Money and the Premier$hip

Last time I delved into the growing discrepancy in talent between the top teams in the world and everyone else. I offered nothing in terms of solutions in that article and I hope to remedy that in this one.

Introduction

Money may be the root of all evil, but in the world of football money is what makes everything run. In the era of ever growing transfer fees, bloated salaries, sponsorships and international scouting the impact of finance is felt heavily throughout the football world. Currently the amount of money paid out to a club by the Premiership depends on the table position of the club. The higher the finish, the more money a club receives.

This sounds fine since the system is based on merit, but without a countervailing force (amateur draft or salary caps) to equalize the teams, it leads to a rising discrepancy in talent, power and profits.

The Finances

Over the next three seasons (2007-2010), the Premiership is set to earn 2.7 billion pounds in broadcasting revenue which will eventually be redistributed to the clubs. Since I don’t know much about the EPL’s operating requirements etc., I’ll knock that down to 2.4 billion pounds (100 million pounds per year for the EPL bureaucracy to operate. Should be enough right?).

That means each year the EPL will have approximately 800 million pounds to distribute or approximately 40 million pounds per club. No doubt redistributing equitably will leads to howls of protest from the big 4 so that is automatically out. The problem lies as such: we need to redistribute the money so that the lower clubs get a share that allows them to compete with the major clubs and yet reward the top clubs for finishing well.

The Proposal

So we’re starting out with 800 million pounds to distribute amongst 23 teams (the 20 currently in the EPL and the 3 about to be promoted). Before I go through and spit out all the numbers, remember that this is just something I came up with out of the blue. I didn’t crunch statistics or weigh win values. I also have no idea how EPL manages the games shown on TV so I’ll assume that all matches are equal in this game. Ready? Lets go.

Conditions

• There are 380 matches played in the EPL (20 clubs, 38 matches each, but half are duplicates).
• There are 63 matches played in the FA Cup from the 3rd round on (Wiki). We’ll count 62 and handle the final separately.
• That gives us a total of 440 matches and the FA Cup final to reward.
• Premiership winner, FA Cup Winner and FA Cup Runner Up should be rewarded.

Match Payouts

• We’ll payout 500,000 pounds for every match played.
• 400,000 pounds to the winner; 100,000 pounds to the loser; Split evenly if it is a draw.
• FA Cup should be structured differently, but I’m far too lazy to assign values to each round.
• So 500,000 pounds per match, 442 matches so we’ve spent: 221 million pounds.

Amount Left: 579 million pounds

FA Cup and Premier League winner awards

• Premier League winner receives: 10 million pounds
• FA Cup winner receives: 8 million pounds
• FA Cup runner up receives: 2 million pounds
• Total: 20 million pounds

Amount Left: 559 million pounds

Relegation Parachutes

• 3 million pounds each to the poor souls who’ve been relegated
• Total: 9 million pounds

Amount Left: 550 million pounds

Base Payouts

• Each team receives a base payout of the revenues
• We’ll set the base payout to 18 million pounds per team
• 18 million pounds, 20 teams (17 staying up and 3 being promoted). Total: 360 million pounds

Amount Left: 190 million pounds

Payouts based on table position

• Here’s where I attempt to equalize the money. The general view is that the higher up you finish, the more money you should get and thats reasonable since the best teams should be rewarded. But we’ve already paid out huge bonuses to the Cup and League winners.
• Top 4 teams receive: 5 million pounds each. Total: 20 million pounds.
• Middle 10 teams receive: 14 million pounds each. Total: 140 million pounds.
• Bottom 6 teams receive: 5 million pounds each: Total: 30 million pounds.

Amount Left: 0 pounds

Well, we’ve spent a bunch of money. So what do each team’s earnings look like? Here it is for the 2006/2007 season (Note: I didn’t add in the match winnings for the FA Cup. I just paid out for the winner/runner up).

1. Manchester United: 47,950,000 pounds
2. Chelsea: 43,650,000 pounds
3. Liverpool: 34,000,000 pounds
4. Arsenal: 34,150,000 pounds
5. Tottenham: 42,250,000 pounds
6. Everton: 42,250,000 pounds
7. Bolton: 41,800,000 pounds
8. Reading: 41,650,000 pounds
9. Portsmouth: 41,800,000 pounds
10. Blackburn: 41,350,000 pounds
11. Aston Villa: 41,650,000 pounds
12. Middlesbrough: 40,900,000 pounds
13. Newcastle United: 40,600,000 pounds
14. Manchester City: 40,450,000 pounds
15. West Ham United: 31,150,000 pounds
16. Fulham: 31,450,000 pounds
17. Wigan: 31,000,000 pounds
18. Sheffield: 11,000,000 pounds (Relegated)
19. Charlton: 10,700,000 pounds (Relegated)
20. Watford: 10,250,000 pounds (Relegated)

The three teams promoted will get 23 million pounds each (18 million base + 5 million compensation).

The slight discrepancy you’ll notice is that Liverpool and Arsenal get paid out less than those that finished below them. I think this is okay because by finishing in the top 4, they are guaranteed a Champions League spot which means another big infusion of cash. I haven’t crunched the numbers but my guess is that by finishing first or winning the FA cup, you’re guaranteed somewhere around 45 million pounds which will be a little more than the middle 10 teams will get (unless the race is really, really tight). Also note that Chelsea and Man U will be bumped up another 2 million or so due to their FA cup match winnings.

Compare this distribution of income with this one: In the Money

Personal Plug

I’m creating a Digg like website for footy fans. If some of you could look around, test it and get back to me I’d appreciate it. Link: Fan Scope

Another long entry so thanks a bunch for reading. Thoughts?