FIFTEEN YEARS ago, if you had told English football fans in a pub that Manchester City, Liverpool and Tottenham Hotspur would one day be the dominant forces in the Premier League, they would have told you to make the pint in your hand the last one for the day.

In 2004 Spurs finished 14th in the table and Man City 16th. Liverpool, in their 14th consecutive year without a league title, ended up fourth. But they were still far behind the then ruling triumvirate: Arsenal, who had just recorded the competition’s first unbeaten season in more than a century; Chelsea, who had just been bought by Roman Abramovich, a Russian oligarch; and Manchester United, who had bagged 8 of the previous 11 titles. Between 1996 and 2011, these three clubs were the only ones to win the Premier League.

Today, however, fans of the Gunners, the Blues and the Red Devils must worry that they might not get their hands on the trophy again for many years. The new sultans of the Premier League are Manchester City, who on May 12th sealed their fourth title in eight seasons—to the delight of Abu Dhabi’s royal family, who purchased the club in 2008. If City have become arguably the best team in English football history, collecting a record 100 points from a possible 114 last season and 98 this time around, then Liverpool are a close second. Liverpool’s finishing total of 97 points this season would have won them the title in any Premier League campaign before 2018, but that is little consolation.

Liverpool can still look forward to the final of the Champions League, Europe’s most prestigious tournament, on June 1st. Their opponents will be Tottenham—who are some way behind them in the league, but have finished in the top four for a fourth consecutive season, a feat matched only by Manchester City. What has allowed the new trio to dominate English football?

Big money is a big part of the answer. Manchester City’s spending spree between 2008 and 2012 included £520m ($675m) of transfer fees, more even than Mr Abramovich splurged in his first four years at Chelsea. Liverpool were rescued from the brink of bankruptcy in 2010 by Fenway Sports Group (FSG), an American company which also owns the Boston Red Sox, a baseball team. Since purchasing the club for a mere £300m, FSG has spent heavily. Estimates from 21st Club, a football consultancy, suggest that Liverpool pay over £300m in players’ wages and transfer fees every year, roughly as much as Mr Abramovich does (see chart below).

But spending on players is only part of the answer. Football’s Financial Fair Play rules penalise clubs if they spend more than they earn. In fact, Manchester City spend only 8% more per year on players than do Manchester United, the richest club in the world, yet achieve vastly superior results. Spurs have managed to overtake Arsenal, their north London foes, even though they spend 20% less on their squad than the Gunners do.

The secret of the new trio’s success is not lavish spending, but wise investment. The leading trio have learned from the mistakes made by most other English clubs.

Teams in the Premier League are much richer than their counterparts in Europe’s “big five” leagues in Spain, Germany, Italy and France. According to Deloitte, a consultancy, nine of the 20 clubs with the largest annual revenues are English.

This wealth owes much to a combination of luck and shrewdness. The lucky part is that the league has always had at least three teams competing for the title, unlike the eternal duopoly of Barcelona and Real Madrid in Spain, and the near-monopoly of Bayern Munich in Germany, Juventus in Italy and Paris Saint-Germain in France. The shrewd bit is English clubs’ energetic marketing abroad, both in arranging pre-season tours and attracting foreign sponsors. Today, Asian fans are more likely to follow English clubs than those elsewhere. More Americans watch the Premier League than all other European leagues combined.

But English teams have squandered much of this wealth in the transfer market. When 21st Club plotted European teams’ spending on players against their results on the pitch (see the chart above), 16 of the 20 Premier League teams sat below the trendline. In the last ten years, an English side has won the Champions League only once.

This profligacy has two causes. The first is differential pricing, an economic phenomenon in which a seller charges different customers different rates for the same good. European clubs know that Premier League sides are flush with cash, so demand greater transfer fees, reckons 21st Club. English clubs have spent, on average, 80% more than their rivals for the same level of talent.

A second cause has been English clubs’ eagerness to poach ageing stars from elite teams, rather than nurturing talented youngsters. In 2017, when pondering the conundrum of why Europe’s richest league was so mediocre, this newspaper noted that “in recent years a number of English sides have spent club-record sums on older players who are at the peak of their fame but have ended up spending half their time on the bench.”

Data from 21st Club show that Manchester City, Liverpool and Tottenham have now bucked this trend. Since 2016, the players they have signed up have been younger and less likely to come from Europe’s best clubs than those bought by Manchester United, Chelsea and Arsenal (see chart below). Taking a gamble on a very good player in his early twenties makes it more likely that a team will enjoy his best years, in his late twenties, especially if he becomes an extraordinary footballer. And bargaining transfer fees with a smaller club makes it more likely that an English club will secure a good deal.

Manchester City adopted this strategy even though they broke their club record £55m when they bought Kevin de Bruyne, a midfielder, from Wolfsburg, a second-rate German team. Liverpool also broke their record when they purchased Mohamed Salah, an attacker, for £37m from Roma, a good (but not great) Italian side. Though both transfer fees were large, they were fairly priced: now in their peak years, Messrs de Bruyne and Salah have become their teams’ best players. Gallingly for Chelsea, both had played for the London club when they were younger, but were sold after making slow starts to their careers.

Tottenham have had to be even more economical, in order to finance their new stadium, which has cost £1bn to build. In fact, this year they became the first club in Premier League history not to sign a single new player during a season. That they could do so and still prosper was thanks to years of nurturing young talents from Europe’s lesser clubs, who have now matured into stars. They include Christian Eriksen (from Ajax), Son Heung-min (from Leverkusen) and Dele Alli (from lowly Milton Keynes).

Whereas Manchester City, Liverpool and Tottenham fans will struggle to name a bad signing in the last three years, Manchester United, Chelsea and Arsenal have several expensive flops in their squads that they will try to sell this summer. No player has been more emblematic of this than Alexis Sánchez, a 30-year-old striker. Last year Manchester United made him the league’s highest paid player, on an annual salary of around £25m, after prising him away from Arsenal. But the ageing Mr Sánchez had already started to struggle in his final performances for Arsenal. The Chilean’s time in Manchester has been a disaster, scoring just five goals in 45 games. Chelsea’s acquisition of Álvaro Morata, a striker from Real Madrid, for a club record £60m, was equally dire. He lasted just a season. Arsenal have purchased a number of defenders who have failed to live up to their billing.

The hiring competence of Manchester City, Liverpool and Tottenham has allowed them to punch above their weight financially, meaning that English teams are at last able to contest the crown of European football. Whatever happens on June 1st, an English team will win the Champions League for the first time in seven years.