England's Goal Rush

Thursday, Apr. 26, 2007 By ADAM SMITH
YOU'LL NEVER QUEUE ALONE: Liverpool fans line up to buy team merchandise on a game day at Anfield in February
LAURENCE GRIFFITHS / Getty for TIME
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Adding an Asian player to the ranks can help. Four Premiership teams now have Chinese players on their books, and since welcoming South Korea's Park Ji Sung into their line-up in 2005, Manchester United have become big in Seoul. Three-quarters of South Korea's football fans see the club as their favorite European side, according to Birkbeck, and more than 650,000 South Koreans have signed up for a club-branded credit or debit card since their launch a year ago. By launching local-language websites, teams can tailor marketing to fit an individual country, drumming up local advertising and sponsorship revenue. As part of its lofty pledge to become the world's biggest club by 2014, Chelsea, owned by Russian billionaire Roman Abramovich, launched a Mandarin website in January in conjunction with Sina, China's leading portal; in late March, the club unveiled another aimed at South Korea. The London team is also playing benefactor. Apart from hosting the Chinese Olympic football team in London in February, the club sponsors the Asian Football Confederation's Vision Asia project to develop grassroots leagues across China. Next summer, Chelsea will embark on its first-ever tour of China.

Those preseason tours can be pure gold, giving sponsors the chance to exploit target markets. When Manchester United goes to Malaysia, Korea, Japan and China this summer, shirt sponsor AIG will be with the team every minute. That will go some way to repaying the $28 million a year the U.S. insurance behemoth agreed to pay to slap its logo on the club jersey for four years — more than 50% higher than the amount previously paid to sponsor the club by cell-phone operator Vodafone. When one shareholder wondered why AIG would spend so much on the U.K., a relatively modest part of its empire, ceo Martin Sullivan explained: "I am not buying the U.K. I am buying Asia."

The Premiership's triple play — losing the hooligans, luring big money at home, expanding overseas — has made it the envy of other sports leagues. In the 2005-06 season, estimated revenue hit $2.5 billion, much more than that of any other league in Europe. The Premiership still lags behind major U.S. leagues like the National Basketball Association (NBA) or the National Football League (NFL) — the latter earned more than $6 billion in 2005-06. But with only 20 clubs competing in the English league, average club takings are already more than in the NBA. There's more to come. For each of the three seasons of a new broadcast deal that begins later this year, domestic TV rights for the Premier League fetched $1.1 billion, compared with just $680 million for the deal that expires this summer. Taking Britain's smaller population into account, the League, under the new deal, will generate 50% more domestic broadcasting revenue per head than the NFL, and eight times that of the NBA, according to consultants Deloitte.

Increasingly, that TV revenue is going to come from outside the U.K. The Premiership had a weekly global TV audience of 78 million last season, with broadcasters such as the Fox Soccer Channel in the U.S. and pccw in Hong Kong clamoring for a piece of the action. TV deals that put even the smaller Premier League sides on screens from Shanghai to Chicago are "a fantastic impetus to all clubs," reckons Dan Jones, a partner at Deloitte's Sports Business Group. Foreign channels covering more than 200 countries together stumped up $1.23 billion to air the league for the three seasons beginning 2007-08, paying just shy of double the current amount and contributing a quarter of the Premier League's central income. Scudamore told Time that he thinks overseas rights will soon be worth half of that collective pot. Such figures make American sports tycoons green; overall, foreign markets account for less than 5% of the NFL's revenue, and even for the NBA, a true global brand, overseas media rights amount to just $130 million a year.

But no sensible business leader is starry-eyed about sports. A few miles outside Birmingham, at Aston Villa's training ground, new owner Randy Lerner is setting out his vision for the club. From the slightly scruffy facilities to the club's balance sheet, this is no Manchester United or Chelsea. For the $142 million the boss of the NFL's Cleveland Browns' paid for Villa in August, Lerner got last season's 16th-best team in England, complete with tumbling revenue and attendance. So while he spies an "untapped market," he means Birmingham, not Beijing. Compared with other Premier League clubs, he tells a handful of reporters in a rare sit-down with the press, "we have a different geography and a different set of expectations."