Will the rich clubs get even richer when Euro­pean foot­ball re­sumes?

Hindustan Times (Jalandhar) - - BUSINESS - Bhar­gab Sarmah bhar­gab.sarmah@htlive.com

NEWDELHI: Late last month, Manch­ester United chief ex­ec­u­tive Ed Wood­ward warned the club’s sup­port­ers that spec­u­la­tion around trans­fers run­ning into hun­dreds of mil­lions of pounds “seems to ig­nore the re­al­i­ties that face the sport.”

Wood­ward, who made the com­ment at a quar­terly fans’ fo­rum or­gan­ised by the club, said: “We need vis­i­bil­ity of the im­pact across the whole in­dus­try, in­clud­ing tim­ings of the trans­fer win­dow and the wider fi­nan­cial pic­ture, be­fore we can talk about a re­turn to nor­mal­ity.”

Wood­ward’s com­ments point towards Europe’s big­gest clubs cut­ting down on trans­fer spending in the com­ing months, or, plau­si­bly, in the years ahead.

“In two or three years, it will not be pos­si­ble to spend the sums we have been see­ing be­cause every coun­try will be af­fected. In all like­li­hood a new foot­balling world will emerge from this,” Uli Hoennes, the Bay­ern Mu­nich pres­i­dent, has said.

Wood­ward’s re­marks are sig­nif­i­cantly down­beat from what he had pro­claimed at the pre­vi­ous fans’ fo­rum, in Fe­bru­ary. “As part of the re­build, we see this com­ing sum­mer as an im­por­tant op­por­tu­nity,” he had said of the sum­mer trans­fer win­dow.

That was then. With the global foot­ball in­dus­try halted by the pan­demic, clubs big and small are feel­ing the heat. United are no dif­fer­ent.

Many Premier League clubs have fur­loughed staff. Some, like United and crosstown ri­vals Man City, haven’t yet gone down that road, while oth­ers, such as Euro­pean cham­pi­ons Liver­pool and Cham­pi­ons League finalists Tot­ten­ham, re­versed decisions to fur­lough non-play­ing staff fol­low­ing a public back­lash.

As Europe moves towards flat­ten­ing the Covid-19 curve, its foot­ball trans­fer mar­ket may wit­ness its own flatlin­ing af­ter years of colos­sal spikes in player prices.

But while trans­fer mar­ket in­fla­tion could dip due to the pan­demic, it may still widen the al­ready grow­ing in­equal­i­ties be­tween the elites of the sport and the rest.

In its an­nual ‘bench­mark­ing’ re­port, re­leased ear­lier this year,

UEFA ac­knowl­edged some of the im­bal­ances plagu­ing the sport, and, in the back­drop of the coro­n­avirus cri­sis, they serve as warn­ings for what could lie ahead.


The re­port by Europe’s apex foot­ball body as­sessed fi­nances of clubs in the con­ti­nent for the fi­nan­cial year 2018. While the to­tal rev­enue gen­er­ated by top­di­vi­sion clubs across Europe in FY2018 was €21 bil­lion, three­fourths of the amount went to clubs in the ‘Big Five’ leagues – Eng­land’s Premier League, Spain’s La Liga, Italy’s Serie A, Ger­many’s Bun­desliga and France’s Ligue 1. And al­most half of that rev­enue – 49%, over €10 bil­lion – was gen­er­ated by just 30 clubs. The top 11 clubs in this list, in­clud­ing six from the Premier League, ac­counted for al­most 30% of the to­tal rev­enues.

“Eng­land’s 20 top-tier clubs re­ported more rev­enue in 2018 than all 617 clubs in the bot­tom 50 coun­tries com­bined,” UEFA said. Prof­itabil­ity too was dom­i­nated by Premier League clubs. While all leagues across Europe to­talled op­er­at­ing prof­its of €697 mil­lion, United, Tot­ten­ham and Bay­ern Mu­nich to­gether gen­er­ated €480 mil­lion of those prof­its by them­selves. Premier League’s com­bined net profit of €382 mil­lion was also sig­nif­i­cantly higher than the €140 mil­lion com­bined net profit across Europe. Ac­cord­ing to the chap­ter on the trans­fer mar­ket, the ‘Big Five’ leagues dom­i­nated spending (85%) and earn­ings (75%). These leagues also ac­counted for a vast ma­jor­ity of trans­fer debt.

“On the back of rapidly in­flat­ing trans­fer spending, trans­fer payables posted on Euro­pean clubs’ bal­ance sheets in FY2018 to­talled €5.1 bil­lion, up 37% in just one year from €3.7 bil­lion in FY2017,” the re­port said. Of the €5.1 bil­lion, Europe’s top five leagues ac­count for 87% of the pend­ing trans­fer pay­ments.

“Any de­lay or non-pay­ment can have a knock-on ef­fect on the care­fully planned cash flow of many clubs along a chain of trans­fer bal­ances,” the re­port warned.


Cash flows of clubs across the world have been af­fected by the pan­demic-in­duced halt. The sit­u­a­tion could de­te­ri­o­rate fu­ture and this is where Europe’s big clubs could find them­selves at an ad­van­tage.

Clubs with less fi­nan­cial clout in the Premier League, or in another top-tier league, or in a lower-tier league in Eng­land it­self, may find it hard to re­sist the temp­ta­tion of sell­ing some of their best play­ers at prices they prob­a­bly would not have con­sid­ered some time back.

Wood­ward’s at­tempt to quell spec­u­la­tion about megabuck trans­fers came only a cou­ple of weeks af­ter United manager Ole Gun­nar Sol­sk­jaer said that the club could ‘ex­ploit’ the trans­fer mar­ket ow­ing to its fi­nan­cial might.

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