Deloitte and Touche Reports Drop in Premier League Transfers
Gross Transfer spending by Premiership clubs in 2003 of around £250 million is down (by over 20%) from £323 million in 2001/02
Overall gross transfer spending by Premiership clubs of £215 million during the Summer Transfer Window
Total reported acquisitions by Chelsea of £111 million account for over 50% of Premiership clubs’ spending in the Summer Transfer Window
Including ‘trickle down’, the likely overall ‘Chelsea effect’ was over £140 million (two-thirds of total Summer Transfer Window spending)
Net outflow from Premiership clubs to overseas clubs of around £95 million during the Summer Transfer Window, despite the Beckham deal
Loan deals and free transfers represented around 60% of all moves into and out of Premiership clubs during the Summer Transfer Window
Trickle down from Premiership clubs to Football League clubs – of around £40 million in 2003 – greater than any season since the formation of the FA Premier League
Deloitte & Touche Sport, the specialist Sports Business Consultancy, today released their analysis of 2003’s Transfer Window trading by FA Premier League clubs. The headline findings are shown above.
The analysis showed that, as expected, Roman Abramovich’s arrival at Chelsea has breathed life into the market. But the record activity, for any one club, was not enough to prevent an overall slowdown.
Dan Jones, Director of Deloitte & Touche Sport said, ‘We’ve been predicting a downturn in the transfer market for some time. Our estimates for the January 2003 window proved to be spot on. The activity at Chelsea has changed perceptions of market activity in some eyes, but we see it as the exception that proves the rule. The rest of the market has stayed very quiet as clubs have tightened their belts. Reduced expectations on transfer fees and player wages are generally good news for clubs’ financial situations.’
Aside from the influx of new money into, and then out of, West London, Deloitte sees major changes in the market. Paul Rawnsley, Senior Sports Business Consultant commented, ‘Despite new Premier League rules on spreading the payment of transfer fees over the life of a contract, the more influential rule change seems to be allowing Premiership clubs to take players on loan from other Premiership clubs. This can be beneficial both for clubs’ finances and can give a player the chance to shine elsewhere.’
The business model for the successful operation of football clubs is evolving and player cost control is key. The dampening of transfer market activity is one key element and player wages is the other.
On the face of it, Deloitte’s analysis also provides better news for Football League clubs. They have sold players to net them over £40 million from Premiership clubs in 2003. This ‘trickle-down’ effect is greater than at any time since the formation of the Premier League in 1992/93, although the main beneficiaries have been Sunderland and West Ham United (circa 75% of the total), relegated from the Premiership in May 2003.
Summing up the findings and looking to the future, Dan Jones observed, ‘We firmly believe the market has changed forever and separated stars (with big fees and long contracts) from the rest, on frees and shorter contracts. We hope that the remuneration that goes with those contracts has more performance-related elements (as the Beckham transfer fee did, for example). If those players are carrying the clubs’ hopes and expectations of lucrative success, it’s only sound business logic that their pay should reflect whether they deliver or not. The process of player cost control will then be complete!’
For further information contact:
Deloitte and Touche Sport
Tel: +44 207 303 3861