Gold rushes don’t just happen in dusty wild west towns, the story of the rise of the English Premier League is a modern-day gold rush story.
In just 25 years, the 20 clubs that make up the league discovered gold in slick marketing, better venues and billion-dollar TV deals increasing their value by 10,000 percent.
Manchester City's Kevin De Bruyne climbs high Photo: Photosport
League is now the most popular in the world in any sport.
Jonathan Clegg, an English reporter for the Wall Street Journal, is co-author of a book about the rags to riches rise of top flight English football, The Club: How the Premier League Became the Richest, Most Disruptive Business in Sport.
Thirty years ago, the league was literally invisible. In the 1985/1986 season no first division games were broadcast on TV and the results of games weren’t even announced on bulletins.
The game was moribund, grounds were dangerous and dilapidated. The Hillsborough disaster happened at this time and many other grounds were death traps. There was a culture of crowd violence and stadium toilets looked hellish and smelled worse.
But Clegg says three club owners were looking across the Atlantic at this time, inspired by the way American sport was run.
Arsenal owner David Dein, Irving Scholar at Tottenham Hotspur and Martin Edwards at Manchester United were all unabashed admirers of the American leagues and reckoned they could apply those lessons to the ailing English top flight league.
“Back then it was not much of a spectacle, the grounds were dangerous and unsafe, you had the Hillsborough disaster in which 96 Liverpool fans were killed that was just one of many stadium disasters.
“Infrastructure around the game was crumbling, attendances were falling year after year after year the game itself was not much to behold either, the long-ball style was the dominant way of playing back then.”
Dein’s wife was an American and he frequently caught games by the Miami Dolphins in the NFL – the stadium bathrooms were a revelation, Clegg says.
“Anyone who had the misfortune of visiting a stadium bathroom in English football in the 1980s - the smell probably still lingers in their nostrils.
“Half time back then was just 10 minutes long, the whole process of getting in and out of the bathroom was almost impossible to accomplish, whereas the experience he had in the US was completely different, the bathrooms were gleaming, modern facilities.”
Dein thought this encapsulated the way American teams treated their fans like paying customers whereas British teams took their fans for granted, Clegg says.
At the same time Rupert Murdoch’s Sky TV was struggling to attract subscribers and its CEO New Zealander Sam Chisholm saw the potential of English football to drive up its audience.
Jose Mourinho gestures during an English Premiere League match. Photo: AFP
The idea of a breakaway premier league was formed, and Sky persuaded, with large wads of cash, the new league to give it exclusive broadcast rights.
“Any money that came through was shared among the 92 clubs, so Manchester United earned the same amount as Macclesfield Town. Clubs might have seen 10,000 to 15,000 a season,” Clegg says.
That money rocketed to 300 million pounds over the first five years. Clubs were now awash with money.
“These were figures completely unimaginable to English football,” Clegg says.
Once the EPL became a money-making machine, overseas investors inevitably followed. Ironically some US investors were shocked at the naked capitalism of the EPL model – there was no draft where more lowly clubs had first access to top players and no revenue sharing model.
And then there was relegation – dropping out of the EPL costs clubs millions and millions of pounds.
“The one thing that foreign owners have consistently underestimated and fallen foul of during the past 25 years is how relegation just completely changes the calculus of running a business,” says Clegg.
He says the prospect of relegation can make cautious business people act rashly.
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They are singularly incapable of handling the concept of relegation which just turns things on its head and forces people to risky ill-judged and ill-advised things, because the result of not doing so would be relegation and the nightmare scenario of a 100 million hole in your finances.”
Clegg says there are clouds on the horizon for the EPL, the growth curve looks to be flattening out and the 20 club owners have been increasingly at loggerheads.
“The latest round of TV rights, which sold last year, was the first time there’s been no growth, there was actually a slight decrease.
“Among the 20 owners you have guys who have almost nothing in common seated around the table from each other as business partners but with totally different views on what business they’re in, what the purpose of that business is and how to achieve results.”
Clegg says cultural and business differences between the owners, which includes Arab royalty, Russian oligarchs, US hedge fund billionaires and former pornographers poses a significant threat to the EPL’s future.
“The tensions running between the owners are at a high point and there are some serious challenges for the league in the coming years.”
