Football’s spending restrictions go out the window

Just when we thought football was moving into new era of financial restraint, football’s detachment from the rest of the financial reality was confirmed in a frantic finish to the transfer window on Monday. Premier League clubs splashed out £218,525,000 on transfers in January and £134million of that on deadline day.

The spree contradicts our perception of English football and its financial caution in recent times. For months clubs seemed to adjust to regulations on 25-man squads and UEFA’s “financial fair play rules”, not to mention the impact that Portsmouth’s insolvency has left on the game.

• photo by toksuede

However, while the rest of the country worries over economic growth, Premier League clubs spent lavishly with Liverpool and Chelsea shelling out over half the £218million spent on new players as a number of transfer records were broken.

Chelsea broke the British transfer record by paying Liverpool £50million for striker Fernando Torres, making the Spaniard the fourth most expensive player in history. Whilst Andy Carroll became the most expensive British player ever as Liverpool shelled out £35million to secure his signature from Newcastle.

The cash splurge sums up Roman Abramovich’s unpredictable tenure as Chelsea owner, the club announced that they had made a loss of nearly £70million on the same day they paid £50million for a new striker.

The window indicates the underlying financial differences between the so-called larger and lesser Premier League clubs. Liverpool and Chelsea’s response to their fall from was to spend-big with both clubs seeming stronger on paper for it. Clubs threatened with relegation, such as Wigan Athletic and Wolverhampton Wanderers, did not hit the panic button of unsupportable spending. One reason being is that relegation no longer means certain financial catastrophe. Parachute payments have increased to £18million for the first two years of relegation and four years altogether.

On Tuesday, UEFA reminded big-spending Premier League clubs of the new financial regulations that will be enforced after the record-breaking transfer window. The rules which come into force in 2012-2013 mean European teams must breakeven over any three-season season period and will only be allowed to incur losses of approximately £39million. UEFA said they were confidents that European clubs could keep their financial affairs in order.

If the new financial regulations are implemented effectively then smaller clubs will experience a respite from the financial bullying of richer clubs. However, Blackpool’s firm handling of wantaway captain Charlie Adam was a welcomed reminder that sometimes ethics don’t have to be enforced by rules and governing bodies.

Guest post by Aidan Donovan a copywriter who produces articles for a matrix management company.