A Study of The English Premier League’s Current Globalisation Strategy
The English Premier League (EPL) is the fourth most lucrative sporting league in the world, behind America’s NFL, NBA and Major League Baseball. It is a corporation owned by the 20 participating football clubs and currently has revenues of £1.8billion a year and television rights deals worth over £2.7 billion. It is already one of the UK’s most successful and recognisable international brands. The EPL’s top four clubs, Manchester United, Chelsea, Liverpool and Arsenal are global brands in themselves, occupying four of the top eight of Deloitte’s football money league places and commanding combined revenues of £714.1 million last year. (Deloitte Sports Business Group, 2008)
Earlier this year the EPL publicised plans for each club to play one extra game in the season in foreign cities against other EPL teams. This proposed strategy for global expansion was specifically intended to raise the international profile of the league and react to similar successfully executed expansion strategies by America’s most prominent leagues. In contrast to reaction in America, however, these plans have been angrily dismissed by the international football governing body FIFA, by potential host countries and by the clubs’ fans. This essay will examine the FA’s globalisation strategy, or ‘Game 39’, so called because currently 20 clubs each play each other twice, resulting in 38 games played per season. It will argue that, like other global businesses, the EPL faces intense international threats that need to be combated and opportunities that need to be realised.
Richard Scudamore, Chief executive of the EPL, proposed that each team would play another randomly selected team during one weekend in January. Two games would be allocated to each of five cities around the world following a bidding process from potential host cities. The games would be financially beneficial to the city, as the NFL game in October earned London over £20million. Crucially, points earned from the games would be included in each teams’ final tally, meaning these extra games could decide final positioning in the EPL table. This caused consternation among clubs, as teams would feel it would be unreasonable should they be randomly drawn against a strong side, such as Chelsea, and suffer relegation as a consequence of losing points related to that game, while a similar team may benefit from an easier draw and stay up. As the revenue loss as consequence of relegation is between £25 and £30 million per year, the financial impacts for owners and chairmen are potentially disastrous. For fans, the disappointment that comes with relegation is priceless.
American sports teams, increasingly run as business franchises rather than ‘local’ clubs, have already embraced globalisation strategies. In October 2007 the Miami Dolphins and the New York Giants played the first league NFL game outside the USA in history at Wembley stadium. It was seen as a groundbreaking occasion for the globalisation of sport and evidence that the strategies of major sporting leagues must include international expansion. Alasdair Kirkwood, NFL’s UK expansion director, considered that the success of the Giants vs. Dolphins game would be measured by the number of new British NFL fans were generated by the game. The NFL’s ‘endgame’ is to have enough interest in American football in the UK to form a UK team that will compete in the NFL, creating millions of new British fans of the sport (Kirkwood, 2007). Fans are a particularly loyal and therefore particularly lucrative type of customer. They do not simply switch teams as one may switch gas suppliers, meaning that securing a fan’s support guarantees a life long financial relationship between that fan and the club.
The Game 39 strategy is intended to increase advertising revenue. The more people who see a game, the more can be charged to advertise in it as the television ratings...
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