The BT vs SKY war makes the rich untouchable

 

With the Premier League clubs already enjoying the benefits of their new domestic and global TV deals, the cash from the recent £900m gamble from BT will start to flow in the accounts of England's leading clubs from 2015-6. Everybody is getting richer, but unfortunately the gap between the rich and the really rich will grow larger every year.
 
The fundamental effect of BT's new deal will be additional wealth for England's top 4, the one's which make it into the Champions League places. The effect will be that there will be 6 teams playing to get into the Champions League spots, whilst the 14 teams play for survival, as teams such as Everton and Newcastle will never get near the top again, as the difference in revenues will be too great.
 
The main worry is that the new deal will make the Premier League as a whole, less competitive and thus less attractive to viewers to watch. In the past it has been this competitiveness which has made the BPL such as compelling product, but this is likely to be reversed with this news.
 
However, evidence for this supposed superiority as a result of this deal is being rebuffed by certain people with the claim that many relatively less wealthy clubs such as SV Zulte Waregem, Real Sociedad and Grasshoppers have all qualified for the Champions League despite being in the bottom half of wage-payers in their league. Also, in recent years,  the likes of SC Braga, Borussia Dortmund and FC Basel have punched above their weight at elite European competition - further evidence that wealth is not everything in the 'beautiful game'.
 
The argument cannot be concluded however from the basis of past evidence, it must now be seen if this new implementation has any effect in the future of the power England's top clubs and whether it really does lead to a less competitive league, which for all neutrals of the game, we hope not.

Hollande stands firm on the 75% tax rate despite strike plans

As I previously revealed in my blog about Monaco and its illustrious tax haven, France are planning to impose a 75% tax rate on earning above 1 m euros (£850 000).

Mr Hollande met with the club presidents and informed them of his choice to go ahead with the plans amid talks that it could spark an exodus of players. They have joined the chorus of protests from business and wealthy individuals who have recently condemned the tax and have left the country.


"The need to rebalance public accounts fully justifies this effort asked of companies that have made the choice of paying annual salaries at such a level," Mr Hollande said.


In response, Jean-Pierre Louvel, the head of the UCPF club union, said after the meeting that clubs would refuse to take part in match fixtures from 29 November to 2 December in protest. 


If this occurs, then this will be the first football "strike" since 1972.

The proposed levy will last the rest of 2013 and 2014. 

The initial proposal to tax individual incomes was ruled unconstitutional by France's top court. But the government modified it to make companies liable for the 75% tax rate for salary paid above the 1m-euro mark.

However, it still requires approval by parliament.

The Qatari-owned Paris Saint-Germain, France's richest club, has more than 10 players whose pay exceeds 1 m euros, including the Swedish striker Zlatan Ibrahimovic and the Uruguayan striker Edinson Cavani

Last season the Ligue 1 clubs registered a combined loss of 108m euros and paid around 700m in social charges and image rights, which was more than they received from the television deals.

The new tax, they say, will hit them hard, sparking an exodus of top players, to the greater detriment of the French domestic leagues.

Although this levy will not affect Monaco, the rest of the French Leagues, in particular Ligue 1, will feel the full effect of this ruthless tax, and this may unfortunately result in players of the highest calibre, including Ibrahimovic, Cavani, Lucas, and many more leaving the league which is definitely not positive for French football as a whole.  

Transfer Aftermath: How can Real afford Bale and is the myth of the British Premium true?

So... Transfer deadline day is finally over, much to the relief of many football fans. Along with that, Bale's transfer saga, which was FINALLY concluded last Sunday, with the former Tottenham player making his 'dream move' to Real Madrid was a extortionate fee of £85 million!!! But how can Real Madrid, or any club for that matter, afford this humongous fee?

Over the past 13 years, Real Madrid and their President, Florentino Perez, have broken the world record transfer five times - Figo in 2000, Zidane in 2001, Kaka and then Ronaldo in 2009 and now of course Bale in 2013. Those five players cost a rather cool £303.6m!

But it is what Real Madrid can afford, not surprisingly, with the club earning £415 million in 2012 - hence making them the wealthiest club in the world (as stated in one of my earlier blogs). Perez argues anyway that the big marquee signings will pay off in replica shirt sales and sponsorship. 

But still, how can clubs all over the world afford and justify paying huge sums for players. Even Arsene Wenger, who is seen in world football as the stingiest of them all spent a massive £42 million on Mesut Ozil. 

Well once again, it's all down to pay TV. Starting from this season, clubs in the Premier League will  benefit from the new £5.5bn, three-year deal for domestic and overseas TV rights. Much of this - £3bn - comes from Sky and BT Sport. The competition between these two companies has helped inflate the football economy to unprecedented levels. The bigger clubs will get a larger share of the TV money, the reason why they can afford to buy these big name players.

Anyway...moving on...

Every time an Andy Carroll or Jordan Henderson, or Jack Rodwell get sold and Liverpool (over-)pay for British-born players, the idea of an English (or sometimes, British) premium is bandied about.


But... is it really true that you have to pay a premium for English players? The underlying idea here is that there is positive discrimination in the English player market, with selling clubs charging a little (or a lot) extra for English or British players.

A study was recently undertook to find out if the 'British Premium' exists in reality. To figure out if there is evidence of a premium, it conducted several regression analyses to see if a player's "Britishness" is a significant predictor of his market value once it takes into account a variety of factors that also might determine how much he goes for - things like age, his contract year, which club he plays for, position, etc. 

The results covered from the investigation are as follows:

Non-British: £7.45
British: £5.07

Non-English: £6.97
English: £4.99

To see how this plays out,  the models can be used with some fancy math to determine how the market values two identical players. Take two 25-year old midfield players who are - for the sake of argument - identical and average in every other way. The prediction for the British player would be that he is valued at £3.96 million; for the non-Brit, the model predicts £6.58 million. Or take the average 28-year old forward for example; the Brit would be valued at £4.74 million; the equivalent player from elsewhere £7.36.

So can the myth be dispelled? Well there exceptions to the rule, with players such as Andy Carroll costing £35 million, and other names, but in relation to foreign imports, it can be concluded that British players are significantly cheaper, much to the surprise of some. 

So maybe, clubs should start investing in local talent instead, grabbing themselves a bargain and on the bigger scale - helping out the national team, which is clearly lacking in top quality.

Programme, Pie and Pint...The Triple P Index

On a typically cold and windy British Saturday afternoon, football fans like you and I will be tucking into a toasty, crisp pie at our respective fixture to help warm our insides, but the question is - are we getting ripped off by our teams?

Well the obvious answer is YES. Pies on average at a Premier League fixture cost £3.06 - you wouldn't usually pay this much for a low-quality pie when popping down to your local Tesco's. 

But it isn't just Pies that we're looking at. A survey has gone out in the 2012/13 season to find the 'Triple P Index' at all 20 clubs in the League, comparing prices of Pie (of course!), a Pint and the match-day programme. 

Team	Programme	Pie	Pint	Total
Arsenal	£3.00	£3.30	£3.50	£9.80
Aston Villa	£3.00	£3.10	£3.50	£9.60
Chelsea	£3.00	£3.60	£3.50	£10.10
Everton	£3.00	£2.80	£3.50	£9.30
Fulham	£3.50	£3.90	£4.20	£11.60
Liverpool	£3.00	£3.20	£3.60	£9.80
Manchester City	£3.00	£3.50	£3.40	£9.90
Manchester United	£3.00	£3.10	£3.30	£9.40
Newcastle	£2.50	£2.80	£4.00	£9.30
Norwich	£3.50	£2.50	£3.50	£9.50
QPR	£3.00	£2.90	£3.80	£9.70
Reading	£3.00	£3.20	£3.90	£10.10
Southampton	£3.00	£3.20	£3.60	£9.80
Stoke	£3.50	£2.70	£3.70	£9.90
Sunderland	£3.00	£2.90	£3.60	£9.50
Swansea	£3.00	£3.00	£3.45	£9.45
Tottenham	£3.00	£3.70	£4.00	£10.70
West Brom	£3.00	£2.40	£3.10	£8.50
West Ham United	£3.50	£3.00	£4.00	£10.50
Wigan	£3.00	£2.30	£3.20	£8.50
Average	£3.07	£3.06	£3.62	£9.75

As can be clearly seen, on average of the 3 P's, the pint is the most expensive, with Fulham charging an extortionate £4.20 for 1 pint!!! Fulham also claim the gong for the most expensive Pie at £3.90. They then have to share the award for the most expensive match-day programme with Norwich, Stoke and Wesh Ham at £3.50. 

These results may be perceived as quite surprising as you wouldn't associate Fulham or any of the other clubs mentioned above as the most successful clubs, raising the question to why do Fulham charge the most out of all the Premier League clubs. 

A correlation that is evident to see is that, as you get closer to London, the deeper the pockets required, with Chelsea, Fulham, Tottenham and West Ham being 4 out of the 5 clubs with a 'Triple P Index' above a tenner. 

So seeing as London is the capital, it may be understandable why there are more extortionate prices there than elsewhere, but what is still is not explainable is that fact that Fulham can charge £4.20 for a pint!

And if you're wondering, like I know you are, Ipswich are at the top of the football 'pie league', with their pies being voted the most mouth-watering pies around. 

Tax in Football: Why are Monaco attractive to the best players?

Over the past few days, AS Monaco's tax avoiding activities have been the subject of much media attention given that the French League authorities want to move Monaco's headquarters into France to bring equality to all the clubs in the league. 

Currently Monaco levies no income tax upon individuals, meaning that all the money earned by footballers and the general public alike is received by the earners. This absence of income tax has attracted a large number of 'tax refugees' with the incentive of larger 'after tax' (not that tax applies) pay packets.  

The advantage to a football club such as Monaco in this instance, is that they can now attract the biggest and best players to their club as they have done so recently with the surprise acquisition of star players such as Radamel Falcao, James Rodriguez and Joao Moutinho, to name a few. 





The problem with this is that other French clubs, including Lille and Lyon are unable to compete financially with the tax advantages experienced by Monaco. To rub salt even further into the other French clubs faces, the owner of Monaco is Dmitry Rybolovlev, a Russian billionaire, who is #119 on the Forbes' list of richest billionaires in the world. 

The plan by the French football association is to order a hearing to take place to force Monaco to relocate their headquarters to France by June 2014 or face possible suspension from the league.

If Monaco were to relocate, then their players and staff would have to abide with the proposed 75% income tax rate which is to be set for individuals who earn more than 1m euros a year. This plan would allow other clubs to compete on a more level playing field with Monaco and would bring equality overall to the league. 

In comparison to the recently proposed tax rate in France of 75%, the tax rate in England for top earners is 50%, with Spain's top earners having to pay 56% income tax, both of which are staggeringly lower than the rate in France which would seem to make it more appealing to play in the Premier League or La Liga, which reflects the pattern in reality to where the top quality players are found in Europe. 

Transfers: the biggest and the best

1. Cristiano Ronaldo    - £80 m
2. Zinedine Zidane       - £64 m
3. Zlatan Ibrahimovic   - £59 m
4. Kaka                       - £56 m
5. Edinson Cavani        - £55 m
6. Luis Figo                  - £53 m
7. Radamel Falcao        - £51 m
8. Fernando Torres       - £50 m
9. Neymar                    - £48.6 m
10. Hernan Crespo         - £ 48 m

For football fans all around the world, the transfer window is the pinnacle of the season, where clubs they support are linked and often purchase players from other clubs. This 'transfer window' occurs twice a year in each country - in the UK it runs from 1st July - 31st August and then again in mid-season from 1st-31st January. 

Outrageous fees are paid for the players who are considered as the world's best; the top 10 highest transfer fees paid to date are:

This list however may change very soon due to 'player inflation' which is very similar to inflation. Willie Groves who in 1893 moved from West Bromwich Albion to Aston Villa, was the first player in history to be transferred for a sum of over £100. 

This has very much changed as you will well know nowadays, with the transfer fee having been broken on numerous occasions in past; and it may well be broken again very soon with the impending transfer of Tottenham's Gareth Bale who is being courted by the European giants Real Madrid, with the transfer looking ever more likely to occur. 

And don't just think it's the player's who are sought after and have big transfer fees paid for them. The managers also have had ludicrous sums paid for their services with Chelsea paying FC Porto a massive £13.3 Million to secure Andre Villa Boas as their new manager - however Chelsea sacked Villa Boas in March in that same season, making the amount paid for him seem even more ridiculous!

Most valuable football teams in the world

To start things of with, I thought we'd go for something simple. So I went with the most valuable football teams in the world. In recent years, the main gong of most valuable team has been contested fiercely between Manchester United and Real Madrid, which isn't too surprising considering their dominance in their respective leagues. In 2013, Real Madrid pipped Man Utd to the crown of most valuable team.

Rank	Team	Value ($M)	Revenue ($M)
1	Real Madrid	3,300	650
2	Manchester United	3,165	502
3	Barcelona	2,600	613
4	Arsenal	1,326	368
5	Bayern Munich	1,309	468
6	Milan	945	326
7	Chelsea	901	409
8	Juventus	694	248
9	Manchester City	689	362
10	Liverpool	651	296
11	Tottenham Hotspur	520	226
12	Schalke 04	498	221
13	Borussia Dortmund	436	240
14	Internazionale	401	236
15	Lyon	368	167
16	Corinthians	358	119
17	Napoli	330	188
18	Hamburg	300	154
19	Marseille	285	167
20	Newcastle United	263	146

Well why are Real Madrid the most valuable team in 2013?

The answer doesn't lie because of its recent successes but its ability to achieve success over a substantial amount of time. In the past century, Real Madrid have racked an impressive 32 La Liga titles as well as 9 UEFA Champions League trophies. These successes come with very rewarding prizes, with La Liga earning the club $4m. The Champions League is much more rewarding than La Liga as when a team reaches each stage in the tournament, it receives the following amount: 

• Playoffs: €2,100,000
• Base fee for group stage: €8,600,000
• Group match victory: €1,000,000
• Group match draw: €500,000
• Round of 16: €3,500,000
• Quarter-finals: €3,900,000
• Semi-finals: €4,900,000
• Losing finalist: €6,500,000
• Winning the Final: €10,500,000

Typically the winner of the competition will receive over €30,000,000 which is of course a lot of money in comparison to a team that goes out in the Playoffs or simply does not qualify in the first place. 

However, a large part of the distributed revenue from the UEFA Champions League is linked to the 'market pool', the distribution of which is determined by the value of the television market in each country. So as Real Madrid are a popular team for supporters, this means that more of their games are streamed live to the public which enables them to get a larger proportion of the television money from UEFA. 

Another reason for its placing in the table is down to the outrageous kit deal it has struck with Adidas which generates $42 million a year. The sponsorship deal isn't too bad either, with Emirates airline paying Madrid $39 Million a year for 5 years. 

And lastly, the main reason for its outstanding revenue figures is because of the tickets they sell each game. With a maximum capacity of 85,454, the match tickets will generate a massive revenue for the club which can only be matched notably by very few clubs in European football.