by Ben Hughes

Created on: February 12, 2010

When the English First Division became The Premier League in 1992, it marked a huge shift from a domestic football league to a football league which was to challenge for all major club honours over the coming years. Far from just challenging the domestic football set-up, the Premiership has risen to become the biggest and richest league in the world and in doing so has attracted the world’s best footballers.

When the football clubs broke away from The Football League in the early 1990s to form The Premier League, they created a huge marketing potential which could negotiate a separate – and consequently – more lucrative deal than the remaining clubs. This combination of the various television deals, growing attendance figures and marketing potential have combined to make the Premier League the richest in the world.

Despite the huge turnover of clubs like Real Madrid and Barcelona, the distribution of money from The Premier League means that the income it generates is spread between fewer clubs. So whereas Real Madrid and Barcelona are richer than most Premier League clubs, the Premiership as a whole is far richer than La Liga – in fact, figures from Deloitte suggest it’s up to twice as rich as the Spanish league.

The wealth of Premier League clubs translates into success on the pitch because winning games generates more money. As an example, Premier League clubs have consistently reached semi-finals of the Champions League. In the last five seasons, two members of the Premier League’s Big Four have won the Champions League (Liverpool in 2005, Manchester United in 2008) and each of the Big Four has been a runner up in the last four years (Arsenal in 2006, Liverpool in 2007, Chelsea in 2008 and Manchester United in 2009). This led to The Premier League being promoted to the top of the UEFA rankings of European leagues based on their performances in European competitions over a five-year period.

As well as the reported average of £28 million per club for broadcasting rights, prize money for the final league placing of clubs rose by almost 50% between the 2005-6 season and 2007-8. This increase in marketing potential and bargaining power has meant that The Premier League has also attracted the big name players. Despite the recent credit crunch, Premier League clubs’ spending during the recent January transfer window was still around £30 million, but it represented a huge drop from the £170 million from last year. This means that while clubs like Portsmouth, Cardiff City and Southend are facing winding up orders in the courts and Notts County are being sold for a reported £1 with debts of over £1.5 million, Chelsea and Manchester City are bought by multi-billionaires and City, when taken over last year, splashed out over £78 million on new players in just six weeks. And that was only the beginning. Since its beginning, The Premier League has consistently been able to attract the world’s best footballers.

This, in turn, has helped increase attendances at games and draw even greater television revenue. It ultimately has a snowballing effect but also means that smaller clubs are less likely to attract big name footballers, television broadcasting rights or big money sponsorship.

So while the rich clubs can generate more money, those left behind are increasingly in the distance. A lucrative Premier League unfortunately impacts negatively on grassroots football which, unless checked, may ultimately impact on not only the international game, but on the future of competitive football itself.

Learn more about this author, Ben Hughes.
Click here to send this author comments or questions.