Creating the English Premier Football League: A Brief Economic History with Some Possible

Lessons for Asian Soccer

The Formation of the English Premier League

The English Premier League (EPL) is the top tier of professional football in England and is

‘the world’s most successful domestic sporting competition’.1 It was founded in 1992 when

the existing First Division of the four-division Football League split away to become an

independent organisation, the Football Association Premier League.2 English football had

reached a low point in the late 1980s with its clubs banned from European competition

because of hooligan behaviour, with its stadiums falling apart because of a lack of

investment, and with attendances and revenues lagging behind those of elite leagues in

Spain and Italy. It has been aptly described as ‘a typical rustbelt industry, characterised by

under investment, poor quality products, falling demand and poor profitability’. 3 However,

things were beginning to improve on the field of play. UEFA, European football’s governing

body, had lifted the ban in 1990 and Manchester United won the Cup Winners Cup the

following year; the national team had reached the 1990 World Cup semi-final; and the

Taylor Report of 1991 recommended significant improvement in spectator facilities. The

time was ripe for change.

Although the Football Association backed the proposal on the overt grounds that a

reduction in the number of games (it envisaged a super league of only 18 clubs) would aid

the development of the English national team, it was also a means of undermining the

Football League with which it had a fraught political relationship. The Football Association

has the responsibility for all football in England including the national team, but the EPL,

although they have to respect the governing authority, gave primacy to the interests of its

1
constituent clubs. The elite English clubs paid lip service to the idea of strengthening the

international side and were more concerned with strengthening their own teams and

making money.4 Economically they were particularly attracted by the prospect of more

television income. In 1986 the Football League had signed a two-year television contract

worth £6.3 million which increased to £44 million over four years when it was renegotiated

in 1988. This was a catalyst for the breakaway by the leading clubs who wished for all the

money to remain with them and not be redistributed to the lower leagues: at the time 50%

was cascaded down.5 Initial discussions were held with London Weekend Television, a

commercial terrestrial broadcaster, but ultimately the EPL did not go with them but to a

new channel BSkyB (Sky). This was a subscription channel offering sport via satellite, a new

phenomenon in the British media. Playing success in football can be partially determined off

the field and the clubs hoped that the television deal could be the means of strengthening

their teams so that, at best, they could compete effectively in European competitions and,

at worst, avoid relegation to the lower tiers of English football.

The Legacy of the Past

The EPL developed out of an existing organisation and thus did not have a blank sheet on

which to draw plans: indeed it has been remarked that English football has ‘the most

entrenched traditions’ in the sport.6 These can be beneficial in that there was an existing

base of fans but also stultifying if change is resisted.

The size of the League was inherited in that there were 22 teams in the existing Football

League First Division when the breakaway took place. Despite the hopes of the FA that a

league of 18 teams would eventuate so as to reduce fixture congestion and keep players

2
injury-free for England duty this did not occur. In 1995, at the insistence of FIFA, the size was

reduced to 20 teams by relegating four teams and promoting only two that season, though

that was the end of turkeys voting for Christmas. In 2006 FIFA requested a further reduction

to 18 teams but the EPL refused to comply.

A major decision of any sports league is whether to be an open or closed organisation. In

the former quality control is merit-based and is maintained by relegating the poorer teams

and promoting the successful sides from a feeder league. Opponents of this pyramid system

argue that it can undermine long-term investment and lead to too much of a focus on short

term results in the effort to avoid the financial costs and status loss associated with

relegation. In contrast closed leagues, as in the major American sports, guarantee stability

of membership, encourage continuity of planning, and bring in new teams only by

expanding the size of the league rather than by replacing existing members. Tradition

determined that the latter option was a non-starter. This meant that the EPL could not

(whether it would have wished to is another matter) adopt the American franchise system

with clubs generally having monopoly rights within a given metropolitan area. Indeed at one

time London had six teams in the EPL.7 It is notable that, despite the EPL breaking away from

the Football League and the two being run as separate institutions, promotion and

relegation still took place between the two organisations.

Another inherited feature was club ownership which at the time was predominately by non-

quoted joint-stock companies, though in reality the fiefdom of individuals, often local

businessmen.8 This, however, was more amenable to change as it did not need a collective

decision by the League. Indeed there have been two major waves of change, one leading to

more dispersed ownership, the other to a greater concentration. The first came in the mid-

3
1990s with stock market floatation by clubs eager to raise capital. Tottenham had pioneered

this in 1983 but now nearly half the League adopted this funding mechanism, encouraged

by a threefold rise in the share value of both Tottenham and Manchester United between

1994 and 1996.9 By 2001 nine extant members of the EPL were listed companies. Nine years

later the figure had fallen to just two as the city institutions behind the flotations came to

terms with the fact that football clubs were not attractive investments for those seeking

financial returns, even though in 1998 the Football Association had relaxed its rule on

dividend payments (possibly in reaction to falling share prices). This was much less of a

concern to those individuals in the second wave of change that began with Russian

billionaire Roman Abramovich’s purchase of Chelsea in 2003 which heralded the

development of a ‘benefactor’ model of foreign ownership in which the motive of short-

term playing success outweighed financial considerations. By 2010 nine extant EPL members

were overseas owned.

There were other ownership options which were not taken up.10 The German Bundesliga has

operated successfully with a rule (the so-called 50% + 1 model) that all clubs must be

controlled by their members and cannot be taken over by private investors. 11 Several teams

in the Football League adopted spectator community ownership in which a fans’ trust takes

over a club, but this could not raise the sums of money required to operate at EPL level. A

variant of this operates in Spain where clubs are set up as non-profit institutions with

ordinary fans as members who vote in a president. Here finance comes mainly in the form

of long-term bank loans which seem to be continually rolled over because of the cultural

significance of the clubs. British bankers may be more hard-nosed. France has a long

tradition of municipal involvement in the financing of football including local authority

ownership of many major stadia but this had never been a tradition in England and the

4
tightening of local authority finances made such a move politically unfeasible. What might

have occurred was a copying of several major European football clubs who were owned by

industrial and media companies but when Sky attempted this with Manchester United it was

frowned on by the Football Association and knocked back by the Monopolies and Mergers

Commission.12

A final inherited feature that would have longer term consequences for EPL clubs was the

renewed access to European competitions under the aegis of UEFA, the governing body for

European football. This ultimately has forced the clubs to accept a set of regulations in,

generally known as Financial Fair Play, which were intended to bring discipline to European

club finances by, among other things, imposing a break-even rule limiting team spending on

players’ wages and transfers to revenue obtained from football related activities.13 Yet the

pressure has not been unidirectional. Threats from leading clubs to breakaway and form

their own super league have forced UEFA to expand the size of the European competitions

so that now up to four EPL teams can enter the now totally mistitled Champions League and

a further three into the Europa competition.14 This had led in effect to a mini league within

the EPL as top teams strive for a place in the lucrative European tournaments.

The EPL as a Cartel

Much of the economics associated with sport are conventional. Funds have to be raised,

wages have to be paid, and resources have to be allocated to the production process. Yet in

some respects sport has peculiar economics. Unlike in conventional business each producer

needs a competitor before a product is available for sale. As one pioneer in sports

economics remarked it is no use being heavyweight champion of the world if you have no

5
one to fight.15 No other form of commerce requires rivals to work together to produce a

sellable product.

Most professional team sports operate via a league system and such leagues can be

considered as being cartels, economic institutions that are outlawed in most free market

economies. A league can engage in price-fixing, exhibit explicit profit-sharing agreements

and forms of revenue redistribution, and impose restrictions on new entrants to the

industry. Some conventional industries may deter newcomers via high set up costs but

leagues can simply exclude them. The sports industry has a history of regulations

determined by leagues which have impacted on the free movement of labour and not

allowed employees to choose where they want to work or who for. Collectively leagues

have also imposed limits on player payments via maximum wages and salary caps.

The EPL did not opt for either a team or player salary cap. One consequence has been an

enormous rise in player reward as stars were able to claim their full economic rent. Nor was

any limit set to transfer deals (and there was no draft or zoning recruitment) so the richest

clubs could buy the better and more expensive players. Eventually in December 2012 the

EPL clubs agreed in principle – possibly in anticipation of forthcoming UEFA regulations on

financial fair play - to new cost controls including a break-even rule and a cap on the amount

by which their wage bill could be increased. In contrast to the commercial orientation of the

EPL, UEFA views football much more as a community-based activity.16

Achieving Its Objectives: Making Money

6
EPL clubs faced a dual business objective involving both success on the field and raising

sufficient revenue to ensure this would happen. They had four major revenue streams to

draw upon: sponsorship, merchandising, gate receipts and the sale of broadcasting rights.

In 2005 Arsenal received a £100 million stadium and shirt sponsorship from Emirates. 17 As

television coverage of games has expanded to a worldwide audience shirt sponsorship has

proved attractive to advertisers, rising from £100 million in 2010/11 to almost £226 million

for the 2016/17 season.18 Clubs also benefitted from the sponsorship of the EPL itself; in

2013 Barclays paid £120 million for three years’ naming rights.19 Merchandising has been a

way that clubs further capture the utility of their fans (an economic expression for rip off).

Replica shirts have been joined by products with only a tenuous connection to football –

own label wines, fragrances and children’s toys - as merchandise sales have soared to rival

revenue from gate receipts.20 By 2007/08 the average EPL club made about £20 million from

commercial activity.21 Such monies will attain greater significance under the Financial Fair

Play regulations.

The quality of football certainly led to an increase in average attendances which rose from

21,126 in 1992/93 through 34,215 in 2009/10 to 36,695 in 2013/14 (though this is still

behind the Bundesliga’s near 43,500). Here clubs were free to charge what they wanted as

all gate receipts were retained by the home club.22

This rise in attendance would be regarded by some sports economists as paradoxical as

there is a widely-held belief that uncertainty about the outcome of sporting fixtures is the

key factor in attracting spectators. Beginning with Rottenberg’s seminal study of 1956, the

desirability of competitive balance within a sports league has become an article of faith

amongst many sports economists.23 Essentially the argument is that competitive inbalance

7
leads to predictable results which in turn reduce attendances and league revenues. The

debate on outcome uncertainty will be different at individual club and aggregate league

level. Successful clubs will have devoted fans who will fill their stadiums to see their heroes

win. But what about away fans and the reverse fixture? And those teams left with nothing

to play for? Unlike many leagues in the United States, the EPL did not adopt competitive-

balance policies such as revenue redistribution and cross-subsidisation of weaker teams,

draft systems for recruiting players, or salary caps.24 Given the reluctance of the EPL to

endorse competitive balance policies, inequality of competition was to be anticipated. And

so it has turned out.

Using a variety of measures, all of them variants on analysing the dispersion of winning

percentages, Lee and Fort have computed the degree of competitive balance in elite English

football at the end of each season.25 Although their data ran from 1888 it ceased in 2007 but

the results were unambiguous. Historically the twenty-first century has exhibited the

greatest inbalance followed by the last decade of the twentieth century, in other words the

years of the EPL. They also identify a sharp decline in competitive balance from the mid-

1990s, corresponding with structural changes in the Champions League which offered more

games (hence revenue) and carried less chance of an early departure from the competition.

Despite Leicester’s surprise premiership last season the two and a half decades have

generally been dominated by the ‘Big Four’ of Arsenal, Chelsea, Liverpool and Manchester

United with the recent addition of Manchester City. Yet crowds have not diminished. Given

the constant rise in attendances Szymanski has commented that ‘contrary to received

wisdom, the fans did not seem to care too much about competitive balance’. 26 Ultimately it

may be that the quality of the product offered for sale, in particular the skills demonstrated

8
by the players, outweighed the uncertainty principle as a demand stimulus. At the lower

end of the quality scale relegation fights may also play a role.27

However, it can be argued that it was proxy attendance via television viewing of football as

an entertainment product that really brought in the money. Last season premier league

matches or highlights were broadcast to an estimated 643 million households worldwide.

The sale of broadcasting rights is the only revenue stream negotiated collectively by the

League. This was a prime example of a monopolistic situation with one seller and several

potential buyers, a situation ripe for exploitation and profiteering. Yet initially, in order not

to affect attendance, the EPL restricted live coverage of matches to an average of 60 of the

380 games played each season. This lasted through the revised agreement of 1987 until

2001 when a new contract increased the number to 106 and then 138 from 2004/5. 28 The

initial contract gave the League £170m over four years; from 1997 it was £670m over four

years.29 Even by 2001/2 broadcasting revenue received by the clubs exceeded their gate-

money receipts, 38% of turnover compared to 31%.30 The EPL generates some €2.2 billion in

domestic and international television rights: indeed it can be argued that the EPL has

become dependent on television revenue and in 2014/15 clubs received apportioned

revenues of £1.6 billion. The television money was basically distributed among the clubs

according to a formula: 50% was shared equally, 25% was distributed partly according to the

league standings of the previous season (so-called ‘merit payments), and 25% went to the

teams actually televised.31 Undoubtedly it is satellite television that has made the EPL a

global brand with claimed viewing figures of 3 billion in 225 countries. 32 Television audiences

are less likely to be home team fans and here competitive balance might have a role to play,

but rising television audiences lead to a suspicion that something more than equality of

9
competition has stimulated demand. Asian viewers in particular are attracted by the

reputation of the EPL as being free from corruption which encourages a betting market. 33

The EPL transformed the commercial behaviour of elite English football. Between 1991 and

2008 the aggregate income of EPL clubs grew at a compound rate of over 16% (still over

13% when allowing for inflation). At the top end the annual income of four individual clubs –

Manchester United, Chelsea, Arsenal and Liverpool – in 2008 exceeded that of all EPL clubs

in 1992.34 In 2009/10 the total revenues of EPL clubs were £2.48 billion, the largest of any

football league in the world. The rustbelt image had gone except in one aspect. Stated

profits were not reflective of the increased commercial activity: only four clubs reported

making a gross profit and the debts of EPL clubs totalled £484 million. 35 The reason for this is

straightforward. Profit-maximisation was not at the heart of EPL clubs’ business strategy.

Their potential surpluses did not materialise as the drive for playing success (or avoidance of

relegation) led to much of the revenue being spent on the wages of and transfer payments

for players. Success in the EPL opens the way to participation in additional (and lucrative)

European competitions. Success is built around investment in human capital – players and

managers – and, given the short careers at the top level, restructuring of teams is an

ongoing and expensive task. In 2013/14 the EPL’s net profits were just over £78 million (not

large by international business standards) because much of their potential surplus had gone

to players and their agents?36 Essentially a players’ arms race has developed. Wilson,

Plumley and Ramchandani suggest that some change in motivation might be forced on clubs

from two directions. One is a possible growth in American ownership where profit

orientation in sport is more pronounced and the other is the development of UEFA

‘Financial Fair Play’ regulations which will have a ‘break even’ requirement under which

clubs may not spend more money than they generate, though the latter might be

10
circumvented by pseudo sponsorship arrangements which convert loans from owners into

generated income.37 Till then EPL clubs remain executive toys.

Achieving Its Objectives: Strengthening Teams

It is impossible to determine whether quality of performance actually rose within the EPL as

it is not something that can be measured: it remains a subjective issue. Within a league

relative wage bills are a good predictor of team league standings in European football. 38 In

mobile labour markets absolute spending levels might offer a similar insight and ‘a player’s

salary will be a good reflection of his expected contribution to team performance and

revenues’.39 Quality is related to a player’s skills and abilities and ‘wage expenditure …

systematically reflects player skills and performances’.40 If this holds then undoubtedly

player quality improved in the EPL. Yet it is unlikely that the massive rise in player salaries

(see below) totally reflects an absolute increase in player quality rather than an arms race

between club owners.

Comparisons with clubs in other leagues might also yield clues. First there is the issue of the

performance of promoted clubs. Many newly promoted teams have been relegated in their

first season in the EPL: indeed in every season except 2001/2 and 2011/12 at least one

promoted team has gone straight down again which suggests some disparity in the quality

levels between top-level Championship sides and even run-of-the-mill Premiership teams.

Second there is the matter of playing against European opposition. Looking at the UEFA

coefficients of performance in European competitions there seems to have been a distinct

improvement. When the EPL began English clubs were ranked 13th in Europe but this had

improved to 5th by the turn of the century. Since then they have never been out of the top

11
three and for a five-year period from 2007/8 they attained first position. Of course neither

of these say whether within the League’s overall quality has improved just the results. It

could be that other leagues have seen a decline in quality rather than an EPL improvement.

Welfare Effects

Clearly spectators have had to pay much more to consume the EPL product. In the first

decade and a half of operations alone ticket prices rose over 300%.41 This has excluded some

potential spectators, but that is the way of all free markets and sufficient attendees are still

willing to pay the going price. The main losers among football fans are those who prefer to

watch the games on television. They can no longer rely on a single channel and, if they want

to watch all televised fixture, must subscribe to both Sky and BT. Bringing competition into

broadcasting to prevent monopoly pricing has had the unintended consequence of

dedicated football viewers having to pay more in total than a monopolist broadcaster might

have charged.

On the field the real gainers are those players who made the grade. When the League was

formed the average annual wage was £75,000 but by 2008/9, thanks to lucrative television

deals, this had risen to £1.1million.42 However the lessening of transfer deals with lower tier

Football League clubs and the escalation of broadcasting fees for the EPL has widened the

income gap between premier league clubs and those in the Football League with a

consequent relative decline in Championship player salaries.43

Conclusion: How English is the EPL?

It may be called the English Premier League, but in reality how English is it? The only true

English quality about the EPL is its location. Many clubs have built new stadiums but are still

12
primarily located in areas where they began Obviously most of the clubs are English based,

though Cardiff and Swansea, both Welsh teams have featured at times; their presence is a

legacy of the Football League which allowed entry to several Welsh clubs. This geographical

liberty has not been extended to other nations. At one stage Wimbledon sought to relocate

to the Irish capital of Dublin but this was vetoed. For several years too there has been talk of

the Scottish duo, Celtic and Rangers, joining; both are major drawcards north of the border

but nothing has eventuated.44

Looking at other aspects of the EPL the domestic input has declined. Players now resemble a

league of nations. In the starting line ups for the first round of fixtures in 1992, just eleven

players came from outside the United Kingdom or Ireland. This changed dramatically. On

Boxing Day 1999 Chelsea became the first PL side to field an entirely foreign starting eleven.

By 2000/01 foreigners made up 36% of the aggregate registered PL players, a figure that had

risen to 45% by 2004/05. In 1999 the Department of Education and Employment had

brought in regulations that prevented the employment of non-EU passport-holding players

unless they had featured in three-quarters of their county’s competitive internationals in

the previous two years.45 However, this failed to stem the flow and in 2008/09 foreign

players made up 59.3 % of EPL club rosters compared to 50.2% (Germany), 35.5% (Italy) and

30.5% (France).46 Next season the figure went beyond 60%.

Once foreign players became so important it made sense to appoint foreign managers who

had experience in handling such players and also who had the contacts for their

recruitment. Of the 20 managers at the start of the 2016 season only six were English (Mark

Hughes of Stoke is Welsh) and not one English manager has ever won the premiership title

(Both Alex Ferguson and Kenny Dalglish were Scottish).

13
As this paper was being prepared Yunyi Guokai Sport Development led by Chinese

entrepreneur Guochuan Lai bought an 88% stake in West Bromwich Albion taking to 60%

the number of EPL clubs with a majority overseas ownership. This expansion of foreign

ownership has tied in with the British government’s acceptance, if not encouragement, of

inward investment in the economy generally, and has been aided by British clubs, unlike

many continental ones being either public or private companies rather than associations.

The success of the EPL has been due not to indigenous factors but international ones

including the dependence on a transnational influence in the form of media group News

International and its Sky subsidiary. Yet the inflow of foreign funds and human capital has

had some negative consequences. Clubs in the lower levels of English football no longer

receive the volume of transfer fees that they used to. Additionally the escalation in

broadcasting fees for the EPL has widened the income gap between the EPL clubs and those

in the Football League.47 There has been a refusal by the EPL clubs to accept any

responsibility for the performance of the England team: they reneged on their initial

promise to reduce the League to 18 clubs and they have reduced the opportunities for

young English players to play at the top level. The national game has moved beyond national

control, at least economically.

Possible Lessons for Asian Soccer

Although FIFA President, Sepp Blatter, famously proclaimed in 2012 that ‘The future of

football is Asia’, the region has not had a legacy of well-supported professional football, as

did the EPL, to act as a base for development.48 Nevertheless the sport has had a

bourgeoning recent popularity in what is now a major international growth region with

sufficient consumer spending power to expand the game even further at the elite level, a

14
move begun in the late twentieth century with the formation of professional leagues in

China, Japan and South Korea [hereafter the C-, J- and K- Leagues]. Whilst recognising the

heterogeneity of football organisation, economic scenarios and the politics of football across

Asia, has the experience of the EPL any lessons to offer to the development of elite Asian

soccer?

Asian soccer will have to decide if it wants open or closed leagues. The EPL experience of

maintaining a promotion and relegation system as a means of quality control has, in some

instances, led to extreme short-term decision making with money spent extravagantly – and

not always successfully – to avoid relegation to a lower league. Closed leagues, as initially

instigated in Japan and China, offered teams protection from relegation and theoretically

enabled more directed investment into the production and development of domestic

players. Once the J-League was successfully established, promotion and relegation between

its two divisions was instituted but no club faced relegation out of the overall league

structure.49 All the leagues have expanded over time but via a version of the American

franchise system which generally restricted cities to a single club, though the C-league has at

times reduced the number of teams because of economic difficulties.

Asia will also have to decide what type of ownership is preferred. The Asian economies are

producing sufficient rich individuals for benefactor ownership to be an option. This has paid

off for several EPL clubs in terms of successful on-field performance. However, this is

dependent on the current owner being able and willing to continue to fund the club. If no

one is monitoring their actions there are dangers in such concentrated ownership as

Portsmouth found out in 2010 when unpaid debts led them to becoming the first – and so

far only – EPL club to enter administration.50 The major Asian leagues may have an

15
advantage over the EPL by resorting to corporations rather than individuals. This was a

continuation, albeit on a grander scale, than the running of amateur teams owned by

companies, regional government agencies or the military.51 Yet the objective of the

corporations seems not to aim to make the football clubs directly profitable but to gain

publicity and kudos from their association with the sponsored club. Ultimately, like the EPL

benefactors, the corporations subsidise local elite football.

Foreign players, foreign managers, foreign owners and international broadcasters have

made the EPL a high quality sports entertainment product. If sufficient start-up funds are

available, the same could happen in an Asian football league. The question is whether the

league would become an export enclave with earnings and profits mainly remitted abroad

and not spent in the local economy. Moreover, as in the case of the EPL, there is scant

evidence that a high quality league under dominant foreign influence aids the development

of the national team. The interests and loyalty of foreign owners, players and managers is

unlikely to be to the domestic football association, the domestic national team, or even the

local football community around their clubs. Currently all three leagues have placed

restrictions on the number of foreign players that each club can register. Initially ageing

stars and later South American mercenaries dominated overseas recruitment but now,

particularly in the C-League world-class players are being brought in at wages above EPL

levels.52 The negative impact of corruption in Asian football in terms of spectator interest

was highlighted at this conference by James Kitching, Head of Sports Legal Services

Department and Governance for the Asian Football Confederation and underscored by

several other papers.53 In contrast allegations of corruption in the EPL are few and far

between which may partially account for the rise in crowd figures. This reputation for on-

field integrity has also contributed to the popularity of the EPL telecasts in Asia where

16
gambling on football is widespread. In turn this expanding audience helps the EPL gain

further broadcasting revenue. Football and gambling can work well together; having a bet

can add to the excitement of the match and the unpredictability of the sport can create a

lively betting market. Football should not exist for the sake of gamblers, but it has to be

recognised that gambling on football is a significant activity. Anti-corruption policies will

help sell the product to those attending matches and to those watching on television

including those who bet on outcomes. The reverse side of the coin is that unless corruption

is controlled Asian leagues will never attract substantial broadcasting revenues. Given that

the vast distances between stadiums militates against travelling fans, and thus reduces gate-

money, such revenues could be important.

Will there be salary caps? In the late 1990s wage bills in the J-League were half the total

aggregate expenses of clubs leading to the imposition of a salary cap which led directly to a

reduction in overseas players.54 Although it might be felt in some quarters that EPL players

are overpaid, Asian soccer promoters and authorities must be careful not to allow the

pendulum to swing too far the other way. Robbie Gaspar, an Australian footballer who

played in Indonesia for a decade, noted after he finished playing in 2012 that 80% of the

clubs were late in paying their players and he documented case studies of three players

whose consequent inability to cover medical costs led to premature death. 55

One major difference between the EPL and the major Asian leagues is the involvement of

national governments. Apart from requiring adherence to national laws, none of which are

football specific, the British government leaves the EPL alone, but in Asia football has been

used for the purposes of nationalism and national prestige. More interestingly in Japan the

government, working with the J-League, developed the idea of corporate community clubs

17
simultaneously acting a prime movers in local and regional development whilst creating a

group of committed football supporters for the local team.56 This seems like an Asian

combination of the European membership club and American local government stadium

provision. Is there a lesson for the EPL here?

Acknowledgements: I am grateful to Stephen Morrow for comments on an earlier draft.

18
1
Wyn Grant, ‘England: A Liberal Model Under Challenge’, in Arne Niemann, Borja García and Wyn
Grant (eds.), The Transformation of European Football (Manchester: Manchester University Press,
2011), 89.
2
The name changed to the English Premier League in 2007.
3
Stefan Szymanski, Football Economics and Policy (Basingstoke: Palgravemacmillan, 2010), xiv.
4
David Conn, ‘Greg Dyke Seems to Forget His Role in the Premier League’s Formation’, Guardian, 4
September 2013.
5
Babatunde Buraimo, Rob Simons and Stefan Szymanski, ‘English Football’, Journal of Sports
Economics 7, no. 1 (2006), 32.
6
Carlos Pestana Barros and Stephanie Leach, ‘Performance Evaluation of the English Premier Football
League with Data Envelopment Analysis’, Applied Economics 38 (2006), 1450. For more on the dead
hand of tradition in English football see Alan Clarke and Lawrie Madden, ‘The Limitations of Economic
Analysis: The Case of Professional Football’, Leisure Studies 7 (1988), 59-74.
7
Potentially competition within an urban area could reduce a club’s attendance (and revenue). A
study of the EPL from its foundation to 2006 argues that such intra-city competition for spectators
partially offset the advantage of larger market size in terms of people living within ten miles of the
ground. Babatunde Buraimo and Rob Simmons, ‘Market Size and Attendance in English Premier
League Football’, Lancaster University Management School Working Paper 2006/003.
8
This section draws on Robert Wilson, Daniel Plumley and Girish Ramchandani, ‘The Relationship
between Ownership Structure and Club Performance in the English Premier League’, Sport, Business
and Management 3, no. 1 (2013), 19-36 and Buraimo, Simons and Szymanski, ‘English Football’, 30-
32.
9
Stephen Dobson and John Goddard, ‘Ownership and Finance of Professional Soccer in England and
Europe’, in Rodney Fort and John Fizel (eds.), International Sports Economics Comparisons
(Westport, Connecticut: Praeger, 2004), 191.
10
Ibid., 197.
11
The two exceptions are Wolfsburg and Bayer Leverkeusen, both of which were originally works
teams. Guardian, 13 November 2009.
12
Dobson and Goddard, ‘Ownership and Finance’, 192; Monopolies and Mergers Commission, British
Sky Broadcasting PLC and Manchester United PLC: A Report on the Proposed Merger (London:
Stationary Office, 1999).
13
Thomas Peeters and Stefan Szymanski, ‘Financial Fair Play in European Football’, Economic Policy
(2014), 205-207. For more on the Financial Fair Play regulations see Stephen Morrow, ‘Football,
Economics and Finance’ in John Hughson et al. (eds.), Routledge Handbook of Football Studies
(Abingdon: Routledge, 2017), 167-168.
14
Thomas Hoehn and Stefan Szymanski, ‘The Americanization of European Football’, Economic Policy
(1999), 205. For more on the relationship between clubs and UEFA see Borja García, ‘Football and
Governance’ in Hughson et al., Routledge Handbook, 104.
15
Walter C. Neale, “The Peculiar Economics of Professional Sports: A Contribution to the Theory of the
Firm in Sporting Competition and in Market Competition,” Quarterly Journal of Economics 78, no.1
(1964), 1-2.
16
Grant, ‘Liberal Model’, 83.
17
Barros and Leach, ‘Performance Evaluation’, 1451.
18
Guardian, 1 September 2016.
19
Anna Semens, Football Sponsorship’ in Hughson et al., Routledge Handbook, 120.
20
Wladimir Andreff, ‘Team Sports and Finance’, in Wladimir Andreff and Stefan Szymanski (eds.),
Handbook on the Economics of Sport, (Cheltenham: Edward Elgar, 2006), 692.
21
Szymanski, Football Economics, xiv-xv.
22
Until 1983 20% of notional gate receipts from every Football League match were paid to the visiting
club and a further 4% was pooled to be shared equally between all league clubs. Neither of these
policies were adopted by the EPL.
23
Simon Rottenberg, ‘The Baseball Players’ Labour Market’, Journal of Political Economy 64 (1956),
242-258. For a discussion of the literature see Brad R. Humphreys and Nicholas M. Watanabe,
‘Competitive Balance’, in Leo H. Kahane and Stephen Shmanske (eds.), The Oxford Handbook of
Sports Economics vol.1 (Oxford: Oxford University Press, 2012), 18-37.
24
Salary caps would be impractical as they would handicap English teams in a European-wide
competitions where other clubs did not have such a restriction.
25
Young Hoon Lee and Rodney Fort ‘Competitive Balance: Time Series Lessons From the English
Premier League’, Scottish Journal of Political Economy 59, no. 3 (2012), 266-282.
26
Szymanski, Football Economics, xix.
27
David Forrest, Robert Simmons and Babatunde Buraimo, ‘Outcome Uncertainty and the Couch
Potato Audience’, Scottish Journal of Political Economy 52, no. 4 (2005), 659.
28
David Forrest, Rob Simmons and Stefan Szymanski, ‘Broadcasting, Attendance and the Inefficiency
of Cartels’, Review of Industrial Organisation 24 (2004), 244, 264.
29
Ibid., 245.
30
Forrest, Simmons and Buraimo, ‘Outcome Uncertainty’, 642.
31
Fiona Carmichael, Ian McHale and Dennis Thomas, ‘Maintaining Market Position: Team
Performance, Revenue and Wage Expenditure in the English Premier League’, Bulletin of Economic
Research 63, no. 4 (2011), 464-497.
32
Guardian, 1 September 2016.
33
Grant, ‘Liberal Model’, 81.
34
Szymanski, Football Economics, xii.
35
Observer, 10 June 2010.
36
Deloitte, Football-Money-League, 18th edition January 2015.
37
Robert Wilson, Daniel Plumley and Girish Ramchandani, ‘The Relationship between Ownership
Structure and Club Performance in the English Premier League’ Sport, Business and Management: An
International Journal 3, no. 1 (2013), 20, 33.
38
Stephen Hall, Stefan Szymanski and Andrew S. Zimbalist, ‘Testing Causality between Team
Performance and Payroll: The Cases of Major League Baseball and English Soccer’, Journal of Sport
Economics 3 (2002), 149-168; Rob Simmons and David Forrest, ’Buying Success: Team Performance
and Wage Bills in US and European Sports Leagues’ in Fort and Fizel, International Sports Economics
Comparisons, 123-140.
39
Buraimo and Simmons, ‘Market Size and Attendance’, 9.
40
Carmichael, McHale and Thomas, ‘Maintaining Market Position’, 464.
41
Szymanski, Football Economics, xiv.
42
Laura Williams, ‘Premier League falls behind German Bundesliga as Europe’s most Profitable
Football League’, Daily Mail, 8 June 2010.
43
Chris Gratton, ‘The Peculiar Economics of English Professional Football’, Soccer and Society 1, no.1
(2000), 24.
44
Stephen Morrow, ‘Structure and Change in Professional Football: An Old Firm’s Search for a New
Market’, Soccer and Society 14 no, 4 (2013), 462-484.
45
Grant, ‘Liberal Model, 85.
46
Ibid., 93.
47
Chris Gratton, ‘The Peculiar Economics of English Professional Football’, Soccer and Society 1, no. 1.
24.
48
Ben Weinberg, ‘”The Future is Asia”? The Role of the Asian Football Confederation in the
Governance and Development of Football in Asia’, International Journal of the History of Sport 29,
no.4 (2012), 535-7; John Horne and Wolfram Manzenreiter, ‘Football, Komyuniti and the Japanese
Ideological Soccer Apparatus’, Soccer & Society 9, no. 3 (2008), 359-60.
49
Harald Dolles and Sten Söderman, ‘Implementing a Professional Football League in Japan:
Challenges to Research in International Business’, Deutsches Institut Für Japanstudien Working Paper
2005/6, 17-18.
50
Morrow, ‘Football, Economics and Finance’, 164, 169.
51
Wolfram Manzenreiter and John Horne, ‘Playing the Post-Fordist Game in/to the Far East: The
Footballisation of China, Japan and South Korea’, Soccer & Society 8, no.4 (2007), 568.
52
Manzenreiter and Horne, ‘Playing the Post-Fordist Game’, 566.
53
James Kitching, ‘Match manipulation in Asian Football: The Approach of the Asian Football
Confederation’, paper presented at the 2016 International Conference on Sports History and Culture:
Soccer and Society in Modern Asia’ Shanghai University of Sport. See also papers by Liu Hui, Zhang
Huijie, Lin Zheng and Wang Bo, and Feng Jing and Ma Yingzhi.
54
Wolfram Manzenreiter, ‘Japanese Football and World Sports: Raising the Global Game in a Local
Setting’, Japan Forum, 16, no.2 (2004), 304.
55
Robbie Gaspar, ‘Fighting for Players Rights’, Reading Sideway, 4 April 2016. I am grateful to Dr. Andy
Fuller for this reference.
56
Manzenreiter, ‘Japanese Football’, 293-5, 305-7; Dolles and Söderman, ‘Implementing a Professional
Football League’, 14-16; Horne and Manzenreiter, ‘Football’, 361-3; Manzenreiter and Horne, ‘Playing
the Post-Fordist Game’, 572.