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How The Rich Get Richer In The EPL

By Matthew Clibanoff

For the first time in 15 years Barclays is not the title sponsor of the Premier League. Between misconduct scandals that may cost the bank billions and the Premier League’s recent increase in broadcasting revenue, Barclays feels that it is no longer able to afford English soccer’s top advertising spot. When this was announced last year, the League decided that it would be forgoing a title sponsor in favor of less overt advertising strategies. This is the first time since the League’s inaugural season that it doesn’t have a title endorsement. Barclays has been invited to stay on as a key sponsor and as the official bank of the EPL for the next three seasons. This echoes the League’s approach with its former title sponsor Carling Brewery which has stayed on as the official League beer.

The elimination of a title sponsor has left the EPL with a 50 million dollar question: how do they plan to make up for the lost revenue?

Alongside Carling and Barclays, the Premier League has given three other companies official status.  TagHeuer is the official watch, Nike is the official ball and EA Sports is the official sports technology partner. EA has also been given the leadership role amongst the EPL sponsors and will be very present on-screen for the next three seasons.  EA has promised £65M ($85M) over the next three years for this coveted position.

In a separate bid to increase ad revenues, the EPL has amended its rules for advertising on jerseys. The League has decided to allow clubs to have multiple sponsors per shirt and has decided to let clubs sell the sleeve space that was previously occupied by Barclays. Some estimates have Premier League sleeve space valued at £10M ($12.5M) per year. This news comes after Chelsea recently signed a 15-year, £900M ($1.12B) kit deal with Nike.

A Salary Cap? No, Thanks.

Though league advertisement revenue seems to be going up and the league is striking huge deals left and right, a lot of these deals have the potential to hurt the league in the long run. Unlike a lot of American sports associations, the Premier League’s teams function relatively independent of one another. For example, in the NFL, the league runs on a system of salary caps and revenue sharing that is colloquially referred to as sports socialism. If every team has the same amount of money and the same salary requirements, the league will have a more even playing field. The idea behind this is simple: parity between competitors makes for the best games.

The Premier League does not share this opinion. Each team individually decides sponsorship of team kits. Shirt Sponsors are team-based as well. The EPL and EFL don’t share ad revenues despite the fact that teams are relegated/promoted between the leagues yearly. The result is, that despite the Premier League entering its 25th season, only six teams have ever won the title. A team that consistently wins, like Manchester United, will garner higher advertising revenue than smaller clubs like West Brom or Crystal Palace. Unfortunately this means that the clubs who were winning in the early 90s, at the time of the league’s inception, are the same clubs who are winning now. Being a top-flight team in the Premier League is cyclical. The more a team wins, the more ad revenue they get, the more ad revenue they get, the better players they can afford, the better players they can afford the more they win, the more they win… you get it. It’s the soccer equivalent of giving tax breaks to billionaires.  

Salary caps are another huge issue within the league. While UEFA and other governing bodies have tried to impose sanctions on clubs for exceeding player salary limits, the larger clubs shrug it off. The ultra-successful teams usually just opt to break the salary cap and pay the fines. They have so much money that they’re willing to accrue financial penalties in exchange for top tier talent. The thought behind this is to pay the comparatively small fees in exchange for a chance to win the title, qualify to the Champions League and secure more advertising revenue.  

With Barclays ending its stint as the title sponsor, the Premier League has been awarded a huge opportunity. They’ve added different companies to their roster, diversified the way in which they advertise and have continued to increase the League’s profits. That being said, at some point the League will have to step up and help raise the standard of competition. With the recent cash infusion from EA and its other category sponsors, the EPL can help the smaller clubs gain some relevance in the race for the title. Man U is worth over 10 times Leicester and a lot of the lower tier clubs. While some may cite last year as proof that the current system is working, Leicester currently has less than 10 wins and are dangerously close to getting relegated. They have solidified themselves as a fluke. For all the talk surrounding the EPL as a more competitive league than Spain’s La Liga or Italy’s Serie A, if it doesn’t address its lack of equality at the top, it runs the risk of fans losing interest. It’s hard to care about a League when there are so few teams with a realistic shot at winning it.

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