FootBiz newsletter #192: Premier League Spending Breaks Another Record

Good morning.

The fax machine has been unplugged, the private jets have landed and Fabrizio Romano can finally be returned to his charging dock.

The summer transfer window is over, and the Premier League has broken football again.

English top-flight clubs spent approximately £3.46 billion on players this summer, obliterating the previous record and spending roughly three times as much as they did only five years ago.

Wolverhampton Wanderers and Brighton & Hove Albion at Molineux in 2022.

Photo: Bex Walton · CC BY 2.0 · unmodified

Manchester City spent around £458 million; Chelsea spent approximately £349 million; and Tottenham spent around £303 million. Four players moved for fees exceeding £100 million.

But buried beneath the enormous numbers is something potentially more important – approximately 38% of Premier League transfer activity this summer took place between Premier League clubs.

For most of the past two decades, the Premier League's economic relationship with European football has been relatively straightforward.

England earned; Europe developed; and England bought.

Portuguese clubs found young South American players Dutch clubs polished teenagers. French academies produced them by the dozen. Italian and Spanish clubs occasionally turned established players into superstars. Then a club from England arrived carrying £60 million.

It was a wonderful business model for European football, but the Premier League is increasingly buying from itself. That trend could ultimately prove more consequential than another summer spending record.

The Premier League Is Becoming Its Own Transfer Market

Consider what happens when one Premier League club buys a player from another for £70 million.

The purchasing club gets a player already acclimatised to English football. Generally, the recruitment department has considerably more information about him. The coaching staff know how he performs against Premier League opposition, and the medical department probably has better visibility of his physical history. There is less uncertainty over language, culture, climate and adaptation.

Suddenly the selling club has £70 million and it spends it. Perhaps £30 million goes to France, while another £25 million goes to another English club. That club then spends the money.

And suddenly, one £70 million transaction has helped produce four additional deals. Money doesn't leave the system but circulates through it.

This is a demonstration of that precious commodity in European football – liquidity. The Premier League isn't simply richer than everybody else; it also has a functioning internal market, with 20 extraordinarily wealthy institutions buying and selling assets from one another while simultaneously having access to the rest of the football world.

This extraordinary economic flywheel means a mid-table Premier League club can now reject an offer that would fundamentally transform the finances of clubs elsewhere in Europe.

It doesn't necessarily need the money, but when it does sell, another English club is often capable of paying considerably more than a European bidder. That dynamic establishes Premier League prices.

A player isn't worth £50 million because some theoretical valuation model says he is. He's worth £50 million because Bournemouth, Brentford, Brighton, Crystal Palace, Everton, Fulham and West Ham can all plausibly pay £30–50 million for the right player.

That reality creates a domestic floor underneath valuations, and once that has happened, everybody else has to react.

Europe's Great Supplier Network

Obviously, none of this means England has stopped shopping abroad, and the Premier League remains the world's greatest importer of football talent.

But the relationship between English football and the rest of Europe is becoming increasingly asymmetric, with France perhaps the clearest example.

Ligue 1 clubs continue producing an extraordinary volume of talent while operating within an increasingly difficult domestic media environment. French clubs therefore possess something Premier League clubs desperately want – players – while Premier League clubs possess something French clubs desperately need… cash.

Portugal occupies a slightly different position: Benfica, Porto and Sporting have turned player trading into an industrial process.

The Netherlands has traditionally performed a similar function, while Belgium has increasingly emerged as a developmental market.

South America remains the great upstream supplier.

But the Premier League's extraordinary purchasing power increasingly means clubs aren't merely competing with each other for players; they're effectively determining the price of global football talent.

If Brentford value a 20-year-old midfielder at £25 million, the implications can reach Argentina and if Brighton decide an 18-year-old winger is worth £30 million, somebody in Brazil recalculates what his academy graduate is worth.

If Chelsea spend heavily on another teenage prospect, agents representing the next generation will notice that.

Premier League money travels a very long way.

The Age Arbitrage

There has also been a philosophical change in what clubs are buying: youth is no longer merely desirable but is a financial strategy.

Football executives increasingly view players through two simultaneous lenses: can he help us win, and what will he be worth later?

Imagine two players. Player A is 29, an established international capable of immediately improving the team, while Player B is 20, less accomplished and perhaps slightly worse today.

Historically, the wealthiest club might simply buy Player A. Increasingly, Player B possesses several advantages.

His wages may be lower; his contract can be longer; his physical peak remains ahead of him; and his transfer value should appreciate. If he succeeds, the club possesses an asset that could eventually be sold for considerably more than it paid.

This isn't particularly romantic but modern football recruitment isn't supposed to be anymore.

Football's Venture Capitalists

This helps explain why enormous fees for teenagers no longer look particularly unusual, and clubs are effectively purchasing options on future superstars.

And though most won't become one, some will become good Premier League players. Others will be sold and a few will fail completely.

But occasionally a £15 million teenager becomes a £100 million footballer. The logic is familiar to anyone in venture capital: you don't need every investment to become exceptional, but you need enough successful investments to compensate for the failures.

Brighton have demonstrated one version of this model, and Chelsea have attempted an extraordinarily aggressive version.

Manchester City operate their own interpretation through one of football's most sophisticated multi-club structures.

The consequences of buying players extend beyond recruitment. Academies matter more; loan management departments matter more; data matters more; and contract management matters more.

And a good sporting director increasingly becomes part coach-builder, part arbitrage trader, and part portfolio manager.

And Then There's Regulation

This makes the spending particularly interesting, as European football has supposedly entered an era of cost control.

UEFA's Squad Cost Rule is now fully phased in at 70%, limiting spending on player and coach wages, transfers and agents relative to club revenues. The Premier League is moving toward its own squad-cost framework.

So why is everybody spending so much money? Because regulation doesn't necessarily eliminate spending; it changes how clubs think about it. Revenue, academy players, players with resale potential and efficient contracts all become more valuable, as does the ability to generate recurring transfer profits.

A club producing £40 million of academy sales has effectively created spending capacity from assets that entered its accounts at little acquisition cost. That is why the academy is no longer merely a football department; it is potentially one of the most valuable financial engines inside a football club.

And that is why selling players isn't necessarily evidence of sporting weakness. For intelligently run clubs, it can be the mechanism that allows them to keep buying.

Everton Want Company

Another interesting piece of football-finance news emerged this week: The Friedkin Group is exploring bringing additional investors into Everton.

Barely 20 months after the group completed its takeover, advisers are reportedly working on a potential minority investment.

The immediate temptation to interpret any football owner selling equity as a sign that they want out is probably premature. Minority investment is increasingly becoming part of the ownership playbook.

Everton provides a useful explanation for why. Buying a football club is expensive, and owning one can be considerably more expensive.

The acquisition price is only the beginning. Even extremely wealthy owners eventually ask why they should have to fund all of it themselves.

Institutional capital can provide liquidity without surrendering control, and a minority investor receives exposure to an appreciating sports asset. The controlling shareholder receives capital and potentially a strategic partner, and the club receives additional financial firepower.

Everybody gets to issue a press release saying they are delighted.

Liverpool have already introduced significant minority capital into their ownership structure, and other clubs will follow.

Football ownership is slowly moving away from the image of one wealthy benefactor writing cheques. Increasingly, the club itself is beginning to resemble an institutional asset.

Everton’s Hill Dickinson Stadium.

Photo: Austiñobobbiño · CC BY 4.0 · unmodified

Starbucks Puts Its Logo on a Football Shirt

Meanwhile in France, Toulouse have landed a genuinely interesting commercial partnership.

Starbucks has become an official partner of Toulouse FC for the 2026/27 season. The Starbucks logo will appear on the sleeve of Toulouse's first-team and academy shirts.

According to the club, this represents the first time Starbucks has appeared on a football shirt anywhere in the world.

The agency SPORTFIVE helped broker the agreement, and there is an interesting lesson here for commercial directors.

The traditional sponsorship hierarchy says the biggest global brands want the biggest global clubs, and sometimes they do.

But not every sponsorship needs an audience of 500 million supporters. Brands increasingly want relevance, and factors such as geography, demographics, culture, content, hospitality and community activation come into play. Occasionally a brand wants to test a sport without spending £50 million.

For Toulouse, attaching Starbucks to the shirt is therefore more meaningful than the sponsorship fee alone.

If you're trying to convince another major consumer brand that Toulouse can provide an effective marketing platform, the sales presentation just became considerably easier.

The first major brand is often the hardest one to land.

Toulouse FC before their Ligue 1 match at Lens in September 2023.

Photo: Supporterhéninois · CC0 · unmodified

The Commercial Arms Race

Football's commercial market is also changing because clubs can no longer rely on broadcast growth doing all the work.

The media-rights boom transformed European football, but in several markets, the easy growth has disappeared.

France has provided the most dramatic warning: domestic broadcast economics have deteriorated dramatically. Other leagues face increasingly difficult negotiations.

Streaming has fragmented audiences, and consumers have only so many subscriptions they're willing to buy. All of this means that clubs have to control more of their own revenue.

These changes will become increasingly important as squad-cost regulation links sporting expenditure more closely to revenue.

Every additional pound, euro or dollar of sustainable commercial revenue potentially increases the amount the club can spend on football, intertwining commercial and sporting performance even more closely.

Bordeaux: The Takeover That Still Isn't a Takeover

One of European football's stranger ownership sagas continues in Bordeaux, where the attempted rescue of Girondins de Bordeaux has become a reminder that acquiring a distressed football club is considerably easier to announce than it is to complete.

The six-time French champions have spent the past two years dealing with the consequences of financial collapse, relegation and restructuring, while various potential investors have circled one of France's most recognisable football brands.

One of the more recent proposals involves Franck Tuil and the Sparta group, who have sought to construct a route toward taking control of the club. But Bordeaux remains an extraordinarily complicated proposition.

Girondins de Bordeaux players warming up at Lens in September 2020.

Photo: Supporterhéninois · CC0 · unmodified

Any rescue must account for creditors, legal and financial restructuring, regulatory requirements, relationships with local authorities and the stadium.

The question that eventually confronts every investor looking at a distressed football club is how much money it will actually take to make the thing work again.

That number is usually considerably larger than the acquisition price.

— FootBiz