Football players come and go. Sometimes they arrive at a new team with great fanfare, and sometimes they leave for a rival squad in a haze of bitter acrimony.
At best, a new player can be a catalyst for a significant change of fortune, making the transfer window – when clubs buy and sell – an exciting part of the footballing calendar.
In recent years, there has been no better place to observe the transfer business than the English Premier League. Europe’s most watched league has long claimed to be the most lucrative in world football.
Since it was established in 1992, the Premier League has attracted talent from around the globe, broken transfer records, and provided broadcasting revenue to fund huge transfer fees and pay packets. Just ask Kevin de Bruyne or Alexis Sanchez who have been earning £350,000 per week for Manchester City and Manchester United respectively.
Yet this season there feels to have been a slow down, with the Premier League apparently losing its transfer sparkle. Clubs have been working much harder over the summer of 2019 to get fewer deals over the line.
Real Madrid’s Gareth Bale has seemed more interested in a lucrative move to the Chinese Super League than returning to the Premier League. Matthijs de Ligt chose Juventus over Manchester United, who themselves have struggled to get a number of deals done – although they did finally succeed in luring Harry Maguire from Leicester City for £80m, making him the most expensive defender in the world.
Transfer spending seems to be slowing down as clubs inflate prices because they don’t want, or need, to sell. English clubs spent £1.24 billion last summer and, even though the spending this year just about crept up to the 2017 record of £1.4 billion, it seems to have been an endurance event. Newly promoted Aston Villa helped as one of the biggest spenders (£110m) and Manchester City bought their record breaking full back Joao Cancelo from Juventus for £60m.
The TV deals which stimulated an increase in fees and wages have also ensured that clubs feel less urgency to sell players like they used to. But there are other factors at play here.
One is the “Financial Fair Play” rules, which mean teams have to work more cautiously, spending what they earn and not generating large losses.
Also, the Premier League simply isn’t as internally competitive as it used to be. The emergence of a “Big Six” – the two Manchester clubs, Liverpool, Arsenal, Chelsea and Tottenham Hotspur – which hoard ever more wealth, and ever more of the league’s best players, is starting to ensure those intoxicating upsets, are becoming rarer. The system as a whole is statistically less competitive than it used to be.
The story is the same in the Championship, England’s second football division. Last summer (2018/19), clubs spent a combined £201m, but only £150m has been spent in this window. Remarkably, Championship clubs recouped £280m from player sales and four clubs didn’t spend at all, relying instead on player loans and free transfers.
A deeper dive into Championship clubs’ finances makes it easy to see why some clubs are reluctant to pay out. Financial sustainability in the Championship is currently a distant concept.
In 2017/18, operating losses of the 24 clubs totalled £361m. Net debt was £963m and, collectively, clubs spent £795m on wages while generating only £749m in total revenue.
More recently, some clubs (Sheffield Wednesday, Derby and Aston Villa) have sold their stadiums to turn losses into profits, thereby avoiding sanctions on the pitch – something which Birmingham City was unable to do at the end of last season. Birmingham City’s nine point penalty has perhaps put clubs on edge when it comes to spending big as there had been scepticism prior to this as to whether the English Football League was willing to dish out such a harsh sporting punishment.
Yet the potential prize of Premier League riches remains the drive in this division, and the evidence points towards spending, more often than not, leading to greater sporting success. With the promotion windfall worth at least £120m , the temptation remains for clubs to go all in, and gamble with their financial sustainability.
With more wealth in Europe, less competition in England and lower spending in the Championship, we can start to see why so many clubs are struggling to enhance their squads. But if a lack of transfers leads to reduced sparkle in the coming season, it could be the Premier League – and its millions of fans across the world – that suffers.
The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.
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