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August 4, 2024

Football could be approaching a new transfer market era where wealth no longer Dominates – La Liga 2

Many clubs have inquired about Victor Osimhen this summer, but interest has been limited. This marks a significant shift from last year when Napoli owner Aurelio De Laurentiis set an asking price of €200 million (about £170 million) for the Nigerian forward.

De Laurentiis is eager to offload Osimhen because the club cannot sustain the wages promised in a new deal intended to boost his sales value. The issue is that very few teams can meet such high demands. Chelsea is among the few considering it, partly due to the potential savings from Romelu Lukaku’s high wages, which Napoli’s Antonio Conte is interested in.

Kylian Mbappe (PA Wire)

Credit to La Liga 2 Image Gallery

If the deal goes through, it would represent a practical solution driven by necessity rather than a display of ambition.

This transfer window has yet to reflect such ambitions. Instead, it has been characterized by austerity, raising questions about whether this signifies the beginning of a more significant trend. Could the financial bubble be finally deflating? Is football on the brink of what one club CEO describes as “an era of austerity”?

Of course, this term is relative in a sport still awash with state and billionaire funding, where salaries are exceptionally high. Real Madrid, for example, has recently agreed to pay Kylian Mbappe half a million a week before taxes, and the Premier League has already spent nearly a billion before accounting for sales.

Despite this, it represents an unexpected leveling off of a trend previously anticipated to continue accelerating. This recent stabilization results from a dose of financial realism. Madrid can only offer Mbappe so much after several years of focusing on younger signings, and the Premier League’s spending is significantly lower compared to last year’s nearly £2 billion.

Executives, sporting directors, and agents frequently echo phrases such as “there is very little money around”, “low liquidity” and, ultimately, “it’s very quiet”.

Aside from Mbappe, which was essentially a long-discussed Bosman move, this window has yet to have a significant blockbuster deal. As it currently stands, it seems unlikely that any such deal will materialize. There is no Harry Kane-like saga to compare with last season.

Credit to La Liga 2 Image Gallery

Mbappe joined Real Madrid for no fee and huge wages 

Arsenal’s interest in Alexander Isak could have evolved into a significant deal, but the market dynamics dictated otherwise. The situation did not reach the level where the London club would consider paying the £200 million Newcastle United might have demanded. Therefore, the transfer market baseline has reverted to lower levels.

Given the limited slots for foreign players and their preference for younger talent, the Saudi Pro League must find a way to afford such an expenditure.

The strong desire to make signings in football remains intact, with clubs actively pursuing deals. For example, teams like Napoli and Chelsea must make concessions to secure players. When a relatively prominent club nearly finalized a deal for a needed position, they quickly sought to extend the contract from three to four years because they could not reasonably manage payments over a shorter term. Most transfer fees are now being amortized over extended periods. Few deals across Europe have been settled with upfront payments or even within the contract’s first year. Even the substantial spending by Manchester United and Chelsea is balanced by the current trend of high fees for younger players and lower wages.

Others are approaching the market with more precision and selectiveness. Liverpool’s relatively low spending has garnered significant attention, and some in the industry believe that the market may see a surge in activity in the final weeks of the window as necessity overcomes caution.

Aston Villa stands out as one of the few clubs making significant moves, thanks to a sudden influx of Champions League revenue, which necessitates high-quality additions for competitive performance at that level.

Credit to La Liga 2 Image Gallery

Arne Slot has yet to make a signing for Liverpool

This situation highlights how circumstances vary, but much is due to a financial reckoning built over time. In England, restrained spending is a direct consequence of clubs’ extensive expenditures in recent years. With wages reaching exorbitant levels, budgets are now stretched to the limits of the Profit and Sustainability Rules.

Despite the criticism of these regulations, their fundamental purpose remains crucial: ensuring that clubs stay within their means and ability to generate revenue independently.

Many clubs outside England are discovering that they need more revenue to compete in the market.

Broader socioeconomic factors are influencing this situation. Football is not immune to these effects. Commercial and broadcasting revenues have declined in many countries, with Ligue 1’s struggle to secure a media contract as an early indicator of the trend. The continuous rise in wages proved unsustainable on a wide scale. With its substantial spending power, the Premier League attracted significantly larger broadcasting deals, creating a classic “virtuous cycle” in football.

While the Bundesliga and Serie A have seen some recent improvements, they have not approached the Premier League’s level. Economic downturns often lead to a “flights to quality”, as a senior football executive described it, where people prefer to spend their money on well-established, high-quality options.

The onset of a potential era of austerity could significantly affect the broader football landscape.

Football needs to adjust its reliance on constant spending. Transfers are often seen as the primary solution to any issue, but this approach is only sometimes beneficial, as demonstrated by the success of emerging young players. Limited spending can also drive managers to innovate, bringing the focus back to coaching and leading to intriguing tactical developments.

Credit to La Liga 2 Image Gallery

Everton were among the clubs docked points last year for failing to adhere to financial rule

A prime example of this shift is evident this summer. Spain’s impressive performance at Euro 2024 can be attributed to their earlier economic downturn, which curtailed spending by top clubs. This created more opportunities for Spanish talent in La Liga, resulting in a more diverse national team and a rejuvenated league that had grown stagnant.

This situation has additional implications. Players like Athletic Club’s Nico Williams are now highly sought after, and Real Sociedad might lose Mikel Merino and Martin Zubimendi. A prominent Super League founder, Robin Le Normand, has moved to Atletico Madrid, underscoring the ongoing influence of financially powerful clubs. Austerity often benefits those already financially strong, and football’s free market may reflect this dynamic.

However, this summer might signal the beginning of an era where the market becomes less extravagant than in the past.

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