Why Bayern Munich and Dortmund are envious of Bournemouth

At 5:30pm UK time on Saturday, Bayern Munich will host Borussia Dortmund. While the top two Bundesliga sides are warming up, the Premier League’s 3pm kick-offs – which include Nottingham Forest against Wolves, Bournemouth against Fulham and Crystal Palace against Leicester City – will finish.

Ostensibly, the Bundesliga clash is far more attractive. And yet Bayern and Dortmund have reason to be envious of Bournemouth and company.

For winning their 10th successive Bundesliga last year, Bayern earned £79 million (€90 million) in broadcasting and central commercial payments from the league. In the Premier League, bottom-placed Norwich earned £100 million in broadcasting and central commercial payments. Coming bottom in the Premier League now pays better than winning the Bundesliga – or Serie A or Ligue 1. Even in La Liga, the sums that Real Madrid and Barcelona earned from the league were less than any of the Premier League big six.

Officially, there is no European Super League. Instead, the Premier League is rapidly taking on this role. Nine of the 10 biggest spenders in European football this year are from England. The Premier League now boasts 11 of the 20 wealthiest clubs in the world, Deloitte finds – a record for any one country. Their latest Football Money League report predicts that all 20 Premier League clubs could soon rank among the world’s 30 wealthiest clubs.

This financial gap, it is true, is not quite reflected in European competitions: only two Premier League sides have made the last eight of the Champions League. Yet, over the longer-term, Premier League performances in Europe are improving markedly: five English clubs have made the last four Champions League finals. Manchester City’s 7–0 evisceration of RB Leipzig – who are only eight points off the top of the Bundesliga – was a freakish result. Yet for European clubs it also, perhaps, gave a terrifying glimpse of how financial inequality could eventually manifest itself on the pitch.

Eventually, it’s “more or less inevitable,” that the Premier League will translate its financial dominance into sporting dominance, says Stefan Szymanski, the co-author of Soccernomics. Indeed, the financial gap between the Premier League and the rest is only becoming more acute. For the gap is increasingly driven not by audiences and revenue in a league’s domestic market, but by the eyeballs of the world.

This season the Premier League became the world’s first major sports league to earn more money from overseas broadcasting than domestic broadcasting. The Premier League now earns £1.85 billion a year from overseas rights; the next most lucrative European league, La Liga, generates £730 million. Serie A, Europe’s foremost league 30 years ago, generates just £180 million a year from its foreign broadcasting rights – one-tenth of the Premier League. The Bundesliga and Ligue 1 generate even less.

Just as Spotify and Netflix help leading musicians and dramas to be popular throughout the world, globalisation also means that the best sports leagues can now capture a greater share of the overall worldwide market than ever before. The Premier League’s six-year TV deal in the United States, with NBC, is worth £2 billion. For US fans weaned on the Premier League, which has combined sport and story-telling like no other football league, switching to the Bundesliga is no more appealing than swapping Succession for a mediocre soap. While the Premier League’s latest overseas rights have risen by 26 per cent, largely thanks to the US, the value of the latest overseas rights for the Bundesliga and Serie A actually fell compared with the previous cycle. As the Premier League becomes more attractive abroad, it might even be reducing demand to watch competitor leagues.

“The already-huge gap between the Premier League and the rest of the top-division leagues in Europe is likely to continue to grow,” says Jake Cohen, a sports lawyer at Mackrell Solicitor. He believes that, “The Premier League has only just scratched the surface of the US market.”

For all its global appeal, the Premier League could still be dragged back. A new independent regulator in English football could bring clubs new difficulties – perhaps by limiting what owners can inject into clubs. Uefa’s new Financial Sustainability Regulations might also lower Premier League spending, says Dan Plumley, a sports economist from Sheffield Hallam University.

'This is what I call financial doping'

Javier Tebas, the president of La Liga, is leading opposition to what he calls the Premier League’s “unsustainable model, based on massive debts and private equity investments”. In the five years to 2021, shareholders in the Premier League and Championship put in £2.8 billion to their clubs, compared with £365 million in La Liga. “This is what I call financial doping, which has led to player salaries spiralling out of control. It is dangerous and not financially sustainable.”

Such spending has indeed had calamitous effects on clubs such as Derby and Wigan, whose attempts to reach the Premier League have failed. Yet owner investment has also made the Premier League more competitive. While the Bundesliga and Ligue 1 have a 'big one', the Premier League, despite Man City’s spending, still speaks of a big six, which Newcastle United could soon make a big seven. The question of who should be allowed to own clubs is very real; Premier League clubs have too easily been bought for profoundly dubious ends. But, on the pitch, investment from owners has increased the Premier League’s quality, and therefore its global appeal.

The greatest risk to the Premier League’s standing, Szymanski believes, is that the Bundesliga revisit its ‘50+1’ ownership rule. This limits private ownership to a minority stake in a club – giving fans representation on boards, but also effectively helping to entrench the position of Bayern, the country’s wealthiest team. If the ownership rules were changed – something that there seems little appetite for - than Germany, with its bigger population and economy than England, could be best-poised to challenge the Premier League.

Football fans have grown accustomed to relative equality between major European leagues. Yet, in the global sports landscape, football has been unusual in its major leagues competing against each other for supremacy.

The three major US sports, baseball, basketball and American football, each has a league that leaves all others in its wake. So, now, does cricket, with the Indian Premier League. This is the direction in which football might be heading, with the remainder of the big five European leagues slipping ever-further behind the Premier League – just as the top leagues in the Netherlands and Portugal, whose leading clubs once competed regularly for European honours, did long ago.

In other sports, “the natural equilibrium is for one league at the top”, Szymanski explains. “Increasingly the other four major leagues are looking more and more like minor leagues relative to the Premier League.”

The Premier League has no need for a Super League. But, to the continental elite, a Super League might represent their best hope of quelling the Premier League.