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 Year 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 499 4230 lion (+37.6%). 2017 178 782 0 Throughout the period studied, the invest- 2018 4713 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 374% 3 Sere 21 20.6% 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. Year E ES ITA ER FR 2010 75 30 15 178 1 2011 83 31 3 21 207 2012 722 177 82 30 2 2013 22 7 578 311 3 201 12 8 76 30 23 201 10 62 8 499 370 201 1773 607 81 71 283 2017 207 731 123 7 1118 2018 2122 131 117 00 583 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) 1'470 teams. The top three comprises Manchester City, Chelsea and Barcelona. 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 4. S FR) 122 European football, only Real Madrid (€912 mil- 5. Manhester t E) 1102 lion) and Bayern Munich (€554 million) are sit- 6. Jvents IA) 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 9. Roma IA) 80 spent the most. Ten English teams are in the top twenty places. Borussia Dortmund and 10 Atlto Mar ES) 74 Monaco are the only representatives of the 11 Internaonale IA) 78 German and French championships. This re- 12 Monao FR) 706 sult is largely related to the financial gaps ex- 13 Mlan IA) 678 isting between leagues of the big-5. 14. rsenal E) 71 1 Everton E) 57 1 Tottenham E) 8 17 Napol IA) 7 18 Valena CF ES) 555 19. ayern Mnhen ER) 554 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 Jvents IA) 1 2 2 4. Atlto Mar ES) 66 18 21 5. Chelsea E) 65 137 202 6. Monao FR) 2 13 18 7 Real Mar ES) 0 17 17 8 Everton E) 54 112 1 9. Manhester Cty E) 7 8 10 10 Valena CF ES) 13 10 13 11 rsenal E) 8 82 10 12 Roma IA) 1 17 18 13 Flham E) 3 13 13 14. Leester E) 5 123 128 1 West am E) 13 10 117 1 Sothampton E) 22 0 112 17 ortmn ER) 2 77 103 18 rhton ove E) 17 8 103 19. Sevlla FC ES) 11 0 101 20 Napol IA) 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 24% league clubs between 2010 and 2018 shows that most of the money stays within these Clbs n other b- leaes 3.5% 3 championships: 66.6% of the total. This per- Lower vson lbs n centage reached 69.9% in 2018. This increase the same ontry 78 78 indicates that the most expensive transfers in- Lower 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 EFA assoatons 181 12 AS Monaco heads the rankings of teams hav- Non-EFA lbs 6.1 41% 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) 683 3 Roma IA) 80 4. FC arelona ES) 28 5. Real Mar ES) 2 6. Chelsea E) 62 7 Jvents IA) 20 8 Benfica (POR) 18 9. ortmn ER) 564 10 Valena CF ES) 1 11 Porto (POR) 10 12 Sevlla FC ES) 0 13 Tottenham E) 8 14. Atlto Mar ES) 449 1 Manhester Cty E) 388 . Internaonale IA) 388 17 Sothampton E) 371 18 Napol IA) 370 19. Unese IA) 37 20 enoa IA) 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 Year E ITA ER ES FR Total economics of the transfer market, aside from 2010 -23 -87 -29 22 18 -33 sums spent and recipients, it is essential to 2011 -321 -9 -1 -5 -17 -33 study the net balance sheet for operations at both league and club level. Between 2010 2012 -33 1 -124 45 - -1 and 2018, big-5 league clubs recorded an ac- 2013 -8 -36 -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 -197 38 -1 100 -36 for 78.3% of this deficit. This percentage was 201 -102 7 -18 -20 11 -102 85.7% in 2018. 2017 -817 -13 -9 -2 -210 -123 Despite the considerable investments made 2018 -1131 -288 2 -28 333 -131 by Paris St-Germain during the period studied Total -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) 706 995 +28 +66 between 2010 and 2018 again highlights Mo- 2 lle FR) 182 38 +1 +69 naco’s exceptional case: +€289 million (+€66 3 Unese IA) 28 13 +1 3 million in 2018).