Brandeis and Premier League

Some friends have said that the Brandeis ratio and tax post was tough reading.  I read it again, yes, it is obfuscating.  Let's try something else, at least that closer to me.  The English Premier League. 

Since Blackburn Rovers won the league in 1994–95, only three clubs have won the  title – Manchester United, Arsenal and Chelsea.  Manchester City will probably join this group this season. Between 1992 - 2011, the top spending club, Chelsea, spend nett £504,965,000 (after selling players) and Blackburn, -£3,723,000.  Financial prowess played a huge part and the league is getting boring.  Kevin Keegan said in May 2008, "This league is in danger of becoming one of the most boring but great leagues in the world." Think he will say the same today with the Abu Dhabi-financed Manchester City juggernaut.  Power is concentrated in a few clubs and this makes the league a less interesting place.  Same applies to our society – the playground has suddenly gotten a lot smaller. The smaller participants are unhappy and many more are disinterested.  Think Occupy movement. 

The Brandeis solution to the Premier League boredom?  Let’s say that the median spending is £56,000,000. The top spending is Chelsea’s £504,965,000 or 9 times that of the median. Let’s supposed that the optimal level is not more than 5 times that of median which translates to £280,000,000.  Then Chelsea will be taxed a percentage of £504,965,000 - £280,000,000 = £224,965,000.  You are probably right on the mark if you spot the two problems with such a system.  1) what is the optimal level, and 2) how much tax is needed to make the clubs think twice about buying another Rooney, Aguerro or Torres (His impact is suspect of course but that is for another story).

I think that the difficulties with deriving answers to 1 and 2 should not discourage us from studying it further.  Even UEFA has recognized the problems with huge disparities and will implement the Financial Fair Play system from 2013. There are no silver bullets but for a start, we need corporations and top 1% earners to recognize that their playground is much more fun if it is more encompassing.  This is not to say that the EPL is suddenly less exciting and losing revenue – in fact, it is making more than ever.  And that the likes of West Ham and Fulham are occupying Old Trafford.   But to many diehard and fervent fans, it is less exciting and what’s the fun in seeing Manchester United hammer Fulham 5 – 0, only to be hammered themselves 6 -1 by their City rivals?