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Is Leicester City’s title a one-off or will the increase in TV money allow more mid-table sides to challenge for Premier League glory?

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On the 2nd May 2016, Leicester City won the English Premier League after Tottenham Hotspur failed to beat Chelsea (BBC, 2016). It was the East Midlands’ side first top flight championship and the first time the league was won by a side other than Manchester United, Manchester City, Chelsea and Arsenal since Blackburn Rovers’ victory in 1995. With bookmakers offering odds on the title victory of 5000/1 at the start of the season (Innes, 2016), it is fair to say that this title was more than unexpected. Therefore, it is fair to assume that this season is a one-off and the forthcoming years will see a return to the more traditional pecking order. However, a new TV deal has been announced this season, which could see teams earning £120million a year on broadcasting revenue (Harris, 2016). Will this new money allow more teams to compete?

Leicester’s title win is more surprising when you consider where they had been just one year previous. In the 2014/15 season they became only the third side to escape relegation after being bottom at Christmas. Already an unlikely tale, it would not be possible without ambition. Leicester are owned by Thai billionaire Vichai Srivaddhanaprabha, and when they were promoted in 2014, he declared they would spend “£108m to … challenge for the top five” in three years (BBC, 2014). They have achieved it in two seasons, and by spending less money than Mr Srivaddhanaprabha thought. If they can do it, other clubs will be entertaining the same thought.

While obscene to the ordinary man, that money mentioned by Mr Srivaddhanaprabha is not unusual for the Premier League. The league is broadcast to 212 countries, across 80 different companies – therefore making it the most watched football league in the world (Premier League, 2016). With money also coming in from ticket and commercial sales, as well as the draw of advertising, the money generated by the Premier League is vast.

Figure1

Figure 1: The value of TV income for the Premier League (BBC, 2015)

Financial weight and success are intrinsically linked, apparent by looking at the Premier League honours roster. The clubs with the most amount of money to spend, Manchester United, Arsenal, Manchester City and Chelsea, dominate, and Blackburn spent a lot to win the league in 1994/95. If winning the league is aided by having a lot of money, then logic suggests that more money for all clubs will help improve the prospects of every side in the league. The new TV deal is worth over £5bn, and figure 1 (BBC, 2015) shows the huge gulf between this one and the previous. The major difference between the two is the sheer amount of money in the new one, whereas before the difference was minor, now it is crucial. The Premier League works by sharing TV revenue equally between the 20 clubs, hence this is not a deal that only benefits the already rich, this is a deal for all. So, in theory at least, this new TV deal should allow a more competitive league to flourish.

At least, this is the view put forward by Tony Evans, for ESPN, who writes: “English football could be on the cusp of an exciting new era.” Evans’ argument is that European talent will start moving to traditionally unfashionable clubs, highlighting the example of Xherdan Shaqiri playing for Stoke City. When discussing the Deloitte list, Evans writes: “This year, England had 14 [clubs] in the top 30 [richest]. After 2017, all 20 Premier League teams could end up in this wealthy elite group.” If that does materialise, then the likes of Crystal Palace and Middlesbrough could outspend teams such as AC Milan, Ajax and Athletico Madrid. Only Barcelona, Real Madrid, PSG and Bayern Munich will remain richer than the majority of English Premier League clubs. Evans’ finishes his argument by stating “the division will get significantly more competitive over the next 10 years” (Evans, 2015).

On the other hand, the Soccernomics book, written by Simon Kuper and Stefan Syzmanski, constantly hints at football sticking with the status quo. Throughout the book, chapters have reference to how football will stay the same, and how fans want it to. They use economic theory, and apply it to football, in part to check out old clichés. They argue that fans “prefer unequal leagues. In fact, if football were even less fair, it might become even more popular” (Kuper and Syzmanski, 2014, 221). Their argument for this is two-fold. One, the matches involving the big clubs attract the highest amount of fans, i.e. when the result is almost certain, and two, the big clubs evoke strong emotions which draw people to the league. So, in short, the book argues fans should not want a competitive league.

Further, it argues that there will never be a competitive league. With the TV deal bringing in more money for all the clubs, there will be a greater want to spend money on players. This is a natural reaction, fuelled by desire from fans and a belief that will help; yet Soccernomics says that this is wrong. They argue “the more you pay your players in wages, the higher you will finish; but what you pay for them in transfer fees doesn’t seem to make much difference” (Kuper and Syzmanski, 2014, 17). The book continually refers to the inefficient transfer market, an inefficiency that only the clubs with a solid structure can manipulate. The biggest clubs, who can already buy the best players, will use the extra money to improve their structure behind the scenes and put measures in place to use the market sensibly and pay higher wages.

The argument is simple. Money does have an impact on success, however not in the obvious way. To be successful on the pitch, you have to spend it wisely off the pitch. Using this argument, it would be logical to draw the conclusion: Leicester’s title challenge might not be a one-off, if a team such as West Bromwich Albion, Everton or Swansea uses the extra income to sort out the inefficiencies of the transfer market. This point is one of many worth further thought when considering the question posed above.

Samuel Stevens of the Independent argues that this is the reason behind Leicester’s success. By taking a look at the lack of backroom changes manager Claudio Ranieri made when he took over, Stevens praises the scouting network and states that “astute scouting is fused effortlessly with an inherent trust in the Category One academy” (Stevens, 2015). Scouting the right talents, putting the right amount of faith in youth – both will involve spending money gleaned from the TV money but spending it in the right way to improve the long term prospects. Stevens goes on to state Leicester’s owner “keeps his distance from team affairs” (Stevens, 2015), which is a direct contradiction to the usual rhetoric about owners dabbling too much in team affairs. Mr Srivaddhanaprabha put money in to help the backroom, then took a back seat and put faith in people. Spending wisely will be something other clubs are taking on board.

Figure2

Figure 2: Leicester’s spending in comparison to other Premier League clubs (de Menezes, 2016)

However, The Independent’s chief football writer, Mark Ogden, goes further. He accepts the argument above but believes this title has very little to do with spending. He writes, “the title can be won, without money, but with smart recruitment, astute management and a group of players hungry enough to drag themselves over the line” (Ogden, 2016). Figure 2 appears to back this argument up, as only the three promoted clubs had spent less on their sides at the start of the season. Leicester’s spending of just over £50m is dwarfed by reigning champions Chelsea’s £298m and Manchester City’s £411m (de Menezes, 2016). What figure 2 doesn’t show, however, is the amount spent on the backroom staff, and scouting capabilities. Ogden’s argument is one worth making, however it is impossible to see how this title could be won without money.

Despite the seemingly logical view that financial weight brings success, albeit if spent wisely, as argued by Soccernomics, it is become increasingly apparent that the 2014/15 title winning side from Leicester did things differently. With that in mind, it would be easy to write this season off as a write-off, a one-off and a fluke. It would be logical to accept that next season will see a return to the norm, however the TV deal does place that assumption under threat.

Jonathan Wilson argues this in the Guardian. He writes, when discussing the affects of the new TV deal, “there is less need for the non-giants to sell, less financial advantage for the best players at the non-giants to move.” Wilson goes on to argue that no club in the Premier League is afraid of the Manchester clubs, Chelsea or Arsenal anymore, however he does admit that this season may still look unusual in a few years time. He returns to the competitive point put forward by ESPN’s Tony Evans at the end, stating: “enormous wealth all round means less statistical variation, means a more tightly bunched league table” (Wilson, 2016). So then, it could be argued that, while Leicester’s title win might be a one-off, the possibility of seeing new teams in the Champions League may well increase. As the financial gaps between clubs close, more will begin rising to close to the top, if not reaching the summit.

On the other hand, The Economist magazine argues that this season is very much a one-off. When discussing the new TV deal, they say: “this arrangement… cannot account for greater parity within the EPL, because the pay-out formula has not changed.” Later on, they argue that the reasons for Leicester’s success are all on the football pitch, rather than off it. The article states: “this season appears to be an acceleration of the never-ending cycle of innovation, in which clubs devise new strategies to exploit opponents’ weaknesses, and their rivals respond with counter-tactics designed to neutralise these methods” (The Economist, 2015). Although this argument is tailored towards last season’s results, the inclusion of the new TV deal allows it to become a prediction for next, and state that, despite the influx of money, the league will return to normal.

The Economist and Soccernomics are basing their arguments on economic theory, which, while sound, is not always correct. It is perhaps as a result of this thinking that a lot of the traditional top clubs are looking to change their manager. Mr Wilson in the Guardian points out that “the two most exciting managers in the Premier League are at the fifth- and sixth-wealthiest clubs” (Wilson, 2016), with Manchester City and Chelsea both reacting to poor results by bringing in big names from the managerial market. Next season will see Pep Guardiola, Jurgen Klopp, Mauricio Poccettino and Antonio Conte manage in the league, with the possibility of Jose Mourinho and Frank de Boer joining them. One way to get ahead of the TV money, and the increased power smaller clubs will have, is to recruit the best managers – who will still be attracted to the bigger jobs, and the better wages. Certainly, many outlets have credited Leicester’s success to hiring the right manager (Evans, 2015), and there is a growing belief that the right person in charge can offset any financial equality.

On the other hand, the danger for managers is that success will become expected and therefore their jobs less secure. As Richard Jolly writes in the Daily Express, “the penalty for failure will become greater. Job security will become an oxymoron” (Jolly, 2015). Further, it has been argued that managers do not matter. Jamie Carragher wrote in his autobiography: “if you assemble a squad of players with talent and the right attitude and character, you’ll win more football matches than you lose” (Carragher, 2008, 125). Soccernomics agrees with the Liverpool defender, with their research showing “at best one-tenth of the 699 managers we have observed since 1973 look like overachievers” (Kuper and Szymanski, 2014, 129). Ranieri’s stellar first season at Leicester may have been down to him, but theory, and indeed reality from a training ground, suggests more is at play. Carragher’s view suggests that he believes last season to be a one-off, and the status quo will return, as they will have the best players.

Figure3

Figure 3: The financial difference between the Premier League and other top European leagues (Deloitte, 2015)

Tony Evans of ESPN said that every Premier League club will be richer than most in Europe (Evans, 2015). Figure 3 shows the breakdown of finances across the main five European leagues, and it proves how much the Premier League dominates the market. The staggering block is the green one, where the TV money dwarves all the other respective deals, and this was made before next year’s money kicks in. The Premier League already overshadowed the other leagues, and from next year it will essentially monopolize European football. The effect is greater when considering the equality of the separation, the Premier League shares its wealth between the 20 clubs, whereas the other leagues do not. It has been argued that the new TV deal may see more clubs in Europe and figure 3 shows that they should be able to compete when there.

David Conn, writing for the Guardian, believes that the new TV deal will usher in a new era for the Premier League, an era that will leave Europe behind. He writes: “Premier League riches allow even its smaller clubs to compete with European giants.” Conn states that the new TV deal will widen “exponentially” the Premier League’s financial dominance over Europe, which he argues will allow the league to become more competitive (Conn, 2015). Despite worries from the continent over their ability to compete with British clubs, Russia Today Sport believes the new TV deal will have a derogatory effect on Premier League sides in Europe (RT, 2015). They argue that the TV schedule following European nights and the increased competition will hinder top-flight teams in Europe. Interestingly, however, the article does make the assertion that the Premier League will be more competitive, and thus this season was not a one-off (RT, 2015).

Ultimately, nothing can be said for certain on how the new £5billion TV deal will affect the competitiveness of the Premier League, predictions are all that can be made. Having said that, there are some consequences that are likely to happen. More money than ever before will be pumped into the Premier League and, if Leicester’s title was a one-off in one aspect, then it was, as has already been argued, because they did not spend a huge amount of money on building their squad. One of Leicester’s stars from the season has been Jamie Vardy, plucked from non-league football for only £1million. How many more times will that happen? Henry Winter, The Telegraph’s football correspondent, wrote a comment piece fearing about the future of grass roots, and by association non-league, football in the country. Winter is optimistic about the deal, writing “more of the TV money should flow into the grass roots”, however he warns that more English prospects are needed and challenges Richard Scudamore, the Executive Chairman of the FA, to “not let the grass roots … wither” (Winter, 2015).

Last season, for the first time since 1995, a club outside of London and Manchester won the Premier League. With a major increase in TV money coming for all teams from next season, the question is being asked whether this was a one-off or whether it is here to stay. Jamie Redknapp, the former Liverpool and Tottenham midfielder, described the title as no other, saying: “I’ve grown up always believing the big clubs, with the most money, win” (France-Pesse, 2016). That implies Redknapp sees it as a one-off, although hints at there being a shift in attitude of clubs and those within football.

As the Premier League TV deal comes in, more clubs will have a lot of money to spend. The immediate effects of these are that they will be able to spend more money on better players, while having no financial pressure to sell their best assets. Behind the scenes, they can improve their backroom structure to get better scouts and produce more talents, or they could improve their stadium to attract more fans. The ways in which they can spend the money are endless, however will the funds allow them to compete in the higher reaches of the Premier League?

Mid-table clubs are hoping, as Tony Evans for ESPN, David Conn and Jonathan Wilson for the Guardian argue, that the gap between Manchester and London and the rest is now closing. However, economic theory put forward by Soccernomics and The Economist suggests that this season was more fluke than an insight into the future. Soccernomics go further, and argue that a competitive league will harm English football rather than help it.

One aspect of success that all writers seem to agree on is that it is attained through sensible spending rather than just purely spending. Soccernomics point out that average wage determines position finished in the league rather than money spent on transfers, Mark Ogden of the Independent goes further to argue that Leicester’s title was more down to the hunger of the players than money. It appears that future success will be more determined by who spends smartly, rather than who spends.

If, then, there is going to be a change in how the Premier League is won, it will not be in the massive transfer fees that will be splashed over the front pages this summer. Tactics will win the Premier League, as well as finding the right prospects and assembling the best squad. As the poorer get richer, the richer will too, hence the big clubs will remain the best on paper. Although, the leveling of the financial playing field will more than likely bring a more competitive feel to the league. It will not be as surprising to see lesser known clubs at the top for longer periods, and competing in Europe, and to see the gap between the top flight and the rest of English football widen.

Reference List:

BBC (2016) Chelsea 2-2 Tottenham Hotspur. Manchester: BBC. Available from http://www.bbc.co.uk/sport/football/36126924 [accessed 16 May 2016].

Innes, R. (2016) How the odds on Leicester winning the Premier League went from 5000/1 to 1/5. Mirror, 26 April. Available from http://www.mirror.co.uk/sport/row-zed/how-odds-leicester-winning-premier-7736523 [accessed 16 May 2016]

Harris, N. (2016) Premier League sides have their eye on the TV cash bonanza… but this is the worst season to be relegated from the top flight. Daily Mail, 1 January. Available from http://www.dailymail.co.uk/sport/football/article-3381083/Premier-League-sides-eye-TV-cash-bonanza-worst-season-relegated-flight.html [accessed 16 May 2016]

BBC (2014) Billionaire owner ‘will spend £108m’ to make top five. Manchester: BBC. Available from http://www.bbc.co.uk/sport/football/27387616 [accessed 16 May 2016]

Premier League (2016) The World’s Most Watched League. London: Premier League. Available from http://www.premierleague.com/en-gb/about/the-worlds-most-watched-league.html [accessed 16 May 2016]

BBC (2015) Premier League TV rights: What does deal mean for fans & clubs. Manchester: BBC. Available from http://www.bbc.co.uk/sport/football/31386483 [accessed 16 May 2016]

Evans, T. (2015) Premier League’s new TV deal will make it more competitive than ever. ESPN, 23 November. Available from http://www.espnfc.co.uk/barclays-premier-league/23/blog/post/2724541/premier-league-new-tv-deal-will-usher-in-bold-era [accessed 16 May 2016]

Kuper, S. and Szymanski, S. (2014) Soccernomics, 4th edition. London: Harper-Collins.

Stevens, S. (2015) The Secret of Leicester City’s success: Boardroom stability, astute scouting and an emphasis on youth. The Independent, 25 November. Available from http://www.independent.co.uk/sport/football/premier-league/the-secret-to-leicester-city-s-success-boardroom-stability-astute-scouting-and-an-emphasis-on-youth-a6748591.html [accessed 17 May 2016]

De Menezes, J. (2016) Leicester City: The chart that shows how the Champions’ transfer budget was dwarfed by their Premier League rivals. The Independent, 3 May. Available from http://www.independent.co.uk/sport/football/premier-league/leicester-city-the-chart-that-shows-how-the-champions-transfer-budget-was-dwarfed-by-their-premier-a7011126.html [accessed 17 May 2016]

Ogden, M. (2016) Leicester win the Premier League: Title-winners are worthy champions and don’t let anyone tell you otherwise. The Independent, 2 May. Available from http://www.independent.co.uk/sport/football/premier-league/leicester-win-the-premier-league-title-winners-are-worthy-champions-dont-let-anyone-tell-you-a7010281.html [accessed 17 May 2016]

Wilson, J. (2016) Smaller clubs toppling Premier League elite – we may have to get used to it. The Guardian, 28 January. Available from https://www.theguardian.com/football/blog/2016/jan/28/premier-league-leicester-manchester-united-city-chelsea-arsenal [accessed 17 May 2016]

The Economist (2015) Why the English Premier League has been turned upside down. London: The Economist. Available from http://www.economist.com/blogs/gametheory/2015/12/competitive-balance-football [accessed 17 May 2016]

Jolly, R. (2015) Premier League TV deal brings great financial reward … and added pressure for managers. Daily Express, 15 February. Available from http://www.express.co.uk/sport/football/558210/Premier-League-TV-Deal-Financial-Reward-Added-Pressure-Managers [accessed 17 May 2016]

Carragher, J. (2008) Carra: My Autobiography. Ealing: Bantam Press.

Deloitte (2015) Annual Review of Football Finance. Cambridge: Deloitte. Available from http://www2.deloitte.com/uk/en/pages/sports-business-group/articles/annual-review-of-football-finance.html [accessed 18 May 2016]

Conn, D. (2015) TV cash takes more than England’s elite beyond reach of continentals. The Guardian, 2 September. Available from https://www.theguardian.com/football/blog/2015/sep/02/premier-league-tv-riches-too-much-for-european-clubs [accessed 18 May 2016]

RT (2015) Have TV billions made the English Premier League more competitive? Moscow: RT. Available from https://www.rt.com/sport/326096-premier-league-tv-deal/ [accessed 18 May 2016]

Winter, H. (2015) Premier League TV deal: Windfall must benefit grass roots and England. The Telegraph, 10 February. Available from http://www.telegraph.co.uk/sport/football/competitions/premier-league/11403849/Premier-League-TV-deal-Windfall-must-benefit-grass-roots-and-England.html [accessed 18 May 2016]

France-Pesse, A. (2016) ‘The old order has broken’: Premier League closes book on a transformative season. The National, 16 May. Available from http://www.thenational.ae/sport/english-premier-league/the-old-order-has-broken-premier-league-closes-books-on-a-transformative-season [accessed 18 May 2016]

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Author: GHardman42

Mancunian. Main passions are Sport and Mus(e)ic. Huge Everton, AM, Lancashire, JB and England fan! I play tennis like Dolgopolov (except nowhere near as good). Josh has said "You just don't know what will come next"

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