“LIVERPOOL are a big club, we have to bring Liverpool back in the Champions League, because it’s where it has to be.”
That was Philippe Coutinho last month, responding to yet another round of questions about interest in his services from Barcelona.
That Liverpool are a de facto “big club” in the grand scheme of things raises little arguments beyond the petty, but how that size and power should be exploited is another matter.
Last week in Harrogate the chairmen of all 20 Premier League clubs got together for their annual shareholders’ meeting.
And if newspaper reports are to be believed, top of the agenda was a motion from the ‘The Big Six’ – Manchester United, Manchester City, Arsenal, Chelsea, Tottenham Hotspur and Liverpool – to restructure how TV money is distributed among the clubs.
The Telegraph reported that the ‘elite clubs’ are pushing for a bigger share of the money earned from overseas rights, estimated to be £3 billion of the current £8.3bn deal.
The argument is that clubs the size of Liverpool command greater audiences and that it is their popularity that sells the Premier League above all.
Also, supposedly key to the ‘Big Six’ argument is the need for extra revenue to compete at the top end of European competition.
Former chief executive Ian Ayre controversially broached the subject of a change in the revenue share back in 2011, saying “in Kuala Lumpur there isn’t anyone subscribing to ESPN to watch Bolton”.
The proposal went down like a lead balloon and resulted in John Henry having to apologise to Bolton Wanderers.
When asked recently about the quotes, Ayre said: “I was supposedly very outspoken early on in my time here about whether the bigger brands in English football should share a bigger part of the spoils. I still believe that is true.
“At that time I also said I thought that not doing that would have some effect on the decline of English football in Europe – that’s coming to pass.
“It’s something to look at and it’s something that is still being debated within English football.”
Does Ayre’s – and seemingly now the ‘Big Six’s’ – argument stand up to scrutiny?
The basis for sharing Premier League revenue was set out in the Founder Members’ Agreement, a one-page document signed on June 13, 1991.
It set out the framework of the constitution of the Premier League – the voting rights, the basis for making decisions – as well as the formula for sharing income.
It said that domestic TV rights would be shared using the 50/25/25 formula (50 per cent split equally, 25 per cent based on places and 25 per cent based on number of TV appearances) and that sponsorship and overseas TV would be shared equally.
In 1991, the First Division clubs received around £8 million from the Football League TV deal with ITV and a negligible amount from overseas TV. This was the context for the unanimous support for the Founder Members’ Agreement.
In the first year of the Premier League, domestic rights were worth around £40m and overseas rights £8m, 20 per cent of the domestic.
Although the Founder Members’ Agreement had no legal significance its principles have been unchanged for 25 years and this has been a foundation for the success of the Premier League – a simple constitution that works and a revenue share that ensures competitive balance.
The top club receives approximately 1.5 times as much as the bottom club – the fairest share in any of the major leagues. Even the Champions League copied the idea of the domestic sharing formula and has equal shares, rewards for performance and recognition of TV popularity.
Clubs have proposed changes to the domestic formula in the past arguing that the bigger clubs were getting too much. On every occasion there was a reference back to the Founder Members’ Agreement.
You can argue that nothing is forever, that circumstances change.
And it would have been perfectly logical to decide to share overseas TV income on a 50/25/25 basis, especially now that overseas income represents around 70 per cent of the domestic total.
But that wasn’t what was agreed.
You could also say that the Premier League should have split everything equally (which some of the smaller clubs wanted). But that wasn’t what was decided either. The league would never have been formed on that basis.
So now that the Premier League is making vastly more money than was ever envisaged and vastly more money than any of the other major leagues, why do the bigger clubs want more money?
To compete in Europe seems to be the leading theory. This coming after a season when Sunderland earned more money from TV than Bayern Munich, Juventus and Monaco. Does the argument that they are not earning enough stack up?
Let’s look at 2004-5 when Liverpool won the UEFA Champions League and Chelsea were semi-finalists.
In particular, look at the total revenue and total wages of the top division clubs in the top four leagues.
So the English clubs were making €739m more than their nearest rival (Germany) and their wage bill was €332m higher than the next (Italy).
Italy was paying 28.5 per cent less in wages – enough of a gap to explain the Premier League clubs’ success, perhaps.
Fast forward to 2013-14, the first year of the last Premier League TV deal before the huge leap in 2016-17.
The equivalent figures are:
So the gap in revenue had risen to €1,623m and the gap in wages to €1,090m. Italian clubs were paying 48 per cent less than the Premier League clubs in wages.
And look how closely clustered the other three leagues are in wages. Almost identical. The Premier League by 2013-14 was paying around double the average of the other three. The gap had widened dramatically since 2004-5.
But what of English teams in Europe?
The best measure of success is the UEFA Association Club Coefficients which award points for every club result in the Champions League and the Europa League.
Let’s compare where England stood in 2008-9, another competitive year for English football, with where the country stood at the end of 2016-17. These are five year cumulative figures so 2004-5 is the starting point for the 2008-9 totals.
So England is the only country to lose points and in the process has dropped from first to third in the rankings, despite making much more money and paying even more out in wages.
Now of course the UEFA coefficients apply only to the countries’ top teams and cannot be related to league revenue and wage figures as a whole.
But why were our top teams doing so much better when there was much LESS money in the Premier League?
It’s impossible to isolate a single reason. Does simple bad management come into it?
But it is probably fair to conclude that a huge factor is the strength of the Premier League and the fact that it is much more competitive than the other leagues.
Back to the Sunderland comparison.
It’s not that the big clubs don’t have enough money. It’s that the smaller clubs have too much.
It is said that the ‘Big Six’ clubs were proposing a change that would see the top club earn £15m more than they currently do from overseas TV and the bottom club earn £15m less.
With a wage bill of £232m in 2015-16 would £15m really help Manchester United to compete against Real Madrid or Barcelona? It wouldn’t even cover the agent’s fee on one signing.
But taking £15m off Bournemouth, for example, with a wage bill of £60m would have a huge impact. It could be five players’ wages.
So what this is all about appears to be a dumbing down of the Premier League; making life easier for the big clubs.
And once you start making small changes, when do you stop?
Is that what we want? Is it fair? And more importantly, is that what Liverpool Football Club is about?
Greed begets more greed and it’s not too much of a reach to envision a situation in which the Premier League becomes a mirror of La Liga, dominated by the same names every year with the smaller clubs merely making up the numbers.
And what does that do long-term for the league as a product?
The Premier League might feel like it’s the same clubs winning every season, and to a degree this is true, but no one team has won back-to-back titles since 2009, and while Leicester City might have been a fluke that may never be repeated, every game in the competition is exactly that – competitive.
Two of the major drivers of the popularity of the Premier League, especially abroad, are the spectacle of full stadiums and the unpredictable nature of results.
The new proposals might be to Liverpool’s benefit now but what happens when Manchester United or Manchester City decide that they want to close the shop even more?
The proposed new arrangement isn’t about the greater good, it’s about cornering the market for the benefit of the few.
It is said that football without fans is nothing. And the long-term effects of this greed could one day be empty stadiums and a lack of competitiveness leading to a decline in viewing figures and ultimately revenue.
The Premier League needs to remain competitive, a competition ran fairly and for the benefit of the league, not a few select clubs, including Liverpool.