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After all the controversy surrounding Europe’s Super League project, we could take a look at the American competition system with respect to its two most important leagues, the NBA and the NFL. We will find out how they have managed to be much more profitable than the European leagues. This article will reveal the key to the NBA and NFL success.
American sports have succeeded in reducing the inequality between big and small teams. Its system includes a good management of sporting talent. One of the reasons for the creation of the Super League was to try to maximize revenue, with the two biggest American leagues as a benchmark. But in Europe, certain key issues have not been taken into account and it differs greatly from the American system.
To begin with, the NBA and NFL competitions are closed tournaments, in which there is no relegation. Franchises have to pay large sums of money to join them. Let’s take a look at how these leagues run in America.
American clubs are not independent. They are franchises of the league to which they belong. So, for example, the Tampa Bay Buccaneers cannot exist outside the NFL. Thus, the teams have common goals and a greater consensus in decision-making. In case of disagreements on relevant issues, these do not come to light and are resolved in private. Quite different from Europe, where clubs have much more autonomy in their own competitions.
The economic equality of all NBA and NFL clubs is a fact. Both leagues have mechanisms to prevent franchises from big cities such as New York or Los Angeles from having a higher turnover than those from smaller cities.
In addition, the revenues they receive from television rights and merchandising generated outside the country are shared equally among all the clubs in the league. In the competitions, there are no performance bonuses either. This means being the champion or reaching the final does not bring any financial reward.
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In American sport, players are not transferred, but only contracts, so there is no transfer fee. When a star player moves to a new team with a current contract, he takes his contract with him to his new destination. In return for obtaining his talent, the team does not pay money to the other team but sends them players that may be of interest to them.
The contracts are regulated and defined in advance. While in Europe, Cristiano Ronaldo earns a stellar salary, in the American leagues, stars like Luka Doncic or LeBron James will never reach the figures that European leagues pay for some players. NBA or NFL stars even have big salaries, these are capped so that lesser-known players are guaranteed a minimum salary.
Concerning the proper cost control, the NFL has a salary cap and it cannot be exceeded under any circumstances. If the league sets a spending cap, no team can exceed it, no matter how many resources it has. In the case of the NBA, if this cap is exceeded, the teams will pay a luxury tax, which will also be distributed among the rest of the franchises.
The Draft: The NBA and NFL source talent from American college sports. The draft helps to reduce inequality by giving less competitive teams the opportunity to acquire the best player available. The draft system allows the franchise that has accumulated the most losses in a season to select the player of its choice first. This fair agreement maybe is the main key to the success of the NBA and NFL system.
To conclude, NBA and NFL television contracts are not sold to a single network but are spread across several networks in order to maximize their value.
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