European soccer clubs have reinvested cash from television deals to go on a record-breaking summer spending spree led by teams from the English Premier League and Spanish giants Real Madrid and Barcelona.
Clubs in the English top flight had spent £630mn by the player transfer deadline on Monday night. Teams in the big European leagues must now wait until January before they can hire new players.
The spending by English clubs broke the 2008 record of £500mn, according to figures compiled by business services group Deloitte, and underlined the Premier League’s status as the world’s richest national competition.
“As the financial rewards for participation and success in the Premier League increase, so it follows that clubs are investing on the pitch to ensure they continue to benefit from the remarkable Premier League growth story,” Deloitte’s Dan Jones said.
Manchester United and the other 19 EPL teams are expected to share revenues of about £1.6bn this season thanks to enhanced TV deals with BSkyB and BT in Britain, and broadcasters around the globe that began last month.
Spending such sums might appear to defy logic given Spain’s economic problems but Real and Barcelona enjoy the luxury of doing their own TV deals rather than pooling revenues as happens in England and other major leagues.
That has made the two clubs the world’s richest in terms of revenues and allowed them to remain buyers when many of their Spanish rivals are forced to sell their best players.
Real and Barcelona have TV deals with Spanish production and distribution company Mediapro. They both also have lucrative new main sponsorship deals this season — Barcelona with Qatar Airways and Real with the Emirates airline names on their kit.
Overall spending levels may also raise eyebrows when loss-making clubs are supposed to be complying with new Financial Fair Play rules introduced by UEFA, European soccer’s governing body, to put soccer on a more stable footing.
“A lot of English clubs have gone on a spending spree but they haven’t breached the Financial Fair Play rules as they are only spending what they have earned,” said Simon Chadwick, a professor of sports business at England’s Coventry University.