September 1st, 2011
10:54 AM GMT
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As the final day of the summer transfer market came to a frantic close late Wednesday, European football’s aristocracy again demonstrated its apparent immunity to the economic gloom affecting everyone else.

The continent’s wealthiest leagues, in England, Spain, Italy and Germany, spent almost $1.8 billion on acquiring new talent.

The English Premier League led the way, parting with $665 million. The most expensive deal being Sergio Aguero’s $62-million move to Manchester City from Atletico Madrid.

But by far the most eye-catching deal of the summer involved a club from the most unlikely of places: the Republic of Dagestan.

Anzhi Makhachkala, who play in Russia’s top league, persuaded Internazionale striker Samuel Eto’o to swap Milan for the Caucasus by reportedly making him the game’s top earner.

Bank-rolled by billionaire investor and politician Suleiman Kerimov, the club has also invested heavily in Brazilian legend Roberto Carlos, Chelsea winger Yuri Zhirkov and PSV Eindhoven midfielder Balazs Dzsudzsak.

Transfer deadline day – the biggest moves

But this close-season largesse comes against a backdrop of new financial “fair play” regulations imposed by UEFA, European football’s governing body. From 2012-13, all member clubs must break even over a three-year period or they will not be permitted to play in European club competitions. Basically they’ve been told to spend within their means.

No problem for the cash-rich clubs of the top four leagues right?

Wrong. Despite wealthy benefactors and lucrative broadcasting deals, many of the biggest clubs in world football have balance sheets that would terrify accountants in businesses in any other industry.

According to company accounts, Chelsea owner Roman Abramovich has effectively underwritten more than $1.1 billion in loans to the club since taking control in 2003. Without the Russian’s continued investment this debt would be impossible to pay off.

Last season, an audit into the finances of European champions Barcelona revealed that the Spanish club had debts of almost $600 million.

Yet these clubs continue to import superstar players with superstar transfer fees.

Meanwhile, most other clubs in Europe are left to sift through the sport’s bargain basement, looking for out of contract players and loan deals.  Some of these clubs are huge – such as Scotland’s Rangers and Celtic – but the lower profile of their league limits the income potential from broadcasting rights and sponsorship.

However, the silver lining is that clubs in this situation are increasingly running their businesses prudently, investing in homegrown talent that won’t break the bank.

While it’s not a formula for winning trophies in the short term, it is more likely to ensure the long-term future of a club.

soundoff (10 Responses)
  1. Jeff

    Perhaps governments should also be forced to break even over a 3-year period.

    September 1, 2011 at 1:09 pm |
  2. Marco

    No mention of the few clubs that actually DO keep balanced accounts and an eye on the bottom line? Arsenal which was one of the most active club on the last day and still pulled a profit from its summer dealings, whilst maintaining a cost-effective approach to running its football operations. The clubs most guilty of financial irresponsibility are those that are bankrolled by wealthy billionaires who repeatedly use their personal fortune to support their club's excesive spending and allow them to live above their means.
    The question is will UEFA really crack down on these clubs with the implementation of the Financial Fair Play rules next year or is this just a smokescreen that will allow more loopholes than swiss cheese (see Manchester City's stadium sponsorship deal)?
    Come on CNN! if you're going to do investigative journalsim, do it right and do it well, dont just skim the issues, how about some deeper research and analysis?

    September 1, 2011 at 3:05 pm |
  3. Lauro Silva Brazil

    But who would have the power to go fully into the cubs investigating their accounting? The paradox with the worldwide economic situation is simply staggering if not criminal.

    September 1, 2011 at 3:05 pm |
  4. Jack

    If they can afford to pay the players, let them. Football is about the only thing that gives people a moment's rest anymore, since its become too expensive to do anything else.

    September 1, 2011 at 6:04 pm |
  5. Astonlad

    They can't afford to pay the players, though. Their chairmen can, but it's coming out of someone's pocket rather than the club's hard-earned coffers. It also means many (not all) big clubs are losing the skill of coaching and growing your own. They're just relying on bought talent, which is a shame.

    September 1, 2011 at 6:33 pm |
  6. Erik

    Love Jeff's first comment.
    But I do not believe that 'fair play' rules actually change anything. Most major clubs are too important to mess around with, see the Italian salary strike...Unfair but realistic, I am afraid.

    September 2, 2011 at 11:25 am |
  7. Herve

    A similar "Financial Fair Play" system has been in place for years in France and it has been working pretty well. When a soccer club doesn't keep balanced accounts, it is relegated to a less important league or the club may even loose its professional status. This is what just happened in Strasbourg (7th largest city in France). This is one of the reason why French clubs are "less competitive" than Spanish, English, German, etc... If the same rules apply to all European clubs, then it might be a huge change.

    September 2, 2011 at 1:48 pm |
  8. FootFan

    Spending by these billionaires really upsets a lot of people because it upsets the natural order of things. Every league has its top teams. In England it was Pool, ManU and Arsenal. In Spain it's Barca and RM. And so on. These top teams monopolize the TV revenues and win the top trophies, which allows them to buy the top players, which means they stay on top year after year.

    According to some, that's the way it should be, forever and ever. Every team should know it's place.

    Not only is this wrong, it's boring. What is wrong with a wealthy investor coming in to shake things up? Who is to say their wild spending doesn't some day end in a profit? To forbid them from operating is to forbid change from ever entering the system, and for us to just watch the same 8 teams make the CL quarter-finals every single year.

    I say, let them operate and shake things up. If the CL final is Man City and Barca, I'll still be cheering for Barca, but it will still be great to see some new blood challenge us. Just playing ManU or Bayern or Inter or Madrid again will be so boring.


    September 4, 2011 at 7:41 am |
  9. Anthony Payne

    Contrary to the suggestion that financial benefactors enhances competition, they in fact stifle it . Take Manchester City for example. They have a large number of discarded players like Adebayor and Santa Cruz who have such lucrative contracts that the likes of Spurs can only take them out on loan. However, due to regulations Adebayor cannot play for Spurs against Man City.
    Before long we could have a scenario where City have a player on loan @ half of the 20 clubs in the Premiership. This would leave these sides immediately under strength when they play City. However loopholes are there to be exploited (as an Arsenal fan i'm aware of those we explored to secure the signings of Anelka and Fabregas).

    As much as i would like Cesc Fabregas to win a Champs League medal (if Arsenal don't do it of course!) it would actually be good for the game if a German club were to win the Champs League this season. Perhaps this would endorse the business model that appears to work very well in the bundesliga.

    September 13, 2011 at 2:17 pm |
  10. Romeo Lazer

    Great post, I believe website owners should acquire a lot from this site its rattling user genial. So much excellent info on here :D.

    January 30, 2012 at 2:08 pm |

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