By Paul Nicholson
February 11 – The drop in transfer spending as a result of the global pandemic will not be a one-off occurrence but the start of a correction of the whole transfer business, according the KPMG Football Benchmark researchers.
FIFA’s annual Global Transfer Market Report 2020 reported a decline in global transfer activities for the first time in the last ten years. KPMG, who warned back in May of “significant shifts in player trading activities”, have now analysed the full extent of what is a seismic change.
“Comparing the value of squad investment during the pandemic affected 2020/21 season (summer and winter transfer periods combined), clubs across the big 5 European football leagues spent almost 50% less on transfers compared to the previous season,” says KPMG.
Premier League clubs, still the biggest spenders in Europe, reduced outlay on new players by 20% in 2020-21, while LaLiga clubs reduced their spend by a massive 70%, the largest decline in Europe’s Big 5 leagues.
“Moreover, the top 10 European clubs by transfer spending invested EUR 1.25b into their squads in the 2020/21 season – representing a 46% reduction compared to the top 10 clubs by spending during the corresponding 2019/20 transfer periods. While Real Madrid were the club with the highest investment in the previous season, having paid a total of EUR 355.5m for new players such as Eden Hazard and Ferland Mendy, Chelsea top this season’s ranking with EUR 247.2m, with all their major transfers (including Kai Havertz, Timo Werner and Hakim Ziyech, among others) completed in the summer,” says the report.
A closer look at the types of transfers completed shows a relative stability in the market for loan deals, academy and free agent transfers but a big drop in the number of purchased players from 602 to 390 (35%).
KPMG also highlight that the market value of transferred players has dropped significantly. According to the KPMG Football Benchmark’s Player Valuation Tool, the aggregated market value of the top 20 new arrivals in Europe’s big 5 leagues “was just above €1 billion this season, a decline of 21% from the previous season, where the top 20 transferred footballers boasted a total market value of €1.4 billion in market value.
The report authors say they expect these trends to continue and issue a warning that clubs who are what they term as ‘net-sellers’, with a financial model based on developing and selling players, are likely to suffer the most in the post-pandemic football economy. With the English market also becoming more restrictive in terms of player movement post-Brexit, it could be the perfect storm that corrects what already looked like an over-heated transfer marketplace.
Click here to see the full report.
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