According to Forbes, depending on the year, three of the five (or ten) most valuable sports teams

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Question:

According to Forbes, depending on the year, three of the five (or ten) most valuable sports teams in the world are football teams. In 2020, they were: Real Madrid ($4.2 billion), Barcelona ($4.0 billion), and Manchester United ($3.3 billion). As you can see, we are not talking about American football teams. We are talking about what some of us call soccer. (The most valuable sports team in the world in 2020 was the the Dallas Cowboys at $5.5 billion).

The English Premier League, where Manchester United plays, is the top soccer league in the world, based on revenue generated. (La Liga in Spain, where Real Madrid and Barcelona play, as well as the Bundesliga in Germany, where, for example, Bayern Munich plays, are other top leagues.) There are 500 players in the British Premier League (20 teams 25 players each). The average annual salary (before the pandemic) was about 3 million. At today's British pound/U.S. dollar exchange rate, that is about $4.1 million. In 1992-1993, the average player salary was about $210,000 (adjusted for inflation). Besides the salaries, one other thing that has changed is where the players come from. In 1992-1993, 69 percent of the players were English. Today, it is 31 percent. Thus, it is no longer the case that the majority of players in the English Premier League are English. Indeed, there is now a rule that of the 25 players on the roster, 8 must be "home grown." Of the top 20 goal scorers in the most recent year, 7 were from England.

Some economists have noted the benefits of this globalization of the English Premier League and open borders/free movement of players ("workers"). Arguably, the quality of play in the League has improved because it draws the best talent from around the world rather than being mostly limited to local talent. That, in turn, has led to globalization of the product market. Specifically, English Premier League football is watched around the world, not only because of the elite quality of play and players, but also likely because many countries have players in the League, which probably increases interest in those countries. That brings in large amounts of revenue from outside of England in the form of television rights, jersey sales, and advertising. To help see the global reach of the League, one can look at the players' jerseys. The jerseys for the club Tottenham, for example, carry the logo of AIA, an Asian-based insurance company that has no offices in England. The book Soccernomics refers to the League as "the most successful product in sporting history."

So, what's not to like? Greg Dyke, chairman of the Football Association, which governs English soccer, has asked how many English players in the English football academies dream of playing football but "cannot get a first-team game." He has proposed limits on the number of foreign players in the Premier League.

QUESTIONS:

1. Has the globalization of the English Premier League been a good thing? Who is better off as a result? Who is worse off? Think carefully about owners, fans/consumers, and players. Are there others who have been affected as well?

2. Consider the proposal by Mr. Dyke to limit the number of foreign players in the English Premier League. Take the perspective of owners, players, and fans/consumers. Who would benefit and who would lose under this proposal?

3. Do players from England play in elite leagues outside of England? Does that affect your evaluation of the proposal? If so, how?

4. One concern expressed by Mr. Dyke is that the English national team may be suffering because fewer English players can develop in the English Premier League. Jrgen Klinsmann, former coach of the U.S. National team, has criticized players who play in the Major League Soccer (MLS) league in the United States, rather than in one of the European elite leagues, because he feels MLS does not provide strong enough competition for the U.S. players to develop their full potential. Comment on the arguments by Mr. Dyke and Mr. Klinsmann. What would be best for the English national team?