Although England does not produce the best footballers in Europe and although the English Premier League (EPL) clubs do not win the Champions League very often, the EPL’s financial dominance of European football is becoming more absolute with each passing year: “During a frantic January transfer window in Europe, English clubs spent €830mn, almost double the previous record. Chelsea alone spent more than all the top-tier clubs in Italy, Spain, Germany and France combined, a sign of the Premier League’s increasing financial dominance over the world’s most popular sport. Of the top 10 biggest spenders in Europe this season, all but one play in England.”
So how has the EPL come to dominate European football? This FT article says that the origins of the EPL’s dominance lie in the shambolic financial state that the English football clubs found themselves in by the end of the 1980s: “The 1980s were blighted by fatal events such as the Hillsborough stadium disaster. The response was a major overhaul of infrastructure, bringing in all-seater stadiums just as pay TV was gaining traction.
In 1992, the top clubs then decided to break away from the existing system by forming the Premier League, aided by cash from BSkyB, then Rupert Murdoch’s UK satellite television venture.
Barney Francis, executive vice-president at sports and media company IMG and former managing director of Sky Sports, says rising broadcast revenues stemmed from building better stadiums, recruiting the best managers and players, and creating a “much more exportable product”.
“If you’re a broadcaster in the Far East or Latin America, the Premier League became head and shoulders above everybody else,” he says. “It’s where the big managers are, the best players, it’s where the football is super competitive.”
England’s top division has enjoyed rapid growth outside its home market, with international rights now accounting for more than half its income. Its total income this season is expected to top £6bn for the first time, according to Deloitte, thanks in part to a new multibillion-dollar US TV deal.”
The televised glamour of the EPL then drew the world’s richest men to the league – owning an EPL club has become the ultimate status symbol for the global super rich. Owning a penthouse in New York or an American sports team sounds positively old-fashioned in comparison.
However, as bizarre as it might sound, the other European countries whose leagues have not managed to attract super rich owners, have reacted to the rise of the EPL with spending rules which ban their clubs from overspending: “Without billionaire benefactors, other leagues in Europe have chosen to implement stricter financial standards. The idea is to stop teams living beyond their means in pursuit of glory. In Spain, La Liga’s economic controls require clubs to submit regular updates on their revenue, which the league then uses to calculate pre-determined spending limits.
Last summer, those rules briefly barred FC Barcelona from registering new signings, before the Catalan club used asset sales to boost its balance sheet. The league has since tweaked its controls to make that harder to do.
In Germany, ownership of clubs is guarded by the so-called 50+1 rule, which prevents outside investors from acquiring controlling stakes in most teams, leaving clubs to rely on their own income to fund themselves. The Bundesliga says these rules help protect German football from “reckless owners”.”
The result is predictable – the EPL clubs spend more money and pull away all the prized talent from the European clubs to the EPL: “…many of the game’s superstars gravitate towards English clubs. “It’s the same as any industry — the way you attract talent is by offering generous compensation. The Premier League just happens to have the most money,” says Jake Cohen, sports lawyer at Mackrell Solicitors. “I don’t see that changing.””
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