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.
Interesting topic about which I have some toughs and questions. When comparing the different leagues I believe that the network element you mentioned in Soccernomics is crucial. While I totally agree that EPL hugely improved the quality of play since early 1990s for the reasons you mention, bringing top players and coaches form abroad, to a degree that between, let’s say, 2006-2008 EPL clubs had arguably a most effective way of playing, it seems to me that since then they are again starting to lag behind their continental rivals. Germany and Italy have a lot of young coaches with new ideas and that improved their performance while Spain (and, judging by results in UEFA’s competitions, not just Real Madrid and Barcelona) hugely improved during last years. If matches during a last couple of years are anything to judge by, and the sample is admittedly low, EPL clubs don’t cope well with teams that press and have a better ball control. Of course, the financial advantage will again give them the opportunity to buy players and know-how (and then there is a question how would star players react to new demands from new coaches as AVB and Chelsea remind us) but it would probably take some time.
There are also some other things worth considering.If we are talking about CL success, we are talking about top teams, and mostly from the big leagues. Although football is very globalized, most, even top, German or Italian players still play in their countries. Does that enable top teams from those leagues ( at the moment Bayern and Juventus but also Borussia Dortmund and possibly some other clubs) to be competitive even with lover wages paid? If they pay a top wages in the league they are playing in and if it is a big league with many good players, they probably still can keep most of top players even with greater wages in EPL. Related to that, can clubs from leagues with greater supply of good homegrown players (certainly true for Germany and Spain and possibly for Italy) create an equally good teams for less money than it is possible in England?
Does history matter? Or to put it more precise, do players find the prospect of playing for a big club attractive enough to accept a bit lover wages? If, for example, Real Madrid and PSG bid for the same player, how much more would PSG have to offer to be a more attractive option?
Ajax had its best days before the Bosman ruling but clubs from Portugal are quite competitive when you take all into consideration. Is that at least to a degree because third party ownership is the most prevalent there of all leagues in Europe? What do you think about tpo in general?
All good points. Thankfully spending will never explain 100% of the variation in outcomes- what would be the point of watching then? The question is, what percentage? Small samples don’t help us much.
As i said, I’m sure that 50% more money doesn’t translate into 50% better performance, but I’m also pretty sure it’s no 0% either. More likely it’s 20% or 30%- but the difference between these two would be pretty important.
Simon’s point has always been that countries like Germany, Italy and Spain benefit from being in Europe’s core, while England, Russia, Turkey have struggled because they’re on the periphery. This is a difficult hypothesis to quantify, but I think it makes some intuitive. If the English are too insular to learn, then money won’t help them much. However, these days the EPL is becoming less English….
Yes, it is less English and that’s a good thing for the league. However, if other leagues still posses a better “football laboratories”, and it seems that is still the case, are English teams bound for a cyclical periods of catching up? Until we see Wengers and Mourinhos, or in current terms Guardiolas, Klopps, Contes… of this world starting their career in England rather than arriving as already established names – therefore sharing what is already known and utilized outside of England-that might be the case. And it is good thing for a competition in the CL.
Regarding the TV rights, have there been any projections about how much La Liga would be worth if it moved to a collective deal?
Well, I also think we can go too far in suggesting the EPL is behind- it’s record in Europe over the last decade is pretty impressive- far better than the BL, for instance.
I haven’t seen anything on the value of La Liga rights if collectively sold – the big question is how it will impact on the top two. And even with collective selling, surely the rest of the clubs (pace Athletic Bilbao) are on the borderline of financial viability?
True, around 2004-2009 EPL was undeniably at the pinnacle of world football (United can even claim to be one of the pioneers of 460 formation). Afterwards they still had very good results but they lost dominance and most changes in tactic happened elsewhere.
About La Liga, I don’t know, guess it all depends on how much money would be involved.
The English Premier League is the richest in the world but with that comes a tradeoff, and that is usually down to owners’ impatience. So despite clubs quickly rising in the Deloitte Money League, it won’t be a telling indicator of who can keep themselves competitive of financially viable. It might actually serve to undermine the Premier League’s prestige in a way as just a sort of agglomeration of wealthy clubs who can pay players more.
I find it interesting that England hasn’t adopted a Winter Break. I’m not saying that’s the reason why Spanish or German teams are more successful but doubling the amount of fixtures during the festive period can pose additional risks or rather burnout when the season wears on. It can’t hurt to introduce it.
I also wonder how the League Cup will play into all of this. There is a Europa League place at stake, but most of the bigger teams use it as a testing ground for their reserves or fringe players. Most teams don’t take it seriously until they have a real chance to win it. If some teams get enough financial incentive to build a good team and focus exclusively on the Premier League and European games, they could elect to withdraw from the League Cup and reduce whatever little relevance it has.
There is no winter break because playing and watching football at Christmas was a British tradition long before the Bundesliga or La Liga existed.League games have been scheduled on December 26th since 1889 – and it’s a tradition that the fans still enjoy to this day. And after all, that’s the objective – to provide entertainment to fans.
Apologies for the late comment, I’ve only just discovered this blog thanks to a tweet from Raphael Honigstein.
Festive football might be a grand old tradition in the British game but surely there’s nothing stopping the Premier League enjoying a winter break as well? Simply shut the league down in January for 3 weeks. Admittedly this would marginalise the FA Cup further (as games would have to be scheduled midweek), but no-one really cares about the FA Cup anyway.
Of course, German clubs can benefit from an extensive winter break because their season is much shorter; the maximum number of domestic games a Bundesliga side will play is 41 (34 League, 6 Cup, 1 Super Cup) compared with a minimum of 40 domestic games for a Premier League side (38 league, 1 League Cup, 1 FA Cup).
It also depends what you are trying to achieve. For many people January is the most miserable month of the year. Why take away people’s entertainment?