$138m Jack Grealish transfer shows it’s business as usual for English Premier League’s elite

It wasn’t that long ago that six of the English Premier League’s biggest teams – Liverpool, Chelsea, Manchester United, Manchester City, Arsenal and Tottenham – sparked outrage for signing up to the proposed European Super League (ESL).

The closed shop for the continent’s biggest clubs was partly born from the desire to earn a larger slice of football’s mammoth pie and to create a more stable income during such uncertain times.

Like every business, clubs were impacted by the pandemic last year with games forced behind closed doors. Teams were robbed of their matchday revenues – the bigger the clubs were in terms of stadium size, the greater that financial hit was.

Not that you’d have noticed in recent weeks as clubs prepare for the new Premier League season.

Led by Manchester City’s eye-watering $138 million deal for English playmaker Jack Grealish, the Premier League has seen bumper prices being paid for some of the best players on the planet ahead of Friday’s opener as newly promoted Brentford hosts Arsenal.

Meanwhile, Chelsea reportedly paid over $130 million for its former striker Romelu Lukaku and Manchester United has already paid $100 million for Jadon Sancho.

Arsenal and Liverpool have bolstered their defenses with $69 million and $48 million deals for central defenders Ben White and Ibrahima Konaté respectively. Tottenham has also invested $65 million in buying Cristian Romero from Atalanta.

Despite the financial hit from Covid-19, football finance expert Kieran Maguire is not surprised about the amount of money being spent at present but has noticed a new trend, funded in part by the mega TV deals for those at the top of the footballing ladder.

“I think what we have seen is a concentration of spending on very, very high value players, whereas perhaps under normal circumstances, it would be improving the quality of the squad,” Maguire told CNN Sport.

“So we’re seeing individual values being very high but the quantity of signings has actually diminished.”

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Jack Grealish broke the Premier League transfer record when he joined Manchester City.

Manchester City eyes huge transfer window

When it comes to City’s signing of Grealish – the former Aston Villa captain is now the most expensive player in Premier League history – Maguire is only surprised it took so long for a club to break the previous league record.

“All of the other transfers that have gone above that value have been in Spain and France, so to a certain extent, given the Premier League is the world’s richest league, it’s surprising it’s taken the Premier League so long,” Maguire added.

“Also, if we take a look at the transfer that it exceeded, the last one was Paul Pogba to Manchester United in 2016. So it’s taken us five years for Manchester City to actually break the transfer record.”

City has also confirmed its interest in Tottenham striker Harry Kane which could blow Grealish’s transfer record out of the window, with a transfer potentially worth over $200 million.

BELFAST, NORTHERN IRELAND - AUGUST 11: Kepa Arrizabalaga and Kurt Zouma of Chelsea celebrate on the podium after their team's victory on penalties during the UEFA Super Cup 2021 match between Chelsea FC and Villarreal CF at the National Football Stadium at Windsor Park on August 11, 2021 in Belfast, Northern Ireland. (Photo by Catherine Ivill/Getty Images)

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Among other regulations, league rules prohibit English clubs from making an “aggregate loss in excess of ￡105 million over three consecutive seasons” with the idea of stopping clubs running big losses through spending on players.

Many have questioned how City, which is bankrolled by its Abu Dhabi owners, could sign Grealish and potentially Kane and still comply with those financial fair play (FFP) guidelines but Maguire explains how the club manages to balance the books.

He says a club like City, which won the Premier League, would have earned around $110 million from TV money alone after reaching the Champions League final last season and says sponsors may have paid extra bonuses as a result of the team’s relative success.

But there are also other ways in which large transfer sums can fit within the regulations, with the initial cost spread out over the player’s contracts.

“So Grealish signed a six-year contract. If Kane does the same, we’ve got an [estimated] $350 million spread over six years. So that’s less than $60 million a year,” Maguire said.

“At the same time, Manchester City has sold players. When you sell a player, you take all of the profit in one year rather than spreading it over a period.

“So Manchester City has actually sold players, which will cover the vast majority of that $60 million from the purchase of Grealish and potentially Kane on top of that.”

Speaking of the club’s recovery from the pandemic, City said: “The result of these extraordinary pandemic factors is a reported net loss of ￡126m ($148m) for the 2019-20 season.

“However, the club expects to immediately return to profitability in 2020-21, as a result of a less COVID-impacted season and deferred 2019-20 revenues. The likely normalized losses for each of the 2019-20 and 2020-21 seasons will therefore be less than ￡60m ($70m) per year.”

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Jadon Sancho shakes hands with Manchester United manager Ole Gunnar Solskjaer after signing with the club.

‘Impossible has become even more difficult’

Maguire says that within the current FFP guidelines, English football’s “big clubs” will continue to drift away from the rest of the league unless FFP is rethought.

“For a club to come in and challenge the existing elite, it was extremely difficult historically,” he said.

“People will point to Leicester City winning the Premier League in 2016 as evidence […] but immediately after Leicester City won the Premier League, those big clubs forced the Premier League to change the rules in terms of the distribution of TV money to concentrate a greater proportion of it in the hands of the elite.

“So what was almost impossible has become even more difficult as a consequence of these changes in the rules.”

One of those teams trying to make a name for itself this season is Leeds United.

The club enjoyed its first season back in the top-flight since 2004 last year but it’s still a long way short of its former glory.

Leeds was one of the most dominant teams in English football for decades but that was before the big money rolled into the Premier League.

Current owner Andrea Radrizzani says closing the gap to the league’s modern elite is no easy feat but hopes football’s unpredictability can benefit a team like his, trying to find its way back to the top.

“There is a different size of revenues between the clubs and a different level of finance opportunities between the clubs,” Radrizzani told CNN Sport ahead of the new season.

“We play in the same league and we try to show that football is a sport that can always bring surprises. So we need to remember what Leicester did a few years ago.”

So with the dawn of a new season upon us and last year’s stuttering campaign – beleaguered by the pandemic – somewhat of a distant memory, it appears clubs, and fans, are excited to make up for lost time.

Money may be king but, as we’ve seen time and time again, football has a wonderful way of upsetting the odds.