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THE MAGIC OF THE BARCLAYS PREMIER LEAGUE

 

 

The recently published Soccerex Transfer Review by Prime Time Sport has put again English Premier League in the spotlight, with the news that in the winter transfer window it monopolized 52% of total investment by top 5 European leagues. The report, which provides insightful analysis of player transfer activity in Europe since 2009, showed that English top division sides investment in new players at season 2013/14 -including both summer and winter transfer windows- grew 15% to 881mio€. It is the highest amount in history, it doubles the likes of Italian Serie A, French Ligue 1 and Spanish La Liga and it even quadruples the investment by successful German Bundesliga. In fact, Barclays Premier League has consistently topped the investment in new players in the 10 editions (2 per year) of Prime Time Sport transfers report and that has just been relaunched in partnership with Soccerex.

The report has also highlighted some other interesting data about the Premier League and its teams, like Chelsea being the most active side in Europe at winter transfer windows, since during the last 5 years the blues have bought players for 181mio€ and sold for 82mio€ in January. English top division is also the tournament with most spread distribution of investment, with top 2 teams (Chelsea and Tottenham) accounting for 29% of total 2013/14 expenditure of the league and top 4 (adding both teams from Manchester) accounting for 50%. On the opposite side, Real Madrid and FC Barcelona monopolized 62% of investment at La Liga and PSG and Monaco 73% at Ligue 1.

A revenue generation machine

The Premier League investment strength is obviously driven by the capacity of the league and its teams to generate more revenues globally and consistently overtime. As published at Deloitte’s latest Annual Review of Football Finance, English top division sides generated in total 2,9bio€ at season 2011/12, 53% more than Bundesliga and 61% more than La Liga. Furthermore, Premier League has as much as 6 sides among top 14 teams generating the highest revenues in Europe as shown by Deloitte 2014 Money League report.

But what drives this unparalleled revenues success? Obviously it is not about magic as it is not either about the size of the country or a better situation of the overall economy. The continued growth of revenues of English Premier League can be explained by 6 factors that positively impact each other and that all together provoke an amazing multiplier effect on revenues when the whole cycle is completed. Let’s see…

  1. TV value and reach: As a result of having a high value product, English Premier League has the most lucrative TV rights contracts, which have reached an astonishing pick for 2013-2016 cycle at around 2,1bio€ per season and more than 50% above previous cycle amounts. None of the other top European leagues even reaches 1bio€ per season; Serie A follows at 950mio€, while La Liga and Bundesliga make around 600mio€ per season). Furthermore, Barclays Premier League games have the widest global distribution, which facilitates brand development and fan acquisition by participating teams.
  2. TV revenues fair distribution: English top division has the most generous TV revenue distribution model in Europe, as the ration between the team that makes the most (Manchester United with around 73mio€ in 2013/14) and the one which gets the lowest amount (QPR at 48mio€) is just of 1.5 to 1. This compares with 10 to 1 at La Liga (the only league where clubs sell TV rights individually), 4.2 to 1 at Serie A, 3.6 to 1 at Ligue 1 and 2.2 to 1 at Bundesliga.
  3. The best game: The fact that even the smallest teams get an important portion of TV revenues results in a much higher ability to buy new players for them all. For instance, the 3 teams that promoted to the Premier League for season 2013/14 –Cardiff City, Crystal Palace and Hull City- spent on average 37mio€ in new players transfer fees, which compares with a total of 16,6mio€ spent by promoted sides Villarreal (16 of them), Elche and Almeria at La Liga. So with more money on the pitch matches are in general more even and results less predictable. And that’s why Premier League has one of the highest winners rotation among top European leagues and lowest points ratio among top 3 teams of the table (as shown at latest edition of Soccerex Transfer Review by Prime Time Sport).
  4. Stadium attendance and fan engagement: The high number of thrilling games, coupled with reasonable ticket prices results in full stadiums week after week and passionate fans cheering for their team. As a consequence, English Premier League matches are 92% full (the highest rate in Europe along with Bundesliga). It is also remarkable the way fans support their teams on away games, massively travelling all over England even on cold winter weekdays and often becoming the best clients for hosting teams.
  5. Sponsorship deals: So a league producing recurrent advertising impacts all over the world combined with full stadiums with cheering fans is a very attractive proposition for sponsors globally. In this sense, all 20 Premier League sides carry a shirt sponsor and 15 out of the 20 sponsors are global brands or companies overseas headquartered. More importantly, overseas lucrative deals are not only restricted to the top teams and the likes of Sunderland, Crystal Palace, Everton and Swansea have shirt sponsors South Africa, Dubai, Thailand and China.
  6. Higher value product: All factors together end-up producing a higher value product to sale. Better quality matches, most of the best players on the pitch, more unpredictable results, widespread impacts for sponsors and beauty image on TV keep on resulting, cycle after cycle, in more and more lucrative deals and therefore more and more cash availability to keep on spending in new players.

Premier League has therefore become the most successful domestic club football competition and the participation aspiration for all players. And it will continue like this for a long time. As one thing is for sure: the next edition of Soccerex Transfer Review by Prime Time Sport, which will be launched in September in Manchester as part of the Global Convention, will once again feature Premier League as the highest spending league.

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© Esteve Calzada, 2017
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