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Premier League football is heading for global domination

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If you thought Monday's transfer deadline day was as exciting as a wall of drying paint then you certainly would not be alone. This was not a sign of austerity hitting the Premier League, but possibly one of the last examples we will have of England's elite showing some sort of financial restraint. After all, by the time deadline day rolled around, European football had already been blown away by the Premier League's spending power.

The 2014/15 season oversaw a £965 million splurge by Premier League clubs, representing a 100 per cent increase on the 2009/10 season expenditure of £480 million. With revenue streams only going up, there is nothing to stop this total from surpassing £1 billion with ease in the near future.

Unless there are regulations put in place to stop this incredible rate of growth, a cycle of infinite accumulation could see the Premier League become not just the strongest football league in the world, but, quite possibly, the only football league in the world worth watching.

The Premier League is now undeniably the richest on the planet. Its watershed moment came in 2012 when BT shifted the landscape of British broadcasting by pushing the British TV rights above £3 billion over three years. It was a 71 per cent increase on the previous deal and guaranteed an extra £14 million per year for each club from 2013-14 to 2015-16.

England's top tier competition is raking in a further £2.3 billion over the same period from foreign broadcasters. They also sold the highlights package to the BBC for £179.7 million – recently confirming a new deal worth £204 million– and £20 million per year from News International for the right to screen goals and highlight videos through their websites and mobile apps.

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To put this increase in television rights into context, the £62 million last season's bottom club Cardiff City received in prize money and TV money was £1.2 million more than Manchester United had received for winning the Premier League the season before. And the £20 million Rupert Murdoch paid for those little goal clips that The Sun+ and The Times subscribers enjoy was more than the Scottish Premier League sold their entire television rights. To add insult to injury, SPL goals are included on those The Sun+ and The Times subscriptions.

All of this resulted to an unprecedented summer of spending with Premier League clubs forking out an incredible £835 million in transfer fees. This was a 25 per cent increase on the previous record of £630 million. That is nothing compared to the rise in wages, which has itself gobble up 75 per cent of revenue increases in recent seasons. The total wage bill for the 2013/14 season was estimated at £2.2 billion a season.

With the auction set to get underway for the next three-year stint beginning 2016/17, experts are already predicting the 168 live matches, separated into seven packages, to fetch over £4 billion. Should Discovery confirm rumours and enter the bidding, the figures could go above and beyond estimates just as they did in 2012.

Those lucky enough to be in the Champions League next season will also see the estimated £30 million bounty double to £60 million when BT Sport take over exclusive coverage.

Consumers pay the price

This is only bad news for those with Sky Sports and BT Sport subscriptions. While we all want to see our clubs get richer, few are able to make the link between an increase in their annual subscriptions and their club's bank account. Any increase in Premier League TV rights is likely to pass straight through to the consumer. Sky can scarcely afford to lose the Premier League so will continue to bid bigger and hope their customers agree to pay the bill.

While the Premier League may be growing, the public's wages are not. They will be required to pay more to watch their favourite team. For those who go to games, however, there could be hope on the horizon. As commercial revenue becomes a bigger slice of the pie, it promises to lower the importance of generating revenue on match-days, resulting in cheaper tickets.

Commercial revenue streams are growing just as fast. In 2010, Premier League clubs generated £450 million from commercial sources. By the end of the 2013 season, that had risen by 57 per cent to almost £700 million, overtaking the advertising giant that is NFL in the process.

Those figures don't take into account Arsenal's new £30 million-a-year deal with Puma or their £30 million-a-year deal with Fly Emirates, Chelsea's imminent deal with Turkish Airways for a similar amount, or Manchester United's £47 million-a-year with Chevrolet. From next season, the Red Devils will also be earning £75 million-a-year from Adidas.

These figures are nothing short of staggering for a club that has already grown its commercial revenue by 83 per cent in the last three years. As a result, Manchester United can expect to top the football rich list in 2017 with the Premier League boasting six of the ten richest clubs in the next few years. In fact, thanks to the huge increase in TV revenue, all of the Premier League's 20 clubs are present in Deloitte's top 40 richest club list. An increase in this revenue could see them occupy the top 30 in years to come.

Infinite accumulation of wealth and power

So, yes, the rich are certainly set to get richer in the coming years and those revenue streams will help the Premier League grow even stronger in the coming years.  But while everyone in England wants to see our home league grow stronger, there is plenty of concern that the Premier League will simply outstrip all of its European competitors in the future, possibly leaving them lifeless as a result.

Conditions are perfect for the Premier League to take advantage of growth in football. They already have a product with global appeal; people all over the world are hooked on it because it is considered to have the best clubs, players and competition. Therefore, more money comes in, enabling teams to buy more good players and become infinitely better.

The Premier League now has the power to strip their competitors of their best assets. It is now averaging £160 million in revenue per club compared with the Bundesliga (£111m), La Liga (£95m) and Serie A (£65m). That is enough to make sure the best players from each of those leagues makes his way to England.

Angel di Maria, Alexis Sanchez, Cesc Fabregas and Radamel Falcao all arrived on these shores in the summer after being made available. These names now make up four of the top ten highest earners in the Premier League. It was the start of an influx of world-class stars made possible only by an increase in turnover.

Real Madrid, Barcelona and AS Monaco had to sell these players to make sure they met financial fair play regulations and Manchester United, Chelsea and Arsenal took full advantage. Only Chelsea were forced to sell in order to buy, but such was the strength of their squad, they managed to sell a player they didn't even want for a significant sum.

As the best players continue to arrive, foreign interest in the Premier League will continue to grow at the expense of other leagues. A Polish fan who decides to support Manchester United instead of Legia Warsaw adds value to the Premier League and takes it away from the Polish Ekstraklasa. The Premier League claims that 1.46 billion – or 70 per cent of the world’s estimated 2.08 billion football fans now actively support a Premier League club.

The Polish Ekstraklasa and the like will be the first to go bust if this trend continues. Eventually, if the Premier League continues to attract more fans, the bigger leagues, like France's Ligue 1 and Portugal's Primeira Liga will become worthless to commercial partners and television companies.

Two-tiered league

The rule of equal distribution for television revenue will help to maintain a decent level of competition in the league, but there is already a growing sense that a two-tiered competition could become prevalent as commercial revenue streams become more important.

Manchester United's kit deals with Chevrolet and Nike will generate £70 million for the club in the 2014/15 season. They are one of six clubs to generate double figures from shirt sponsorship. The other 14 clubs combined is less than Manchester United's total.

Financial fair play regulations will mean Manchester United will have a significant advantage over their European and domestic rivals in the transfer window. They alone, accounted for 17 per cent of the Premier League's summer spending and that will only increase as they take the lion's share of revenue.

While Manchester City, Chelsea and Arsenal may be able to keep pace, the rest of the clubs will be left behind. Eventually a huge gulf in class will emerge, rendering the other dozen or so Premier League clubs as also-rans. For some, that is already true. Only outliers like Southampton can compete at the upper echelons, but for the Saints, their time at the top will come to an end when the big six pluck their best players for sizeable fees.

Home-grown joke

It is not only English clubs that could suffer from this continual growth but also young English players. Commercial partners will demand big stars and those big stars will come at the expense of home-grown youngsters.

That was evident when Manchester United agreed a loan deal for Radamel Falcao, pushing Danny Welbeck out of the door as a result. Arsenal's deal for Gabriel has also pushed Calum Chambers out of first team action while Chelsea have had just one truly homegrown star, John Terry, come through their ranks in the Roman Abramovich era.

As money becomes less of an issue for Premier League clubs, attention will turn away from producing local talent and flooding the squad with internationally recognised stars. home-grown rules have looked to curb this trend, but all it has seemed to do is increase the amount smaller clubs can sell their best English stars for. Adam Lallana, for example, only sold for £25 million because Liverpool needed more home-grown players to fill their quota.

Again, this deprives the smaller Premier League clubs of their best stars, who in turn join bigger clubs where they play second fiddle to foreign imports. The English talent pool is already drying up with some suggesting a new rule to force clubs to fielding at least three home-grown players in every game is the only way to reverse the trend.

The global league

Eventually the English Premier League will start to consume it's competition and ultimately devalue football as a result. It could lead to a product played on a global level with games taking place in all four corners of the worlds and clubs eventually being located abroad.

It won't be long before Premier League clubs are surpassing the £1 billion mark not just across the summer and winter but in just the former. The top clubs like Manchester United and Chelsea will be able to do this without concerning themselves with financial fair play regulations.

The Premier League can absorb the best of their European counterparts. For now, that means paying top dollar for the best players, but in the future it could even move on to adopting the best clubs. Imagine a world where Real Madrid and Barcelona are forced to accept the Premier League's invitation to join because La Liga is crumbling around them.

It is equally scary as it is exciting, or maybe it's just scary.

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Topics:
Football
Premier League

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