Covid-19 & Brexit Dampens January Transfer Spending Spree

The January 2021 transfer window saw significantly reduced activity across Europe as clubs exercised caution amid the highly uncertain environment created by the Covid-19 pandemic and, for those clubs in the UK, the immediate aftermath of Brexit. 

There were only 24 Premier League transfers during the window, compared to the average of 46 across the previous three years’ January windows.

Premier League clubs spent a total of just £70m during the January 2021 transfer window according to analysis by the Sports Business Group at Deloitte. This represents a decrease of gross transfer expenditure of £160m compared to January 2020 and marks the lowest window of spending since 2012.

Of this year’s spending, over 75% of the expenditure was driven by just three £10m+ transfers; Said Benrahma, Amad Diallo and Morgan Sanson. The remainder of the expenditure is made up of loan fees and relatively low value permanent transfers

This year was also the first following Britain’s exit from the EU which effectively ended the free movement of players between Europe and the UK with the introduction of a points based system for English clubs to sign all foreign players.

Speaking of the impact these factors have had on transfer spending, Dan Jones, partner at the Sports Business Group at Deloitte, commented: “Premier League clubs were understandably cautious in the January transfer window given the ongoing financial impact of the Covid-19 pandemic.

“Despite this, Premier League clubs’ very busy summer window, at a time when the rest of European football was more restrained, saw total net expenditure for the 2020/21 season reach a new record level of £950m. It remains to be seen if the relatively low activity in January will continue throughout 2021. We certainly do not expect to see another new record this summer.”

Jones added: “During the January 2021 window, Premier League clubs’ expenditure on players from non-English clubs fell to just £45m. In the previous two January transfer windows, Premier League clubs’ spend on this category of expenditure averaged £165m. While new post-Brexit rules on acquiring players from overseas may have contributed to this, the financial impact of the pandemic was, by far, a more important factor.”

The ‘big six’ Premier League clubs have not invested heavily in their squads this window, investing in three permanent transfers and three loan fee transfers, accounting for 35% of the total spend. In the January 2020 window they accounted for over half of all expenditure by Premier League clubs (c.£120m).

Furthermore, the current bottom four clubs in the table only spent £6m to acquire seven new players during this window. Comparably the clubs in the same position last season completed a total of eight inbound transfers for a value of £40m, as they sought to avoid relegation.

The impact of the COVID-19 pandemic can be seen across the other ‘big five’ European leagues. The volume of transfers in January 2021 amongst the other ‘big five’ European leagues is down by 40% when compared to the previous three-year average for January, resulting in reduced total transfer expenditure in each.

Key findings from Deloitte’s analysis of the January 2021 transfer window include:

Premier League clubs spent £70m to acquire new players in the January 2021 transfer window;

There have been a total of 24 Premier League transfers in this window. This is 48% fewer than the previous three-year January transfer windows’ average (46 transfers);

Premier League clubs recorded net transfer spend of £45m in January 2021, bringing the total net spend for the season 2020/21 to £950m, a new record high;

Three £10m+ signings; Said Benrahma, Amad Diallo and Morgan Sanson, accounted for the vast majority (over 75%) of Premier League expenditure during the January window;

Liverpool, Manchester United and Arsenal were the only ‘big six’ Premier League clubs to spend during the window;

At the end of the January 2021 window the bottom four relegation threatened clubs spent £6m during the window. This compares to £40m spent by clubs in the same position last season;

Premier League clubs spent a total of £45m on players from non-English clubs during the window, accounting for 64% of expenditure. This is a decrease from the £185m spent, and 80% of total spend, on such players in the previous January window;

Premier League clubs’ deadline day expenditure totalled £7m, which is a decrease from deadline day in January 2020 (£25m);

The 2020/21 season’s transfer spend by Premier League clubs was £1.4 billion. Considered together with the totals for 2019/20, which is appropriate given the revised timings of that football season to cut across two financial years, gross transfer spending equated to around one third of revenues – in line with the average over the preceding 5 years (33%);

The total gross transfer expenditure for English Football League (EFL) clubs’ in January 2021 was £5m, less than 20% of January 2020 windows expenditure (£37m), as EFL clubs continued to utilise the loan and/or free transfer market to add to their squads; and

Similarly to the Premier League clubs, spending amongst the remaining ‘big five’ European leagues’ clubs in the January transfer window was subdued with all leagues seeing a reduction in transfer activity and volume compared to January 2020. Serie A (2021: £70m/€80m 2020: £180m/€215m), Bundesliga (2021: £45m/€50m 2020: £165m/€195m), La Liga (£30m/€35m 2020: £110m/€130m) Ligue 1 (£25m/€30m 2020: £100m/€120m).