European football is scandalized with the spending capacity of the Premier compared to the rest of the European leagues. As is well known, the Premier has invested almost 830 million euros in this winter market, more than the Spanish, German, Italian and French leagues combined. Of course, the great focus of attention has been placed on Chelsea, who this winter have spent 330 million euros on transfers, with the Argentine Enzo Fernandez at the head of the bill, and have invested a total of 745 million euros since the beginning of the season. At the opposite pole is Barcelona, a rich club that has to beg to register its players because it breaks the financial rules of the League. Although not all are disadvantages for continental competitors because they have monopolized the bulk of the spending of the Premier: only 3% of that spending has gone to clubs in the English lower leagues.
The reasons for all this can be summarized in four. One, the Premier in general and Chelsea in particular have money to spend. La Liga in general, much less, and Barca in particular, almost nothing. Two, the rules of fair play finance are much stricter in the League than in the Premier. Three, and a key point, the rules of the League are proactive (the restrictions are applied taking into account the future: if a club does not get the accounts, it is immediately chained and cannot sign or cannot sign if it does not fix before the accounts) while those of the Premier are reactive (anyone who is shown to have breached the containment rules for a certain period is subject to subsequent sanctions in the form of fines and, potentially, the withdrawal of points). Four, the rules of the Premier are not only more lax than those of the League, they are also more lax than those of UEFA (which affect all clubs that play European competitions) while those of the League are much more demanding than those of UEFA, although that is changing especially in one crucial aspect: the salary caps with respect to total spending in European competitions will soon be as strict as the Spanish ones.
English clubs have more money because television rights are much higher than in other leagues and are distributed more evenly, which favors small and medium-sized clubs and allows them to break into the continental market. The strength and attractiveness of the Premier also means that there are many more investors willing to spend money on English football and makes it easier for them to attract sponsorship and advertising contracts, which in this case favors the big clubs. Currently only Brentford, Brighton, Southampton, Tottenham and West Ham are controlled by English owners.
Up to six clubs are dominated by US capital in addition to Aston Villa, controlled jointly by American Wes Edens and Egyptian Nasseff Sawiris, and Fulham, owned by Pakistani-American millionaire Shahid Rafiq Khan. Leeds United is controlled by an investor from Italy, Leicester by a Thai family, City by Abu Dhabi, Newcastle by Saudi Arabia, Forest by Greece, and Wolverhampton by China, while Everton is owned by Farhad Moshiri. , a British-Iranian based in Monaco.
There are investors looking to make money, like the Glazers with Manchester United. Others seek social or political influence. Petrodollars made Manchester City a world power, are now trying to do the same with Newcastle United and put French PSG on the European soccer map. The problem is that the owners of these clubs care very little about winning or losing money: they mainly seek political propaganda for their countries (the United Arab Emirates, Saudi Arabia and Qatar). There is a widespread suspicion that a large part of the advertising and sponsorship contracts for these clubs ultimately come from companies connected to those governments, which is why they would in fact constitute State aid. City was investigated and sanctioned by UEFA in 2020, but the Court of Arbitration for Sport annulled the sanction on the grounds that the accusations had not been proven or the term to sanction them had expired.
However, the English press assured in its day that the British justice system was still investigating based on publications in the German press and that City had tried to hide it. Precisely, on Monday, the Premier League accused City of breaching financial regulations more than 100 times between 2009-10 and 2017-18 and referred the case to an independent commission. The club risks not only receiving a fine, but also having their points reduced or even relegated to a lower division.
The English rules of fair play prevent the clubs from having annual losses of more than 35 million pounds (39 million euros) per year for three consecutive years (117 million euros in the whole period), but the clubs have always been able to make up their accounts taking into account the different items of spending that are excluded from this rule, from the losses caused by covid to investments in women’s football, stadium renovation or community spending.
Brexit has hardly affected the Premier: foreign players have to add a series of very easy requirements to obtain a work permit, but now they cannot sign foreign players under 18 years of age. Clubs from the European Union can sign players over the age of 16.
A key aspect in football finances is that the Premier has never incorporated a salary limit; unlike the League, which prohibits the wage bill from exceeding 70% of total spending. English football considers introducing some kind of limit, but the suggested figure is 90% on the grounds that, if not, small clubs would be greatly affected.
As has already been said, Spanish teams find themselves with the added drawback that as soon as they breach this limit, the relevant corrective mechanisms are applied, which prevents them from signing or registering new players, including those from the subsidiary they want to occupy. place in the first team. In addition, the League limits the presence of non-EU players to three, another obstacle that does not exist in the Premier, although in this there is an obligation that at least eight players be English.
The European standards of fair play Established more than 10 years ago, which have not managed to curb waste or avoid the advantages of the so-called club-States, they have now changed to gradually impose a system of salary limits: 90% as of the 2023-season. 24, 80% from 2024-25 and 70% from 2025-26. But it has raised from 30 million euros to 60 million the losses allowed in a period of three years. According to the report by the consulting firm Deloitte, PSG spent the equivalent of 111% of their income on salaries in the 2021-22 season, ahead of Everton (96%), Newcastle (95%), Leicester City (85%) , Juventus (84%), Inter (82%) and Barcelona and Real Madrid (73%). Manchester City, leader in revenue (619 million euros), is only sixth in total wage spending. Madrid is second in both factors, while Barca is seventh in income but third in wages.
Chelsea’s stratospheric spending is due to the arrival of a group of investors led by the American Todd Boehly after the forced departure of Roman Abramovich, expelled by the British government for his ties to Russian President Vladimir Putin. What is your secret? Offer very long contracts to new players, up to eight years, and distribute their amortization based on the years of contract. In other words, if they have spent 745 million euros on players with an average contract of eight years, the amount to be amortized each year is 93 million and that apparently allows them to comply with current accounting standards.
Chelsea’s problem is that in a few years it can become the new Barcelona (especially when UEFA applies salary limits), although it will partly depend on the performance of the new signings. Barcelona also distributes the amortization of its transfers over several years, but it has found itself with an unusual number of players who have cost a fortune, they have had very long, highly paid contracts, they have not performed what was expected, but they have put a lot of obstacles to leaving and/or when they have done so, Barcelona has continued to pay a large part of their salary. The list is extensive: Coutinho, Griezmann, Umtiti, Pjanic, Andre Gomes, Arda Turan, Lenglet, Mingueza, Junior Firpo, Trincao, Adama, Luuk de Jong, Riqui Puig… In addition to Messi’s traumatic departure or refusal to leave ( or renew to be able to be sold at a good price) of players who one day seem essential for the team and the other a relief for the club’s financial problems, such as Dembele and Frenkie de Jong.
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Source: EL PAIS