(upbeat music) - [Narrator] If you had to guess what the 20 most valuable sports teams on earth are, where would you start? - [Announcer] Up and in. - [Narrator] Football is the
most popular sport on earth, so you'd guess some famous football teams would be on this list. Real Madrid, yep. Here at number 11, Manchester United, check. Barcelona, Liverpool, check and check. How about that team that won
a historic three trophies last year and is owned by
an ultra rich monarchy? Nope, not on the list. In fact, that's it for football teams. Baseball also has a huge fan base, but only one team made the list. And there's only three basketball teams. The last 12 teams on
this list don't play any of the world's most popular sports. Turns out they all play American football in the National Football League, which has pretty much been printing money for 50 years. - [Announcer] NBC sports presents the National Football League. - [Narrator] Today the NFL makes more money than any other sports league in the world,
and it's not even close. (upbeat music) What did the NFL figure out that all the other sports leagues didn't and will any of them ever catch up? - [Announcer] To the 50, Harper chasing. They're not gonna catch him. It's gonna be touchdown. (soft music) - [Narrator] The first
difference between the NFL and European leagues stems
from a single decision made more than 120 years ago. - [Announcer] Third base
in the first inning. - [Narrator] In the mid 1800s, both America and England decided to create professional leagues for their favorite sports. In the US, that was baseball. In England, it was foot, okay, quickly before we move on, because this video is ultimately
about American football, I'm gonna call this sport
football and this sport soccer. Apologies to my non-American viewers, but that's just how we're gonna do it. (upbeat music) Both countries wanted to
create a league where, one, all the best teams in the
country could consistently play each other, and two, the
team owners would make money, but each achieved this in different ways because they have different geographies. In the US, the major cities, and therefore the best
teams are far apart. A round trip for the Boston team to play the St. Louis team would take
almost three days of travel, which cost the owner a lot of money. He needed to pay his
players for all that time, and in fact, make them
full-time employees, which was new back then. So when the National League formed, it gave them some guarantees. First, a monopoly over their territory. The league wouldn't let
in another Boston team, so they would always be the
best team in their region, allowing them to attract the most fans and make the most money. Only in huge cities like New York and Chicago would they allow two teams. After establishing itself, the NL restricted membership, guaranteeing these teams a spot and creating the first closed league. The rest of America's sports
leagues followed its example, including in 1920, the
National Football League. - [Narrator] Football, Yankee style, rougher, more spectacular
than rugby or soccer. - So Americans decide
to create closed leagues is a key decision that makes them different
from European leagues. And I want to create an animation that we can use throughout the
video to see how this works. (soft music) Okay, so this is the league, and these are the teams in the NFL. There are 32 of them,
and the best teams are up here and the worst down here. Okay, so this orange line means
that the league is closed, but I kind of wanna figure out a way to make this visual a
little bit more memorable. Okay, let's use this to close it. Now, the size of each
team is gonna represent how rich they are, which is important because the NFL worried that the richest teams would
buy up all the best players and always beat the poor teams. Basically, they worried every NFL season would end like this, and
fans would find that boring. So early on, they made another
key decision to avoid that. The NFL limits every team to spending the same amount
on players every year. Something called a salary cap. In addition, the worst teams
in the league gets the first pick in a draft of college
players the next year, giving them a better chance of moving up. These rules, give every NFL
team the same chance to succeed. This is how the NFL finished
in the 2022, 23 season. In the last decade, eight different teams won the championship. - [Announcer] Chiefs are Super
Bowl champions here in Miami. - [Narrator] These rules
to keep teams equal is why experts often describe American sports
leagues as socialist. And if we use our same diagram to look at Europe's soccer leagues, you can see why they're
described as hyper capitalist. Okay, so running Search Party
requires a ton of writing, whether it's writing emails to my sources early on
in the story or outlining or scripting or even giving notes to our researchers and editors. But all that work is for
nothing if my writing is bad. So that's why I use Grammarly. It's an AI partner that helps professionals make their writing better and faster, and they're the sponsor
of this month's video. So Grammarly helps you make
your writing better almost anywhere you write in your web browser. So for me, that starts in the email. I use Grammarly to help me
quickly write emails to sources that sound both professional and personal. I often then use Grammarly
to help me summarize research for pitching a video. It even has a tool to help
me shorten it and improve it. 96% of Grammarly users report that Grammarly helps them
craft more impactful writing, and Grammarly never sells any
of this data to third parties. So you can be rest assured
that what you write is private and you can always request a personal data report straight from Grammarly. I really encourage you
to give Grammarly a shot because it's free to try. If you go to this link,
grammarly.com/searchparty, you can sign up and download
Grammarly and try it for free. Clicking that link is one of the best ways to support Search Party, but also make your
writing better and faster. I really recommend this tool. It's been huge for my work, and I just wanna thank Grammarly for sponsoring search party. Now let's get back to the video. (soft music) Cities in England are much
closer than in America. So in 1888, the founders of the football league didn't give teams the same guarantees. Instead, they created a
series of open leagues. It's called Open because
anyone can start a team and enter the bottom league. Then each year, the top
few teams in each league are promoted up and the bottom few are relegated down in order to keep the best teams
together each season. But unlike the NFL, it means
any team can join the top league simply by winning. - [Announcer] Impossibly, illogically, Lester City are the champions of England, - [Narrator] But this
also means that any team can get kicked out if
they have a bad season. - [Announcer] Well, it has
been one hell of a ride for Lester City, but seven years after they
lifted the Premier League, it is time to say goodbye - [Narrator] To make
matters more cutthroat, England's football leagues
don't have a salary cap like the NFL does. So rich teams can spend far more than the others and win more. This is why the Premier League
finished like this in 2023, and why only five teams have
won it in the past decade. Today, every European country's
soccer league works roughly in the same way, and many are dominated
by the richest teams. But because they're in Open leagues, they're still considered less
valuable than most NFL teams. See, investors know if an
NFL team finishes dead last, it gets to stay in the NFL
next season making NFL money. But in a European league
like the Premier League, when a team finishes
last, they're kicked down to the lower less popular league where they'll make far less money. Even the threat of that
happening is pressuring Premier League teams to spend
dangerous amounts of money. - Newcastle United have
broken their transfer record. - [Announcer] The English
Premier League's record summer spending has come to an end. - [Narrator] Take Manchester City who earned $788 million
in revenue in 2022, the most in the Premier League. That year, the Washington Commanders made 545 million, the
eighth most in the NFL, but Manchester City spent
more than $614 million on player wages, while the Commanders were only allowed to spend 214 million because
of the NFL's salary cap. That's the biggest reason why
the Commanders ended up making $30 million more in profits. In fact, every NFL team
was more profitable than Manchester City, which again was the most
profitable team in England. Most teams in the Premier
League actually lose money. Even though soccer teams are more popular than football teams, investors consider NFL
teams to be more valuable because that league's guarantees and cushy safety net makes
them a far safer bet than Europe's teams that need to spend big and get lucky just to maybe make a profit. But that leaves one more
question about this list that becomes glaring. When you expand it to the top 50. American baseball teams
are in a closed league, but they are only five here. And American basketball
teams are in a closed league with a salary cap, but there's only six. Meanwhile, almost every
NFL team is on this list. That's because the NFL saw what the future of sports would be long
before anyone else did. - Who doesn't enjoy a football game? If you are one of the lucky
ones able to get a ticket, thanks to the newest marvel
of modern science, Television, you can just lean back in a
comfortable chair at home, relax and watch the game. - [Narrator] In 1946, there
were approximately 12,000 television sets in the US. Four years later, there
were about 4 million and they were increasingly
tuned to live sports. Major League Baseball broadcast
its first game in 1939. Two months later, the NFL followed. It was the start of a close relationship with television companies. That would be another key ingredient to the NFL's business success. At first, NFL teams sold
their television rights individually to their local stations. But by 1950s, big national
networks wanted in. Football was dramatic programming that they could air relatively cheaply, and it allowed them to fill the otherwise boring
Sunday afternoon slot. In 1961, the NFL sold the
rights to broadcast all of its games to CBS. The first time any sports league sold its TV rights collectively, and the US government sued them. The NFL prevailed and made a
second revolutionary decision. In keeping with the spirit of equality, they decided to split that TV revenue equally among the teams. Arguably, the big city teams
deserved a bigger share because they would attract more viewers. But the NFL believed sharing
the revenue would enable them to grow rich together and
keep every team competitive. And they were right. One team from a small rural town in Wisconsin soon dominated the NFL. - [Announcer] The only professional team that ever has won five
national championships. Green Bay on game day. Community spirit has encouraged these boys and kept them among the leaders. - By the late 1960s, TV networks helped make football
America's favorite sport. Americans still love
baseball and basketball, but NBA teams played 82 games a season, and MLB teams played 162, meaning many games were inconsequential. NFL teams only played 16 games, so every single one of them mattered. The TV networks loved that and paid the NFL more money each year, which the league passed
along to the teams. But this TV revenue also
pushed the NFL to think of its games, not just
as sports competitions, but as television products. - [Announcer] And we hit
the two minute warning. That'll bring us to the two minute warning. Two minute warning at the AFC title game. - [Narrator] The NFL instructed referees to pause the game nine
minutes into each half, if play hadn't stopped yet, creating the first TV timeout and it maintained breaks two minutes before the end of each half, the most dramatic moments in the game so that TV networks could
sell ads at a premium. - [Announcer] At ABC's NFL
Monday Night Football Presents. - [Narrator] Playing every game simultaneously divided viewership. So in 1970 TV networks got the NFL to move one game to Monday night. Monday Night Football was such a success that in 2006 they added
a Thursday night game. In 2022, these three slots
were the first, third, and six most watched TV shows in America. As early as the 1960s, the NFL welcomed cameras on its sidelines and locker rooms, then on its equipment. In the eighties, it was the first league to have its referees use
instant replay to review plays. The NFL even updated the rules to incentivize passing offenses which TV audiences enjoyed the most. Deciding early to optimize itself for television is a major reason
why today the NFL can sell its TV rights for far more
than any other sports league. In fact, English soccer struggle to get its games reliably
on TV until the 1980s, primarily because it was
worried, it would dissuade fans from attending them in person. Today, Europe's TV audience is divided among the many soccer leagues, while in the US every
football fan watches the NFL. This huge amount of TV money
pouring into a closed league is why the average NFL team is now worth more than $5 billion and therefore make up most of the world's most valuable
sports teams, for now. In 20 21, 12 of Europe's
richest soccer clubs announced they were
forming a new Super league. Each would be guaranteed a
spot in this closed league, adhere to strict spending rules
and would share TV revenue, a lot like the NFL. It's no surprise that three
of these teams are owned by people who also own
American sports teams. Given soccer's global
popularity, a league like that could make these teams
billions of dollars every year, catapulting them past NFL teams. They canceled the plan when
fans rose up in protest, but they're unlikely to give up, because they know it would make them rich. Just look at India. In 2008 when Indians launched a professional cricket league, they styled it after the NFL,
creating a closed league, including just a few franchises and splitting the TV revenue equally. A mere 15 years later, it's second behind the NFL in revenue and closing fast. The NFL figured out how to turn a distinctly American sport into the world's richest league. Now we're about to see
the world's most popular sports try it for themselves. Hey everybody, thanks for watching and welcome to Search Party. In 2024, we've got a bunch
of new stories coming up that I'm really excited about, but since our last
video, we've added about 40,000 subscribers. So I wanna welcome you
all to Search Party. We cover sports, we cover geopolitics, and we cover a mix of the two. Thanks so much for subscribing, and if you haven't, check
out our membership program. All the details you
need are in the bottom. And other than that, keep commenting, keep pitching me stories. We've got stories coming up this year that have been suggested by readers, and I'm really excited
to share those with you. Thanks again and we'll see you next month. (soft music)
