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A Growing Gulf?

October 20, 2008

A Growing Gulf?

As the FA Premier League kicked off for the first time in 1992 no one could have imagined the impact that it would have on football, both nationally and indeed globally. Now in 2008, it is increasingly clear that there is an unprecedented gulf between the top flight in English football and the less glamorous Football League, (consisting of the Championship, League One and League Two), below it.

The future of football is important to us political folk not just because it affects the happiness of many of our constituents! It is a matter of public interest because of the significant amount of public money that has been channelled into the sport over the past decade and a half. Some also hope that we will win the chance to host the 2018 World Cup, something which will no doubt require political will and more public cash.

I have engaged in many parliamentary debates on the sport, being a diehard Bury FC fan myself, and today asked Sports Minister, Gerry Sutcliffe MP, what he would be doing to ensure that high-profile concerns about the football industry are brought to book.

In recent months there have been countless newspaper articles, comments by TV pundits, and more worrying, a growing voice of complaint from football’s lifeblood – the supporters who pay to attend or watch the game on TV. There are questions about the morality and value for money of the Premiership from people who have seen a huge transformation of the top league in the last sixteen years. Yet, as the latest reports into the game show, all the signs are pointing to the fact that this gulf is likely to continue to grow ever wider.

One of the most radical ways in which football has changed, and that such a gap has manifested itself, is due to the revenue incomes of the Premier League clubs compared to their Football League counterparts. TV broadcasting revenue, sponsorship and admission prices have all played their part. TV broadcasting money has rocketed with the bright lights of Sky and more recently Setanta having become inbuilt parts of the modern game.

Just to indicate the scale of this revenue, the Premiership currently receives a staggering £2.8 billion in broadcasting revenue over a three year contract. When we break this figure down, this means that in each season of the contract, the team who wins the league will receive £49.8 million, with the team who finishes bottom receiving £29.5 million in prize money alone. In stark contrast, the Football League’s latest contract (which is still in fact a huge improvement on the previous contract), is £88 million for three years of broadcasting rights. When shared across three seasons and three leagues, a total of 72 clubs, this remains a woefully insignificant figure compare to the Premiership. No wonder every Football League Chairman dreams of making it to the top flight, (even if it is just for one season due to the gulf in quality and resources), not least because all relegated sides receive parachute payments of £10-£12 for the next two seasons. In short, one season in the Premiership means £50 million of money financing the future decade of the football club. The most recent estimation, from the Sports Business Department at Deloitte Accountancy Group, is that there is a £70 million gap in revenue between the team that finishes bottom of the Premiership and one that is near the top of the Championship.

The Football League has attempted to bridge this gulf, and they should be congratulated. Attendances have on average increased throughout the leagues in recent years and sponsorship and broadcasting revenue deals have improved. The problem is that this improvement is cast into the shadow of the Premier League and its world wide growth and success. The fight for survival remains a weekly battle for many of the less glamorous clubs at the bottom end of this steep football pyramid.

The Premier League franchise has been an incredible success. English clubs have begun to dominate off the pitch across the world, (indeed if we look at the last four seasons of the Champions League, they have begun to do so on the pitch too). Deloitte’s most recent report into the game predicts that “It is likely that the 20 Premier League clubs will soon be in the top 50 worldwide revenue table within a couple of years”. If the world’s top clubs are struggling to keep up with the top English clubs what hope is there for the Football League? In recent years we have seen the Premiership become a billionaires playground, (mere millions will no longer suffice!). Manchester United, Liverpool, Chelsea, West Ham United, Aston Villa, Portsmouth and, of course, most recently Manchester City have all been brought by fabulously rich investors with limitless funds and the promise of yet further investment, big names and instant success.

The gulf between the divisions in our national game increases further by sponsorship which has soared in the Premiership in recent years. Conversly, whilst it is essential, it is decreasing in the lower leagues. Manchester United’s sponsors, AIG, currently pay around £14.125 million per year, and let’s be honest, even if the US government had not bailed out the insurance giant, Manchester United would be able to attract many big money sponsors even in the toughest of economic climates. And if not? Well it doesn’t really matter, as we can see West Brom FC and West Ham FC are currently playing without a sponsor on their shirts. For sure they would like one, but only at the highest of prices, until then they will carry on, it is not essential. For clubs in the Football League, who will be feeling a far more painful pinch at the moment, going without a sponsor could cause deep financial troubles.

It is not only in terms of income from sponsorship and broadcasting contracts that set the top 20 clubs apart from the rest but ticket prices too. Ticket prices in the tope tier of English football have increased by an incredible sixfold since 1990, which is even more staggering when compared to the general consumer prices of around 80% over the same period. The average cost of a Premier League season ticket is now £590, up 7% on last season. The cost of tickets has provoked much anger amongst fans and discussion in the media but often Football League prices go unnoticed. The average age of a Premier League fan is now 43 years old, and there is a growing fear that a generation will miss out on going to football as supporters can no longer afford to take their families to matches. However, Football League clubs are looking to take advantage and once again are running the excellent ‘Fans of The Future’ initiative. This allows young fans of under the age of 11 in to games for free when accompanied by an adult at participating clubs.

Away from revenue, there is a very well discussed topic of expenditure that again shows the gulf between the Premiership and the Football League – Salaries for talent. Being a footballer must be one of the most remarkable jobs in the world, in the sense that, one man, doing the same job as another, playing in the same position as another, in the same country, at the same age, height and weight could earn literally millions a year more than the other. So much for equal pay legislation! Football has truly become an adjunct of show business. Premier League players, on average, earn just over £1 million a year, according to Deloittes in 2007. The average League Two footballer earns, by contrast, £49,600. While many Premier League players are now also considered celebrities, lower down the football ladder, footballers have good reasons to be concerned about a short term career, threatened further by injury or competition.

Without doubt the Premiership has become truly global. With club shops across the world, supporters clubs in most nations and live TV audiences in ever continent. With this in mind it could certainly be said that for a more traditional local community spirit around a football club you increasingly need to look to the Football League. The bigger clubs typically draw bigger crowds, but increasing more people are travelling longer distances to be at matches. The Football Leagues clubs may be smaller, but many supporters feel that they have a greater link to the local community. With the Premiership considering how to continue to further its appeal abroad, with the ideas of playing games between two English clubs in another county, and changing times of games for international audiences, one can’t help but feel that too some extent the local communities around the top clubs don’t quite have the special relationship that they used to. The question is can a ‘globally branded’ Premiership club also be a ‘local community’ club, or do we have to accept that they are just worlds apart.

So what are the potential consequences of the multi-million top flight and the big name foreign acquisitions it brings with it now – a lack of home grown players. With the Premiership continuing to attract and spend on the best from around the globe, will our home grown talent dry up? Will young English players be given the chance at the top level or will they slip through the net? England coach, Fabio Capello, believes that he has the hardest job of all the national team coaches in Europe. “In the Premier League, only 35% of players are English. In Italy around 72% are Italians”. Trying to prevent the danger of young footballers being released by their clubs is the Football League’s Exit and Assessment Trials, which offer young players a second chance and clubs a cheap but possibly promising signing, by arranging various trial days. It goes without saying that the Home Nations have somewhat underachieved on the international football stage, and with memories of 1966, (which in truth is only one of two occasions in which England have got past the Quarter Finals at the World Cup), fading even more with each year of disappointment that passes, it must be the number one priority for everyone in the ‘football family’, from the FA to the supporters, to develop and grow a wider pool of home grown players.

With the likes of Manchester United, Liverpool, Arsenal and Chelsea all having sold out their season tickets and corporate hospitality allocations, it would appear that the top clubs are not too fearful of an economic downturn. Meanwhile lower down the football ladder, the battle to survive is usually a weekly if not daily one.

The Football League should be congratulated for the way it has marketed itself in recent years and for its greater emphasis on helping younger players fulfil their potential. The Professional Football Compensation Committee, The Football League Exit Trials, League Football Education and The Football League Trust are all excellent initiatives which should be supported. However, one cannot help but feel that with the continued investment in the Premiership that the financial gulf at least, will only grow wider.

Yet maybe it is not the gulf between the Premiership and the Football League that is of greatest concern to football fans, maybe it is the gulf between the average working fan and the billionaire Premier League clubs and players. The Premiership should be wary. The likes of Bolton, Middlesbrough and Wigan are already struggling to draw in the same crowds of just a few years ago, and the atmosphere in grounds does appear to be changing. Many fans are now demanding more, expecting better and feeling more disillusioned with what the top league has become. Whilst the Premiership is proving to be remarkably economically resistance at the moment, one can still remember Leeds United’s fate just a few years ago in a economy that was booming. Perhaps a greater danger is the fact that, for many people, Premiership football seems to be losing its identity and its soul, things which cannot be brought, no matter how much money you have. The Football League, and indeed, as likes of AFC Wimbledon and FC United have shown, the amateur leagues below it, are proving to be a evermore attractive alternative for many.