Transfer Window, Market Value, and Budgets: The Commercial side of European Football and its significance

For anybody new to the nuances of European football and the various leagues across the continent, “Transfer deadline” or “Transfer Window” is an exciting part of the football season since it affects the success of

For anybody new to the nuances of European football and the various leagues across the continent, “Transfer deadline” or “Transfer Window” is an exciting part of the football season since it affects the success of many teams and has the potential to define the end result in a league. Signing or losing one marque player can make or break a clubs season which pushes the clubs to jostle for that elusive signature. And for this, they are willing to break their banks and pay ridiculous amounts of money on the way to breaking all time records.

Simply put, Transfer Deadline or window is the time frame within which any club across Europe or in a league can buy or sell players. Unfortunately, as simple as it sounds, the complications of having different transfer deadlines in various countries make it difficult for fans to follow the circus of player movement around Europe. To top that, there are a couple of factors that affect a club’s ambitions like Financial Fair Play (FFP), and Club Revenue which dictates how much budgets each club has available to spend on new players.

Let us look at the top 5 leagues in Europe and understand why some leagues are at a disadvantage due to an early closure of the transfer window while some benefit immensely. Budgets spent in the 2018-2019 transfer window and the respective Market Value each league holds will also be discussed.

League Transfer Deadline
English Premier League 8th August
Italian Serie A 23rd August
Spanish La Liga 2nd September
German Bundesliga 2nd September
French Ligue 1 2nd September

As can be seen from the Transfer Deadline/Window closure dates, the EPL transfer window (for buying players) closes on the 8th of August which is before the actual start to the season. This is the earliest closure of the transfer window among the top 5 leagues in the world. This leaves the English clubs exposed to poaching from foreign clubs. It cannot sign players after the 8th of August and risks losing players to powerful clubs in Spain, Germany, and Italy till the 2nd of September. The clubs in Spain and Italy with their glamorous appeal can sign the top talent in EPL by luring players away from England with more money and promise of success in most competitions. Not to mention better weather conditions than England.

Clubs like Real Madrid and Barcelona from Spain while Juventus or Inter Milan from Italy have a huge appeal for players due to the following reasons

  1. Possess some of the best talent in the world
  2. Big paychecks
  3. Potential for winning the biggest prize in Europe
  4. Tremendous Glamour
  5. Better climatic conditions

However, these aspects do not necessarily guarantee success on the pitch. We live in a money-minded world where the rich usually succeed due to their financial might. The below graph shows that although the English Premier League is the biggest and most popular league in the world when it comes to market value and TV viewership, the financial might of top 2-3 clubs in Spain, Italy, and Germany makes it difficult for English clubs to retain top talent.

Where the EPL scores highly are the competitive nature of its league. The title is closely fought between the top 6 teams while the rest of the 14 teams can cause major upsets on any given day. This uncertainty coupled with the fast-paced style of football makes EPL the most-watched league in the world which in turn brings in millions of dollars as can be seen from the enormous market value this league holds.

Conversely, the leagues in Spain, Italy, and Germany, although boasting of some of the best teams on the planet, fail to deliver when it comes to competitiveness and overall excitement. Barring the top 3 teams in Spain, the top 3 teams in Italy and top 2 teams in Germany, the chances of other teams winning the league are extremely low. You will simply never see a Leicester City moment (2015) in these three leagues. Every season, it is pretty much a foregone conclusion as to who will be the champion which robs the fans of the suspense factor which is so critical to the financial success of EPL. To explain what I mean, below is the list of winners in the top 5 leagues over the past 5 seasons and the points difference between the 1st and the 5th club in each league over the same period.

Talking about Transfer budgets (as can be seen from the graph above) in 2018-2019, the EPL led the way when it came by a significant amount. This can partly be linked to the sheer amount of revenues generated across the clubs namely the sharing of TV revenues. And this translates to success on the football pitch. You can see the end results as the EPL enjoyed tremendous success in 2018-19 in top European competitions and dominated the Champions League and the Europa League by having represented by 4 English teams in the finals.

The might of the EPL is constantly rising primarily due to friendly schedule (TV times for ASIA where they have the largest fan base), excellent marketing by top teams across Asia and the US and the excellent TV coverage offered. This allows them to bring in tremendous revenues and thus spend big during transfer windows. The way English clubs are run is very different as compared to Spain where Barcelona and Real Madrid are mainly supported by the Government and thus have a very different business model. The long term sustaining power of these varying business models is debatable.

So to summarize, next time you see teams like Manchester City, Liverpool or Tottenham doing well in European competitions, apart from tremendous footballing skills and the best managers in business, the small matter of excellent revenues and transfer budgets also plays a vital role in the success of these top teams. The financial aspect could very well be the unglamorous aspect of European football, but it is a vital piece of the puzzle that translates into sustained success on the pitch.

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