Splashing the Cash

Concerns about the financial state of football do not appear to have stopped Premiership clubs splashing out in the transfer window with total spending of £485m up a third on a year ago, according to figures from Deloitte. The pattern of increased spending was reproduced over four of the five top leagues in Europe, Germany being the exception where spending held steady.    Serie A clubs spent around £400m, those in Spain £300m while France accounted for £165m.  Qualifying for and succeeding in the Champions League appears to be a major motivation for spending.  

Although spending was up in the Premier League, it did not reach the 2008 record of £500m. Three clubs in the north-west spent over £50m with Manchester City leading the way with £63.6m followed by Manchester United with £53.1m and then Liverpool in third place.  Chelsea came fourth with spending of £40.6m.   Two-thirds of the spending in the Premier League was by the top five clubs.   £100m was spent on deadline day.

Spending on foreign players was down by 25 per cent on a year ago but still accounted for 42 per cent of the total spend.   The increased spend on home grown talent reflects the regulatory encouragement given by the football authorities.

17 clubs in the Champions League had a net spend of £350.3m which will leave them little leeway under Uefa's financial fair play rules once wages are taken into account.    This poses Uefa with a challenge in terms of enforcing the rules.   It is one thing to make an example of an >arriviste like Manchester City, another to start excluding the likes of Bayern Munich.   Exclude too many top clubs and you don't have a meaningful competition.

Football League spent about £30m over the summer.   They benefitted from a net inflow of £60m from Premiership clubs and overseas side.

A lot of attention during the transfer window focused on Arsenal as part of a broader debate about Arsene Wenger’s stewardship of the club.   Indeed, at times the sports pages seemed to be obsessed with Arsenal. The 8-2 defeat by Manchester United only intensified the interest.

Arsene Wenger, under pressure from fans and the board, was one to make a last minute trolley dash but only used £27.8m on four players from the £60m he had available from the sales of Fabregas and Nasri (indeed the Arsenal Supprters’ Trust calculated that as much as £80m could be available if it was needed).   In part this was because of silly prices.   Lille wanted £30m for Yann M'Villa and Blackburn Rovers £30m for Christopher Samba.

Although I do think that Arsene Wenger is a great manager, Arsenal should have drawn up and implemented a transfer strategy much earlier in the summer to avoid this last minute rush.   Their actions were hardly a prudent or sensible approach.   Arsenal are also constrained by their complex wages structure which topped out at £125,000 a week when Fabregas was there.   That puts them way behind the two Manchester clubs and Chelsea.

Arsenal do seem to be taking a closer interest in the key Asian market which is so important for Premiership football.    It contains a number of emerging and increasingly prosperous countries with growing populations and an appetite for football.   It is a key element in the growth of overseas television revenues.   There are great opportunities for selling merchandise, even if counterfeiting is a problem.  Up to now, Manchester United and then Liverpool have made the greatest strides in this market.

Now Arsenal have sought to appeal to this valuable market by signing the captain of South Korea's national football team, Park Chu-Young.  A £3m deal with AS Monaco is imminent.  His transfer comes at the end of a summer in which Arsenal toured Asia for the first time.   Previously opposed to leaving Europe for pre-season training, Arsene Wenger has spoken of the importance of capitalising on international markets.

Nasri has argued that everything has gone downhill at Arsenal since they move to the Emirates.   But Highbury could not generate the gate revenues needed to compete with Manchester United.   The commercial basis of the move was well thought through.   The recession has meant that some available land has not yet been developed, but that remains an asset for the future.   The irony of the situation is that Arsenal has lost out because it has been a self-funded club.

At the other end of the spectrum, the troubles of Plymouth Argyle continue and the club remains in administration.   The money is supposed to be in place to complete a bid from Gibraltar-based consortium Bishop International Limited, but it hasn’t happened yet.  

The public face of Bishop International is property developer Kevin Heaney who is the owner of Blue Square South club Truro City.   Because of the ‘two clubs’ rule of the Football Association, he cannot be involved in running Plymouth Argyle.   The solution that has been arrived at is to sell the club to a company headed by former Leeds United and Cardiff City boss Peter Ridsdale.   Heaney and his associates would then be free to develop the land around the club’s Home Park stadium.   This arrangement is yet to be approved by the Football League.

In any case the club remains desperately short of money and players were not paid again at the end of August.   They then threatened to go on strike and the administrators managed to find enough money to pay 40 per cent of what they were owed.   In principle a league club in a large ‘stand alone’ city like Plymouth should be viable, but the club has been through many difficulties.   Hopefully everyone will be resolved soon otherwise the survival of the 125-year old club might be in doubt.

Wyn Grant is a regular contributor to Albion Road and also the publisher of footballeconomy.com, a website covering the business and economy of the game of football.