Football Finance

English Coursework Football Finance

English Coursework: Football Finance Essay

The general consensus today is that English football is in a fine financial state, but is this really the case? Of the top 20 richest clubs in the world, 8 are English. Manchester United are in fact the second richest club in the world, with an income of just over £166.4m last year however, this wealth does not seem to be filtering throughout the whole of the English game. Teams in the lower divisions are threatened with closure or administration on an alarming and ever increasingly regular basis.

Just recently, Rotherham Utd of League One have been given 4 months to raise £1m or face closure. Many are now questioning whether the big Premiership clubs are to blame, as they refuse to share TV money and increasingly spend their money on foreign imports. In 1992 the top 20 League clubs broke with the Football League to form The Premiership. This meant that rather than sharing out television money between all 92 League Clubs, the money would be shared out only between the elite Premiership clubs. The most recent Premiership TV deal gave the 20 top flight clubs a staggering £1.66 billion over three years. This has led to claims from lower league chairman that their Premiership counterparts are greedy as they refuse to share any of this increased income with the less fortunate. It has also been claimed that Premiership clubs are no longer investing in home grown players from lower league clubs. They are instead apparently choosing to spend their increasing riches on foreign imports and in fact, 45% of all transfer fees last season were paid out to foreign clubs. In years gone by, lower league clubs could invest in young players knowing there would be a good chance that a top flight club would snap them up. These days, this is much rarer and is seen as further evidence of the big guns failing to support the grass roots game.

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However, the top flight clubs have hit back. They point out that Premiership football is the main draw for TV coverage. They feel it is their right to reap the fruits of their labour. For example, it is now thought that Manchester United have the world’s highest share of supporters. When they play on television they have immense pulling power in terms of viewing figures. This has enormous benefits, with The Premiership now being one of the most famous leagues on the globe. It has many millions of viewers worldwide. Many analysts believe this was due entirely to the breakaway in 1992 from the Football Leagues other 72 Clubs, which allowed Premiership clubs to broker their own TV deals. In their view Premiership clubs are entirely justified in solely claiming the financial rewards. On the charge of spending money abroad on foreign imports, big clubs are again unrepentant. They claim there is much better value for money on the continent, with experienced international class players being able to be purchased much cheaper than untried youngsters from lower league clubs. With the huge financial benefits of being in the Premiership, it is felt that taking chances on unproven talent is just too risky and does not make good business sense. It is also interesting to note that the Premiership chairman react angrily to claims that it is their greed that is forcing lower league clubs out of business. They accuse lower league clubs of financial mismanagement and overspending, suggesting this is the real cause of the current spate of problems in the lower leagues.

English Coursework: Football Finance Essay

It is certainly not a simple problem and not as cut and dried as some would have us believe. On the one hand you have lower league clubs suffering crippling financial problems, with their Premiership cousins seemingly content to see them go out of business whilst they get fat off the fruits of the enormous TV deals. On the other hand however, you have the Premiership clubs who believe that they are bringing this extra money in and are run like big businesses. Why should they share it with poorly run clubs who will probably only waste it anyway?

As the debate is sure to rage on, it is difficult to see how any kind of compromise can be met. Lower league football clubs see themselves as being part of the community and so believe that they should be subsidised in order to carry on providing a service. Whilst Premiership clubs see themselves as big businesses delivering a product and see the demise of lower league clubs as simply an effect of market forces. For now the future of lower league clubs and the communities in which they operate seem unclear.

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