The year was 2011. One Direction were at the peak of their powers, the Harry Potter film franchise had just finished, and Fernando Torres was the greatest striker in the Premier League. After four prolific years at Anfield Road, Torres completed a move to Chelsea for £50m, a British transfer record at the time. Fast forward eight years and the landscape looks very different. Torres is certainly not one of the best strikers in the world, Harry Potter movies are back somehow, and One Direction heartbreakingly went their separate ways. Most importantly, £50m gets you an entirely different calibre of player. Manchester United spent exactly that amount on Aaron Wan-Bissaka this summer when they signed him from Crystal Palace. While he is certainly an exciting prospect, that is still a substantial amount of money to spend on a 19-year-old right back with one year’s experience.
Football is now as much about boardrooms as it is about ballparks, if not even more so, and that has stripped the game of some of its heart. A combination of massive investments and exuberant television deals means that clubs have more money than ever to spend on players in an endeavour to buy their way to glory. The wantonness with which clubs spend their not-so-hard-earned money is drastically impacting the market and causing rapid inflation in an industry that is set to cripple it if something is not done.
It is hard to dispute that there has been a more valuable transfer in the history of the game than that of Cristiano Ronaldo joining Real Madrid. At the time, the player cost €94m, a deserved world record transfer. At Manchester United, he had already led his team to a Champions League victory, while winning the coveted Ballon D’or for his personal trophy cabinet. However, this is certainly a meagre sum when compared to today’s transfers, such as PSG’s acquisition of Neymar from Barcelona. While he was a brilliant player, the €222m price tag attached to his services was certainly not reflective of his quality. And, unlike Ronaldo, he has not lived up to his world record price.
Neymar’s transfer has been one of a long line of deals which appear to defy logic. Players who have yet to, or failed to, impress still achieve astronomical transfer values every summer and Christmas. Ousmane Dembélé and João Félix were both sold for over €100m after one stand-out season and Chelsea’s new keeper, the 24-year-old Kepa, is now the most expensive shot-stopper in history, having been bought for €80m. With only 50 appearances for Atletico Bilbao and a handful for Spain, what was it about Kepa that warranted that amount of money?
The Premier League is experiencing an acute form of hyperinflation, known as “demand-pull inflation”. It simply means that in the case of the Premier League there has been an increase in business funds but no increase in player supply. As a result, the pool is becoming smaller and the small fish appear bigger, fetching a higher price.
This massive spike in club finances is due in no small part to television deals within the industry, which has seen Sky and BT spend £5.1b in the past to broadcast matches.
However, all good things must come to an end. The price for television rights has dropped to £4.46b at the most recent negotiations and is unlikely to stop. Prices are falling, and so too will this spending model within the league. Clubs will attempt to maintain this spending but there simply will not be enough financial backing to succeed. This is a case of disinflation as price rises are slowed but not entirely stopped.
Another issue which is corrupting the transfer market is the recent inception of ‘state-owned’ clubs, such as PSG and Manchester City. These clubs are owned by Qatar and the United Arab Emirates (UAE) respectively. Qatar Sports Investments, a subsidiary of a state owned holdings company, is the sole shareholder for PSG while Sheikh Mansour, City’s owner, is deputy prime minister of the UAE. Both bodies have funnelled state funds in the billions into each club in an attempt to achieve success. And while these clubs cannot be held entirely accountable for the state of the transfer market, they have certainly played a major role in its downfall.
Since Pep Guardiola took over as manager in 2016, City have spent €720.8m on only 20 signings. Although that averages out at a normal price per player (approximately €36m), in reality this is extremely damaging to the market. A good example of how their spending has affected things is evident in their purchase of John Stones. Stones became the second most expensive defender in history after City bought him for €56m in 2016. Without doubt, Stones was a talented young centre back and has proved his worth to the Etihad faithful over the years. But at the time Stones was not worth that amount of money. He was, however, a hotly contested prospect, wanted by many top clubs. Manchester City were able to use their excessive capital to pay above the odds for Stones in order to simply secure the player and in doing so, they set a new precedent price that stifled other, less affluent clubs. Now, top tier centre backs are like gold dust, costing on average €85m.
Many will say that where the money comes from doesn’t matter, only that you have it to spend. But most sources of income are hard earned. TV revenues vary depending on how well a team performs, fans will buy less merchandise if the club is failing and it is even difficult to sell players when their performances have been poor. The only way that the natural success of the club does not affect transfers is when the money is given freely. In that case, clubs can afford to spend abhorrent sums of money on players and skew the market in the process, with little to no consequence.
The Premier League is arguably the greatest league in the world. It has always been full of drama and suspense. Great players have struggled and nobodies have become legends. It is the league where clubs go undefeated and underdogs win championships. But with the transfer market in its current state, there is no guarantee that the league will stay that way. As more money is pumped into the game, the market is resembling more and more the housing market circa 2007. And every football fan around the world is waiting for the crash
