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Is The Premier League’s TV Contract Hurting English Clubs in Europe?

When the quarterfinals of the UEFA Champions League kicked off last week you may have noticed something that is becoming a bit too much of a familiar sight in Europe. For the second time in three years no English club made the quarterfinals of the competition, a fact that seems to be becoming more of a trend then an anomaly. It’s a far cry from the times where it always seemed like Manchester United, Liverpool, Arsenal, or Chelsea were in the Champions League final (from 2005-2012 one of those clubs made the final in every season except for 2010, and the 2008 final was an all-English affair).

It was just a few years ago that the English Premier League was the pride of Europe. In 2008 the Premier League became the first league to have four teams reach the quarterfinals in one season. From the 2006/07 competition through 2010/11, sixteen English teams reached the quarterfinal. Hell, even Tottenham made it that far in their one year competing. To go even further, the three year period from 2007-2009 saw English clubs make up 3/4th of the semi-finals three years in a row.

These days it’s a completely different story as English clubs are not only struggling to make it through the knockout rounds but just making it out of the group stage is becoming a challenge.

As this continues to happen year after year it’s becoming clear a trend is developing, but what is the cause behind it? One possible answer may surprise you: The Premier League’s massive TV contract, which is raking in the money for every English club, is actually hurting English clubs in Europe.

 

The Premier League by far and away has the biggest TV contract

The Premier League by far and away has the biggest TV contract

The TV money distribution is the most balanced in England

The TV money distribution is the most balanced in England

As you can see from the picture above, the English Premier League has by far and away the highest paying TV contract, and it is only going to get bigger when the next contract kicks in for the 2016/17 season. But as the second picture shows, the Premier League distributes the wealth in a far more balanced way then the rest of the top European Leagues. This leads to everybody getting a big piece of the pie, as opposed to the other leagues where most of the money goes to the big clubs.

Take La Liga for example. They have the second highest TV contract but the way it it’s currently* set up, Barcelona and Real Madrid control their own rights and therefore get a far bigger percentage of the pie then the rest of the clubs. This leads to a massive difference between these two clubs and the rest of the Spanish league, creating a playing field that isn’t even close to even.

*It’s important to note that when La Liga’s new TV deal kicks in it will be far more balanced and Barcelona and Real Madrid will no longer be as out ahead of everyone else in terms of TV money. Even so, it will take years before this has any kind of noticeable affect.

What does this mean for the Premier League? For starters, the EPL’s TV deal is so big that every single Premier League club, even the tiny clubs like Leicester City, Burnley, and last year’s last place finishers Cardiff City, get more money from their TV deal then all but five clubs in the world: Barcelona, Real Madrid, Juventus, Inter Milan, and AC Milan. That means at the end of this season, the teams who are relegated from the Premier League will still bring in more money from TV then Bayern Munich, the club that is running away with the Bundesliga, has played in three Champions League finals in since 2010, and employs many of Germany’s World Cup stars.

Don’t get confused here. Clubs like Bayern Munich, PSG, Atletico Madrid, Borussia Dortmund, and Schalke are still making more money then most clubs from matchday revenue (ticket sales, in stadium sales), advertising, commercialism, and Champions League money. This allows them to be able to afford top players and build strong squads that can compete with Europe’s best. The difference is the lack of TV distribution means the rest of the teams in the German, French, Italian, and Spanish leagues can’t even come close to competing with the European teams in their domestic leagues.

So how does this all effect the Premier League clubs in European competition? Take a look at this chart.

14 of Europe's richest clubs  are from the Premier League

14 of Europe’s richest clubs are from the Premier League

At the end of the 2014 season, 14 of Europe’s 30 richest clubs are playing their football in England. Take a club like Southampton. The darling cinderella of the current season Southampton, picked by many to be relegated after losing their manager and being forced to sell many of their stars to ‘bigger’ clubs last summer. Well as it turns out, referring to Southampton as a ‘small club,’ as they have long been considered in England, isn’t exactly accurate anymore. Last season they took home just £1 million less the AS Roma, one of the biggest clubs in Italy. So while Southampton did sell players like Luke Shaw, Adam Lallana, Calum Chambers, Dejan Lovern, and the club’s 2013 leading scorer Rickie Lambert; the club was still able to afford to shell out £40.9 million for the likes of Dusan Tadic, Fraser Forester, Graziano Pelle, and Shane Long. Now while they did bring in £92 million from the sale of the aforementioned players, £40.9 million is a lot for a club of Southampton’s size to be spending. Furthermore, that £40.9 million is only going toward the transfer fees to the other clubs, it doesn’t cover any of the money the club will have to spend on those players wages; wages that will be higher then the players Southampton usually command.

With the amount of TV cash being spread around England, clubs like Southampton, Swansea City, Aston Villa, Stoke City, and the rest of the league are no longer ‘little clubs’ on the world stage. Sure there is more money out there for clubs in the Europa League and another kings ransom for the clubs that make the Champions Leauge, but all that does is keep the top English teams at the top of the English league, it doesn’t actually help them in Europe.

Here is the part where you tell me none of what I’m saying makes any sense and here’s where it all comes together.

As England’s TV contracts kept soaring, the ‘smalller’ clubs began making enough money to be able to afford some of the top international talent. Suddenly the 14th place team in England could afford to pay a player more then the 7th place team in Spain could.

But Pauly, you keep talking about how all the bottom clubs in England have money, how does this have anything to do with Chelsea and Manchester City being unable to win in Europe?

SOCCER: MAR 15 Premier League - Southampton at Chelsea

With every team in England loading up on talent it’s created a domestic league where there is no easy game, ever. 5-10 years ago when Chelsea or Manchester United had a home game against a bottom half of the table team, they would win without even breaking a sweat. An away game would be a bit trickier, but eventually the smaller clubs would tire and let in a late goal. That’s not the case anymore, Swansea and Southampton both won at Old Trafford this year and wee little Burnley got a draw at Stamford Bridge. Manchester United have won just five of 16 away matches this year while Newcastle, who have looked beyond lost for much of this season, took all three points at home to Chelsea. It doesn’t matter what team you play for and who you’re playing against anymore, if you don’t show up ready to play your best in the Premier League you’re not likely to win.

While fans of other leagues will argue that the difference between 5th-13th place in the Bundesliga is just eight points and therefore Germany is a more competitive league then England; those numbers don’t tell the whole story. In Germany 5th place club Augsburg sits 12 points out of 4th place and 29 points behind the leaders Bayern Munich. Wolfsburg, who are in second place, are 13 points behind Bayern and are a Europa League team. So yes, when two mid table clubs meet, it’s anyone’s guess who will win. The games will go back and forth and the standings will change week by week. It’s an exciting season from a neutral’s perspective, but when Bayern Munich comes to town, they roll over every one of those teams.

The same thing happens in Spain. Barcelona, Real Madrid, and Atletico Madrid battle it out at the top, everyone else battles it out in the middle. When any of those three clubs come to town, it’s no contest.

Now look at the last two Champions League finals. Last season it was a Madrid derby between Real and Atletico (Spain) and the year before that it was Bayern Munich vs. Borussia Dortmund (Germany). It’s no coincidence that the countries with the least competition domestically have gone the furthest in the Champions League.

SOCCER: APR 15 Champions League - Bayern Munich at FC Porto

Thinking that teams need to be tested week in week out in their domestic season in order to make a run in the Champions League is a myth. These teams are made up of the biggest stars on the planet, they can compete against anyone. What allows these teams to make a a run in the Champions League, is their ability to rest their stars and keep them fresh. When Bayern Munich look at their schedule and see they have to play in the Champions League on Tuesday, they have no problem resting some of their stars when they visit Mainz 05 the Saturday before. Bayern’s reserves will pick up the three points over the weekend, and their stars will be fresh for their midweek Champions League clash.

Premier League teams no longer have that luxury. The middle and bottom of the league is simply too strong that you need to give them respect. Chelsea currently sit 10 points ahead of Arsenal at the top of the league. One of the reasons Chelsea have gotten there is because they’ve used the fewest players in the entire league this season. Part of that is injury luck but a lot of that is Jose Mourinho not rotating his squad. Every league game is important and therefore he plays his best team for every match.

Every year there are smaller clubs who threaten to break into the top four of the Premier League who end up fading down the stretch due to a lack of depth. Chelsea have used the fewest players in the league, they run the same team out there every week just like the smaller clubs. When you think about that it’s really no surprise that they faltered in extra time against PSG, or lost at home to Bradford City in the FA Cup. The season has become too taxing to compete on four different fronts in one season.

The TV money coming in to the Premier League has been great for the English game of football overall. From top to bottom every team in Premier League can compete (Leicester City beat Manchester United 5-3!!). Until the other European leagues follow suit and begin distributing their TV money more evenly and create stronger middle and bottom of the table clubs, the trend of English teams struggling to go far in Europe is likely to continue.

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