|The Unfair Football Finances and a Fairer and More Sustainable Alternative|
Written by BlueRaider on Thursday, 16th May 2019 18:43
The Current Revenue Split
During the 2017/18 season the 92 Premier League and EFL teams shared a pot of TV money totalling £2.8 billion. Just think about that number for a second, it equates to nearly £50 for every man, woman and child living in the UK.
The Premier League teams receive 85% of this money, with prize money per position meaning that the champions received nearly £150 million, and the team finishing 20th received £95 million.
The next 9% of the money is received by Championship teams who are in receipt of parachute money (£47m in first season after relegation, £41m in the second, £22m in the third).
This means that there is just 6% of the money left for the remaining 65 clubs, Championship teams receiving £6.7m each, League One teams receiving £1.4m each, and League Two teams £0.9m each.
This means that there are enormous cliff edges in terms of TV revenue for teams dropping down a division:
Championship teams receiving parachute payments receive just 39% of an average Premier League team.
Championship teams without parachute payments receive just 18% of an average club with parachute payments.
League One teams receive just 21% of a Championship team without parachute payments.
League Two teams receive 64% of a League One team.
I contend that the existing model benefits only the top six clubs (City, United, Liverpool, Arsenal, Chelsea, Spurs). These teams generally receive the most Premier League money, Champions League money, and sponsorship endorsements.
As long as these clubs are competently run this clique will be very difficult to break into for a sustained period (witness how Leicester lost their stars after their title win and are now back in the mid table pack).
The next tier of clubs in English football history are arguably Everton, Aston Villa, Leeds, Newcastle and Sunderland. Only one of these has survived in the top flight for any length of time, so I would argue that other than the top six, none are immune from relegation, all it takes is a spot of poor management, a dose of bad player recruitment, and a modicum of bad luck with injuries.
The cliff edges in terms of finance cause the following issues:
- The 14 ‘smaller’ Premier League teams are more desperate than in normal times to avoid the drop because of the gigantic loss of revenue.
- The big six are almost impossible to compete with on a consistent basis due to their gigantic revenues which dwarf most others, meaning they can sign the best players and pay obscene wages.
- Championship clubs are either desperate to go up to board the gravy train, or desperate not to be relegated to avoid the cliff edge down to League One.
- This means that many clubs gamble their futures to further their league status – one in eight Championship teams are promoted each year, this doesn’t sound like bad odds does it?
- This results in clubs being in huge financial trouble, you don’t need to look much further than the sorry state of Bolton Wanderers for evidence of this, and there are many other clubs including Town who are technically insolvent but for a wealthy owner.
- Most clubs field drastically weaker teams in the cup competitions as they want to rest players for the league, and only take them seriously if they somehow get through to the latter stages. The state of the FA cup is a source of great sorrow to me, when you think how valued it was in the years before the Premier League.
A Fairer Model?
How about splitting the £2.8 billion more evenly between the 92 clubs? Introduce even drops in TV revenue between the divisions, all Premier League teams receive the same, all Championship teams receive 70% of this figure, League one teams 70% of that, and League two teams 70% of that.
Premier League - £50m each
Bring this in with a rule that player salaries are capped to 80% of this figure and I believe you will have a level playing field and allow teams that are well run and invest in youth to flourish.
It is arguable that some concession to these rules could be made to take into account club support (for instance you can pay an extra 2% for every 10,000 on your average attendance?).
I contend that this model would give many benefits :
- Clubs could just put 70% relegation clauses in their player contracts and would be able to more easily manage their finances.
- Less desperation and gambling with clubs futures to preserve/gain league status
- Less super rich players (Premier League players would still be able to earn handsome sums (average of £30k per week in a 25-man squad)), and I for one wouldn’t miss those that left just because of money.
- Good salaries for players all the way through the league.
- No more ability for teams to stockpile players (a la Chelsea and Manchester City particularly).
- Much easier for lower division teams to buy/loan players from higher divisions in terms of paying players, and to resist selling players.
- Domestic cup competitions would be more valued, and players less likely to be rested as there would be less obsession with the league.
- Lower ticket prices for fans as clubs strive to fill their stadiums as that revenue stream can no longer be used for player wages.
- More money available for clubs to help the grassroots and youth development facilities in their local areas.
I think this model would be of benefit to all but the top six Premier League teams once they look at the benefits beyond the drop in revenue that they would initially suffer, and therefore this could be voted through on the 2/3 majority needed in the Premier League.
What do you think? Perhaps it is time to start a fans campaign for a fairer model!
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