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Post by QPR Report on Sept 2, 2009 6:07:24 GMT
Guardian/Owen Gibson
Record spending turns to record profit for Premier League's top four
The summer trade was a period of collective belt-tightening for all but the spendthrift Manchester City
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As the transfer window shut with a whimper rather than a bang, it emerged that England's four Champions League representatives had made their biggest ever net profit on summer transfer dealings. English football's new financial realities, at least outside the City of Manchester Stadium, were illustrated by figures showing that the Big Four closed the book on their summer dealings £75.3m in the black, according to accountants KPMG, as compared to a net outlay of £45.2m a year ago. Even if the world record £80m paid by Real Madrid to Manchester United for Cristiano Ronaldo is subtracted from the total, the four traditionally biggest spenders were left only marginally in the red as all pulled in their belts for a variety of reasons.
Despite the outlay of Manchester City, who topped the spending table with a net figure of £98m as the Abu Dhabi owners attempt to break into the top four, the net spending of Premier League clubs was down to £81m from £210m a year ago. Overall, clubs in the top three tiers of English football recorded a net outlay of just more than £6.5m, down from £167.5m in the 2008 summer transfer window.
The proposed new 50% top rate of income tax and the weakness of the pound against the euro have been cited as reasons for the lack of big signings from overseas this summer, while others have blamed the impact of Real Madrid's spending spree. Last month, Deloitte Sports Business Group calculated that the true cost of an overseas player to English clubs was up to 70% higher than to their Spanish counterparts.
"I don't buy into the idea that it's the credit crunch that is curtailing the spending of the Big Four, but the fact they are no longer able to attract the top European stars for some reason," said Geoff Mesher, head of the forensic sports industry team at KPMG. "The tax rate and the euro-pound exchange rate may well have had an effect. European players are less attracted if they are going to be paid in pounds."
Despite widespread speculation that Roman Abramovich, their owner, had vowed to make a "marquee signing", Chelsea's biggest deal of the summer remained the £18m paid to CSKA Moscow for Yuri Zhirkov. That still made the Stamford Bridge club the only one of last season's top four to appear in the top half of a spending table compiled by KPMG, with Manchester United and Arsenal recording a profit and Liverpool a deficit of only £2.7m. Doubts have been cast over Liverpool's spending power since their American owners, Tom Hicks and George Gillett, agreed a refinancing package last month that involves repaying £60m of £290m debt over the next 12 months.
Manchester City aside, those spending the most during the current window were clubs such as Sunderland, Birmingham and Wolves, gambling in order to retain or consolidate their Premier League status. Sunderland and Birmingham have the next highest net outlays, of £19.2m and £18.6m, respectively. "This level of investment in the current economic climate reflects the financial pressure on clubs to avoid relegation and their willingness to speculate to achieve this goal," Mesher said. "Whilst relegated clubs will receive substantial parachute payments this is no match for the lucrative television and prize money on offer in the Premier League."
KPMG's figures reveal a decrease in transfer fees paid to overseas clubs, giving further credence to the theory that English clubs are finding it harder to attract talent from overseas. Of the total Premier League spend, 35% was paid to non-English teams, down from 47% in the 2008 summer window. Of the £156m investment in players from non-English teams, 5% went to the Spanish league compared with 35% of the £222m sent overseas in 2008. Conversely, around 85% of transfer funds received by Premier League clubs from overseas came from La Liga, and in particular from Real Madrid.
Separate figures from Deloitte , also published tonight, showed that overall spend by Premier League clubs had declined by 10% compared to the same period in 2008. Yet the relatively strong spending power of clubs throughout the top division, chiefly thanks to the way TV money is distributed, meant that the spending by Premier League clubs, £460.4m, again exceeded that in other European leagues, albeit not by as much as in previous seasons. Spending by Real Madrid and Barcelona boosted summer 2009 transfer spending by clubs in Spain's top division to around £400m, while Italy's Serie A clubs spent around £350m. Clubs in the top divisions of each of France and Germany spent around £200m
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Post by QPR Report on Sept 2, 2009 6:14:55 GMT
The Independent/Nick Harris
Recession? What recession? Football goes for brokePremier League clubs spent around £477m during the transfer window, according to calculations by The Independent. That figure has only ever been topped in one window, summer 2008, when the elite spent £500m. So much for the recession. The Premier League thus remains the world's biggest spending division, ahead of Spain's top division (where around £430m was spent this summer, more than half by Real Madrid) and Italy's Serie A, with £400m spent and Jose Mourinho's Internazionale spending most, £90m. Manchester City's outlay of £123.7m on Gareth Barry, Carlos Tevez, Roque Santa Cruz, Emmanuel Adebayor, Kolo Touré and Joleon Lescott underpinned the English splurge, with Aston Villa spending next most (£41.5m) as the "big four" were kept in the shade. But if two deals by Premier League clubs told the wider story of the window, then they were Sunderland's signing of Michael Turner from Hull and Manchester United's low-profile capture of Mame Biram Diouf from Molde. This pair of deals exemplified the nouveau riche credentials of "lesser" clubs on the one hand, and the financial prudence of the giants on the other. Turner cost Sunderland an astonishing £12m, or rather a fee that will rise to that. Diouf has cost United £4m and could yet prove to be the steal of the summer. He is a 21-year-old Senegal international and a prolific goalscorer. United lured him from Norway in a deal finalised at the end of July while United were touring the Far East. The player will stay on loan with Molde until January but he is a summer signing, bought and paid for now because other suitors were circling. England's "big four" were unwilling rather than unable to spend; it is an important distinction. Certainly United, Arsenal and Chelsea had more funds available to their managers than they spent. But Sir Alex Ferguson, Arsène Wenger and Carlo Ancelotti were wary of paying way over the odds for, among others, Franck Ribéry and Karim Benzema, as Real Madrid went bonkers. At Liverpool, Rafa Benitez would have liked to spend more and will be frustrated that his club's American owners did not give him £25m-plus (net of sales) as expected, but he still spent almost £40m. Elsewhere, clubs as varied as Sunderland (spending £36.5m), Tottenham (£29.5m), Everton (£20.7m), Stoke (£18.3m), Birmingham (£17.6m), Wolves (£16.8m) and West Ham (£15.5m) spent upwards of £15m each. Loan signings were made in addition, by Portsmouth and others. Business was rarely stellar, but it was steady. Austerity? Ha ha. www.independent.co.uk/sport/football/transfers/recession-what-recession-football-goes-for-broke-1780193.html
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Post by QPR Report on Sept 2, 2009 6:21:00 GMT
Telegraph/Jeremy Wilson
Premier League faces taxing times as transfer deadline day falls flat
Amid the barrage of condemnation for Uefa regarding Eduardo, there was an equally blunt message from Arsène Wenger last week that addressed an issue of even deeper significance for English football. "The great days of the Premier League will disappear," declared the Arsenal manager. Why? "Tax problems and pound problems," he said. "It is simple. Let's say a guy who gets £1 million [gross] earns £600,000 [net]. With 50 per cent tax you have to increase wages by 20 per cent to keep him at £600,000. Related Articles "In Spain they pay 25 per cent tax for the first five years. It is a lost battle. We are privileged people and we can't complain but, compared to other countries, it is a disadvantage for the Premier League." As one of the most lacklustre transfer window deadline days finally petered out at 5pm on Tuesday, the analysis of Wenger, an economics graduate, certainly appeared to ring true. The contrast with last year's midnight drama at Eastlands and Old Trafford was stark and it also further underlined three telling – and concerning – summer trends. Firstly, even with Manchester City's spree, overall Premier League spending has unexpectedly fallen for the first time in more than six years. The sharp drop in the net spending from £215 million to £80 million is particularly eye-catching. Indeed, the 'big four' have actually ended the transfer window more than £75 million better off than they were just three months ago. Secondly, the great influx of foreign talent has slowed significantly, with only a third of all Premier League spending going toward recruiting players from abroad compared to around half last year. Finally, and most striking of all, La Liga can now convincingly claim to be the league of choice for the world's elite footballers. Last year, Spanish clubs spent half as much as those in the Premier League. This year, boosted by the renewed 'galactico' policy at Real Madrid, they are almost on a par with their English rivals. After three years of English Champions League domination, there are other signs that the pendulum is now swinging back to Spain. It was, after all, only 12 months ago that the Premier League could claim to have both the world's best player and the European club champions. This year, it is La Liga who can make both boasts. What's more, as well as Cristiano Ronaldo, the 2008 World Footballer of the Year, they now have the winner of that award in 2007 (Kaka) and surely this year's recipient in Lionel Messi. It is also no exaggeration to say that in Ronaldo, Kaka and Karim Benzema, La Liga has succeeded this summer in cherry-picking each of the best players from the English, Italian and French leagues. Germany's best, Franck Ribery, is also expected to join Real Madrid next year. There has been money available to spend this summer at Manchester United, Chelsea and Arsenal, but a combination of confidence in the existing squads and a refusal to pay inflated fees and wages have underpinned strategies of prudence. Time will tell whether they have made the right choices. Industry analysts have also broadly explained the summer trends with reference to the prevailing economic climate in England, specifically the weakened value of the pound and the introduction of the 50p tax rate next year. According to Deloitte, as a direct result of the difference in the tax rate, English clubs would have to spend 70 per cent more than a Spanish club to satisfy a net annual wage demand from an overseas player of three million. In short, even with generally lower revenues, it is easier for Spanish clubs to pay high salaries and this is reflected by the fact that La Liga now contains four of the world's five best-paid players in Kaka, Ronaldo, Messi and Zlatan Ibrahimovic. "It is becoming more difficult to attract the best European players and that is a result of financial rather than footballing factors," said Geoff Mesher, head of the forensic sports industry team at KPMG. Domestically, though, there has been some benefit to the increased proportion of trading between Premier League clubs. Manchester City have spent more than £100 million this summer and that has largely gone back into other English clubs. The behaviour of City, though, has skewed a generally more cautious approach and it is clear that recessionary pressures – particularly in relation to borrowing money – have impacted on others. Aside from City, no other Premier League club have even recorded a net spend this summer of more than £25 million, with Sunderland, Birmingham, Chelsea, Stoke and Wolves among the other larger spenders. There is more evidence of fiscal pressure further down the Football League pyramid. Indeed, according to KPMG, clubs in the top three tiers of English football had net outlays of just over £12 million during this transfer window, significantly down from £167.5 million in 2008. www.telegraph.co.uk/sport/football/football-transfers/6123341/Premier-League-faces-taxing-times-as-transfer-deadline-day-falls-flat.html
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Post by QPR Report on Sept 2, 2009 6:22:19 GMT
Telegraph/MArk Ogden
Premier League riches bypass English lower leagues
The trickle-down effect of Manchester City's £117.5 million summer spending spree has resulted in a paltry £500,000 working its way down to English football's bottom two divisions. While City manager Mark Hughes has secured blue-chip signings from the Premier League's elite clubs, the money banked by Aston Villa, Blackburn, Arsenal and Everton for the likes of Gareth Barry, Roque Santa Cruz, Kolo Toure, Emmanuel Adebayor and Joleon Lescott has largely been invested on the continent or simply deposited in the clubs' bank accounts. As for the £25.5 million City spent to secure the services of Carlos Tevez, only the Argentine's 'economic rights holders' know where that money has ended up, but it is safe to say that English football's grass roots have not been beneficiary. Only two clubs outside the top two divisions, Colchester United and Cheltenham Town, have gained from Sheikh Mansour bin Zayed Al Nahyan's investment during the summer transfer window. Aston Villa's decision to spend the £12 million received for Barry on Middlesbrough's Stewart Downing led to Boro using £350,000 of that money on Colchester's Mark Yeates. Arsenal, £41 million richer having sold Toure and Adebayor to City, passed on £150,000 to Cheltenham as compensation for 15-year-old midfielder Jamie Edge. Middlesbrough and Watford, whose £5.3 million combined windfall from Portsmouth for Tommy Smith and Mike Williamson came courtesy of the £5.7 million Pompey received from Everton – £22 million better off having sold Lescott to City – for Sylvain Distin, have been the big winners in the Championship from the trickle-down. Having sold David Nugent to Portsmouth for £6 million two years ago, however, Preston chairman Derek Shaw fears the prospects of Premier League clubs signing Championship players are evaporating. Shaw said: "Premier League clubs don't want to take a chance on players from the lower divisions. "If the best goalkeeper or defender in the Championship moved to a Premier League club, he probably wouldn't get a game straightaway. "The Manchester Citys of this world only deal with the big clubs now, but it is a concern when the clubs receiving the money spend it abroad or amongst themselves." Villa apart, each club who have sold players to City this summer have spent the majority of their windfall abroad. Arsenal paid Ajax £10.1 million for Thomas Vermaelen, Everton have invested £10 million in Lokomotiv Moscow's Diniyar Bilyaletdinov, while Blackburn's big summer signing has been the £6 million Hajduk Split forward Nikola Kalinic. Fees and wages have rocketed as a result of City's financial muscle, but the knock-on effect is already being felt by club's in the Football League's basement division. Rochdale chairman Chris Dunphy said: "People say that the massive transfer fees and wages being paid by the likes of Manchester City don't affect clubs like Rochdale, but there is a real knock-on effect because it just ups the ante at this level. "Players in the Championship want more money and it goes down to League One and League Two. We've noticed a 20 per cent rise in our wage bill this season. "Our best hope of making money in the transfer market is by insisting on sell-on clauses. If we sell to a Championship club for £400,000, then hopefully that player becomes a £4 million transfer the next time he moves www.telegraph.co.uk/sport/football/football-transfers/6122525/Premier-League-riches-bypass-English-lower-leagues.html
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Post by QPR Report on Sept 2, 2009 9:28:34 GMT
BBC Tax rise 'to hike footballer pay' Cristiano Ronaldo Cristiano Ronaldo will pay lower tax in Spain than he would have in England English Premier League clubs may face higher wage demands from European players due to sterling's weakness and the new 50% tax rate, a report said. Offers to transfer targets and existing players may need to be raised to match the take-home wages offered by European rivals, consultants Deloitte added. Deloitte said giving a European player a net annual salary of 3m euros (£2.6m) would cost an English club 6.8m euros. But a Spanish club needs only pay 4m euros to deliver the same net salary. The UK figure is also higher than clubs in France (6.7m euros), Italy (5.7m euros) and Germany (5.4m euros) would have to pay, according to the Deloitte calculations. "The summer transfer window opened over a month ago, but Premier League clubs are yet to make significant acquisitions from overseas," said Pete Hackleton, senior manager in the Sports Business Group at Deloitte. "The reduced value of sterling against the euro and the proposed increase in the top rate of income tax are contributing factors to this." Revenues advantage The pound is currently worth about 1.15 euros compared with 1.50 euros, two years ago. And from April 2010, the tax band for top earners in the UK will increase from 40% to 50%. This will impact the vast majority - if not all - top-flight players. The concern is for the biggest clubs competing for the best talent, where the reduced tax rate in Spain gives the likes of Real Madrid and Barcelona a significant advantage Pete Hackleton Deloitte Some big European clubs have proved willing to spend, with Spanish side Real Madrid having reportedly splashed out about 200m euros on three players from other big European Leagues - Cristiano Ronaldo, Kaka and Karim Benzema. Ronaldo, who left Manchester United for Real Madrid, will be paying tax at a non-residents rate of 24% in Spain, as opposed to the 50% bracket he would have faced had he stayed in the Premier League. "The concern is for the biggest clubs competing for the best talent, where the reduced tax rate in Spain gives the likes of Real Madrid and Barcelona a significant advantage in attracting the best players in the world," Mr Hackleton said. But he added that high revenues enjoyed by Premier League clubs meant the league could still afford the world's best players. Total Premier League revenues were the equivalent of 2.44bn euros in 2007/8, more than 1bn euros ahead of Spain's La Liga. The difference is largely driven by the sale of the lucrative television broadcast rights which are then split between the clubs. newsvote.bbc.co.uk/2/hi/business/8155677.stm |
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Post by QPR Report on Sept 6, 2009 7:01:06 GMT
Deloitte -Premier League clubs’ transfer spending down 10% September 01, 2009 Player transfer spending by Premier League clubs was around £450m in the summer transfer window, according to analysis by the business advisory firm Deloitte. Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “After last summer’s record £500m of transfer spending, Premier League clubs’ spending is down 10% to £450m this summer. Whilst the level of player acquisitions from other Premier League clubs matched the previous record level, the level of acquisitions from overseas clubs was around 40% down compared to each of the transfer windows in summer 2007 and 2008. The reduced value of Sterling against the Euro and the proposed increase in the top rate of income tax are contributing factors to this.” Reflecting on the level of net spending, being the net amount that flows to non-English clubs and Football League clubs, Jones remarked: “Premier League clubs received over £110m in transfer fees from Real Madrid alone. Combined with the lower level of player acquisitions from overseas clubs, Premier League clubs’ overall net transfer spending was £80m. This is down significantly compared to over £200m in each of the summer 2007 and 2008 transfer windows. Net spending comprised £8m to overseas clubs and £72m to Football League clubs.” Some of the key findings from the analysis by Deloitte include: * Premier League clubs have committed to around £450m in respect of player transfer fees in the summer 2009 transfer window. This is £50m/10% below last year’s record amount. * Manchester City’s transfer spending has been a key driver of the overall level of spending in summer 2009, with the club’s acquisitions of around £120m representing 27% of total spending. Each of Aston Villa, Liverpool, Sunderland and Tottenham Hotspur has reportedly spent more than £25m on player acquisitions in the summer transfer window. * Premier League clubs have spent around £215m on players from other Premier League clubs; equivalent to the record level in 2008. This intra-Premier League spending represents almost half of total transfer fees committed by Premier League clubs, which is a higher proportion than in previous transfer windows. * Transfer fees to overseas clubs was £155m, down by £95m compared to summer 2008. This represents 34% of total transfer fees committed by Premier League clubs (50% in summer 2008). This level of spending slightly exceeded transfer fees received from overseas clubs, of which around three-quarters was from Real Madrid. * Premier League clubs’ net transfer fee spending declined to c.£80m, being the net amount that flows to overseas clubs (£8m) and Football League clubs (£72m). This is a significant reduction compared to summer 2008 (£215m) and summer 2007 (£240m). * Premier League clubs’ transfer fee spending in the summer window has again exceeded that in other European leagues, albeit not by as much as in previous seasons. Spending by Real Madrid and Barcelona has boosted summer 2009 transfer spending by clubs in Spain’s top division to around £400m. Italian Serie A clubs have spent around £350m and the clubs in the top division of each of France and Germany have spent around £200m. * Football League clubs have spent around £20m in summer 2009. Net of amounts received from Premier League and overseas clubs, the Football League clubs benefit from a net inflow of around £72m this summer.Summing up the findings and looking to the future, Paul Rawnsley, Director in the Sports Business Group at Deloitte, said: “As expected, despite the significant spending by Manchester City, Premier League clubs’ transfer spending declined in summer 2009. Economic conditions may improve in 2010 and the Premier League is expected to secure enhanced values for international media rights generating higher revenue for Premier League clubs. However, without further significant capital injections from owners, transfer spending is unlikely to exceed the record level achieved in 2008.” - ENDS - 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. The information is based on reported transfers as at 17:30 on 1 September 2009. 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/sportsbusinessgroupwww.deloitte.com/view/en_GB/uk/news/news-releases/press-release/aedf0b5428673210VgnVCM100000ba42f00aRCRD.htm
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