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Trophies for Sale
Premier League results are pre-determined on the balance sheet.
Manchester City’s fifth title in six years is an incredible achievement, but it also reinforces the Premier League’s unfortunate truth - that money, not skill, is the primary determinant of each club’s final position in the table. We compare the two footballs - English and American - to demonstrate just how stark this reality is, closing with brief thoughts on why we should care about such predetermined outcomes.
Read Time: 10 minutes
I’m an avid fan of Arsenal FC, the Gunners, a top English football (soccer) club in North London made famous by Arsène Wenger’s “Invincibles” squad.
The English Premier League (EPL) is, without question, the world’s top soccer league, and though our homegrown American league (MLS) has improved tremendously in its short 30-year lifespan, I don’t think it has yet cracked even the top 10 of global leagues. American exceptionalism it is not (yet).
Over the next few months I will be publishing a number of pieces covering various facets of the sport:
Exploring what it actually takes to own a club, especially in light of the Reynolds/McElhenney success with Wrexham.
Why the business of English football is so much smaller than its American compatriot despite incomparably larger fandom.
The power dynamics at the heart of international football governance.
The obligations of Football clubs not just as business entities but as cultural institutions anchored to towns and citizens.
But we start here with an exploration of the competitive nature of the world’s wealthiest soccer league, the English Premier League.
Outcomes are Predetermined
As we near the end of this EPL season, Manchester City has once again emerged victorious, making this their fifth Premiership title in six years. It pains me to no end, given that my Arsenal squad1 unexpectedly led the league in points for most of the season, but the City machine has fulfilled the seemingly inevitable conclusion.
Despite increasing pressure from resurgent former powers like Manchester United, Newcastle, and, yes, Arsenal, the uncomfortable reality is that Manchester City will likely remain the favorites for at least the next several years.
And though we’re loathe as fans to admit it, the final positions of the EPL table were already written in the stars before the season kicked off. Or perhaps more accurately, on the balance sheets of each club.
The unfortunate truth is that the Premier League is not a competitive league, nor is it meritocratic. Leicester’s dream run notwithstanding, the Premier League is not made for Miracle’s or Rudy’s. No, the truth is that the league was constructed to ensure that the Big 62 clubs (almost) always finish on top.
The EPL is a Pay to Win league in which the top clubs guarantee their perpetual success by hoarding top players.
This is neither opinion nor conjecture but unassailable fact, easily demonstrated with a comparison to its football cousin, the NFL.
Club Earnings are Highly Skewed
Looking first at revenues generated by each club in the 2021-22 season, it’s immediately obvious how differently each league is constructed:
The NFL’s top club earned roughly 2.4x the lowest earner, and if we remove the Jerry Jones outlier here, the ratio drops to just 1.4x. That is, football’s second-highest earner made just 40% more than its 32nd.
English soccer is not nearly as equitable, with its top earner garnering 23.7x the revenues as the lowest. This is a bit unfair, as revenues for the bottom three clubs (all newly promoted) do not include the lucrative media rights revenue share that they’ll enjoy after the season. Excluding these clubs, the delta between top and 17th earner is still 4.7x.
The earnings capacity disequilibrium extends even further3:
You get the picture - the EPL’s Gini coefficient is super high!
Money Buys Happiness (and Top Players)
Players are not only the largest expense of any major sports league but the (obvious) most important factor contributing to on-field performance. The NFL’s salary cap effectively neutralizes spending as a a club-level advantage that can be deployed against winning:
Perhaps “neutralizes” is a bit too strong; we still witness some club-level spending differences:
The delta between the top and bottom spender is $44M, or about 21% of average player costs, with a standard deviation of about 4% ($7.4M).
Given the football vs. football disparity in club earnings, it should come as no surprise that the same disparate outcome extends into player spending:
With no salary cap in place, Premier League clubs can spend whatever they can “afford”, again leading to massive inequity:
The top-bottom spending delta is $380M, or 180% of average player costs, with a standard deviation of 50% ($105M) of the average.
The Premier League is a Talent Oligopoly
Though clubs would obviously prefer to monopolize talent, both financials and league rules (necessarily) prevent such an outcome. The NFL’s Collective Bargaining Agreement (CBA) is not the swiftest 456-page read, but it lays out two distinct mechanisms that ensure relatively equitable distributions of players across its 32 constituent clubs:
The aforementioned salary cap (and floor), which keeps total spending per club contained within a narrow band.
A hierarchy of salaries by position, ensuring that the most valuable position (Quarterback) earns substantially more both maximally and on average than the least valuable position (Long Snapper).
This has led, predictably, to a linear distribution of top talent across the clubs4:
To reiterate - all teams have effectively the same level of player investment (within a 4% standard deviation), but it’s the skill of their front office (both by drafting well and by managing their salary cap) that determines where top talent is “concentrated”.
Once again the Premier League offers a stark contrast in approach. Although the league has baseline regulations to help influence spending behavior (e.g.,“financial fair play”), it possesses neither the salary cap nor the positional salary bands that the NFL has at its disposal.
Because there are no trades in international soccer - since players can be transferred not only between clubs but between leagues, of which has its own sets of regulations - transfers of players currently under contract require a transfer fee, which is another (high cost) piece of leverage dominated by wealthy clubs.
As a result, talent hoarding is the norm:
Chelsea, ever the over-spender under former owner and alleged Russian oligarch Roman Abramovich (and continuing under his similarly budget unconscious successor, American Todd Boehly), have almost as many top 100 salaries as clubs 7-20 in the league. Extended further:
Just four clubs represent 65(!) of the top 100 salaries.
Only three top player salaries are found on the rosters of clubs that finished 12-20 in the league last year.
Mind you, an EPL roster is just 25 players, compared to the NFL’s 55 (formerly 53), so effectively 80% of Chelsea’s roster falls within the top 100 salaries, compared to the NFL’s most talent-laden team (my Eagles) at 15% of the roster.
Paying to Win
Leveraging one’s massive monetization advantages to hoard players is ultimately a nothing-burger if such spending doesn’t actually translate to performance on the field/pitch.
Given everything I’ve presented to this point, it should be wholly unsurprising that player investment and winning are uncorrelated in the NFL:
In contrast, the Premier League once again demonstrates a much clearer relationship between player spending and team performance:
The Manchester United performance blip notwithstanding, club-level talent costs are highly correlative with end of season position, especially in the top half of the league.
Now, one might argue that I’m only looking at a single season here which itself could be an outlier. Reasonable? Yes. Correct? Unfortunately not.
The authors of Soccernomics investigated the relationship between player wages and league position for the entire 2011-2020 decade:
A full 90% of variance in league position could be explained by the club’s wage bill.
That is, the EPL is a league explicitly structured to ensure that the top earners, and thus top spenders, pay for their end of season ranking. Inverting this,
It is functionally impossible for clubs outside of the Big 6 to consistently qualify for the “playoffs” because they simply don’t have the capital.
Your Team Has No Chance
Let’s further unpack the competitive imbalance of each league. Of the 50 clubs who have ever participated in the Premier League (going back to 1993), only seven clubs have ever won the EPL, and just four teams are responsible for 27 of 30.
Contrast this title concentration with the NFL, in which 15 teams have won a Super Bowl, and only one (the Patriots) has more than three titles in the period (six), compared to Manchester United’s 13 titles.
If we expand the purview into “playoff” appearances5, the stark contrast continues:
Of the 50 historical EPL participants, only 20 (40%) have ever secured a Top 6 league finish to qualify for the playoffs.
Only six clubs (the Big 6) have made the playoffs in at least 10 of 30 seasons, and four of these clubs made the playoffs at least 80% of the time (with top dog Manchester United missing the playoffs just once in 30 years).
In the NFL, not only did all 32 teams make the playoffs, they all did so at least 3 times, and 19 of 32 teams (59%) made the playoffs at least 10 times in the 30 year span.
Only three teams made the playoffs at least 20 times, with a max of 22.
Taken together, we have an all-too-familiar view contrasting the NFL’s linear versus EPL’s logistic performance curves:
The Sanctity of Competition
Beauty is not the goal of competitive sports, but high-level sports are a prime venue for the expression of human beauty. - David Foster Wallace
How are we to grapple with this unassailable fact that final Premier League positions are (mostly) preordained by wealth? There’s a capitalistic argument to be made that such certainty of outcomes actively undermines the league’s monetization capacity (and I will argue this very point in a future installment).
But that’s not the place to begin. Not everything (even in business) must or should be fiscally motivated (or at least not as the only motivator). No, it is the sanctity of competition itself that is at risk.
Sports are the purest competitive endeavor we as humans have yet created, given their:
Pre-defined and transparent rules, enforced (mostly) in real-time.
Objective measurement of performance.
Clear, binary, permanent outcomes.
I should make clear that optimal competition is not equality, nor is it pure randomness.
There is a paradoxical comfort offered by dynastic clubs. I think they represent both an imprimatur of quality and, more importantly, an affirmation that sustained excellence is possible; that we, as individuals, can be consistently great because such persistent greatness exists. We’ve witnessed it on the pitch.
Competition also requires an element of fairness, and though we may have an inherent penchant for persistent winners, it is the nature of that persistence that is currently in disequilibrium.
We celebrate a student’s acceptance to a great school when it is earned - by her personal brilliance and doggedness. We (rightly) deride the same outcome when it is unearned, derived instead from his family’s legacy status (and wealth).
Competitive outcomes, at their core, must primarily derive from skill, not wealth.
Manchester City is, unequivocally, the best club in the Premier League. They are a dynasty, with an absolutely enviable combination of manager, players, and system. But City are also one of six legacy families who have purchased their seat at the table, in perpetuity.
Soccer is the beautiful game. The Premier League is the preeminent national league of the beautiful game. But the league as constructed bastardizes the very spirit of competition. The game is sub-optimally designed, and it must evolve.
We’ll take on this task in the next piece.
Yes, I will be using first-person possessive pronouns for all fandom articles. I don't like it but so it is.
Manchester City, Manchester United, Liverpool, Tottenham Hotspur, Chelsea, and of course, my beloved Arsenal.
Again using only the 17 clubs who participated in the Premier League the season prior. Promotion/relegation makes all numbers a bit funky so it’s easier to exclude them in this analysis, but I’ll return to these clubs in the next piece.
Here I’m using salary as a proxy for player quality. I gathered the top 10 salaries by positional class to generate a rank ordering of the top ~100 players. This is an imperfect method but directionally useful.
Yes, I’m well aware that the Premier League does not in fact have its own playoff system (something I’ll be discussing in the next piece), but end of season standings do qualify clubs for European playoffs, and that’s what I’m using here.