Despite Manchester City’s transfer window shopping expected to surpass the £100m mark, this summer’s transfer market has been a decidedly low key affair. With less than two weeks to go until the new Premier League season kicks off, there has been very little transfer activity between the clubs who make up the richest football league on the planet.
While the total Premier League net spend on players last summer was down 10%, the final total still reached a whopping £450m. This season the total so far is just over £170m, with Manchester City accounting for over £75m of that total amount. Whilst there is still a long way to go until the transfer window slams shut on August 31st, it is unlikely we will see a huge increase in spending from top flight clubs.
Arsenal boss Arsene Wenger has already confirmed he is likely to make just one or two signings before the start of the new season and has spoken in the past about his refusal to run the club into debt with over-priced superstar signings. Chelsea manager Carlo Ancelotti believes his Double winning side have more than enough quality to compete on all levels again next season and is unlikely to make any major changes. Liverpool have been looking to enhance their squad with free transfers and Tottenham will again look to improve with a few high quality additions.
However it is wise old owl Sir Alex Ferguson’s assessment of the current transfer market which is most intriguing:
“The enormous amounts of money they [players] are paid, not just for the transfer fees but for their salaries, I don’t think it rests easy with supporters,” commented Ferguson. “We’re in such a competitive world now that you’re hamstrung in relation to the borders people will stretch to get the best players.
“Over the years we’ve bought players for quite high amounts like Berbatov, Ferdinand, Verón and Rooney. We try to equate how we’re going to get proper value before we do it. When I see some of the values now, and you’re talking about players at £40m or £30m-odd, we have to assess our own players first.”
Ferguson obviously thinks the current market is inflated, namely because of the enormous amounts of money lavished on players by Real Madrid and Manchester City over the last two seasons. In comparison, Ferguson has added a few modest signings to his United squad, refusing to spend the majority of the world record £80m he received for the attacking talents of Cristiano Ronaldo last summer.
The current dip in spending follows the pattern of January’s transfer window, which saw the lowest transfer spending since the mid-season window opened in 2003 coming in at £30m, £140m less than the season before. Following the credit crunch, cash-flow crisis and the recession, clubs have began to extend a tighter grip over their finances and have looked to reduce the amount they are spending on new players.
The summer spending low comes after Portsmouth became the first ever Premier League club to enter administration and docked points in February earlier this year with spiralling debts of £60m. The south coast club faced a winding up order as years of financial mismanagement came to a head, with reports the club were spending a mind-blowing 90% of their income on player’s wages. Even Spanish champions Barcelona were reportedly running at a £60m loss last season and are over 442m Euros in debt, even having to take out bank loans in order to pay their player’s wages.
Football finance has come under scrutiny in the spotlight of the recession with sports business experts Deloitte warning that the current level of spending in the Premier League is not sustainable unless changes are made. UEFA have made plans to tackle the debt which threatens to engulf English football and has approved financial fair play plans. Clubs must not be running at a loss following a three year period starting from 2012 and failure to meet these requirements will mean clubs will be banned from participating in European football.
The current level of debt in European football remains a massive challenge for both clubs and UEFA to tackle. UEFA are concerned about the level of spending which has been seen in recent seasons, reporting that over 50% of Europe’s top clubs are losing money every year. “I would not paint such a cataclysmic picture of major clubs folding because football has always shown there can be solutions but having said that, we are seriously worried to see these trends,” said UEFA General Secretary Gianni Infantino.
“The clubs themselves are worried, the leagues are worried. These are the reasons that pushed us to take the decision to do something.”
Premier League clubs have made small steps in addressing their finances under the current restricted economic, however there is still a long way to go before Premier League clubs can start to run with a healthy profit and not rely high interest bank loans. Premier League spending this summer shows that clubs have started to change their spending habits, albeit some out of necessity. However as Manchester City up the ante in their pursuit of trophies and more clubs are taken over by wealthy foreign businessmen, it will be difficult for clubs to sit back and refuse to match them in the transfer market.