Chilling proof of recession in Premier League
The January transfer window traditionally culminates in a deadline-day parade of last-minute deals by the desperate, the doomed, and Tottenham Hotspur.
When the window closed with an anti-climactic whimper on Monday however it also offered chilling evidence that the cold economic realities facing the wider economy have finally caught up with football.
Gross spending in the past four weeks across all four divisions in England was about £50m, the lowest figure since the first year that two-window system was introduced in 2003, when £40m was spent.
At 5.30pm on Monday, spending by Premier League clubs stood at just £41.5m, according to accountants KPMG, with around a third of that attributed to Chris Smalling's proposed move from Fulham to Manchester United in the summer for a fee that could eventually total £12m.
The reduced spending by Premier League clubs is just 20pc of the record £190m of business done in January last year. While almost half of that was attributable to the Manchester City spending spree and Tottenham's rebuilding under new manager Harry Redknapp, this year's figures represent a marked reduction.
While some of the downturn in spending is explained by a growing distaste for January business among leading clubs, the impact of the recession is undoubtedly a significant factor.
Relegation-threatened clubs are typically active in January, but with Portsmouth, Hull and West Ham all financially challenged they were limited players.
Geoff Mesher, head of the KPMG Forensic Sports Industry Team, said football was finally feeling the impact of recession. "Whilst the UK has just recently exited recession it appears that football may just be entering it," he said. "Financial uncertainty still exists for a number of English clubs and many club chairmen will look at the current plight of Portsmouth, facing a winding up order on Feb 10 in the High Court, with concern."
Spending levels this year may reflect a more cautious approach by clubs, but there are also practical reasons connected to the financial crisis that make short-term gambles in the transfer market harder to pull off.
Many clubs have relied in the past on short-term financing from smaller "boutique" lenders, securitised against elements of future income. With the tightening of the credit markets and the collapse of several lenders in this market the options for clubs, many of whom carry significant debt, has narrowed.
"There is definitely a little bit of a hole in the market for short-term finance because some of the providers that operated in this space offering clubs financing on transfer deals are no longer in business," said Chris Lee, head of professional sport, Barclays Corporate, which provides banking services to a number of Premier League clubs.
"Clubs are finding themselves being offered all sorts of alternatives from third parties trying to expedite short-term credit to fund transfers, but interest rates are far bigger than with more established lenders, and the fees can be very high too."
The downturn is accompanied by a growing mood that January is the wrong time to spend money, a view endorse by Sunderland chairman Niall Quinn.
"It looks like it [the January window] was done for the right reasons a few years ago but as time has played out it's just become so difficult and so fraught and you end up gambling. And one of the things at football clubs – and it's playing itself out now down at Portsmouth – when you gamble, sometimes you don't win."