The Social Institution of Football: 2 – TV and Wage Inflation

It has been estimated that there were 4740 professional players turning out for 158 English clubs by the outbreak of World War 1 in 1914. By this time crowd in excess of 100,000 were regularly attending FA Cup Finals at the Crystal Palace. The minimum price of admission for a League match was sixpence (2.5p), rising to an average of one shilling (5p) between the Wars. Attendances in the 1930 and’40s set records yet to be surpassed. In the peak year of 1948-9, 41.2 million people attended League football.

Moves to restrict players’ wages came early in the professional era. A maximum wage of £4 a week (still double the wage of a skilled worker) and a ban on match bonuses were introduced in the 1901-2 season. The players’ response was the formation of the Association Football Players Union in 1907; but fighting back was a hard struggle and football was to remain a working-class sport for restricted wages for many years. Through most of the interwar years the maximum wage was £8 per week, rising at a snail’s pace to £20 a week during the playing season and £17 off-season in 1961. It was in 1960-1 that the newly elected chair of the (re-named in 1958) Professional Footballers Association, Jimmy Hill, masterminded a successful strike ballot to abolish the maximum wage (a deal was struck without the need to strike). It was the George Eastham case in 1963, however, that broke management control over the crucial retain and transfer system. By the close of the 1960s, the era of celebrities like George Best and members of the victorious English World Cup team of 1966, First Division players’ wages had risen to between £3,500 and £5,000 per annum. FA rules still forbade players to have agents, but by 1978 no leading player was without a financial entourage of agent, accountant and bank manager. Kevin Keegan’s career in the 1980s epitomized that of the modern footballer-business-man.

Despite this significant enhancement of players’ wages, however, the 1970s and ‘80s saw something of a decline in football’s fortunes. A number of pressures coalesced: demographic and social changes, the problem of hooliganism, and the failure of clubs to maintain their physical infrastructures being among them (Dobson & Goddard, 2001: 123). It was the tragedies of Heysel, Bradford and Hillsborough that precipitated reform. Football’s ‘rehabilitation’ in the 1990s, however, was to coincide with a sharp rise in financial and competitive inequality between clubs. In part, the shifting balance of football revenues reflects technological changes in broadcasting and its dual status as spectator sport and television spectacle. If footballers had in its pioneering days been football slaves, they were, in Harding’s phrase, to become socceratti.

Morrow charts these changes with some precision. Although the English Premier League continues to have competitive balance, judged in terms of points differential, it is now a small cluster of elite clubs that provides the actual winner. What price Southampton being crowned champions by the time we go to press? Morrow notes that only eight clubs out of a possible 25 had managed top-five places in the Premiership in the five seasons prior to 2003. The tacit acknowledgement here that there is now an elite of clubs is perhaps best broached via the ‘Bosman ruling’ of 1995. Dobson and Goddard summarize:

‘the requirement for the payment of compensation to the former club of an out-of-contract player who was signing for a new club was found to be incompatible with provisions in Article 48 of the Treaty of Rome for the freedom of movement of labour. The existing ‘three-foreigner’ rule, which had the effect of limiting the number of individuals outside the jurisdiction of each national football federation allowed onto the field of play at any one time, also contravened Article 48, by restricting opportunity for EU nationals to play for clubs located in other EU countries’.

This ruling fundamentally changed the players’ labour market. The removal of restrictions on players from European Union (EU) countries, extended to non-EU players of international standing, precipitated an influx of foreign players, particularly into the Premier League. The net transfer expenditure outflow of the English League clubs as a whole was underway prior to 1995, with the notable move of Eric Cantona from Nimes in 1991, first to Leeds United and subsequently to Manchester United, proving the catalyst; but the post-Bosman increase was spectacular. (In the wake of England’s under-par performances in international competitions through the turn of the century, this was to lead eventually, in 2010, to new rules governing overseas players: clubs were compelled to include eight ‘homegrown’ (although not necessarily English) players in a senior squad of no more than 25.)

Another effect of the Bosman judgement was to alter the balance of power among League clubs, with the richest clubs gaining unfettered access to the best professional labour. Chelsea, or ‘Chelski’, afforded the paradigmatic case. When Russian oil czar Roman Abromovich spent £111 million – out of total assets of over £8 billion – to purchase ten star recruits in 62 days, he not only broke records but transformed the club’s prospects. Equally revealingly, in the summer of 2003 the Real Madrid first team was valued at £230 million, with David Beckham (of whom more later) registering as only its fifth most expensive acquisition at £25 million (compared with Zinedine Zidane’s £46 million). The Bosman ruling also, alongside factors like players’ agents and, crucially, television revenues, accelerated wage inflation. By the late 1990s the best players were on incomes in excess of £1 million. The average income of a player in the Premier League, not the optimum European League by any means for those football migrants Maguire and colleagues term ‘mercenaries’, exceeded £500,000 by the millennium.

By 2000 it was being argued that the symbiotic relationship between television and football had become a major threat to professional football. While football had become to television’s business model, the monies from television rights had become a vital income stream for football clubs. Moreover, as Morrow explains, by the early 1990s a fundamental reversal in the economics of broadcasting had occurred. While previously programme content had to compete for scarce transmission outlets (i.e. television channels), now a large number of channels were competing for scarcer content. This new scenario accounts for the fact that the combined worth of contracts covering Europe’s major leagues in 2001-2 was an astonishing £1795 billion.

Europe’s top clubs responded swiftly to these new developments. In England they led to the formation of the FA Premiership in 1992; and in Europe they led to the metamorphosis of the European Cup into the UEFA Champion’s League in 1992-3. Even in countries where television rights are negotiated collectively, there was a rapid polarization in television income between top and bottom clubs. And because this income tended to be seen by clubs as a windfall gain (unlike merchandising for example, it did not incur costs), it was often made immediately available for player recruitment or pay. ‘Current systems’, Morrow wrote, ‘are designed for continual strengthening of the strongest teams and clubs; competition is in danger of being replaced by structural self-perpetuation’. Premiership clubs have to keep spending to survive. It has been likened to a military arms race between nations!

While the gap between the top and bottom clubs in the Premiership increased, that between the top and all lower leagues became a chasm. Most clubs promoted to the Premiership then (and since) returned whence they came at the end of the season. Only the proprietorship of a committed multimillionaire, it seems, offered continuity. Even the introduction of ’parachute payments’ to relegated clubs to soften the financial blow failed as a palliative. Solvency became, and has remained, a significant threat to many clubs. Nor did the television audience figures hold up. The ‘Match of the Day’ (highlights) figures dropped off as did those for Sky Sports (live); and Pay-TV, or pay-per-view, failed to take off as expected.

References:

Dobson,S & Goddard,J (2001) The Economics of Football. Cambridge; Cambridge University Press.

Maguire,J, Jarvie,G, Mansfield,L & Bradley,J (2002) Sport Worlds: A Sociological Perspective. Champaign, Illinois; Human Kinetics.

Morrow,S (2003) The People’s Game? Football, Finance and Society. Basingstoke; Palgrave-Macmillan.

 

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