A worthy investment? Middle East spending more on football
Player transfer spending by Premier League clubs in the summer 2013 transfer window was a record, according to analysis by Deloitte. Gross spending totaled GBP 630m, 29 per cent up on the equivalent 2012 figure of GBP 490m and GBP 130m more than the previous record of GBP 500m set in 2008.
Dan Jones, partner in the Sports Business Group at Deloitte, said, “The story of this summer transfer window is of new records: a new record for Premier League spending as well as a new world transfer record fee. Premier League clubs’ gross spending this summer is GBP 630m, beating the previous record of GBP 500m set in 2008. Whilst the sale of Gareth Bale brought GBP 85m into the Premier League, net spending is also a record, at GBP 400m. As the financial rewards for participation and success in the Premier League increase, so it follows that clubs are investing on the pitch to ensure they continue to benefit from the remarkable Premier League growth story.”
Alex Thorpe, consultant in the Sports Business Group, said, "As we have seen in previous transfer windows, some of the highest net spenders this summer have been clubs with Middle East based ownership. Both the financial backing of the ownership, as well as the impressive revenue growth achieved in recent years, have allowed clubs such as Manchester City and Paris Saint-Germain to again compete at the very top of the market to attract leading talent.
“This is the first year that Premier League clubs will benefit financially from the league’s new broadcast deals; each club benefitting from a share of the extra GBP 600m of revenues in 2013/14 alone. Testament to the impact this is having is in the scale of Premier League gross spending, as well as the gulf in net spending between the Premier League and other European leagues. Whereas many clubs around Europe have been reliant on selling players in order to spend, the financial advantages Premier League clubs enjoy has enabled net spending of GBP 400m across the league. Many clubs, including new entrants to the league, have successfully competed in the European transfer market to attract high profile foreign talent.”
Dan Jones said, “While Premier League clubs are in a stronger position to afford increased transfer and player costs than ever before, the key challenge remains cost control. With regulations at both a league and continental level encouraging clubs to balance their costs with revenue, we hope that while these revenue increases allow the league to attract top players, they will also result in a more profitable picture across the league in the years to come.”
Some of the key findings from the analysis by Deloitte include:
Premier League clubs have committed to around GBP 630m in respect of player transfer fees in the summer 2013 transfer window, well above the GBP 490m spent in summer 2012 and breaking the previous record of GBP 500m set in summer 2008.
Premier League clubs concluded player acquisitions totaling around GBP 140m on deadline day. The equivalent deadline day figure in the summer 2012 was around GBP 110m.
The four Premier League clubs competing in this season’s Champions League - Arsenal, Chelsea, Manchester City and Manchester United - had a combined gross transfer spend of GBP 230m this summer transfer window, representing 37 per cent of the aggregate gross transfer spend by Premier League clubs.
Gross transfer fees to overseas clubs were around GBP 490m, over 60 per cent up on the level seen in summer 2012. This represented 78 per cent of aggregate gross transfer spend by Premier League clubs, as compared with 61 per cent in summer 2012.
Across all of the ‘big five’ top divisions of Europe, gross spending by clubs is up compared with last year. After the Premier League, the next highest spenders were La Liga and Serie A, each with a gross spend of GBP 335m, followed by Ligue 1 with GBP 315m and the Bundesliga with GBP 230m.
Premier League clubs’ net transfer spend, being the net amount that flows to overseas clubs (GBP 370m) and Football League clubs (GBP 30m), was also a new record of GBP 400m, beating the previous record level of GBP 250m set in summer 2012.
Net transfer spending across Europe is a more mixed picture, with La Liga (GBP 95m) and Serie A (GBP 10m) generating surpluses from player trading this summer, while Ligue 1 (GBP 130m) and the Bundesliga (GBP 50m) both spent more than they received.
In aggregate Football League clubs benefited from net transfer inflow of around GBP 30m from Premier League clubs in summer 2013.
Since the introduction of the transfer window system, gross player transfer spending has exceeded GBP 5.3bn, with 80 per cent of this being spent in summer transfer windows.