Last week Deloitte published their Football Money League, a list of the twenty largest football clubs in the world measured by revenues. This is the 16th edition they have published, and the rankings have been pretty stable – the top ten in 2011/12 have been fairly consistently in the top ten since over the 16 years
Generally the top clubs move within a narrow band- Manchester United have moved between 1st and 3rd, Real Madrid 1st and 6th, Barcelona 2nd and 13th, Bayern Munich 2nd and 8th, AC Milan 3rd and 10th, Juventus 2nd and 13th, Chelsea 3rd and 10th (although they only entered in the 2nd edition), Arsenal 5th and 20th, Liverpool 5th and 19th, Inter 6th and 12th. Deloitte construct a running points score, awarding 20 points to first place, 19 to second, 18 to third and so on. Over 16 years 71% of the points have been taken by the top ten.
To put it another way, if these ten clubs had always appeared in the top ten, they would have achieved the maximum combined Deloitte score of 2480, when their actual score was 2392- that’s over 96% of the maximum. As everyone should know, European football dominated at the top by a very stable group of teams. Manchester City broke into the top ten for the first time this season. The only two teams that would not have appeared consistently in this elite group for most of last half century are City and the other sugar daddy team, Chelsea.
That said, change may be on the horizon. The Premier League’s new broadcast deals are set bring in about €2.2 billion a year from next season, and Deloitte’s forecast that this will push several Premier League teams into the top twenty. The current edition includes 7 Premier League teams in the top 20, Deloitte reckon that could rise to over half of the total.
As we say in Soccernomics, and as Sheikh Mansour has kindly demonstrated in order to persuade the doubting Thomas’ among you, money buys success. However, the evidence for that is at the level of an individual league. Does this work between countries as well? One can certainly construct a narrative which says that in the 1980s Serie A dominated European competition, in the 1990s and early 2000s it was La Liga while in recent years it has been the EPL, and in each case the dominance has been driven by money (think Berlusconi and AC Milan, Perez and the Galacticos and Chelski) .
But one can also see plenty of exceptions to prove the rule- arguably Barcelona has reached the top of the Money League because it has the best team, and not vice versa. Teams like Porto and Ajax have occasionally prospered on limited resources.
Moreover, the combined income of clubs in a league is not necessarily a good indicator of likely success in Europe since the distribution of income also matters. For example, the Bundesliga has the same aggregate revenue as La Liga, but because in the latter case almost all the wealth is concentrated in two dominant teams, they have a better European record overall. So even if, say, Aston Villa enter the Money League, they are not likely to light up Europe, at least for a while.
It’s interesting to ask how much relative revenues affect performance at the international level. For a few years now the EPL revenues have been about 50% larger than the other big three European Leagues, but I doubt anyone would argue this has made the EPL 50% better. You may like the style of play better in EPL or in La Liga, and that is something that changes relatively little over time, no matter how much money there is.
But I also think it’s undeniable that the standard of play has improved in the EPL over recent years. Critics still bemoan the quality of ball control and so on, but surely it’s improved a lot since the early 1990s, and that’s largely due to the influx of foreign players, which is in turn a consequence of the EPL’s above average income.
I think there are two factors which limit the capacity of money to improve the quality of the league relative to rival leagues. The first is what economists call “compensating differentials” – England is an OK place to live, you could do a lot worse, but some of the other destinations on offer in Europe- Barcelona, Milan, Munich are very attractive places to live. Some players may demand a premium to work in the UK, which makes it relatively expensive to obtain the best talent. Apparently Pep Guardiola could not be persuaded at any price (and there was a similar story surrounding Kaka a couple of years ago).
A second problem is that English/British players probably become overpriced because of the difficulty of securing enough overseas talent. This may reflect a degree of bias in favour of home players, either because the coaches are mostly British and a susceptible to bias themselves, or because the owners want to create home-grown heroes for the crowd (usually a more marketable commodity).
Either way, while I think it likely that financial dominance does translate into international playing dominance, my guess is that the link is much weaker than at the level of the domestic league. I hope to do some research on this in the coming months, so I’ll report back any results.