Every season big clubs from top European leagues spend huge sum of money to sign players in a bid to re-enforce the team and boost their financial status.
According to a report by CIES Football Observatory on transfer of players from 2010 till 2018, analyses the paid transactions involving teams from the five major European championships: the English Premier League, Spanish LaLiga, German Bundesliga, Italian Serie A and the French Ligue 1.
The report shows the sums paid in transfer fees, what the clubs and leagues have benefitted from these investments, and the financial balance sheets for both teams and leagues over the period stretching from 2010 to 2018.
The figures published in this report include fixed transfer fees, eventual add-ons, as well as sums paid in the context of paying loans. The sums involved in the case of loans with an obligation to buy are included in the figures for the year in which the agreement was concluded. Within the limits of the available information, the data on recipients take into account the resale percentages negotiated by former clubs.
For the first time since 2012, transfer fees paid out by big five league clubs were less than for the previous year. In 2018, a drop of 2.4% was recorded in comparison to 2017: €5.82 billion instead of €5.96.
The strong increase observed during the 2018 winter transfer window did not continue through to the summer one. However, over the whole year, the amounts invested were clearly above those paid out in 2016, an increase of €1.59 billion (+37.6%) in the big five leagues (2010-2018)
Throughout the period studied, the investments of Premier League clubs represented 37.4% of the total measured for the big-5 leagues. A slightly lower proportion was measured in 2018 (36.5%). Since 2010, the English top division teams have spent 1.6 times more than the Italian clubs, 2.1 times more than the Spanish, 2.8 times more than the German and 3.1 times more than the French.
In 2018, a new spending record was established in two leagues: the English Premier League and the Spanish LaLiga. In the first case, the increase was rather limited to 2.1%. In the second, the increment in comparison to 2017 was very marked 80.4%.
Thanks to a better distribution of television rights and international success, the LaLiga is now established as the second force of world football.
The rankings of clubs having invested the most in transfer fees since 2010 highlights the incredible financial power of a handful of teams. The top three comprises Manchester City, Chelsea and Barcelona. Four other teams have spent over a billion € over the eight-year period analysed. Among the heavy hitters of European football, only Real Madrid (€912 million) and Bayern Munich (€554 million) spent less.
As for 2018, Barcelona piped Liverpool and Juventus in the rankings of the clubs who spent the most. Ten English teams are in the top twenty places. Borussia Dortmund and Monaco are the only representatives of the German and French championships. This result is largely related to the financial gaps existing between leagues of the big-5.
The teams that benefited from transfer indemnities invested by these league clubs between 2010 and 2018 shows that most of the money stays within these championships: 66.6% of the total. This percentage reached 69.9% in 2018. This increase indicates that the most expensive transfers involve more than ever players who have already proved themselves in the five major leagues.
AS Monaco top the rankings of teams that received the most indemnities for transfers between 2010 and 2018. The team of the principality earned almost one billion in eight years. Many wealthy clubs also figure in the top twenty, while Benfica and Porto are the only two teams outside the five major championships in the top positions of this ranking.
To have an optimum understanding of the economics of the transfer market, aside from sums spent and recipients, it is essential to study the net balance sheet for operations at both league and club level. Between 2010 and 2018, these big league clubs recorded an accumulated deficit of €7.29 billion. The Premier League is single-handedly responsible for 78.3% of this deficit. This percentage was 85.7% in 2018.
Despite the considerable investments made by Paris St-Germain during the period studied (accumulated deficit of €874 million), Ligue 1 was the only big 5 championship with a positive balance (€199 million).
In 2018, the net balance sheet of transfer operations concerning teams from the French top division reached a historic record of €333 million.
The rankings of teams with the most positive balance on the transfer market between 2010 and 2018 highlights Monaco’s exceptional case of €289 million increase and €66 million in 2018.
Manchester City with €1.03 billion and Paris St-Germain, €874 million were among teams with the most negative net balance sheets for transfer operations between 2010 and 2018. Five Premier League teams are in the top ten places, as well as two Italians clubs; Juventus and Milan, two Spanish clubs; Barcelona and Real Madrid and Paris St-Germain.
The English top division occupies a central position, more than any other championship. Between 2010 and 2018, the six international relations with the greatest net monetary flows involve the English top division: -€905 million with France, -€831 million with Spain, -€645 million with Italy, -€582 million with Germany, -€412 million with Portugal and -€369 million with the Netherlands.
Despite the slight drop in spending observed in 2018 compared to 2017, the economic development of the top of the professional football pyramid suggests that a renewed increase of sums invested in transfer fees will happen in the near future.
Anthony Nlebem
