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‘What we in Europe can learn from the American competitive sport’

Inkomstenherverdeling, salarisplafonds, draftpicks, closed competitions,… America seems to be on the sports organisation other planet. It has a liberal economy, but when it comes to sport, it is almost communist. The European professional would be to sail in the implementation of some of the key principles from the American competitive sport, Niels Verborgh.

David Beckham set up a new football club in Miami © Belga Image

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What we in Europe can learn from the American competitive sport

A large difference between sports industry and other industries is that in sports one team no product can make: clubs have opponents, and therefore, there is a form of cooperation between competitors is required. The American vision of cooperation differs fundamentally from the European. Although America is a strong liberal economy knows, their sports system is remarkably genoegnet strong anti-capitalist tendencies and a strict regulation. Competitive balance and unpredictability are essential. To the extent that not only are there financial restrictions clubs have, but that there is between the clubs is also a inkomstenherverdeling.

This is in contrast with the European organisation of sport. Rather than a dirigiste system, there is in Europe is there a darwinian system, in which mainly the wealthy clubs sporting success in an environment that is almost completely at the market’s discretion. The krachtverhoudingen are therefore totally skewed. The European sports can be some useful lessons to be learned from the economic and financial organization of the American sports events, where the general competitiebelang prevails on the clubbelang.

European degradatieangst versus American long-term thinking

In Europe lurked for many clubs the economic risk of degradation is always around the corner, whereas in the USA it is not. In Europe, there is an ‘open’ competition: clubs can relegate and promote. In the Belgian football camps degradanten almost always with financial problems. The cause is to be found in declining revenues from tv rights, but also in the declining number of spectators and reduced sponsoring. The degradatievrees and the loss of revenue that relegation is accompanied, resulting in short-termism, the irrational and irresponsible economic and financial behaviour that entails.

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The degradatievrees and the loss of revenue that relegation is accompanied, resulting in short-termism, the irrational and irresponsible economic and financial behaviour that entails.

In the hope of degradation to avoid going to clubs even future budget spend. Unpredictable additional costs, such as trainersontslagen and investment to the left) is competitive, then the warp and weft. If, in spite of the investments goes wrong, die clubs often certain death.

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An entrepreneur would rather lose income because of something onvoorspelbaars such as degradation.

In America knows the kortetermijnpolitiek that relegation brings with it no applause. The Dutch sporteconoom Tsjalle van der Burg describes this aptly: “An entrepreneur would rather lose income because of something onvoorspelbaars such as degradation.” Degradation is thus out of the question in the United States and therefore, there is a closed competition. A club can have a bad season afford without degradation to have to fear. This allows for a long-term strategy in which the conduct of a well thought-out policy is central. So can a club during an off-season for example, some less experienced players the chance to develop without being the survival of the club in the edge.

European weak brothers vs. American market potential

The fact that there is in America no degradation, brings with it a promotion, there also does not exist. However, this does not mean that competitions are always from the same clubs exist. On the contrary: extensions and changes are not inconceivable. This happens, however, only after thorough studies have shown that such decisions are financially and economically responsible.

There are two types of modifications are conceivable within the American competitiemodel, namely relocation and expansion. There are strict rules for relocation of a team. So should a club not move to a city where there is already a franchise, though there are exceptions for large cities such as Los Angeles, Chicago and New York. In the past, all clubs moved to the other side of the country because they are better would render (by, for example, in a newer stadium to play in a region with a larger market), even though the relocation of a team for economic reasons, a little romantic thought within the sport.

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The Belgian sporteconoom Trudo Dejonghekwam in 2001 to the conclusion that the American system with franchises and/or territorial exclusivity for the model to be followed is for an economically healthier competition.

An expansion occurs when a new club joins an existing league. In the American soccer league MLS, the grant of a new franchise tied to conditions. So should the owners have sufficient financial capacity to make investments in the team and they should be ‘committed’ to the league. In addition, should the club have a stadium that sufficient income can be generated. There must be potential is and there is a need in the local population an economic demand for football matches.

The American football league MLS is currently in full expansion and there are also a few new additions in the pipeline. So will the city of Atlanta on behalf of Atlanta United FC, a franchise and will David Beckham play a leading role in the development of the MLS team to Miami. If the motive for the allocation of Atlanta was the marktpotentiaal cited, since the state of Georgia have no football club at the highest level and there is a lot of voetbalgekke latinos live.

The Belgian sporteconoom Trudo Dejonghe came in 2001 to the conclusion that the American system with franchises and/or territorial exclusivity for the model to be followed is for an economically healthier competition.The problem is that small clubs or teams from smaller cities – from their point of view very understandable – would oppose such a move from self-interest.

European winmaximalisatie versus American profit maximization

The big difference between the American and European sports is that sports organisations in Europe – from their point of view again, understandable – don’t strive for (economic) profit maximization for all, but for (sports) winmaximalisatie for the individual team. The richest clubs have the best players, while the poorer clubs have to do with less good players. In the long term, there is in the European football an obvious positive correlation between budget and performance points: the richest makes the most chance to win.

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The American sports swear on competitive balance because care for the other also implies that for themselves.

The American sports swear on competitive balance because care for the other also implies that for themselves: sport competitions have benefited from the good cooperation that the general level of the league once more. After all, it is crucial for the attractiveness of the competition to find good opponents to have. The Americans also through a variety of herverdelingsmechanismes that the equality is maintained. In that way, are not only competitions, but also individual competitions a relatively unpredictable given. This is in contrast with the lack of tension in European leagues, where there are barely herverdelingsmechanismen are entered and often the same winners.

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Revenue sharing ensures optimal winstmaximalisering for all, and is in the long term an excellent recipe to make a league exciting and attractive to keep.

Revenue sharing ensures optimal winstmaximalisering for all, and is in the long term an excellent recipe to make a league exciting and attractive to keep.The greater the solidarity between the clubs, the better the competitive balance. In the American Football revenue from tv rights and merchandising will be equally divided between all the clubs and get the visiting clubs a significant part of the recettes of the home team. Inkomstherverdelingsmechanismen similar to that of the NFL are also to be found in the MLS, NFL, NBA, MLB and NHL.

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In the American NFL is about 66 percent of the revenue shared by the clubs, whilst in English football, but at 20 percent.

In the European football is such solidarity, as yet, unthinkable. Only in some countries, there is a limited form of redistribution of the income from tv rights. In the American NFL is about 66 percent of the revenue shared by the clubs, whilst in English football, but at 20 percent.

It is actually logical that televisiegeld is shared as the sum is paid to the competitieorganisator, who is obliged to let it trickle down to all clubs. Here, this happens largely according to sporting criteria, and so got in England, the lucratiefste team in 2015 but less than 99 million pounds, while five clubs, no more than 70 million pounds received. The richest people are becoming richer and the gap between rich and poor is growing larger and larger. This forms a great contrast with the equal distribution of tv money in the NFL. As long as the degradatierisico and the philosophy of ‘winmaximalisatie’ continues to exist, will be the support from within the European sport for the inkomstenherverdeling that ‘profit maximization’ entails, of course, rather limited.

American talentherverdeling versus rot European credit transfer system

In America the individual professional clubs in the rule, not youth as we know it within European professional football. There are youth clubs in the USA, but talents will find their way to professional sport through the ‘draft’, after they first for universities or colleges have played. Coarsely outlined works a draft as follows: the team in a certain year in the worst performance, get the best chance of the greatest talent from the hogeronderwijscompetitie to contract at a relatively low standaardsalaris. Then, it is the second-weakest team, and so on. At the moment the best club of a certain vintage, so the move is to allow a player to choose, was the greatest talents of all their road to weaker teams. The krachtverhoudingen of the last season to be so restored to a ‘level playing field’for the next season.

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The personal interest is also at the level of despeler subordinated to the collective interest.

The reverse side of the draft is that a young player’s career, not always can be define: if he wishes to be before at the world championships by a professional club, he accepted that he had no individual choice. The club the player chooses, while the player that choice should be respected and therefore all should be happy that he is privileged to profsporter to be. The individual belangwordt so also on the level of despeler subordinated to the collective interest (think of the hoopla at the recent transfer of Laurent Ciman of Montreal Impact at Los Angeles FC).

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On any given Sunday, any team can beat any other team.

There is also yet another disadvantage associated with the draft. Teams which is a less season knew, were formerly often purposely the reins to celebrate so if worst ranked team the greatest young talent to be able to recruit. In 1985 came the NBA with a rule on the gpu to fix this. Now is the draft organized in the form of a drawing lots for a fairer competitieverloop need to worry, but with weaker teams more of a chance to be the first of an absolutely top talent. This is typical for the American sport where the underdog is still a rosy perspective is provided: “On any given Sunday, any team can beat any other team”.

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Almost all theoretical and empirical studies show that deafschaffing of the credit transfer system the American professional sports.

In Europe, this is not possible. Clubs organize itself (in a very competitive manner) of their youth with the objective of ensuring talentdoorstroming to their first team. America knew in the past, however, a system that was similar to the European credit transfer system, in which clubs far-reaching property rights had on players. Almost all theoretical and empirical studies show that deafschaffing of the credit transfer system the American professional sports. It is likely that the abolition of the transfer system in European football similar effects would have. European voetbalbestuurders played the idea that a credit transfer system for an even distribution of spelerstalent would worry, but this is a great illusion proved to be.

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In my master’s thesis argue I why the lion’s share of the current transfer fees is in conflict with both the Belgian and the European law.

In addition, meet and transfer fees for football players pan out. So paid the English Manchester United’s 105 million euros to the French player, Paul Pogba to recruit. The irony wants that player four years ago for Manchester United had played, but that the club then that he was free had to leave for the Italian club, Juventus. Barely a year and a half later, the transfer fee for Pogba was paid in the new standard. The European Commission had four years ago, however, warned of the ‘artificially inflated transferbedragen’. In my master’s thesis awarded with the Flemish dissertation Award _ argue I that matter, why is the lion’s share of the current transfer fees is in conflict with both the Belgian and the European law. Also from sporteconomisch point of view, the credit system in urgent need of changes.

The European spendeerpolitiek versus the American salarisplafonds

Another remarkable difference between the European and the American profstelsel is located in the salarisplafond that America, while there is no single form of restrictions on wages exists in the European professional football. The loonbepaling in the European football is done on the basis of demand and supply. Clubs that have high salaries have bought copies for players, the best athletes are able to recruit and therefore the greatest chance for prizes. The vast majority of the revenue clubs get from televisiegeld, sponsorship and ticket sales is in Europe spent on spelerssalarissen. In addition, people in the European soccer is no limitation on the number of players within a team, in the American system and the number of players per club is limited(‘grid’).

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In the USA there are restrictions on the number of players that a club in his selection.

In the USA, a salarisplafond in and there are restrictions on the number of players that a club in his selection. The regulations on this area, however, what pliable. The flexibility is reflected in exceptions to the salarisplafond and in the fact that blessurelast can be captured. The logic behind this is that players that the league more attractive, more may earn and that teams that have been weakened by injuries just for a less attractive competition.

The American salarisplafond know grosso modo two variants, namely a hard and a soft salarisplafond. A soft salarisplafond, the so-called soft cap, meaning that a club-imposed salarisplafond may still override if they have a luxury tax to pay. This luxury tax is a pay tax which is then bored below the clubs that the salarisplafond respect. This is an interesting mechanism to watch over the equality.

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For every euro that Manchester City in the 2010-2011 season earned, was 1.14 euro to paycheck issued.

A hard salarisplafond can be found in the ice hockey (National League Hockey) and American Football (National Football League). In a hard salarisplafond there is an agreement on the percentage of income that may be spent on wages. There is also a maximum and a minimumloonmassa which may not be deviated from. In the NFL if clubs during the season 2014-2015 only 59,5% of income to spend. In comparison: the English Manchester City spent in the 2010-2011 season, a whopping 114 percent (!) of income on wages. For every euro that the club earned, was 1.14 euro to paycheck issued.

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A minimumloonmassa is a mechanism that ensures that clubs remain competitive.

A mandatory minimum that clubs have to spend on salaries seems, at first sight, maybe a weird requirement, but there is a logical reason behind it. A minimumloonmassa is a mechanism that ensures that clubs remain competitive. This should be a more balanced and exciting competition is guaranteed. The philosophy is the following: if teams a salarismassa of the same order of magnitude, would be that teams are, in principle, matched. So were the basketball teams from the NBA season 2016-2017 required to have 90 percent of the salarisplafond to spend. The average annual salary of a NBA player is higher than that of a player of the best European football clubs. But NBA teams are only allowed a maximum of fifteen players, while some football clubs a triple to the players on the payroll.

Conclusion

More than 20 years after the Bosman-ruling it remains clear that the European football sector trouble trouble to make themselves distinguished to regulate. From the above it appears that the European professional would be able to sail with the careful implementation of some of the principles from the American competitive sport. Since this conflicts with the interests of the established order, the looks of the chance to change not so limited. Both UEFA president Aleksander Ceferin as FIFA president Gianni Infantino gave recently, to be open to changes, but for now it will have to wait on concrete initiatives. The risk is that European soccer clubs are tearing off in a separate top league (along with some non-European top teams) hangs as a sword of Damocles over the head of UEFA and FIFA. In that respect, it can only be regretted that through the football sector has been no response to the call of advocate general Carl Otto Lenz in the Bosman judgment. He saw more than twenty years ago in that salarisplafonds and inkomstenherverdeling within the football or even a beneficial effect might have.

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