The Premier League premium: How mediocre players benefit from being in England

No wonder the ticket prices are so high.
No wonder the ticket prices are so high.
Image: Reuters/Carl Recine
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A report from Sporting Intelligence reveals that NBA basketball players and elite European soccer stars make the most money in the world of sports. And in soccer, the English Premier League is the most lucrative league for players.

First-team players in England earn $3,935,197 on average a year (p.18)—a third higher than La Liga in Spain and almost double that of Serie A in Italy.  That is despite the Spanish league having the highest-paid squads in all of sports, not just soccer, in Barcelona and Real Madrid. (Manchester United has the highest wage bill in England, the report said.)

In the Sporting Intelligence report, a soccer-advisory consultancy named 21st Club notes that clubs elsewhere take advantage of England having the most lucrative TV-rights packages around—with even Amazon involved—and billionaire owners who will pay double or triple what players might be worth in other countries.

“One Scandinavian team we met last year were looking to sell one of their brightest young stars to raise some income,” wrote 21st Club’s head of football intelligence, Omar Chaudhuri. “Our objective valuation of the player—based on similar players in the market—assessed him to be worth €6-8 million.” But Chaudhuri said the Scandinavian team’s sporting director turned to him and said that, “But if we sold him to an English club, we could maybe get double that.”

Chaudhuri suggested the director had actually underestimated this premium.  He said that in Serie A, it costs about £4.5 million to buy a player on average and, in La Liga, that’s about £4.7 million. But in the Premier League, the cost is about £10.7 million. “While generalizing to make a point,” Chaudhuri says, “it’s plain that the Premier League clubs are paying almost 2.3 times as much for players as La Liga clubs [when] the player quality is as good if not better.”

We’re talking here about the transfer fee, which is the cost to clubs to purchase a player outright. And this Premier League premium also feeds into the wages themselves, creating the huge payrolls.

Chaudhuri uses the example of West Ham United, an English club, and Girona, a Spanish team. “West Ham United are rated at a similar level to Girona in La Liga,” he says. “If the two were to play at a neutral venue, it’s likely that it would be a tight match,” even though West Ham’s average first-team pay is approaching £3.2 million, and Girona’s just £700,000.

“The English team is effectively paying over four times as much for the same level of performance,” he notes.