Premier League clubs spend £1.41 billion in the summer transfer window narrowly missing out on an all-time record

The following is an extract from the Deloitte’s Sport’s Business Group News Release of 8 August 2019, following the closing of the English Premier League 2019 Summer Transfer Window at 17 00 hours on the same date:

The 2019 summer transfer window saw Premier League clubs spending £1.41billion, according to analysis from Deloitte’s Sports Business Group. This represents the second-highest total spend since the introduction of the transfer window system in 2003, falling just short of the record of £1.43 billion set in the summer of 2017. It is the fourth consecutive summer transfer window that Premier League clubs’ spending has been in excess of £1 billion.

The ambitions of clubs at all levels across the Premier League has driven spending in this year’s summer transfer window.

Following successful Premier League and UEFA Champions League campaigns, spending from last season’s top four has been driven by Manchester City (£150m) and Tottenham (£105m). Liverpool and Chelsea have been less active, with the former satisfied with the squad that were Champions of Europe and runners-up in the Premier League and the latter subject to a transfer ban.

Targeting a return to the top four and the UEFA Champions League, Manchester United have spent a world record fee on a defender (Harry Maguire, £80m), whilst Arsenal have broken their player transfer record (Nicolas Pepe, £72m). Everton, West Ham United, Leicester City and Wolverhampton Wanderers have each spent in excess of £80m as they attempt to challenge the established ‘big six’.

Following promotion, Aston Villa have invested around £125m as they look to ensure their survival in the Premier League.

Dan Jones, partner in the Sports Business Group at Deloitte, commented: “Premier League clubs’ transfer spend continues to be driven by the desire for success on the pitch, ranging from competing at the top of the Premier League and qualification for the UEFA Champions League to simply survival in the top division. This summer has seen over half of the Premier League clubs break their individual player transfer records in pursuit of these objectives.”

Premier League clubs’ net player transfer expenditure (player purchases less player sales) to 8 August was £625m, with only three clubs in a net receipts position. This is the lowest net spend in a summer transfer window since 2015.

Jones continued: “With this level of net spend, combined with a more modest increase in Premier League broadcast rights values for the coming season than we have seen previously, we would expect wages to increase at a greater rate than revenue, returning to a wages to revenue ratio of over 60%. However, this does not signal major financial concerns as Premier League clubs collectively generated pre-tax profits of £426m in 2017/18, whilst net spend as a proportion of revenue of 12% is at its lowest since 2012.”

 

Spanish spending spree

Another notable emerging theme from this year’s summer transfer window has been the increased spending of La Liga clubs (currently totalling £1.1 billion), initially outpacing the Premier League and passing the £1 billion mark for the first time, setting a new league record.

Tim Bridge, director in Deloitte’s Sports Business Group, added: “With over three weeks to go before the Spanish window closes, La Liga clubs’ current spend has more than doubled from its total just two years ago, mainly driven by the relative financial security provided by a new cycle of broadcast rights contracts commencing this season (2019/20). This has provided additional funds for investment in the transfer market as they start to see the benefits from the switch to a collective rights model in 2015/16.

“Nonetheless, two-thirds of this spend to date has been from just three clubs: Atlético de Madrid, FC Barcelona and Real Madrid.”

Whilst Premier League (and Championship) clubs are unable to make any further player acquisitions, they will be able to continue to sell players to clubs in other leagues, with most transfer windows remaining open until Monday 2 September.

The full Deloitte’s Sport’s Business Group News Release of 8 August 2019, which makes very interesting reading can be accessed by logging onto:

https://www2.deloitte.com/uk/en/pages/press-releases/articles/premier-league-clubs-spend-1-point-41-billion-pounds-in-the-summer-transfer-window.html