Breakaway fiasco gives Premier League the chance to fix its greatest flaw
The question now turns to how the Big Six should be punished for their scheming. Should they be hit by points deductions and transfer bans? Or should they be hit where it hurts most?
ARSENE WENGER NEATLY captured one of the maddest aspects of the English clubs’ breakaway efforts this week.
“England voted for Brexit to master their destiny. England has the strongest league in the world and by signing documents like that they destroy the Premier League.
“What is behind that thinking? It’s unbelievable to believe that it makes sense.”
Clockwise: Roman Abramovich (Chelsea), John Henry (Liverpool), Daniel Levy (Spurs), Stan Krenke (Arsenal), Joel Glazer (Man United), Sheikh Mansour (Man City)
The Super League ignored all matters cultural, historical, and sporting to found itself solely on money, but was it even a canny financial move for the English clubs? Because by joining the Super League, they would effectively kill the Premier League, their golden goose and the reason the likes of Real Madrid and Juventus have been jostling for a breakaway for years.
Of course the Super League clubs said they wanted to continue to in their domestic leagues, but the further distortion to the competitive balance and the dilution of jeopardy beyond the league title race would have effectively destroyed the Premier League’s value, and the six English teams would lose their fundamental advantage over the European clubs with whom they would be competing.
The reason for their advantage is the value of the Premier League broadcast rights are far greater than those elsewhere in Europe, and the primary reason for their value is the relatively equitable distribution of money among its teams.
The Premier League has flourished based largely on how it sold and distributed its broadcast rights: they are sold collectively, and 50% of the revenue is split equally between the 20 clubs. Another 25% is shared based on clubs’ final position in the table, and the remaining 25% is divvied up based on how often a club appeared on live television.
And though it may sound counter-intuitive on first thought, a football club needs their rivals to be strong if they want to be strong themselves. Let’s take one small piece of anecdotal evidence.
In 2004 Borussia Dortmund were on the brink of financial implosion, and among those to come to their rescue were Bayern Munich, who granted them an interest-free loan of €2 million to stave off disaster.
You could wonder, ‘Why didn’t Bayern just allow their biggest rivals go under?’ And you could look at the fact Dortmund won the Bundesliga in 2010 and 2011 as proof of Bayern’s folly.
Firstly, Dortmund’s disappearance would have devalued the Bundesliga, and so it could have hit Bayern in the pocket, and they would likely be poorer even if Dortmund couldn’t repay the €2 million. Plus, Bayern’s hoisting their rivals to their feet allowed Dortmund to sign a relatively unknown Polish striker from Lech Poznan and introduce him to German football…and now Robert Lewandowski is the second-highest goalscorer in Bayern Munich’s history.
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So in football it is useful to keep your enemies close…and those enemies already close closer still.
Let’s make the point more broadly.
As the superb financial blog Swiss Ramble has illustrated this week, the richest clubs in football are those who take a smaller share of the total revenue generated by their domestic league.
Interesting from @SwissRamble detailing the distribution of wealth across the top European leagues.
You have to wonder how Real Madrid & Barcelona have got into the state they are in with that much of an advantage.
This is effectively a way of showing that fans (or consumer in eejit saboteur owner speak) will pay more for a league (okay, or product) which is more competitive. Look at Barcelona and Real Madrid on that graph – only up until recently they sold their La Liga TV rights themselves, leaving the rest of the league hopelessly uncompetitive.
The Premier League has been relatively unpredictable in the last decade – it has delivered five different champions in the last 10 seasons, whereas France has had four, Spain three, and Germany and Italy two each.
This isn’t to say the Premier League is a paragon of equality, of course. The gap has been widening ever since Roman Abramovich invested in Chelsea, and it has been trending ever-faster in the same direction since Abu Dhabi turned things up to eleven at Manchester City.
That growing inequality has also now been written into the Premier League rules. In 2018 the Big Six successfully argued for a greater slice of the overseas TV rights of the Premier League, under the same principle as led the Super League – people are paying to watch us, so why should we share our cash with Burnley and West Brom? – and now revenue above a certain threshold is distributed based on where a club finishes in the table.
The value of the rights in the Premier League, as elsewhere across Europe, are falling, and one way to arrest the slide is to ensure a more competitive league in which more is regularly at stake. To now it has been politically impossible for the lower clubs to regulate to make this happen, given the Big Six could dangle the trump card of a potential breakaway to get their way.
Now they’ve played that card, they’ve played it terribly, and for the first time, the bottom 14 have their rivals over a barrel. There was initial fevered talk they would kick them out of the League, which would be an act of insane financial immolation from the Burnleys and Fulhams of the world.
Perhaps there could be points deductions or transfer bans…but is it fair to punish players, managers and supporters who knew nothing about this breakaway?
The best thing to do it to push for a more equitable distribution of TV revenue, which, for the first time, they have the political capital to do. Address the overseas revenue issue, and then perhaps readjust the distribution of the domestic rights to take into account the distorting effect European money now has. Rather than split half the revenue equally, why not split 75% of it equally, and do away with the 25% based on frequency of broadcast?
And if the Big Six can conquer their own absurd myopia, they should realise that funding their rivals will work out best for them, too.
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Breakaway fiasco gives Premier League the chance to fix its greatest flaw
ARSENE WENGER NEATLY captured one of the maddest aspects of the English clubs’ breakaway efforts this week.
“England voted for Brexit to master their destiny. England has the strongest league in the world and by signing documents like that they destroy the Premier League.
“What is behind that thinking? It’s unbelievable to believe that it makes sense.”
The Super League ignored all matters cultural, historical, and sporting to found itself solely on money, but was it even a canny financial move for the English clubs? Because by joining the Super League, they would effectively kill the Premier League, their golden goose and the reason the likes of Real Madrid and Juventus have been jostling for a breakaway for years.
Of course the Super League clubs said they wanted to continue to in their domestic leagues, but the further distortion to the competitive balance and the dilution of jeopardy beyond the league title race would have effectively destroyed the Premier League’s value, and the six English teams would lose their fundamental advantage over the European clubs with whom they would be competing.
The reason for their advantage is the value of the Premier League broadcast rights are far greater than those elsewhere in Europe, and the primary reason for their value is the relatively equitable distribution of money among its teams.
The Premier League has flourished based largely on how it sold and distributed its broadcast rights: they are sold collectively, and 50% of the revenue is split equally between the 20 clubs. Another 25% is shared based on clubs’ final position in the table, and the remaining 25% is divvied up based on how often a club appeared on live television.
And though it may sound counter-intuitive on first thought, a football club needs their rivals to be strong if they want to be strong themselves. Let’s take one small piece of anecdotal evidence.
In 2004 Borussia Dortmund were on the brink of financial implosion, and among those to come to their rescue were Bayern Munich, who granted them an interest-free loan of €2 million to stave off disaster.
You could wonder, ‘Why didn’t Bayern just allow their biggest rivals go under?’ And you could look at the fact Dortmund won the Bundesliga in 2010 and 2011 as proof of Bayern’s folly.
Firstly, Dortmund’s disappearance would have devalued the Bundesliga, and so it could have hit Bayern in the pocket, and they would likely be poorer even if Dortmund couldn’t repay the €2 million. Plus, Bayern’s hoisting their rivals to their feet allowed Dortmund to sign a relatively unknown Polish striker from Lech Poznan and introduce him to German football…and now Robert Lewandowski is the second-highest goalscorer in Bayern Munich’s history.
So in football it is useful to keep your enemies close…and those enemies already close closer still.
Let’s make the point more broadly.
As the superb financial blog Swiss Ramble has illustrated this week, the richest clubs in football are those who take a smaller share of the total revenue generated by their domestic league.
This is effectively a way of showing that fans (or consumer in eejit saboteur owner speak) will pay more for a league (okay, or product) which is more competitive. Look at Barcelona and Real Madrid on that graph – only up until recently they sold their La Liga TV rights themselves, leaving the rest of the league hopelessly uncompetitive.
The Premier League has been relatively unpredictable in the last decade – it has delivered five different champions in the last 10 seasons, whereas France has had four, Spain three, and Germany and Italy two each.
This isn’t to say the Premier League is a paragon of equality, of course. The gap has been widening ever since Roman Abramovich invested in Chelsea, and it has been trending ever-faster in the same direction since Abu Dhabi turned things up to eleven at Manchester City.
That growing inequality has also now been written into the Premier League rules. In 2018 the Big Six successfully argued for a greater slice of the overseas TV rights of the Premier League, under the same principle as led the Super League – people are paying to watch us, so why should we share our cash with Burnley and West Brom? – and now revenue above a certain threshold is distributed based on where a club finishes in the table.
The value of the rights in the Premier League, as elsewhere across Europe, are falling, and one way to arrest the slide is to ensure a more competitive league in which more is regularly at stake. To now it has been politically impossible for the lower clubs to regulate to make this happen, given the Big Six could dangle the trump card of a potential breakaway to get their way.
Now they’ve played that card, they’ve played it terribly, and for the first time, the bottom 14 have their rivals over a barrel. There was initial fevered talk they would kick them out of the League, which would be an act of insane financial immolation from the Burnleys and Fulhams of the world.
Perhaps there could be points deductions or transfer bans…but is it fair to punish players, managers and supporters who knew nothing about this breakaway?
The best thing to do it to push for a more equitable distribution of TV revenue, which, for the first time, they have the political capital to do. Address the overseas revenue issue, and then perhaps readjust the distribution of the domestic rights to take into account the distorting effect European money now has. Rather than split half the revenue equally, why not split 75% of it equally, and do away with the 25% based on frequency of broadcast?
And if the Big Six can conquer their own absurd myopia, they should realise that funding their rivals will work out best for them, too.
Premier League fixtures
Friday
Arsenal vs Everton 8pm
Saturday
Liverpool vs Newcastle 12.30pm
West Ham vs Chelsea 5.30pm
Sheffield United vs Brighton 8pm
Sunday
Wolves vs Burnley 12pm
Leeds vs Manchester United 2pm
Aston Villa vs West Brom 7pm
Monday
Leicester City vs Crystal Palace 8pm
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Premier League Super League talking point