Blog Feb 14, 2023

The USA vs Europe: The Two Approaches to Sports Business

The USA vs Europe: The Two Approaches to Sports Business

The world of sports is an exciting and dynamic arena, where athletes, coaches, and teams push their limits to achieve greatness. However, behind the scenes of sports business, there’s much more at play than meets the eye.

In this article, we will:

  1. Explore the different approaches to sports business between the USA and Europe,
  2. Talk about examples of the two approaches,
  3. Discuss how these approaches impact the success of sports initiatives. 



Sports Culture in the USA: The American Dream on the Playing Field

The USA is a country built on the foundation of individualism and competition, and this ethos extends to the world of sports. American society values winning and individual achievement, and this is reflected in the way sports are played and viewed. In the USA, sports are a showcase for determination, hard work, and raw talent.

One of the key elements of the American approach to sports business is the focus on revenue generation. Sports organizations in the USA invest heavily in marketing and advertising to build their brand and attract fans, sponsors, and media partners.

Teams and leagues sell broadcast rights to media companies, and also generate income from sponsorships, merchandise sales, and ticket sales. The focus on revenue generation is driven by the need to support large, expensive sports programs and to pay top-level athletes and coaches.


The USA vs Europe: The Two Approaches to Sports Business

The case of Major League Soccer

One of the main business differences between the American and European styles of managing sports initiatives can be showcased in Major League Soccer (MLS). 

Some of the key differences are:

  1. Ownership Structure: MLS operates on a single-entity structure, meaning that all teams are owned by the league and not by individual owners. In contrast, European leagues operate on a system where teams are independently owned and operated.
  2. Salary Cap: MLS operates with a salary cap, limiting the amount of money teams can spend on players. This is in contrast to European leagues, where there are generally no salary caps and teams can spend unlimited amounts of money on players.
  3. Promotion and Relegation: European football leagues operate on a system of promotion and relegation, where the bottom teams in the top division are relegated to the lower division, and the top teams in the lower division are promoted to the top division. MLS does not have promotion and relegation.
  4. Financial Strength: European leagues, especially the top leagues, generate significantly more revenue and have much larger budgets than MLS. This allows European teams to sign top-level players and compete at a higher level.
  5. Player Development: MLS has a strong focus on player development and operates a number of initiatives, such as the MLS Academy and the Homegrown Player Program, to promote young talent. European leagues also have strong youth development programs, but they often rely more on buying players from other teams or countries.



Sports Culture in Europe: A Team Effort for the Greater Good

In contrast, Europe has a more community-focused approach to sports, with a strong emphasis on teamwork, sportsmanship, and social interaction. Sports in Europe are seen as a way to promote physical and mental well-being, and to bring people together. European sports programs place a great deal of importance on the development of young athletes, with an emphasis on holistic training and skill building.

Europe is home to some of the world’s most successful sports programs and teams, including world-class football clubs like Barcelona, Bayern Munich, and Real Madrid. With a focus on community, sports in Europe are more than just a competition; they’re a way of life that brings people together and promotes healthy living.


Sports as a uniting factor of a community in Europe

To display how football is more community-focused in Europe, let’s take a look  at some examples of European football teams that have a long history and link to specific communities:

Celtic F.C. – The Glasgow-based football club was founded by Irish immigrants in 1888 and has a strong cultural and historical connection to the Irish community in Scotland.
Sheffield Wednesday – This English club was formed in 1867 by members of the Sheffield Wednesday Cricket Club, and has a long history of being connected to the steel industry in Sheffield.
FC Basel – The twenty-time winner of the Swiss football league was founded in 1893 by Basel pharmaceutical company employees.


Sports Fan Engagement: The American and European Perspectives

The level of fan engagement between American and European sports culture is a significant difference. American sports fans consider game days as a festive occasion, with parties in the parking lots of stadiums and arenas, and merchandise sales reaching high levels.

European sports fans are passionate, but they take a more reserved approach, focusing more on the sport itself and the quality of competition. Going to a football match is often seen as a social outing, with fans meeting up before or after the game to socialise and discuss the action on the pitch. 

Also, American sports leagues are famous for introducing various technologies to improve their fan engagement. One example is the NBA and the use of Meta Quest 2 VR headsets in their match broadcasts.

However, European clubs are now investing in fan engagement, offering VIP seating areas, dedicated fan zones, and interactive pre-game activities. With the rise of technology, European clubs are also investing in augmented reality experiences to bring fans closer to the action.


The USA vs Europe: The Two Approaches to Sports Business

Best practices for Sports Business: USA vs Europe

We can see that the way people see and interact with sports in USA and Europe differs greatly. Understanding these differences can be key to success in the industry. Both continents display good qualities in managing sports initiatives and can learn a lot from each other. 

The community-focus aspect and the strong emphasis on teamwork and social interaction of European football, can be highly beneficial to the still young American football league MLS. Building a football team community that reflects its local community will leave a long-lasting legacy and in turn will unite local supporters, and benefit local businesses and entrepreneurs.

On the other hand, European sports teams can place more effort into youth development by securing financial support from sponsors. Moreover, fan engagement could be further developed by investing in technology that is already used across the pond. However, this can also lead to the over-commercialization of sports

The best approach to sports business may lie in finding a balance between the two. Incorporating elements of the American approach, such as revenue generation and marketing, with the European approach, such as community-focus and player development, could lead to a sustainable and successful sports initiative.


The USA vs Europe: The Two Approaches to Sports Business


In conclusion, the American and European approaches to sports business are both effective in their own way. By taking the best from both the USA and Europe, we can create sports initiatives that promote both individual and team success, provide opportunities for athletes to reach their full potential and grant high fan engagement at the arena as well as online. 


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