Abu Dhabi ruling family member bankrolls football team's £125m ($192m) outlay.
Sheikh Mansour Bin Zayed Al Nahyan’s Manchester City accounts for more than a third of the total spent on new players by the Premier League’s 20 teams in the transfer window that closed on Tuesday.
The Abu Dhabi ruling family member bankrolled City’s £125m ($192m) outlay, the highest in England’s top tier for the second straight year. The spree comes as rivals try to improve balance sheets amid pressure from lenders and new financial rules established by European soccer’s governing body.
The total spending by Premier League teams [ see pics ] is about 100 million pounds less than the 450 million they spent last season, and 30 percent lower than two years ago, according to figures released by accountant Deloitte LLP.
“ Premier League club s’ spending in this transfer window has been relatively restrained,” Dan Jones, a partner in Deloitte’s Sports Business Group, said in a statement. “In general, an absence of new owners and clubs striving to improve their financial balance has diminished the vibrancy of the transfer market.”
UEFA, which governs European soccer, will start to examine club finances next season. Teams that can’t keep costs down to what they earn face suspension from its Champions League and Europa League competitions.
“For years and years we were in total anarchy but the clubs asked for the rules because they knew they could not continue,” UEFA President Michel Platini told reporters last week. “We can see already that the clubs are spending less as they look to balance their books.”
In France, Germany and Spain gross spending is down by about 40 percent on last season, Deloitte director Paul Rawnsley said.
Earlier this year, Portsmouth became the first Premier League club to seek bankruptcy protection after debts rose to more than 100 million pounds. Former owner Alexandre Gaydamak bought England strikers Peter Crouch and Jermain Defoe as the team won the 2008 F.A. Cup, its first major trophy in 58 years.
“That situation has brought about a greater sense of reality,” Rawnsley said in an interview. “Seeing the extent that club overextended its spending is a reminder to all.”
In February, UEFA said 18 Premier League clubs had total borrowing of about 3.8 billion euros ($4.8 billion) in 2008, about four times the next-highest figure, in Spain, where teams owed 978 million euros.
West Ham United owner David Gold in March said clubs “needed to be saved from ourselves.”
Most teams have changed their behavior. Chelsea, once the league’s biggest spender under Russian billionaire owner Roman Abramovich, has cut about 20 million pounds in salaries by releasing Michael Ballack and other high earners and brought in lower paid replacements.
“The European financial fair play laws focus people’s minds on (breaking even),” Chelsea Club Secretary David Barnard said. “I’m sure every club would like to achieve those aims and be a bit more prudent than we were before.”
Eighteen-time champion Manchester United has also resisted spending big on established stars. The team, which pays more than 40 million pounds in annual interest on its loans, signed 22-year-old Mexican forward Javier Hernandez and 20-year-old Portuguese forward Bebe, who was playing street soccer just over a year ago. Liverpool coach Roy Hodgson has made room for acquisitions by selling players.
Manchester City, by contrast, hasn’t eased up as it seeks to break into the Champions League for the first time.
The club has spent more than 350 million pounds on new players since Sheikh Mansour bought the club in 2008.
City in January announced a loss of 92.5 million pounds, the second highest in Premier League history, meaning the club wouldn’t meet the criteria imposed by UEFA.
The cash infusion bought in forwards Mario Balotelli and David Silva as well as midfielder James Milner this season.
“We have fast-tracked the investment and maybe what would normally take five or 10 years we have done much sooner,” City’s football administrator Brian Marwood said. “But we are extremely fortunate that we have the owners to invest their time and money into the club.”
City, which is ninth in the Premier League after three games, will likely develop a more “sustainable” attitude to recruitment once it’s achieved “a step change in the quality of that squad,” Rawnsley said. (Bloomberg)