Rick Parry is not in the business of speculation because the business is not in the speculation.
"Let’s not waste time speculating, instead let’s do our research and remain aware of developments. The speculation is for others" the Premier League's first chief executive tells Balls. He was rightly too pragmatic to dawdle in fantasy: he would never have been close to getting it right.
25 years on from its foundation, the Premier League has become the richest league in the world, with all of its clubs among the 40 richest in the world. Revenues have skewed the world order: Sunderland have more money than Napoli; West Ham are richer than Inter Milan. The 2015/16 season yielded a total income of more than three billion pounds, and that is before the most recent TV deal is factored in, which is 60% larger than the one which has preceded it. It has become the global league of the global game and is watched in 200 countries worldwide, yielding TV revenues of about 60% of the domestic rights.
But as revenues have spiralled, so have the costs, both material and otherwise. Ticket prices have multiplied by about a thousand percent, live games have been sequestered away by satellite television, precious community heirlooms have been rebranded for commercial gain, players have become wealthy, cosseted and alienated, the England national team have only once progressed beyond the quarter-finals of a major tournament, and many clubs have been skelped for profit by international capitalists.
So how did we get here?
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The provenance of the Premier League is found in the Blueprint for the Future of English Football. It outlined plans for an 18-team Premier League with the ostensible aim of bettering the English national team, hence the proposal of a slimmed-down competition keeping weekends prior to England games free.
It was announced as an FA document, but in reality, it was partly the creation of the Big Five: Liverpool, Everton, Arsenal, Spurs, and Manchester United. In the mid-1980s, these cubs were waking up to their earning potential, as ITV's Greg Dyke proposed that they sell the TV rights to their games separate to the rest of the division. This was tantamount to a breakaway, and the clubs approached the FA to outline their plans. From here Parry got on board, and went on to become the Premier League's first Chief Executive and instrumental in its founding.
The Big Five were inspired to break away by Greg Dyke, but they recognised they couldn’t do it in isolation.
Graham Kelly, who did a great job on steering us through, said that 'We [the FA] were more receptive than ever before', and relations between the F.A. and the Football League were at an all-time low.
So he said 'Yes, we probably would support it, but get your act together and get a plan in place', and that’s when Graham brought me in. He said he couldn't be actively involved as it would be inappropriate, but if I went to him with plans or proposals he could give guidance.
The Blueprint was the result of these initial meetings. The Premier League existed a year later, but in the fundamentally different guise of a 22-team competition, naturally inimical to the initial mission statement of bettering the English national team. (Exactly how committed the FA were to the vision of the Blueprint as the key to the success of the national team is open for debate: they did not consult with Graham Taylor during the process, then the England manager).
So how could the FA have lost out so badly? They literally shrugged their shoulders.
At the very first meeting after the announcement of the Blueprint, the first question from the clubs was naturally if there was any room for manoeuvre on the number of sides in the competition. The FA's Chairman, Bert Millichip, shrugged and said, "It's your league, you decide".
Brian Glanville later sardonically termed Millichip "Bert the Inert", and this moment is epochal. Millichip then offered the clubs a boardroom next door, in which Parry and the clubs drew up the Founders' Agreement, a copy of which Parry keeps on his phone as it is "the stuff of legend".
As the FA stood idly by, the clubs created the rock upon which they built their bank. Parry cites two lasting ideas from this document which has guaranteed the League's success. These are still in force today: each club has one vote, and rules need a two-thirds majority to pass.
The other is the distribution of revenue from TV rights. 50% of the money is shared equally between the clubs, with 25% awarded on the basis of league position, and the remaining 25% divided on the grounds of how often a club has appeared on live television. It is the most equitable distribution of TV money across Europe's major leagues, and in Parry's words, "It’s not equal shares, that was never realistic, but at least people thought it was equal opportunities".
This merely continued a trend of the FA's torpor in reaction to change. In 1983, Tottenham told the FA of their plan to revolutionise English football, and didn't even receive a reply. The FA rulebook regulated in such a way that football clubs remain a part of their community, and thus made it next to impossible to make a profit from them, with clubs only permitted to pay 7.5% of profit as a dividend.
Spurs found a way around it. They created a holding company, which owned the club as a legal subsidiary, meaning they escaped the FA's restrictions. Spurs wrote to the FA to inform them of their intentions, to which they received no reply.
Everybody followed suit, and today the richest club in England is owned by a holding company called Manchester United plc., registered in the Cayman Islands.
Reflecting in 2004 with The Guardian's David Conn, Graham Kelly laments that the FA were "guilty of a tremendous, collective lack of vision".
Parry, however, rejects the claim that the FA ceded all control of the game to the clubs at the formation of the League. Instead, he portrays the Premier League as the elision of tradition with modernity, with the FA nodding in approval to each of the "sensible" changes the League proposed leading to a process of evolution, rather than revolution. "There was nothing secretive, it wasn’t a case of 'smoke filled rooms and we’ll go screw the FA’".
These included the breaking from the initial plan for the Premier League to be a sub-committee of the FA to become a separate limited company for the simple reason of having their own bank account, so as to make the negotiation of multi-million pound TV deals as straightforward as possible.
Not the big clubs, but some of the smaller clubs, were suspicious and not overly-impressed with the FA’s ability to run anything, just down to the fact that it was committee-driven, and they were the governing body and were not commercial or purposeful. Some of the smaller clubs liked the idea of a Premier League and a fresh start, but asked, ‘Why would we ask the FA to run it? Why would we not just run it ourselves?’
The initial plan was for us to be a sub-committee of the FA, with the FA taking care of the commercial dealings. Again it was some of the smaller clubs, who were not being in the least bit confrontational or political, but were being sensible, ‘wait a minute, if we are entering into multi-million pound TV contracts, and if we are a committee of the FA, then the money could disappear into their bank accounts, and we may never see it again.
This was sensible. There was nothing divisive, or deceitful in it. It was a case of ‘Yeah, that makes sense’. The FA went along with it.
The Premier League then set about inverting the Wilde aphorism that personalities, and not principles, drive the ages. The League's simple, stripped-down format worked efficiently, unencumbered by the committees and sub-committees a hundred years of tradition had wrought at the FA.
While Parry fiercely contests the notion that the FA ceded control from the outset, a chasm developed between the two bodies over time. Parry attributes this drift down to the fact that the Premier League busied themselves getting things done:
Because we had this good, simple governance model, we actually started getting things done: taking decisions, and beefing up the Premier League rulebook.
So if we decided we needed better discplinary procedures with independent judges, we just did it. If we wanted to have rules on players managers and agents, we just did it.
It was just so laborious getting anything changed through the FA. It was the same as it was a hundred years ago.
In Graham Kelly's latter-day lament, he reflected that "so many things have come back to haunt us, which could have been dealt with by establishing principles then: on the financial integrity of the game, on agents, good management of clubs, putting country before club".
There was no discussion of foreign ownership of the clubs at the formation of the League, and Parry does admit that the FA could have acted faster in relation to matters that weren't an issue in 1992:
The idea that clubs would be attractive to foreign owners was never envisaged. Again, is it logical that clubs would introduce rules that would restrict them from benefitting in the market place? Pretty unlikely.
So without passing the buck, if the FA had been more purposeful, and had been doing its job as the governing body, should they have been thinking about fit and proper persons tests, and financial fair play? For me, it’s more of a role for the governing body, and it is an area where the governing body have not exercised any foresight or control.
The FA had the power to enforce rules: they did it to aid the foundation of the Premier League. As the Big Five grew stronger, the Football League tried to curb a breakaway passed the three-year rule, which dictated that clubs wishing to quit the League had to serve out a notice period of three years. At the formation of the Premier League, the Football League took the clubs to court, and it was found that the three-year period was in contravention to a six-month rule in the FA's rulebook.
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Parry left the Premier League to experience it from the other side, and took a job at Liverpool, whom he had supported since he was a child. He succeeded Peter Robinson as Chief Executive in 1998. With money flooding the Premier League through TV revenue and the paradigm-shifting arrival of Roman Abramovich at Chelsea, Liverpool learned that they had to spend merely to stand still in this vast, largely unregulated competition.
Within a few years of his appointment, Parry realised that David Moores would sell Liverpool as he did not have the requisite funds to compete with Chelsea and Manchester United. Liverpool needed a new ground - or at least to expand Anfield - and could not afford to stop investing in the squad while building around it.
Moores spent years looking for the right owner - Robert Kraft, the owner of the New England Patriots, was interested for a while before walking away - with Dubai International Capital then arriving on the scene as the mot likely buyers. They dawdled however, and with Liverpool sitting on a £12 million bill for steel ordered for a new stadium, the club was eventually sold to George Gillet and Tom Hicks, the latter a late arrival on the scene to beef up Gillet's funds.
What followed was an absurd public wrangle for control of the club. In a turn of phrase unimaginable in an era before the Premier League, Tom Hicks compared Liverpool to Weetabix:
When I was in the leverage buy-out business we bought Weetabix and we leveraged it up to make our return. You could say that anyone who was eating Weetabix was paying for our purchase of Weetabix. It was just business. It is the same for Liverpool.
The club was loaded with the debts belonging to Hicks and Gillet, and when the economy crashed and credit crunched, the club started repaying their debts to RBS. By the end of the Hicks and Gillet reign, Liverpool were paying about £100,000 a day in interest repayments. It was utterly dysfunctional, with Hicks publicly calling for Parry to resign as CEO in an absurd fireside chat on Sky Sports News:
So, with Parry at the frontline of the wrecking of his boyhood club as a result of their need to stay competitive in the Premier League, did he ever regret his role in forming the competition which had led the club into such dysfunction?
Oh no I never regret the Premier League. No, never, ever. I tend not to look back. People have been asking over the last few days, ‘Do you look back with great pride on the formation of the Premier League?’ Well why would I do that? Maybe when I’ve got grandchildren sitting on my knee, but do I sit around saying ‘Oh I’m very proud of what we did in 1992’? Why would I waste my time when there are so many other things to think about.
But never, ever at Liverpool do I look back and say ‘If only we could go back 20 years when life was simpler’. What sharpened in the Premier League era was a feeling that the rate of change was increasing all the time. It was quite interesting that a few times when I was running the Premier League a few years in, a number of the more rational and reasonable club chairmen would occasionally say, ‘Listen, it’s great, and we don’t regret this for a moment, but wouldn’t it be nice for a moment if we could just...stop? That’s it, we’re actually now quite happy'.
The change increases all the time, and certainly at Liverpool, there was the awareness that you had to move forward, or you’d go backward. You couldn’t stand still. Because everyone was changing so rapidly. But looking back and regretting the whole Premier League thing never, ever occurred.
It could have been far different for Liverpool had the rules been different. Robert Kraft was the preferred choice of owner, given his track record with the Patriots, but among the reasons he walked away was the lack of cost control and salary cap. This, Parry says, is not the result of narrow-mindedness on the part of the Premier League or the FA, but the nature of the sport:
I think Robert would have been a great owner for Liverpool. The more you talk to the American owners, and the more you study American sports, there are fundamental differences. You don’t just have the hard [salary] cap, you also have revenue sharing. And you’ve got to have the two.
Obviously we share revenues from TV and sponsorship, but you don’t have revenue sharing the way you have it in American sports, where merchandise is pooled, and just about everything aside from ticket sales is shared. You can’t cherry pick. The other thing they don’t have is promotion and relegation, so they don’t have a change in membership.
So that’s fundamental to cost control. The other point is the most fundamental is that we’re competing in the European pool. There’s no point in having tight control over premier league wages, if suddenly you’ll lose all your players to Real Madrid and Barcelona.
So it’s incredibly complex. UEFA have taken steps with FFP and break even requirements, fortunately the ridiculus debt clubs were building up here in the 2000s is coming down and has been capped.
But that’s the beauty of football. In what other industry, when the revenues are going up 20% per annum, and TV money is pouring in, in what other industry do you have to go to people to say ‘Oh, we’re going to have a rule in which everyone has to make a profit’, and everyone objects to it?
I mean, how mad is that?
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Parry admits that the second pillar in the success of the Premier League has been Sky Sports. The broadcaster gazumped ITV in the bid for the first set of rights, and the two brands have been synonymous with each other since, in what has been widely hailed as the "greatest corporate romance of all time".
The fact that Sky were willing to create so much programming around the League and show every side at least once - ITV's bid featured only one supporting show, Saint & Greavsie, and showed just 18 live games under their previous agreement, with four sides going the entire deal without being shown live on TV - swung it for the clubs awarding the TV rights in 1992.
In spite of a quarter-century of astonishing success, however, the future is uncertain. Sky's viewing figures for live Premier League games fell by 14% last season, and the broadcaster have rebranded to offer sport-specific channels from this season onwards, in a nod to prevailing moods of preference for on-demand TV.
Given the fact that Sky paid most of the £5.14 billion that went to the most recent set of TV rights, and the challenges they now face to hang onto their subscriber base, have we seen the ceiling on the value of Premier League TV rights?
You’d be a very brave person to say it won’t go higher. Because it keeps on going higher. I think there is still global potential. The Premier League is unquestionably a global, rather than a domestic brand. It’s quite interesting to compare it with the American sports. These are massively successful, but are essentially generating income for only one market.
I don’t think we’ve necessarily seen the peak of the TV revenues. But even if they have [reached a peak], it’s not a bubble. It’s a balloon. So it’s not a bubble that will burst, it’s a balloon that will deflate gradually rather than instantly. Premier League wages are now double the other major leagues, so what if they are only 50% more?
The game actually regulates itself, in a sense. The game is big enough, and the teams are big enough. So they are all going to have eleven players, they are all going to have good players. It won’t be a catastrophe overnight. People said the day after the Bosman judgement that ‘this is is, the end of the game as we know it’. It wasn’t, because the game is so big and so powerful that it will find solutions, often despite the best efforts of people running it.
What will almost certainly change is the way in which supporters watch games. Again, Parry isn't willing to speculate, but he is certain that there will be change, and that the clubs are well-placed to capitalise upon it.
I think the clubs in the League will be well-placed to take advantage of the new technologies. Personally, I still think that TV is a good way of watching football. But new generations do things in different ways. The point is, live sport, particularly live football, is the great unscripted drama.
That’s why it works. So it has that power, whatever the technology. The fact that the Premier League has the right governance structure and is agile means it is perfectly well-placed to take advantage of whatever technologies we are consuming in the next ten years.
Parry says that any time he speaks abroad about the success of the League, chins hit the floor when he reveals that the Premier League makes billions - and Sky an operating profit of around one billion - off Sky's relatively modest subscriber base of 10.6 million. "Apple sell 10.6 million iPads every six weeks. How can Sky conceivably have done this with so few subscribers? So what potential, therefore, is there in 1.4 billion people?"
If that question is answered, everyone's speculations would be conservative.
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