CIES Football Observatory Monthly Report n°37 - September 2018

Financial analysis of the transfer market in the big-5 leagues (2010-2018)

Drs Raffaele Poli, Loïc Ravenel and Roger Besson

1. Introduction

Since its creation in 2005, the CIES Football Observatory has been monitoring the transfer of players through information published by clubs and the media. This report analyses the paid transactions having taken place since 2010 involving teams from the five major European championships: the English Premier League, the Spanish Liga, the German Bundesliga, the Italian Serie A and the French Ligue 1. The first chapter studies from a historical per- spective the sums paid in transfer fees, while the second analyses the clubs and leagues having benefitted from these investments. The third chapter presents 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 fig- ures 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.

1 Monthly Report 37 - Financial analysis of the transfer market in the big-5 leagues (2010-2018)

2. Sums invested Figure 1: transfer fee investments of big-5 league clubs, € million

For the first time since 2012, transfer fees paid ear smmer nter total out by big-5 league clubs were less than for 2010 133 18 11 the previous year. In 2018, a drop of 2.4% was 2011 1817 22 233 recorded in comparison to 2017: €5.82 billion instead of €5.96. The strong increase observed 2012 17 287 1 during the 2018 winter transfer window did not 2013 233 38 2720 continue through to the summer one. However, 201 211 30 201

over the whole year, the amounts invested were 201 33 8 383 clearly above those paid out in 2016: +€1.59 bil- 201 3731 230 lion (+37.6%). 2017 178 782 0

Throughout the period studied, the invest- 2018 713 1107 820 ments of Premier League clubs represent- ed 37.4% of the total measured for the big-5 leagues. A slightly lower proportion was meas- ured in 2018 (36.5%). Since 2010, the English Figure 2: spread of transfer fee investments top division teams have spent 1.6 times more between big-5 leagues

than the Italian clubs, 2.1 times more than the 2010-2018 2018 Spanish, 2.8 times more than the German and 3.1 times more than the French. remer eae 37 3 Sere 21 20

In 2018, a new spending record was established a a 17 227 in two leagues: the English Premier League nesla 127 103 and the Spanish Liga. In the first case, the in- crease was rather limited (+2.1%). In the second, e 1 118 100 the increment in comparison to 2017 was very marked (+80.4%). Thanks to a better distribution of television rights and international success, Figure 3: transfer fee investments by league, € the Liga is now well-established as the second million force of world football. ear E ES I ER FR

2010 7 30 1 178 1

2011 83 31 3 21 207

2012 722 177 82 30 2

2013 22 7 78 311 3

201 12 8 7 30 23

201 10 2 8 370

201 1773 07 81 71 283

2017 207 731 123 7 1118

2018 2122 131 117 00 83

2 Monthly Report 37 - Financial analysis of the transfer market in the big-5 leagues (2010-2018)

The rankings of clubs having invested the Figure 4: transfer fee investments by club, € most in transfer fees since 2010 highlights million (2010-2018) the incredible financial power of a handful of 1 Manhester Cty E 170 teams. The top three comprises Manchester City, Chelsea and . Four other teams 2 Chelsea E 1310 have spent over a billion € over the eight-year 3 FC arelona ES 128 period analysed. Among the heavy hitters of S FR 122

European football, only Real (€912 mil- Manhester t E 1102 lion) and Bayern Munich (€554 million) are sit- vents I 108 uated below this threshold. 7 verpool E 1071

As for 2018, Barcelona has pipped Liverpool 8 Real Mar ES 12 and Juventus in the rankings of the clubs who Roma I 80 spent the most. Ten English teams are in the top twenty places. and 10 tlto Mar ES 7 are the only representatives of the 11 Internaonale I 78 German and French championships. This re- 12 Monao FR 70

sult is largely related to the financial gaps ex- 13 Mlan I 78 isting between leagues of the big-5. 1 rsenal E 71

1 Everton E 7

1 ottenham E 8

17 apol I 7

18 alena CF ES

1 ayern Mnhen ER

20 ortmn ER 31

Figure 5: transfer fee investments by club, € million (2018)

nter smmer total

1 FC arelona ES 178 13 321

2 verpool E 8 212 28

3 vents I 1 2 2

tlto Mar ES 18 21

Chelsea E 137 202

Monao FR 2 13 18

7 Real Mar ES 0 17 17

8 Everton E 112 1

Manhester Cty E 7 8 10

10 alena CF ES 13 10 13

11 rsenal E 8 82 10

12 Roma I 1 17 18

13 Flham E 3 13 13

1 eester E 123 128

1 est am E 13 10 117

1 Sothampton E 22 0 112

17 ortmn ER 2 77 103

18 rhton ove E 17 8 103

1 Sevlla FC ES 11 0 101

20 apol I 0 100 100

3 Monthly Report 37 - Financial analysis of the transfer market in the big-5 leagues (2010-2018)

3. Recipients Figure 6: recipients of transfer fees invested by big-5 league clubs

The spatial analysis of teams that benefited 2010-2018 2018 from transfer indemnities invested by big-5 Clbs n the same leae 321 2 league clubs between 2010 and 2018 shows that most of the money stays within these Clbs n other b- leaes 3 3

championships: 66.6% of the total. This per- oer vson lbs n centage reached 69.9% in 2018. This increase the same ontry 78 78 indicates that the most expensive transfers in- oer vson lbs n other b- leae ontres 1 20 volve more than ever players who have already proved themselves in the five major leagues. Clbs n other EF assoatons 181 12 AS Monaco heads the rankings of teams hav- on-EF lbs 1 1 ing received the most indemnities for transfers to big-5 league clubs between 2010 and 2018. The team of the principality earned almost one billion € in eight years. Many wealthy clubs Figure 7: clubs having received the most fees also figure in the top twenty, while Benfica and for transfers to big-5 league teams, € million (2010-2018) Porto are the only two teams outside the five major championships in the top positions of 1 Monao FR 0

this ranking. 2 verpool E 83

3 Roma I 80

FC arelona ES 28

Real Mar ES 2

Chelsea E 2

7 vents I 20

8 Benfica (POR) 18

ortmn ER

10 alena CF ES 1

11 Porto (POR) 10

12 Sevlla FC ES 0

13 ottenham E 8

1 tlto Mar ES

1 Manhester Cty E 388

Internaonale I 388

17 Sothampton E 371

18 apol I 370

1 nese I 37

20 enoa I 38

4 Monthly Report 37 - Financial analysis of the transfer market in the big-5 leagues (2010-2018)

4. Financial assessments Figure 8: balance sheets for transfers, big-5 leagues

To have an optimum understanding of the ear E I ER ES FR otal economics of the transfer market, aside from 2010 -23 -87 -2 22 18 -33 sums spent and recipients, it is essential to 2011 -321 - -1 - -17 -33 study the net balance sheet for operations at both league and club level. Between 2010 2012 -33 1 -12 - -1 and 2018, big-5 league clubs recorded an ac- 2013 -8 -3 -7 72 -18 -7 cumulated deficit of €7.29 billion. The Pre- 201 -0 -0 -13 - 31 -

mier League is single-handedly responsible 201 -720 -17 38 -1 100 -3 for 78.3% of this deficit. This percentage was 201 -102 7 -18 -20 11 -102 85.7% in 2018. 2017 -817 -13 - -2 -210 -123

Despite the considerable investments made 2018 -1131 -288 2 -28 333 -131 by Paris St-Germain during the period studied otal -70 -7 -8 -38 1 -720 (accumulated deficit of €874 million), Ligue 1 was the only big-5 championship with a pos- itive balance (+€199 million). In 2018, the net balance sheet of transfer operations con- Figure 9: most positive balance sheets for cerning teams from the French top division transfers, big-5 league teams reached a historic record of +€333 million. 2010-18 2018 The rankings of big-5 league teams with the Spent Earne alane alane most positive balance on the transfer market 1 Monao FR 70 28 between 2010 and 2018 again highlights Mo- 2 lle FR 182 38 1

naco’s exceptional case: +€289 million (+€66 3 nese I 28 13 1 3 million in 2018). In the top ten places, we find enoa I 23 23 10 2 five teams from Ligue 1, three from the Serie A and two from the Liga. No current English Pre- Sevlla FC ES 1 8 1 mier League club presents a positive balance yon FR 27 37 130 32 sheet over the period analysed. 7 thlet Clb ES 103 221 118 8 Manchester City (-€1.03 billion) and Paris 8 talanta I 18 27 1 - St-Germain (-€874 million) stand out among Montpeller FR 8 1 88 20 teams with the most negative net balance 10 e FR 180 8 1 sheets for transfer operations between 2010 and 2018. Five Premier League teams are in the top ten places, as well as two Italians (Ju- ventus and Milan), two Spanish (Barcelona and Figure 10: most negative balance sheets for Real Madrid) and Paris St-Germain. transfers, big-5 league teams 2010-18 2018 Spent Earne alane alane

1 Manhester Cty E 170 38 -1032 -113

2 S FR 122 38 -87 103

3 Manhester t E 1102 330 -772 -2

FC arelona ES 128 - -213

Chelsea E 1310 772 -38 -7

vents I 108 7 -0 -120

7 verpool E 1071 73 -328 -7

8 Mlan I 78 382 -2 -1

rsenal E 71 38 -28 -8

10 Real Mar ES 12 2 -20 -8

5 Monthly Report 37 - Financial analysis of the transfer market in the big-5 leagues (2010-2018)

5. Conclusion

This report illustrates the incredible develop- Despite the slight drop in spending observed ment of the transfer market having occurred in 2018 compared to 2017, the economic de- over the last decade in parallel to the econom- velopment of the top of the professional foot- ic expansion of the five major European cham- ball pyramid suggests that a renewed increase pionships. The latter are in a position to invest of sums invested in transfer fees will happen increasing sums in transfer fees and salaries in the near future. Established for thirty years, to attract and keep the top talents worldwide. this process has led to a high concentration of talents in the richest clubs. This makes possi- The English top division, more than any oth- ble the assembly of top performing teams. At er championship, occupies a central position. the same time, market concentration reinforc- The spatial analysis of the balance sheets of es the imbalance of competitions. international transfers having involved big-5 league teams illustrates the key role played by the Premier League in the structuration of the market. Between 2010 and 2018, the six inter- national relations with the greatest net mon- etary flows involve the English top division: -€905 million with France, -€831 million with , -€645 million with Italy, -€582 million with Germany, -€412 million with Portugal and -€369 million with the Netherlands.

Figure 11: main net monetary flows for international transfers having involved clubs in the big-5, by league (2010-2018)

Premier League 0 831 Ligue 1

117 1 133 8 Serie A 12 Bundesliga 82

82

183 13 100 3 OR E 12

30 13 232 7 1 E R 17 172

100 103

11 R 123 R 7

CRO SI RS

6