Why English football needs to tackle its wealth gap
Nearly a month ago, the Premier League’s Manchester City travelled to low-league Cheltenham Town to play out their FA Cup 3rd Round tie. After an enthralling game between the two sides, with the underdogs initially taking the lead, City edged the tie 3-1. Yet, despite the close affair, the financials behind both the sides signified a widening wealth gap that is growing in English football. City’s squad was put together at a cost of £563m, whilst Cheltenham’s starting XI was composed of 8 free transfers, 2 loanees and a £10,000 signing.
Former Aston Villa director, Lord Mervyn King, has proposed the idea of a third-party regulator in order to redistribute Premier League clubs wealth, better enforce rules on club ownership and limit the spending on players. In the past two years, Bury FC and Wigan Athletic have both been subject to severe mismanagement, with the former being expelled from the Football League. The destruction of these clubs is having a detrimental impact on small communities that rely on these clubs at the centre of their township.
Other examples including, Leyton Orient, Blackpool and Bolton Wanderers, have all seen dire ownership within the past 5 years. There are too many cases occurring, and so following King’s advice, there needs to be improved vetting of new ownership. Consistent withdrawal of cash from these smaller teams, redundancy in staff and a lack of investment into club infrastructure is a key driver of the widening wealth gap in English football, leaving some clubs in jeopardy.
However, the gap is not only occurring between divisions, but rather can be seen within the chaotic environment of the Premier League. The Gini coefficient is a common measure to evaluate the extent of wealth inequality between countries, presented through a scale of zero to one. Countries that have a score closer to zero are considered to be more equal and vice-versa. Since we now know how the Gini works, we can use it to measure the distribution of wealth in the Premier League – looking at the estimated market values of each player in a squad. Since 2013, our Gini coefficient has risen from 0.44 to nearly 0.5, highlighting the growing inequality between teams in the Premier League alone. If we were to use data that compared the Premier League to other divisions, we would see a substantial rise in this inequality, especially when factoring in the 35% rise in the top flight’s overseas broadcasting cost – which is up to £4.35 billion - as of the 2019-22 period.
Subsequently, from looking at the data, it is hard to refute Lord Mervyn King’s argument of redistributing the Premier League’s wealth. This is more important now than ever before due to the effects of the pandemic on clubs in the lower leagues. King is part of an influential group of figures, including ex-pro Gary Neville, Manchester mayor Andy Burnham and former FA chairman David Bernstein – all of whom back a “Manifesto for Change” (Financial Times). This group envisages the most dramatic change in the English Football League structure since the inception of the Premier League in 1992. They wish for an independent third-party regulator in football, that will deal with the financial affairs of the Premier League, looking to redistribute the wealth earned through TV broadcasting rights, to other clubs further down the football league pyramid. King has argued that the Football Association (FA) has been incompetent in regulating ownership and spending in recent years, which has ultimately led to the expulsion of Bury FC.
The FA has failed to reform itself in recent years to tackle these problems, and with the current COVID-19 crisis, this is becoming an ever-growing concern. Continuing in this fashion could damage the fabric of many communities if lots of football clubs began to disappear. The Premier League’s chief executive, Richard Masters, rejected the new proposals, stating that those involved in the FA and the sport as a whole, felt football could “look after itself”. It is true that the Premier League could survive the pandemic without financial injections, falling back on the revenue from television rights, but the same cannot be said for smaller clubs. Each month without fans equates to a £100m loss across English football. This matchday income, generated from the club shop and tickets, is almost the sole provider of revenue of many clubs across England and thus the key to their survival.
The debate will continue over how to best tackle the wealth gap and the financial crisis currently facing the sport, with the controversial proposal – “Project Big Picture” – being refused last year. This suggested transferring 25% of television rights to the lower divisions, in exchange for the biggest clubs seizing power over the running of the top division. Whether alternative reforms in the near future will be accepted is yet to be seen, with the immediate sustainability of football for fans at risk.
And so the question remains, will English football find a solution to the wealth gap through an unprecedented restructuring programme? Or will football be left to its own capabilities to survive?