Arsene Wenger described the economic imbalance in European football as “financial doping”. This imbalance operates on a number of levels. There is and has been for a considerable time, a top tier of European clubs with financial spending power that reaches beyond the rest. The names are familiar – Real Madrid, FC Barcelona, Manchester United, Bayern Munich.
Yet the composition of this elite group is both shrinking and changing. Bayern Munich can no longer compete financially with the very richest. This is a relatively recent development. In Germany itself, Bayern have come in for scorn in recent years for strong-arming their Bundesliga rivals into selling their best players to them.
The strategy seems to be as much about weakening other teams as it is strengthening Bayern’s. Since Borussia Dortmund reached the Champions League Final in 2013, the star players who have made the switch to Bayern include Robert Lewandowski, the since returned Mario Goetze and Mats Hummels. The motivations for these transfers were certainly not purely financial but without Bayern’s financial dominance over the rest of the German league, this strategy would not have been possible.
Yet the transfer landscape has altered dramatically in the past year. Bayern cannot or will not match the record-breaking fees being paid out by Barcelona and Paris Saint-Germain. One of Europe’s great footballing predators is being priced out of the top of the food chain.
Juventus have wisely re-invested the considerable transfer fees they have received in recent years to replenish their ranks, but neither they nor any Italian team can compete at the most expensive end of the transfer market.
On a continental level, the advent of the Premier League has created another level of imbalance between the top twenty clubs in England and the rest of Europe. The Premier League, a remodelling of the old First Division, was an attempt to maximise the commercial potential of English football. The TV rights are famously lucrative and now stretch into billions of pounds worth in value.
Each Premier League club receives a share, giving them an enormous advantage over clubs of similar stature elsewhere on the continent. Promotion to the Premier League means that the likes of Huddersfield and Bournemouth can hope to compete financially with some of the most esteemed clubs in Europe.
Some great European clubs have simply fallen by the wayside altogether: Ajax of Amsterdam, AC Milan, Inter Milan, Deportivo la Coruna, Valencia, Olympique Lyonnais, Olympiakos, Benfica and countless others. These are all clubs who have made a wonderful contribution to European football but are now virtually irrelevant when it comes to the highest levels of competition.
The likes of Real Madrid and Barcelona, of course, have been laying the foundations for the current inflationary transfer fees for years. The Spanish giants have always competed for the very best in the world and have been able to pay for them. Real Madrid famously adopted the “Galacticos” policy in the 2000s, pursuing the very best and most marketable footballers no matter the price.
In 2009, their transfer business temporarily ensured that, at that point, the three most expensive fees ever paid for a player were all by Real Madrid, and all dated within the last 8 years. Kaka’s €67 million transfer that summer was the second most expensive of all time behind only the €77 million they had paid for Zinedine Zidane in 2001. Mere weeks later, Kaka’s signing was overshadowed by the arrival of Cristiano Ronaldo from Manchester United for €94 million. Barcelona would then sink some €86 million euros into the signing of Neymar from Brazilian club Santos in 2013.
Yet Real Madrid and Barcelona’s financial power had much to do with their status as Europe and Spain’s most prestigious and successful clubs. Decades of success and legendary players had built a brand that was marketable all across the world. Both boast massive stadiums which generate enormous match day gate receipts. In other words, although it may not have been fair, their money wasn’t coming from nowhere. It seemed somewhat organic, and if their financial dominance allowed their sporting success, there was at least some sense that their financial and sporting successes were somewhat interdependent.
The likes of Manchester City, Chelsea and Paris Saint-Germain changed all of that. Chelsea was arguably the first project of this kind where a club which had not enjoyed any great level of success in recent years received the backing of a super-wealthy owner. It was the most instantly successful as well. Within a year of purchasing the club,
Russian oligarch Roman Abramovich had installed upcoming Portuguese coach José Mourinho and gave him the financial backing needed to build the team he wanted. Chelsea won back-to-back Premier League titles under Mourinho in 2004/05 and 2005/06, breaking the record for the number of points attained in a Premier League season. Chelsea were regularly competing in the quarter and semi-finals of the Champions League.
Chelsea proved that money could indeed buy you success, but in light of recent years, it also proved that that money had to be spent correctly. Chelsea, apart from a few notable failures such as Andriy Shevchenko and Fernando Torres, used their newfound wealth smartly.
It took longer for Manchester City and Paris Saint-Germain to find their feet as European super clubs. Many would argue that due to their failure to turn huge spending power into consistent Champions League performances, that is a status they have still yet to reach. But crucially, for the likes of these clubs, backed by Middle Eastern oil money, there is a huge margin of error. The wealth of the people backing these clubs appears at times to be limitless.
If something doesn’t work, they will simply plow even more money into the project until it does. For both, it finally seems to be working. The valiant defence European clubs have put up against this onslaught of financial doping appears to be crumbling. Paris Saint-Germain have, after committing to the two most expensive transfers in history in the course of one summer, finally assembled a front line that looks capable of beating any team in the world.
Neymar’s absurd €222 million transfer fee more than doubled the world record set by Manchester United in the signing of Paul Pogba last summer. Weeks later, they secured 18-year-old star Kylian Mbappe from French rivals Monaco for an estimated €145 million plus an additional €35 million in add-ons if certain performance-related conditions are met.
It would be trite to claim the Mbappe transfer as a “watershed moment”, for it seems this term is applied every time the world transfer fee is broken. In a transfer market characterised by ever spiralling inflation, each fee seems more absurd than the last. But the Mbappe transfer is revealing when we consider why there are no effective safeguards against “financial doping”.
Union of European Football Associations (UEFA) introduced the Financial Fair Play regulations to try and ensure that clubs could not spend more than they raise in revenue and have their enormous losses written off by a wealthy backer. How then, did PSG manage to break last summer’s world transfer record twice in a matter of weeks? The Mbappe transfer highlights how toothless Financial Fair Play is. Rather than the fee being paid this summer and therefore going onto PSG’s books, they agreed on a season-long loan deal with Monaco for Mbappe, with a commitment to buy next summer.
In addition, while there are provisions to suspend teams from European competition, clubs such as PSG could feasibly be punished with no more than a fine. For owners with bottomless pockets, this is no great deterrent. Manchester City have also been accused of circumventing Financial Fair Play through artificial sponsorship deals.
City receive lucrative sponsorships from up to 4 companies owned by the United Arab Emirates government. City are, of course, owned by Sheikh Mansour, Deputy Prime Minister of the United Arab Emirates. And yet these huge sponsorship deals are recorded as legitimate revenue rather than investment from the owner.
As always with UEFA and football’s governing bodies, one suspects the problems go far beyond the solutions they are willing to contemplate. Financial Fair Play has failed to level the playing field. It is at best a nuisance for elite clubs, it creates obstacles for them to navigate.
But it has not held back the tide of inflationary spending. Enormous expenditure is now required simply to stay afloat in the higher echelons of European competition. In a few years’ time, will we be contemplating any potential European champions other than Real Madrid, Manchester City or Paris Saint-Germain?