Analysis: The Saudis revive the transfer market in a pandemic

For a government in turmoil, there is little to celebrate in the corridors of power in London. Apart from perhaps the financial weight of England’s football clubs and their ability to spend on players.

The news that Premier League spending reached £ 295 million ($ 400 million) over the last month was celebrated by Sports Minister Nigel Huddleston in the hours after the clubs completed their final trades of the season.

“Good to see the Premier League recover so strongly from the pandemic,” Huddleston tweeted, “with spending levels in the January transfer window at the second-highest ever.”

In fact, deducting the amount from the sale from total spending showed that Premier League clubs had the highest net spending of £ 180 million since the January transfer window was introduced in 2003, according to a statement from auditing firm Deloitte.

The ability to so markedly renew the troops in the mid-season has shown the resilience of the world’s richest league to cope with the economic consequences of coronavirus, helped by the government halting all capacity restrictions that have continued to hamper rivals in Europe.

But it is the government’s warmth towards investment from Saudi Arabia that has also contributed to the headline trumpeted by Huddleston.

In the first transfer window since Newcastle’s takeover of Saudi Arabia’s sovereign wealth fund was approved by the Premier League – despite prayers from human rights activists but reflecting the government’s embrace of the kingdom – the Northeast club accounted for £ 90 million in player spending. And the Public Investment Fund would have paid out even more as it pursued more than the five trades it got across the line before Monday’s transfer halt.

Now it’s the squad Newcastle are stuck with until May in its mission to ensure its first season with the richest owners in the football world does not end in relegation. Escaping the drop zone only means wiping out Norwich’s single-point edge at Newcastle with 17 games left. To that end, manager Eddie Howe has acquired three new defenders, a midfielder and a striker.

Kieran Trippier, who was part of England’s run-up to the 2018 World Cup semi-finals and the 2020 European Championship final, is the recruit with the most star power.

It is only the start – delayed if Newcastle fall into the second row – of the club’s commitment to use its wealth to compete with the superpowers for talent in the way Manchester City rose from mediocrity to winning half of the last 10 Premier League Leagues thanks. to his Abu Dhabi bank account.

Players need a bit of conviction now to join City, even though this was a more restrained transfer window, reflecting the nine-point lead that Pep Guardiola’s team had at the top of the Premier League. After letting Ferran Torres join Barcelona for around $ 60 million, City spent just a third securing another potential young striker – 22-year-old Argentine Julián Álvarez – who will be played from next season.

While the most expensive single charge was the 60 million euros, which lies in second place, Liverpool committed to pick up Luis Diaz from Porto, the other teams in the top five – Chelsea, Manchester United and West Ham – spent nothing.

Instead, more than half of the league’s spending was by teams in the bottom five, with an estimated outlay of £ 150 million of them, according to Deloitte.

The desperation to avoid relegation is reflected by Everton, who are in 16th place and four points above the drop zone, spending more than £ 50 million on players on top of the cost of replacing manager Rafa Benitez with Frank Lampard.

“This transfer window indicates that the financial pressure from COVID on Premier League clubs is easing,” said Dan Jones, sports director at Deloitte, “with money back to pre-pandemic levels and remarkably among the highest we have ever seen in January.”

It reinforces England’s high status apart from its European rivals, supported by a growth in the value of international broadcasting rights. The second largest users in January were Serie A clubs, whose total of 175 million euros (almost $ 200 million) was almost half the cost of Premier League rivals.

Next were La Liga clubs, which spent € 75 million on transfers, followed by € 65 million across Ligue 1 in France and € 60 million in the Bundesliga.

Calum Ross, Deputy Director of Sports Business Group at Deloitte, commented: “In stark contrast to January 2021. The wider European transfer market appears to be booming. Many clubs are beginning to return from significant COVID-induced reductions, with rising revenues reactivating activity in the transfer market. “

While total spending across Europe’s five major leagues rose to 735 million euros from 460 million euros last January, the figure was almost 1 billion euros in 2020, before coronavirus spread across Europe, disrupting leagues and revenue streams.

“Provided fans continue to return to stadiums and disruptions in the upcoming football season remain limited,” said Calum Ross of Deloitte, “we should see revenue, and therefore transfer costs, continue to rise in the coming seasons.”

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