FOR THE past decade, English football has been dominated by two clubs: Manchester City and Chelsea. Between them, they have won 17 of the 30 domestic trophies on offer and Chelsea have won a further four European prizes. The pandemic has left both clubs’ relatively unscathed though City made a hefty loss in 2019-20, but the economic strength behind both clubs means they can smile when it’s a rainy day. Not so for most of their rivals.
The debacle that was the European Super League was not necessarily their idea, but they are like any other club, they suffer from FOMO (fear of missing out), so they appeared to go along with the flawed idea. The ESL needed Chelsea and Manchester City more than they needed the ESL. Paris Saint-Germain were in the same ballpark. PSG didn’t bite the bullet and steered clear and the Premier duo were the first to call time on the proposal. The fact is, for all three of these clubs, the status quo works just fine. Those desperate to regain the status and advantages they had before ultra high net worth individuals got involved in the game were the keenest advocates.
The owners of Chelsea, Manchester City and Paris Saint-Germain have different agendas than those behind Liverpool, Arsenal and Manchester United. For US investor/owners, sports team ownership is an asset class, which is why private equity firms have developed a taste for football clubs. It is likely that Roman Abramovich and Shiekh Mansour do not expect to make money out of owning a football club, although the involvement of private equity firm Silver Lake at City does change the dynamic. One area that makes US investors squirm is relegation – it’s something they try to eradicate from American sports.
With so much wealth behind these clubs, it is no surprise that the pandemic has put paid to the Premier League’s so-called “big six”, a group of clubs founded on the basis of their financial power, their position in the game and their heritage.
While Chelsea and City will forever be looked upon as “new money” by fans of Arsenal, Liverpool and Manchester United, their modern records are impressive. Before the two clubs’ owners took over, Chelsea had won eight major prizes, City nine. Between them, they had three league titles, Chelsea’s coming in 1955 and City’s in 1937 and 1968. They were underachieving clubs that lived in the shadows of their local rivals – in Chelsea’s case, Arsenal were always the top name in London, while City’s honours list was dwarfed by Manchester United.
Fans of English football’s old “big three” taunted Chelsea and City as having “no history”, but increasingly it counts for nothing other than making books more interesting. History is created on a daily basis, clubs are not born with a ready built honours list. And while sceptics might claim that success has been “bought”, that has almost always been the case in football, going right back to the days when mill owners subsidised and paid for success for the local club. The figures just happen to be far greater today.
The type of ownership at Chelsea and Manchester City enables the clubs to weather storms that affect others. The models at Arsenal, Liverpool and Manchester United are different in that their owners expect a return. As a result, their clubs make money and dividends can be paid. As for Tottenham, their ownership is ENIC, a UK investment company that may have similar objectives to the club’s north London neighbours. There is a growing presence in football of private equity firms entering the market which indicates there could be a rise in professional investment that knocks companies into shape, makes them more efficient and then sells them to make a profit on their investment.
While there is nothing legally wrong with this practice, it does not align itself to the spirit of the game. But then should it be obliged to? Football Finance experts such as Kieran Maguire of Liverpool University and The Price of Football fame have long acknowledged that football was never a well-run business from a financial perspective. Football doesn’t like the wealthy owner model, but neither does it appreciate the professional investor expecting something back. What does football really want?
With the pandemic, in all probability, ending an era of exponential growth and excess, clubs like Chelsea and Manchester City will surely only strengthen their position at the top of the game. The other members of the “big four” will be Liverpool and Manchester United, primarily because of their vast worldwide support that will be further monetised, and sound management. But both clubs will not have the same financial power of Chelsea and City.
These clubs will have to rely on skilful recruitment and player trading, along with their commercial prowess, which is considerable. No matter how successful they are, Chelsea and Manchester City will never have the same cachet as Liverpool and Manchester United. This is where history and longevity has its advantage. Liverpool won the Premier League in 2020 because they had an excellent coach and had been very astute in the transfer market. That can happen again, but ultimately, those clubs with fewer financial restrictions will rise to the top.
So how did six become four? In truth, Tottenham’s flirtation with the “big six” was brief. Their trophy haul has been abysmal in the past 40 years and their last title was in 1961. With the construction of their new stadium, they have a brilliant home, but this will undoubtedly have an impact on their disposable income for a period of time, just as Arsenal’s Emirates Stadium slowed the club down. Arsenal went nine years without a trophy before scooping a quartet of FA Cups between 2014 and 2020, but Spurs have gone into a period of possible restriction after their best team in years peaked.
Arsenal’s problems seem to be manifold: Poor succession planning following Arsene Wenger’s long tenure; sub-optimal recruitment; lack of ambition for too long; and detached, unpopular ownership that has made them uncompetitive. The culmination of a period of stagnation is that Arsenal will not be playing in European competition for the first time in 25 years in 2021-22 season. But this is still Arsenal and their time will come again, one presumes.
Arsenal, over the past five years, have seen their revenues decline by 3%, while Spurs have enjoyed an 87% rise from £ 209 million in 2015-16 to £ 391 million in 2019-20. Chelsea and Manchester City both saw their income go up by 23%, while Liverpool’s revenues rocketed by 62%. The dynamic between Arsenal and Spurs is interesting – in 2016, Arsenal had a
£ 150 million advantage of their rivals but are now £ 50 million behind them. Similarly, Manchester United and City is a story of one club falling and another rising – in 2016, United earned £ 123 million more, but in 2020, the gap was £ 27 million.
With Premier League clubs likely to suffer more challenges once the 2020-21 figures are revealed, the Chelsea-City axis could take a renewed stranglehold on the English game. For the foreseeable future, we may see what many people predicted a while ago when clubs started to become the property of wealthy oligarchs and oilmen. The advantage they gave these clubs may become more and more visible. If the cry of “foul” was heard then, it may become somewhat louder when the next wave of crisis sweeps over professional football.