For all the talk of financial might, this summer's transfer window saw the Premier League's collective net spend fall by more than 25%.
Whether you use Transfermarkt figures (showing a drop of 24%, from €1.019 billion to €774 million) or the numbers put out by Deloitte (a fall of 26.4%, from £850m to £625m), it's pretty clear that 2019 saw a sharp U-turn in spending compared to years past. In fact, Deloitte says this was the lowest net spend since the summer of 2015, which is rather remarkable when you consider that Premier League revenues have risen by 22% since then. And bear in mind, the window has closed in England but remains open elsewhere, which means that the net spend number can only go one way: down.
Even more remarkable is net spending by the Premier League's wealthiest clubs: Manchester City, Liverpool, Chelsea, Tottenham, Arsenal and Manchester United. They have traditionally driven spending, as you would expect, yet collectively, in the summer of 2019, their net spend is around £241m. Because that number can only go down in the next three weeks, don't be surprised if we end up with the lowest Big Six net spend since the summer of 2012.
To give you an idea about how long ago that was, Sir Alex Ferguson was managing Manchester United and signing Robin Van Persie to win one last title before retirement.
Obviously Chelsea's transfer embargo affects the total and coupled with Liverpool's decision to effectively sit out this window, it accounts for a big chunk -- though by no means all -- of the shortfall relative to last season. And we're still some £260m down on the summer of 2016.
Two other factors come into play that would have suggested greater net spending from the Premier League big boys. One is that the Premier League supplied both Champions League and Europa League finalists last season. That translates into a prize money windfall, as well as (usually) greater commercial and sponsorship revenue down the road.
The other is that this summer, more than any other in recent memory, has seen superstars, mostly at continental clubs, finding themselves on the market. Some have effectively had "for sale" signs around their neck (Gareth Bale, Mauro Icardi, Paulo Dybala), others had release clauses (Antoine Griezmann) and others still, you suspect, would have been available at the right price (Neymar, Matthijs De Ligt, Philippe Coutinho). In the past, you would have expected interest from English clubs, but not this summer. For a variety of reasons, and much to the frustration of agents and intermediaries, they tended to stay put, whether it was onerous contracts, excessive commissions or, in some cases, a feeling that a big name might disrupt harmony and chemistry.
So why did the big English clubs suddenly stop spending? And is this a sign of things to come?
There are, broadly, two answers. One is, for lack of a better word, circumstantial. Clubs tend to spend big when they are underachieving, need to rebuild and/or when they have new managers (who have often been given assurances of transfer budgets). That's not the case for Manchester City, Liverpool or Tottenham (though Spurs did spend relatively big, which was understandable after doing nothing last year). With Chelsea on the sidelines, that leaves Manchester United and Arsenal. The former were rather conservative by their standards, possibly because they're still not clear on whether Ole Gunnar Solskjaer is a long-term solution. The latter had one of their biggest windows ever but still are hamstrung by a high wage bill and mega-contracts for players such as Henrikh Mkhitaryan and Mesut Ozil, who eat up a vast chunk of the wage bill.
And that brings us to wages and revenues, the macro trend. Wages and transfer fees of course come out of the same pot. In the Premier League, salaries have grown faster than revenue over the past three seasons and after years of vertical growth, you suspect owners are starting to think the Gold Rush is ending. This may explain why, as a proportion of revenue, this summer's net spend of 12% (and, remember, that figure will only go down) is the lowest since 2012.
The value of the Premier League's most recent domestic TV deal fell by 8%, from 2016-2019 to 2019-2022, despite a 19% increase in the number of games being sold for broadcast. And while revenue from overseas rights is up 30%, more than making up for the shortfall, that's less than the Premier League had predicted five years ago. Piracy and illegal streaming are a big factor here, as is the fact that, in many markets, there is a dominant broadcaster exercising a monopoly.
There are only so many ways you can grow revenue and with gate receipts pretty much maxed out -- except for Tottenham, who will benefit from their new ground -- if media rights income goes flat, that leaves only commercial revenue as a potential growth driver. And that's already a pretty saturated market. It's not a reason to despair -- it remains head and shoulders above other domestic leagues -- but there is a sense that if you want to be profitable you need to keep an eye on costs. And this is especially true given the nature of Premier League owners, particularly at the Big Six.
For better or worse, Arsenal, Liverpool, United and Tottenham are owned by businessmen who expect to make money in the long term (and often the short term too). Chelsea and Manchester City, after years of free spending and "vanity ownership," are in the same boat too. Which, incidentally, is why all these clubs back Financial Fair Play: It keeps the costs down and the profits up.
Financially, this may be remembered as the transfer window when England's Big Six were reasonable, level-headed and far-sighted. Football-wise, you wonder if maybe it won't be remembered as a missed opportunity to hoover up even more talent and consolidate their power at the top even further.