The U.S. is taking over European sports
Why are there more and more American owners in European football clubs, and why are games and competitions seemingly all desperate to be staged in the U.S.?
America the Beautiful
The U.S. is increasingly influencing and controlling European sports. Out of the 20 English Premier League (EPL) clubs, 9 are now majority owned by Americans (with 777 Partners in a bid to take over Everton and make it 50% of all EPL clubs). Liberty Media’s takeover of F1 has made the sport much more U.S. focused, on the back of the Drive to Survive success, of what has historically been a European centric sport.
Besides an equity takeover by the U.S., increasingly more events are staged in America (three F1 races in 2024 compared to only one a couple of years ago) itself and may further expand. La Liga and Serie A have been pushing to host domestic league games in the U.S. for years and recent developments may hint towards that path finally opening up.
What is driving this “Shift to America” and what does it mean for the future of the biggest sports in Europe?
American owners take control
The U.S. money that has flown into English football is not solely concentrated in the top flight EPL. One third of all the 92 professional teams in England’s top four leagues now have some form of U.S. ownership. It has become quite a trend for American celebrities/former athletes to invest in English football. The likes include Ryan Reynolds and Rob McElhenney taking over Wrexham AFC, JJ Watt investing in Burnley FC and Tom Brady’s involvement with Birmingham City. As noted, 9 out of 20 EPL teams are majority U.S. owned nowadays, with Everton as a potential addition (and West Ham having a minority U.S. investor):
- Arsenal: Stan Kroenke
- Aston Villa: V Sports
- Bournemouth: Bill Foley
- Burnley: ALK Capital
- Chelsea: Todd Boehly
- Crystal Palace: Three U.S. investors combine for 81%
- Fulham: Shahid Khan
- Liverpool: Fenway Sports Group
- Manchester United: Glazer Family
All in all, there are 20 teams in the top 5 leagues in Europe with U.S. ownership. Besides the nine in the EPL, there are five each in Serie A and Ligue 1, as well as one in La Liga. Noteworthy, the absence of any Bundesliga club, which is a consequence of their 50+1 ownership rule. It stipulates that 50% + 1 share of the voting shares in the commercial companies, which operate most Bundesliga clubs’ professional football teams, remain in the hands of the members of the parent clubs. Exemptions can be granted if an individual shareholder can prove they have provided substantial and uninterrupted financial support to a football club over a period of 20 years (provided to pharmaceutical firm Bayer in Leverkusen, automobile giants Volkswagen in Wolfsburg and software billionaire Dietmar Hopp in Hoffenheim).
Additionally, Liberty Media has taken over F1 in 2017 and just recently announced its agreed takeover of Moto GP as well. While F1 is the most global sport in the world, the heart and center of it remains Europe, with the most avid fanbase and all bar 1 team (Haas) having their HQ and car development in Europe.
What has driven this growing desire to invest in European teams and sports by U.S. investors?
Primarily, it is the fundamental belief that the value generation in Europe has not been optimized to the extent it is in the U.S. There are inefficiencies in running professional sport teams that these investors bank on exploiting (gameday commercialization, licensing, operations, etc.), driving up the team/property values and producing the desired returns for them. Secondly, they bank on their ability to penetrate the local U.S. market more, building upon their market knowledge, opening further revenue opportunities there, beyond the mostly saturated domestic market the teams operate in.
With the increased number of U.S. owners in the most lucrative European teams/sports, there is also a growing desire to transfer practices that have successfully worked stateside. This includes a more dedicated commercialization focus across the board, but also more structurally fundamental changes, such as the introduction of a cost cap in F1, to turn the sport from a loss-making to a profit-generating endeavor (for more details, check out my piece on “Drive to Survive’s economic and popularity impact on F1”). Even the EPL has just recently agreed to explore measures that would put a cap on player spending through an “anchoring” concept to limit player wages, transfer fees and agent fees to a multiple (in the region of 5x) of the TV revenue generated by the league’s bottom club. Something that would previously have been unthinkable to even discuss.
It is one step towards the closed-league parity driven system the major U.S. leagues run, though do not expect a full transition to such a system anytime soon. One of the main reasons for the heavy backlash to the European Super League a few years ago was the closed nature of that tournament, with the promotion and relegation aspect a staple in European football. Even if U.S. owners would much prefer closed systems that more stably guarantee their revenues, a cost side control already massively improves the ability to turn a consistent profit and drive up team/property valuations.
Event strategy shift — follow the money
Besides some of the structural changes coming from the increased U.S. ownership presence in European sport, there are further event related implications. F1 is a great case study for this, with the increasing number of races hosted in the U.S. since the entry of Liberty Media and the popularity of the Drive to Survive Netflix series. In 2017 when Liberty Media had taken over, the Austin GP in Texas was the only U.S. based race. Nowadays we have three such races, with the Miami GP and the Las Vegas GP having joined Austin on the F1 calendar (with additional North America races in Canada and Mexico). There was even the rumor of a Chicago race from 2026 onwards going around last week, which has since been shut down by F1. However, where there is smoke there usually also is fire, and the Chicago race rumors have been persistent for a few months now, so keep an eye out for a potential fourth U.S. race.
On the football side, there may be European domestic fixtures being played on U.S. soil sooner rather than later. La Liga and Serie A both have been pushing for this since 2018, with La Liga even having planned to host a Barcelona vs. Girona game in Miami, only for a FIFA directive to block it on the grounds that “official domestic games must be staged in the league’s home territory”. This led to a lawsuit between the organizing Relevant Sports (owned by Miami Dolphins owner and Miami GP promoter Steven Ross) and FIFA, which has just recently in April been settled privately, potentially opening the door for U.S. based Top-5 League football games. The video by Tifo/The Athletic breaks this down really well, for anyone interested in more detailed information on that dispute.
This would be akin to the International Series Games the NFL plays every year, with the NBA, NHL and MLB all also having such internationally hosted games (see prior piece on How leagues use international games to boost their revenues and global profile for more information).
Why this push for “Americanization” at all?
As with most decisions in (sports) business, there is a financial upside to commercialize in a U.S. model and to stage events in the States. With stagnating domestic broadcasting rights values in European football (for more details, check out my prior piece “European Football media rights values are plateauing”), it is paramount and lucrative for them to grow their audience abroad, particularly in the U.S., where the average value per customer is the highest globally. To illustrate this, we only need to look at the advertising revenue Facebook can generate per user (in Q4 2023) in the U.S./Canada at $68.44, versus $23.14 in Europe. The advertising value per customer in the States is nearly triple that of a European viewer.
Furthermore, the event ticket prices in the U.S. are noticeably higher than anywhere else in the world, making it more lucrative to host events there, such as F1 races or potential future European domestic football games, or even a Champions League final. Comparing the 2023 3-Day General Admission tickets for every F1 race emphasizes this point quite well, with all three U.S. races occupying the top-3 most expensive spots (a similar picture can be seen when looking at Pit-straights 3-Day tickets, with Miami and Vegas far ahead of the rest of the field).
Besides the previously noted revenue generating efficiency gains, there are also sporting incentives to improve the commercialization. Financial Fair Play restrictions in football that aim at maintaining the financial stability of football clubs, where the amount of spending allowed by a club is regulated by the revenues they can generate, limit the spending potential. While broadcasting deals bring in the most revenue, these are mostly fixed for the duration of a TV-deal cycle. To increase the spend potential of a club, allowing it to attract more expensive and valuable players, teams have to focus on growing commercial matchday revenues. Commercial refers mainly to sponsorship and merchandising deals, which will grow in value through a growing audience, particularly in an affluent country such as the U.S.
American teams are much better at maximizing matchday revenues than their European counterparts. Tottenham Hotspur and Real Madrid are two recent examples of teams bringing in a more American approach to matchday/stadium monetization. The newly renovated Santiago Bernabéu Stadium in Madrid has a fully retractable pitch (a rarity in Europe) and a roof, allowing for multipurpose use of the stadium to host concerts, other sport events (e.g. basketball or tennis tournaments) and even turn it into an exhibition center. All of this increases the revenue generated from the stadium that directly flows into the accounts of Real Madrid.
Similarly, the new Tottenham Hotspur Stadium was built with an American stadium blueprint in mind, not in small part to also host NFL London games there every year. It too has a retractable pitch, with an NFL synthetic turf field beneath the grass pitch used for football, also allowing for easy concert hosting. Furthermore, they installed additional hospitality and luxury boxes, as well as “The Goal Line Bar”, Europe’s longest bar, all in an effort to increase matchday revenue. With the stadium having opened in 2019, we actually have some data to validate this. In the 2016/17 season, the last to be played at their old stadium White Hard Lane, Tottenham managed to generate on average around $1.25m per matchday, totaling $57m over the entire season in matchday revenue. In the 2019/20 season they moved to their new stadium (playing the two intermediary seasons at Wembley Stadium). Nowadays they generate around $7.5m per matchday, and in the 2022/23 season generated a whopping $135m in overall matchday revenue, second only to Manchester United.
Evidently, the American model of optimizing matchday revenue and having multi-purpose stadiums elevate the income generation that helps improve competitiveness, in a reinforcing upward spiral. Naturally, other teams are intent on following suit, with new Manchester United minority owner Sir Jim Ratcliffe stating as such in a recent podcast, wanting to transform Old Trafford stadium into a state of the art entertainment venue as a platform to host big events in the North of England. He even specifically highlights how beneficial this is in light of the restrictions from the Financial Fair Play rules.
Where do we go from here?
Expect overall more events that were historically hosted in Europe to be staged in the States, particularly if there is a lift on the FIFA rule that domestic fixtures have to be played in the respective country. All bets are off if that is the case, where we will certainly immediately see La Liga and Serie A matches contested in the U.S., and based on the audience response in the domestic markets and the U.S., many others might follow suit. Additionally, expect U.S. operational practices and commercialization methods to become more widespread among teams, in an effort to remain competitive, economically and in terms of performance.
However, Europe is not the only fertile ground to be enticed by the allure of U.S. consumers and money. The population diversity and diaspora in the U.S. gives it a unique appeal for global sports anywhere, as large untapped audience interest for their home country sport exists (e.g. there are around 4.5 million Indians living in the U.S. that may warrant cricket games to be held in the States). The developments we see in European sports are only the beginning, expect there to be further sporting properties staging meaningful games in the U.S., particularly as the marketing and data analytics improve and give a more nuanced picture of the untapped potential.
In sum, this increased spread of events must not necessarily be something bad, as long as it is done in moderation. With international rights values matching or even overtaking domestic rights deals, there is a valid argument as to whether everything should solely be done in favor of the domestic audiences. Potentially giving up one matchday a year to an overseas game in the States may not be the end of the world, and provides the local fanbase there also the opportunity to enjoy one of their favorite sports live. Personally, I am thrilled that we in Europe a few times in a season have the opportunity to attend NFL Games here (if you get lucky enough to snag a ticket). Seems only fair to return the favor with our most popular sports.
One random fact
It may seem counterintuitive, but reducing concessions pricing can actually increase your overall matchday revenues. The Atlanta Falcons pioneered this model and reduced food and beverage prices by 50% across the board, which resulted in a 16% increase in F&B spending by spectators. When fans do not feel taken advantage of, they tend to be in a better mood and splurge more. I would not complain if every stadium adopts this approach.
Thanks for reading
I hope you enjoyed this breakdown and gained a new-found appreciation for why seemingly every new event is staged in the U.S. or aims to go there. If you have, please consider sharing it with your friends and subscribing, much appreciated!
The AO, a page dedicated to unveiling the business dynamics behind the sports media industry, aimed at giving context on the strategic considerations behind some of the biggest sporting events and decisions.
If that sounds appealing to you, then feel free to follow The AO, which is completely free and releases every 2 weeks.
