5 Teams That Need to Rethink Their Spending Habit
Football clubs seem to occupy an alternate universe when it comes to spending.
Be it squandering or saving, some sides need to rethink the way they are using their cash.
Astronomical sums were splurged over the summer months, with the Premier League alone parting ways with upwards of £630 million.
Across Europe’s "big five" leagues, gross spending was up on previous records. La Liga and Serie A each had an outlay of £335 million, Ligue 1 shelled out £315 million and the Bundesliga parted with a relatively modest £230 million, as reported by Deloitte analysts.
However, in the UK, some Premier League sides shelled out less than £2 million over the summer months, when they should have been shopping for new recruits.
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Newcastle United did not have a successful transfer window and they're going to have to rethink their spending habits, or lack thereof, in the future.
The Magpies may have brought in six new players last January, but new recruits were sorely needed this summer, after a terrible 2012/13 season that saw them flirt perilously with relegation.
Newcastle need to need to replace director of football Joe Kinnear with someone who is respected and has a genuine ability to spend well on the right players.
One look at rivals Sunderland shows the gulf between the two clubs in terms of player recruitment. The Wearsiders, although perhaps a little over zealous in their acquisition of 14 new faces, had little difficulty in attracting players over the summer months.
A large part of this was due to Paolo Di Canio's all-Italian backroom staff—director of football Roberto Di Fanti and chief scout Valentino Angeloni.
Di Canio can be accused of many things—failure to act in the transfer window is not one of them.
Whether the Black Cats' clutch of new faces, including Italy international Emanuele Giaccherini, US international Jozy Altidore and former Lazio defender Modibo Diakite, can gel as a team remains to be seen. But they now have genuine strength in depth, which puts them in a far healthier position than Newcastle.
Owner Mike Ashley should draft in a new director of football and focus on bringing quality signings to St James' Park, before it's too late.
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For a team that was in Ligue 2 this time last year, it’s an incredible amount of money.
Being owned by Russian billionaire Dmitry Rybolovlev helps, as does the added bonus of being situated in a tax haven.
The French side's big spending has been described as making a mockery of UEFA's Financial Fair Play regulations, which cannot be enforced on a team playing outside of European competition, as seen here on Goal.com.
Monaco's emergence as a serious contender to win Ligue 1 and take part in future Champions League campaigns has not gone down well in France. The club, managed by Claudio Ranieri, can offer huge tax-free salaries and do not have to pay the same taxes to Ligue 1, as clubs who are based in France.
Currently based in the tax haven of Monte Carlo, the football club have to relocate their headquarters and tax base to France by June 2014, or they will face suspension from Ligue 1, as reported by BBC News, who say:
The resentment felt by other clubs comes against the backdrop of the prospect of the introduction of a 75 percent tax rate on individual annual incomes in France exceeding 1m euros (£860,000), including those of footballers.
Monaco have been to court to fight the decision, as seen in the Guardian, but so far no agreement has been reached and will not be made until next season, unless a compromise is hashed out before then.
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Manchester United are already missing an influential figure, whose strategy and bargaining helped to shape the team we see today.
That man is David Gill.
Although the 56-year-old's stock fell with United fans after the Glazer takeover, the club is now counting the cost of losing the former chief executive after an unconvincing summer transfer window.
Gill remains on the club board but was replaced in his earlier role by Ed Woodward, after taking a new position on UEFA's executive committee.
It's early days but Woodward's first few months in the job have done little to endear him to the United support.
It was a summer of botched deals and mystifying forays into the transfer market. A-grade players like Cesc Fabregas, Robert Lewandowski, Cristiano Ronaldo, Thiago Alcantara and Luka Modric were linked to the club but the Red Devils had success in signing only Marouane Fellaini (bought for £4.5 million more than his release clause stipulated earlier in the summer) and Guillermo Varela, from Penarol.
Fabio Coentrao and Ander Herrera also failed to materialize on deadline day, the two mooted moves branded as "disastrous" and "baffling" by Spanish journalist Sid Lowe on talkSPORT.
United managed to keep hold of Wayne Rooney over the summer—the club's best piece of business.
Woodward, described by the BBC as an "ally to the Glazer family" should be replaced by a new chief executive, or perhaps work alongside a technical director more versed in the ways of football transfers—someone in the Txiki Begiristain (Manchester City) or Franco Baldini (Tottenham Hotspur) mould.
With money to spend, the club will have to reevaluate how they operate in future transfer windows.
Chelsea's spending is excessive, to say the least. Many might look at Roman Abramovich—ranked 107 in the world's richest men, owner of a $1 billion boat and wonder what the problem is: "He's got the money, why not spend it?"
It's old news to point to the expensive purchase of players like Andriy Shevchenko and Fernando Torres, strikers with huge transfer fees that never quite worked out, but recently Chelsea's spending has been over the top and unnecessarily so.
The club's wage bill amounted to £173 million in 2011/12, second highest behind Manchester City's £202 million, as seen in the Guardian.
According to Transfermarkt, the Stamford Bridge side blew £66.3 million on new faces this summer and received £8.9 million on players going the other way.
Abramovich's money was largely spent in midfield, where the side already had a wealth of options. There is no denying the talents of Andre Schurrle, Marco van Ginkel and Willian, but whether these players were needed is questionable, especially when players of Juan Mata's quality are left on the bench.
Midfielders Kevin de Bruyne and Michael Essien also returned from loan spells at Werder Bremen and Real Madrid, respectively.
Willian's transfer was the strangest, appearing more a case of one-upmanship against Tottenham Hotspur. Spurs had gone so far as to complete a medical with the Brazilian, who looked like he was on his way to White Hart Lane, until Chelsea came calling.
The Blues needed a good striker, something that was highlighted when Mourinho decided to field a striker-less side against Manchester United recently. It was a move that spoke volumes about Mourinho's regard for Torres and Demba Ba.
Chelsea wanted to sign Rooney but they had their advances rebuffed by United and, rather than packing off Torres or Ba, it was Romelu Lukaku that left the club to join Everton on loan. A coup for the Toffees and the player himself, who will be guaranteed playing time. Yet a bizarre move by Chelsea.
Samuel Eto'o has come on board, which could turn out to be a masterstroke. However it's going to be a short-term answer, if at all, for their needs up-front.
They may be a wealthy side but Chelsea need to spend with care, if they want to stay on the right side of FFP and common sense.
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Manchester City spent early this summer, wrapping up deals for Jesus Navas (£17.6 million), Fernandinho (£35 million), Alvaro Negredo (£22 million) and Stevan Jovetic (£22.8 million) long before deadline day. Martin Demichelis (£4.4 million) was the last player to arrive before the window shut on September 2.
According to talkSPORT, City coughed up £202 million in wages during the 2011/12 season. That figure may be a drop in the ocean for the club's vastly wealthy owners, but it's a great sum for a club with reported losses of £97 million last year and £197 million the previous year, as seen in the Economist.
Talk has abounded of UEFA clamping down on spending in the 2013/14 season. However, shopping sprees headed by some of Europe's wealthiest clubs have been branded "a joke" by Arsene Wenger (as seen on Goal.com) and make it hard to see that things are going to change.
Under UEFA's proposed rules for FFP, clubs must stay within break-even parameters which, in a nutshell, are designed to prevent clubs spending more than they earn.
- to introduce more discipline and rationality in club football finances
- to decrease pressure on salaries and transfer fees and limit inflationary effect
- to encourage clubs to compete with(in) their revenues
- to encourage long-term investments in the youth sector and infrastructure
- to protect the long-term viability of European club football
- to ensure clubs settle their liabilities on a timely basis
City have pointed to a £400 million Etihad stadium sponsorship deal as one way of plugging the gap in their financial losses of the last few years.
But, as reported by the Independent in 2012, the deal has been called "an improper transaction," as Etihad is owned by the Abu Dhabi royal family, to which City owner Sheikh Mansour belongs.
If FFP is enforced as stringently as promised, UEFA will have the power to exclude clubs from European competition if they are not in line with their rules.
City may be in trouble if they don't rethink their spending in the future.