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Author Topic: How to cope with relegation from the English Premier League - Economist Article  (Read 5435 times)

Offline Tokyo Sexwhale

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Villa related article in The Economist:

http://www.economist.com/blogs/gametheory/2016/03/surviving-drop?force=scn/fb/te/bl/ed/howtocopewithrelegationfromtheelnglishpremierleague

Quote
IT IS beginning to look very lonely at the bottom of the Premier League for Aston Villa. Fans of the Midlands side—the fifth most successful English team of all time in terms of league titles—are now preparing for life in the Championship, the second tier of English football. After four uninterrupted months at the bottom of the Premier League, with 12 points lying between them and the safety of seventeenth place, bookmakers give Villa odds of 150-to-one of escaping relegation; Michael Caley, a blogger on football statistics, calculates that their probability of surviving is closer to one-in-50,000.

The question for Aston Villa’s owners is no longer if, or even when, they will be condemned to the drop, but how to pick themselves up afterwards. A spell in the Championship holds little appeal. According to Deloitte’s annual surveys of football wealth, second-tier clubs earned an average of  £20m ($28m) in the 2013-14 season, eight times less than their peers in the Premier League. The increase in Premier League television revenue alone that season (£569m) was greater than the earnings of the entire Championship put together (£491m).

So many second-tier clubs spend aggressively in the hope of a crack at the big time. For every £1m they earn, they spend £1.05m on player wages (a rate that falls to £0.58m in the top division). Subsequently, Championship teams made an alarming combined pre-tax loss of £247m in 2013-14, while the Premier League finished with £187m profits. Villa will begin next season amongst opponents who are risking everything for a shot at promotion.

If Villa’s current accounts are anything to go by, they will be no exception. An analysis by The Swiss Ramble, a football-finance blogger, shows that the club posted the biggest reported pre-tax loss (£28m) of any Premier League club last season, and had the second highest wages-to-turnover ratio. Since Randy Lerner acquired the team in 2006, fans have been irked by his willingness to sell players to bigger clubs. But the American has also overseen nine successive seasons of pre-tax losses, costing him a quarter of a billion pounds in total; he spent £53m on players in the summer. He may well be tempted to gamble further for a rapid promotion.

Historical analyses have leant support to the idea that the longer a club spends in exile, the harder it is to return. Jonathan Liew, a writer at the Telegraph, found that of the 85 teams relegated from the top tier over the past 28 seasons, only 20 were promoted back the following season. That proportion remained unchanged even after the introduction of “parachute payments” in 2004, which offer relegated Premier League teams £64m over three years to adjust to life outside the top tier.

If a less-than-one-in-four chance of bouncing back immediately seems slim, then in subsequent seasons the chances get even worse. Former Premier League clubs spending a second year in the Championship have just a 14% chance of promotion; by the time they begin a third campaign, they are actually slightly worse than the average team in the division, typically finishing in the bottom half. In fact, of the 37 teams demoted from the Premier League in its 24-year history, nine are now in the third division or lower.

All of which suggests that relegated teams should go for broke to regain their former status. Mr Liew advises teams to push for promotion “as quickly as humanly possible”. But reckless spending in the expectation of short-term success can have severe consequences.

The first is that many clubs who gamble successfully for a place in the top tier find themselves back where they started within a couple of years. Of the 65 promotions to the Premier League that occurred between 1993 and 2013, 39 (or 60%) were relegated again within three seasons. The “yo-yo club” phenomenon, in which teams move frequently up and down the divisions, has become familiar for some fans: Birmingham City, Bolton Wanderers, Middlesbrough, Norwich City, Nottingham Forest, Sunderland and West Bromwich Albion have each been relegated from the Premier League three times.

The second risk is insolvency. Eleven sides that have lost their Premier League status have subsequently entered administration, at which point they are legally required to sell players and other assets in order to pay off debts, and are deducted league points (often leading to further relegations). Leeds United’s hubristic descent from the semi finals of the Champions League to the third tier of English football is the most notorious example of how a “bounce-back” mentality can prove disastrous for a once-great club. (Profligate clubs who end up stuck in the lower divisions are now commonly said to have “done a Leeds”.)

In recent years, however, an alternative, sustainable model of gaining a place at the top table has emerged. It is typified by two small clubs, Stoke City and Swansea City. Each won promotion to the Premier League for the first time (the former in 2008, the latter in 2011) and have yet to lose their places. Since their arrival, five other clubs have arrived in the Premier League without suffering a subsequent relegation: Southampton, Crystal Palace, Leicester City, Bournemouth and Watford, all of whom will probably survive this year. Indeed, modest Leicester City, 5000-to-one outsiders on the opening day of this season, are currently favourites to win the title.

What lessons do these teams offer? Above all else, patience. All spent at least five seasons before promotion in the lower divisions; Bournemouth, Southampton, Stoke and Swansea each played third-tier football in that time. While Mr Liew’s data show that toiling in the Championship for three seasons reduces the chance of a return to the Premier League, one benefit might be that teams have more time to rebuild and develop a sensible transfer strategy. On average, these seven clubs ran transfer surpluses in the season that they gained promotion, spending £800,000 less on player purchases than they received in sales.

Far from gambling everything on a fast return, they were building for the future.  Another lesson is to focus on the academy of youth players. Of the 20 most expensive player purchases in Championship history, 14 were made in the last three seasons: to date, only one has helped his club gain promotion. By contrast, the Southampton side that returned to the Premier League in 2012 was filled with starlets developed by the club. (Indeed, the Saints academy has supplied more players to the England national side than any other over the past year.) A good youth system might also buy time: when fans see their club slowly building a team of homegrown players, they are more likely to wait for success.

As Aston Villa ponders its fate, it might take consolation from one further thing. Villa Park is the seventh largest club stadium in England. Over the past five years there has been a correlation coefficient of 0.78 between stadium capacity and finishing position within the four English divisions (with 0 indicating no relationship at all and 1 suggesting a perfect match). Selling more tickets means more money to spend on players. So far in this miserable season, Villa’s loyal fans have yet to abandon their club: around 35,000 turn up for every home game. With enough patience in the boardroom and in the stands, one of the worst  teams in Premier League history might be able to recover.

Offline bob

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Fifth?

Stopped reading.

Offline Ads

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Same here.

Offline Mister E

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Fifth?

Stopped reading.
why?

"one of the worst  teams in Premier League history" - ain't that right.
Depressing reading if slightly disingenuous: last summer's spend of £53m was somewhat mitigated by sales of Benteke and Delph. And some statements of the bleedin' obvious: like, the one about developing the youth academy.

Offline mr underhill

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what ever way you colour it, things are shit - at the moment. with the proper structures in place, normal, sensible everyday decision making the norm ( i.e. not having your European scout lounging on Bondi Beach all day) a semblance of dignity might return and with it, an upturn in our wonderful club's fortunes. UTV.

Offline levico

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Not sure I want to measure success by the probability of our return to the PL. the way I feel right now, and this may change, is that I am heartily sick of the PL. I'd rather be watching us us win games in a lower league than the ritual slaughter I'm watching every week.

Offline Tokyo Sexwhale

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Fifth?

Stopped reading.

I think that's correct, Chelsea have overtaken us on major trophy count.

Even by the articles definition of most League titles, we are fifth (behind Man U, Liverpool, Arsenal and Everton.

Offline Andy_Lochhead_in_the_air

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Fifth?

Stopped reading.

I think that's correct, Chelsea have overtaken us on major trophy count.

Even by the articles definition of most League titles, we are fifth (behind Man U, Liverpool, Arsenal and Everton.

It is correct. It's also a better introduction than say   "Aston Villa are one of just seven founder members never to have been relegated since football was invented in 1992". 

Offline Comrade Blitz

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What did people in England do on Saturday afternoons prior to 1992?

Offline Archbishop Herbert Cockthrottle

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What did people in England do on Saturday afternoons prior to 1992?
Watch the wrestling.

Offline dave.woodhall

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Quote
Eleven sides that have lost their Premier League status have subsequently entered administration, at which point they are legally required to sell players and other assets in order to pay off debts.

That's not true is it?

Offline cdbearsfan

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We're only below Everton if you count the Charity Shield as a major honour.

Online ChicagoLion

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Quote
Eleven sides that have lost their Premier League status have subsequently entered administration, at which point they are legally required to sell players and other assets in order to pay off debts.

That's not true is it?
No, they are required to pay off all Football related debts under the League and FA Rules to retain thier license.

Offline SoccerHQ

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Not sure I want to measure success by the probability of our return to the PL. the way I feel right now, and this may change, is that I am heartily sick of the PL. I'd rather be watching us us win games in a lower league than the ritual slaughter I'm watching every week.

Maybe so but ultimately this club has spent the vast majority of its existence keeping against the very best teams in this country on a weekly basis.

Who knows what the future holds, after all Leicester were a league one club as recently as 2009 and West Ham a championship club in 2012. Now both could be playing CL football next season when it's supposed to be next to impossible in the modern era.

Offline Andy_Lochhead_in_the_air

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What did people in England do on Saturday afternoons prior to 1992?
Watch the wrestling.

In addition to the likes of Kellett, McManus, Kendo Nagasaki you also had the ITV Seven and perhaps some Water Skiing or Stock Car Racing.

 


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