The English Premier League and the New Global Oligarchy

The drama of Western decline is played out on an English football pitch

Go watch Chelsea play at Stamford Bridge, and you are more likely to find yourself sitting next to a banker entertaining his client than to a football hooligan. Long-time fans will tell you the life has gone out of the crowds — not simply because the English Premier League chased the hooligans out of its stadiums decades ago, but because the ticket prices have put matches beyond reach of the traditional working class fans who once filled the terraces. Not that London has that big a working class left anyhow. After the Second World War, it was still primarily an industrial city, and half its economic output came from manufacturing. Today, London is known principally as a banking centre and a plaything for the planet’s new aristocracy.

English football teams often began their history as youth clubs or civic associations for the betterment of the working class. Chelsea was always a business but, appropriately to its origins, one founded in a pub. In England, cricket and tennis were the sports of the well-heeled, and football was for everyone else. In the first FA Cup played after the war, famously, the band that led the players onto the pitch at Wembley were paid more than the players, most of whom had other jobs to top up their incomes.

Chelsea owner Roman Abramovich: Don't ask how he made his money

Chelsea owner Roman Abramovich: Don’t ask how he made his money

What a quaint time that now seems. Few of the top clubs are locally-owned, in England or elsewhere in Europe, and fewer still retain their charitable or non-profit status (Barcelona being among the most notable exceptions). The Premier League itself has gone from being an institution rooted in the English working class to being a global brand that attracts billionaire investors from around the world. Chelsea is now owned by a Russian oligarch, Manchester City by Arab oil money, Manchester United by an American sports franchise, and on it goes. Showering these clubs with money, selling boxes to rich corporate sponsors, then marketing their product across the world, these magnates have admittedly raised the game to a new level — but one which is increasingly out of reach to its traditional fans. Of course there’s less chanting and singing at Chelsea matches: everyone’s too busy cutting deals.

In my previous blog-post in this series, I wrote of how the gap between rich and poor countries was narrowing just as the gap between rich and poor people has been widening. The Premier League dramatizes this. The World Bank economist Brank Milanovic has argued that by bringing players from around the world onto one pitch, the top leagues have raised the quality of them all. The result is that the wide gap between the best and worst country-teams has narrowed at international tournaments, with the lopsided results or previous World Cups being a thing of the past (unless, of course, you’re playing Germany in a semi-final). To him, it is globalization done right. On the other hand, the gap between what the best football players now earn, and what the rest of them struggling back in their home-countries or the lower divisions take home, has grown into a chasm. The global oligarchy has created an aristocracy in football to match it.

Source: ETH Zurich
Source: ETH Zurich

Oxfam reports that half of the planet’s wealth now belongs to a few dozen oligarchs, a group so small they could fit into a London bus (although I can’t imagine them ever needing to ride one). Moreover, through such things as cross-ownership and inter-locking directorates, this oligarchy is tightening itself into something of a new global aristocracy. A 2011 network analysis by the Swiss Federal Institute of Technology uncovered a web of global corporate control in which a few hundred ultra-rich actors control the bulk of the planet’s publicly-listed firms. At the core of this web, just fifty companies, mostly financial firms, call the shots.

Not an oligarch

Not an oligarch

It’s not just the Premier League which is becoming a plaything for oligarchs. London itself is doing so. When I hear people complain about all the immigrants who are coming to London and taking over the country, I agree whole-heartedly: Russian, Chinese or Arab oligarchs are indeed driving property values so high that ordinary Britons are increasingly being priced out of the city. Moreover, anyone who wants to set up a small business has to deal with fixed costs so high that he or she will struggle to make it out of the first year. Prime Minister David Cameron talks of high-tech manufacturing reviving London, but it is unlikely any kind of manufacturing will return to the city in these circumstances. Meanwhile its mayor, Boris Johnson, jets around the world trying to attract more investors for luxury London properties, many of which end up lying empty since the owners are just looking to park their swelling riches somewhere. In a city where rough-sleeping is widespread, there are more empty homes than homeless people. Several councils in London are now encouraging people on social assistance to go live elsewhere in the country because they can’t afford the rents.

London Mayor Boris Johnson drumming up investment abroad

London Mayor Boris Johnson: Drumming up investment abroad

So we have a Premier League which grows ever more distant from its working-class origins, and a working class that is disappearing as jobs go abroad and the city is taken over by in-comers. Some, including Mayor Johnson, view the transformation taking place in London as proof that the West will remain the economic centre of the world. But this assumes that London is still a British city. In fact, its economy is increasingly oriented towards the global economy, and to servicing the needs of the new global aristocracy, whether entertaining them on its football pitches, banking their riches, serving their wives and mistresses who crowd into high-end stores like Harrods, or offering them legal services in its courts. London is ever less integrated with the rest of the British economy. So it’s hardly surprising that Boris Johnson wants the city to gain more autonomy, and more taxing power of its own. It is slowly developing into a free city on the model of medieval Europe.

Seeing politicians bow down before the might of global oligarchs is something we’re getting used to. This new class is using its leverage to hollow out and weaken the state. Almost everywhere, in the wake of financial crises caused by bad lending practices, banks have succeeded in getting themselves bailed out and then prodded governments to impose austerity on their citizens. Those which don’t are punished by bond-rating agencies and oligarchs who pull up stakes and move their assets elsewhere. During Greece’s recent negotiations over a bail-out deal with Europe, I heard whisperings in Athens that Russian money had told the Syriza government to ignore the democratic mandate it got to refuse the harsh German terms — themselves designed to protect German banks, which had been heavily-exposed to bad Greek debt before Germany took them onto its books (passing the bill on to ordinary Greeks). Instead, Prime Minister Alexis Tsipras was instructed to make peace with Berlin. Failing that, Russian oligarchs were going to take their money elsewhere.

The resources available to this new aristocracy are also making it possible for them to insinuate themselves into these weakened states, and gradually colonise them. Either they bankroll runs for public office, a practice that is becoming more common in the United States, or they use their economic influence to capture public officials: you can’t tell me Bill Clinton was unmindful of all the money banks would be giving his foundation or paying him for speaking engagements when, as President, he decided to go easy on bank regulation, a soft-touch approach to the financial sector which it is now widely accepted helped precipitate the 2007-2008 financial crisis, and our current mess.

Given my love of football, I might otherwise say the sheer quality of top-flight football justifies the price we pay in seeing the emergence of this oligarchy. But it is more worrying than just the fact that London, let alone decent seats at Stamford Bridge, are gradually moving beyond the reach of the people which built both. A powerful oligarchy hollowing out the state and creating a world that increasingly served them rather than everyone else was just what brought down the Roman Empire and ushered in a Dark Age. If the fruits of global convergence are being mostly captured by a tiny corporate elite who answer to nobody but one another, it would be as tragic an outcome as the Arab Spring revolts installing Egyptian generals.

Lest one get too fatalistic about the seemingly grim future of the West, it’s worth noting that those who find themselves increasingly marginalised by the emerging global political-economy are not passively accepting their fate. Within London itself, resistance has been building. These worst of times may yet be our best of times. That itself makes for a good story, one I’ll return to in another post in this series.


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