CARE SHOULD be taken before generalising too wildly about this transfer window in which the least amount, €35 million – according to accountants Deloitte – was spent since the system was introduced in 2003, dramatically less than the record €195 million spent last year.
The relative parsimony of this January’s spending does not mean Premier League clubs are in financial meltdown, although, clearly, the climate has turned chilly. Portsmouth are the extreme case, a club embargoed by the Premier League for much of January from making any signings because they still owe instalments on players signed in 2007 who have since departed.
Hull City’s auditors have said the club must reduce its costs by €19 million even if Phil Brown’s men survive in the Premier League, so chairman Adam Pearson’s balancing act has been to decide which players can be retained so City might have a chance of doing both.
It is generally accepted that a sudden realisation of the need to end their never-never profligacy has thudded into most clubs below the biggest. Hull and Portsmouth both borrowed against future television income, and Standard Bank’s demands to have all the money repaid precipitated Pompey’s near-collapse.
Several senior Premier League figures said yesterday that banks have reined in their lending to clubs. While transfer fees and new signings are falling as a result, there is no sign, according to one chairman, that players’ wage inflation is even slowing.
Steve Morgan, the Wolves chairman, who has kept a check on spending despite the club’s promotion windfall, said: “In football and generally in business banks are not backing people to extend themselves against future earnings. That is the new realism. We can’t keep living beyond our means and hocking the future to pay for the present.”
The imminence of next season’s Uefa-inspired rule limiting squads to 25, of whom eight must be “homegrown”, is encouraging even stable clubs to offload players, not sign more. In the move to encourage opportunities for young players, unlimited numbers of those aged under 21 are allowed to supplement the 25, and that partly explains this window’s most eye-catching deal, Manchester United’s reported €8 million signing of the 20-year-old centre-half Chris Smalling, who has played just 11 first-team matches for Fulham.
United chief executive David Gill insisted at the weekend Alex Ferguson does have the proceeds of Cristiano Ronaldo’s sale to spend, despite the club’s €820 million debts, which gave United licence to use €80 million to reduce the money owed to hedge funds by the Glazer family.
Liverpool, the other club subjected to a leveraged buyout by American owners who shifted their borrowings on to the club, have made it clear there is not much spare cash for Rafael Benitez to shop for players with.
Standing apart from the rest are two clubs who remain undeniably rich. Yet Chelsea have spent nothing, with owner Roman Abramovich signalling that he really would like to make good his pledge to one day break even financially at Stamford Bridge.
At Manchester City, Sheikh Mansour of Abu Dhabi is not suddenly poor. Unlike the Glazers, he is not thought to be personally borrowing money from his club, yet even City have not been lavish. Last January City spent over €50 million buying Shay Given, Wayne Bridge, Craig Bellamy and Nigel de Jong, but the club stated they would not be similarly acquisitive this time. New manager Roberto Mancini has had to content himself largely with the squad he inherited.
Tottenham Hotspur were last January’s other big spenders, €52 million furnishing Harry Redknapp with Jermain Defoe, Robbie Keane, Wilson Palacios, plus Carlo Cudicini, on a free transfer, and Pascal Chimbonda for an undisclosed fee.
Spurs fans, and players, must hope the club has the backing to pay the ongoing bills rather more reliably than his previous club, Portsmouth.
Mostly, however, the Premier League clubs have suddenly realised they cannot keep borrowing and spending to fuel rampant transfer inflation.
GuardianService
