A number of academics have carried out statistical analyses of the relationship between spending and success in football, but now The Economist has carried out its own analysis. The data by individual managers and teams is available here.
Last year Premiership wages totalled £1.7bn. They consumed 75 per cent of club revenues, up from 46 per cent in 1996. By comparison, investment banks, who pay well, spend 30 per cent of their revenues on renumeration.
A number of academics have carried out statistical analyses of the relationship between spending and success in football, but now The Economist has carried out its own analysis. The data by individual managers and teams is available here.
Last year Premiership wages totalled £1.7bn. They consumed 75 per cent of club revenues, up from 46 per cent in 1996. By comparison, investment banks, who pay well, spend 30 per cent of their revenues on renumeration.
The wage gap within the Premier League is growing. In the early days of the competition the three highest spending clubs spent three times more than the three lowest spending clubs. Now they spend four and a half times more.
What is the relationship between player pay and performance? The Economist has crunched the numbers for 34 clubs that played in the top division between 1996 and 2014. There is a strong relationship, as one might expect. Relative to the league median, 55 per cent of the variation in points scored in any one season can be explained by the amount spent on wages.
However, that still leaves 45 per cent of the variation unexplained. There is also an issue about the cause and effect relationship. It could be that in runs in two directions: teams that perform better might reward players with better salaries.
Managers make a difference too, but they are increasingly quickly punished for what is seen as poor performance. Tim Sherwood at Spurs is the latest casualty, despite securing a Europa League place. 60 per cent of Premier League clubs have changed their manager this season. The median job tenure among the current crop of Premier League managers is just 11 months: in 1996 that figure was three years.