Why Are Soccer Transfer Fees so High?

| July 18, 2019 9:03 am PDT

Transfers have been around pretty much since the dawn of professional soccer.

The FA started it all in the late 19th century when registration of players was introduced so that a club wouldn’t simply lose someone who found a new club in the summer.

Back then, players had to register every season, and if they decided to leave or were sold, the club had to be compensated.

For a long time, transfer sums were nothing like the ones we have today. Then the George Eastham vs. Newcastle United debacle happened in the ‘60s.

The trial was viewed as a big victory for professional players, but it also started a movement of player power which was brewing for decades before it reached its boiling point in the modern era.

It was further facilitated by the rise of the Premier League and one particular ruling I will explore in detail later on.

Suddenly, we found ourselves in the midst of astronomical transfer fees which are easily dished out by the clubs to get the next best thing.

So how did we get there, and how much are the big European clubs actually spending to strengthen their squads nowadays?

Let’s have a look at the numbers and try to figure out what led to all these record-breaking expenses.

How Much Are the Clubs Spending?

Let us first explore the world’s most expensive transfer fees and who has paid them.

The Top Transfer Sums in Soccer History

Player Transfer Fee Buying Club
Neymar €222 million Paris Saint-Germain
Kylian Mbappe €135 million Paris Saint-Germain
Philippe Coutinho €132 million Barcelona
Joao Felix €126 million Atletico Madrid
Antoine Griezmann €120 million Barcelona
Ousmane Dembele €105 million Barcelona
Paul Pogba €105 million Manchester United
Eden Hazard €100 million Real Madrid
Cristiano Ronaldo €100 million Juventus
Gareth Bale €100 million Real Madrid
Cristiano Ronaldo €94 million Real Madrid

If you had shown me this table just a decade ago, I would’ve definitely called you crazy. However, the big increase was waiting to happen, and the reasons have been right before our eyes.

Bear in mind that all of these transfers with the exception of the bottom two happened in the last few seasons.

As you can see, PSG, Barcelona, and Real Madrid are among the top spenders, but those transfers are not just one-offs. These clubs have a history of spending big, and they aren’t afraid to splash the cash even if the talents of the players they are getting are still of an unknown quantity.

However, you might be surprised to find out that none of them take first place in expenditure during the last decade.

The Top-Spending Clubs

Here’s a breakdown of exactly how much the big European teams have spent since the start of the 2010/2011 season.

  • Manchester City €1.45 billion
  • Barcelona €1.35 billion
  • Chelsea €1.33 billion
  • Paris Saint-Germain €1.18 billion
  • Juventus €1.17 billion
  • Manchester United €1.13 billion
  • Real Madrid €1.12 billion
  • Liverpool €1.01 billion
  • Atletico Madrid €984.31 million

It is evident that the top transfer chart is not completely indicative of who the world’s top spenders are. Yes, Barcelona, PSG, and Real Madrid are all in there, but Manchester City is the clear leader, and Chelsea comes in third place.

Neither of these English clubs has secured a world-record deal, but the amount of money they’ve spent on transfers in the last ten years is ludicrous. Simply looking at the raw numbers can make one’s head spin.

So the big question is what have these clubs bought with all that money?

The Quality of Modern Players

If you go back to the table detailing the top transfers in history, you will see that it contains some of the biggest talents of the latest soccer generation.

Cristiano Ronaldo, who is arguably the best pro we’ve seen alongside Lionel Messi, has warranted a place there with both his transfer to Real Madrid and subsequent move to Juventus.

Neymar, Eden Hazard, and Philippe Coutinho have a case of being considered among the top playmakers around and the guys who are closest to rivaling Ronaldo and Messi for the Ballon d’Or.

So that’s all good. Yes, the fees for their transfers are huge, but at least the clubs know what they’re buying, and those players are bound to guarantee consistency and quality on the pitch.

However, there are other entries which raise an important question. Should clubs splash out more than €100 million for young players who haven’t really achieved anything in their careers yet?

Of course, as is the case with most things, there is context to this. Let’s have a look at some examples.

Mbappe to PSG

The second-highest transfer fee on record was paid by PSG for securing the services of Kylian Mbappe. The Frenchman may still only be 20 years old, but he was an integral part of his nation’s World Cup-winning team and has won both domestic competitions with his club.

On top of that, he has been banging in goals like crazy. He finished last season with 33 goals for PSG, averaging one in just under 71 minutes.

It was evident that Mbappe is a huge talent and that signing him even for a high fee would get teams quality and further room for improvement. So, even if he was priced at €135 million by Monaco, I still think that it is one of the best transfers on the list.

Joao Felix to Atletico Madrid

Looking at some of the other guys, I’m not convinced of the same. I have to admit that a big reason behind my idea to do this piece was Joao Felix’s transfer from Benfica to Atletico Madrid.

Before I say anything about that, I do feel there are two important factors we should acknowledge.

First and foremost, the kid possesses great talent. Anyone who has watched him has seen that he is way more mature than other 19-year-olds, and he plays the game with panache and intelligence.

Simply put, he has all the ingredients to become a top player, and I’m not surprised that the big clubs were after him.

Secondly, Atletico Madrid had to prepare for the loss of their best player and talisman Antoine Griezmann. He eventually wound up with rivals Barcelona, but Atleti knew that a big transfer sum was coming and that they would need to find a suitable replacement.

That being said, is Joao Felix really worth €126 million? Well, no. Nobody is worth that kind of money, but in this day and age, we will be seeing more and more of these deals.

You can make a point that the club knew the Griezmann money was coming and that they had to act before Felix was snapped up by someone else.

But it’s hard to justify that price. Yes, the guy has talent, but he is 19 years old and has only played for Benfica, who isn’t exactly a European heavyweight. Plus, the Portuguese league is not nearly as competitive and dynamic as the Spanish La Liga.

At 19, he can easily find himself unprepared to mix it up with the big dogs, and with that price tag, everybody will be quick to criticize him and the transfer.

It’s still early days, and we’ll have plenty of time to see how his career at Atletico pans out, but it doesn’t change the fact that it was a risky piece of business.

Unlike Mbappe, Joao Felix has yet to prove he can play on the big stage and tackle the European elite in crunch games.

Paul Pogba to Manchester United

Another good example of how transfers are being handled these days was the Paul Pogba move from Juventus to Manchester United.

Admittedly, Pogba was turning a lot of heads with his performances in Italy. He had become one of the best players in a Juventus side that featured legends such as Andrea Pirlo and Carlos Tevez.

In 2016 came his transfer, but there is an important detail which you may not know. Pogba was actually a Manchester United academy product. He signed with them in 2009 and spent his final youth years with the club.

For one reason or another, he decided not to sign a contract with the Red Devils back then. Some say it was Ferguson who pushed him away; others claim his agent already had plans for him abroad.

It’s hard to pinpoint the exact cause, but the fact of the matter is that Pogba left for nothing in 2012. After four years in Italy, he felt that a return to his former club was a good idea, and the €105 million transfer sum paid turned into the highest ever at that point.

Again, I have to stress that Pogba is a unique talent, and despite his tough character and ego, he can be a world-class player on his day. But his transfer shows us exactly how clubs nowadays are treating their transfer budgets.

You have an academy prospect who is showing bags of potential. You don’t tie him up to a contract when it will cost you nothing, but then go and spend over €100 million to get him back four years later.

It just sounds absurd to me, and it’s not like you are guaranteed that this guy will stay with the club forever. In fact, I won’t be surprised if Pogba leaves during this transfer window. He has already shown that he can be difficult to work with, and his confidence, while great for his game, can be very destructive outside the pitch.

How Did Transfer Sums Become So Big?

After detailing some of the biggest transfers in modern history and their specifics, let’s have a look at the important factors which led to these astronomical fees. I’ll then try to figure out how we got from €77 million for Zinedine Zidane to over €100 million for a 19-year-old.

The Bosman Ruling

Nothing helped boost today’s transfer fees more than the Bosman ruling of 1995. Jean-Marc Bosman was a Belgian soccer player who played for Liege in the Belgium First Division. His contract had expired in 1990, and he requested a transfer to French side Dunkerque.

However, Dunkerque was strapped for cash and couldn’t afford to pay what Liege wanted for the services of Bosman. The player then decided to take matters into his own hands and started an appeal with the European Court of Justice.

He won the case, which resulted in every EU player being granted the chance to exit his club on a free when his contract expires. It also brought about massive changes to the freedom of movement for soccer players.

Prior to the ruling, almost every European league had quotas on the number of foreigners teams could bring in.

After the Bosman trial, those quotas were lifted, and that practically opened the floodgates. Clubs started bringing in tons of foreign talent, and the transfer fees started getting bigger because of the high demand.

By 2016, nearly 70% of the players in the EPL were foreigners.

Okay, so far, so good. Mr. Bosman wanted to move to another club when his contract expired, and the court recognized he had good reason to request this. Quotas were also not optimal, as you want to be watching the best talent there is in the big leagues, so there is no point in limiting the clubs.

However, the Bosman ruling took a turn for the worse when soccer associations introduced the “Under 24” rule. It stated that a player under the age of 24 cannot be transferred without a fee unless released from their contracts by the club. It was widely believed this would protect younger players, but it actually did much more harm than good.

The other side of the “Under 24” ruling stated that players aged 24 or older who have six months or less remaining on their current contract can sign a pre-agreement with another club and join them when the contract runs down.

It doesn’t sound too scary on paper, but it is one of the most toxic practices in modern soccer and has turned players into monsters.

Nowadays, a 24-year-old can practically hold his club for ransom if he requests a transfer. The club faces the dilemma to either get a small transfer fee for their player or risk losing him on a free when his contract expires. Тhis may not sound like something that directly affects transfer sums, but it is in a way.

It introduced an easy way for players to twist the arms of their clubs, so teams are now looking to sell before the Bosman rule can come into effect. Naturally, they want bigger sums for their contracted stars as they need something in return if they are to let go of their most important players.

Basically, the Bosman rule has effectively pushed clubs to sell players early, which has driven up transfer numbers.

How I’d Fix It

The Bosman started out as a victory for freedom of movement and association but ended up being an instrument for power-hungry players and agents to do whatever they want.

The big losers are the clubs who have put in a great effort and a lot of money to bring up talents from the youth system and risk eventually losing them for nothing.

Here is an infamous rant of Ian Holloway on the subject when Wayne Rooney threatened to leave Manchester United. It still rings true to this day and perfectly details the absurdity of the “Under 24” rule and how it actually hurts the people it was designed to help.

Commercialization

A big reason for the ramped-up transfer sums nowadays is the complete commercialization of soccer. In 2016, the EPL clubs all signed a three-year deal to sell the rights to their games for a combined fee of $13.4 billion. It was the highest TV deal in the history of the sport.

Subsequently, television channels in the UK now pay nearly $13 million to show a single Premier League game.

It is evident that the demand for soccer is a global phenomenon now, and there is nothing wrong about that. Every person who is passionate about the sport deserves to have easy access to the games.

However, it is only natural that high demand and astronomical TV revenue lead to higher transfer fees.

In fact, commercialization has gone so far that the clubs now contemplate bringing in marquee signings not simply to strengthen the squad but to sell merchandise. And I, for one, can’t blame them. If you look at the shirt sales that come in after a big transfer, you will also completely agree with that line of thinking.

PSG may have spent over €350 million for Neymar and Mbappe, but they also saw an 80% increase in their shirt sales when the deals were wrapped. This translated into 800,000 more shirts sold than the previous year. It is just an astounding figure and a great example of how commercialization drives up prices and transfer activity for all the wrong reasons.

How I’d Fix It

There is no hiding from the fact that soccer is the most popular sport in the world, and the demand for it keeps growing. If clubs want to limit transfer spending, they should start abiding by the Financial Fair Play laws that are in place.

The problem is that there are so many loopholes that the current law is practically useless.

The only way to channel the commercialization of the sport into something good is for the soccer governing bodies to find a sure way for clubs to only spend the revenue they generate. This will not only lower transfer sums but will give way to promoting youth talent, which is one of the main casualties of the modern transfer activity.

Agent Power

Without a doubt, some of the biggest purveyors of regular big-money transfers are the players’ agents. In the past, the soccer agent profession was practically non-existent. Young players relied on their relatives to represent their interests in front of the club executives.

With the growing popularity of sports, agents started appearing more and more. At first, it was thought that it would be better for young talents to have a professional take care of their career decisions, but as with everything in modern soccer, this quickly morphed into something entirely different.

Agents quickly started building ties with the clubs and added promising players to their lists. One of the most prominent figures in the power agent movement is Mino Raiola.

You simply need a quick look at his portfolio and his clients’ transfer moves to convince yourself that it’s not only soccer matters that drive this train.

The most recent examples are those of Paul Pogba and Matthijs de Ligt. Raiola is very tight with Juventus, and although all of the big European clubs were after de Ligt, he quickly ended up with the Turin outfit.

Pogba is another high-profile client, and close sources believe that it was Raiola that engineered his move away from Manchester United in 2012.

He was to ensure Juventus gave him playing time, thus increasing the young Frenchman’s market value, something that Sir Alex Ferguson was not prepared to do at Manchester United. Yes, Pogba’s career benefitted from all this, but Raiola’s bank account did as well.

How I’d Fix It

It is clear to me that power agents like Mino Raiola and Jorge Mendes have a stranglehold on most clubs. The extent of this is so big that if a club is not in their good graces, there is zero chance they are getting one of their clients, even if the player expresses an interest to go there.

Something that was spawned out of the intention to protect young players has now exposed them to money-driven decisions that can have a great negative impact on their careers.

It has also promoted a nomad-like culture among the talents, and the concept of club loyalty has completely been obliterated.

The problem is I’m not sure any regulation can completely stop the impact agents have on the game. The only realistic scenario I can think of is prohibiting professional agents to represent youth players prior to them signing a professional contract with their clubs.

There will still be ways for Raiola and the sort to manipulate both the players and the market, but at least the players will have only themselves to blame if they invite representation after they have turned 18 and have signed a professional contract. 

Conclusion and a Look at the Future

Soccer has become more global, entertaining, and dynamic in the last ten years, but the cost for the clubs has been great. They need to not only think about how the team is performing but also make sure they have the right sponsors, contacts, and beware of their players’ contract situations.

It is a reality which necessitates a plethora of executives looking into every aspect and ensuring that the club is in good stance on all these fronts.

My thinking is that transfer sums will get even higher as there is still a lot of untapped potential in the global soccer market.

Oil and Chinese money will continue to enter the fold, and TV rights will grow exponentially. It is just a matter of time before Neymar’s transfer record is broken.

So, what I’m saying is that I anticipate it will get a lot worse before it gets better.

My hopes lie in the fact that the game is making strides to correct itself with regulations such as the Financial Fair Play and the VAR technology. They still have a long way to go before they are effective, but if this transfer madness goes around for too long, I can only imagine that the soccer governing bodies will be compelled to introduce caps on the amount of money clubs can spend.

It will probably not solve all issues, but it will be a step in the right direction, and it’s high time for the sport to begin a massive overhaul and return to the values that made it great around the world.

This wraps up my piece on the modern transfer sums. I will be glad to read your side of the story, so please don’t hesitate to leave a comment below and join the debate!

Elias Wagner

Elias Wagner has been a soccer fan since he was a young boy. He still has a huge passion for the sport itself as well as betting on it and writing about it.

Outside of soccer, Elias also enjoys other sports including basketball, tennis, and snooker. He's been writing for GamblingSites.com since 2018.

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