Friday, February 1, 2013

Big spending masks age of austerity for top soccer clubs

Mario Balotelli, David Beckham and Christopher Samba were the stars of transfer deadline day.
(CNN) -- January can be a grueling month. Christmas is but a distant memory, with the only reminder of the festive period the credit card bills which keep tumbling through the letter box.
It is often a time for cutting ones cloth as once profligate football clubs are finding out, though the likes of English Premier League club Queen Park Rangers have gone on a spending spree in a desperate bid to avoid relegation.
English Premier League clubs splashed out a combined £120 million ($190 million) on new players during the January transfer window -- double the £60m spent during the same period in 2012 -- but those figures can be deceptive, with QPR, Liverpool and Newcastle United accounting for over half of the money spent in England's top flight.
But, in truth, the increase in spending contradicts the mood of austerity which is blowing like tumbleweed through European soccer.
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"Winter window activity tends to be driven by the on-pitch competition at the upper and lower ends of the Premier League table."
The elephant in every club boardroom is the need to factor in European governing body UEFA's new financial rules that are designed to prevent big spending clubs spending beyond their means and posting unsustainable yearly losses.
"Clubs are now in a reporting period that will count towards the first assessment of UEFA's financial fair play break-even requirement for international competition and Premier League clubs are also considering the implementation of additional cost control regulation at a domestic level," added Jones.
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"Their apparent relative restraint in this transfer window may reflect an increasing focus on clubs achieving more sustainable levels of expenditure relative to revenues."
Like QPR, the motivation for Newcastle, currently 15th in the table, to bring in reinforcements was to ensure Premier League survival. And the arrival of the cavalry at both clubs is already starting to have an effect.
France striker Loic Remy scored on his debut for QPR in a 1-1 draw with West Ham United, while Newcastle's new French midfielder Moussa Sissoko dominated the game during Tuesday's 2-0 win at relegation rivals Aston Villa, who preferred a strategy of financial prudence, which may yet backfire.
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Premier League survival is more important than ever this term, with a record-breaking television deal set to offer clubs and unprecedented bounty next season.
"Premier League clubs have been relatively restrained in their player transfer fee spending, in spite of the upcoming uplift in their broadcasting revenues of between £20m and £30m each from next season," added Jones.
"Whilst the clubs' total spending was £120m, after taking into account transfer income, the Premier League clubs' net transfer spend was £70m."
The transfer window system has been in place across European since 2003. In 11 January windows, English clubs have traditionally outspent their continental rivals, and the trend continued in 2013.
The second highest spending league this January was Italy's Serie A, which spent roughly 70% of the EPL's total.
The most high-profile of those transfers was that of controversial striker Mario Balotelli, who joined AC Milan from English champions Manchester City.
Spending in France and Germany was dwarfed by that in England and Italy. The total amount spent in both countries was between 30 and 45% of that recorded in England, with an exodus of players across the English Channel the trend during France's transfer window.
One Englishman who bucked the trend was soccer icon David Beckham, who joined Paris Saint-Germain on a deal which will see his wages donated to a local childrens' charity.