There has been plenty of moral outrage at the amount of money coming into the Premier League under the new television deal and the amount of money being paid to its players. One political economy blog has already asked me to write a suitably indignant piece which really be a less eloquent rendering of the kind of article that David Conn writes so well in The Guardian.
There has been plenty of moral outrage at the amount of money coming into the Premier League under the new television deal and the amount of money being paid to its players. One political economy blog has already asked me to write a suitably indignant piece which really be a less eloquent rendering of the kind of article that David Conn writes so well in The Guardian.
Richard Scudamore scored something of an own goal when he said he was ‘not uncomfortable’ if clubs continued to pay multi-million pound salaries to top players but paid no more than the minimum wage to the lowest paid club staff. However, the clubs are not franchises and if they think it is their interests to pay more in transfers and wages, they will do so. At the end of the day, Scudamore is their hired hand, albeit a very well paid one.
Since the league’s formation in 1992 up until the 2012-13 season, revenues have increased at a compound annual growth rate of 14 per cent, and wages by 16 per cent, according to figures by Deloitte. The wages-to-turnover ratio has reached 71 per cent, well above the 50 per cent level recommended by Deloitte Sports Business.
It is conceivable that we shall see the £500,000 a week footballer before long? Are they worth it? They may often not represent a wise investment, but the market in goods that are very scarce can operate in a very odd way (think about rare paintings). They will also be paying a lot of tax, particularly given that some avoidance and/or evasion loopholes have been dealt with.
According to Richard Scudamore, the Premier League is comparable in the eyes of people abroad to the BBC and the Queen. I think that it is overstating it, even though it probably has a bigger following than either. Whether it does as much for English prestige is a moot point. However, some of the attacks on the Premier League look like ‘tall poppy syndrome’, i.e., cutting down something that is successful.
One defence of the Premier League is that if you are in it, it offers a fairer distribution. The ratio of TV income between the top and bottom Premier League club last season was 1.57 to 1. In La Liga, it is more like 10 to 1.
The Premier League now has to renegotiate its overseas rights. Even a more modest increase should take international rights above £3bn. That could give each club another £100-£150m a year from 2016-17, depending on how much the league distributes externally. That could make Premier League clubs even more attractive to investors.