Are football fans to blame for the transfer fee madness?

September 1, 2013 2:39 pm0 comments by:

As at 1st September 2013, the total spend in transfer dealings by football clubs in the English League stood at £482 million. In the Spanish La liga, the total spend will increase by at least £70 million, once Welsh Gareth Bale completes his transfer to Real Madrid. This includes the £50 million spent by Barcelona on Brazilian Neymar.

The French League Clubs have recently  joined the party with Monaco spending more than £100 million o Radamel Falcao, James Rodriguez and Joan Moutinho. PSG have continued from last season with signing of Edinson Cavani for £56 million, £28 million for Marquinhos. The Serie A also look to increase their total spent this year, compared to 2012.

The huge money spent on a player transfer fee increases every season with no sign of stopping in near future. This makes a mockery of  the Financial Fair Play and the constant statement present in all Countries Budget. Global economic uncertainty will remain with us for some time. The economic outlook is improving, but requires that we actively tighten our expenditure.

The question is who is to blame for the increase in transfer  fees madness?. You can lay the blame on the fans for crying for star players or individual clubs management for succumbing to the pressure. The Clubs will argue that they are spending within their budget and if not FIFA will punish them. They will point to the increase in TV revenue and constant stream of ticket and Merchandise sales for source of income. The Clubs also stress that players are classified as assets and can be sold to other clubs at a profit.

These are valid points to justify Turkish Club Fenerbahce spending £13 Million to sign Nigerian Emmanuel Emenike from Spartak Moscow. This is just short of 20 percent of Nigerian’s 2013/2014 total Budget N4,987 trillion ( £200 Million). Gabon Pierre Aubameyang sold from Saint Etienne to Borussia Dortumund for £13 million will surely dent Gabon’s total 2013/2014 Budget Sh 12 trillion. However, the Finance Ministers for Nigeria and Gabon will surely argue against the justification.

The budget department given the task to draft the budget for both countries will state otherwise. They will state that, although it is possible for a particular player to increase the ticket sales or increase the Club mechanise sales. There is a high possibility that the player will not fulfil their potential. This will result in the player’s  devalue and ultimately sold at a loss.

They will also point to the uneconomic uncertainty that will continue to exist and affect fans spare income. This will lead to less spending in the club and more on the family.

The status quo backs argument for and against big transfer fees and there lies the problem. Each Club is run and financed in different ways. The English Premier League has gained massively with increase in TV right, especially with BT’s introduction to the market.
Internationally, audiences in Africa Countries have risen to demise of the local leagues. The European Clubs have also been boosted by the sudden rise in transfer kitty, as they sell their valued players at massive profits. This has resulted in the trickle effect and sudden urge to keep pace with the rivals.

For instance, Real Madrid is on the verge of breaking the world record for a transfer fee.  As Gareth Bale looks to seal over £100 million dream move from Tottenham Hotspur to Real Madrid before the deadline day 2nd September 2013. This will dwarf the £80 million fee paid for Cristiano Ronaldo from Manchester United in 2009. In the same year, they bough Kaka for £56 million, who is surplus now and will leave for half of that transfer fee.

Real Madrid is a member-owned Club similar to their La Liga rivals Barcelona. They benefit from the commercial sponsorship fuelled by the global fan base. This accounts for a bulk of the transfer budget, in addition to the sizable TV rights. They earned a total of £161m, which includes around £33 m from their Champions League campaign.

In contrast, countries have no TV rights to show parliament discussions. They do not have loyal fan base to pay for tickets to attend shows or merchandise. Instead, they have to generate funds via taxes, exporting the countries natural resources or services. Even some African Countries have to borrow from IMF to offset the deficit in their budget.

It is difficult to defend spending 35, 50 or 70 million pounds on a single player. It is a risky investment on a single individual or asset that depreciates on a daily rate. The problem is that clubs are not countries so maybe they should not be compared with normal economics.
In my view, fans are the main contributors to the transfer madness spend. We slate the club for not signing high profile players, buy the extra TV package to watch sports, pay high ticket price and wear the shirt. Clubs are pressured to sign players to keep the flow of funds.

 

Obioma Aguocha
Self Publisher:The Guide to being the Best (Paperback) 2007 & Sporting Success Simplified (E-book) 2012

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