Why Football’s Financial Pyramid Is All Wrong

Robin Hood would be turning in his grave. The rich getting richer and the poor getting poorer was not a mantra shared by Nottingham’s favourite renegade but after the Premier League announced their latest TV rights deal, it would appear the poor will remain poor for a very long time.

The Premier League’s latest TV deal earns them a record £3bn over three years which amounts to a massive 71% increase on the previous agreement. As the top flight’s wealth increases, it’s another kick in the face for the struggling Football League whose clubs can only look up at their rivals with an envious glare. There’s an ever widening gap forming between the lower leagues and the top division so isn’t it about time the governing bodies reviewed football’s financial pyramid?

The truth is they’ve already made strides to lessen the void but the newly adopted Financial Fair Play Rules merely help maintain the current financial stability of clubs while the disparity between the leagues remains grossly exaggerated. This is due to another increase in televised football rights after broadcaster BSkyB recently announced they will pay £2.3bn over three years for 116 matches per season from 2013-14. BT, the latest new kid on the block after Setanta and ESPN fell by the wayside, also won a portion of the rights and will screen 38 games while paying £738m over three years. This amounts to roughly £14m more per year for each Premier League club and amazingly the league’s worst placed team from 2013-14 onwards is likely to receive more than the £60.6m Manchester City earned for finishing this season as champions. The Football League Playoff Final is already one of the most profitable events in football and now that teams are guaranteed a bigger financial windfall they’ll be even more desperate for slice of the Premier League’s lucrative pie.

The Football League’s present deal only earns £372 million and that’s shared between 92 clubs with most of the funds used as parachute payments worth £48 million over four years to each team relegated from the top flight. That leaves just £2.2 million each for the rest of the Championship clubs and makes it impossible for them to compete will their affluent superiors. Fans berate the fact that a week’s wages for a footballer is worth more than their yearly income but this inequality is echoed throughout the beautiful game. Each individually televised Premier League match will now cost broadcasters £6.6m. Not only is that and increase on £4.7m from the previous deal but it’s more than the teams below them are receiving for an entire season. With that in mind, how can the lower leagues ever compete?

Financially speaking they can’t for the business side of the game is ruthless and the best product will naturally attract the most investment. While it may be unfair on the smaller clubs, it makes sense for the biggest teams to receive more investment and even the most starry eyed football lover would accept there is little promoters can do to raise the lower league’s profile. Cities like Stoke, Swansea and Norwich have shown there’s some hope for smaller sides trying to break the mould but they’re unlikely to ever compete with the league’s top teams. While it’s possible to be promoted and subsequently become established in the top flight, it remains extremely difficult for aspiring teams to ever compete for trophies at the highest level.

With such a competitive league forming the pinnacle of British football, it’s understandable that teams inside the VIP section get the best service. While the rest of the football league shouldn’t be overlooked, it’s difficult to promote an unpopular product when there’s such an exciting alternative on offer. If viewers have no desire to watch then how can the league generate more funds when supply outweighs demand?

While fans would embrace more financial equality, the position of the Football League’s egg timer means realistically the sands of profit will always sift into the pockets of the big boys.

Do you think the gap between the top flight and lower leagues is too big? Would you be happy if teams had more financial equality? What can be done to promote the lower leagues?

Let me know your views and opinions by following me on Twitter – Tweet me @Alex_Churcher

 


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