Premier League clubs have defied the financial slowdown caused by the Covid-19 pandemic by running a huge deficit in the transfer market compared to their European rivals.
An analysis of deals struck during the summer months by clubs in the English top flight shows that they will account for 99 per cent of the transfer deficit run up across the five major European leagues. The Premier League’s members spent £689m more on new players, among them the £71m paid to Bayer Leverkusen by Chelsea for the services of winger Kai Havertz, than they made from selling members of their existing squads.
The figures mean that while clubs in the top flight leagues of Spain, Italy, France and Germany took the opportunity rein in their spending, their English counterparts absorbed the massive drop in income from gate receipts and other revenues such as merchandise to continue their pre-pandemic spending habits. Indeed, the Premier League’s 2020 summer deficit is larger than the £627m racked up in 2019.
The analysis by Centre for Economics and Business Research (CEBR) shows the top English clubs continued a long-term trend which has seen them spend roughly double what they earn from buying and selling players for each of the last 19 years. Across the 2019-2020 season as a whole, the Premier League spent a record £1.6bn on new players, resulting in a deficit of £781m. The gap was more than double the next highest deficit of £349m run up by Italy’s Serie A.
‘Greatest financial shock in generations’
The study’s authors said that while overall transfer spending across Europe was down by almost half during the last 12 months, English clubs were determined to buck the trend. Pablo Shah, senior economist at CEBR, said: “The pandemic represents the greatest financial shock to the football industry in generations, with ticket sales out overnight and TV and sponsorship revenues set to come under sustained pressure amid the global economic downturn. However, even the jolt delivered by the pandemic has not been enough to eliminate the huge structural transfer deficits operated by Premier League clubs.”
The spending records of English sides, with Chelsea, Liverpool, Manchester United and Wolves among the Premier League clubs splashing out on big name signings this summer, are in stark contrast to those on the Continent. Spain’s La Liga and the German Bundesliga are on course to record small deficits of £60m and £26m respectively, while France’s Ligue 1 and the Italian Serie A are expected to register surpluses.
Largesse
With their vast income from global television rights, the Premier League clubs have hitherto been able to balance their largesse on the transfer market against their substantial income. Observers are now asking if this can be sustained.
Mike Bohan, co-founder of football betting platform Football Index, which commissioned the survey, said: “The Premier League has run up the biggest trade deficit in world football transfers for many years now, but the overall income it generates from the likes of ticket sales and broadcasting rights has far outweighed the cost of imported players.
“However, with the emergence of Covid-19 set to have a huge impact on the finances in football, new questions have been asked around how the top clubs in Europe will fare.”
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