19th April 2021
Back in July 2017, we released our very first report on Premier League financial and economic performance covering the period 2009 through to 2016. As part of the media exposure regarding its launch we were invited into TalkSPORT to be interviewed at length by Mark Saggers. Nick Harris, Chief Sports Reporter of the Mail on Sunday, was invited to participate which he duly did and all in all it was a lively debate. It is fair to say that Mr Harris took a very different perspective from our own which, of course, is fair enough.
A few weeks later we received a note from Nick Harris via Twitter’s Direct Messaging service. Here is an excerpt;
“From Talksport it was clear you had little to no understanding on the dynamics or history of the European breakaway situation or its (lack of) chances of happening. Yet your press release is still chock full or statements about six or seven clubs breaking away and financial doom. You also don’t seem to have an appreciation of TV rights values and what’s happening across the whole picture (overseas as well as domestic).”
The press release regarding our report was distributed for publication on 10th July 2017. It highlighted the worrying financial position of Premier League clubs, the over-reliance on broadcasting revenues, the lack of resilience if anything were to happen to them and the distinct possibility of structural reform/European Super League if things continued as they were.
A couple of days later, Deloitte, the FA and Premier League auditor of choice, issued a lengthy press release extolling the financial virtues of the Premier League and all its good works. Coincidence?
Sadly, as time went on, our predictions regarding the Premier League clubs’ deteriorating economics despite two huge broadcast contract increases came to pass. Indeed, records were broken for all the wrong reasons in a pre-Covid 2018-19, when the Premier League clubs achieved record economic losses of £599.54m despite record revenues. All of this time, our work was clearly attracting the interest of a number of American investors. Their increasing ownership and desire to generate a return from their investment are just two of the drivers in yesterday’s announcement.
Unfortunately, the writing had been on our wall for some considerable time. And it wasn’t for the want of trying that we communicated our concerns to various politicians and luminaries. At least the EFL had the good grace to see us back in October 2017 but sadly missed the opportunity to put measures in place to address the dire economic position of football clubs under its sphere of influence. Furthermore, Greg Clarke (FA), Damian Collins MP, Julian Knight MP, Alexander Ceferin (UEFA), Oliver Dowden (MP), Gary Neville and others all received letters from us. No replies were received. As fans, it was incredibly disappointing. As analysts, it was jaw-dropping.
Our data had consistently pointed to change. Any business would have to take a very deep look at itself given the size of the economic losses and the amount of capital owners were still injecting into their clubs just to keep the show on the road. Sooner or later, something had to give.
Eventually, Project Big Picture emerged in October 2020. From our perspective, an entirely predictable event. Much gnashing of teeth ensued but it was clear to us that structural upheaval was in the works. All the stars had aligned in perfect order, just as we had predicted in our blog of 8th August 2018.
At the time of considerable consternation surrounding the American initiative, we tried to explain the rationale behind their thinking. It wasn’t greed as such, it was an inability to achieve consistent and regular profits which was fuelling their desire to explore alternative structures and competition formats. Some might call it financial mismanagement. Others might call it ‘ambition’. The lack of effective regulation was allowing this and more to happen. We even wrote a blog about how to game the FFP ruleset and still achieve significant economic losses. Football was doing itself no favours by allowing the financial imbalance between the big clubs and the rest to grow further. But no restrictions were put in place. Meanwhile, the fundamental economics continued to deteriorate.
And so we arrive at the events of yesterday. A European Super League. The Americanisation of European football is finally here. And we told you so.
All of this could have been prevented. If we could see this happening 5 years ago, then why could others not see it too? Our own data was explicitly clear in highlighting these very events and structures yet football’s mandarins and those who seem to foster some moral responsibility for the beautiful game chose to ignore our warnings.
In our view, the Premier League is now in its twilight years, just as we said it would be. It is already a B-team league when it comes to clubs managing their resources around European fixtures with the additional and common problem of lesser clubs spending more than they earn in revenue just to be able compete. Professional club owners will have to look long and hard at their finances given the double whammy of the damage inflicted by Covid-19 and the trickle-down implications of the European Super League.
‘Legacy fans’, as the newly-emboldened ESL clubs have implied, are being consigned to the sidelines as the new order goes global with Instagram, Facebook and Whats App as the media of choice. Super League is the new face of world club football.
Scaremongering nonsense indeed.
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