Premier League clubs’ spending on new players dropped by 10 percent to £450 million during this year’s close-season transfer window.
Even Manchester City’s huge £120 million outlay failed to see the top flight match the record sum of £500 million spent a year ago.
Observers believe the high rate of the euro and 50 percent tax rate for the very highest earners has contributed to the drop, particularly in terms of players coming from the continent.
Paul Rawnsley, director of Deloitte’s Sports Business Group, said the figures were no surprise – and net spending has dropped from £200 million to £80 million as clubs such as Manchester United and Arsenal did not reinvest all their income in fresh signings.
Rawnsley said: “Despite the significant spending by Manchester City, Premier League clubs’ transfer spending has dropped.
“There are a number of contributory factors – the exchange rate, the tax regime in Spain being more favourable to players and clubs, and perhaps clubs thinking there is less of a risk in buying established Premier League players than from overseas.”
Rawnsley does not expect the picture to alter next year either even if, as expected, the Premier League benefits from a big rise in the value of overseas TV rights.
He added: “Economic conditions may improve in 2010 and the Premier League is expected to secure enhanced values for international media rights generating higher revenue for Premier League clubs.
“However, without further significant capital injections from owners, transfer spending is unlikely to exceed the record level achieved in 2008.”
Deloitte’s analysis shows Manchester City’s overall spending has been around £120 million representing 27 percent of the total spent, while Aston Villa, Liverpool, Sunderland and Tottenham have each spent more than £25 million on new players.
Rawnsley said the necessity of the owners of Manchester United and Liverpool to make big interest payments on loans taken out to buy the club have also had an impact.
He said: “Having to pay interest can have a bearing on transfer budgets but that is not necessarily why United have spent more of the Ronaldo money.
“Some clubs may well have felt that thanks to the spending of Real Madrid and others such as Manchester City the transfer market has been too inflated.”
The Big Four of Manchester United, Arsenal, Chelsea and Liverpool, ended the summer £75.3m in the black, as compared to a net outlay of £45.2m a year ago.