The revenue supplied to Premier League football clubs through the sale of television broadcast rights has been ever increasing since the £2.6 million per season contract was signed in 1984. Now that figure stands at £3.018 billion and yet the majority of clubs in the Premier League fail to turn a profit. Whats more or rather whats worse is the fact that the amount of clubs within England entering administration is on the rise and some of the responsibility must fall on the shoulders of media giants who continue to pay sky rocketing prices for rights to the worlds game.
This is not to say that the sale of broadcast rights has not brought (or bought depending on your point of view) with it some positives. Increased sponsorship funds, wider use of advertising and the opportunity to branch into new and emerging markets such as America and more recently Asia is all a result of the popularity the league has gained through television.
However, the biggest change this increase in club revenue has brought (along with the Bosman Ruling) is a higher quality of player, often from overseas, which have now graced the English Premier League for the past twenty years. Thierry Henry, Cristiano Ronaldo, Jurgen Klinsmann and Dennis Bergkamp to name a few have all desired and succeeded to ply their trade in what is described as the greatest league in the world. Although with great players comes greater financial burden and the rise in player wages and transfer fees is a direct result of both increased revenue and popularity of clubs within the Premier League. This coupled with the escalating level of influence of agents has seen wages rise and profits fall with damming effects.
The growing amounts clubs spend in wages and transfer fees has led to an increase in the amount of clubs falling into ever increasing levels of debt. Leeds United, Leicester City and perhaps most spectacularly Rangers have been architects of their own downfalls through spending beyond their means in order to maintain and strive for success.
This week has brought yet more sorrow for Portsmouth Football Club and its loyal fans as the club face the very real threat of liquidation. Their hope of survival rests on the outcome of their summer transfer window and the final result could be left up to it’s high earning players who need to either leave the club through transfer or decide to go unpaid for the foreseeable future or at least until enough funds are raised to ensure the clubs survival.
There in which lays the question, is the higher quality of players a positive or negative substitution for the existence of the club?