Premier League’s record spending could help make English football fairer and more competitive – but it depends on Liz Truss
Many industries are understandably cautious at the moment, as they steel themselves for more tricky economic times ahead. But it seems that nobody told the English Premier League – which has just broken its own record for spending money on football players – to the tune of £1.9 billion.
Of the top 20 most expensive European club signings this summer, 15 were in the Premier League (four were in Spain’s La Liga, and one in Germany’s Bundesliga). Overall, the Premier League spent more than the top divisions in France, Spain and Italy combined.
This level of spending is not new. In the 2017-2018 season, the Premier League spent £1.86 billion, equivalent to more than £2 billion today. But what might be different this time is the potential impact on increasing the level of competition throughout the league.
For the (financial) value of playing talent is now more evenly distributed across Premier League clubs, which in theory could lead to more competitive balance. Figures suggest a large net transfer of spending by clubs outside of the “big six” (Manchester City, Manchester United, Chelsea, Arsenal, Tottenham Hotspur and Liverpool).
In particular, West Ham, Newcastle and newly promoted Nottingham Forest have been some of the bigger spenders, to the extent that the estimated market value of Premier League clubs is now more evenly distributed than in any of the last ten seasons.
Historically, more even distribution of playing talent means a more even distribution of league points, so the competitive balance of the league may well be about to improve.
That’s all very well for the 20 clubs in the top tier of English football, but the gulf between the Premier League and the second tier, the Championship, is now larger than ever. The gap in transfer spending is now £1.3bn, three times what it was ten seasons ago.
That gap gets even greater when you move into the third and fourth tiers (League One and League Two), which respectively have estimated market values of just 2.4% and 0.9% of the Premier League. This creates significant financial barriers to entry to the top tier, which should be a real concern for both clubs and football fans.
For English football has a systemic problem when it comes to financial sustainability. A large number of clubs spend many times more than what they earn and frequently require cash injections from their owners. And while there are various financial rules in place for football clubs, every team is well aware of the direct correlation that exists between spending on players and the chance of winning matches.
A tactical approach
So victory is expensive. But overspending can be ruinous, as fans of clubs which have gone into administration, like Wigan and Derby County, will attest. Our research showed that even big clubs’ resilience to economic shocks has been historically poor, so football is far from immune to current global difficulties.
This article is republished from The Conversation under a Creative Commons Licence. Read the original article.