The football transfer window closed last week bringing to an end another summer of high spending for European football's elite clubs. Those in the top divisions of Europe's 'Big Five' leagues (Premier League, La Liga, Serie A, Bundesliga, Ligue 1) collectively spent more than £1.6 billion (Dh9.79bn) on new players.
The 20 clubs in the English Premier League spent about £450 million, more than any other league, although down 10 per cent on the record £500m spent by Premier League clubs last summer.
A significant factor in this reduction was the fewer player acquisitions from overseas. This year saw a 40 per cent reduction in the level of acquisitions from non-English clubs compared with each of the transfer windows in 2007 and last year.
Premier League clubs spent £155m on overseas players in this summer's window, compared with £250m in the previous two summers. This represents 34 per cent of total transfer fees committed by Premier League clubs, compared with 50 per cent last summer.
There has also been an increase in the amount of money flowing into the Premier League from their European rivals.
Premier League clubs received more than £110m in transfer fees from Real Madrid alone. Combined with fewer player acquisitions from overseas clubs, Premier League clubs' overall net transfer spending was £80m.
This is down significantly compared with more than £200m in each of the previous two summer transfer windows. Net spending comprised £8m to overseas clubs and £72m to clubs further down the English football pyramid.
Manchester City's transfer dealings have been a key driver of the overall level of spending this year, with the club's acquisitions of about £120m representing 27 per cent of the total.
This takes the total transfer spending of the club's new owners to about £200m since the takeover by Abu Dhabi United Group. Manchester City has been the highest spending club in each of the past two transfer windows.
This year they bought nearly an entire new team, including Carlos Tevez, Kolo Toure and Emmanuel Adebayor.
A number of other clubs made significant additions to their squads with Aston Villa, Liverpool, Sunderland and Tottenham Hotspur each reportedly spending more than £25m on player acquisitions in the latest period.
Transfer spending by Premier League clubs in the summer window has again exceeded that of other European leagues, albeit not by as much as in previous seasons.
Spending by Real Madrid and Barcelona has boosted transfer spending by clubs in Spain's top division to about £400m.
In contrast to the Premier League, however, there were a number of "marquee" signings with five players (Ronaldo, Kaka, Ibrahimovic, Benzama and Alonso) acquired for in excess of £250m. Italian Serie A clubs have spent about £350m and the clubs in the top division of each of France and Germany have spent about £200m.
Last year, Premier League clubs spent more than clubs in Spain, Italy, Germany and France combined. These figures show that Premier League clubs are facing tougher competition from other leagues for the best talent.
The reduced value of sterling against the euro means that English clubs also are facing higher costs in recruiting players from mainland Europe.
In addition, the proposed increase in the top rate of income tax in the UK to 50 per cent from April next year means that Premier League clubs are also facing increased wage costs for new signings. For example, if a player negotiating a new contract this summer demanded ?3m (Dh16.05m) a year after taxes, the cost to a Premier League club following the income tax increase would be ?6.8m, a significant rise on the current cost of ?5.7m based on a top tax rate of 40 per cent.
This is 70 per cent higher than the ?4m it would cost a Spanish club to give a non-Spanish player the same net pay. In recent years, Spain's La Liga has emerged as the main alternative to the Premier League for top talent.
Spain has a favourable tax system which broadly permits temporary non-Spanish residents, including sports men and women, to be taxed at just 24 per cent, along with minimal social security contributions, instead of the top rate of 43 per cent for Spanish nationals.
While the cost of players is rising for Premier League clubs, the scale of its revenues still gives the league a significant advantage in attracting players. Last season, total Premier League revenues were ?2.4bn, more than ?1bn ahead of total revenues for La Liga.
However, football clubs face the same turbulent conditions as any other industry and clubs need to cut their cloth accordingly.
Despite the current economic climate, the Premier League clubs can take comfort from the fact that broadcasting revenues, representing 48 per cent of total revenues last year, are secured for the foreseeable future.
However, clubs face significant challenges in the short term to maintain current performance in relation to both commercial and match-day revenues.
For larger clubs, playing to sold-out stadiums, with strong demand for corporate packages and wide commercial appeal, the impact may be limited. However, for smaller clubs, where demand is more variable and where significant excess capacity exists, the downside may be more pronounced.
This year's summer season ticket renewal period has been watched more closely than ever by clubs. Price is one of the few variables over which clubs have complete control and clubs have been carefully reviewing marketing and pricing strategies during the season.
In an effort to boost sales, and perhaps to show solidarity with their key stakeholders, we have seen a change in policy almost across the board, with price freezes or even reductions commonplace for this season.
Although conditions are likely to be difficult it is timely to remember that the fundamentals supporting the game remain strong.
Football remains a relatively inexpensive hospitality option compared with other one-off events, and seasonal packages present a variety of individual opportunities.
Furthermore, many corporate hospitality buyers are small businesses, fans in their own right who have "traded up", rather than large enterprises which may have weaker brand loyalty.
It does appear then that many clubs are adopting a more risk-averse strategy when it comes to transfer spending. Looking ahead, although economic conditions may improve next year, it is still unlikely that Premier League transfer spending will exceed the record level achieved last year, without further significant capital injections from owners.
Paul Rawnsley is a director in the Sports Business Group at Deloitte
Company%20profile
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Sudden change in behaviour or displays higher levels of stress or anxiety
Shows signs of depression or isolation
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Academic performance begins to deteriorate
Changes in eating habits
Struggles to concentrate
Refuses to go to school
Behaviour changes and is aggressive towards siblings
Begins to use language they do not normally use
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Sir Tim Berners-Lee was born in London in a household of mathematicians and computer scientists. Both his mother, Mary Lee, and father, Conway, were early computer scientists who worked on the Ferranti 1 - the world's first commercially-available, general purpose digital computer. Sir Tim studied Physics at the University of Oxford and held a series of roles developing code and building software before moving to Switzerland to work for Cern, the European Particle Physics laboratory. He developed the worldwide web code as a side project in 1989 as a global information-sharing system. After releasing the first web code in 1991, Cern made it open and free for all to use. Sir Tim now campaigns for initiatives to make sure the web remains open and accessible to all.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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Name: Xpanceo
Started: 2018
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Industry: Smart contact lenses, augmented/virtual reality
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Investor: Opportunity Venture (Asia)
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This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Profile
Company name: Jaib
Started: January 2018
Co-founders: Fouad Jeryes and Sinan Taifour
Based: Jordan
Sector: FinTech
Total transactions: over $800,000 since January, 2018
Investors in Jaib's mother company Alpha Apps: Aramex and 500 Startups
T20 World Cup Qualifier A, Muscat
Friday, February 18: 10am - Oman v Nepal, Canada v Philippines; 2pm - Ireland v UAE, Germany v Bahrain
Saturday, February 19: 10am - Oman v Canada, Nepal v Philippines; 2pm - UAE v Germany, Ireland v Bahrain
Monday, February 21: 10am - Ireland v Germany, UAE v Bahrain; 2pm - Nepal v Canada, Oman v Philippines
Tuesday, February 22: 2pm – semi-finals
Thursday, February 24: 2pm – final
UAE squad: Ahmed Raza (captain), Muhammad Waseem, Chirag Suri, Vriitya Aravind, Rohan Mustafa, Kashif Daud, Zahoor Khan, Alishan Sharafu, Raja Akifullah, Karthik Meiyappan, Junaid Siddique, Basil Hameed, Zafar Farid, Mohammed Boota, Mohammed Usman, Rahul Bhatia
All matches to be streamed live on icc.tv
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
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Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
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Four motivational quotes from Alicia's Dubai talk
“The only thing we need is to know that we have faith. Faith and hope in our own dreams. The belief that, when we keep going we’re going to find our way. That’s all we got.”
“Sometimes we try so hard to keep things inside. We try so hard to pretend it’s not really bothering us. In some ways, that hurts us more. You don’t realise how dishonest you are with yourself sometimes, but I realised that if I spoke it, I could let it go.”
“One good thing is to know you’re not the only one going through it. You’re not the only one trying to find your way, trying to find yourself, trying to find amazing energy, trying to find a light. Show all of yourself. Show every nuance. All of your magic. All of your colours. Be true to that. You can be unafraid.”
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