Transcript of Skype interview with Johnathan Hill, Kentaro:
(Nicholas Moore, Johnathan Hill)
Do you think the Premier League has been beneficial to the English game as a whole?
The commercial answer to this in the broadest sense is of course yes as the level of revenues coming into the English club game have increased beyond any level of expectation from when the PL was formed 20 years ago.
It is a fact that none of the principal protagonists in the creation of the original PL (or indeed any industry experts or analysts) could have had any idea of the revenue levels being generated from broadcast and sponsorship revenues from the rights vested in the PL in the most recent rights negotiations ie from season 2013/14 onwards. This is very much testament to the business skills and political (sporting, regulatory and governmental) of one man, long-term CEO of the PL, Richard Scudamore.
This gradual influx of cash (based on the PL’s approach of three year commercial deals) has not only raised the level of footballing sporting expertise within the PL (mainly via the introduction of top-level overseas talent) but also the standard and level of infrastructure (in particular stadia) and this truly has made the Premier League the number one football league in the world and, along with the major American sports, the most successful sporting franchise in the world, ever.
From your perspective what have the major impacts of the league been on the English game?
However this is only half of the answer to your first question and answering the second half of that question also answers part of this question. The following is my view on the effect on other key stakeholders in the English game:
· Competitiveness of the PL itself
o 20 years ago it was still possible for a team outside of the “Big Five” to win the top English League (look at Aston Villa, Leeds United, Nottingham Forest etc). Now it would appear that is broadly impossible as the top clubs have so much more spending power than their fellow teams in the PL (this is not just down to the PL but also the UEFA Champions League which also hugely favours the top teams). This broadly now has the effect of their being Leagues within a League and statistically it can be shown that every year there has basically been a Top 6 competition, a Middle 8 and a Bottom 6 and, in my view, most fans accept and understand this. For all but three of the 20 clubs every year “survival” has become acceptable because of then significant financial rewards attached to it (this will only become more pronounced in the next 3 years). The competitiveness of the PL itself will be challenged even more by the new FFP rules being introduced by UEFA.
· Competitiveness of the League(s) below the PL
o The above has had a significant effect on those teams in the League directly below the PL (now called the Championship) where the disparity in revenue generated by the central League via broadcast and sponsorship deals has become progressively more marked with every passing three year deal cycle, whereby now the disparity in revenue between the two Leagues makes it very difficult for clubs to successfully make the jump from one league to the other. With the introduction of so-called “parachute payments” this has process has become even more difficult as clubs coming down from the PL already have a significant advantage over their fellow Championship clubs (see Blackburn Rovers this season). It is an interesting point of debate if the Championship clubs are stronger or weaker than 20 years ago (the PL does distribute a reasonably significant sum to the 3 Leagues below – c£125m pa – but this set against overall revenues of £2bn+ pa for the PL moving forward). Many fans of Championship clubs are actually very happy for their teams not to get into the PL!
· Standing of The FA and its competitions/properties (ie The FA Cup and the England team)
o The single biggest mistake of The FA over the past 20 years was to allow the PL to be created without either 1) exerting more fundamental control over its development from 1992 or 2) failing that, negotiating a levy on all monies generated by the PL from its inception (a 10% levy – which the clubs would almost certainly have accepted 20 years ago – would have generated in excess of £2bn that could have gone directly to the grassroots game or potentially the FL if The FA so chose).
o Instead the inexorable rise of the PL (and again to a lesser extent the Champions League) has had the following effect:
§ The effective emasculation of the control of the national game to the PL and its member clubs (for example there is no longer a CEO of The FA – historically seen as the most important administrator in English football. That effective title now goes to Richard Scudamore who in fairness is the best administrator in the game by far)
§ The gradual erosion of The FA Cup competition as a brand (in the eyes of all stakeholders ie clubs, players, commercial partners, the media)
§ The gradual erosion of the perception of the England team as the pinnacle of the English football pyramid (in the eyes of players, clubs, fans, media and commercial partners). This has had a sporting effect ie the arrival of so many overseas players has led to increased standards at PL level but with no real positive effect on English players who have found themselves having increasingly less playing time at first team level) and a commercial effect which eats into the heart of the revenue-generating potential of The FA which in turn has a negative effect on the monies that can be redistributed to the whole of the game (The FA is a not-for-profit organisation that has to re-invest its surplus back into the game according to its statutes). Ironically as the PL and the PL clubs have become increasingly influential within The FA itself, they have now even negotiated that 50% of that surplus goes to the “professional game”, despite its relative wealth.
· The Grassroots Game
o Has the PL made football more or less popular with the “man/woman on the street” over the last 20 years??
§ Well it has certainly turned on its head the perception of football in the late 80s which was driven by hooliganism and poor stadium facilities and up to 2006 at least it made football very “of the moment”. Whether there is the same attitude towards players who earn relatively huge salaries and the game now in 2012 and clubs who charge their fans the highest ticket prices of any league in the world, is open to debate.
§ Are more people playing football now than 20 years ago? The answer is an unequivocal no (at least in relation to the 11-a-side game) although it would be unfair to blame the PL for this as lack of investment into facilities/pitches etc is much at fault. However imagine what could have changed if the PL had unilaterally agreed to give that 10% levy to The FA to invest in grassroots??
What could have been done differently and where should the Premier League and English football go from here?
As per the above the real time to effect a difference would have been at the point of inception ie 1992 but in fairness to those involved at that point, no-one had a crystal ball at that point powerful enough to have predicted even half of what has since happened.
However the game is where it is and whilst the PL would say it is in a very healthy position, it is very debatable if the rest of English football could claim the same (with multiple club administrations outside of the PL etc etc). The question is – how much does the PL and the member clubs care about that?? If they are only interested in staying in the PL and therefore the bottom line (as I suspect is the case with most of them) then they will not be interested. Does the rest of English football have any leverage over the PL to make it act differently? Answer – not much but it could mobilise itself and in effect seek to do a deal that would change the face of English football. My solution would be to merge the three key entities ie the PL, The FA and the FL, into one supra agency and to have a CEO/Commissioner and for me the only person currently who could do that is Richard Scudamore. The three entities could then trade what they have against what they want in relation to power and influence and the PL could, in effect, agree to re-distribute more of its wealth to the overall pot in return for more control.
Will this happen? Very unlikely as The FA council is unlikely to vote itself out of existence but unless something does change then unfortunately the fortunes of the PL v everyone else will continue to be increasingly marked.
Email interview with Dan Corry, Freelance Economist and Football fan:
Do you think the Premier League has been beneficial to the English game as a whole?
It has made the premier league stronger – on the whole the standard of play and skill in the PL is much better than it used to be. Some English players have risen to the challenge but there are far fewer at the top level and that has seriously affected the England team.
From your perspective what have the major impacts of the league been on the English game?
It has split off the top clubs from the rest and reduced the uncertainty of outcome of each game and even more so, the key trophies. Even more than before, the richest clubs now dominate.
What could have been done differently and where should the Premier League and English football go from here?
There was not as much need to remove all ways of ‘sharing out’ resources as the PL brought in. The PL just looks after itself – would be better if the FA were more powerful but the top clubs will not allow that. One could have eg a draft system to share out talent and limit the difference in rewards and TV rights income between the big and the rest. But I fear things will go in the other way with the big 5 not wanting to pool resources for TV deals for much longer – and getting more involved in automatic qualification for big EU tournaments etc.
Email interview with Chris Birkett, BSkyB:
Do you think the Premier League has been beneficial to the English game as a whole?
On balance yes. There have been some losers, in particular fans of middle ranking top tier teams who now have no realistic prospect of winning the major trophies. And people who have been priced out of the game because of ticket prices – but in general the quality of the football is much higher at the top level; I also watch a reasonable amount of football at lower levels and it’s pretty much as it was before.
From your perspective what have the major impacts of the league been on the English game?
Better football at the top level.
Better television coverage of football both in terms of quality and availability at all levels – and that is the
way that most people consume the game
Massive change in the ownership of football clubs – now oligarchs or publicly owned at the top level
Higher Admission Prices leading to change in social profile of the fans who attend.
Hugely more media interest with blurred line between sport and celebrity.
Some alienation of fans leading to the grassroots fans movements -= an unintended by product.
Fans have not been listened to enough – look at how Germany has done it.
Financial fair play in PL – why wait for Europe?
It is inevitable that the PL will go global with it eventually partly being played abroad (eg the so called 39th
game)
More middle ranking clubs below premier league will go bust if they aim too high
In the six PL deals since 1992/93 which will take us to the end of 2015/16 Sky has paid a total of £7.22 billion. First deal £302 million for five years – latest £2.3 billion for 3 yrs!
92-98: 302 million
98-03: 670 million
03-07: 1.024 billion
07-10: 1.31 billion
10-13: 1.62 billion
13-16: 2.3 billion
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