By: Nur Renollet
Feb. 23, 2023
Photo Credit: Associated Press
The 2022/23 European January transfer window resulted in the de facto coronation of the Premier League as the financial king of European and Global soccer.
Premier League clubs spared no expense in cementing this fact as their combined expenditure on transfer fees was £815 million ($981.9 million). This is a 276% increase in spending compared to the 2021/22 Premier League January transfer window (£295 million). Combined, the remainder of the perennial ‘top-five’ European leagues (Spain’s La Liga, Germany’s Bundesliga, Italy’s Serie A, and France’s Ligue 1) spent a mere £220 million.
Under American owner Todd Boehly, Chelsea F.C. are the most recent poster-boy for Premier League opulence as they spent £280 million this transfer window. Chelsea F.C. not only outspent the other top-five European leagues, but was only £15 million shy of the total value of transfer fees during the 2021/22 Premier League January transfer window.
The Premier League’s extravagant spending has not been met kindly by top officials of other leagues, as highlighted by La Liga president Javier Tebas’ accusations that Premier League teams are being “financially doped” by ultra-wealthy owners who can afford to recoup the large losses transfer windows tend to incur.
Others also find it uneasy that a side like A.F.C. Bournemouth, who are currently 17th in the Premier League, can enter bidding wars with clubs like A.C. Milan, who are currently 4th in Serie A. This was seen in the transfer war over A.S. Roma’s player Nicolo Zaniolo. Bournmouth agreed to match the Italian club’s £26.4 million asking price and increase Zaniolo’s wage – Zaniolo ultimately refused to sign. Though A.C. Milan was Zaniolo’s desired destination, they were unable to cough up the necessary funds to match Bournemouth’s offer.
The financial prowess of the Premier League not only burns the egos of top clubs from other leagues but sends a message to the rest of the world: If you want to get “the big bucks” join one of the twenty Premier League teams.
The Premier League has taken great care over the last decade to develop its international brand which has seen foreign investment and the commercial value of the Premier League skyrocket. Excluding owner wealth, the most identifiable factor to the league’s wealth is television rights (see Figure 1). The disparity between the Premier League and “the rest” is vast and growing. This has allowed the Premier League to allocate larger sums of money to clubs every season which has encouraged further owner and commercial investment into individual clubs. This three-pronged influx of cash has propelled Premier League clubs to collectively become extremely lucrative business entities.
Figure 1: Value of 2022/23 Season European TV Rights Deals by League
The Premier League’s buying power was put on full display this past January, but many question its sustainability. Excluding loans and free transfers, forty-two transfers were conducted by Premier League clubs – twelve were from English clubs and thirty from international clubs. Given this, the average signing would cost around £19.4 million. Excluding loans and free transfers, Premier League clubs only sold 15 players. Thus, the Premier League can most certainly be considered as a buyer of talent.
A few fears have arisen in wake of these lucrative transfer deals and the growing financial disparities. First, will European clubs become too dependent on Premier League cash and create a scenario where the Premier League essentially ‘bankrolls’ the rest of European soccer? Second, given the transfer markets' historically high sell on value for expensive signings, who will be able to purchase them? Finally, in the near future, could Premier League clubs be forced into a ‘circular market’ when attempting to sell on expensive talent given that only a handful of non-Premier League clubs can match Premier League club finances?
Given that the European transfer market has only seen player transfer fees increase over the last decade, it will be fascinating to see if these fears pan out or if the market will shift in ways that combat the Premier League’s financial prowess from growing out of control.