Football’s madness: Astronomical transfer fees, a signal of an imminent implosion

Neymar has been signed for more than €200 million. Let that sink in for a minute.

Alright, two minutes. That money is enough to wipe out a debt of a small nation (Haiti’s debt is exactly that amount), or if you’re the president of the said nation, you could splash that on ten F-35 Lightning fighter jets, the current superstar of the US Air Force.

Speaking of superstars, while PSG are parading their latest around at the Parc des Princes, Chelsea are hoping their new not-so-superstar-but-still-very-good-striker Alvaro Morata will hit the ground running after his so-so display against Arsenal in the Community Shield.

Show me the money

Chelsea seemed to have pulled off a transfer coup in signing the Spain international, having signed him for – as some are calling it – a “cut price” fee of only £58 million. One that could rise to £70 million, if Chelsea meet their targets, and while they might be loath to part with more money, it is a necessary evil: both player and club will want to achieve greatness for the money Chelsea have forked out.

The Blues face off against Manchester United on November 4, when the latter’s shiny new £75-million (again, that’s just the initial fee) signing Romelu Lukaku is sure to be in the thick of things.

Lukaku isn’t even United’s most expensive signing. That accolade goes to Paul Pogba, who we all know was signed for a staggering £89.3 million last summer. Morata, on the other hand, is Chelsea’s costliest acquisition, eclipsing the £50 million fee they shelled out for then-Liverpool striker Fernando Torres in 2011, by a mere £8 million.

The Reds, on the other hand, went on to make Luis Suarez their most expensive arrival, signing him for £22.8 million from Ajax. Suarez, who even then was destined to achieve great things, was signed for a fee that would be considered paltry in today’s terms.

Current Liverpool boss Jurgen Klopp has only shelled out a net total of £33 million on three players – Mohamed Salah, Dominic Solanke and Andrew Robertson – all of them quality additions, and his outlay is sure to impress even his detractors.

“Without paying too much money or the highest transfer fees we have additions in the squad,” he said.“That’s good. We’ve always said that until August 31, we’ll run through the world with open eyes, that’s clear, but it’s not us alone who decides about these things.”

If a club were to sign a fresh-faced Suarez from Amsterdam today, how many would actually be able to afford him, and more importantly, how much would it cost them? That number would surely be more than what Lukaku and Morata are worth, which shows just how inflated transfer fees have become in the last seven years, and that’s not too long ago.

Those pulling the strings behind the scenes will justify the case of supply and demand for such skyrocketing fees, but surely there will come a point in the future when even the likes of Roman Abramovich and Mansour bin Zayed al Nahyan will put their foot down at the exorbitant fees demanded by clubs and – more significantly – agents.

Risky investments

The owners of these clubs look at them as little more than businesses, and are investing such massive sums in the hope that these may one day pay off.

Since his takeover of the club, Abramovich’s spending on wages alone has hovered around the £2.4 billion mark, with a further net spend of £806 million on transfers, and an additional £71 million shelled out in compensation to managers who’ve been given the sack: about £75 million per trophy. Much of this has come through an interest-free loan of slightly more than a billion quid, lent to Chelsea via the club’s parent company, Fordstam Investments.

Antonio Conte, though, has resignedly justified his hierarchy’s exorbitant spending. “You must understand the status of the team,” he said. “Every team has to understand what their ambitions are. If their ambitions are to fight for the title or win the Champions League, you must buy expensive players. Otherwise you continue to stay in your level. It’s simple.”

Despite Jose Mourinho spending a club record amount and then nearly matching it, he too has raised concerns about such astronomical sums being traded for not-so-good players.

“Players like Pogba, there are one or two big transfers per transfer window,” he admitted.“The other is where you have 100 transfers and, for me, that’s the dangerous area of the market. That’s what worries me a little bit, because now we speak about £30m, £40m or £50m in such an easy way.”

‘The dangerous area of the market’

“We spent big money on a striker because, with strikers, you either spend big or you don’t get.”

It is – funnily enough – a similar situation at Old Trafford, where United have also splashed the cash, £400 million of which were spent after Sir Alex Ferguson retired in 2013. Since Abramovich took over at Chelsea, the Glazers have spent £486 million (net), on transfers, with only a slightly lower wage bill of £2.19 billion. They’ve also had to dole out £2.19 million in compensation towards David Moyes and Louis van Gaal.

The Glazers value the club at £1.6 billion, and in keeping with the notion of owners regarding clubs as little more than business opportunities, have extracted £1.053 billion from Manchester United, as they attempt to recoup their initial £790 million investment, for which they had to raise funds to the tune of more than half a billion pounds from questionable sources, putting the interest required to repay all of this borrowed money onto the club as well.

While it has ushered in an unprecedented era of success at United, both in terms of silverware and commercial value – regionalised deals have been signed with Nigerian soft drink companies, Korean pharma chains, and Spanish winemakers to name a few –the Red Devils’ debt at one point reached an eye-watering £800 million pounds, although that has now shrunk to a more manageable £380.5 million as of 2015.

What is worrying is that despite this massive inflow of money, the Glazers have ordered a series of cost-cutting measures to United’s academy, the home of so many players who have made up the backbone of several successful Red Devil teams since Manchester United were founded in 1878.

Anchorless since Academy Director Brian McClair left to oversee a similar role for Scotland, United are sacrificing their future prospects, at a time when they should be expanding it to maintain their overwhelmingly successful and sustainable model of promoting youth through the ranks.

With Manchester City aggressively expanding their own academy setup via the formation of the Etihad Campus – part of the £1 billion development plan by the club – there are genuine concerns as to where the next generation of players such as Ryan Giggs, Paul Scholes, Gary and Phil Neville, Nicky Butt and David Beckham will come from.

Sheikh Mansour has accrued personal debts of £535 million, excluding a £200 million development of the City Football Academy, having also spent north of a billion on developing and revamping Manchester City.

They’ve just unhesitatingly spent £45 million on Kyle Walker, and a further £52 million on Benjamin Mendy, and while City might’ve forked over such large amounts, there will surely be those behind the scenes questioning if he was indeed worth so much money.

But how long will the madness continue?

Given the vast amounts of money being spent on players such as Lukaku, Morata and Walker, who are quality signings, but surely not worth the astronomical fees they command, one has to wonder: how long before an owner puts his foot down and refuses to pay such an inflated fee, as he asks himself the true cost of footballing success?

For every Chelsea or Manchester United, there are a plethora of clubs for which the arrival of megabucks owners didn’t work out: the best example of this would be Sheikh Abdullah Al Thani, who quickly grew disillusioned with his project at Malaga, after taking over in 2010.

After finishing the 2011-‘12 Spanish La Liga season in fourth and qualifying for the Champions League, built on the back of the club’s most expensive signing Santi Cazorla, who was signed from Villarreal for £21 million, as well as players such as Nacho Monreal, Ruud van Nistelrooy, Jeremy Toulalan, Julio Baptista, Salomon Rondon and Martin Demichelis, the club would never reach those heights again, after Al Thani questioned the value of his roughly £65 million in player investments over two seasons.

Cazorla was sold to Arsenal for less than he was signed from Villarreal, and a number of other players were jettisoned, as Al Thani called for a fire sale of players in the light of him scaling back his investment. Malaga finished the 2016-‘17 season in 11th.

While it might not seem like it, the reality is that this could be the future of any club, when their owners are pushed over the edge. It’s not a question of “if” but of “when”.