English clubs suffering effect of weak pound
The pound’s dramatic slide against the euro means that English football clubs are having to spend up to 30% more than they would have this summer if they are to bring in talent from the continent.
Where a player that was valued at €10 million may once have cost English clubs £7 million, the same player would now cost the equivalent of £10 million. The basic reason for this is that the value of the pound has been weakening against the euro for several months, culminating in the current situation where £1 is approximately equal to €1.
Arsenal’s pursuit of Russian hotshot Andrei Arshavin is a perfect example of how English clubs have been hit by the uncertain economic climate. Arshavin’s club, Zenit St Petersburg, value their player at €20 million, so while £15 million would have landed the player in August, he would now cost Arsenal a more significant £20 million - a staggering 30% increase.
And although English clubs are feeling the crunch of the exchange rate on their January transfer plans, managers of European teams will be rubbing their hands together as they benefit from the situation, making Premier League players a much more attractive option than they were six months ago.
However, the so-called ‘big four’ of English football have benefited from the weak pound. UEFA Champions League revenue is paid to the clubs in Swiss francs, meaning that the English participants will receive up to 25% more than last season when the funds are exchanged into sterling.
And such is the current stature of the Premier League, the bigger clubs should still be able to land the players they are after, as money is not short in the league. But it may make clubs more wary of future purchases from Europe.
It is likely that the pound will strengthen against the euro over the coming months, however clubs that were looking to splash the cash on players from Europe during the short January transfer window may be forced to hold out until the summer.