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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
Championship - £35m each
League One - £25m each
League Two - £17m 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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BlueandTruesince82 added 21:45 - May 16
I like it both the split and FFP benefit only the big clubs. Therd must be a better way
2

armchaircritic59 added 22:43 - May 16
All sounds pretty sensible to me, which is why of course it ain't going to happen!
2

Bugs added 23:16 - May 16
I agree completely, the current funding criteria is broken. But there isn't a snowballs chance in hell of a major overhaul like, or similar, happening anytime soon.

You also have to remember that you have to think European wide. The premiership clubs would argue that they would struggle to attract top international players, due to the limitations on budget for players wages that other European clubs wouldn't have. Probably no bad thing in developing British players though.
0

ElephantintheRoom added 18:19 - May 17
Your top six includes three teams that have been relegated recently - Spurs, Man United and Man City. Granted before the current TV excesses - but their 'size' gave them huge advantages out of all proportion to better run clubs at the time. The only way 'fans' can stop the ever-growing gap in TV revenue is to stop buying overpriced TV packages. Even that strategy, which is already happening in this country to a certain extent is dwarfed by the growth in global TV sales. The Premier League is a global league with global players and a global fan base. There is no way TV revenue will go to rubbish clubs other than as sops - and in reality there is no commercial reason why it should. Creating an elite is the best way to improve standards. Ironically salvation may be on the imminenet horizon as UEFA are being coerced into expanding the 'champions league' (final this year between two teams who haven't been champions this century). This will, if it has not already done so, create a european league with no relegation. So the league will shortly be without your big six anyway - and you'll get your wish of rubbish clubs getting more money for being rubbish.
1

BeattiesBackPocket added 18:50 - May 17
Also think that these premier league clubs can also come and steal the championships, division one and twos most talented kids from each clubs academy as well! The premier leagues it’s own entity and they don’t care about any other clubs that aren’t in it unfortunately.
0

Edmundo added 10:05 - May 18
Turkeys and Christmas come to mind when you look at how the Premiership runs teams. Currently, the biggest injustice is teams that "stockpile players (a la Chelsea and Manchester City particularly)." It's crazy to think that there are probably 60 players in the bigger clubs who will never get a 1st team career beyond a few loans until they are let go (probably injured due to over-playing them in the loan teams as they are the "stars") in their early 20s with little or no chance of achieving the dreams they and their parents are sold when they are 15-16. Ben Knight is a rare exception, but even for him, one bad injury in the next 12-24 months and I can see him out on his backside..."next" comes the call from the Man City Academy.
In all honesty the only way this gravy train is going to stop is with a major recession, worldwide. (Even then I'm sure half of the subscribers to sports tv channels will still pony up!)
0

therein61 added 17:30 - May 18
Very constructive article.
0

RegencyBlue added 09:00 - May 19
The Premier League run football in this country and there’s not a cat in hells chance they will change a business model that has worked for them for the best part of thirty years!

Football sold its soul to Sky and this is the result.
2

stiffy501 added 20:50 - May 21
The greed of the top six will stay i'm afraid even the academy system (cat 1 & cat 2) has been rigged to favour the top clubs, taking the best talent for minimum outlay. While they have all the voting rights nothing will change.

1

bleedblueandwhite added 10:21 - Jun 22
You are right but unfortunately completely unrealistic. The EPL bottom 14 know that if they vote for anything remotely similar to this, the top 6 will leave the league and play with their wealthy friends in Turin, Munich, Madrid, Barcelona and Paris. And thus scares them more than anything else.
0
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