Player transfer spending by Premier League clubs was around £500m in the summer transfer window, a new record, according to analysis by the business advisory firm Deloitte.

Paul Rawnsley, Director of the Sports Business Group at Deloitte, commented: “Last summer saw a record level of transfer spending that was fuelled by the new TV monies and new owners.  This trend has continued with this summer’s transfer spending £30m higher at £500m.  This level of transfer spending is far in excess of spending by other European leagues.  With the majority of their revenue streams already contractually secured, English football clubs are proving resilient to the current challenging economic environment.  Whilst football is not recession-proof, it is recession-resistant.”

Reflecting on the overall annual figures, aggregating the amounts spent in the January and summer transfer windows, Rawnsley commented:  “Overall the Premier League clubs have spent around £675m in 2008, including £500m this summer, which is up on transfer spending in each year since the transfer windows were introduced.”

Some of the key findings from the analysis by Deloitte include:
• Premier League clubs have committed to around £500m in respect of player transfer fees in the summer 2008 transfer window.  This is a record amount around £30m (6%) higher than the previous record spending in summer 2007, and around double the amount committed in each of the previous summer transfer windows since 2003. 
• Each of Aston Villa, Liverpool, Manchester City, Manchester United, Sunderland and Tottenham Hotspur has reportedly spent more than £30m on player acquisitions in the summer transfer window.
• Manchester City’s acquisition of Robinho for a reported £32.5m was a British record transfer fee.  The £30.75m Manchester United reportedly spent on Berbatov was also above the previous highest British transfer fee.
• Premier League clubs have spent around £215m on players from other Premier League clubs.  This intra-Premier League spending represents over 40% of the total committed transfer activity by Premier League clubs, which is a higher proportion than in previous windows (when it has typically represented around one-third of total spending).
• Nonetheless, Premier League clubs continue to redistribute a significant amount of revenue to the benefit of overseas clubs (£250m of transfer fees committed) and to Football League clubs (£35m).
• Premier League clubs’ net transfer fee spending was £215m, being the net amount that flows to non-English clubs and Football League clubs.  This is slightly below the net £240m outlay last summer.
• Football League clubs spent over £25m in summer 2008, including around £20m on players from other Football League clubs.  Net of amounts received from Premier League and overseas clubs, the Football League clubs benefit from a net inflow of around £40m this summer.
• Premier League clubs’ transfer fee spending in the summer window has again far exceeded that in other European leagues.  Spending by Premier League clubs is around double that of the clubs in Italian Serie A and Spanish Primera Liga.

Summing up the findings and looking to the future, Alex Byars, a senior Sports Business Consultant at Deloitte, said: “The levels of spending again demonstrate the strength of the top level of English football and some of the financial benefits that are passed on to overseas clubs and Football League clubs through the player transfer system.  Nonetheless, over the next couple of years there will be a continuing challenge to ensure that the clubs’ overall level of spending – on both transfer fees and player wages - is maintained at sustainable levels.”

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Note to editors

Basis of preparation
The information on player transfers is based on publicly available information in respect of player registration acquisitions by clubs, including from www.bbc.co.uk and www.premierleague.com, and further analysis carried out by the Sports Business Group at Deloitte.  Further commentary about the transfer market is included in the Deloitte Annual Review of Football Finance.  The figures contained in this release will not necessarily be the same as the cost of acquiring players’ registrations as recognised in the financial statements of each club.  Under accounting requirements, the cost of acquiring a player’s registration includes the transfer fee payable (including any probable contingent amounts), plus other direct costs such as transfer fee levy and fees to agents.

About the Sports Business Group at Deloitte
Over the last 15 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.

For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup

About Deloitte
 
In this press release references to Deloitte are references to Deloitte & Touche LLP, which is among the country’s leading professional services firms.  Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other’s acts or omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press. For further information, visit our website at www.deloitte.co.uk