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Premier League Transfer Spending Reaches Record $1.2 Billion

English Premier League soccer clubs spent 725 million pounds ($1.19 billion) on player transfer fees since the last offseason, the highest amount for the eight-month period, according to Deloitte LP.

The 20 teams have spent a combined 95 million pounds during January’s transfer window, which closes later today, Deloitte said in an e-mailed statement. Manchester United (MANU) spent the most so far by signing Chelsea playmaker Juan Mata for a club record 37.1 million pounds on Jan. 26.

The previous record transfer outlay for a season was 670 million pounds in the 2008-09 campaign, Deloitte said in a separate e-mail. Clubs are using increased income from broadcast contracts to finance spending, according to Dan Jones, a partner in Deloitte’s sports business group.

“It is important to put this in context: the transfer spending is supported by the record level of revenues of Premier League clubs, driven primarily by new broadcast agreements,” Jones said in a statement.

The Premier League dwarfs the rest of Europe in soccer trading. In the last transfer window, which ended Sept. 2, its clubs spent 671 million pounds on transfer fees while Italy’s Serie A spent 361 million, according to Bloomberg Sports calculations. Spain’s La Liga, which includes Real Madrid and Barcelona, was the next highest, having spent 355 million.

‘Competitive Advantage’

Soccer players typically join a club for a fixed contract period. Other teams can sign them by paying the club a transfer fee, effectively buying them out of their contract. The fee is negotiated between the clubs.

The transfer window is a period during which teams are allowed to purchase contracted players from other clubs and register them as their own. There are two windows in the Premier League season: the first from the final day of the season, usually in May, until around the end of August, and the second in mid-season from Jan. 1-31.

Simon Chadwick, a professor of sports business strategy at the U.K.’s Coventry University, said English clubs enjoy a “competitive advantage” over their European rivals thanks to larger television revenue and an ability to attract some of the biggest sponsorship deals.

English football and its administrators and managers have been more openly receptive to the growth of commercial opportunities, Chadwick said.

‘Work Harder’

“This means English clubs think and work harder to make efficient use of their strategic resources, such as stadiums, and also to grow income through, for example, merchandise sales,” he added in e-mailed comments.

The record spending could put English clubs at risk of breaching European ruling body UEFA’s “financial fair play” regulations, which are aimed at protecting clubs’ stability by stopping them overspending.

From this season teams that break the rules could be excluded from elite European competitions such as the Champions League.

Manchester City said Jan. 29 that the club had a loss of 51.6 million pounds for the year through May 31, 2013 on record sales of 271 million pounds. While City’s losses exceed the threshold allowed under UEFA’s rules, the team may avoid penalties because of spending on items such as infrastructure.

Chelsea posted a loss of 49.4 million pounds for 2012-13. The Blues today acquired defender Kurt Zouma from France’s Saint-Etienne, for a fee of about 12.5 million pounds according to the Daily Mail. He follows Nemanja Matic, Bertrand Traore and Mohamed Salah into Stamford Bridge during this month’s transfer window.

To contact the reporter on this story: Ben Priechenfried in London at bprie@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

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