USA: 21+ | Commercial Content | T&Cs apply | Play Responsibly
The summer of 2020 saw record levels of spending on football transfers. The “big five” of Europe – Germany, Spain, Italy, France, and England – combined to splash out a record €5.5bn, representing a €900m increase compared to the year prior.
The football transfer landscape has since changed.
While most experts predicted even larger expenditures for 2020, COVID-19 put a sudden halt to leagues all over the world. Football grounds are empty, players are churning out even more Instagram stories, betting markets have been limited to the Belarussian football league, and pundits have resorted to reminiscing about matches gone by. The transfer market will undoubtedly look very different as well; what can we expect to see for the rest of 2020?
Transfer News Still Popular
Football has only just started back up again in Germany and Spain, but football transfer news never lost popularity. According to the BBC Sport website analytics, the gossip columns are amongst the most popular. Will Jadon Sancho leave Dortmund? Can we expect Neymar and Messi at Barcelona?
Even though the market is currently closed, fans still yearn for transfer speculation. Despite football’s enduring popularity, however, transfer gossip interest doesn’t reflect the state of the market. It is likely that football clubs will be forced to deal with a new reality.
While some leagues, such as the Bundesliga and La Liga, have already seen a return to action, others have completely cancelled their seasons. Ligue 1 (France), Eredivisie (the Netherlands), and the Scottish Premier League all made quick decisions to axe their seasons, which have led to plummeting revenues across the board. Leagues such as the Eredivisie have had to implement rescue plans to prevent the poorer clubs from going under.
Big leagues have also suffered. The English Premier League, the richest in the world, for example, is expected to see a £500m drop in revenue as a result of the coronavirus pandemic. Deloitte uses predictions on losses from commercial deals, matchday revenue, and broadcast rebates as the biggest factors to account for the losses.
Fees Expected to Drop
Experts agree that such unprecedented losses will lead to a depression in the transfer market. We should expect to see not only a drop in transfer fees, but also a decrease in the number of transactions.
Even with leagues competing without fans, KPMG predicts that player values will drop by €6.6bn. And if leagues are forced to revert their decisions and have to pull the plug altogether? Then this figure will reach an astonishing €10bn. Considering experts are predicting a second wave and there’s every chance players will test positive after the restart, the latter scenario is not entirely unthinkable.
KPMG analysis has concluded that some big names have seen significant drops in their values. Harry Kane and Jadon Sancho, two players familiar with the transfer rumour mill, are reportedly worth as much as 16% less than pre-COVID-19 levels.
The age of the £100 million-plus player may be numbered, at least for the next several years. Of course, players like Kylian Mbappé will still command huge fees, but clubs will be more hesitant to overspend on targets. Conversely, we can also expect to see clubs trying to hold onto their players if they don’t absolutely need to sell.
Panic Sales from Smaller Clubs?
Experts predict that the depressed transfer market will strengthen the power of big clubs, effectively creating a ‘buyer’s market’. Teams that are struggling and unable to bridge the financial gap may be forced to sell their players at cut-price deals. It’s possible we’ll be seeing a fire sale of the best players from small teams, with all hoping to flog their stars to plug their financial leaks as a result of the pandemic.
In addition, big clubs will no longer see it as financially responsible to spend the fees of previous years. Salary caps will be adhered to more closely, with even the big clubs having to watch their purse strings. They will also realize that with smaller clubs in financial difficulties, the power will be firmly in their control.
If this does indeed happen, it would be a sad continuation of the transfer of power to the rich clubs of Europe. Fairytale stories from the likes of Ajax or FC Porto will become even more unlikely, perhaps taking a bit of the romance away from the sport.
V-Shaped Recession and Negative Tests
Clubs will be placing their hopes on two things: that players continue testing negative as the football season progresses, and that the economy experiences a v-shaped recession. The return of some sense of normality coupled with fans being willing and able to spend their money on football (tickets, replica kits, Sky Sports subscriptions, etc.) will help bring the industry back to near pre-COVID-19 levels. We have a feeling, however, that football’s transfer market will take a while to recover.