Chelsea’s dramatic Champions League elimination at the hands of Paris Saint-Germain on Wednesday night makes it likely that next week will bring down the curtain on the participation of Premier League clubs in this season’s flagship European club competition, before even the quarter-final stage. Survival in the other big continent-wide tournament, the Europa League, may last only a further 24 hours if Everton cannot get the better of Ukraine’s Dynamo Kiev over two legs.
But if performances on the pitch by top English clubs in Europe currently leave much to be desired, off-field developments could hardly augur better for their future competitiveness.
Clubs were just getting used to the benefits of a 2013-16 domestic broadcasting agreement that was worth 70% more than its predecessor, when league bosses last month unveiled a new £5 billion-plus domestic deal for 2016-19 that represents a further 70% increase and should keep clubs’ turnover forging strongly ahead for the balance of the decade.
FIFA’s clampdown on third party ownership – with a ban on new deals from May 1 and existing agreements allowed to remain in place until their contractual expiry – should, meanwhile, ensure that a practice which has helped strengthen playing squads in other European leagues ceases to do so.
Now, the appreciation of pound sterling against the euro is gathering momentum and further increasing the purchasing power of Premier League clubs in comparison to their main European rivals. The pound is up nearly 20 per cent against the European currency in the past year, with much of this movement coming in the past few months.
If the trend holds good into June and July, this will come as a real bonus: just as English tourists will be able to enjoy cheap bouillabaisse and retsina in Mediterranean sun-spots, so it would enable English clubs to stock up on stars from the Bundesliga and Serie A during the main summer transfer window without breaking the bank, while offering wages that most European clubs would find extremely difficult to match when converted to euros.
Already, the fall-out from UEFA’s Financial Fair Play (FFP) initiative and the pressure it has put on loss-making clubs to get their bottom-lines in order appears for now to have undermined players’ bargaining power sufficiently to prevent the extra TV income draining away into pay packets, as has happened in the past.
As I reported this week, this has resulted in a remarkable – and remarkably rapid – turnaround in the profitability of Premier League clubs, which are on course in 2013-14 to record an aggregate pre-tax profit (probably a substantial one) for the first time in over a decade.
Normally, with so many clubs now in the black and another big TV increase in the pipeline, you might expect players and their representatives to use the leverage they have built up over recent years to turn the tables back to their advantage and force another jump in wage levels, in line with the increase in broadcasting rights income.
The favourability of the exchange rate from the Premier League clubs’ perspective may now though keep the lid on this for longer than might otherwise have been possible. Quite simply, only a handful of foreign clubs – Chelsea’s conquerors Paris Saint-Germain, the two Spanish giants, perhaps Bayern – will be able to compete, making it harder for intermediaries to play suitors off against each other for all but the most exceptional talent.
Lower down football’s food chain, a strong pound should help leading Scottish clubs to improve their squads this summer with better quality imports from the euro-zone too.
It is now nearly three years since the last Champions League win by an English club: Chelsea’s penalty shoot-out victory in Bayern’s backyard, secured with Didier Drogba’s famous spot-kick. This concluded a run of eight English finalists in eight years, compared with three from Spain (all of which were crowned champions), three from Italy and two from Germany over the same period. The West London side also claimed the 2012-13 Europa League.
The cream of Europe may be running rings around the top English sides at the moment. But the financial ammunition at the disposal of Premier League clubs is becoming so substantial that a rapid end to this short era of inferiority seems almost inevitable.
David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics, the 2010 World Cup and London 2012. Owen’s Twitter feed can be accessed at www.twitter.com/dodo938.