Premier League spending gap shows why rivals are plotting overseas games
It’s more than 10 years since Bernard Caiazzo, then the co-president of French club Saint-Etienne, called on Uefa to take steps to curb the rampant financial power of the Premier League.
Caiazzo’s warning came after the English top division had just announced its latest record-breaking media rights deal, which he said could see it become “the NBA of football”, hoovering up all of the world’s top talent with budgets of £500m-£600m, and “greater than the Champions League”.
The Premier League may not yet have achieved NBA levels of cultural hegemony but Caiazzo’s fears that its teams would disappear over the hill financially have proven well founded.
Manchester City, Manchester United, Arsenal, Liverpool and Tottenham Hotspur do indeed have annual revenues in excess of £500m. They, along with Chelsea, made it six English representatives in the most recent top 10 richest clubs compiled by Deloitte.
The Premier League’s latest media rights contracts are now worth around £4bn a year, more than double that of its closest competitor, Spain’s LaLiga. A series of botched deals in France means Ligue 1 sides are only guaranteed around £100m between them this season, which is less than each team in the English top flight receives in central distributions.
Premier League spending dwarfs rivals
This growing financial disparity is reflected in the transfer market, where even mid-sized Premier League clubs can pick off talent from all but the very biggest European teams due to the fact that, at the last count, Brighton and Hove Albion had more income than Italian champions Napoli.
In the summer transfer window, which closed this week, Premier League teams collectively spent a total of £3bn – more than their counterparts in the top divisions of Spain, Italy, Germany and France put together. Even more tellingly, they had a net spend of £1.2bn. In stark contrast, the Bundesliga and Ligue 1 made more money in sales than they spent.
Caiazzo’s forecast was right in that English clubs are leaving their European rivals behind, in financial terms at least. That has not yet translated to competitive dominance, however, with Premier League teams winning just three of the 11 Champions League finals since – half as many as Spain.
Uefa’s spending rules have curbed the ability of the likes of Manchester City and Chelsea to make huge losses (or find creative ways to offset them) but the European governing body’s financial regulations were never drawn up in order to improve competitive balance. Solvency was the aim and to that end they have succeeded.
The swiftly aborted European Super League breakaway was an attempt by Europe’s historic giants in Italy and Spain to bridge this growing financial gap to England. Had it gone ahead it would likely have done that, which explains both English clubs’ hesitation at joining it and their distinct lack of appetite since.
With that project flatlining (at least until reviving it becomes advantageous to enough parties), those European giants have had to look for other ways to rein in the Premier League, which is why both LaLiga and Serie A want to stage league games overseas – in the US and Australia, respectively – this season.
Fifa at crossroads on overseas games
The plans are hugely controversial, with critics arguing they damage the integrity of the competitions and deprive loyal fans of a home fixture. Supporters groups this week redoubled calls for Fifa to block the proposals, which the European Commissioner for Sport has described as “a betrayal”.
Advocates for the move, meanwhile, argue that leading US sports leagues such as the NFL, NBA and MLB have been taking games abroad for years, so why shouldn’t football? In theory, it promises to grow the visibility and appetite both for the clubs slated to take part, who include Barcelona and AC Milan, and their leagues.
Previous attempts have foundered because they failed to attract enough support from across the game but the latest efforts look more likely to succeed, even if the backing is anything but universal.
Fifa now finds itself at a crossroads on the issue, and the clock is ticking. Its climbdown earlier this year in an antitrust case brought by a US promoter which works with LaLiga, makes it increasingly difficult to see it blocking overseas games, especially given it has positioned itself as pro-expansion through the Club World Cup.
Premier League chief executive Richard Masters last month reiterated that it had no plans to follow suit even if Serie A and LaLiga get their way. English clubs had their fingers burned by the infamous 39th Game idea and, in any case, would likely need to seek approval from the new independent regulator.
As the transfer window showed, the Premier League has no great need to take competitive games overseas. But for as long as they crack the whip financially, their European rivals will look for ways to bolster their own money-making weaponry.