You Ain't Seen Nothin' Yet

Many have called this the most exciting finish to a Premier League season with many twists and turns and ‘oh my god’ moments.  There’s little doubt it has been exciting, maybe not with the ending I would’ve preferred though.  But for Liverpool fans we can at least console ourselves with comments from neutrals such as “Liverpool made the title race” with a brand of football which was exciting, invigorating and utterly consuming.

When Brendan Rodgers was appointed as manager last summer he was given a three year contract.  For me, personally, I expected it would take him that long to get the team challenging for Champions League qualification.  We’re a year ahead of that target so there is much to be positive about for next season.  But in my view, the race for Champions League places, and ultimately the title, will be even more competitive than this year.

Clubs Improving

Liverpool has plenty to build on, but they also need to make improvements to the squad.  Not only does the defence need strengthening but the squad has to be bolstered to deal with the rigours of Champions League football and pushing for the title again.  They certainly won’t be the only club building and strengthening.

Manchester City will no doubt buy some more players, and although Pellegrini seems less reactionary than previous incumbents, there must be some disquiet about the wealth spent on a squad which had to wait till the second half of the 38^th game to secure the title.  They were almost beaten by a team with a fraction of the transfer kitty they drool over at The Etihad.  City will want to retain the League title, something only Liverpool, Manchester United and Chelsea have managed since Wolves did it in the 1950’s.

Chelsea are already rumoured to be signing Diego Costa who should give them the much needed firepower up front.  Third place represents one of the worst seasons for Jose Mourinho in his managerial career, ironic in a year when he questioned the abilities of other rivals.  There seemed a point when he looked to have sacrificed the Premier League for Champions League success, yet ended up with neither.  Chelsea won’t take this lying down.

Arsenal and Everton may only need to make minor adjustments.  I expect there will be the usual calls from some quarters at The Emirates for Wenger to be given the push, but their season may well have turned out differently had Aaron Ramsey been fit throughout.  Whether Wenger will be able to identify and secure the right players to improve the team, remains to be seen.  But in my opinion, Arsenal fans would do well to think about what Wenger has given them, not what he hasn’t.

For Everton they have had a tremendous season and, much like Liverpool, have plenty to build on.  There doesn’t seem to be any danger of them losing many of their players, although Martinez will need to think very carefully about Gareth Barry and Romelu Lukaku.  Both made outstanding contributions to Everton’s season, yet both are on loan deals.  On the other hand neither may want to return to their clubs where they’re probably not wanted.

Tottenham and Manchester United have similar concerns in that they are both looking for new management.  Both will want to sign high profile names, who will no doubt want to spend some cash.  If the press rumours are to be believed then Louis Van Gaal will be at Old Trafford and Ronald de Boer at White Hart Lane.  The problem for Spurs is they’ve sold the crown jewels and spent all the money.  The return they got for that spending was minimal.  They may well find a buyer for some of these players, but they could well start another season with a new set of players trying to settle in.

For Manchester United this coming season is critical.  Van Gaal has usually been successful wherever he has been and is likely to look to build something in what could well be his last big appointment in club management.  United desperately need someone to build something, but the question is, do they have the time?

Liverpool found out how costly dropping out of the top four is and how difficult it is to get back in.  We have had to accept less high profile players, yet there are only so many Coutinhos and Sturridges around where you can buy an undervalued player who turns into a gem.  In appointing Van Gaal, United are in danger of submitting to the traditional European style club management of a new boss every three years with a huge turnover of players.  They may feel this is what’s needed to remain amongst Europe’s elite, but will it sit well with their traditional fanbase.

For next season I believe we will have seven clubs vigorously chasing four places and it could go ‘right to the wire’.

There is one other major reason why next season could be critical.  Money

Money

For English clubs the TV deal for the following season is substantial, and unprecedented.  This could make such a difference for Europe too, that things may well never be the same.

From the 2015-16 season BT Sport have the rights to broadcast Champions League matches.  They paid an astonishing £897m to have the rights for three years.  For the Champions League qualifiers from next season this could mean a pot of £100m to share out between them, simply for finishing in the top four.   This TV pool is expected to be shared with 40% for the winners and tapering down 30%, 20% and 10% and then there are also caveats for how far a club progresses in the Champions League to determine how much they make from Champions League participation.  The previous deal involving Sky & ITV was just £400m.  Based on that deal, Manchester United earned £30m when reaching the last 16 in 2013.  Arsenal made £26m and Manchester City, £24m.  Put that into context, Bayern Munich only made £31m and they won the whole competition. 

Just like Manchester City has changed the landscape of English football, BT’s entrance into the party has also ramped things up.  Their TV deal for Premier League matches has meant participation in the England’s top division has a vastly superior reward than playing in the Championship.  This would explain the seemingly panic button management of many owners.  Queen’s Park Rangers, currently trying to get back into the Premier League via the Championship play-offs are reportedly £170m in debt.  According to Steve Parrish, Crystal Palace Chairman, the TV deal for Premier League football is worth approximately £60m whereas in the Championship this falls to less than half that figure.  How on earth can QPR continue when their debts are likely to increase and their income reduce?  I’m afraid things look unlikely to get any better for those who cannot keep up with the elite, widening the gap between the ‘haves and the have-nots” even further.

This knee-jerk reaction to impending financial pressures may generally only hit clubs who drop out of the Premier League, but it may not be long before we see bigger clubs in trouble.  Manchester United, for example, has to pay around £70m simply to finance the interest payments on their debts.  Their very successful business model has been built on intelligent and pioneering commercial and sponsorship deals.  However, without Champions League football how many of those corporate partners will be tempted to look elsewhere?  What if PSG comes calling and offers these companies sponsorship at a lower price to United’s?

I will cover this in a further article about European and Champions League football, but if you consider the effect the new TV deal will have on English clubs, then there is no way Europe will not respond.  Already many European leagues this season have been won by a club retaining their title.  For some leagues this has meant a club retaining the title for three or more years.  As several European leagues do not operate the same spread of domestic TV revenue, as we do in the Premier League, there is a greater case of rich clubs getting richer and richer.  This results in the circumstances becoming almost impossible for them not to win their domestic league. 

It is conceivable from 2015-16, English clubs could earn more from Champions League football than even a club which wins the competition.  Europe is unlikely to be up with that for very long.  Clubs like PSG, Bayern Munich, Monaco, Barcelona and Real Madrid are going to be desperate to compete and throwing more money at the situation seems their only tactic.  For Barcelona this is a nightmare scenario given their transfer restrictions.  For other clubs they may become desperate to snap up the finest talent around simply to deny their rivals the opportunity of uncovering a gem.

In my view, the next Manchester United manager, whether Van Gaal or someone else, will be under more pressure than David Moyes ever was.  Independent analysts seem to agree United may well be able to cope with one season out of the Champions League, but two or more seasons could have a profound effect on the finances of the club.  Andy Green, the Manchester United finance blogger has illuded to this effect in his excellent blog.  If you consider what the club did with the record fee they received from Real Madrid for Cristiano Ronaldo then you get an idea of how precarious a position this could be.  None of the money was spent on the team, it all went on repaying debts.  Mind you, it would appear they got more value for money than Spurs did with their record transfer money.

For next season, missing out on Champions League qualification could mean as much as £30m disappearing from your income column.  From the season after this could amount to £50m.  For a club such as Everton, whose turnover for 2013 was £85m, this presents an amazing opportunity.  Naturally the concern for Everton fans, as it has been for many other clubs, is would this tempt Bill Kenwright to sell to wealthy foreign owners.  As we have all found out, all that glitters is not gold.

Competition For Places

As mentioned earlier, I expect fierce competition for places pushing for Champions League qualification and the Premier League title.  At the other end of the table, there should be a continued scramble to hang onto the drawbridge before it is pulled up.  We may see more owners making rash, knee-jerk reactions towards managers in a desperate attempt to recoup some of the money they have thrown at a dream of football riches.  But this is where football remains stubbornly unable to move over to the traditional behaviour of companies and businesses.  Many owners try to run their clubs like businesses but they are unlike any other business they will have ever owned.  For many businesses control their customers to some extent with product and pricing, knowing if they get it wrong people will vote with their feet.  But in football, the customers will be there longer than the owners, and are not so easy to get rid of, yet certainly more demanding.  The other anomaly for football club owners is the traditional pool of raising funds in the commercial sector, through banks etc, is just not available to football clubs and they have to invent ingenious ways of trying to balance the books.

The Premier League TV deal is currently about £3bn a year from Sky & BT.  The prize of survival is huge.  Hence the reason owners who are staring at losing that income stream, will make decisions such as employing three managers in one year.  When you consider the riches on offer for a top four place, maybe a trophy for getting there isn’t such a daft idea.

If you thought this season was good, you ain’t seen nothin’ yet.