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Sun 9 Nov 2014 08:29 AM

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Football focus: Premier League’s big spenders

How the British clubs spend millions to survive in the world’s most exciting sporting league

Football focus: Premier League’s big spenders
Abu Dhabi brought professionalism and stability to Manchester City’s fluctuating financial situation.

Football costs money — a lot of money. Just ask Manchester City, the team bought by Abu Dhabi United Group (ADUG) in 2008, which has spent a whopping $766.6m net on transfers since that September takeover six years ago.

Now, for the first time, Arabian Business reveals exactly how much it has cost Manchester City, and all the other English football clubs that have maintained their positions in the Premier League since 2008, to buy each point in what many fans see as the world’s most exciting sporting league.

Our research shows the total amount spent over a period of six seasons, the amount of points secured each season and what the net return for that spend was when the total number of points were factored in. The higher up the table you finish, the more money you get in return.

Propping up the table is Manchester City. Every point picked up since 2008 has cost the current Premier League champions a whopping $1,738,270 in net transfer fees. The figure is not far off double the investment paid by Chelsea, the next biggest spender, which has poured in $948,562 for each point gained.

At the top of our table is Everton. Unsurprisingly, the spendthrift days of David Moyes saw the Merseyside club finish up with a negative spend — they made $44.7m from their transfer dealings, meaning for every point they secured during their six-year period, they actually earned just over $124,492.

Interestingly, new manager Roberto Martinez, who has earned widespread praise for turning a conservative yet effective Everton team into a team that challenged for a Champions League place last season, has spent $58.2m (net) in the most recent window in a clear change in policy.

Other clubs have followed suit. Manchester United spent the most with a net spend of $180.6m as they attempt to atone for their disastrous season last year, finishing seventh as defending champions.

It feels like an age since Sheikh Mansour’s ADUG completed the takeover of what was then Manchester’s second club, making an immediate impact on deadline day with the marquee signing of Brazilian striker Robson de Souza, more commonly known as Robinho, from Real Madrid for $53m.

It was to mark the start of something extraordinary in English football.

Chelsea, through their Russian owner Roman Abramovich, had delved into their deep pockets to finance Jose Mourinho’s championship-challenging sides, as had Jack Walker in funding Blackburn Rovers’ solitary title-winning side in 1995, but this was something on a totally different scale.

Money is now no object for the Premier League’s nouveau riche, in what has become a relentless drive to secure trophies and titles. In the process, it has changed the face of football forever.

Success didn’t come immediately to Manchester City, who had been rescued from potential financial ruin through the intervention of Sheikh Mansour and his multi-million-dollar investment.

In the years leading up their eventual title triumph in 2012 (four seasons), a total of $721.4m was spent on 22 new players — $601m of which came in just two seasons.

In their second season, the club bought Argentina striker Carlos Tevez, who had been on loan at United for the previous two seasons. Announcing his arrival, the club posted a billboard in the Deansgate area of the city — seen as the gateway to Manchester — with Tevez in a City shirt, arms outstretched, with the words ‘Welcome to Manchester’.

It was the ultimate provocation in most people’s eyes, but in the blue half of the city, the real message was that Abu Dhabi United Group was here to stay.

The FA Cup in 2011 was the first trophy for the new owners, a remarkable change in fortune for a club that languished in the third division of British football as recently as 1999.

But with the investment came expectation, and the traditionally working-class club were now demanding success, which duly arrived in the next season, but not before a dramatic final-day saga that almost saw them hand the title to United.

The Abu Dhabi investment in City, however, did have the knock-on effect of driving up transfer fees, and wage demands, for clubs at the top level of football.  The level of spending since their initial foray has been eye-watering, and it’s only going one way.

After spending $4.8bn in transfer fees from 2008 to 2013, Premier League clubs went and broke the record again in the most recent summer transfer window, spending a whopping $924.3m on recruiting new players — 15 percent more than this time last year, and almost double that of the next biggest spenders Spain.

Barclays Bank released research figures last month that showed Premier League clubs are running the biggest balance of trade deficit on players in the world football transfer market at $604.9m, which is a seven times larger deficit than the country in second place.

The deficit is somewhat, however, offset by the $1.6bn in revenue from overseas television and foreign sponsorship rights.

The actual rights are worth in excess of $1.1bn a year, while paid sponsorships from overseas businesses will contribute over $547m in the coming season.

Barclays estimate that English football attracts another $1.6bn per annum in domestic revenue, thus ensuring English football is well-placed to attract top overseas players to its football clubs.

Which is just as well given the amount of money being spent on players, because the return on that investment is never a guarantee of success.

The recent Manchester derby was notable for the amount of money it took to assemble both teams, with United’s team costing an estimated $385m versus City’s $280m (the richest game took place seven days previously with the El Clasico between Real Madrid and Barcelona).

The level of spending required to stay competitive is getting higher and higher, but that doesn’t seem put off the increasing number of foreign owners, who see the business return in investing in a club, regardless of the stature.

Of the 20 current Premier League clubs, 13 of them are completely or partially owned by foreign individuals, families or organisations. There are similar figures for the next tier down, the Championship, where clubs are trying to earn that golden ticket up to the Premier League.  And it’s not stopping there. Italian football has seen a number of foreign owners come in, including AS Roma and Inter Milan.

When the Glazer family bought Manchester United, it had very little to do with football, or their love of the beautiful game. It was all about profit.

During their time as owners of the world’s biggest club (valued at $2.23bn in Forbes’ list of the most valuable sports teams in the world), they won five Premier League titles, three League Cups and a Champions League crown.

In the days after Manchester City’s title win in 2012, lifelong City fan and The Guardian journalist David Conn published an edited extract from his book, ‘Richer Than God: Manchester City, Modern Football and Growing Up’.

Conn said how he has met with Manchester City chairman, Khaldoon Al Mubarak on a number of occasions. He said the investors from Abu Dhabi firstly identified the global popularity of the English Premier League, shown and watched in 200 countries around the world, thereby making it a huge media phenomenon.

“Al Mubarak told me that the attention and coverage devoted to the takeover of City, worldwide, dwarfed anything he had ever been involved with,” Conn wrote in The Guardian article.

“But Al Mubarak was at pains to emphasise that the purchase was not a corporate or state-sponsored venture planned by the Abu Dhabi government or those investment companies straining to spend the oil miracle prudently.

“Sheikh Mansour is a huge football fan, he follows it very closely, and I think he has always wanted to have a European club that he can take and build and become one of the top clubs in the world. There is an enjoyment that comes with owning it, a pleasure, but also he is an astute businessman. He believes that you can create a value proposition in football that has not yet been accomplished’,” he recalled.

What Abu Dhabi also brought to Manchester City was stability to the club’s fluctuating financial situation and a professionalism that had been surprisingly absent, like a personnel department.

On the field, they set about investing heavily in the squad — aiming to have two first class players for each position.

“We’ve been a good addition to the industry, and sometimes people forget that,” Brian Marwood, Manchester City’s football services managing director, told Arabian Business at the beginning of the club’s 2011/12 Premiership-winning season. “There’s always an investor — whether it’s in the world of property or banking — and there’s always someone fuelling growth. So you could, say, look at Arsenal, who have sold us in excess of $95m worth of footballers, which in turn means they can afford to go and buy players, which means they are fuelling the football family.

“Sometimes you have to be thankful there’s economic growth, and you have to be thankful that at any point in time, there’s an investor. A few years ago it was Chelsea, and let’s not forget that Spurs and Manchester United have all played their part over the last few years. We just happened to do it in a very condensed period of time.”

With the global profile created by their investment, and subsequent success, Manchester City also represents the ultimate promotion vehicle for Abu Dhabi and its various interests, albeit through sponsorship deals.

The stadium, training ground and shirts bear the name of the national airline, Etihad (an estimated $559m ten-year deal). Other partners include Abu Dhabi Tourism Authority, Aabar Investments, Etisalat and Arabtec, all of whom recognise the value of promoting the brand through on a global scale.

With the vast investment, however, comes an element of criticism from those who would see investors like Abu Dhabi, and Abramovich and Walker before them, as buying success.

Conn recalled another conversation he had with Al Mubarak about competing with the likes of United.

“If you said football was not supposed to be about which “owner” had the most money, so who could pay the most to players, thereby seducing them to their club, he [Al Mubarak] wondered aloud how United had won the Premier League so many times, and how anybody could compete with them without money,” wrote Conn.

“There is an opportunity we have identified and taken hold of,” as Al Mubarak put it. ‘A mid-tier club will move to become a big club because of the financial resources we are able to make available. Because we see value in making that transition. And that is the bottom line’.”

But the rules are changing and the likelihood of another club repeating what Manchester City have done with the introduction of UEFA’s financial fair play regulations looks slim.

First agreed in principle in September 2009, the rules were brought in to prevent professional football clubs spending more than they earn in the pursuit of success. In May this year, UEFA announced that they had agreed to settlements with nine clubs after Financial Fair Play investigations, among them Manchester City, who were fined $78.1m, $51m of which is suspended, and could only name a 21-man Champions League squad this season.

City recorded losses of $314.4m — the greatest ever by any English football club — in the 2010-11 season, which was the year before finances came under scrutiny.

The rules would certainly appear to limit the powers of billionaires investing in a mid-tier club and creating another Manchester City. But in his conclusion about what Abu Dhabi’s investment has meant for City, Conn said the club has changed for the better.

“Yet with all the fortunes poured in, the Abu Dhabi regime brought professionalism, and an appreciation of City’s heritage, that has made them, by contradiction, the most careful owners the club has had in my lifetime.”

How the next eight years will turn out is anyone’s guess, but one thing is for sure: the largesse being poured into the world’s most-watched sport won’t be curbed any time soon.

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