Why players might be choosing Spain over England

There have been some massive signings around Europe in the summer so far but it has been noticeable that very few players have made the move from continental Europe over to the Premier League.

Obviously, Real Madrid have been the really big spenders but other European clubs are splashing out as well. The club in England with the biggest spending power is Manchester City, who in theory have the money to buy whoever they want and pay whatever wages they need to pay.

Noticeable

City have made some big signings but it is again noticeable that they have all been transferred from other clubs in England. Carlos Tevez, Gareth Barry, Roque Santa Cruz and Emmanuel Adebayor have all arrived and John Terry seems to remain the number one target. All good players but all already in England.

A report from financial sports business consultants Deloitte may well go some way to explaining why this might be. The figures they reveal are truly astonishing.

Sterling

With the weakness of British sterling and the new 50% tax rate being paid by the highest earners, the wage demands being made by European players are likely to have significantly increased. Quite simply, offers being made by mainland European clubs may be almost impossible for English clubs to match at this time.

The astonishing figures to which I refer are that Deloitte have calculated that to pay a European player a net annual salary of three million euros (£2.6million), it would cost an English club a total of nearly seven million Euros. To produce the same net salary a Spanish club would only need to pay four million euros!

Higher

The amount paid in these circumstances by an English club is also higher than the 6.7 million Euros required in France and considerably higher than Italy and Germany at 5.7 million and 5.4 million Euros respectively.

A spokesman from Deloittes said,

“The summer transfer window opened over a month ago, but Premier League clubs are yet to make significant acquisitions from overseas. The reduced value of sterling against the euro and the proposed increase in the top rate of income tax are contributing factors to this. The concern is for the biggest clubs competing for the best talent, where the reduced tax rate in Spain gives the likes of Real Madrid and Barcelona a significant advantage in attracting the best players in the world.”

If you take a look at the example of Cristiano Ronaldo, he will be paying tax in Spain at the non-residents rate of 24% as opposed to the 50% he would have been paying if he had stayed at Manchester United. If Manchester United and Real Madrid both offered Ronaldo £100,000 per week, that would mean picking up £1,352,000 a year more at Madrid than he would at United.

Impact

The pound is currently worth about 1.15 euros compared with 1.50 euros, two years ago.
And from April 2010, the tax band for top earners in Britain will increase from 40% to 50%. This will almost certainly impact on all Premier League footballers.

The Deloitte report does go on to say that the top English clubs can still afford to compete for the top players as the revenues enjoyed by them are considerably higher than in the rest of Europe. Largely because of the lucrative television deals the 2007-08 season saw the revenues of English clubs reach 2.44 billion Euros, some 1 billion Euros more than in Spain.

Although the amounts of money we are talking about are obscene, particularly in these difficult times, it is easy to see why players may be looking to mainland Europe at the moment rather than the Premier League.