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Tuesday, October 27, 2020

Covid-19 effect: At £1.2 billion, EPL spending during transfer window lowest since 2015

Premier League clubs were less reluctant to splurge but most clubs, when buying players, have deferred the bulk of the amount to a later date.

Written by Tushar Bhaduri , Edited by Explained Desk | New Delhi | Updated: October 10, 2020 10:56:26 pm
Football, Football transfers, EPL, English Premier League transfers, Transfer window, Indian ExpressFrom left: Timo Werner, Ruben Dias, Kai Havertz and Federico Chiesa (Photos: AP, Reuters)

It was a football season like none before in Europe, and it was followed by a transfer window much later than anyone is used to. The pandemic ensured the dynamics of business changed, but as deadline day approached, the narrative seemed similar to that of previous years.

What was different about this transfer window?

The European football season generally finishes in the first week of May, and thereafter till August, clubs are allowed to complete their deals on player movements. But the pandemic halted proceedings in March, and the season ended much later than usual. The players who had their contracts till June 30, the nominal end of the season in normal times, had them extended. The transfer window ran from July 27 to October 5.

How did the pandemic affect clubs’ finances?

It affected those at the lower levels of the football pyramid the most. Premier League clubs’ spending was down to £1.2 billion, their lowest since 2015, but they still comfortably out-spent other major European leagues such as Bundesliga, Serie A and La Liga.

“Total expenditure on player acquisitions is significantly down across all the top five European leagues against the five-year average — ranging from -7% in the Premier League to -46% in La Liga,” according to London-based investment company Carteret Analytics, quoted by BBC. “It is a fair assumption that Covid-19 has caused this significant contraction in the player transfer market in this window.”

Even Real Madrid, who are never shy of making a big splash in the transfer market, were quiet during this period, the first time that has happened in the summer window since 1980. Los Blancos suffered from significant losses due to the coronavirus, and were also held back by the expensive renovation of their Santiago Benabeu Stadium. Though the grapevine says they are keeping their powder dry for a huge bid for Paris Saint-Germain’s Kylian Mbappe next year, it shows that even the biggest clubs are not immune to the pandemic’s financial fallout.

Their La Liga opponents Valencia were in the same boat. Club president Anil Murthy blamed the lack of arrivals on a €100 million fall in revenue due to the virus. Barcelona’s revenue fell by an estimated €203 million last year.

According to Gazzetta Dello Sport, spending in Serie A fell by over half a billion euros.

Football, Football transfers, EPL, English Premier League transfers, Transfer window, Indian Express Fans pose for pictures with Arsenal’s mascot Gunnersaurus in Singapore. (AP Photo: Joseph Nair, File)

What are the other effects of the pandemic?

Football was halted for more than two months and when it restarted, it did so without spectators. Several clubs, including big ones in the Premier League, furloughed non-playing staff. Arsenal have even made club mascot Gunnersaurus redundant as part of cost-cutting measures.

The fallout of the pandemic was felt even in faraway Brazil, which exports the largest number of footballers in the world. In the middle of September, it was reported that transfers to foreign clubs had fallen by 62 per cent in this transfer window. There was a sizeable dip in the amount of money involved as well. According to France 24, football transfers generally account for a fourth of the revenue of Brazilian clubs, second only to TV rights.

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How did the unusual timing of the transfer window affect football clubs?

When the window opened, the 2019-20 Champions League season had still not been decided. Some players, like RB Leipzig’s Timo Werner who went to Chelsea, insisted on a move before the season was over. Consequently, their clubs had to do without a key player in the knockout games of the biggest club tournament in the world.

How have clubs tried to deal with the situation while acquiring players?

Premier League clubs were less reluctant to splurge but most clubs, when buying players, have deferred the bulk of the amount to a later date.

“When clubs are doing these deals, it tends to be a low down-payment, and the rest of the amount that needs to be paid is back-ended,” John Purcell of football finance specialists Vysyble told AFP. “That suggests to us that, firstly, the clubs are thinking this Covid situation is not going to last forever. Secondly, it is forcing the clubs to stack up their risk exposure a little bit further down the track.”

Why are the Premier League clubs still ready to spend big?

The lure — financially as well as prestige-wise — of the Champions League is forcing the big clubs to splurge. Failing to qualify for continental competitions or, for those lower down the points table, the threat of relegation is deemed worse that the financial effect of the pandemic.

Big guns like Manchester United, Manchester City and Liverpool suffered unexpected reversals leading up to deadline day, piling up the pressure to bring out the cheque book. And the Red Devils responded by signing four players the day after losing 1-6 to Tottenham Hotspur.

The same supporters, who flayed the clubs for furloughing staff, now wanted them to go out in the market. It suggests that apart from those directly affected by the layoffs, most fans’ biggest consideration is results on the pitch.

Also in Explained | Liverpool’s 7-2 drubbing explained: How the EPL champions are caught in their own off-side trap

What were the biggest transfers during the window?

* Napoli spending up to €80m on Victor Osimhen from Lille
* Chelsea buying Kai Havertz from Bayer Leverkusen for £71m
* Manchester City acquiring Ruben Dias from Benfica for £65m
* Juventus buying Federico Chiesa for up to €60m from Fiorentina
* Bayern Munich getting Manchester City’s Leroy Sane for £54.8m
* Liverpool buying Diogo Jota from Wolverhampton Wanderers for £45m
* Arsenal buying Atletico Madrid’s Thomas Partey for £45m

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