January transfer window – A window of uncertainty

Watch the clock …

As the transfer window was closing on January 31st, I was at a very cold Bet365 Stadium watching a very dull game between Stoke City and Watford. It was no surprise when I later discovered that the ball had been in play for only 42 minutes, the lowest amount of time of any game in the Premier League this season. I haven’t confirmed this fact, but the suggestion that every starting Watford outfield player went down injured was very believable. What I do know is that Watford’s delaying tactics started before kick off with what seemed like a never ending pre-match huddle!

I do sense that dour contests are becoming the norm. As I wrote previously, on all measures this season is one in which the Top 6 have continued to strengthen their dominance. While their combined number of points is slightly down on last year’s halfway record total, goals scored and goal difference are at record levels. Possession is also more skewed towards the top teams than ever before. As a result, the majority of the clubs are more concerned about the possibility of relegation than of sneaking into a European qualifying spot.

Waking up on February 1st the Premier League table supported this view. 11 teams from 11th to 20th place were separated by 8 points and the 6 teams from 14th to 19th by one point. It is a very competitive lower half of the table. With over half the division worried about relegation, it is no surprise that tension is affecting performances on the pitch.

… and follow the money …

Why is the Premier League changing in this way? For me it seems a case of economics. The top 6 clubs appear to have access to ever larger sources of commercial income and are willing to invest this into strengthening their playing squads and support teams. I wrote in the summer about the record breaking transfer window and the January window had the same result: £430mn spent according to the BBC, excluding the Sanchez/Mkhitaryan swap, close to double the previous mid-season highs of 2010/11 and 2016/17.

Why is the Premier League changing in this way? For me it seems a case of economics.

According to The Guardian, 51% of all European spending came from Premier League teams and of the rest, almost half of La Liga’s 30% contribution was the Coutinho transfer from Liverpool. The finances of the Premier League are unmatched across Europe. Despite their increasing dominance, this January window did see the 6 richest clubs flex their muscles, spending £265 million compared to less than £1 million in 2016/17. With Manchester City breaking their transfer record despite failing in a late bid for Riyad Mahrez, their dominance of the competition appears assured. The result is that competition for places in the Champions’ League is intensifying with 5 teams competing for 3 slots.

… as we try to guess what happens next at the top ...

It is going to be fascinating to see how the season pans out. Are there any clues we can take from the latest round of spending?

At the top end, Manchester City have set out their stall and breaking their transfer record is a clear message. Behind them, Chelsea and Arsenal shuffled their squads with high profile departures such as Sanchez, Walcott, Giroud and Costa balanced by the arrivals of Aubameyang, Mkhitaryan, Barkley, Giroud and Palmieri. Liverpool had one in and one out, Tottenham Hotspur bought in Moura and Manchester United added Sanchez. Overall, the message seems to be one of looking to push on but recognising Manchester City are out of reach both in terms of points and probably finances, at least for now. It looks as though the battle for second, third and fourth will go to the wire with little to choose between the teams.

… and bottom …

Elsewhere the story is mixed:

• Leicester City and Everton moved significantly to shore up their top half positions and appear well placed to do so;
• Southampton, Brighton & HA, Crystal Palace, Huddersfield Town, Stoke City and Swansea City also invested significantly in their attempts to stave off relegation;
• By contrast, Watford, West Bromwich Albion, Newcastle United decided to rely on loans to improve their fortunes;
• Bournemouth stuck with what they had suggesting confidence in their prospects;
• Burnley did a little but no surprise given their strong season to date; and
• West Ham’s window was very hard to read but it felt a little light in terms of activity given their recent injuries.

With so much resource being deployed at the top end of the market, scope for high value deals to make a difference becomes harder the further down the division we go. The top players are attracted to the successful teams, prices are being driven up and the result is that the rest of the division have to think long and hard about their approach. As a result, clubs have adopted different strategies and hence the transfer window doesn’t provide definitive answers to the likely outcome of the relegation battle. Does the use of loans by several teams reflect a lower financial risk play or does it simply reflect the difficulty of attracting players better than their existing squads? At the end of the season we may be able to determine which strategies were more effective – if money talks then Watford, West Bromwich Albion, Newcastle United and West Ham United may be in trouble, but if loans work out then we should worry about Southampton, Brighton & HA, Crystal Palace, Huddersfield Town, Stoke City and Swansea City.

It is all to play for.

@MarkGregoryEY