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Tax rise shifts the balance of power from England to Spain
Published : 06 Aug 2009 01:11:06
When four English teams muscled into the last eight of the Champions League in March, there appeared to be no disputing that the Barclays Premier League was the world's most powerful. The best players had been flooding to these shores for years, citing the packed stadiaand the rich history as their reasons, while happily compiling small fortunes. Continental craft had been added to speed and aggression and it was proving an irresistible thrill for anyone with football in their veins. That was then, this is now...Cristiano Ronaldo has quit Manchester United for the riches of Real Madrid and the Spanish League Arsenal, Manchester United and Chelsea beat Italian opposition to reach the quarter-finals and Liverpool destroyed Real Madrid 5-0 on aggregate. The humiliation of Real's four-goal drubbing in the second leg at Anfield, however, would have consequences beyond last season's European Cup campaign. It triggered a regime change at the Bernabeu Stadium which sparked the return of Florentino Perez as president and a new Galacticos era. The signing of Xabi Alonso from Liverpool this week for £30million took the summer spending spree beyond£220m and suddenly the Premier League had lost its magnetic pull. Cristiano Ronaldo, FIFA's World Footballer of the Year, had already left Manchester United for Real and Lyon's Karim Benzema preferred the Bernabeu to Old Trafford. Italian football lost Kaka and Zlatan Ibrahimovic to Spanish football and no one proved able to prise David Villa away from his homeland. While Spain has always been capable of luring football talent with its sunny skies and healthy wages, the volume ofglamorous imports into England is slowing noticeably. Manchester City's frenzy of spending has been mainly domestic. Last summer, the big arrivals included Luka Modric, Roman Pavlyuchenko, Jose Bosingwa, Jo, Albert Riera, Vincent Kompany, Samir Nasri, Jonas Gutierrez and Robinho. This year there has been Belgian defender Thomas Vermaelen, Ecuador's Christian Benitez, Yuri Zhirkov from Russia and not a lot more. The poor financial climate, the weakness of the pound against the euro and imminent tax changes can all take their share of the blame for making the Premier League a little less attractive. In Spain, footballers will continue to pay a 24 per cent temporary non-resident's tax as opposed to the 43 per cent top level for residents after their Congress voted against abolishing the special rate this summer. From next April, players in Englandwill pay 50 per cent top rate. A European player demanding a net salary of e3m (£2.54m) costs an English club e5.7m (£4.83m), which will go up to e6.8m (£5.76m) under the 50 per cent rate, according to Deloitte's sports business group. In Spain, the same new salary for a non-resident player would cost the Spanish club e4m (£3.39m), the best return of Europe's 'big five' leagues. At a time when all clubs are trying to shave costs, it represents a significant advantage, even if the Premier League's Sky TV package still keeps clubs competitive.The self-satisfaction of the Champions League March has soon evaporated. Barcelona emerged from the English pack to win the European Cup and those who spoke of football's natural cycles can feel extra smug. The power has shifted very quickly.