Friday, September 20News For London

The rise and rise of transfer fees from the late 80’s to today

In 2001, Real Madrid set a precedent when they smashed a then-record transfer fee of £46.2m to sign 29-year old Zinedine Zidane from Juventus.

Despite the fact that the French star was nearing the end of his playing career, Real Madrid took the plunge, which incontestably paid off as it was Zidane’s spectacular goal that won them the Champions League against Bayer Leverkusen in Glasgow a year later.

The inflation of world record transfer fees from 2001 to 2017

The world’s most decorated club got their man and, after years of publicly admitting that his desire was to join the Blancos one day, Zidane arrived at the Estadio Santiago Bernabeu amid sky-high pressure and expectations. Thanks to Zidane’s arrival, Madrid entered a new dimension on and off the pitch and sent sporting shockwaves through the world. And football has never been the same since, with clubs willing to pump more and more money in order to land their dream footballer, who in their minds, would not only deliver titles on the green rectangle, but also make an impact off the pitch in areas like merchandising, marketing and sponsors. Real Madrid knew what they were doing and the large amount of shirt sales covered the mammoth transfer fee in no time.

Invariably, a few eyebrows were raised at the time because a player is assumed to peak from the age of 25-26 onwards before entering an inevitable phase of gradual decline by the time he is 29-30-years old. And the French 1998 World Cup winner was only 11 months away from getting on the wrong side of 30.

A goalkeeper or defender can generally play at the top level well into his mid-30’s because his performance does not rely on pace, agility and sharpness, but rather on positional sense, tactical awareness and speed of thought. It goes without saying that generally clubs are reluctant to break the bank on over 30-year old players because they have little to no room of improvement and a limited potential resale value.

Over the years, more and more clubs followed Real Madrid’s example, although it is worth remembering that such a stratospheric fee has only been paid once again for an ageing player over 28 years of age. And it was 30-year old Ukrainian striker Andriy Shevchenko, five years later, in 2006, when his move from AC Milan to Chelsea carried a £46m price tag.

Ironically though, it was Real Madrid itself who kept on breaking their own transfer records in the upcoming years, so much so that in the same summer of 2009 the £99.2m record signing of Cristiano Ronaldo was preceded by the £56m purchase of Kaka’ two weeks earlier, as the attached Sky Sports graph shows. The Portuguese had blown only 24 birthday candles at the time while the Brazilian was only 27, meaning that both had just entered their prime years and had a high number of years at the top of their game left. Four years later, it was again Real Madrid to take centre stage in the transfer window as the £100m arrival of Gareth Bale signalled a massive statement of intent. The Welshman was excellent value for money as he helped Real Madrid to four Champions League trophies in less than five years from his arrival.

The graph also demonstrates that back in the glorious 80’s and 90’s, the prices in the Italian league were spiralling. Serie A was the Holy Grail of international and the place-to-be for the world’s best. A promising payday, the prospect of playing with and against the best on the planet and newly-built stadiums for the 1990 World Cup in Italy were enticing prospects to turn down, so much so that arguably the greatest player of all time, Diego Armando Maradona left FC Barcelona for minnows Naples in 1984 for a deal in excess of £6m, which at the time, was a a lot of money.

Fast-forward to 1987, Dutch forward Marco Van Basten swapped Amsterdam for Milan as he put pen to paper on a multi-million deal with Silvio Berlusconi’s AC Milan.

In 1992, the transfer record was broken three times, twice by AC Milan for French jewel Jean-Pierre Papin and Gianluigi Lentini while Juventus lured Gianluca Vialli from Sampdoria for £12m.

The graph indicates that English teams were no forces to be reckoned with on the market 30 years ago but that has its specific reasons.

The scrappy old ‘First Division’, which was renamed Premier League in 1992, was not an enticing destination at a time, when Italy was a player’s first, second, third and fourth choice. Another reason lies in the fact that the UEFA banned all English clubs from competing in European competitions following the death of 39 Italian and Belgian football supporters in the build-up to the 1985 Champions League final between Juventus and Liverpool in Brussels. English football hooligans caused the riot and all the other sides such as Nottingham Forest, Manchester United or Arsenal paid the price and were refused participation in the Champions League and UEFA Cup. And as we all know, the world’s best footballers want to be involved in European competitions to showcase their talent and hunger.

The quality of defenders has dropped, yet the price tag has risen

Premier League clubs are accused of overspending on average players from abroad. This is because clubs know that British clubs have a stronger financial muscle compared to the rest of Europe. Football inflation also runs much quicker than standard inflation due to the fact that each new TV deal pumps more money into the game. Gareth Bale’s £86m price tag became the barometer when he joined Real Madrid in 2013 as from then on every player suddenly cost 30% more. As the Statista graph here below shows, good but not world-class players such as Virgin Van Dijk, Kyle Walker and John Stones were overpaid. But this is also due to the fact that there aren’t any really world-class defenders in football anymore. Could you imagine how much the likes of Fabio Cannavaro, Paolo Maldini and Alessandro Nesta would be valued in today’s market? In his autobiography, former Arsenal manager Arsene Wenger revealed that ‘talent is rarer than money’ in football.

Yet, Italy suffered a political and financial meltdown at the start of the new millennium, which hit clubs from Il Belpaese hard. The contemporaneous blooming of other nations such as Spain, England and France have added further insult to injury.

With the passage of time, AC Milan and Inter Milan’s sugar daddies Silvio Berlusconi and Massimo Moratti lost interest in the game and eventually sold their respective clubs. As a consequence, both historic clubs plummeted to an all-time low and struggled to compete in the transfer market, with existing powerhouses such as Real Madrid, Barcelona and Manchester United and up-and-coming multi-millionaire clubs in the name of Man City or Paris Saint Germain, who were taken over by lavish tycoons, to hold a financial advantage to snap up top players.

Yet, only two of the most expensive transfers in history joined Italian sides: Gonzalo Higuain and Cristiano Ronaldo, and both were wrapped up by Juventus.

Yet, it needs to be said that Higuain’s £75.3m signing from Napoli was funded by Paul Pogba’s £100m departure to Manchester United in the same summer of 2016 whereas Cristiano Ronaldo was already 33-years of age when he brought an end to a nine-year stay in Madrid to join Juventus for £99.2m. All things considered, neither was wanted by top European clubs.

Nowadays, there is also an inclination for players to go to clubs, which belong to the most affluent chairman as they guarantee the highest wages and the opportunity for the player to become a global brand off the pitch. If back in time players tended to choose Italy, Spain or England to feature in the best teams and leagues, fast-forward to today the financial aspect dominates most players’ decision.

The fact that Brazilian superstar Neymar Jr. quit a competitive league such as La Liga and arguably the best side in the world FC Barcelona for European underdogs Paris Saint-Germain in 2017 reflects this theory. The perennial French champions tripled the Brazilian’s wages and their financial muscle was further highlighted when they pipped Real Madrid to AS Monaco starlet Kylian Mbappe’. Neymar cost PSG £200m while Mbappe was worth £166m. In the pre-oligarch and sheiks era these two players would probably have ended up in Serie A.

However, despite the fact that in the last two seasons Italian clubs are rediscovering the financial strength of old, Serie A clubs have to comply with the UEFA Financial Fair Play rules. And the UEFA imposed a two-year ban on AC Milan last summer because they were guilty of breaking spending rules between 2015 and 2017. This means that the outcome cannot surpass the income until clubs will obtain a Voluntary Agreement.

The absence of Germans clubs in the table of the world’s most expensive players below reflects the habit of Bundesliga clubs to invest in homegrown talent at the expense of household names. This does not mean that they lack the financial resources, as Bayern Munich are one of the world’s wealthiest clubs, but it goes to show a different mentality when it comes to defining success. For German clubs having success does not mean to win the Champions League year-in year-out, but to see five to six academy graduates faring in the first team. Bundesliga clubs rather get eliminated in the quarter-finals with six academy graduates on the team sheet out of 11 players than to win Europe’s biggest prize with eleven foreigners. Bayern Munich pride themselves on fielding a squad full of Bavarians.

In a nutshell, we can conclude that, as more and more clubs generate colossal revenues from television rights, sponsors and merchandise, the price tags and salaries of the modern day footballer have gone up exponentially.

The landscape has changed over the years. Football has become a global sport and there no longer exists a single reason to choose a particular club or league. Many players even prefer to ply their trade for a modest Premier League club such as Wolverhampton or Watford over a prestigious Dutch, Portuguese or Belgian club, where they would be able to play European football and win domestic titles. This means that trophies are no longer the single most important thing to most footballers because it’s often the financial aspect to have the final say on their decision.

As the data bases show, the Premier League is certainly an alluring destination in that respect, although not the only one.