Report shows huge fall in transfer spending

Leading finance experts are predicting the demise of the transfer fee for all but the biggest names.

Leading finance experts are predicting the demise of the transfer fee for all but the biggest names.

Deloitte and Touche's 14th annual report into the finances of football shows a 50 per cent decline in the cash clubs spent on new players.

The overall £203m budget for 2002-03, was exactly half the sum spent the previous year. The 20-team Premier League cut back spending by 41 per cent to £187m. In the Football League, the situation is even more acute. Outside the top flight only £16m was spent on transfer fees, a massive 81 per cent decrease.

Dan Jones, sports business group partner at Deloitte and Touche, said: "Clubs are starting to abandon what we have always thought to be the risky strategy of buying players in the belief that if things go wrong, they can always be sold.

"Long-term, that is an unsustainable position and one that needs to end."

However, the report goes on to point out that the Premiership generated £1.2bn during the 2002-03 season, making it by far the most lucrative league on the planet, accounting for almost 17 per cent of worldwide revenue.

The popularity of the English game abroad has helped stabilise TV revenues when in other countries they have fallen. Premiership clubs have also managed to keepwage inflation at eight per cent ­ the lowest increase in the Premiership's history.

But as the Football League still battles to recover from the catastrophic financial effects of ITV Digital's collapse, the gap between the Premiership and the Football League is growing.

In 2002, the average turnover difference between a Premiership side and its First Division counterpart was £44.2m. By 2005, it will be an estimated £56.8m.

PREMIER RATE LEADING TEAMS' FINANCIAL STATISTICS FOR 2002-03

TOP 10 NET DEBT

Fulham £133m; Leeds £78m; Chelsea £75m; Arsenal £60m; Middlesbrough £57m; Man City £50m; West Ham £45m; Newcastle £43m; Bolton £38m; Sunderland £36m.

TOP FIVE WAGES TO TURNOVER

West Brom 41% (finished 19th); Man Utd 45% (1st); Newcastle 47% (3rd); Liverpool 52% (5th); Birmingham 54% (13th).

TOP FIVE PROFIT

Man Utd £47.8m; Newcastle £27.6m; Liverpool £19.8m; Arsenal £19.5m; Tottenham £11.0m.

TOP FIVE LOSS

Leeds £25.4m; Fulham £13.8m; Derby £9.0m; Ipswich £7.7m; Watford £7.6m.

AVERAGE TURNOVER

Premiership: £56.6m (2001-02); £62.3m (2002-03); £66.5m* (2003-04); £68.0m* (2004-05).

First Division: £12.4m (2001-02); £10.6m (2002-03); £11.0m* (2003-04); £11.2m* (2004-05).

Difference: £44.2m (2001-02); £51.7m (2002-03); £55.5m* (2003-04); £56.8m* (2004-05).

* projected