LaLiga condemns heavy transfer spending

LaLiga, the top soccer league in Spain, has chastised the exorbitant spending of English Premier League clubs in the January transfer window.

combined to spend more than $1bn

An analysis revealed that the 20 top-flight English teams combined to spend more than $1bn during the 31 days that transfers could be made. Chelsea Football Club led the way with over $350m, which was nearly three times as high as the previous January record by a single club.

January is usually less active than the summer window since teams are more incentivized to keep players that are part of their active squads. All the more cause for concern for non-English sides.

Getting around the rules

LaLiga corporate general director, Javier Gomez, is ready to ask UEFA, the governing body of European soccer, to apply more regulation to player transfers.

LaLiga president Javier Tebas shared a video of Gomez commenting on the Premier League’s massive spending spree and the future of LaLiga on his Twitter account.

“We are aware there is a lot of talk about how LaLiga’s economic control means Spanish clubs sign less than Premier League clubs,” said Gomez. “The reality is that at LaLiga we want clubs to spend what they can afford and generate themselves, that is to say, their own revenues.”

UEFA already has a system in place, called Financial Fair Play (FFP), to uphold the standards Gomez mentioned. FFP mandates clubs meet a breakeven requirement, meaning they cannot spend more than their annual income and must balance their books over the coming three years.

use long-term amortization to lessen the blow of grandiose player transfers

Chelsea, however, is one of several teams that has circumvented the intent of FFP. Their tactic was to use long-term amortization to lessen the blow of grandiose player transfers on a year-to-year basis, which is why many of their new transfers signed six-eight-and-a-half-year contracts.

By using this and other methods, they were able to spend much more than ever intended. Their final purchase of World Cup winner and golden boy Enzo Fernandez rang up $132m, but only cost less than $50m up front.

Gomez believes that Chelsea and other Premier League teams are not abiding by the financial rules.

“The data is as follows: With data compared up to June 30, 2021, and across the five previous seasons, the PL and Championship—top two tiers of English football—lost €3bn ($3.3bn),” said Gomez. “In that same time, the Spanish league lost; we all suffered in the pandemic; €250m ($273m).”

Imminent change

Gomez continued his speech by saying that owners of Premier League teams are injecting their teams with external funding and “doping” the club, making it unsustainable for long-term growth. He also accused EPL teams of cheating, since other clubs and leagues could not do the same.

“That is our fight, demanding that UEFA implements a new economic regulation that prevents the shareholder of a club from putting in more than a certain amount and that it enforces this rule and sanctions non-compliant clubs,” said Gomez. “It doesn’t matter which league or country it is, they should sanction clubs that don’t comply with this regulation.”

UEFA has already promised to institute an amendment to FFP in the summer, capping the amortization limit at five years. That means that teams like Chelsea will not be able to get year-to-year discounts on large transfer fees.

only encouraged the brash spending that occurred in January

However, that implementation only encouraged the brash spending that occurred in January. Once the loophole was exposed and identified as a problem, it only made sense to abuse it while it was available. 

All in all, Premier League teams outspent all of the other “big five” leagues (LaLiga, French Ligue 1, German Bundesliga, and Italian Serie A) by nearly 400%. Chelsea spent more than the other four leagues on its own.

Tim Bridge, the lead partner in Deloitte’s Sports Business Group, said that there needs to be a happy medium when it comes to spending.

“While there is a clear need to invest in squad size and quality to retain a competitive edge, there will always be a fine balance to strike between prioritizing success on-pitch and maintaining financial sustainability.”