A “Pandemic-proof” Premier League?


A week-long series of articles on this summer’s major transfers

In the recent transfer window, overall expenditures in the Big 5 leagues have decreased by 11%, a smaller albeit still significant decrease compared to the 39% drop in the previous year. While the negative effects of the pandemic are still being deeply felt, cautious optimism induced by fans returning to full stadia has fuelled transfer activity at the top of the game.

Taking into consideration the four most expensive transfers in the pandemic era - Havertz in 2020, Sancho, Lukaku and Grealish in 2021 - in the context of record transfers in the previous years' windows, two main outcomes are apparent: first, the average of the ratio between transfer fees paid and operating revenues of the buying club is, at 20%, in line with the average of the same ratio calculated for top transfers occurring in the 10 years prior (2010-2019), at 23%. While various factors affect the final price paid and the revenues generated by each club playing in different leagues, it is fair to assess that during the pandemic-hit transfer windows there is a similar correlation between transfer fees and purchasing power of clubs compared to the previous period. Second, and as already highlighted in our first piece published yesterday, the dominance of the English Premier League (EPL) is very evident, as all transfers in the below list which occurred in 2020 and 2021 refer to acquisitions made by English clubs.

However, it is also important to note that the ratios calculated for the 2021 transfer window could be even higher had the calculations been made with accounts from the 2020/21 season, not yet available, in which matchday revenue vanished almost completely.

Further evidence of the prominent role played by the EPL is provided by expanding the scope of the analysis to a larger sample of this summer's biggest transfers. As our chart shows, seven out of the 10 most expensive transfers were signed by Premier League clubs. Additionally, from the 24 clubs who have spent in excess of EUR 50m, 12 come from the Premier League. Purchasing power in the EPL not only emanates from the usual suspects, as recently promoted side Norwich City FC have spent more on transfers than the French, German, and Italian champions respectively (LOSC Lille, FC Bayern München and FC Inter Milan), and only EUR 10m less than the Spanish title holders (Atlético de Madrid). On deadline day, Premier League clubs lead the charge again, spending EUR 173.1m, 52% of the total fees spent among the Big 5 leagues on the last day of the transfer window.

The most expensive transfer of the 2021 summer window is represented by attacking midfielder Jack Grealish, who left Aston Villa FC to join Manchester City FC for a reported EUR 118m. Despite the crisis, the Citizens afforded to register the third most expensive transfer of the last decade - when looking at the yearly most expensive transfers - behind the unattainable EUR 222m paid by PSG for Neymar back in 2017, and Atlético de Madrid signing João Félix for EUR 127m from Benfica in 2019. In an era in which, mainly due to the COVID-19 restraints, clubs are struggling with limited financial means, state-backed football clubs such as the Citizens and PSG – on which we will provide a more focused analysis over the course of this week – are able to flex their muscle and demonstrate a significant difference between themselves and the rest of the world.

The Premier League has emerged as the leader of the pack in Europe in terms of financial might in past two decades by virtue of their excellent commercial strategy and record broadcasting deals. The most recent health crisis entrenched EPL clubs’ dominant position as their financial cushion allowed them to take more risks and be more bullish in a depressed market. While not entirely pandemic-proof, the Premier League was much better equipped to deal with such an exogenous shock to the football ecosystem.

Stay tuned for more! Be sure to catch all of our articles over the course of this week in order to get more details on the summer transfer window.