Wednesday, 4 May 2016

Leicester City Defy Gravity and Soccernomics

This time last year I wrote

Another Premier League season is drawing to a close and the whole circus shuts down for the summer. Fans will be looking for their club to strengthen push on to the next level. For the most part it won't happen some clubs will rise some will fall but unless either one of the elite  has a complete meltdown or a club from the mid-table mix has a year of all years then the table at the end of May 2016 will look pretty similar to this years and the glass ceiling will remain intact.
Well here we are in 2016 and Leicester City have made  me look a little foolish and to a lesser extent so have Spurs. To recap my hypothesis was based on the central premise that the financial advantages enjoyed by the top 6 which are reflected in their wage bills pretty much cemented their place at the top of the English game. The financial hierarchy is demonstrated in the following table

Rank Current League Position 2014/2015 Wages (£m)
1 9 Chelsea 216
2 5 Man United 203
3 4 Man City  194
4 3 Arsenal 192.2
5 8 Liverpool  166.1
6 2 Spurs 100.8
7 20 Aston Villa 83.8
8 11 Everton 78
9 18 Sunderland 75.1
10 6 West Ham 73
11 7 Southampton 72
12 13 Swansea 71
13 14 West  Brom 69.8
14 16 Crystal Palace 68
15 10 Stoke City 67
16 17 Newcastle 65
17 1 Leicester 57
18 19 Norwich 48
19 15 Bournemouth  30.4
20 12 Watford 20.6

It should be noted that the newly promoted teams (Norwich,Bournemouth and Watford)  salary bills refers to the last year in the Championship typically these numbers will rise by 50 to 100 percent during first season in the Premier League although in this case Norwich's is already relatively high which in all probability reflects their recent Premier League history and as such might not grow quite as rapidly. 

Leicester City finished top with one of the lowest wage bills in the division which is truly remarkable and stands everything I previously wrote on it's head. In fairness I wasn't the only one and Leicester City were priced at 5000/1 by the bookies at the start of the season. To put that probability into context had the Premier League been run in it's current format since the Bronze Age Leicester City would be expected to have won it once.

While there was woeful under performances from some of the elite the plain fact is that clubs who on the face of it better equipped than Leicester to take advantage of the situation failed to do so. An opportunity was lost by half a dozen teams they didn't have terrible seasons but put alongside Leicester's rise there really is a sense of an opportunity spurned. In particular Arsenal performed in line with expectations but in a year where the recently dominant Manchester clubs and Chelsea hit the self destruct button, Arsenal should have been the next taxi off the rank but their engine stalled. 

Maybe Economic Determinism in football is dead

This year all of the major European leagues have been contested by the top 2 or 3 wealthiest clubs within the league and in many instances won by either the richest or the second richest. The Champions League semi finals were contested by 3 out of the top 6 richest clubs in Europe, so no Leicester City are the outlier the wonderful exception to the rule.

Is the Premier League Different? 

The nature of the Premier League TV deal makes the league a little different in a number of respects.

1. A relative even distribution of TV money 
There is a disparity between the wealthiest English clubs and the rest but it is far less pronounced than other European Leagues.

The wealth in European Leagues is far more heavily concentrated.

In Spain Barcelona and Real Madrid are 3 times richer than Athletico Madrid and at least 4 times wealthier than the fourth wealthiest and anything up to 20 times wealthier than the smallest. To put this into context this would like giving a League One team entry to the Premier League.

In Germany Bayern are fifty percent richer than Dortmund who in turn are 30% richer than Schalke and no other club even has 25% of Bayern's income

France PSG are 4 times richer than any other team in the division they are so wealthy that I think their revenue is greater than the poorest 10 Ligue 1 teams combined.. 

2. It is the biggest deal in Europe

To put the Premier League TV revenue into context according to Deloittes West Bromwich Albion are  the least wealthiest club in the Premier League that appears in their "Football Rich List" and they are richer than all but

  • 4 Italian Teams
  • 3 German Teams
  • 3 Spanish Teams
  • 1 Turkish Team
  • 1 French Team
So while WBA are relative paupers they are wealthier than most teams on the continent and therefore even they are able to attract better players than similar sized clubs in other leagues.

3. The big beasts aren't that big
Question: Why are Alexis Sánchez and  Mesut Özil Arsenal players?
Answer:  Because Barcelona and Real Madrid didn't want them.

For all their wealth the top Premier League clubs have 4 other beasts to compete with when it comes to the top talent and certainly when that talent is at it's peak they tend to lose out to the Spanish giants and in some cases to PSG and Bayern Munich who are often be the first choice for the elite players in Ligue 1 or Bundesliga. As such they cannot sign and retain the players that would truly elevate above the rank and file of the Premier League.


Leicester City are the glorious exception to the rule but it doesn't disprove the rule. It remains unlikely that a less wealthy club will disrupt the European football elite. If it was going to happen anywhere it would be in England because as we have seen the League is the most competitive in the world and there are factors which make the lesser lights in England a little bit tougher than their counter parts elsewhere in Europe

As for next season will the old order reestablish itself? Probably although Leicester City's place in the hierarchy is about to be transformed by a huge influx of money from the Champions League, regression to mean maybe but the mean has moved and it probably doesn't include relegation.

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