The £20m Premier League premium worrying European clubs

The old adage used to be that English players came at a premium. Now that surcharge seems to apply to any player already in the Premier League. The summer window delivered a striking figure: the average spend on a footballer signed from another English club was £39.4m, almost double the £20.2m paid on average for a recruit arriving from overseas.

Kieran Maguire, professor of football finance at the University of Liverpool, calls it a Premier League tax. It is the clearest sign of a growing trend: English clubs are increasingly comfortable selling to each other, even to direct rivals, and that dynamic is reshaping the pricing scale of European football.

What the Premier League tax is and why clubs pay it

The English market broke spending records, but the most revealing detail was not how much was invested, it was who the clubs chose to do business with. High-value moves worth £40m or more doubled in a year, from 13 deals in 2024-25 to 27 this summer.

The comparison is even more telling. Two years ago, seven transfers of that size were completed with teams on the continent and only six between Premier League clubs. This summer there were nine big-money agreements with European sides, but domestic deals trebled from six to 18. Total spending on internal transfers more than doubled as well.

From European talent pool to Premier League proving ground

Maguire points to one reason: English clubs now scout players abroad so extensively that they sign them far earlier and turn them into Premier League assets. A new group of clubs, what he calls the algorithm kids, recruit from international markets, bring those players to England, and then the Big Six sign the best of them.

Carlos Baleba is the perfect example. Brighton brought him from Lille three years ago for £23m and sold him to Manchester United last week for £70m. For Maguire, it has effectively created a recruitment area, a petri dish to determine which overseas players can deliver in the Premier League. If the test works, everyone wins.

Deals that could only happen in England

Some transfers look like they could only take place inside the Premier League bubble. Would a European club have paid Manchester City the £75m Tottenham spent on Savio? Or handed Everton £65m for Iliman Ndiaye? What about the £85m West Ham received from Spurs for Mateus Fernandes? Those are figures that would never have moved on the continent.

To underline the point, only seven signings of £40m or more were made this summer by European clubs with other sides on the continent. Barcelona, Bayern Munich and Paris Saint-Germain were responsible for all of them. Trevor Watkins, the former Bournemouth chairman who now works as a sports lawyer, says the Premier League almost operates within its own bubble. Its revenues dwarf what other leagues generate, and English clubs are practically the only ones able to pay certain wages and fees.

Why accounting profit now beats sporting value

The market has become a game of spreadsheets where it is almost impossible to value players against each other. The reason is simple, though the explanation is more complicated: profit on a transfer matters more than what a player contributes in saves, clearances, assists or goals, because that profit is what allows reinvestment in the squad.

Elliot Anderson cost Nottingham Forest £35m from Newcastle, and Forest sold him for £116m. But that is not £81m of profit. The original fee is spread over the length of his contract, and when the midfielder moved to Manchester City around £21m was left on the books. Under the Premier League's new squad cost ratio rules, known as SCR, the profit is £95m, averaged over three years at £31.67m per season for Forest.

Clubs can no longer use a sale as a one-hit quick fix, either to boost spending power in a single window or to escape a breach of financial rules. Generating high transfer fees has become even more important because it raises the profit average for SCR, which is calculated over one season. And that benefits, above all, those with the greatest financial power.

The protected Big Six and the other 14 clubs

The Big Six — Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham — spent £1.658bn on players. Their commercial revenues are on a completely different scale. For Maguire, they have future-proofed themselves by generating more income: Spurs are the classic example, with a multi-function, multi-sport stadium in which the football club is the biggest part. It is the reward for clubs that expanded their grounds or thought outside the box to add revenue.

The other 14 clubs invested a combined £1.833bn, and for them player trading is crucial. Aston Villa and Newcastle completed five deals worth £40m or more between them, but only after bringing in hundreds of millions from player sales. Money rules, and income from transfers fuels the whole project.

The inflationary effect Europe already fears

If Premier League clubs spend more of their money between themselves, less flows to the continent. But the concern is that the spiral will still act as an inflationary trigger for fees and wages across Europe. Javier Gomez, LaLiga's corporate general director, criticised this week the loss-making model that is an issue exclusive to the Premier League. For Gomez, it inflates the entire sector: the Bundesliga, the French league and, eventually, the Spanish one too.

Some of Europe's traditionally bigger teams have already found themselves unable to compete with the top sides in England. Maguire argues that, with the exception of global brands such as Real Madrid, Barcelona, PSG and Bayern Munich, the Premier League can outspend almost anyone. In the latest Deloitte ranking, 14 Premier League clubs sit among the 30 richest in world football.

Andre Villas-Boas, president of FC Porto, admits the Portuguese club has had to step up its scouting work to avoid bidding wars it cannot win. For Porto, competing for talent no longer means fighting Manchester City or Liverpool, but clubs like Coventry and Brentford, with no disrespect to them. English spending power makes everything harder. The Premier League is set apart from the rest, Villas-Boas says, and that is why English clubs are becoming more dominant in European competitions.

Aston Villa won the Europa League and Crystal Palace the Conference League last season, while Arsenal were beaten by Paris Saint-Germain in the Champions League final. The Premier League's spending bubble refuses to burst, and it risks widening the inequalities of European football even further.