $79,887, Boston Celtics $79,188, Los Angeles Lakers $78,245, Phoenix Suns $76,001, Toronto Raptors $73,197, Houston Rockets $72,981, Milwaukee Bucks $71,088, Detroit Pistons $71,084, Washington Wizards $70,542, Miami Heat $69,952, Indiana Pacers $69,668, Orlando Magic $69,672, Denver Nuggets $69,422, Sacramento Kings $68,739, Oklahoma City Thunder $68,341, Atlanta Hawks $68,168, San Antonio Spurs $67,993, Chicago Bulls $67,705, Golden State Warriors $67,416, Philadelphia 76ers $67,242, New Orleans Hornets $66,842, Minnesota Timberwolves $65,980, Utah Jazz $65,841, New Jersey Nets $62,666, Charlotte Bobcats $62,507, Los Angeles Clippers $62,174, Memphis Grizzlies $55,093,507 Source: 17
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19 La Liga ( ) English Premier League ( ) Real Madrid 345 Chelsea 152 Barcelona 315 Arsenal 133 Valencia 139 Liverpool 122 Atletico de Madrid 138 Newcastle 83 Sevilla 90 Tottenham Hotspur 74 Villareal 68 Manchester City 62 Deportivo Coruña 65 West Ham 60 Athletic de Bilbao 53 Everton 58 Español 45 Bolton Wanderers 54 Racing de Santander 33 Aston Villa 49 Mallorca 30 Blackburn Rovers 43 Osasuna 29 Charlton Athletic 42 Almería 23 Birmingham City 40 Getafe 18 Sunderland 39 Valladolid 18 Fulham 37 Malaga 14 West Bromwich 35 Sporting de Gijon 12 Wigan Athletic data for La Liga and data for EPL 19
20 2000/ / / / / / / /08 Euros (millions) Operating Revenues Net Operating Income 20
21 Operating Revenues Sports Personnel Expenses Amortiz. Player Acq. Costs Total Sports Personnel Expenses Total Sports Personnel Costs/ Operating Revenues 2000/ % 2001/ % 2002/ % 2003/ % 2004/ % 2005/ % 2006/ % 2007/ % 21
22 22
23 CLUB '07-08 '06-07 ManU $96.4M $62.5M Chelsea $89.1M $60.4M Arsenal $91.5M $56.7M Liverpool $88.7M $55.5M Everton $82.3M $49.5M Aston Villa $82.7M $43.0M Blackburn $78.6M $43.0M Portsmouth $79.0M $45.0M Manchester City $77.6M $41.1M West Ham United $72.0M $41.3M Tottenham Hotspur $70.4M $53.4M Newcastle $76.7M $41.5M Middlesbrough $66.9M $40.1M Wigan $65.3M $36.0M Sunderland $65.8M $12.7M* Bolton $62.6M $48.1M Fulham $61.3M $39.9M Reading $59.9M $46.2M Birmingham $58.3M $12.7M* Derby County $57.0M --- EPL TOTALS $1.6B $983.5M SBJ,
24 24
25 Movement between leagues Vast variations in revenue is relegated down Example Leeds United 1992 Was Founding Member of Premiership League 1996 Listed on London Stock Exchange Big Spending in search for Championships May Makes Semi-Finals of UEFA Champions League March 2004 Leeds Sold to Private Company May 2004 Relegated From Premiership League Championship League January 2005 Ken Bates (Ex-Chelsea) Takeover 2007 relegated to League One 25
26 Top 10 of all time ($ value) Wikipedia Compilation 26
27 27
28 The paper compares the rules of the business game across 15 dimensions of four North American leagues and four European leagues. In doing so, it articulates their differences and similarities and analyzes the resulting implications on the strategies and economic performance of these leagues. 28
29 North America National Football League (American football) National Hockey League (ice hockey) National Basketball Association (basketball) Major League Baseball (baseball) Europe English Premier League (football) La Liga (football - Spain) Ligue 1 (football - France) Bundesliga (football - Germany) Rationale for choice: Largest & most influential leagues Access to financial data Long-term plan: expand 29
30 The selection of the 15 dimensions on which the leagues are compared is based on what are believed to be most relevant factors in shaping the business landscape of professional sport leagues as supported by a review of literature (not presented here) and the experiences of the authors. 30
31 At times, financial data in professional sport is available to the general public or researchers. If provided to the researcher by an organization, the researcher is typically required to sign disclosure and, as such, cannot publicly share the data. However, sometimes data is available, typically for the following reasons. The organization is public, such as the Green Bay Packers of the NFL. The organization is required to disclose financial statements at either the club or association level. This is typically the case for European leagues. A legal event happens which requires the public disclosure of the financials of the parties involved. Third party organizations use secondary data and their own proprietary metrics to estimate the key financial variables of professional sport (i.e., team valuations, profit, revenue, player salaries). This is typical when ownership is private and financials are not disclosed (the case in most North American clubs). Examples include Forbes in North America and Deloitte in Europe. In the case of the 4th reason (third party estimates), it is very important to understand that these numbers are not 100% accurate, however researchers (see Nadeau & O Reilly, 2006) have used valid reports (e.g., Levitt Report or Popper Report in the NHL and the Blue 9 Ribbon Report in MLB) to assess the accuracy of Forbes data finding that, although the data is not exact, the trends and relative differences amongst clubs are useful for analysis. 31
32 32
33 On-Field CB Hope versus UOH Rules of the Game (Relegation versus Playoff) Off-Field CB Collective Bargaining Trade-off in CB versus Economic Viability Salary Caps and Luxury Taxes Entry Draft or Player Selection Mechanisms or Free Agency Scheduling Revenue Sharing Formula (Owners versus PA) #1 Define Pool and #2 how do you share?
34 15 Comparisons of Institutional Arrangements 34
35 How the game is organized impacts business side North America Closed single-league competition no penalty for poor season * rewarded with high draft pick Membership: only changes via expansion or club failure Division structure (many games vs local rivals) Minor League Structure (MLB and NHL) Europe Multiple leagues with multiple champions Relegation (penalty for poor performance) Balanced schedule (play each team twice) Club system for player development 35
36 Broadcasting rights how are rights fees revenues divided up North America National (shared) versus Local (not shared) model Vast differences by leagues and clubs Some clubs NYY and TML large local TV deals Many Minnesota, Calgary, Pittsburgh very low NFL is exception (next slide) Europe Typically large clubs win most (EPL reward those most often on TV; and those who win) Some exceptions La Liga now similar to NFL 36
37 37
38 Marketing, sponsorship and merchandising significance and sophistication of off-field sources of revenue No generalizeable difference NA versus Europe Differences are by: League some share (NFL; sponsorship only in EPL and La Liga) but most are team-driven Market size and Star Player impacts merchandising and sponsorship driven by market factors, where the haves benefit and the have-nots suffer 38
39 Competitive balance taxes mechanisms, if any, in place to provide for parity North America MLB and NBA tax those who spend over a set salary threshold, with the tax being allocated equally to the teams who do not over-spend NHL and NFL hard salary caps Europe There are no CB taxes 39
40 Salaries - Pre-Strike versus Post-Strike Franchise Anaheim Mighty Ducks Atlanta Thrashers Boston Bruins Buffalo Sabres Calgary Flames Carolina Hurricanes Chicago Blackhawks Colorado Avalanche Columbus Blue Jackets Dallas Stars Detroit Red Wings Edmonton Oilers Florida Panthers Los Angeles Kings Minnesota Wild Montreal Canadiens Nashville Predators New Jersey Devils New York Islanders New York Rangers Ottawa Senators Philadelphia Flyers Phoenix Coyotes Pittsburgh Penguins San Jose Sharks St Louis Blues Tampa Bay Lightning Toronto Maple Leafs Vancouver Canucks Washington Capitals Total Average
41 IMBALANCE Barcelona Major club La Liga (#3 of all PL clubs in revenue) Revenue Breakdown (Deloitte, 2009) Matchday: $101 million Euro Broadcast: $136 million Euro Commecial: $129 million Euro Tottenham PL club (#14 of all PL clubs in revenue) Revenue Breakdown (Deloitte, 2009) Matchday: $51 million Euro Broadcast: $51 million Euro Commecial: $43 million Euro Wigan Athletic (Lowest Revenue EPL club) EPL club Revenue Breakdown (Deloitte, 2009) Matchday + Commercial: $13 million Euro Broadcast: $39 million Euro BALANCE: Green Bay Middle of the Road NFL Team (15-20th) Revenue Breakdown (Public, 2009) National (Shared Revenue): US$135.5 million Local (Not Shared Revenue): US$105.5 million 41
42 Revenue sharing mechanisms methods and policies to share league and club revenues North America Additional mechanism implemented by certain leagues (e.g. NFL and visiting team revenue shared 1/32) Most in NFL, then NHL and NBA, then MLB Europe Limited revenue sharing (similar to MLB) 42
43 Revenue Differentials by League * Revenues by Club - EPL, NFL, NBA, NHL, NBA *2008 or 2009 Data (Forbes or Deloitte) - presented in $US 43
44 Players salary structure how are players paid Europe No salary caps No upper or lower limits on players salaries Some leagues have no limits on #of players signed Some (but reducing over time) limits on number of foreign players North America Salary Caps or Luxury Taxes Minimum team salaries and minimum rookie salaries Limits on number of players signed 44
45 Player transactions how are players moved from one club to another Europe All leagues share same rules (same labor market) Rescission Clause to sell contract to another team Messi & Barca now 250M Euros For players 23+, 5% of fee distributed to development teams North America Players are traded for other players or draft picks, not for money Alex Rodriguez example wanted to negotiate down league (MLB) did not allow it 45
46 Free agency are players eligible to become free agents and what are the related rules Europe European leagues treat free agents as unrestricted with the ability to sign with any team in any league. Rule applies to players older than 23. Until then, a transfer fee paid towards development costs North America Considers unrestricted and restricted free agents Leagues varying in openness to free agency MLB open after 4 years NHL closed over 30 years of age NFL and NBA relatively closed 46
47 Talent draft how is young talent allocated to each club Europe Open competition for young talent within FIFA regulations North America Entry Drafts (league level mechanism) Worst Teams draft first Lottery for first round top picks First round picks almost guaranteed stars in NBA and NHL; higher risk in NFL and MLB 47
48 Development system how is future talent developed and at what level Europe (two routes of player development: Clubs internal development system Clubs invest in their own soccer schools for players as young as 8 years old. Labor laws are important Purchase talent from weaker leagues such as Latin America and Africa similar process to a player transfer via a rescission clause North America Following entry draft, a player makes the major league team or Plays in the minor leagues (NHL or MLB) for one of their club s farm teams In some cases they go back to their junior or college team (any of the 4 leagues) In leagues without a development system (NFL and NBA), the player may stay on the practice roster or may play in an alternate league (e.g. CFL in the case of the NFL; or Europe in the case of the NBA). 48
49 NBA players are required to play one year of college minimum or in a European league. In the NCAA, this is often dubbed the one and done, as star players often enter the draft after one year. NFL 3 years min after high school is the rule and most players tend to play their entire college career before entering the draft. NHL most players do not go the college route. They must be at least 17 years old on draft day and most come from the Canadian Junior Leagues (Ontario Hockey League, Quebec Major Junior Hockey League, Western Hockey League) or US High School Hockey or European Leagues, while some do come from college and the NCAA. MLB minor leagues, drafted young with intense scouting. Players tend to play multiple years in the minors before going to the MLB with very few exceptions. Premier Leagues no specific rules on player backgrounds. 49
50 Globalization is league growing or pursuing international growth North America League level considerations High interest TV, merchandising, exhibition games, regular season games, etc. NFL Europe failure Europe Club level considerations Clubs purchasing MLS clubs 50
51 Fan clubs extensiveness, priority and revenue North America Underdeveloped Europe Important marketing, branding and revenue generation tool 51
52 Ownership structure, style, rules, voting rights Depends on owner not league or location Varied structures and intent (previously shown) North America all for-profit Europe most for-profit A few not-for-profits with large memerships 52
53 Valuation (Based on data related to year - e.g., 2007 values published by Forbes in 2008 but based on 2007 data are noted as 2007 Team Arizona Cardinals $120 $120 $125 $146 $155 $166 $184 $231 $301 $305 $342 $374 $505 $552 $673 $789 $888 $914 Atlanta Falcons $113 $120 $125 $148 $156 $167 $191 $233 $306 $321 $338 $407 $534 $603 $690 $730 $796 $872 Baltimore Ravens $133 $165 $163 $201 $235 $329 $408 $479 $544 $607 $649 $776 $864 $946 $965 $1,062 Buffalo Bills $126 $125 $138 $164 $172 $188 $200 $252 $326 $365 $393 $458 $564 $637 $708 $756 $821 $885 Carolina Panthers $133 $240 $365 $488 $513 $574 $609 $642 $760 $878 $936 $956 $1,040 Chicago Bears $126 $139 $136 $160 $161 $184 $204 $237 $313 $319 $362 $540 $621 $785 $871 $945 $984 $1,064 Cincinnati Bengals $125 $115 $128 $142 $137 $171 $188 $311 $394 $423 $479 $507 $562 $675 $716 $825 $912 $941 Cleveland Browns $145 $125 $557 $598 $618 $695 $798 $892 $970 $969 $1,035 Dallas Cowboys $180 $146 $165 $190 $238 $272 $320 $413 $663 $713 $743 $784 $851 $923 $1,063 $1,173 $1,500 $1,612 Denver Broncos $113 $114 $119 $147 $150 $164 $182 $320 $427 $471 $540 $604 $683 $815 $907 $975 $994 $1,061 Detroit Lions $116 $110 $118 $138 $141 $150 $181 $312 $293 $378 $423 $509 $635 $747 $780 $839 $870 $917 Green Bay Packers $200 $115 $116 $141 $154 $166 $186 $244 $320 $337 $392 $474 $609 $756 $849 $911 $927 $1,023 Houston Texans $791 $905 $946 $1,043 $1,056 $1,125 Indianapolis Colts $116 $121 $122 $141 $134 $145 $170 $227 $305 $332 $367 $419 $547 $609 $715 $837 $911 $1,076 Jacksonville Jaguars $145 $239 $294 $419 $460 $500 $522 $569 $688 $691 $744 $811 $876 Kansas City Chiefs $122 $123 $130 $153 $172 $188 $204 $257 $353 $367 $412 $462 $601 $709 $762 $894 $960 $1,016 Miami Dolphins $205 $150 $145 $161 $186 $214 $242 $340 $446 $472 $508 $553 $638 $765 $856 $912 $942 $1,044 Minnesota Vikings $119 $120 $123 $147 $154 $167 $186 $233 $309 $322 $346 $437 $542 $604 $658 $720 $782 $839 New England Partiots $100 $103 $102 $142 $151 $165 $197 $252 $460 $464 $524 $571 $756 $861 $1,040 $1,176 $1,199 $1,324 New Orleans Saints $124 $123 $130 $154 $171 $184 $199 $243 $315 $324 $371 $481 $585 $627 $718 $738 $854 $937 New York Giants $150 $150 $146 $176 $168 $193 $211 $288 $376 $387 $419 $514 $573 $692 $806 $890 $974 $1,178 New York Jets $125 $117 $119 $142 $149 $153 $186 $259 $363 $384 $423 $512 $567 $685 $739 $876 $967 $1,170 Oakland Raiders $135 $128 $124 $146 $145 $162 $210 $235 $299 $315 $351 $421 $576 $624 $676 $736 $812 $861 Philadelphia Eagles $141 $146 $149 $172 $182 $192 $209 $249 $318 $329 $405 $518 $617 $833 $952 $1,024 $1,052 $1,116 Pittsburgh Steelers $112 $121 $120 $143 $144 $154 $173 $300 $397 $414 $468 $555 $608 $717 $820 $880 $929 $1,015 San Diego Chargers $113 $115 $119 $142 $153 $169 $191 $248 $323 $393 $416 $447 $561 $622 $678 $731 $826 $888 San Francisco 49ers $150 $134 $139 $167 $186 $196 $218 $254 $371 $379 $419 $463 $568 $636 $699 $734 $799 $865 Seattle Seahawks $130 $130 $137 $148 $152 $154 $171 $324 $399 $407 $440 $534 $610 $712 $823 $888 $921 $1,010 St. Louis Rams $135 $126 $128 $148 $153 $193 $243 $322 $390 $418 $448 $544 $602 $708 $757 $841 $908 $929 Tampa Bay Buccaneers $114 $113 $118 $142 $151 $164 $187 $346 $502 $532 $582 $606 $671 $779 $877 $955 $963 $1,053 Tennessee Titans $119 $128 $132 $157 $158 $159 $193 $322 $369 $506 $536 $551 $620 $736 $839 $886 $922 $994 Washington Redskins $125 $117 $123 $158 $151 $184 $200 $403 $607 $741 $796 $845 $952 $1,104 $1,264 $1,423 $1,467 $1,538 Average $132 $125 $129 $153 $160 $175 $205 $288 $385 $423 $466 $531 $628 $733 $819 $898 $957 $1,040 53
54 Team Arizona Diamondbacks $291 $268 $245 $280 $269 $276 $286 $305 $339 $379 Atlanta Braves $83 $88 $96 $120 $163 $199 $299 $357 $388 $407 $424 $423 $374 $382 $405 $458 $497 Baltimore Orioles $140 $130 $129 $164 $168 $207 $323 $351 $347 $335 $319 $310 $296 $341 $359 $395 $398 Boston Red Sox $160 $136 $141 $143 $143 $172 $230 $256 $284 $339 $426 $488 $533 $563 $617 $724 $816 Chicago Cubs $132 $101 $120 $135 $140 $165 $204 $224 $242 $247 $287 $335 $358 $398 $448 $592 $642 Chicago White Sox $140 $123 $133 $152 $144 $149 $214 $178 $166 $213 $223 $233 $248 $262 $315 $381 $443 Cincinnati Reds $98 $103 $86 $84 $99 $95 $136 $163 $175 $187 $204 $223 $245 $255 $274 $307 $337 Cleveland Indians $77 $81 $100 $103 $125 $175 $322 $359 $364 $372 $360 $331 $292 $319 $352 $364 $417 Colorado Rockies $110 $117 $133 $184 $303 $311 $305 $334 $347 $304 $285 $290 $298 $317 $371 Detroit Tigers $85 $97 $89 $83 $106 $110 $137 $152 $200 $290 $262 $237 $235 $239 $292 $357 $407 Florida Marlins $81 $92 $98 $123 $159 $153 $125 $128 $137 $136 $172 $206 $226 $244 $256 Houston Astros $95 $87 $85 $92 $97 $114 $190 $239 $280 $318 $337 $327 $320 $357 $416 $442 $463 Kansas City Royals $117 $111 $94 $96 $80 $88 $108 $96 $122 $138 $152 $153 $171 $187 $239 $282 $301 Los Angeles Angels* $103 $105 $93 $88 $90 $93 $157 $195 $195 $198 $195 $225 $241 $294 $368 $431 $500 Los Angeles Dodgers $180 $135 $138 $143 $147 $178 $236 $270 $325 $381 $435 $449 $399 $424 $482 $632 $694 Milwaukee Brewers $77 $86 $96 $75 $71 $92 $127 $155 $167 $209 $238 $206 $174 $208 $235 $287 $331 Minnesota Twins $83 $95 $83 $80 $74 $77 $94 $89 $91 $99 $127 $148 $168 $178 $216 $288 $328 New York Mets $170 $145 $147 $134 $131 $144 $193 $249 $314 $454 $482 $498 $442 $505 $604 $736 $824 New York Yankees $200 $160 $166 $185 $209 $241 $362 $491 $548 $635 $730 $849 $832 $950 $1,026 $1,200 $1,306 Oakland Athletics $115 $124 $114 $101 $97 $115 $118 $125 $134 $149 $157 $172 $186 $185 $234 $292 $323 Philadelphia Phillies $115 $96 $96 $96 $103 $112 $131 $145 $150 $158 $231 $239 $281 $392 $424 $457 $481 Pittsburgh Pirates $87 $95 $79 $70 $62 $71 $133 $145 $161 $211 $242 $224 $217 $218 $250 $274 $292 San Diego Padres $96 $103 $85 $74 $67 $86 $161 $205 $197 $176 $207 $226 $265 $329 $354 $367 $385 San Francisco Giants $99 $103 $93 $102 $122 $128 $188 $213 $237 $333 $355 $382 $368 $381 $410 $459 $494 Seattle Mariners $79 $86 $80 $76 $92 $107 $251 $236 $290 $332 $373 $385 $396 $415 $428 $436 $466 St Louis Cardinals $132 $98 $105 $110 $112 $134 $174 $205 $219 $243 $271 $308 $314 $370 $429 $460 $484 Tampa Bay Devil Rays $225 $163 $150 $142 $145 $152 $176 $209 $267 $290 Texas Rangers $123 $106 $132 $157 $138 $174 $254 $281 $294 $342 $356 $332 $306 $326 $353 $365 $412 Toronto Blue Jays $160 $155 $150 $146 $152 $155 $141 $162 $162 $161 $182 $166 $169 $214 $286 $344 $352 Washington Nationals** $75 $86 $75 $76 $68 $77 $87 $84 $89 $92 $108 $113 $145 $310 $440 $447 $460 Average $118 $110 $108 $112 $117 $137 $198 $225 $238 $268 $292 $301 $301 $333 $374 $431 $472 54
55 Decision rights at the league level - strength of global competitions, relationship with International Federation, politics in the sport, and power of Players Association/Union North America Highly centralized (league decisions) NFL is most centralized Europe Largely de-centralized (strong clubs) 55
56 56
57 North American Teams/Clubs focused on value maximization Long-term approach CB important (encourages economic viability of all) Closed market with salary caps/luxury taxes Importance of Players Associations Restricted free agency Leagues champion global expansion European Teams/Clubs Focused on avoiding relegation Short-term necessity Imbalanced approach to revenue sharing (rewards successful clubs) Open market and player transactions for $$$ s Less influential Players Associations Mega-clubs leading global expansion 57
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