As the Guardian notes this morning, this is the current state of the UK's football premier league:
There is, I promise, good economic reason for noting this.
The bottom three clubs in the league will be relegated at the end of the season, which is now just three games away. And it so happens that all three of those clubs now facing the likelihood of relegation were promoted from the second-tier league, the Championship, just one year ago. After a single season in the top flight of English football, they will very likely be returning whence they came.
The economic point that I am making is a very simple one. As is apparent to anyone who follows football, the English Premier League acts like an oligopoly. In other words, the well-established clubs within it make sure that it is organised to their advantage. They do, as a result, collect vastly more revenue than anyone else in the football. Their players are remunerated at extraordinary levels that would be exceptionally difficult to justify without this oligopoly power. In economic parlance, they earn rents on top of any reasonable level of reward they should enjoy. And, as is all too commonly the case when oligopoly exists, there are massive barriers to entry into this market, as the likely relegation of all three clubs that were promoted into it last year makes abundantly clear.
The current UK government has suggested that the UK needs a football regulator. I agree. One of the things that it needs to do is to control the abuse of market principles by the most powerful football clubs in the country. I am not anticipating that any such thing will happen. The idea that fair competition might prevail is, I think, very unlikely to win the support of those who might lose out as a result.
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And it’s the three relegated teams from last season who’ve challenged for promotion from the Championship – apart from Town, of course – buoyed by parachute payments and squads costing literally ten times as much as other teams.
We (Ipswich) may well be promoted, which will be a fantastic achievement, but whether I have any interest in us joining the oligopoly is another question.
I think it will be a decidely hollow promotion is we go up…and I do live i n hope despite that, so absurd is football
Around 20 years ago, the FT had an article on the greatest football managers of all time. Bob Paisley and Jock Stein featured. As the article noted, when Celtic won the Europen Cup (against Real Madrid) in the late 1960s, this was with a side that, mostly, came from within 25 miles of the home stadium. As the article noted, this was an achievement hard to understand now (at the time the article was written). Money was always a feature of the game even in the 1960s, but now it has distorted it beyond recognition. Perhaps it is time to move back to 50% of the team from within a 50 mile radius of the stadium – and lobby for UAEFA to implement. This would force the teams to develop “home grown” talent and reduce the impact of transfers. Won’t happen.
Agreed
Won’t happen
Ipswich won the FA cup in 78 with a goal from a guy who first played for the village team very near where I grew up.
Thank you, Richard.
This gooner shares your sentiments.
One thing which allows this unhealthy situation to persist is the soft power associated with the premier league. A mixture of politicians and officials being in awe of money, the former basking in the reflected glory and lobbying by the big clubs and their client journalists has put the premier league beyond reach.
The regulator will be as captured as its financial services peers.
This gooner is also a lifelong horse racing fan. That industry is another mess. Many people will be aware of Ireland as another bastion of the sport. However, other than fans, few, if any, people will be aware of how good racing is in France. The fan base has fallen in recent decades, but the sport is still well managed and healthy, especially in the provinces. The UK has 59 courses, many under threat. France has 255, including 100 devoted to trotting.
Football I can enjoy at almost any level
I tried horse racing, and just don’t get it, although I do like horses.
Thank you, Richard.
I’m very interested in the breeding and training sides, not just the racing.
You would be surprised at the number of racing enthusiasts on the left, including grandees like Phil Bull, the Grauniad’s Richard Baerlein and the Racing Post’s Paul Haigh and another at the Post whose name escapes me.
Living very near Newmarket I know some…
As a Charlton fan what goes on in the Premiership is a distant memory…. and, most likely, will remain so.
For all those economists that base their models on rationality I just have two words – Football Supporters.
You may have seen in the news today that a British Rugby player has been selected by the Buffalo Bills NFL team in the draft that happened over the weekend.
The NFL has a system where new players enter a draft and then the team that finished bottom gets first pick for a new player. So the best performing team ends up with slightly weaker players to pick from.
It is surprising that an American system seems more egalitarian than the Premier league.
As someone once commented on the Wolves … Steve Bull could only play for the Wolves or the Baggies because if he went anywhere else no-one would understand a word he said. Things change, the linguistic requirement at Molineux became fluency in Portuguese. I haven’t done my homework on soccer finance, but the presence of gambling money seems to me more than unhealthy.
Without independent, authoritative and potentially punitive regulatory oversight so-called “Markets” will inevitably follow their own natural, internal logic; and eventually turn into a monopoly driven cartel. For reasons I have never understood, we are all supposed not to notice; presumably because Government and Parliament ritually refuse to notice, as a matter of standard procedure. Where, exactly are all these free markets? Very, very few are capable surviving close inspection.
Two small but not unimportant corrections. Celtic beat Inter Milan to win the European Cup. It was Aberdeen who beat Real Madrid to win the Cup Winners’ Cup in 1983. Sadly, both a very long time ago.
Secondly, there is no such thing as the UK Premier League, but there are Premier Leagues in both England and Scotland. As a Fulham supporter since my teens I can only agree about your oligopoly comments. We have the same situation in Scotland but confined to just two clubs. It is the good old Tory principle that to them that hath the most yet more shall be given.
Apologies….
Thank you to Richard above with regard to Newmarket.
Newmarket will soon have Theresa May’s brains as MP in succession to Matt Hancock.
Hancock came fifth in the local selection process in 2010. George Osborne, who had recruited Hancock from the Bank of England in 2005, and HQ got the toffs in the local party, including trainer John Gosden and the Earl of Derby’s brother Peter, to make it happen. Truss across the border in Norfolk and Sunak in Yorkshire fared similarly, the former not going down well with the “turnip taliban as she later called them and the latter losing to a local candidate, a farmer if memory serves, before one of the local landowners, Mrs Rees-Mogg, stepped in.
Ahem, as a Norwich fan…
…I offer the following Guardian opinion piece.
https://www.theguardian.com/football/blog/2024/apr/23/for-sheffield-united-and-co-the-premier-league-brings-a-unique-brew-of-misery?CMP=Share_iOSApp_Other
With one more game to go in the Championship season, a play-off place is all but confirmed and an end-of-season showdown with Ipswich could yet be on the cards (assuming they don’t clinch automatic promotion). However, there is a prevailing view amongst many fans they want the team to do well, but not too well. A neighbour of mine summed it up thus: “As long as we don’t go up!” and described the Premier League as the ‘Misery League.” Like Sheffield, Norwich is the perennial yoyo club, ‘enjoying’ brief spells in the top flight only to come straight back down after a season of being the Premier League whipping boys. Where is the fun in that? I guess, when all is said and done, it is better to be a big fish in a small pond, than a minnow among sharks.
I fear we will both be in the playoffs….
As a fan of East Anglian football, having supported Ipswich growing up (born in Ipswich, lived in Bury St Edmunds since I was three) I hope Ipswich get automatically promoted – they so deserve it after a magnificant season (despite the stutters).
Having fallen for Norwich as a city since studying at UEA and also having family links there, I have ‘gravitated’ to Norwich City. Fickle I know!!
Therefore I really hope they don’t meet in the playoffs – only in the Premier League (after automatic promotion for Ipswich, and Norwich through winning the playoffs!).
Mind you, as mentioned, if both Ipswich and Norwich go up they will come back down again in all likelihood.
Oh for the glory days, of Alf Ramsay, Bobby Robson and Mike Walker!
I actually knew Alf Ramsey a little. He lived next door to a girlfriend when I was at school. He was a quiet man, but always willing to say hallo, or more. And I was at Portman Road for Robson’s glory days.