golden boots

EPL clubs are spending like crazy, and fans will end up footing the bill

September 2, 2014
September 2, 2014

This was the costliest summer in history for England’s top soccer clubs. And that, for a country that is already home to the world’s highest paying sports team of any kind, is really saying something.

According to fresh analysis by Deloitte, teams in England’s Premier League spent £835 million ($1.4 billion) buying new players during the summer months. That eclipses the £760 million spent over the course of the entire 2013-14 season. (The transfer “window,” which allows contracted players in Europe to be bought and sold, re-opens in January).

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Now, these numbers don’t include the amounts clubs have recouped in player sales. Nor do they account for players’ salaries. They simply reflect what clubs have paid to buy players from other clubs.

Even so, the large sums being spent illustrate the crazy economics of live sports.

There are a couple of dynamics at play. One is the predicament of Manchester United, one of the richest clubs in the world, which has been re-tooling its squad after its worst finish in recent memory last season. According to Deloitte, United spent £150 million on transfers during the summer window, more than any club has ever spent before—though it has recouped some of that spending through player sales.

But arguably, a bigger reason is the fact that Premier League clubs are receiving more income from broadcasters than ever before. The average club received £25 million more in TV income last season, Deloitte says. The EPL sold its worldwide TV rights for a record £5.5 billion last year. Broadcasters are prepared to pay more for rights because consumers in the UK (and around the globe) are prepared to buy pay-TV subscriptions to watch games.

It is great business to be in if you can get it, because sports teams, players and broadcasters don’t get any of the blame for higher subscription prices. In a US context, when consumers get higher cable bills, they usually direct their anger at their cable company, not ESPN or their favorite sports team.

In the UK, consumer groups have blamed hikes in phone and broadband prices by BT Group on the huge sums that company has spent on soccer broadcast rights; BT denies this linkage. Sky, which also has rights to certain EPL matches, generally costs more than BT. Anger is growing over increasingly excessive ticket prices.  The penny might be finally beginning to drop.

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