How English Premier League is closing the value gap with NBA
Topend Sports, an online sport and science information platform, published last year a list of the world’s most popular sports, based on a set of 13 criteria including number of participants, viewers, social media impact, mainstream media exposure, advertising revenue, income of athletes, etc.
Football was the clear winner. There are over 4 billion football fans in the world and 3.6 billion TV viewers of football games. Basketball was ranked the second, with 2.2 billion fans and 1.8 billion viewers.
Take English Premier League for example. The game has attracted 1.35 billion viewers worldwide, compared with National Basketball Association (NBA) 1 billion viewers.
Strangely, however, the commercial value of English Premier League has constantly lagged far behind that of NBA.
Here are some numbers that show the gap. NBA earns up to US$24 billion from telecast rights per year, way more than US$11.7 billion made by English Premier League. Also, the best-paid NBA star Stephen Curry has an annual salary of US$40.2 million, almost double the US$27.13 million earned by Kevin De Bruyne, the best player in the Premier League.
Forbes estimates New York Knicks, the most valuable NBA team, is worth about US$4 billion. A By contrast, New York-listed Manchester United, the most popular soccer team in the Premier League, only has a market cap of US$2.8 billion.
NBA’s great commercial value is probably due to the sheer size of the US economy. In addition, NBA teams typically adopt modern corporate management to maximize the commercial value.
In contrast, many teams in the Premier League still operate in the old way as they cater primarily to local working class fans.
Having said that, more and more soccer teams are now introducing the American-style management approach, and the tide could be turning.
In a recent deal, US private-equity giant Silver Lake agreed to pay US$500 million to acquire 10 percent stake in the owner of Manchester City, implying a total value of US$4.8 billion.
In 2008, an Abu Dhabi-controlled entity purchased Manchester City for US$260 million. It then injected massive capital to improve the team.
Abu Dhabi brought in modern management, expanded the stadium, and opened up the overseas market to boost the team’s commercial value and global reputation.
The team shot to the champion of Premier League for the first time in 2012, and again in 2014, 2018 and 2019.
The latest divestment deal shows how Abu Dhabi has successfully boosted the value of Manchester City.
This article appeared in the Hong Kong Economic Journal on Nov 29
Translation by Julie Zhu
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