Football spending hurts amid COVID-19
The transfer deadline came. The transfer deadline has expired. Chances are, you didn’t even notice.
Quiet January transfer windows have been common for several years. The clubs realized some time ago that it is rarely worth paying the premium for a mid-season transfer. Selling clubs typically charge more money as compensation for the interruption of their squad during the campaign and take into account the excessive fee a substitute would cost them.
But this winter transfer window was so quiet you could almost hear the proverbial pin drop.
The biggest deals were Ajax, who signed West Ham striker Sebastien Haller for $ 28 million. Manchester United poaches Atalanta prospect Amad Diallo for $ 25 million; and Dominik Szoboszlais reassignment from one Red Bull partner (Salzburg) to another (Leipzig) for a nominal amount of at least 24 million US dollars. After that, the only slightly noteworthy move between two Portuguese clubs for a 28-year-old striker with three caps was Paulinho’s $ 19 million transaction from Braga to Sporting Lisbon.
Most of the time, the window was an extensive mix of loans as the big clubs cleared some unwanted players off their rosters. Liverpool found cover for their injured center-backs through temporary replacements; West Brom took up some reinforcements in the hope of fending off relegation; A bunch of Americans were moving around.
But for the most part, the transfer window was a spectacular type. Not even the transmissions that were rumored but never actually took place were earth-shattering. Dele Alli, on loan from Tottenham to Paris Saint-Germain, was the slightly exciting headliner of the non-deals.
And if you were wondering when exactly the economic hardship caused by the pandemic would hit and hamper the football industry, now is the answer. Right now. The austerity measures of football have started.
Football is almost the only business where the old run-down economy theory actually works. An elite club buys a player from a large club, who replaces him with a player from a medium-sized club, who buys someone from a smaller side, and so on. But even the richest teams weren’t active in the market. Barcelona and Real Madrid owe more than a billion dollars in debt and their survival is at risk. And some of the other typical big donors had either made lavish transfers over the summer, judged caution, or both.
Without this injection of money from above, the market never really got going.
And it doesn’t look like the summer market is recovering. French Ligue 1 could find itself in a financial crisis after losing their main broadcaster in a dispute over renegotiated rights fees and no other credible bidder has been made. In any other league, it is unlikely that large numbers of fans will return to the stands before the end of this season – let alone fill their stadiums with something close to their old average attendance. The pain continues. New variants of the COVID-19 virus are emerging. The pandemic is far from over.
It felt strange that there were big money transfers at all last summer when the economic uncertainty was visible to all. That was the real surprise that the football player bazaar didn’t suffer sooner. It felt immoral that tens of millions were still being spent on new players as current players were pressured to cut or postpone salaries while other employees were on leave or laid off.
The market is finally starting to crumble.
More leagues and clubs are likely to be in real danger anytime soon. Ligue 1 is hardly the only league that is forced to renegotiate with its broadcasters or offer givebacks. Sources of income that the clubs had reckoned with and that they had treated as iron – TV money, match day income, season tickets, even sponsorship – have become shaky. However, the player contracts are signed and the money is committed. Installments on old wire transfers still have to be paid, and other obligations also come due.
Of course, the first cost reduction is also one of the most important: buying players from their old contracts – which is actually a transfer fee, a buyout – to sign them with your club for new ones.
It won’t end there. A football recession is now evident.
Leander Schaerlaeckens is a columnist at Emox News and a lecturer in sports communications at Marist College. Follow him on Twitter @LeanderAlphabet.
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