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Overseas TV money hides English football trade deficit

Article By: ,  Financial Analyst
October 9, 2014 10:45 AM

English football is facing a huge trade deficit, according to a new report from Barclays.

A summer transfer window of high spending has resulted in English football clubs generating a combined deficit of £379 million. While the top Premiership clubs spent heavily prior to the start of the season, the deficit is sufficiently covered by the over £1 billion provided overseas television and foreign sponsorship rights, the Barclays Football Balance of Trade report states.

It has been a record breaking year in terms of spending in the top division. Manchester United were the biggest spenders, splashing out over £150 million on players such as Angel Di Maria, Daley Blind, Luke Shaw and Ander Herrera, while the loan of Colombian striker Radamel Falcao has also come with a hefty price tag.

Chelsea, Arsenal, Manchester City and Liverpool have all paid huge fees for player services with likes of Diego Costa, Cesc Fabregas, Alexis Sanchez and Mario Balotelli all arriving in the Premiership. Despite the high deficit, the amount of money generated from selling rights to screen English matches across the world has been hugely beneficial.

Chris Lee, head of professional sports banking at Barclays, said: "While English football has run up the biggest trade deficit in world football transfers, the overall income it generates far outstrips the cost of importing players from overseas.

"Matches from England's Premier League are beamed to around 211 countries across the globe, and overseas corporates want to be part of what is regarded by many as the best football league in the world."

Germany was ranked second behind England in the report. Despite winning the World Cup, the Bundesliga has not seen its top players leave resulting in the league reporting a £53.8 million deficit. While the figure is high, it is a result of clubs managing to keep hold of their best players.

The likes of Borussia Dortmund, Bayern Munich, Schalke 04 and Bayer Leverkusen have all had to fend off interest for some of their stars. Dortmund especially have resisted approaches for defender Mats Hummels and striker Marco Reus.

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