Why Modern Football Transfers Are So Expensive

Football has evolved over the years into the modern game that we know. From its humble beginnings, football has grown to be one of the most popular and lucrative sports worldwide.

In this article we will look at an important aspect of the  beautiful game: player transfers. Particularly we’ll analyze the reasons for the astronomical increases in transfer fees.

Let’s go!

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Madrid had paid €80 million – a record fee at the time – for CR7 to swap Old Trafford for Santiago Bernabeu.

Everyone agreed the high price was deserved. After all, CR7 was coming off a trophy-laden career at Manchester United and had won the Ballon D’Or in 2008.

Ronaldo won four European Champions League cups, two La Liga titles, two Copa Del Rey titles, and three FIFA Club World Cups in a glittering career at the Santiago Bernabeu.

That was the kind of performance you got in return for spending €80 million on a player a decade ago.

Fast forward to the present, and things couldn’t be any more different.

Now, €80 million for a player may raise some eyebrows, but it won’t attract the same level of attention as Ronaldo’s transfer that year.

You want to know why?

It’s because people are used to seeing clubs spend humongous amounts on player transfers.

Nowadays, it takes a transfer in excess of €100 million or more to truly grab the public’s attention.

For a bit of context, we’ll contrast the most expensive signings this decade against those of the last decade.

Afterwards, you can determine if modern transfers have grown expensive or not.

What Are Reasons For The Rise In Prices Of Football Transfers?

Okay, we can admit that football transfers have become expensive.

But what exactly is fueling the near astronomical increases in transfer amounts?

After researching, we came up with the following as likely explanations for the wanton spending of clubs on players:

1. Inflation

Prior to the 90s, football was rarely a lucrative sport.

Then came the formation of the Premier League in 1992 and introduction of TV rights.

Teams which heretofore had limited income suddenly had millions coming in from sale of TV rights to broadcasters.

From £262 million per contract, broadcast rights grew to a  dizzying £5.136 billion in 2015. 

Then entry of Middle Eastern billionaire sheiks and Chinese business moguls into the football business futher increased money available to clubs to spend.

Clubs such as Manchester City and Paris Saint-Germain, which were previously nobodies, now had millions in transfer funds.

The thing with money is you always want to spend it once you have it.

Armed with millions, clubs were ready to splurge on any player they felt would be the next “big thing”.

Soon enough, the transfer market fell victim to hyperinflation which caused transfer prices to go through the roof.

At this point, you’re wondering what inflation has to do with football.

Let’s explain.

Inflation refers to a situation where the purchasing power of money decreases.

Inflation is usually sets in when too much money is chasing too few goods, forcing money to slowly loses its value.

So how did inflation happen in football?

It’s simple, really.

The supply of money increased but the supply of quality players failed to increase.

Consequently, ‘demand-pull inflation’ set in.

Demand-pull inflation is inflation that happens when too much money is chasing too few goods.

In this case, we had too many clubs with too much money were chasing the few top-quality footballers there were. 

All these created the perfect breeding ground for the hyperinflated transfer prices you hear all the time.

2. Commercialization

As said earlier, the increasing lucrativeness of broadcast rights meant football clubs were now  million-dollar businesses.

The growth in popularity of the sport further opened new streams of income for the clubs.

One of the ways clubs now made money was to exploit the popularity of players.

If a club had a famous player, it could make money from selling merchandise branded with that player’s name.

It could also sign deals with brands to have its players advertise the brand for a specified sum.

Thus, we entered the era where players were bought both for their ability and economic value.

In fact, some transfers were more about the latter than the former.

Clubs were now wiling to buy players at high prices, knowing they would recoup their investment via jersey sales and advertising fees.

Take for instance Cristiano Ronaldo’s move to Juventus. Many criticized Juve’s decision to pay €100 million for CR7 and understandably so – he was aged 33, for crying out loud.

But here’s the good part: Juventus sold a whopping 524,000 jerseys within 24 hours of announcing CR7’s transfer which adds up to about €60 million.

So, already, Juventus made half the forward’s transfer fee – and they’ll likely recoup their entire investment on their star man in the next couple of years.

This just shows why it makes economic sense for clubs to spend on huge transfer fees.

It also shows why the trend of expensive football transfers may never abate, especially if the brand power of players continues to grow.

3. Increased expectations from fans

Perhaps spoiled by early successes, football fans often high expectations of their respective clubs.

A club such as Barcelona might win the La Liga and Copa Del Rey yet will be berated for their failure to win the Champions League.

Such is the state of football  where fans now expect their teams to win in it all .

Egged on by fans, clubs splash money on players they feel may help them win trophies.

And in most cases, the player(s) may fail to live up the hype.

Let’s take Barcelona for example:

Following the departure of Neymar in 2018, they were under pressure to find a replacement.

With money from Neymar’s sale, they bought two players: Philippe Coutinho and Ousmane Dembele.

At least, Coutinho had proved himself at the top level during his time at Liverpool; Dembele was a 19-year old kid with little by way of big-team experience.

Dembele, who cost €135 million is yet to play a full season uninjured. In fact, he’s spent more time outside the pitch than it.

Coutinho didn’t really fit into Barca’s system early on and was loaned out to German side Bayern Munich.

There, he improved significantly and infamously scored against his parent club in the latter’s 8-2 defeat to Bayern Munich.

Barcelona’s situation is telling of the state of football. This is a team that depended on its famed La Masia academy for players whom it groomed to stars.

La Masia produced Messi, Xavi, Iniesta and so many others.

But times have changed and fans have low levels of patience.

A club such as Barcelona doesn’t have the luxury of grooming 19-year olds to perfection.

They need players who can make immediate impact and pay well for that.

It’s easy to blame clubs for spending so much on players.

But the truth is they are under enormous pressure from fans and investors to do all it takes to win, which often involves buying players at outrageous prices.

Will Football Transfers Get More Expensive?

Many individuals and bodies in the football community have expressed their displeasure in transfer fees.

FIFPro, a union of professional footballers, accused high transfer fees of making football “anti-competitive”.

Football has become a sport where a select few such as Real Madrid, Juventus, Barcelona, etc can afford the few elite players.

Unsurprisingly, these teams dominate their home leagues – Juventus, for instance, has won the Serie A title nine years in a row.

But, if we’re being honest, high transfer fees are mostly inevitable in today’s footballing world.

As long as money keeps coming in and the supply of quality players fails to increase, clubs are going to keep demanding – and paying – top fees for players.

Already, we have seen a club pay €222 million for a player – three times what it cost Madrid to buy Ronaldo 10 years ago.

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Are we going to see that record broken soon? Only time will tell.