Uneven Distribution of Resources in the Premier League Reduces the Margin for Error

The revenue gap within European football leagues continued to widen. The COVID-19 virus pandemic is very likely to further exacerbate the situation given that the largest clubs are probably the most contractually protective of their revenues, while the smaller clubs rely more on match revenues and seasonal commercial contracts.

This uneven distribution of resources not only separates a group of leagues, called the “Big Five”, from the rest of the national championships but also separates a group of clubs inside these leagues from the rest of the clubs competing in them. Premier League is the best example for that and the uneven distribution of resources there changes the way clubs fight for the title. Stay with us to learn more…

The clubs of the Spanish La Liga together achieved 3.4 billion euros in the 2018/19 season. Revenue growth of over € 300 million (10%) in the 2018/19 season, the second-largest absolute growth among the ‘Big Five’ leagues, means that La Liga has surpassed Bundesliga revenues (€ 3.3 billion).

However, neither of these two leagues can measure up with the total revenues generated by Premier League clubs, which exceeded € 5.9 billion in the same period – an annual increase of 7 %. Overall, the revenues of the Premier League were 73 % higher than the revenues of the No. 2 league on the list, La Liga. Serie A (€ 2.5 billion) and Ligue 1 (€ 1.9 billion) also achieved significant revenue growth, at 11% and 12% respectively.

The growth of the income of Premier League clubs in the 2018/19 season enabled the spending of additional funds on players. The overall salary-to-income ratio in Premier League clubs rose to 61 % from 59 % last season. At the same time, operating profit fell by 5 % to € 935 million, which is still the third-highest level of revenue recorded so far. However, the pre-tax loss of Premier League clubs was € 187 million in the 2018/19 season, which is almost € 670 million more than last year, due to a drop in player transfer profits and an increase in depreciation.

How They Won Premier League Titles in the First 11 Years

The Premier League revenues, that were increasing year after year since it was established as a new organization in 1992, combined with the arrival of dynamic foreign coaches, famous foreign players, improved fitness levels, an emphasis on the minutiae of tactics, and detailed data has led to the two new appearances. Firstly, the ‘Big Four’ clubs, the ‘Top Six’ since the mid-2000s, made a huge gap in quality and finances compared to the rest of the league. Secondly, the standard at the top of the league is now so good that the margin for error is tinier than ever. If a Premier League club aims for a title, it has to have a fast start to the season: it has to collect as many points as possible in the first 10 matches.

Studying historical Premier League data shows that, until 2003, easing into the season and saving energy for the photo-finish was quite enough to win the competition. In those first 11 Premier League campaigns, the eventual champions led the race after 10 games on just three occasions – 1993/94, 2000/01 (both times Manchester United), and 1997/98 (Arsenal). Furthermore, the average points tally of eventual champions after 10 games those seasons was 20.8, while eventual champions’ average ranking in the first 10 rounds was 2.45.

What Campaign Pattern Is Required for Title Today?

What’s the situation now, more precisely since 2003? The average league position of champions after 10 matches has moved to 2, while their average points tally at that stage has increased to 24. Individual examples since 2003 say that Arsenal, Chelsea, Manchester United, Liverpool, and Manchester City lead at the 10-game mark. Combined, there have been 14 points assemblages of 25 or more after 10 rounds, compared to only three before that.

The race for the Champions League, i.e. the race for the top four in the charts, has a similar pattern but it started a few years later that the title pattern. The study says it was in 2010. It’s hard enough to even be in contention for a top-four spot after 10 games, not to mention securing one of these spots by the end of the season. To do so, a Premier League club must have an average rank of 4.2 in the first 10 matches to finish fourth compared to 5.6 between 2001 and 2010. The average points tally of a team that finishes fourth in the opening 10 rounds supposed to be 19.1 now, while in the first decade of the 2000s it had to be 19.1.

Bottom line: The uneven distribution of resources in the Premier League has definitely reduced the margin for error at the top.

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