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SBD Global/January 30, 2014/FinancePrint All
English clubs were by "far world football's biggest spenders on overseas players" in '13, paying £550M, a "quarter of the total spent by all clubs globally," according to David Conn of the London GUARDIAN. In its Global Transfer Market 2014 report, FIFA said that English clubs "spent substantially more money on overseas players," up 51% on '12, due to the new £5.5B TV deals secured by the Premier League for '13-16. Spain, whose clubs apart from Real Madrid and Barcelona are "struggling with debts, losses and mounting tax bills," was the world's "biggest sellers of players," receiving £341M in total. The figures, "compiled from all international player transfers" by FIFA annually, also reveal that English clubs paid £45M to "intermediaries" or agents to "act for them, in addition to any money paid to players' agents" (GUARDIAN, 1/29). The PA's Martyn Ziegler reported after the Premier League, Italian clubs were the "next biggest spenders on overseas transfers" (£286M), followed by France (£253M), Spain (£192M) and Germany (£144M). The report "also highlighted the growing influence of 'super clubs' such as Manchester City, Paris St. Germain and Monaco, where wealthy owners provide huge sums for fast-track team strengthening." The report states that "across the world there were a total of 12,309 international transfers" in '13, 4% more than in '12, and 90% of these "were transfers with no fee paid" (PA, 1/29).
HEDGING THEIR BETS: In London, Mark Cue reported there was a "significant increase in so-called conditional transfers, where part of the fee is fixed and the rest is performance-based." Fees from "such transfers leapt" 73% to a total of £316M. FIFA Transfer Matching System GM Mark Goddard said that the "jump in conditional transfers could be significant." Goddard: "It is a very interesting trend because the market is becoming more astute, a lot of the transfers are based on either potential performance or past performance, if the players are older. Clubs are hedging their bets, trying to be more sensible in how much money they put into the guaranteed section and into the potential section [of the fee]" (LONDON TIMES, 1/29). The AP's Graham Dunbar reported FIFA's other figures show that nine countries accounted for $3B in spending; 14 more -- including Brazil, the U.S. and Qatar -- spent a further $16M; the remaining $115M was spent by 116 countries. There were "41 FIFA member countries" that were not "involved in any international transfers." Of the 12,309 transfers processed (up 4%), "only 1,628 involved a fee." Out-of-contract players made up 69% of transfers (AP, 1/29).
THREE REASONS: The AFP reported FIFA cited "three main reasons for the spending rise: so-called 'super clubs,' the English Premier League's spiralling broadcast rights value and high turnover of coaches at leading clubs" (AFP, 1/29).
ÖZIL EPL'S PRICIEST: The BBC reported the "biggest overseas signing" by an EPL club was Arsenal's "club-record capture" of Germany's Mesut Özil for £42.4M from Real Madrid. The "biggest outgoing transfer" was Gareth Bale's "world record-breaking" £85.3M move to Real from Tottenham (BBC, 1/29).
ARGENTINA AND BRAZIL SPEND LESS: REUTERS' Brian Homewood reported Argentina and Brazil "spent less on transfer fees last year, with the former down" from $25M to $22M and Brazil "more significantly" from $94M to $73M. The report said, "A currency crisis afflicting emerging economies has reduced Brazilian and Argentine buying power in the international market." Brazil "remained hugely influential, however," and 13% of all transfers, totaling 1,588, "involved players from the 2014 World Cup host nation" (REUTERS, 1/29).
Man City on Wednesday released its latest financial results, which showed that losses have fallen by £46.3M to £51.6M for '12-13, according to James Ducker of the LONDON TIMES. The club's "turnover has increased" by almost £40M to £271M and "for the first time they are operating with no financial debt after paying off all of their remaining borrowings." Man City had "yet to provide full access to the accounts before 4pm but it is thought that they now have every chance" of meeting UEFA's FFP regulations, something which "seemed unlikely when they posted losses" of £197M for '10-11, the "largest in English football history" (LONDON TIMES, 1/29). REUTERS' Keith Weir reported "although City's finances are improving," FFP rules "cap headline losses" at £37.1M ($61.4M) over the past two seasons. There are a "series of exemptions for older contracts and money spent on things such as youth development that might help to reduce City's deficit under the rules set out by UEFA." Man City CEO Ferran Soriano said, "Growing revenues and controlled expenses are bringing the club to break-even in the immediate future and profitability thereafter" (REUTERS, 1/29). Click here for the full report from Man City's website.
Super Rugby side New South Wales Waratahs' financial position "is so unstable and precarious that rain on a couple of home-match nights" this season might be all it takes "to drive the franchise to the wall," according to Wayne Smith of THE AUSTRALIAN. Waratahs CEO Jason Allen said that while "he did not subscribe to the panicky talk surrounding the NSW franchise, its finances were unsustainable." He said, "Do we have enough cash to get through this season? At this point, yes. Can we sustain it? No." He admitted that the Waratahs "literally had nothing set aside for a rainy day." Allen said that "the franchise's financial position was '50 per cent worse off' than at the corresponding period last year, primarily as a consequence of the loss of HSBC as full naming-rights sponsor." He said, "We've got our exposure to a level where it's bloody risky but it's not close-the-door time" (THE AUSTRALIAN, 1/30).