The Finances of the Premier League and the MLS Compared

These are interesting times for soccer in the USA.

As the 2023 MLS season is starting to get underway, it’s seen its first billion-dollar club emerge in the shape of last year’s champions, LAFC.

The team’s success on the pitch has seen a corresponding uplift on the balance sheet, and it’s also seen reflected when it comes to the sports betting over whether they are going to make it two championships in a row.

As of the end of March, their main rivals appear to be St Louis in the Western Conference, with Atlanta and New England in the East, but there’s a long way to go yet.

Looking at soccer in general, it does seem like it’s a key point in its development in the US.

With the next World Cup due to be held across the country, along with Canada and Mexico, in 2026, it may be due to taking things to the next level.

MLS v Premier League

However, no one could deny that soccer in the US is very different from the set-up in the UK, where the Premier League features many of the richest teams in the world as well as the absolute top of the league in the shape of Manchester City.

The differences aren’t simply financial; the whole structure of the sport is different.

Unsurprisingly, MLS copies the blueprint of major sports like football and basketball by having a regular season followed by playoffs between the leading teams. The Premier League, on the other hand, simply runs for the length of the season, with the team that has scored the most points at the end of it being declared champions.

The Value of the Clubs

It also comes as no big surprise that, as the country’s national sport, soccer plays a more important role in England than it does in America, and this is reflected in the paper value of the clubs.

Top of the pile is Manchester United at around £5.95 billion ($7.28), while down at the bottom, there is a team like Bournemouth FC valued at £145 million ($177 million). But the extreme wealth of the bigger clubs in the league means that the average value overall is somewhere around $1.5 billion ($1.83 billion). So even the biggest US club has quite a way to go to catch up with this figure.

The Salary Gulf

There are many factors that continue to separate the financial scale of the Premier League and the MLS, and one of the key ones of these is the salaries that top players can command. In England, the average annual pay of a premiership player is about £3 million ($3.6 million), and in the MLS, it is around $387,000, quite an appreciable difference.

In England, the MLS is also quite widely regarded as a sort of retirement community for players well past their prime. Nevertheless, these do tend to be the individuals who can command higher than average salaries as they are considered to be a big draw for the crowds.

Tickets, TV rights, and Sponsorship

There are a number of sources of revenue that clubs rely on to fund the salaries of their players and other operating costs.

The first of these are through ticket sales. In the Premier League, it can cost around £100 ($122) to watch the biggest teams, while in the US, it’s more like $45. With big Premier League matches attracting crowds of 60,000 or more, this also dwarfs the figure for the MLS, where crowds tend to average around 22,000 per game.

Then there’s the question of TV rights. In the UK, there is huge competition to secure the contracts to show Premier League action costing broadcasters over £5 billion ($6.9 billion) a year, much of which is redistributed to the clubs themselves. In the US, Fox reportedly secured rights to MLS for $7 million per season.

Premier League clubs also have the ability to qualify for European competitions, generating yet more valuable revenue.

In terms of sponsorship, around £462 million ($564 million) is raised for Premier League clubs, while for MLS, it’s a comparable $461 million.

US Investment in the UK

Given that there is such a large disparity in scale in most areas between the US and the English Leagues, it’s not surprising that many of American investors have put money into Premiership teams. Examples include Liverpool FC, Arsenal, and Manchester United, with one of the most recent acquisitions being Chelsea FC, bought from Roman Abramovich by Todd Boehly, owner of the LA Dodgers and part owner of the Lakers.