Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Italy’s new ‘Premier League’

Posted by John Beech on August 27, 2009

The BBC has reported under the headline Serie A to form breakaway league that “Serie A is set to copy the formation of England’s Premier League“, to be known as Lega Calcio Serie A (1). Before looking at a rather important detail that the BBC omits, it is worth looking at whether the formation of the Premier League is such a good model to choose.

There is no argument that the Premier League has negotiated enormous broadcasting rights over the year, but does those who voted for its formation benefit from this?

The original membership, it is worth noting, consisted of 22 clubs (reduced to 20 in 1995): Arsenal, Aston Villa, Blackburn Rovers, Chelsea, Coventry City, Crystal Palace, Everton, Ipswich Town, Leeds United, Liverpool, Manchester City, Manchester United, Middlesbrough, Norwich City, Nottingham Forest, Oldham Athletic, Queens Park Rangers, Sheffield United, Sheffield Wednesday, Southampton, Tottenham Hotspur, and Wimbledon – not a Premier League that we would recognise today, so it’s worth a closer (although I admit not terribly deep) look at how they have fared since the euphoric days of 1991.

  • Arsenal
    One of the few who have enjoyed continuous success, although much of that is directly attributable to Arsène Wenger’s efforts bringing results and hence revenues.
  • Aston Villa
    Have not been relegated, but financial success has eluded them.
  • Blackburn Rovers
    Have stayed up except for a blip in tier 2, but have made significant financial losses year-on-year through overspending on players.
  • Chelsea
    Certainly successful on the pitch, but their accounts tell a very different story. Staying not only up but in the Big 4 has stretched the deep pockets of Roman Abramovich. ‘Benefactor’-dependent.
  • Coventry City
    Relegation in 2001 saw them with huge debts (and within 25 minutes of Administration recently) and a stadium which they do not own.
  • Crystal Palace
    A pattern of yo-yoing, then in tier 2 since 2005. Serious financial problems and stadium ownership issues under Ron Noades and then Mark Goldberg, including a spell in Administration. Currently up for sale and under a transfer embargo.
  • Everton
    An average performance on what might have been anticipated – at least they have stayed up every season (just, on one occasion). Owner Bill Kenwright dreams of a takeover by a billionaire as he sees their debt as big and worrying (but manageable), so it’s hard to count them as a financial success.
  • Ipswich Town
    First relegated in 1995, they’ve made one short appearance since. Into Administration in 2003 with debts of £54m. Now pinning their hopes on reclusive ‘benefactor’ Marcus Evans.
  • Leeds United
    Best not to ask really. Once a European high-flyer, lately it’s been a tale of enormous debt, Administration and a drop to tier 3.
  • Liverpool
    Has certainly enjoyed on-the-pitch success, and few fans would not envy being fourth of the Big 4. Their dependency on banks is not something to envy though, and still their is no new stadium in spite of their success.
  • Manchester City
    One dip to tier 3 and a subsequent one to tier 2. Some worrying financial losses in recent years. Now ‘benefactor’-dependent.
  • Manchester United
    Highly successful on the pitch, thanks to Ferguson. Successful financially over this period, although while revenues have increased nine-fold, pre-tax profit has increased just under five-fold.
  • Middlesbrough
    A couple of instances of yo-yoing (and hoping to repeat that as they are currently in tier 2). Financially dependent on Steve Gibbons, one of the game’s few benefactors who do not need quotation marks round that soubriquet.
  • Norwich City
    Have spent more of the time in tier 2 since 1991; now in tier3. Have become Delia dependent, but know in need of a new benefactor.
  • Nottingham Forest
    The pre-PL glory days are long gone. In spit of their loyal following, a downhill path to tier 3, although now back to tier 2. Regular financial losses.
  • Oldham Athletic
    Downhill since 1994. In tier 3 since 1997. Into Administration in 2003, and almost extinction. Still seeking a new benefactor.
  • Queens Park Rangers
    It was slowly down-hill to tier 3, but back to tier 2 in 2004. In Administration in 2001.
  • Sheffield United
    All but two seasons have been spent in tier 2 since 1994. Consistent financial losses.
  • Sheffield Wednesday
    Relegated in 2000 and again in 2003, but back to tier 2 in 2008. In debt and seeking new investment.
  • Southampton
    Survived in the PL until 2005, but relegation coupled with debts incurred by building a new stadium pushed them into Administration this year, and into tier 3.
  • Tottenham Hotspur
    Have spent the whole of the time in the PL, enjoying moderate success. Made a good profit in the last available accounts, and looking with caution to build a new stadium.
  • Wimbledon
    The least successful of all the founder members, thanks to the antics of its owner. Into Administration in 2003 and Milton Keynes, and the following year relegated to tier 4. No longer exist as a team recognisible as the old Wimbledon, although AFC Wimbledon have so far made excellentprogress on the road back from oblivion.

The Premier League has hardly been an unmitigated success from the perspective of its founder members. It has managed to position itself as the most significant league in Europe, and the world, but at what price? Well, taking the aggregated debt figure for the twenty clubs in the PL last season, a tad over £3 billion. Hardly a model you would expect the Italians to want to emulate.

The BBC report it seems may have been slightly misleading however, and the new Italian ‘Premier League’ is perhaps not strictly a breakaway league in the Premier League sense. According to a sportbusiness report (2), Serie A and Serie B will be managed separately, but with a common president, Maurizio Beretta. Seria A will be able to negotiate joint broadcasting rights for their members, but a lot of important detail has yet to emerge in the English-speaking media. What are the arrangements for relegation and promotion? Will there be parachute payments, for example, or, dare I suggest, rocket payments (3)?

Much will depend on the future relationship between Serie A and Serie B, but it would appear that it has the potential to be significantly different from that between the PL and the Football League’s Championship. If any Italian-speaking blog readers can flesh out the detail of the relationship, it would be very helpful!

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5 Responses to “Italy’s new ‘Premier League’”

  1. Veyron said

    So how are you trying to measure success? I would argue that in the past 4 years that Everton and Aston Villa have been 2 of the more successful clubs directly through their managers and chairman on lesser budgets than those around them. Man Utd are now saddled with debt , so to Liverpool. The debt Everton and Villa have in comparison is negligble. can you expand your thoughts?

  2. John Beech said

    I’m not looking at just the last four years – I’m looking at the founder members who chose to secede from the Football League in 1991 and wondering whether they would now see that as a decision which led to success for them. I’m considering both on-the-pitch success and financial success, in, as I indicated, very broad-brush terms.

    My underlying argument is that the formation of the Premier League facilitated enormous gains in terms of broadcasting rights, but that for the majority of those founder members there has been little or no magic wand of success in the longer term. The kind of revenues that have been generated collectively over almost twenty years might have been expected to lead to significant profits for the clubs involved. What has in fact been achieved is just over £3million debt.

    This leads me to querying whether seceding in order to improve broadcasting rights is a model that is attractive.

  3. John Beech said

    Prompted by a comment by sonsdiary on the Sons Supporters Trust website (Sons = Dumbarton for those of you who don’t speak Scottish), I thought it worth looking at another PL clone, the Scottish Premier League.

    Founder members in 1998 were Aberdeen, Celtic, Dundee, Dundee United, Dunfermline, Hearts (but not Hibs), Kilmarnock, Motherwell, Rangers and (just bounced back) St Johnstone.

    The impact of the breakaway seems much the same to me as with the English PL – success largely only for those who were already successful, plenty of yo-yoing (and thus increased instability for the clubs concerned), and little of the increased revenue remaining as investment within the clubs, wildly escalated wages bills, etc. Again, not a model that as a club you would rush to replicate.

  4. Simon Darnell said

    Also, don’t forget that there are two clubs who helped create the Premier League back in 1991, but due to their relegations in May 1992 have never actually played in it, namely Luton Town and Notts County. The Hatters are currently in the Conference National, while the Magpies are in League Two.

  5. John Beech said

    Breakaway leagues seem to be all the rage – there is now talk of a breakaway from the MSL (1), although the rationale is more to do with with power politics than broadcasting rights.

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