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Are transfer fees really more expensive? Not really.

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While nominal spending is getting higher and higher, clubs are actually getting players cheaper than ever

The voice of sanity

“Transfer fees have gone crazy”, according to those eternal barometers of sanity, TalkSport listeners, as they react to the transfers this summer of Morgan Rogers (£117m to Chelsea), Elliot Anderson (£116m to Man City) and even Sandro Tonali (up to £100m to Tottenham), not to mention Izak and Wirtz to Liverpool last summer. And in a sense, fees do seem to have picked up, given that the record was not broken for 7 seasons between the signing of Paul Pogba by Man Utd in 2016, and the arrival of Enzo Fernandez to Chelsea in 2023. Since then, transfer fees of over £100m have come thick and fast, leading to charges of inflation and insanity.

However people should remember that transfer fee inflation has been a fact of life since the beginning of football. Moreover, football inflation is not the same as CPI, ie the price of a pint of milk; rather it reflects the increasing amount of money coming into the game. To that end, I am updating my proprietary transfer fee inflator index, last written about almost a decade ago. As the data demonstrates, transfer fees today still pale in comparison to some of the biggest deals signed in the past.

There are a few other calculators floating around – for instance here, here and here – but none of them are satisfactory for me. For a start most do not seem to start earlier than 2000, which leaves out a lot of Premier League inflation. Secondly the Kieran Maguire index, which seems to produce reasonable results, rebases to 2019 cost of money and also there are no details that I can find on the calculation.

A recap on my methodology: since inflation is a function of supply and demand, I have based my inflator on the total Premier League TV rights money each year. The biggest change since my last post on this subject is the inclusion of overseas rights into the calculation, the value of which overtook UK domestic rights for the first time in 2023 (for those sad enough to be interested, I include a complete set of data in the appendices). Using the growth of the TV rights money as base line inflation, I then adjust transfer fees accordingly to reflect what their true cost was compared to TV income of the day. It is not perfect, but it is as good a proxy as I can think of to find a measure of ‘football inflation’ rather than normal consumer inflation.

Note: Shading reflects recency

The results speak for themselves. The most expensive transfers in Premier League history, have far outstripped recent deals in ‘today’s money’. Alan Shearer’s £15m transfer to Newcastle in 1995 is about £176m in modern terms, substantially higher than any of the sums being paid this year. Likewise the transfers of Veron in 2001 and most amusingly, Fernando Torres in 2011, which come in close behind. Incidentally Alan Shearer’s first transfer, from Southampton to Blackburn in 1992, falls just out of scope but probably comes in at around the £100m mark too. At these prices, Elliott Anderson or Tonali look cheap as chips by historical standards.

Furthermore, the reverse is also true. The £100m player of today is actually the £25m player of 2010, or the £10m player of 1998, the dates between which I suspect the formative views on transfer fees for many readers (and TalkSport listeners) was set. Certainly these historical numbers account for the reluctance of Daniel Levy or Arsène Wenger, and other ‘old men’ of football, to reject the pricing they saw in the market later on in their careers. They had become antiquated, with the only response that the market was “madness”.

How then, one might ask, do English clubs compare to their European counterparts? It is difficult to make an apples-to-apples comparison, since European TV money has not matched that of the Premier League for a couple of decades now; additionally their earning streams (particularly for Real Madrid and Barcelona) are not structured in the same way as English clubs. For the sake of a completeness, I have calculated what European transfer fees look like in today’s money based on English football inflation, in the appendix. However I do not believe this is an accurate way of looking at it.

A better way to understand what top European transfer fees have been is simply to compare transfer records in Europe vs England to the closest possible point in time. Using this method, we can see that in general, European clubs have committed to much higher headline prices than English clubs typically have – albeit these are driven by only a few clubs.

Note: Euro-sterling exchange rate using average of June-July in each relevant year; where possible, same year transfers have been used but where not, the English transfer used is one year preceding

Gianluigi Lentini’s move from Torino to Capello’s AC Milan in 1992, for instance, was truly a shock to the world in 1992, at almost £13m. It was 3.6 times the highest amount paid in England at that time, which was Alan Shearer’s transfer to Blackburn. Shearer’s next move, to Newcastle, was the closest England has had to a record, benchmarking close to Ronaldo’s record jump from Barcelona to Inter a year later. By the time the next headline was being made in England, with Veron’s purchase by Man Utd in 2002, Zidane was shuffling over to Real for close on twice the amount of money – indeed the Veron fee weighed in at less than that of Figo the year before (£38m), and Christian Vieri three years earlier (£32m).

Since that time, English clubs have actually spent conspicuously less at the top end of fees, even as they have powered to more overall spending. Nobody has come close to matching Neymar’s almost £200m move to PSG for instance, way back from the pre-Covid years. It seems unlikely they will do so any time soon. As a side note, the history of transfer records stands as a real testimony to the shifting fortunes of financial leadership in European football. In the 1990s, records were all set by Serie A; by the 2000s, this was now being set by the two Spanish giants; and in the years before Covid, PSG alone set records – not only the €222m for Neymar but also the €180m spent on Mbappe.

Note: exchange rate same as above; all transfer records have been included

In summary, while headline numbers continue to increase, in the context of club TV money the transfer fees of today are actually quite modest. £100m is the new normal for key players and this is less than was paid for many stars in the last three decades – fees are higher but they aren’t more expensive. English clubs have still never hit the astronomical heights that European counterparts have, either. So lament crazy prices by all means – but we have not really seen anything crazy, unless you want to make the case that Elliot Anderson is not as good a midfielder as Juan Sebastian Veron.

Appendices

1. Comprehensive transfer fee inflation model

Note: multiple and discount factor are derived from each new TV deal, announced in nominal terms, interpolated between the relevant years; Premier League domestic TV money peaked with the 2017-2020 deal, but still grew factoring in foreign rights. To use the table, take any historical transfer fee and its year, and multiply it in order to see the price in today’s money. Or in reverse, take a transfer fee of today, to see what its equivalent number was back when you were young.

2. Evolution of the European transfer record since 1992 (nominal top, re-based to Premier League inflation bottom)

Spain leads football innovation off the field, not just on it

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Given the dominance of Real Madrid and Barcelona on La Liga, and the importance of men like Florentino Perez in European football discourse, the outside observer would be forgiven for overlooking the role of the governing bodies. After all, surely the biggest clubs – which vastly overshadow their domestic peers in a way that does not happen in the Premier League – call the shots?

But surprisingly, the Spanish football federation has not only frequently come out on top against their biggest club members, but has also been a historical pioneer in football governance in a way which has set the agenda across the continent.

Transfer windows

In 1995, La Liga instituted the first modern restrictions on player trading, allowing changes of club only during a long summer break and a shorter winter slot. Strange to think, that across Europe until then, all major leagues allowed unlimited transfers until each of their deadline days – end of January for Italy, February in Germany and France and absurdly the 31 March in England, mere weeks before the season ended. At the time, transfer windows were designed to protect smaller clubs by not allowing Real or Barca to take their rivals’ best players mid-campaign, and Spain even prevented mid-season moves if a player had already played 5 matches for their club. FIFA then went on to adopt this system wholesale, bringing cross-border alignment to all leagues by 2002 to the system we know today.

If no Spain, then no Harry Redknapp hanging out of his car window on transfer deadline days

Buyout clauses

By the time of the Bosman ruling in 1995, Spain already had a system of buyout clauses described by World Soccer magazine, amongst others, as “positively futuristic”. In fact though, Spain had laid the groundwork for this a decade earlier when they actually had their own version of Bosman, leading to the Royal Decree 1006 which freed players to break contracts with their clubs. Clubs in turn responded by introducing the buyout clause – the difference with today being that the buying club actually gave the transfer value to the players themselves, who in turn paid their employer out and became a free agent. The most (in)famous example of this in action was Figo’s transfer from Barcelona to Real Madrid in 2000 for an astronomical €61m. Since that time, clubs around Europe began to normalise such clauses such that they are now commonplace.

Figo celebrating a victory for players’ rights

Image rights

In response to a change in the taxation rules in 1996, Spanish clubs began to split player compensation into two parts: salary and the use of image rights. This was revolutionary in two ways: first, it helped create a new world of tax avoidance which spread to most other leagues; secondly, it focused marketing attention on the image rights portion of football. Marketing agencies began to specialise in this segment which in turn changed the way the advertising industry used football. Image rights became a major political issue under Florentino Perez’s first Galacticos stint, but by then the Premier League and others had already taken up the baton. The reductio ad absurdum of this arrived through incidents such as Paulo Dybala’s transfer to England falling through in 2019 due to his image rights being sold and owned to third parties. At a club level, Barcelona’s rescue package in 2023, where they sold 25% of their future TV rights, is in some ways a continuation of this.

Salary caps

Before the coming of FFP in Europe, and then PSR and now SCR in England, Spain already developed a (seemingly quite heavy-handed) scheme for cost controls. Taking inspiration from US sports franchising, La Liga implemented a total squad salary cap from 2013 onwards, after several years where smaller clubs had come a cropper in the 2000s trying to chase down Real Madrid’s Galactico model. Many of them, moreover, were incurring ever greater debts to still buy players, while owing money on transfers and even wages to the current squad. In order to protect socio-owned clubs from themselves, La Liga actively calculated budgets and prevented new signings from being registered, a personal project from autocratic president Javier Tebas. The most high profile outcome of this was Barcelona’s inability to re-sign Lionel Messi – who was actually still at the club – on to a new contract in the summer of 2021 and hence pushing him out to PSG. Certainly not a case of the big clubs holding the system to ransom.

Messi lamenting the financial austerity only La Liga understood

Neutral venue matches

To be fair, in this area the Premier League did technically start earlier through its “39th Week” proposal in 2008, where the idea was to create an entire new round of fixtures to be played in various venues worldwide. However they backed down on it fairly quickly, where ten years later in 2018 Tebas (yes, it be he again) not only signed a new sports rights deal with Relevant Sports but went as far as to organise the Girona vs Barcelona fixture in Miami, scheduled for January 2019. While both clubs agreed to it, pressure from RFEF, UEFA and FIFA caused Tebas to back down – only for Relevant Sports to bring the lawsuits which forced UEFA itself to finally capitulate in 2025. Matches abroad are now permissible, all thanks to Spain.

Not only that, but Spain has been proactive in wanting to host others. The best example was Spain jumping at the chance to own the 2018 Libertadores Cup replay in Madrid between Boca Juniors and River Plate, after violence prevented the original fixture. However even further back, Spain offered to host everyone from Yugoslavian refugees Red Star Belgrade during their civil war, through to a number of Champions League matches during the height of Covid (not the final mini tournament, but several quarter-finals when logistics were much less sure).

Creation of a breakaway big money league

The most historical example of Spanish innovation is the creation of a more commercially orientated league setup, in anticpation of forthcoming revenues such as television rights. Spanish clubs broke away from the RFEF to form La Liga all the way back in 1984, a decade earlier than the Premier League. While in some respects, this act was as reminiscent of the Football League creation in 1888 as anything else, the similarities with more recent examples is the focus on commercialisation (the FA / Football League split was a contest over professionalisation vs amateurism as much as anything). La Liga was followed not only by the Premier League in 1992, but also the Bundesliga (2001), Serie A (2010) and the Ligue 1 (2022).

A side spur of this is the whole Superleague question. La Liga and the RFEF of course vociferously fought the idea of the Superleague, but ironically the culture of La Liga is what first set Real Madrid and Barcelona off on that direction alongside Juventus. And strange though it sounds to English or German ears, the idea of the Superleague is nowhere near as unpopular in Spain as it has been elsewhere, because the long-term culture to try new things has been cultivated over decades.

Championing employees and fans

*******

There are numerous reasons why Spain has always been so innovative in football governance. Some of this is deeplying in the legal and corporate culture of the country, including the focus on labour law post the Franco regime and the relatively litigious nature of the economy. Some of it has been driven by individuals such as Tebas or Perez. Above all though, Spanish football has always kept a weary eye on its place in the competitive landscape, particularly with regards Italy in the 1990s and then England since the 2000s. The authorites recognise the marketing strength of the big clubs, but also know that the whole product has to be sustainable in order to leverage that reach.

UEFA has headed off the Superleague for now, but the instincts which that proposal embodied – the innovative, the commercial, the litigious – had its roots mainly in Spain. And while the Premier League leads in revenues and sponsorship deals, it seems very likely that the next wave of innovations around governance will come once again from Spain. Ex Hispania semper aliquid novi, as Pliny might have said.

True GOATs are strategic, not tactical

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With the ascent of Jude Bellingham, we are finally marking the passing from one generation of Real Madrid to another. The outgoing vintage, though, was perhaps one of the most remarkable club side midfields we have ever witnessed: the pairing of Luka Modric and Tony Kroos, with the contribution of Casemiro, was the backbone of the Madridistas’ four European Cups between 2016-2021 (Modric won an additional one earlier in 2014). Arguably as impressive is their three La Liga titles over the same period, a competition which they have generally struggled to win compared to Barcelona.

Over the years, Madrid had plenty of other stars of course. Ronaldo and Bale at the Galactico level; Benzema, Marcelo and Sergio Ramos occupying ‘stalwart’ status, which probably underplays their importance; and the rise and fall of starlets like Isco and Asensio. But for all the debates about Ronaldo vs Messi (vs Bale if we want to be British about it, rather like considering Andy Murray part of a tennis ‘big four’), Modric and Kroos will in many managers’ eyes be the most imperative piece of the team.

Both are supremely talented and creative, which as deep-lying No 8s is their obvious role. Both are also superlative set-piece takers, too – Kroos’ last minute free-kick for Germany against Sweden in 2018 has been all-but-forgotten, but is surely one of the greatest ever in a World Cup. Likewise their ability to win, hold and carry the ball is also well-known. The phrase “press-resistant”, a favourite of contemporary analysts, is nowhere better characterised than by these two.

But it is really where these two skills – creative passing and escaping the press – combine that we see where true greatness lies. Because these two also have a side to them which few other ballon d’or candidates have: the desire to chase lost causes, to not give up, and to go the extra mile. And this is why the coaches’ opinions of the GOAT debate vary from many fans.

Below are two small (!) examples of what each of these do to give their team the edge, and it is on such actions that titles are built. Each example demonstrates specifically what Modric and Kroos – who are different players in many ways – contribute, and moreover do so on the biggest stage, in Clasicos and in European finals.

The first is from the 2022 Champions League final against Liverpool. With the game delicately poised at 0-0 and with Liverpool having arguably had the edge until that moment, Modric is fed something of a hospital pass from Casemiro of all people and, confronted by a three man Liverpool press, has to carry the ball right back to his own defence.

Real Madrid’s Decimaquarta

Yet he does not give it up or pass back to the keeper, or play for a foul. Instead, with a single swivel, Modric sends the ball through all three opponents to Carvajal and sets off the movement which sees Vinicius ultimately score the only goal of the match. Commentators did not really think of the goal coming as “out of nothing” since by the end of the move, it was a full Madrid attack. But in fact, looking at the provenance of it, it was pretty much something from nothing. Modric won that match with his indefatigability.

A few months later, Madrid are playing in a rather celebratory Clasico, which Los Blancos go on to ultimately win against Xavi’s early Barcelona side. The 3-1 scoreline, though, belies the fact that such matches are always tough, and always rely on moments; no moment is more important than the first goal.

Ancelotti vs Xavi

Up steps Tony Kroos on 11 minutes to harry through from defence to midfield and, as he is being physically bundled over by Busquets – indeed even as he is falling down on to the turf – sends a through-ball to Vinicius. This in turn leads to Benzema’s goal. Again, no official assist was racked up by Kroos for his effort, but his dogged pursuit of the best option overall (to send the pass), rather than the quickest option (to claim a foul) marks him out. He instinctively makes a long-term choice rather than a short-term one, and whilst Madrid went on to win handsomely, this opener set the tone.

Bear in mind that Modric and Kroos are already 36 and 31 years old respectively during the two highlights above. The reality is that both players show how the very best are strategic rather than tactical. Those who we believe see the ‘bigger picture’ around the pitch are those which will always be valued most by coaches. By comparison, Ronaldo for all his skills, could only ever be a tactical player rather than a strategic one; Messi’s slight edge in strategy is one of the reasons he is the better player in football history.

Madrid have the beginnings of a new platform now, and one which may see much success. But it will be a while before they can recreate a midfield of this quality, and in turn it will be a while before they, or anyone else, can come to dominate a competition like the European Cup the way they did. Players like Ronaldo and Bale still come up from time to time, as Bellingham shows; but players like Modric and Kroos are a much rarer breed.

Why Barcelona are still not learning their lesson

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Messi sad

Ousmane Dembele has just arrived at Barcelona for a “club record fee” of €105m plus add-ons which could take the total paid to around €140m, far eclipsing even the official updated €86m paid for Neymar that the club had to admit to two years afterwards (although the real cost may still be somewhat higher, and we may never know). Whether Dembele can emulate his predecessor in footballing terms is anyone’s guess; but more intriguing is the fact that he may emulate the superstar as a future exit – curiously, Barcelona seem not to have learned their lesson and set a buyout clause of only €400m.

€400m may seem a lot, but this summer has shown that numbers we could barely believe have a habit of becoming reality; if TV revenues increase, the figure will not seem excessive. But in any case, and more importantly, it is already not very high in the world of preventative buyout clauses. If any proof be needed that Real Madrid are better run than Barça at the moment, it can be seen in the buyout clauses currently in place. Not only is Dembele’s price, their newest signing, still way below the sums set by their arch-rivals, but so are all the rest of the squad – by some distance, too. Eight of Real’s stars have clauses higher than Lionel Messi, the best player in the world. Suarez and Busquets look at snip at just €200m.

Real Barca transfers

Source: Gab Marcotti via ESPNFC.com, updated for Asensio, Isco and Dembele

Why have Barça been so remiss and what explains this imbalance? Well first, to be fair, the Barça squad is just that much worse than Real’s. Other than the MSN, most of the others have passed their Pique (lol) and their clauses were signed in another era. Having said that, Cristiano Ronaldo’s €1bn clause was set as long ago as 2015, a full year before Neymar (Barcelona’s youngest and most marketable star) was set at only €200m rising to €250m over three years. Is it perhaps that Barcelona do not have the pull to get players to agree to prohibitive buyout numbers? Or is the board still arrogant enough to believe that players go to Barcelona for its “philosophy”? Either way, it is a failing of their fiduciary duties which would be prosecutable under UK company law.

Furthermore, Barcelona really have encountered a perfect storm. The inflation in this year’s transfer window has hit them just as an irreplaceable star has gone. To be clear, buyout clauses work very differently from normal transfer fees in terms of distorting the market. This is because a normal fee is, these days, usually paid out over a number of years; so that a transfer fee of €222m might only be about €55m per year. The rest of the market (though not the idiot fans) will “know” that the extra money available to the club who has just sold their star asset is only €55m at that point. But with a buyout, the money arrives instantly, meaning that the market is aware of both an entire €222m overhang, as well as the necessity to frantically spend most of it on a replacement. Furthermore, buyout clauses are by their very nature “supernormal”, higher than market valuations. This means that in turn they are causing inflation above normal market values when the money is spent in turn. In other words, it is not just usual “football inflation” (see my previous) but a buyout-driven super inflation. Barcelona this summer have become a footballing version of Mansa Musa I.

Of course in today’s world, only a few clubs are true “buyers”: Real Madrid, who do so from their own resources, and then PSG and Man City, who do not. Barcelona have ultimately been left on the heap as just another “selling club”, the dreadful epithet that even Man Utd had to understand when they lost Ronaldo to Real all those years ago. Barça just have not learned their lesson.