European and British football leagues generally let teams spend as much as they want on players, as long as they do not lose too much money. More successful sides tend to earn more money, and so have more cash to splurge on star players—which in turn translates into more success on the pitch, and so on. The week before its Champions League triumph, Man City snatched the EnglishCup, beating Manchester United, another deep-pocketed team.
American sporting socialism, then, appears to lead to more competitive contests than Europe’s winner-takes-all approach. But do more competitive leagues make for better business? Here the evidence is mixed. On the one hand, unpredictability may drive interest—why watch when you know who will win? The possibility of an underdog’s success might help small teams develop devoted fan bases. On the other hand, people love a winner.
Another structural difference between American and European sport is easier to correlate with their moneymaking potential. Unlike European football, where teams can be promoted or relegated across various tiers of leagues, American sports tend to be “closed”—there is no way for new teams to accede to the top tournament. “The Europeans see this as fundamental to the organisation of team sports,” explains Stefan Szymanski of the University of Michigan, Ann Arbor.