League Express editor MARTYN SADLER suggests that if Super League is ever going to prosper, then it will need to change its ownership structure. This is an updated version of his ‘Talking Rugby League’ column in this week’s issue of the newspaper.
How much progress has Super League made almost 25 years after its launch in 1996?
Given the problems it has suffered in 2020, it perhaps seems a strange time to ask that question, particularly in a week that has been dominated by the problems experienced by Toronto Wolfpack, which have caused the club to withdraw from the remainder of the Super League season.
As we have seen, Super League, like every other sporting competition, has been hit for six by the coronavirus and it will surely take months or even years to recover, regardless of what happens to the Wolfpack.
But if we discount Covid-19, the truth is that on almost any criteria we care to judge it by, Super League has made little progress in 25 years, and may have actually gone backwards in some respects.
At the time it launched in Paris on 29 March 1996, the competition’s profile in the national media was almost certainly greater than it is today and we had what appeared to be a thriving club in London.
On the other hand, the overall attendance levels have grown marginally, and the competition’s broadcast income has also increased significantly, although there has to be some uncertainty about whether that will continue with the next broadcast deal.
Some new stadiums have been developed, allowing some clubs to offer better facilities to their supporters than they could in 1996.
And, despite the demise of the Paris St Germain club in 1997, the competition has expanded internationally into France and Canada, although the coronavirus has intervened to draw attention to the difficulties of running a competition that crosses national boundaries. The long term future of an international club competition has to be called into question.
But the question that has been occupying my mind recently is whether the ownership and governmental structure of Rugby League in the United Kingdom is a barrier to its progress.
We have seen in the last couple of years, since the appointment of Robert Elstone as the CEO of Super League, that the squabbles among the Super League clubs, who inevitably pursue their own individual interests instead of those of the competition as a whole, have stymied progress and ensured that a highly paid chief executive is unable to manage the competition in an unfettered way.
Interestingly enough, we can directly compare Super League with another major sporting competition that also began in 1996.
Major League Soccer (MLS) is the professional soccer league sanctioned by the United States Soccer Federation, which represents that sport’s highest level in the United States and Canada.
Major League Soccer was founded in 1993 as part of the United States’ successful bid to host the 1994 FIFA World Cup. The first season was played in 1996 with ten teams, two fewer than Super League had in that year. The MSL season covers roughly the same months that comprise the Super League season. In other words it is played mainly in summer.
MLS experienced financial and operational struggles in its first few years, losing millions of dollars with teams playing in mostly empty American Football stadiums. Two teams folded in 2002.
But fast-forward to 2020 and the league now comprises 26 teams, with 23 in the USA and three in Canada. And the league is scheduled to expand to 30 teams by the 2022 season.
And, since 2000, soccer-specific stadiums have proliferated around the league. Its average attendance of more than 20,000 per game exceeds that of the National Hockey League (NHL) and National Basketball Association (NBA) (in part due to indoor arenas used by the NBA and the NHL having much smaller capacity than soccer stadiums).
Unlike Super League, Major League Soccer has exhibited spectacular growth in the last 20 years. And that is despite attracting limited TV audiences that deliver relatively small broadcast income to the league.
So why has MLS apparently performed so much better than Super League?
The secret lies in its governance and ownership structure.
Instead of operating as an association of independently owned teams, MLS is a single entity in which each team is owned by the league and individually operated by the league’s investors.
The investor-operators control their teams as owners control teams in other leagues, and are commonly (but inaccurately) referred to as the team’s owners.
In fact Major League Soccer owners own a share in the league and have the right to operate a team.
But the point is that teams and player contracts are centrally owned by the league. In order to control costs, the league shares revenues and holds players contracts instead of players contracting with individual teams.
The league now has 30 investor-operators for its 26 current and four future clubs.
And investors are now prepared to bid huge amounts of money for the right to become owner-investors.
In 2013, for example, New York City FC agreed to pay a record $100 million expansion fee for the right to join MLS in 2015. That record was surpassed by the ownership groups of FC Cincinnati and Nashville SC, which each paid $150 million to join MLS (FC Cincinnati in 2019 and Nashville SC in 2020).
Franchise owners also benefit from an equal share in Soccer United Marketing, the organisation that owns rights to MLS broadcasting, sponsorship and merchandising. SUM also has the commercial rights to football across North America, such as matches held by US Soccer, the governing body behind the men’s and women’s national teams.
But soccer’s basic weakness in North America is that relatively few people want to watch it on television, compared to other mainstream sports.
The current rights package generate roughly $90 million per season for the MLS and they run until 2022.
In contrast, the NFL sees roughly $7 billion generated from rights packages and the National Basketball Association $2.6 billion.
So the challenge for MLS will be to develop a national audience that wants to watch the game on TV.
That’s also a challenge facing Super League, although the MLS seems to be in a much better position to deliver it.
The problem with Super League is that every Super League club owns a share in Super League (Europe) Limited, which administers the competition. Inevitably there are multiple conflicts of interest that prevent Super League from ever fulfilling its potential, when club directors act in the interests of their clubs, rather than the competition as a whole.
If we adopted the MLS model, Super League (Europe) would own the clubs and the investors who currently own them would instead own part of the whole.
And Super League would then be able to direct its resources to where they are needed, without fearing that the clubs could block them at every turn.
And the costs of paying players and coaches would be shared out equally among the clubs, raising the possibility that we wouldn’t have the same clubs every year dominating the competition.
Super League could also set up a dedicated marketing arm to promote the competition as a whole and to bring some major companies on board to sponsor aspects of the competition and the teams themselves. It could standardise its approach to team uniforms to maximise their value.
Financially, such an ownership structure would put Super League in a much stronger position for raising capital, because the risks of club ownership would be shared collectively. And it would make Super League much more proactive in seeking out new opportunities for clubs to join the competition.
So in my view, if Super League is ever going to grow, it urgently needs to change the way it operates.
If we keep operating as we are, we are always going to be a sport that is just a sideshow as far as most people are concerned.
In that case, decline is a much more likely outcome than growth.
This article features in this week’s League Express, which is available from all good newsagents, or is available for subscription, either for the printed version of the paper or the digital version. In order to learn more and to subscribe for the best and most comprehensive coverage of Rugby League, go to https://www.totalrl.com/league-express/