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Deloitte: £1.9bn record-breaking Premier League transfer spend

Author: ICAEW Insights

Published: 20 Sep 2022

New club owners and new team managers looking to make their mark on the biggest football stage in the world push transfer window spend up to nearly £2bn.

The football Premier League is bucking the business confidence trend with analysis showing that spending by clubs during this year’s summer transfer window hit an all-time high, new ownership acting as a catalyst for their collective deep pockets.

Premier League clubs’ gross transfer spending totalled £1.9bn in the summer 2022 window, the highest spend ever recorded in a single transfer window by a margin of £487.8m, according to Deloitte’s Sports Business Group.

The previous record was set in the 2017 summer transfer window, when clubs spent £1.4bn. With the January transfer window still to come, the 2022/23 season already has the highest gross transfer spend since the two-window season began at £1.92bn, narrowly ahead of 2017/18 (£1.86bn).

Tim Bridge, lead partner in Deloitte’s Sports Business Group, said the record level of spending during this transfer window is a clear indication of Premier League clubs’ confidence, as fans return to stadia and a new broadcast cycle begins.

“It’s now become part and parcel of the Premier League that clubs are willing to pay significant sums to maximise performance. This season, the desire to acquire playing talent has reached new levels as the pressure for clubs to stay in the competition is higher than ever before.

“Recent years have demonstrated the risks of clubs sustaining high levels of spend while failing to get their financial house in order. Particularly in the current economic climate, as costs begin to rise, the importance of retaining financial stability off the pitch should be as much a focus for clubs as ensuring their success on it,” Bridge said.

What were the key drivers behind this record-breaking window?

New owners and managers

New ownership acted as a catalyst for increased spending this summer. Chelsea spent more than any other Premier League club – £157.8m more than last summer and £53.3m more than the next biggest spenders, Manchester United, at £202m.

Football finance expert, co-host of viral podcast ‘The Price of Football’ and chartered accountant Kieran Maguire said: “There have been takeovers at both Chelsea and Newcastle in the last 12 months, and the new senior management teams have been amongst the biggest spenders over the summer. In addition, Nottingham Forest was promoted to the Premier League for the first time in over 20 years and the club’s owner has sanctioned a significant transfer spend to try to ensure they stay in the division.”

The managers at Manchester United, Spurs and Aston Villa have all been in their position for less than a year, and the summer 2022 transfer window was an opportunity to mould the squads into the type of player and style that they prefer. “This is a costly exercise,” Maguire added.

Financial pressure easing after the pandemic

With a season of full stadia helping to alleviate COVID-19-induced financial difficulties, fewer clubs have resorted to loan deals than in the previous summer window; just 10% of players signed by Premier League clubs in summer 2022 were signed on loan deals, compared to 14% in the 2021 summer transfer window. The proportion of players being signed for no fee also declined, but only slightly, to 19% in 2022 down from 22% in 2021.

“Transfer spending was more cautious in 2020 and 2021 because of the uncertainty in relation to matches playing in front of paying audiences. The expectation of full stadia in 2022/23 has allowed clubs to budget more generously,” Maguire said.

Spending across the ‘big five’

Gross transfer spend across Europe’s ‘big five’ leagues (Premier League, La Liga, Bundesliga, Ligue 1 and Serie A) totalled €4.5bn in this summer’s window, a 52% increase on the previous year. Despite this growth, spending among Europe’s top leagues has not quite returned to pre-COVID-19 levels; the three-year average between 2017-19 was €4.7bn.

Premier League clubs’ €2.2bn gross spend was almost three times higher than the Serie A league (€749.2m), and more than four times the €484.1m spent by clubs in the Bundesliga. 

“The Premier League has the biggest broadcast deals in football, and this has given it an advantage over other European leagues who have been hit relatively harder by COVID,” Maguire explained.

Matchday income in the Premier League is only about 14% of total, whereas it represents a much higher proportion of income for the other big five European leagues, Maguire explained. “The new broadcast deals signed by the Premier League for USA and Scandinavia in particular are a sign of the attraction of the product.”

Relegation from the Premier League can also result in a decrease in income of about £50m in the first season, even with parachute payments, and that sum can double within three years. “Clubs therefore have an incentive to spend on transfers to avoid relegation. Similarly, there are usually six clubs at the top of the Premier League competing for four Champions League places, which can be worth over £100m if a club gets to the final stages,” Maguire says. “Therefore, there is an incentive for clubs at the top to spend more on talent recruitment too.”

Read the full analysis from Deloitte’s Sports Business Group

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