America
noun
/əˈmer.ɪ.kə/
- For decades the international model of the sports industry. A market of
insurmountable value and infinite opportunity. Home of the NFL, NBA, MLB and most
recently the MLS. Birthplace of Michael Jordan, Muhammad Ali, Tom Brady and other
“GOAT”’s. The place to be for anybody who wants to be somebody within the sports
industry. - Soon, a reminiscence of greater days.
America didn’t create sports, but they sure perfected it. For the past century, the country has been regarded as the benchmark of sports, especially when it comes to its business. In this regard, it doesn’t come as a surprise that, as of 2023, the ten most valuable sports teams are all American; the most valuable being the Dallas Cowboys valued at USD$9.0 billion dollars. In comparison, the most valuable team outside of America is Real Madrid ranked #11 and appraised at USD$6.07 billion dollars. To put it in broader terms, out of the 50 most valuable teams, only 9 are located outside of the United States.
Despite America having the most valuable share of the sports industry worldwide, data shows that the sports industry in other countries is growing very fast. For instance, Paris Saint-Germain experienced a 334% five-year change in value, whereas Las Vegas Raiders, the US team which experienced the most favorable five-year change in value, only showed a 156% difference. Furthermore, the sports landscape has shifted dramatically in the past few years; mainly because of the influence of parties who only recently became interested in the sports industry (Saudi Arabia, Qatar and other Middle Eastern countries).
We are already able to appreciate the repercussions of Middle Eastern countries’ influence within the sports industry. For instance, 2022 Qatar´s FIFA World Cup® marked the first time this event was ever held in November, the first time the Arabic World hosted this event and, controversially, the first time no alcoholic drinks were served to attendants. Additionally, we could argue that Middle Eastern countries’ have already dented the American sports industry. The most notorious example being the LIV Golf’s tournament that poached several of the most notorious PGA Tour’s players and eventually, led to a merger with the PGA tour.
Regardless of your opinion to the matter, there’s no denying that LIV Golf short venture eventually forced the PGA to increase the value of the tournament’s purses, leading to all-time record-breaking profits for its players.
If Middle Eastern countries’ influence is already noticeable, how will the American sports industry adapt? What can we expect from an international standpoint? What will the international sports landscape look like in the following years?
Middle Eastern countries’ influence will eventually force America to choose between the following: First, to expand its operations internationally, tapping into the Middle Eastern, European and Asian markets while consolidating its properties as the most profitable for its relevant sports; or Second, wait for the foreign markets to develop properties of their own, increasing costs and forfeiting significant revenue outside of the United States.
Taking into account the most recent courses of action taken by some of the US most notorious sports leagues, it would appear that America’s sports industry is opting for expanding its operations internationally, not only by taking American sports to foreign countries, but also by bringing in or strengthening sports that were not traditionally popular in the country. Unfortunately, I believe that the international expansion is not happening at the rhythm needed to counteract Middle Eastern countries’ efforts to have a relevant share of the American sports industry.
The aforementioned globalization of American sports will ultimately result in the creation of new leagues and competitions in the Middle East, Europe and Asia. I wouldn’t be surprised if in the following years we were to witness the creation of Saudi Arabia’s own American football, basketball and/or baseball leagues. We´ve already seen the immense growth of Saudi Arabia’s soccer league in just the last year.
Considering the wealth of Saudi Arabia (or other emerging markets), many players will be compelled to leave US leagues for better compensation, which would eventually (i) weaken America’s sports industry; and (ii) force the countries’ leagues to renegotiate their collective bargain agreements, leading to a more equitable distribution of profits. If the growth of American sports takes place in enough countries, we could even experience international competition. Can you imagine an international American football competition to the likes of the UEFA Champions League?
Considering that American sports will be more popular around the world, we can expect an increase of foreign nationals playing in the NFL, NBA and/or MLB at a higher level. Whereas the NBA and MLB are already an example of international superstars running the league (i.e Giannis Antetokumpo, Shohei Othani), the NFL is yet to experience the effects of having a foreign player as the face of the sport. One can only imagine the social and economic effects of having an Arab or Indian player as the Quarterback for the Dallas Cowboys. It’s a given that merchandise and sponsorship profits would increase exponentially by generating worldwide interest.
As is the case in international soccer, foreign teams would be compelled to sign players at a younger age, which will lead to more players opting to play internationally instead of attending college. This scheme will not only bring the US intercollegiate athletics to its knees, but could lead to American teams buying foreign organizations in order to use them as a farming system, enabling the teams to train players earlier and gain a bigger and more exclusive players pool to choose from. Furthermore, this would eventually end all drafting systems and could entail the end of the salarial cap that most American sports established.
Eventually, the international nature of sports will lead to bigger and more complex legal disputes that national tribunals won’t be able to address properly. Therefore, several international sports regulatory bodies will be created and the already existing ones will become stronger and more influential. In this regard, most of these international regulatory bodies will eventually follow FIFA’s and FIBA’s lead and will establish specialized tribunals, both nationally and internationally, where conflicts between players and teams or even between teams of different nationalities shall come to resolution. As a result, the Court of Arbitration for Sports, which already serves as the supreme judicial body for many sports tribunals, would become one of the world’s most powerful organizations.
From a marketing standpoint, American sports will receive the international soccer treatment. Initially, the international dimension of the sport will increase the value of the promotional spot, but eventually, and as the offer of sponsorship opportunities increases, the value per promotional spot will decrease until the market levels itself. Which sponsor would you like to see in your team´s jersey? Could we get sponsored NFL helmets?
The future of American sports as we know it is extremely uncertain. The involvement of third parties and the globalization phenomenon is forcing America’s sports industry to open its doors to the international community and break certain paradigms that have remained unwavered for decades. Are we the generation that is finally going to experience the downfall of the American sports industry as we know it?
I don’t think so; America’s sports industry has long been regarded as one that adapts easily, flexible and, in most instances, one that embraces change. As we approach this final frontier, the United States needs to be swift. If the US sports industry takes too long to go international or is unwilling to diversify its products, third parties will gain ground and sooner than later they will be taking money out of America’s pocket.
Regardless of who is in control of this new era of American sports, we should be excited for it. Sports industry professionals will benefit from it as it will create more diverse and more specialized work opportunities, and as the value of the sports industry increases, the compensation should too. The consumer will also benefit, mainly because of the wider spectrum of content that will be made available.
As we’ve already experienced, TV networks can’t afford to broadcast every single game.
Therefore, they will be forced to choose from the increased number of options available, leaving fans at the mercy of expensive streaming platforms to watch the relevant games.
Ultimately, globalization of American sports will only give us something else to share, and as things stand today in the world, we could use a little bit more sharing. The future of sports looks bright, but let us not forget that sport, besides it being entertainment or business, could serve as a tool that could help us resolve human conflicts. At the end of the day, we’re all on the same team, nobody is keeping scores and the only winners are those who keep playing.
Let’s play together.
