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October 1, 2020

Evening Standard – Premier League clubs’ trade deficit predicted to hit £698m as spending continues despite Covid-19 pandemic

Premier League clubs are continuing to dwarf European sides when it comes to spending in the transfer market, despite the financial impact of Covid-19.

 

That is according to a new report conducted by the Centre for Economics and Business Research (CEBR) and commissioned by Football Index, which investigated the effect of the coronavirus outbreak on the transfer market.

The 2019/20 season saw a record spend from Europe’s five major leagues at £5.8billion, with the Premier League responsible for 28 per cent of that (£1.61bn) and 49 percent (£781m) of the trade deficit.

 

That deficit is calculated by working out a club’s sales and purchases from outside leagues, so as to calculate how much money is leaving the division.

For example, Emiliano Martinez’s £20m move from Arsenal to Aston Villa would not be included in the Premier League’s trade deficit as the money remained in the division – as opposed to going abroad when Chelsea signed Edouard Mendy from Rennes for around £22m.

 

New research conducted by the CEBR is predicting Europe’s five major leagues will spend 46 per cent less on transfers this summer due to the financial uncertainty of Covid-19.

 

The Premier League, however, looks set to be responsible for a staggering 99 per cent of Europe’s trade deficit this summer at a cost of £698m.

 

In contrast, La Liga (£60m) and the Bundesliga (£26m) are on course to record small transfer deficits, while Ligue 1 (£65m) and Serie A (£23m) are set to register a surplus.

The trend is in keeping with last year, when Premier League sides recovered just 52 per cent of the money they spent on new players. Every other major league recovered at least 71 per cent and for Ligue 1 it was 110 per cent.

 

Pablo Shah, senior economist at CEBR, said: “The coronavirus pandemic represents the greatest financial shock to the football industry in generations, with ticket sales wiped out overnight and TV and sponsorship revenues set to come under sustained pressure amid the global economic downturn.

 

 

View the full article here.

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