Economics.
I don’t know much about it. I am not going to dive too deep into the ins and outs of TV revenue splits, income sources, transfer profit margins etc (mostly because I think its boring and I think you will too).
What I am going to do though, is summarise and lift stats from the Deloitte Money Football League 2020. The full report can be found here: https://www2.deloitte.com/bg/en/pages/finance/articles/football-money-league-2020.html
I will summarise what I think are the key takeaways from it, so you don’t have to read it. You’re welcome.
Then I’m going to look at each team’s market value in the big 5 leagues, judging disparity between top and bottom, average value, plus consideration of the financial impact on competitiveness. Sound good?
1.Deloitte
The Deloitte report details clubs’ revenue for the 2018/19 season, giving us the top 30 teams in the world by profits. Of the thirty teams:
-England has 11 (Man United, Man City, Liverpool, Spurs, Chelsea, Arsenal, West Ham, Everton, Leicester, Wolves, Crystal Palace)
-Italy has 5 (Juventus, Inter, Roma, Napoli, AC Milan)
-Spain has 4 (Barca, Real Madrid, Atletico, Valencia)
-Germany has 4 (Bayern, Dortmund, Schalke, Frankfurt)
-France has 2 (PSG, Lyon)
with the last four slots being taken by non ‘big 5’ league teams.
I won’t lie, this absolutely shocked me. I was aware that the Premier League had some sort of a revenue advantage, but I did not expect there to be over double the teams compared to the next best league. The revenue margins partially reflect the efforts of English teams in the 2018/19 season in both European competitions – both having all-English finals. However, mid-table teams such as West Ham, Everton, Crystal Palace (?) making the top 30 demonstrates the financial superiority of the Prem. I would argue, that over the past five seasons as a whole, the European effort by the Premier League has been underwhelming – specifically in the big competition. Especially as it appears to hold a distinct advantage over other leagues.
Most shocking, for the top teams compared to the lowest rated (in the top 30) for each league, is the disparity in profits. Barcelona (1st) made 656 MILLION EUROS more than Valencia (26th). Man United (3rd) made 537m Euros more than Palace (30th). PSG (5th) made 415m Euros over second-placed Ligue 1 side Lyon (16th). Those are HUGE differentials, and they are just teams in the top 30 in the world. It appears that elitism is an issue for competition in all 5 leagues.
2.Market values
If we look at market values between the top and bottom team in each league, we can compare their financial disparity (market values from Transfermarkt):
-Spain: 929m Euro difference
-England: 845m Euro difference
-Germany: 816m Euro difference
-France: 683m Euro difference
-Italy: 510m Euro difference
Financially speaking, it appears that Spain has the greatest team size disparity at nearly a BILLION. France, Germany, and Italy, meanwhile, with their ‘one team title fights’ are the three lowest in disparity. At the top end of every league, there is an upper echelon of competition – no doubt causing the massive monetary differences of every league. The PSGs, Bayern Munichs, Madrids etc are European elite; they are expected to win their leagues because they have so much more at their disposal. Because the elite teams are so far ahead economically, their ability to compete and win their domestic leagues becomes much easier. That doesn’t mean the rest of the league sucks. It simply means they may find it much more difficult to compete with a team in the top 5/10 clubs in the world – which happens to be in their league. People believe that the Premier League is more balanced because there are 6 financially ‘massive’ clubs rather than 1-3. But what about all the other clubs after the big six? England still has the second highest financial difference after all.
Further comparison is found in the mean value for each league. They came out as follows:
England: 376m Euros
Spain: 244m Euros
Germany: 221m Euros
Italy: 205m Euros
France: 146m Euros
Once again, the Premier league shows its financial might by having by far the highest average value. But does it lead to a false narrative that the Prem is better? Considering we know the value of elite sides in Spain, Germany, France and Italy far exceed their mean values, it means there must be a fall-off in finances at the bottom of their leagues. It leads to the interpretation that because the majority of teams in foreign leagues are so far behind the elite sides financially, they are significantly worse – so bad they are called ‘farmer’ teams.
The Prem doesn’t have the same level of drop-off; even the lowest value teams still have significantly higher values than most bottom half teams in other leagues. The lack of dramatic value drop-off is probably what kept the Premier league mean over 100m Euros higher than the next best league. Bottom of the Prem value table is Sheffield United, valued at 113m Euros. For reference, this would financially rank Sheffield: 8th in Ligue 1; 12th in Serie A; 12th in Bundesliga; 11th in La Liga. Does this mean that they would finish this high up in the other leagues? Unfortunately it is impossible to know, as competitive fixtures between European league teams only happen in the competitions mentioned in the previous article. For this reason, I think it would be unfair to judge a league and their depth of quality purely on market value. The Premier League’s significant TV rights deal advantage really boosts the value of a lot English top flight sides – potentially giving an inflated impression of the on-pitch product. If you want to judge the on-pitch quality, watch the leagues and judge for yourself. Just because there is more money at the disposal of richer clubs, it does not mean the on-pitch production is going to be significantly better.
Mean and individual team value is clearly not the definitive factor in the performance of a team or league in Europe. Take Sevilla for example. They don’t compete for the La Liga title; are they a farmer’s team? As a side that has reached UCL quarter finals and won the Europa League, definitely not. The ability of teams such as RB Leipzig (who are currently in the SF of the Champions League this season) and Atalanta (UCL QF, 7th in Serie A value) to perform at elite levels on smaller budgets (than the Euro elite) displays the depth of quality through the top 5 leagues.
In summary
For me, you have to take financial data and club performance in UCL/UEL as a mix in order to rank leagues. You can’t completely disregard one element for another. All five of the leagues discussed have a number of different sides making it to the latter stages of European competition; this, I feel, is an important piece of evidence as it demonstrates semi-equivalent depth of league quality in direct competition against others (please review part 1 if you want a proper evaluation of European performance). Financially, on the other hand, it is clear that there are inequalities, both within the leagues themselves and comparing one league to another. The French league clearly possesses less financial might than the others, seen by its low mean team value. I do not think this justifies calling the French league a ‘farmer’ league, as French teams more than hold their own in European competition – in particular this season. All of the big 5 leagues, both on club performance in Europe and financially, are far ahead of any others.
The main crux of my argument about financial inequalities is this:
Just because an elite side in their own league has very little competition when it comes to financial strength, it does not mean that the rest of the league has no quality and doesn’t push the elite side strongly for the title.
The in-league disparity is not something that is unique to one league. The big boys are the big boys. They all compete to perform in the Champion’s League, with evidence suggesting that they all do. The tier below, the Europa League teams, is much more varied and carries an even competition parity across leagues; there were 21 different big 5 league teams reaching the QF in five years (despite some large differences in market value). Some are teams that have missed out on Champion’s league qualification, others are teams that have risen up to that level of competition. Finally, lower-mid table teams are the comparative smallest. Premier League aside, the lower teams in the top leagues are similar in market value – however I think all 5 leagues have comparable playing ability towards the bottom. I’m sorry, but there is just no such thing as a farmer’s league when it comes to the big 5. There just isn’t.
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