English Clubs Dominate Global Transfer Spending with £1.6 Billion Splurged in 2020/21

Gold Coin Bag IconSome economists believe you have to spend money to make money.

That certainly seems to be the way of the world in football, with the Premier League’s representatives dominating continental competition in the 2020/21 season – Manchester City and Chelsea will contest the Champions League final, while Manchester United are the favourites to win the Europa League final on May 26.

We can therefore draw a straight line between transfer spending and success on the pitch, and that concept is given added weight by a report released by UEFA into the amounts splashed out by clubs in Europe.

The 84-page document makes for interesting reading, and confirms what we perhaps already expected – English clubs spent way more on transfers than any other major league on the continent.

They combined to splurge more than £1.6 billion on new talent in 2020 and into 2021, which equates to just less than half (43%) of the global transfer activity in that time.

Amazingly, the Championship – which is the second tier of English football, of course – was the sixth highest spending league in the world for the timeframe covered by the report.

Here’s a look at the biggest spending countries in the studied time period:

  • England – £1.6 billion
  • Italy – £730 million
  • Spain – £607 million
  • Germany – £554 million
  • France – £530 million

The most prolific ‘flow’ of players was from English clubs to their domestic rivals, although transfers from Germany, France and Spain to England also featured in the top five – a situation that might change post-Brexit.

As you might expect as clubs tightened their belts, there were fewer permanent transfers during 2020/21 – the numbers of traditional fee-based signings was down 1.3% year on year and the number of out-of-contract deals decreased by 1.8%. That formed part of a £1.7 billion in transfer spending compared to 2019/20.

In contrast, the number of loan signings made increased by 2%, while the number of returning loan players deployed by their parent clubs rose by 1.1%.

Plight Felt in Astronomical Losses

Red Financial Crisis Chart

As well as transfer spending, UEFA’s investigation into global finances in football also took a look at the damage caused by the pandemic.

The figures suggest that more than £60 billion has evaporated from the sport in just over a year – UEFA issued a stark warning that transfer fees and wages must be reduced in order to safeguard the future of football. Twenty of the biggest clubs in Europe lost more than £1 billion apiece.

The primary cause of the financial woes has been the lack of paying punters in grounds across Europe, with an estimated 210 million ticket sales lost during the pandemic. That has caused a downturn of approximately £2.5 billion, while sponsorships, broadcast revenue and commercial partnerships have been decreased to the tune of a combined £3 billion.

Another issue for clubs to contend with is that their players have become less valuable in the past year or so. Some 10% has been wiped off the average player value according to a study by KPMG in their Football Benchmark series.