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13 April 2024

There is everything to play for in the business of football

By Gary Meenaghan

The wealth of the world's most pre-eminent football clubs may be relatively recession-resistant, as publication of the Deloitte Football Money League demonstrated this week, but in terms of on-pitch performance, some teams are as resistant to relegation as their manager is to getting his contract terminated.

Two more Premier League coaches lost their jobs this week, and while the motivation behind the departures may be in stark contrast – Portsmouth sacked Tony Adams to try to avoid the drop, while Chelsea gave Luiz Felipe Scolari the boot as they chase silverware – both decisions were made essentially for financial reasons.

Television broadcast rights is big business and, as an owner, if your club is not playing in the top flight, you are set to miss out on your share of the Premiership pie. Likewise, if your club is playing in the Champions League – which Chelsea, five points from slipping out of the all-important top four, risk not doing next season – you can expect greater broadcast revenue, as well as all the knock-on effects of playing on Europe's biggest domestic stage.

Broadcast revenue accounted for €1.6 billion (Dh7.54bn) of the overall €3.9bn generated in total revenue among the top 20 clubs in the Money League. Or, put plainly, 41 per cent.

With the Premier League marketing its overseas television rights in the coming months, clubs are set to benefit and build further as they experience the flipside of the weakening pound. The 20 top-flight teams are currently awarded £9.3m each year from overseas, but that figure is likely to grow as the league continues to expand its global coverage.

With the bottom half of the Premier League so tight – nine points separate the bottom 11 sides – three of the seven clubs in the Money League are arguably still battling for survival. Were Newcastle United, Tottenham Hotspur or Manchester City to be demoted to the Championship, the loss in revenue would be crippling – although importantly, not deadly.

Many teams now have flexibility in terms of their wage structures so that if the club is relegated, players' salaries decrease accordingly.

Likewise, the Premier League appreciates the loss of income that comes with demotion and so, as of the 2007-08 season, it now provides "parachute payments" of £11.4m to clubs for three years after being ousted to stifle the blow.

The package is welcomed by club owners who understand the importance of making an immediate return to football's elite league. But to the fans money is of little compensation: they want results. That is why Adams got sacked, that is why Scolari got pushed and that is why the managerial merry-go-round shows no signs of slowing down as clubs fight for their share of football's finances.

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