Commentary

Big-spending EPL still to buck mediocre trend on the pitch

This summer's transfer window saw unprecedented spending by English Premier League (EPL) teams, as they broke the £1 billion (S$1.81 billion) mark to easily surpass last year's previous record spend of £870 million.

Unlike in previous years though, this spending was not confined to the elite teams and those owned by billionaires, but was spread throughout nearly all the 20 EPL teams as the average spend reached roughly £60 million per team.

What makes the spending remarkable is that the total - estimated to be around £1.165 billion - included 13 of the 20 teams breaking club transfer records.

Manchester United's capture of Paul Pogba marked the first time a British club have broken the transfer world record since Newcastle bought Alan Shearer in 1996.
Manchester United's capture of Paul Pogba marked the first time a British club have broken the transfer world record since Newcastle bought Alan Shearer in 1996. PHOTO: ACTION IMAGES

What makes the spending remarkable is that the total - estimated to be around £1.165 billion - included 13 of the 20 teams breaking club transfer records.

The new distribution of wealth is perhaps best shown by the fact that the 13 do not include Liverpool, Arsenal, Chelsea, Tottenham Hotspur or Manchester City - even though all these clubs spent sizeably, with Man City the biggest spenders of all at £177 million.

Crystal Palace had never spent £32 million in a single window, never mind on just one player as they did on Christian Benteke (as part of £56.7 million in total).

In contrast, the clubs of Spanish La Liga spent only £400 million this transfer window, even behind the German Bundesliga (£460 million) and Italian Serie A (£590 million).

Real Madrid spent only €30 million (S$45.6 million) to buy back Alvaro Morata and Barcelona can perhaps relax knowing they have Lionel Messi, Luis Suarez and Neymar to lead their line. Their spending of €79 million is less than Manchester United spent on Paul Pogba alone, the first time a British team have broken the world transfer record since Newcastle bought Alan Shearer 20 years ago.

There is no doubt that the new £5.1 billion TV deal is fuelling this staggering rise in Premier League spending - suddenly the previous spending constraints of the smaller teams are lifted, as their smaller gate receipts and marketing deals become less of a factor due to the sheer volume of the TV revenues.

While Everton's fans were pleased to see a tycoon take over the club earlier this year, it is likely that they could have afforded their summer spending even without Farhad Moshiri's millions and the sale of John Stones, the most expensive English defender at £47.5 million.

While English players have always been transferred at a premium price within the EPL, now even foreign players are becoming expensive, as other countries are only too aware that the Premier League clubs have money to burn.

Antonio Conte, Chelsea manager, commented that he was being asked to "pay £50 million premium for medium players".

The players themselves are seeing the increased rewards of playing in England too as the wages are also rising as teams share the wealth - as Bournemouth showed by picking up Jack Wilshere on loan, apparently taking on his £80,000 per week wages in full and paying a loan fee.

This year's window saw more players move from Spain's La Liga than ever before, and international stars moving to English teams that could not even offer the traditional lure of European football.

It wasn't only the Premier League teams that spent though, as the parachute payments for relegated clubs allowed Newcastle and Aston Villa to spend more than £110 million between them during this window in an effort to come straight back up next season.

In fact, the English Championship was the fifth highest spending league in Europe, ahead of even Ligue 1 in France.

In spite of all this, Premier League teams still often struggle to make an impact in Europe.

The day before West Ham signed the Italian international Simone Zaza, they were knocked out of the Europa League for the second year running by unheralded Romanian side Astra Giurgiu.

Similarly, after a period from 2005 to 2009 that saw an English team in the Champions League final for five consecutive years (and two in 2008), there has not been an English team gracing the final of Europe's elite club competition in the last five years.

It goes to show that paying big money does not necessarily translate to getting the best players or being able to build the best team. Articles in Spain this week remarked that English clubs were signing fringe players from the big La Liga clubs or players from mid-level teams. They were not enticing the leading lights of Barcelona or Real Madrid to leave Spanish shores.

With this TV deal in place until 2019, expect the big spending to go on, even among smaller EPL clubs well aware that relegation would quickly turn off the money tap.

The rewards of being an EPL team have never been higher, but whether that will translate into English teams winning European silverware remains to be seen.

• James Walton is a Clients & Markets Partner for Deloitte Singapore and South-east Asia, and heads the Sports Business service line.

A version of this article appeared in the print edition of The Straits Times on September 02, 2016, with the headline 'Big-spending EPL still to buck mediocre trend on the pitch'. Print Edition | Subscribe