No turning back for the money men
Trevor Haylett looks at whether football has ever had it so good
Thursday 12 January 1995
Pursued by sponsors, courted by television executives, targeted by children with a new club strip at the top of their shopping list, and supported by you, me and the man next door through the turnstiles, the game has never had it so good.
Growing attendances have pointed the way to a brighter tomorrow for several seasons, but the major catalyst for change was the creation two summers ago of the Premier League, which has turned football on to the kind of wealth it could only dream about before.
Trevor Phillips, the commercial director of the Football Association, said that even though the teams and the faces are basically the same, it is seen outside as a different product.
"If you wrap something up in a new coating, it's amazing what a difference it can make. The improvements which have been carried out to stadiums have been very beneficial from a commercial point of view.
"Then there are the millionaire businessmen that have come into football and, because of the way the premier league is set up, have more of a control over their money than before."
The Premier League's television contract with BSkyB has been enormously beneficial. Last season, it put £2.6m into the Manchester United bank; £743,500 was their starting share, £1.01m was a facility fee for appearing both live on Sky and on BBC's Match Of The Day, and £856,000 was their merit payment for finishing as champions. Even Swindon, who ended up bottom of the table and relegated, earned £1.025m.
With massive television exposure, other sponsors have been queueing up to obtain a share of the action. Carling, the League's central sponsor, signed a deal worth £3m a year over four years. Lucozade paid £1m to be the competition's official drinks supplier, while Citizen paid £300,000 for being the official timekeeper.
That is the easy money, gained merely for being among the elite of the national game, but the clubs have not been idle either, and are now reaping the rewards for their efforts in becoming more marketable. Phillips can recall a time not so long ago when football merchandising meant putting your club's logo on a cheap mug or a scarf to earn a few bob. "Now it is as sophisticated as anything you will find in America."
At Old Trafford, merchandising accounted for a staggering £14m income in 1994, compared with only £2m four years ago. Gerry Boon, of the accountants Touche Ross, says: "Manchester United has always been a very powerful brand name, and now they have people there able to convert that into good profits which are then ploughed back into the club. This enables them to do the kind of things in the transfer market we saw on Tuesday."
United's turnover for last season totalled £43.8m - an increase of 74 per cent -and that was before the opening of their new club superstore. The figure does not include transfer fees, and is made up of revenues through the gate, television and sponsor money, programme sales, catering and the like.
United's profit on the year was £10.8m, so Cole does not look such a vast outlay after all. Arsenal's turnover was up 40 per cent to £21.4m, Newcastle's 50 per cent to £18m and Tottenham's was £17.7m.
The additional prosperity has enabled premiership clubs to compete with their rivals in Europe for the best players. Klinsmann, Popescu and Schwarz all came away from a World Cup summer with England as their destination. The threat of having to match thefabulous offers available abroad is not the problem it was.
Although the gulf is no longer so vast, Italy remains in a different league. Roberto Baggio's contract will see him earn £1.2m in wages alone this season. The television deal negotiated by Serie A brings in £60m a year. For five appearances in the live Sunday evening fixture, Milan, Internazionale and Juventus each pocketed an extra £1.2m.
With huge money comes extra responsibility, and Phillips is not alone in voicing the fear that the gap in financial terms between the Premier League and the First Division has now become so wide that promoted clubs find it impossible to invest sufficiently in the transfer market to ensure they can stay longer than the one season.
Mike Lee, a spokesman for the Premier League, says that there is a drive to continue to plough funds into the game and to update facilities, even though most of the work to comply with the Taylor Report has finished.
The League also points out that while it is their clubs growing fat because there is more cream to go around, the benefits are spread far and wide.
"Whoever Newcastle buy as Cole's replacement, the chances are that eventually a player will make the jump from the Endsleigh League, and thereby bring a tidy sum to his selling club," Lee said. "And those who are relegated from the Premier League will continue to take their share of the Sky television deal for two more years."
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