Commentary: Premier League wins by creating room at the top for football clubs

Commentary: Premier League wins by creating room at the top for football clubs

England’s top division shows how to triumph in the age of global sports, says the Financial Times' John Gapper.

Manchester City's Belgian defender Vincent Kompany raises the Premier League trophy
Manchester City's Belgian defender Vincent Kompany raises the Premier League trophy. (Photo: AFP/Glyn Kirk)

LONDON: When Manchester City held off Liverpool to take the Premier League title on Sunday, it was a victory not only for City, but the league itself.

Liverpool had already gained their own win, qualifying for the Uefa Champions League final by beating Barcelona over a thrilling two-legged tie.

The Premier League has enjoyed a record-breaking 27th season, thanks to Arsenal, Chelsea and Tottenham Hotspur joining Liverpool to monopolise both European club finals. Leagues are group endeavours — an economist might say joint products — and the English league has beaten rivals in Spain, Germany, France and Italy.

But sports are peculiar markets, in which “pure monopoly is disaster”, as the US economist Walter Neale noted in 1964. He meant that no team wants to eliminate all of its competitors because that would mean no matches to attract fans and no television rights to sell. This warning also applies to national leagues in the age of global sports.

Premier League - Liverpool v Wolverhampton Wanderers
Soccer Football - Premier League - Liverpool v Wolverhampton Wanderers - Anfield, Liverpool, Britain - May 12, 2019 Liverpool's Mohamed Salah and Georginio Wijnaldum look on during the match (Photo: Action Images via Reuters/Carl Recine)

YOU WANT A GOOD COMPETITION AMONG TEAMS

If a league is too strong, it provokes clubs that are excluded to seek alternatives. 

This is looming in Europe, with European club owners led by Andrea Agnelli, chairman of Italy’s Juventus, seeking to strengthen the Champions League at the expense of national ones such as the Premier League, La Liga in Spain and Germany’s Bundesliga.

The Premier League has cultivated a balance among its teams. Rather than being dominated by one club, as Serie A in Italy is by Juventus and Ligue 1 in France by Paris Saint-Germain, it is led by a “big six”. This includes Manchester City, which gained strength thanks to the deep pockets of its owner Sheikh Mansour Zayed Al Nahyan.

It has done so partly by selling the rights to broadcasting matches collectively and sharing revenues more equally than top clubs would prefer.

This contrasts with La Liga, which until 2015 let clubs negotiate such rights individually. According to Deloitte, average revenues for the Premier League big six were £415 million (US$535 million) in 2016 to 2017, compared with £147 million for the other 14 clubs.

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The league also follows the European tradition, dating to shortly after the creation of the English Football League in 1888, of open leagues in which some teams are relegated and promoted each year.

That permits teams from below the chance to rise, as Leicester City did by gaining promotion in 2013 to 2014 and winning the Premier League two years later.

FILE PHOTO: Manchester City's owner Sheikh Mansour bin Zayed Al Nahyan gestures before their E
FILE PHOTO: Manchester City's owner Sheikh Mansour bin Zayed Al Nahyan gestures before their English Premier League soccer match against Liverpool at the City of Manchester stadium in Manchester, Britain, August 23, 2010. (Photo: REUTERS/Darren Staples/File Photo)

NEW CHANGES IN DISCUSSION

Mr Agnelli, who chairs the European Club Association, wants to reinforce European competition, allowing leading clubs such as Juventus to spend more time (and garner higher revenues) playing each other, rather than lesser teams in their national leagues.

One idea is for the top teams to hold more secure places in the Champions League and play at least 14 games per season.

This would make the European soccer league more like US sports leagues, which are closed — the same teams compete each season without the risk of relegation, and the leagues only expand occasionally to new franchises.

That suits the incumbents by reinforcing their oligopoly and reducing the revenue volatility that European teams suffer by competing for places.

Along with other European leagues, the Premier League has protested at such a change, although it was founded in 1992 from a similar effort by English clubs to corner revenues. Clubs at the top of Europe’s sporting pyramids are constantly tempted to form super leagues, and the temptation has grown as their audience has become global.

NO TO MONOPOLY IN SPORTS

But there are dangers in teams exploiting their power aggressively. One goes back to Neale’s warning against monopoly, or too narrow an oligopoly, in sports.

Formula 1, a closed league, suffers from being dominated by the Mercedes and Ferrari teams, which makes races less exciting. (The Agnelli family also controls Ferrari.)

Andrea Agnelli is seen as the driving force behind changes to the Champions League
Andrea Agnelli is seen as the driving force behind changes to the Champions League (Photo: AFP/JOHN THYS)

Teams seek certainty but fans do not. As one study put it, “the real intensity comes from identifying with an individual or team as they strive to win”, an experience in which “euphoria is always a possibility”.

It was the high likelihood that Liverpool could not overcome Barcelona’s lead from the first leg that made victory so sweet.

A second danger is distance. The most resonant moment at Liverpool’s Anfield stadium came after the game when fans sang their anthem “You’ll Never Walk Alone” en masse, evoking the club’s history.

It is a fine balance for clubs to retain local identities, while making the most of their global reach; they lose part of what makes them so valuable if they disengage from their roots.

European football balances the two by combining national leagues with continental tournaments, but that can easily be upset.

Europe could be squeezed next by globalisation: Fifa, the sport’s world body, is expanding its Club World Cup into a pilot 24-team event from 2021. Just as US baseball teams move cities, soccer teams could go mobile.

The way to avoid such traps is to ensure sufficient opportunity at home. Other European leagues envy the Premier League for its high revenues and global fame but the quality to which they should most aspire is its breadth at the top.

That is what makes it, and not merely its clubs, a winner.

Source: Financial Times/sl

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