Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Premier League clubs’ spending in this transfer window has been restrained at around £350m, after three years in which the clubs had spent £450-500m each summer. In general, an absence of new owners and clubs striving to improve their financial balance has diminished the vibrancy of the transfer market.”
Reflecting on the level of net spending, being the net amount that flows from Premier League clubs to non-English clubs and Football League clubs, Jones remarked: “Whilst the headline figure for player transfer spending is 22% down, the level of net spending by Premier League clubs of £190m is actually more than double that in summer 2009 and similar to the levels in each of 2008 and 2007. Last year’s net transfer spending of £80m was lower in particular due to Premier League clubs in receipt of £110m in transfer fees from Real Madrid alone.”
Some of the key findings from the analysis by Deloitte include:
• Premier League clubs have committed to around £350m in respect of player transfer fees in the summer 2010 transfer window; £100m/22% below the level in summer 2009.
• Manchester City’s transfer spending has been a key driver of the overall level of spending in summer 2010, with the club’s acquisitions of around £125m representing 36% of total spending as the club strives to build a playing squad to match the owner’s ambitions. Each of Chelsea, Manchester United and Liverpool has reportedly spent more than £25m on player acquisitions in the summer transfer window.
• Whilst new regulations have come into affect for home grown players, the values of player transfers between Premier League clubs and player transfers from Football League clubs are much reduced compared to each of 2007 to 2009. Premier League clubs have spent around £70m on players from other Premier League clubs. This intra-Premier League spending represents 20% of total transfer fees committed by Premier League clubs, which is a lower proportion than in previous transfer windows (summer 2009:48%). It will be interesting to see if this is an anomaly or reversal of a previous trend.
• Transfer fees to overseas clubs were around £260m, c.66% up on the level in summer 2009. This represents around three-quarters of total transfer fees committed by Premier League clubs (34% in summer 2009). This level of spending significantly exceeded transfer fees received from overseas clubs. Compared to the top leagues in other countries, the Premier League generates significantly more revenue and continues to redistribute significant financial value to overseas clubs through the player transfer market.
• Gross transfer spending by top division clubs in France, Germany, Italy and Spain is also down compared to 2009; down by around 25-40% in each country. The top division clubs in Italy and Spain have reportedly spent around £260m and £240m respectively in the summer 2010 transfer window.
• Premier League clubs’ net transfer fee spending increased to around £190m being the net amount that flows to overseas clubs (£175m) and Football League clubs (£12m). For the summer 2009 transfer window net spending was only £80m due, in part, to the reported transfer fees of around £110m received by English clubs from Real Madrid.
• Football League clubs have reportedly spent around £30m in summer 2010. Net of amounts received from Premier League and overseas clubs, the Football League clubs benefit from a net inflow of around £25m this summer; significantly down on recent years (summer 2009: £70m) and not a result that will help alleviate challenging financial circumstances amongst the Football League clubs.
Looking to the future, Paul Rawnsley, Director in the Sports Business Group at Deloitte, said: “Despite improved economic conditions and enhanced values from international media rights that kicked-in for the 2010/11 season, without further significant capital injections from owners, transfer spending is unlikely to exceed the high watermark achieved in 2008. In general, for the time being at least, we are seeing a new financial reality as clubs strive to improve their financial balance.”
For more information, please visit www.deloitte.co.uk