Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “This year we have seen another busy summer transfer window, with Premier League clubs spending around £490m, marginally up from last year and close to the record summer spend of 2008. While the highest levels of spending continue to be at those clubs competing at the upper end of the Premier League and in European competition, we have also seen significant investment by the newly promoted teams, looking to establish themselves in the Premier League.”
Alan Switzer, Director in the Sports Business Group added: “While the total spending this summer is still high, it should be considered in the context of increases of over 70% in the Premier League domestic broadcast deals announced earlier this year. Once overseas broadcast deals are factored in, the average Premier League club looks set to benefit from at least an additional £25m of revenue per year from next season.”
Dan Jones said: “While the new broadcast deals further demonstrate the commercial strength of the Premier League, the key challenge for Premier League clubs is how they manage their costs -notably transfer expenditure and players’ wages – so as to retain more of this increased revenue, address falling profits and, in the case of the top clubs, continue on the road to compliance with UEFA’s Financial Fair Play regulations.”
Some of the key findings from the analysis by Deloitte include:
1. Premier League clubs have committed to around £490m in respect of player transfer fees in the summer 2012 transfer window, slightly above the level seen in summer 2011.
2. Premier League clubs concluded deals totalling around £110m on deadline day. The equivalent deadline day figure in the summer 2011 was around £100m.
3. This summer, each of Chelsea, Tottenham Hotspur, Manchester City, Manchester United and Arsenal have exceeded £30m of gross transfer spending. In aggregate these five clubs have committed to around 55% of Premier League clubs’ transfer fees in the 2012 summer transfer window.
4. Transfer fees to overseas clubs were around £300m, almost 50% up on the level seen in 2011. This represented 61% of total transfer fees committed by Premier League clubs, as compared with 42% in 2011.
5. 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. Clubs in Germany, France and Holland have particularly benefitted this summer.
6. Gross transfer spending trends across the top divisions of Europe are mixed as compared with last year, with top division clubs gross spending in France (around £190m) and Germany (around £210m) up versus last summer. While spending in Italy (around £310m) and Spain (around £110m) are at lower levels than the last summer window.
7. Premier League clubs’ net transfer fee spending was a record level of £250m in 2012, being the net amount that flows to overseas clubs (£200m) and Football League clubs (£50m). (Previous years: 2011: £180m; 2010: £200m; 2009: £85m; 2008: £215m; 2007: £240m).
8. Football League clubs benefited from a total net transfer spending inflow of £50m from Premier League clubs in summer 2012.
9. Since the introduction of the transfer window system, gross player transfer spending has exceeded £4.6bn, with 80% of this being spent in summer transfer windows.
About the Sports Business Group at Deloitte
Over the last 20 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.