Top European Clubs Spend Big

Now that the summer transfer is finally closed, it’s time to look at the clubs and domestic leagues that spent the most money this summer.

The top spenders in the English Premier League should not really be surprising, with Manchester City, Manchester United, Chelsea, Liverpool, and Arsenal leading the way in the England.

Similar story abroad. The usual suspects are amongst the top spenders in Spain, Italy, and Germany. Real Madrid and Barcelona were always going to make the list. Honorable mentions include Italian giants Juventus, French side Paris Saint-Germain, and Bayern Munich of the German Bundesliga.

Here are the numbers behind transfer spending in Europe’s top three leagues (England, Italy, and Spain).

English Premier League: $790 million

Italian Serie A: $651 million

Spanish La Liga: $488 million

The $790 million spent by Premier League clubs was 33% more than they spent in 2010. One reason for the increased spending could be due to the fact that the Premier League is the best football league in the world, at least when it comes to the business side of things.

According to Bloomberg, Premier League giants Manchester United set a record after earning $180 million in operating profits in 2010. The club wasted little time in re-investing their earnings. United’s three summer signings Phil Jones, Ashley Young, and David de Gea cost the Glazer family over $80 million.

Here is an excerpt from an article on BusinessWeek.com breaking down United’s $180 million operating profit:

“Manchester United’s parent company posted a record full-year operating profit of 110.9 million pounds ($180 million) as the English soccer champion plans a $1 billion initial public offering in Singapore.

“Red Football Ltd.’s profit before depreciation, amortization of players’ registrations and exceptional items rose 9.6 percent for the year to June 30, the club said in an e-mailed statement. Revenue climbed 16 percent to 331.4 million pounds, driven by sponsorship and licensing deals with companies including Aon Corp.

“The net debt of the Glazer family’s team was reduced from 376.9 million pounds to 308.3 million pounds. Its pretax profit was 29.7 million pounds, compared with a loss of 15 million pounds last year. It’s the second time in six years the club has been profitable.”

The main point of this piece is United managed to make a profit, despite the financial situation they were in. So why are teams in Italy and Spain drowning in their debts? Well, one reason is ticket sales. Ticket sales account for an extremely low percentage of team revenue in Italy. That could help explain Inter Milan’s financial situation earlier this summer, which forced them to sell star striker Samuel Eto’o to Anzhi.

In comparison, Arsenal, Liverpool, Manchester City, and Chelsea also all spent over $80 million in the summer transfer window. England’s top five clubs make up two-thirds of the transfer spending in the entire English Premier League.