4. What are the benefits accruing to elite EPL clubs from appearing in the UEFA Champions League competition? This is a revenue source for individual clubs outside the EPL governance structure and from playing many non-EPL clubs. What are the challenges t

1. Compare and contrast the architectures of the NFL and the EPL as regards the role of the central league in the business models of their individual clubs.

NFL teams earn more money through broadcasting because they reach a larger national audience and because these revenues are almost equally split among each other’s. Premier League clubs, or at least the very top teams, are better at signing sponsorship deals. Both the NFL and EPL have major differences when it comes to distribution of media and other broadcasting aspects. For starters, there are more teams in the NFL than the EPL, which means more room for revenue opportunities in the NFL. The NFL has 32 teams, while the EPL only has 20. The NFL also has a different way of operating compared to the EPL making them a stronger league. The NFL has equal sharing of all central revenues among the 32 NFL clubs, and they centrally negotiate media contracts for the broadcast of live games. The NFL equally shares National/Central revenues equally to each club. The NFL distributes media revenues in the following components (i) National Television Revenue, (ii) Other NFL Revenue—such as sponsorship, and (iii) Road Game Day Revenue. Like the NFL, the EPL also centrally negotiate media contracts for the broadcast of live games but they don’t distribute revenues equally to each club. Since this is the largest component of EPL central revenue, they distribute media revenues strategically to benefit themselves. EPL domestic media revenues are placed into three different pools: Basic award, facility fee, and the UEFA Champions League revenue distributions to the four EPL clubs appearing in the Champions League in 2014-15, compared to the NFL’s annual Superbowl. The EPL’s basic award is 50% of total domestic media revenues, which is shared equally amongst all of the EPL clubs. The facility fee is 25% of total domestic media revenues which means each EPL’s club shared is based on the number of times the matches are broadcast live (Which is completely different from the NFL.) In the EPL the more popular your league is, the more media revenue gets distributed within your organization. Each EPL club’s share is based on the number of times the matches are broadcast live. A minimum of 10 games are credited per club. The club with the greatest number of games broadcast live receives the highest payment from this pool. This allocation rule favors the high-profile elite clubs like the very popular Manchester United, in comparison to the NFL equally sharing revenue per team. In the EPL there is a sizable bias to only the elite clubs in the EPL receiving this revenue stream. The Merit Award is 25% of total domestic media revenues, Payments are proportionate to each club’s final position at the end of the EPL season. This allocation rule again also favors the high-profile elite clubs. 

2. Consider the system of relegation and promotion. What are the positives and negatives of the system (relative to the NFL system of 32 fixed teams)?

Relegation and promotion are a system in which teams are transferred between leagues based on their performances. Each season, the worst teams in the first division get relegated to the second division. The best teams in the second division get promoted to the first. The same relationship exists between the second and third divisions, and the third and fourth, and so on. At the end of each season, the teams that finish at the bottom of the league are "relegated" (or forced down) to the division below.  Teams that finish at the top of a league move up to a higher league, if they are not already at the top. Some of the positives of the system would be providing excitement at the bottom of the league towards the end of the year.  In the NFL especially, people stop caring about the teams that are in last-place very early in the season.  However, with relegation and promotion, fans have a reason to be interested in their team all year long. It also allows for more teams to play in the top division by allowing teams in lower leagues to qualify. This system punishes clubs that are not doing well, and gives teams a bigger incentive to try and perform better. Some of the negatives of this system could be the financial ramifications for being relegated can be so extreme that teams go bankrupt. In addition to the financial ramifications, teams that are relegated face an immense difficulty in keeping their players, who usually want to switch teams to stay in the same division and play with and against higher quality opposition.

3. In just one paragraph, describe the difference in how NFL media revenues are distributed relative to EPL media revenues.

The NFL evenly distribute the national televised revenue throughout the whole league. Even if most of the revenue is made by the most popular teams in the NFL, the worse teams still get something out of it, but these teams are able to collect their own local TV profit. EPL has two types of media revenues. One of them are domestic revenues and they have to split it three ways, 50% of it split throughout the club’s in the league evenly, 25% is split depending on the club’s appearance on TV and the last 25% comes from the final standings in the EPL league. The other media revenue is overseas which is split evenly throughout the EPL.

4. What are the benefits accruing to elite EPL clubs from appearing in the UEFA Champions League competition? This is a revenue source for individual clubs outside the EPL governance structure and from playing many non-EPL clubs. What are the challenges to the NFL creating additional revenue streams that are similarly generated from playing non-NFL clubs?

It’s beneficial to appear in the UEFA championship league competition because this can help a club increase their revenue outside of the EPL revenue earned. Another benefit can be the exposure for clubs playing from all over Europe facing each other and that could lead to more competitive game, in which people will become fans and maybe more sponsorships. With is league they wouldn’t have to worry about broadcasting the less talented club. The four teams that played in the UEFA champions league competition made up to 45 million dollars extra because of the media revenue. The challenges the NFL face by not playing non-NFL opponents is the talent level and there isn’t a professional league close to making a competitive game out of the match up. Also, the NFL is a 17-week regular season with 16 games and one bye-week, I don’t think organizations would want to risk their players having to play an extra game. American football is a more physical sport than the EPL.

5. In your opinion, which model is the most effective for the long-term growth of a league? Discuss the reasons for your choice.

In my opinion, the most effective for the long-term growth of the league is the NFL. I feel the NFL is more structured and give equal opportunities to all 32 teams to build on what they have or what they need to keep the league competitive. Even if a team have a terrible season they will be able to earn as much as the best team. In the EPL, the winning teams see more money than the clubs losing. It’s a free market and they’re able to regulate the funds and that can stun the club’s growth in the future. I feel this market doesn’t give all clubs the opportunity to become the best in the off season because they don’t gain the funds, but this league is great for exposure because you are able to play more and against others.