Crumbs

[davieG]

The 22.4m reasons why lower leagues get a raw deal

The Premier League's offer to share the wealth of their £2.7bn payday is not as generous as it seems.

David Conn

August 8, 2007 12:15 AM Even in their most feverish dreams at the Premier League's 1992 launch, the club owners who had engineered the First Division's breakaway from sharing money with the Football League's three lower divisions never foresaw the opulent riches now pouring in now.

The £2.7bn over the next three seasons - unprecedented, and unexpectedly high - being paid for Premier League rights by Sky, Setanta, BBC and broadcasters in more than 200 countries, furnishes the context for the current frenzy: the takeovers of clubs by overseas buyers attracted by the TV billions; the fortunes banked by the English former chairmen for selling out; the £343m spent on players in the close season; the players' wage inflation said to be in double figures - and the "solidarity payments" which the Premier League clubs, for the first time, have decided to share with their 72 former brethren in the Football League.

When the package was announced a fortnight ago, the League's chairman, Lord Mawhinney, gave his thanks for "a generous gesture". Richard Scudamore, the Premier League's chief executive who had discussed the arrangement privately with Mawhinney for months before obtaining the clubs' agreement, described it as "a great deal for the Football League", done because the Premier League clubs "recognised the importance of the continued health of the professional game at all levels". The new sports minister, Gerry Sutcliffe, who just a few years ago was calling for a football regulator to ensure "a more equitable redistribution of the plentiful resources at the top of the game", welcomed the payments as representing just that.

Yet the arrangement, although it does provide genuinely new money, serves mainly to emphasise the magnitude of the Premier League's windfall. For all the talk of "solidarity", and despite the payments, this season will see the gap between the two leagues grow vastly wider than ever before.

The main payment from the Premier League, which restores after a 15-year absence some sharing between the top flight and the rest, will be £11.2m per season. That, divided among all the Football League's clubs, is the same as the Premier League's three relegated clubs will each receive as a "parachute payment". If one of those clubs is promoted straight back up, the £11.2m it would have had as a parachute payment for the following season will now also be shared among the Football League's other clubs. If two clubs bounce back, the Premier League will keep the other spare parachute payment. Only if all three clubs bounce back, which has never happened, will the Football League share two of the following season's spare parachute payments.

In addition the Premier League is paying £5.4m per season for Football League clubs' youth development - not much more than it was paying previously - and £4m for community programmes, which is new money, part of the Premiership's increased contribution to "good causes", following a commitment made to the government.

As Sunderland and Birmingham City bounced straight back up last season, one spare parachute payment is to be shared this season. Together with the £11.2m basic payment, that means £22.4m in addition to the money ring-fenced for community work and youth development. In the Football League, Championship clubs receive 80% of the TV money, 12% goes to League One clubs and 8% to League Two. Championship clubs have agreed a "ladder" of payments according to where they finished last season; the bottom 12 will receive £775,000 each of the new money, a figure which climbs to £1.3m for the top club.

That new money will supplement the Football League's TV deal, about £33m a year overall, split £1m apiece to Championship clubs, £375,000 to League One and £265,000 to League Two.

Scudamore, then, was right when he said the Premiership's new payments will almost double the average Championship club's TV income, increasing the top club's payment from £1m last season to £2.3m. But he did not emphasise quite how piffling those figures are compared to his clubs' new deal.

The Premier League's bottom club can expect £30m from TV this season, a 50% increase on last year's £20m. The average Premier League club will receive about £40m from TV, top clubs about £50m. Championship clubs' TV revenues, plus the new ladder payments, may amount to about £2m each, but the gap with even the Premier League's bottom club has grown from £19m to £28m.

Overall, the Premier League's £900m a season dwarfs the Football League's £33m. The £11.2m basic payment being handed out to the 72 clubs is only 1.2% of the Premier League's deal.

These are mere crumbs from the rich men's table compared to the arrangements before 1992, when the Football League always shared its TV money; 50% to the (old) First Division clubs, 25% to the Second, 25% to the Third and Fourth. For the Premier League now to be congratulated by the sports minister for sharing 1.2% with the whole Football League - 2.4% if you include sharing the spare parachute money - represents another tactical coup by Scudamore.

The Premiership clubs are said to have agreed because it would be a "good news story" - winning favourable coverage and government approval, when sharing nothing would have left them too vulnerable to condemnation. The package is understood to have been the most the big clubs were prepared to part with; they always argue they need all the money possible to compete in Europe with the Spanish and Italian clubs, who do their own individual TV deals. The big clubs dominate Premier League policy and Scudamore is felt to have done well to eke out anything at all.

"I am very pleased to have worked with Richard Scudamore towards this new arrangement," said Mawhinney, before cautioning: "The gap is still very big, and that does have implications for the whole football family."

The chief executive of one senior Championship club puts it more bluntly. "Mawhinney deserves credit for obtaining this money," he said, "but it doesn't scratch the surface. The relegated clubs with their parachute payments fuel wage inflation in our league, and their £11.2m each this season gives them great spending power. Players' wages are increasing, so if the rest of us want to compete we will have to spend money we haven't got. This is not meaningful redistribution."

Asked why he thought the Premier League clubs did it, he said: "They had to because their deal is so big. This money is nothing to them, so the PR gain is greater than the actual cost."

True enough, but there may be another reason, too. As some of the world's mega-wealthy individuals are discovering when making large, well-publicised charitable donations, if you have grown rich beyond your imagini ation it can feel good to give a little back.

[Kent Fox]

As I am (supposed to be) packing for my holidays, I couldn't be arsed to read all that.

Highlights, please!!