The Premiership: Now Frugal.

The window closed today, officially, so it’s time to look back. A naked glance could tell you that spending in the Prem has been curbed, along with much of the rest of the world not named Spain, but just how much might surprise. The net figures from the last two years…

2008:+£210m. (€239m)
2009: +£81m. (€92m)

Difference: £119m. (€135m)

(Note that’s net, not gross, which was an important word I skipped and led to great confusions.)

That difference? The rough sum of the transfers of…Cristiano Ronaldo, Xabi Alonso and Alvaro Arbeloa. In other words, Florentino Perez singlehandedly curbed spending in the Premiership.

Not really, but it makes a point: Spain is the new financial powerhouse, and it’s not necessarily because of the global economic faceplant. In fact one of the biggest factors is that British tax increase which everyone heard about but really only began registering when Jermaine Pennant chased the paycheck football in Spain, which has one of the continents most easily swallowed tax rates (not an expert and I’ve failed spectacularly in looking this up for strict numbers in the past, so any help welcome, but I believe in terms of footballers wages it’s closer to 25%, whereas Italy and England are closer to 40-50%).

An accountant for some sports firm whatchamacallit had this to say about Premiership spending:

“There are a number of reasons, but it is not just because of the world financial situation,” he said.
“Football clubs are very powerful, independent businesses but, apart from Manchester City in England and Real Madrid in Europe, most clubs have spent significantly less.
“As far as English clubs are concerned there are a number of reasons, including the exchange rate between the pound and the euro and the tax situation in England.
“Even though you may be a player earning 100,000 pounds a week, those matters can affect whether you come to England or move to Europe and some big names have decided to stay in Europe.”

“The lack of big name players arriving in the England might appear strange given the recent success of English clubs in Europe, with three of the four semi-finalists in the last three years of the Champions League being English, but the reasons are purely financial.”

The pound not quite being what it once was also factors in greatly, as mentioned, as that’s beginning to matter when it comes to transfer fees paid in installments, which has been mentioned ad nauseum as well. (If a Prem club bought a player from the continent, the selling club gets paid in euros, not pounds. So when the value of the pound drops in relation to the euro, as it has, they suddenly owe more pounds to the selling club for an equal sum of euros.)

It’ll be interesting to see how this year’s Champions League plays out, whether or not powers will shift radically or steadily. But as has been warned for years now: finances come in cycles. In another 5 years or so something will change which will shift the balance again, perhaps a skyrocketing of the pound again, but for now, the financial torch has been passed.

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Category: World Football