Clubs face financial risks as cost of players balloons by 31% in a year, says report

money and football

September 5 – The €6.6 billion spent in the European summer transfer window represents a 31% increase in the price of players compared to the previous year, according to figures from the CIES Football Observatory.

“Since 2014, the annual inflation growth rate on the transfer market for big-5 league footballers has been 26%. With respect to 2011, the same player costs now almost three times more,” say the report authors.

Just looking at the Big-5 European leagues, the investment in player transfers has grown 340% from €1.5 billion in 2010 to the new record of €6.6 billion.

“During this period, big-5 league clubs have recorded a cumulative deficit of €8.9 billion. English Premier League clubs alone have a total net negative balance of €6.5 billion, with a record deficit for Manchester City (€1.1 billion),” says the report.

The authors do caution that the signs are that clubs are now at their financial limits with payments being spread out over several years.

There is also a warning on the impact of what is a notorious game of chance when it comes to player transfers and in particular when the those revenues are at the core of a club’s financial modelling.  “In an increasingly speculative and uneven environment, a growing number of clubs, even within the most powerful leagues, include the profits made on the transfer market into their financial model. This situation is not without danger for their stability, independence and competitiveness,” say the authors.

Source: All charts CIES Football Observatory

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