The CIES Football Observatory has released a report on the economics of the Big 5 (Premier League, La Liga, Bundesliga, Serie A and Ligue 1) transfers over the past decade.
With the transfer window for summer 2021 officially closed, it’s time to take stock. And nothing better to help us than a report from the International Center for the Study of Sport (CIES) on the economy of Big 5 transfers. The period covered by the report extends from the winter transfer window of 2012 to that of summer 2021.
A report all the more interesting when we know the economic situation that European clubs are going through since the Covid-19 crisis. And if, unsurprisingly, the pandemic has strengthened the domination of Premier League clubs in the market, we also learn that Spanish clubs have been the most affected. Ligue 1, also impacted, nevertheless continues to rely on its sales: since 2012, the French championship is the only one with a positive transfer balance among the Big 5 (158 million euros). By comparison, the Premier League has accumulated a net deficit of just over € 8 billion over the past decade …
The Premier League has consistently been the biggest-spending league among the Big 5 since the early 2010s, and the Covid-19 crisis has not helped to improve that contrast. On the contrary, the English league has never been so ubiquitous in the transfer market. If the Covid-19 crisis has impacted the spending of English clubs, going from 1,880 million euros in 2019 to 1,684 million in 2021, the difference is significantly less compared to the rest of the Big 5.
“The English championship is separate, says Luc Arrondel, sports economist, research director at the National Center for Scientific Research (CNRS), researcher and associate professor at the Paris School of Economics (PSE), you are beyond 3 billion euros in domestic and international TV rights, that more than compensates for the health crisis and it places you well above other championships. “
This drop of roughly 10% between the last pre-Covid transfer window (summer 2019) and the recent post-Covid transfer window (summer 2021) is much less significant than that which hits La Liga (-77%), Serie A (- 48%), the Bundesliga (-45%) and Ligue 1 (-40%). It is therefore reasonable to say that the health crisis has clearly reinforced the inequalities between the Premier League and the rest of the Big 5 championships: with 44% of total Big 5 compensation in the summer of 2021, the English championship does not has never had so much control over the transfer market.
“When you look at the English league, there is not only growth in TV rights but the position that has increased the most is commercial income and sponsorship. The biggest clubs in the Premier League have balanced their recipes by managing to divide fair TV rights, sponsorship and ticketing. This is what they have succeeded in doing. It will always be them who will be the most buyers of players, “concludes Luc Arrondel.
If the Premier League is the “big winner” of the Covid-19 crisis, La Liga appears to be a loser as its economic influence on the transfer market has taken a hit. While Spanish clubs spent 1,529 million in 2019, only 358 million were disbursed this summer, a drop of 77% recorded in just two years. This legendary championship has been stripped of many of its stars in recent years (Neymar, Lionel Messi, Cristiano Ronaldo etc …) but also of a lot of its young people who leave earlier and earlier to foreign championships, especially in England . “Spanish clubs have taken on a lot of debt in recent years, the health crisis has only accelerated the inequalities between England and the rest of Europe, especially with Spain,” added Luc Arrondel.
The Spanish clubs have therefore exchanged their buyer’s cap for that of seller: among the Big 5 championships, La Liga is the only one with a positive net balance since the summer of 2020, the first post-Covid transfer window, that is to say the only championship which has sold more than bought (720 million in expenses for 916 million in revenue, ie a positive result of 196 million).
While no Ligue 1 club have won a European title since Paris Saint-Germain in 1996, French clubs can claim to be the healthiest economically, at least when it comes to net transfer records per club. “For ten years the French championship has ensured its financial balance with transfers”, summarizes Luc Arrondel.
Two French clubs, LOSC (342 million euros) and Olympique Lyonnais (225 million euros), lead the ranking of current Big 5 teams with the most positive financial results on the transfer market since 2012. They are followed by three Italian teams specializing in player trading: Genoa, Udinese and Atalanta. “Lyon and Lille, a lot of their revenue is associated with the sale of players. It’s a model of player trading. If they don’t sell a player, that’s a big problem, but it just takes a big sale to balance its recipes. It is nevertheless a calculation which can turn out to be very risky and from a sporting point of view, it is not necessarily models which are very durable “.
Two other French clubs, Montpellier HSC (177 million euros) and AS Saint-Etienne (110 million euros) are present in the top 10, and five others climb into a top 20 where we do not find any club English.
In addition, even if it does not have the most positive record, Monaco is the club that has sold the most in the Big 5 since 2012 with 1039 million euros in transfer fees (bonus included) pocketed, among which we finds Kylian Mbappé (180 million euros), James Rodriguez (75 million euros), Thomas Lemar (70 million euros) or even Anthony Martial (60 million euros).
Lionel Messi, Sergio Ramos, Gianluigi Donnarumma, David Alaba, Jérôme Boateng… The number of free transfers this summer has never seemed so high. But is this really a new fad or just a simple illusion? “About two-thirds of transfers are free transfers,” says Luc Arrondel, “it’s a slightly upward trend in recent years.”
The fact that there are Messi, Ramos who go free, that tends to bias the objective observation.
But the economist nonetheless recalls that this summer is no more different from the others, the names are simply more flashy. “I think we got a bit of a distorted view this summer because you see some very high profile players who have gone free when the majority of transfers are free anyway.”
“In the world, one transfer in ten is paying and in the Big 5 it is one in three. There is a small tendency for the players to leave freely but we have to wait a little bit to see if the trend is confirmed Last year, for example, there was a 6% increase in free transfers in the Big 5, so we cannot speak of a reversal of the trend, ”adds Luc Arrondel.
The future will tell us if free transfers are really on the increase or only a fleeting effect, in a year with a little particular economic situation, which will dissipate over time.
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