English football frightens Europe

25 years ago, violence in England struck fear. Today, they have record revenues from selling TV rights.

Thirty-nine victims of Liverpool fans’ rampage in the 1986 European Cup final, dozens of violent incidents at matches both in the UK and across the continent. Rioters known as hooligans spread fear and damaged the image of the country that gave birth to football. This led to the isolation of English teams at the turn of the 1980s and 1990s — they were given a five-year ban from European competitions. Today, England is once again a threat to European football. But this time, not because of hooligans, but thanks to the exceptional business success of its top competition, the Premier League. Between 2016 and 2019, it will earn a record sum of over five billion pounds (nearly eight billion euros) from the sale of domestic TV rights. Including revenue from overseas rights, that’s ten times more than Spain’s and Germany’s leagues will make, and five times more than Italy’s. “The gap between the Premier League and the rest of Europe is widening. For other teams, it will be almost impossible to compete with English clubs in buying and paying top players,” Czech football agent Viktor Kolář told the Economic Daily.

German and French complaints
Money in sport doesn’t automatically guarantee sporting success, but a league’s attractiveness is key. That’s why reactions to the astronomical windfall from TV rights in England came quickly. “The Bundesliga’s competitiveness will suffer. Economically, it’s a clear sign that the Premier League will further consolidate its position as the richest competition in the world,” Wolfsburg general manager Klaus Allofs told Handelsblatt. Even more blunt was Bernard Caiazzo, co-owner of French club St. Etienne. “The Premier League will become a more important competition than the Champions League. Teams like Manchester United or Chelsea will operate with budgets of 700 to 800 million euros,” he told the English Guardian. Today, the revenues of the two clubs are around half a billion euros. Caiazzo believes UEFA should step in against such an advantage. “They would be much more interested if the request to address the situation came from Bayern, Real Madrid or Barcelona. Not St. Etienne,” he said. Bayern has not commented, while the two Spanish giants are facing the opposite problem — due to a new redistribution of income, Real and Barcelona risk losing tens of millions of euros from TV rights.

Higher revenues, stronger currency
According to football agent Juraj Vengloš, in two or three years we may see players like Lionel Messi or Cristiano Ronaldo in the Premier League. “Nowhere else will they be offered such conditions as in England,” he said. In addition to the highest football salaries in the world, the Premier League also benefits from another factor — the steadily strengthening British pound against the unstable euro. This currency movement could further boost England’s status as the most lucrative football destination in the years to come. “That’s why interest in football in England is not only from viewers and broadcasters but also from investors. Eleven of the twenty Premier League clubs are now in the hands of foreign owners,” sports analyst and football agent Jozef Tokos told the Economic Daily. Broadcasters Sky and BT, in an international tender, acquired rights to specific numbers, days and times of matches. “Now the challenge for the German Bundesliga and Spain’s La Liga will be to schedule their matches so that these competitions remain attractive to fans worldwide,” Tokos noted. However, not even a perfect marketing plan will threaten the Premier League’s position over the next decade. “When you’re in demand, there’s extreme interest in you. And not only from fans, but also from sponsors and other partners who will bring more and more money into English football,” explained Viktor Kolář.

The English put their house in order
What happened that allowed England to turn an average league into the most luxurious football brand in just 25 years? “They cleaned up the stadiums, the clubs, and the fan base. They introduced laws requiring troublemakers to report to the police during matches, or they face prison. The competition also became completely transparent and continues to improve,” said Juraj Vengloš. His words are echoed by Jozef Tokos, who adds that in addition to stopping hooliganism, they clearly set economic rules. “If you get into debt, you may have trouble obtaining a league licence. In the past, this has seen clubs like Leeds and Portsmouth drop out of the elite. Besides having strict rules, they also enforce them,” Tokos added. This is a completely different and economically more sensible approach than in Spain, where, despite clubs’ rapidly growing debts, the league’s management has not significantly intervened in their presence in the top flight.