Turning the tables on the Premier League “big 6”

Much has been written and spoken about recently on the attempt by the “big 6” to grab more of the seemingly ever increasing broadcasting revenues paid to the Premier league clubs.

 

Backed by Richard Scudamore, Premier League Executive Chairman, and somewhat incongruously Everton, West Ham United and Leicester City the “big six” attempted to change the existing rules on equal payments to all Premier League clubs arising from the overseas distribution rights.

In doing so the Premier League would have adopted a model of “merit payments” similar as to how an element of the domestic rights are distributed.

Currently the total revenues distributed to the clubs, are allocated as follows:

Equal share Shared equally among all clubs

£706,039,780

Facility fees Based on domestic TV appearances

£407,738,103

Merit Payment Based on final league position

£407,738,103

Overseas TV Shared equally among all clubs

£781,811,920

Central Commercial Shared equally among all clubs

£95,188,080

Total

£2,398,515,773

The distribution therefore gives payments ranging from Chelsea £150.8 million as Champions down to Sunderland in 20th place receiving £93.5 million.

The proposal put by the “big 6” wanted to change the current equal distribution of the overseas TV monies to a model similar to how the domestic revenues are shared. Assuming the model was identical this would result in Chelsea having received an additional £14.9 million, totaling £165.7 million and Sunderland’s share falling by £14.9 million to £78.6 million.

The ratio from the highest receipts to the lowest would rise from 1.61:1 to 2.11:1. This is a significant rise, and in my opinion further stretches the claim that the Premier League is a highly competitive sporting competition. There’s a real danger in this proposal that by reducing the competitiveness even further the league becomes less interesting particularly to overseas markets.

Now, Richard Scudamore and the “big 6” are far from stupid and seldom would do anything that would harm their income streams, willingly at least. So why are they proposing such a move?

Their argument is that as the largest and most successful clubs with the biggest global followings they should enjoy a greater share of the rewards. However, I believe there’s a different reason.

It’s my belief that this is a response to the fact that 6 teams can never fill 4 Champions League places. In the absence of winning the Champions League, 2 teams that budget for participation in the Champions League will each year be disappointed and have a resulting shortfall in revenues through only qualifying for the Europa League.

By taking a greater than equal share of the overseas monies they can effectively cover much of the shortfall created from the certainty that any 2 of the 6 face each year.

The response of the other 14 has been interesting. 11 have flatly refused for obvious reasons. It is believed however that 3 clubs, thought to be Everton, West Ham United and Leicester City have supported the redistribution. The assumption must be that they believe finishing in the top 10 will result in a net increase in income, despite the fact that the teams finishing higher will see greater increases thereby further increasing the income chasms that already exist.

The key number to changes to Premier League rules is 14. When established the Premier League determined that a 66% majority was required to change rules.

Given that there is a “big 6” and the other 14 this is very interesting. Rather than being subject to the demands of Richard Scudamore and the largest clubs, the “14” have it within their power to determine changes in rules themselves.

How about the “14” take on the “6”?

So how about a reversal of the idea that partial merit payments are made on overseas monies by looking at the way the merit payments for domestic revenues are calculated?

Currently the bottom club (Sunderland last season) receive 0.4% of the merit payment pool, this increases position by position to the Premier League Champions receiving 9.5% of the overall pool.

This is calculated by the bottom club receiving 1 share, 19th club receiving 2 shares, 18th club receiving 3 shares all the way up to the Champions receiving 20 shares.

What would happen if all clubs received an equal share, 5%, of the merit pool? (i.e. effectively ending the merit pool arrangements and increasing the equal share element of the payment system)

The effects of equal distribution of domestic TV monies would be as follows:

Current £m Change £m New £m
Chelsea 150.8 -18.4 132.4
Tottenham 145.5 -16.5 129.0
Man. City 146.9 -14.5 132.4
Liverpool 146.1 -12.6 133.5
Arsenal 139.6 -10.7 128.9
Man. United 141.1 -8.7 132.4
Everton 127.8 -6.7 121.1
Southampton 122.5 -4.8 117.7
Bournemouth 118.2 -2.9 115.3
W.B.A. 114.0 -1.0 113.0
West Ham U 116.6 1.0 117.6
Leicester City 115.8 2.9 118.7
Stoke City 107.1 4.9 112.0
Crystal Palace 109.7 6.8 116.5
Swansea City 103.2 8.8 112.0
Burnley 101.2 10.7 111.9
Watford 102.7 12.6 115.3
Hull City 97.3 14.6 111.9
Middlesbrough 98.8 16.5 115.3
Sunderland 93.5 18.5 112.0

The only variation in monies received would be the element relating to appearance on live domestic TV, the so-called Facility Fees.

The effect though is huge, the ratio between the top amount received to the smallest amount falls from 1.61:1 to 1.19:1.

Some of the 14 would have to vote for something that would almost certainly reduce their own income in the current (or next) round. However, the argument would be that the increased competitiveness would assist increasing overall revenues negating the potential loss.

The “big 6” would scream and shout, no doubt. They’d warn that their ability to attract the top talent would be damaged, their ability to compete in Europe would be compromised thereby reducing the attractions of their clubs to their sponsors, further reducing income and damaging the Premier League.

I don’t buy the reducing the attraction of the Premier League. Surely as a more equal and level competition with a greater probability of different results and therefore a greater variation in league positions is healthy and makes the product more attractive?

From the beginnings of the Football League in 1888 up to 2011 there had never been the same 7 clubs occupying the top 7 places twice in any order. Such was the competitiveness of football over 112 seasons. Since 2011 it has happened 3 times, 2012, 2014 and 2017. (thanks to http://www.angryofislington.com for that fact)

The Premier League is losing its competitiveness. The “big 6” want to reduce it even further. The irony is that the other 14, far from ceding to their demands, have it in their control to change the rules in favour of a more equal and therefore competitive competition.

Do they have the courage to do that?

 

 

2 thoughts on “Turning the tables on the Premier League “big 6”

  1. In the end, it boils down to just one word – Greed.

    The so-called ‘big six’ really and truthfully don’t care about the 14 with whom currently they can’t live without, everything is about them and their own myopic view on how football should revolve around them. They seem to have an enormous sense of entitlement about themselves that to me is just plain unhealthy for the game.

    I’ve long felt that the ultimate goal of some clubs/football administrators – and not only here in the UK – is that of a European League with an ‘elite’ 16-18 clubs leaving their respective domestic leagues to form a new competition.

    But if you imagine for a few seconds that if this latest cash-grabbing exercise were to be approved and adopted, as you say Esk, the gap between the ‘haves’ and the ‘have nots’ will widen and deepen year on year… to a point in say five or ten years time that there would be absolutely no competition for the ‘big six’ from the others except by way of an occasional sheer fluke.

    The chances of another season-long, Leicester type success would be smaller than that of a snowball surviving in a blast furnace.

    They’ll have hoovered up all the best available talent in the transfer market, done their utmost to leech the best of the other clubs academy prospects to their overfull rosters with the carrot of “Champions League” footie… and in so doing, they’ll further break the already breaking dream of any team being able to beat any other on any given day.

    By an large, that dream is already on its way out. Of course there will be exceptions aka Burnley winning at Chelsea on opening day, but that kind of shock result doesn’t happen too often and will happen less and less if some level of parity isn’t restored.

    This paragraph summed it up for me and I think your choice of wording is apt…
    “The “big 6” would scream and shout, no doubt. They’d warn that their ability to attract the top talent would be damaged, their ability to compete in Europe would be compromised thereby reducing the attractions of their clubs to their sponsors, further reducing income and damaging the Premier League”.

    They’d warn… that their ability to attract… their ability to compete… would be compromised.

    Well, boo hoo hoo, my heart’s bleeding purple puss.

    Perhaps then they might gain some idea and realisation of how probably eight of the other 14 feel right now, together with every club in the three divisions below the Premier League.

    This one-eyed greed of the so-called ‘big six’ is sickening. All fans want their clubs to be successful and win trophies, but most fans are also realistic that there will be good years and there will be not so good years.

    The measure of success is not how any club or group of clubs steamroller their way to dominance and silverware, but by the strength of the opposition that they have to overcome to get there.

    If the twenty Premier League clubs were much closer to each other in terms of this TV income and the talent it could buy/afford to pay then being Champions might mean something greater than it currently does.

    The ‘big six’ demanding to set themselves on a pedestal in this manner will eventually turn people off, at least that’s my fear.

    But then, I come from an era where at the start of each season, every club and its fanbase truly did set out each August to win the league and not with a survival first attitude and the top ten being some kind of promised land.

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  2. I honestly wouldn’t mind european football adopting a major and minor league system like in the US. The CL is obviously the first step mirroring the league then playoff system however I also think leaving the European super clubs to their own would allow us to be able to compete for trophies. Frankly this season makes me wonder why we even care as things stand. It’s clear the board have no ambition apart from staying in the premier league for the money and I have little interest supporting a mid-table team with little to play for.

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