Soccer’s Spending Spree is About to Shatter Records
by Tony Wyman
Soccer’s global superpowers are shelling out money for top talent and young prospects at levels never seen before, blowing away old record transfer fees and salaries and making amounts paid for stars in the past seem like chump change in today’s new environment.
During the 2014 summer transfer window, Chelsea Football Club, the West London club that would go on to win the English Premier league by eight points over second place Manchester City, sold 21-year-old striker Romelu Lukaku to Everton for £28 million, the fifth highest transfer fee of the 2014-15 season.
In July of this year, Manchester United, the storied Red Devils, bought Lukaku from Everton for a staggering £75 million, a 168% return on the Toffee’s 2014 investment. With performance clauses, the deal could rise to £90 million. Man U, who finished in 6th place in the Premier League last season, desperately need a goal scorer, having put the ball in the net only 54 times last season in 38 matches, the third poorest result of a top ten team, 32 goals fewer than scoring leader Tottenham.
That deal wasn’t the only one to astonish observers in the early days of the transfer window. The normally frugal Arsene Wenger of Arsenal splashed £52.6 million to land Lyon’s Alexandre Lacazette, breaking the previous club record of £39.95 million the club paid Real Madrid for Mesut Ozil in 2013/14. And young keeper, Ederson, just 23, moved from Benfica in Portugal to Manchester City for a record fee of £34.7 million, beating the previous record amount paid for a goalie set when Gigi Buffon left Parma in 2001 to join Juventus for £32.6 million.
Defenders Cashing In Too
Goalkeepers and goalscorers aren’t the only players going for top fees this summer. Manchester City, last season’s third place side, will break the record sum paid for a defender if they sign Monaco’s left back Benjamin Mendy for
£51.6 million, as L’Equipe reported this week they will. They’ve already paid a record £50 million for Tottenham’s speedy right back, Kyle Walker, as part of their defensive upgrade from last season, adding younger legs to replace aging ex-Arsenal players Gael Clichy and Barcary Sagna (both 33), as well as Aleksandar Kolarov (30) and Pablo Zabaleta (31).
Manager Pep Guardiola bought only one defender last season, John Stones, a talented young center defender, and found himself unable to lock down games throughout the season thanks to a leaky defense that often let wins slip away from them.
The former Barcelona and Bayern Munich man watched as City gave up more goals than any team he ever managed in the past, 39, beating his previous worst record of 35 when he managed Barcelona to the Spanish league title in 2008-9 (Barca scored 105 goals that season and won the league by nine points over second place Real Madrid.)
Neymar and Mbappe
The sums paid so far this season pale compared to money teams from Paris St. Germain to Real Madrid have reportedly offered for Barcelona forward Neymar and Monaco’s 18-year-old superstar Kylian Mbappe, both young forwards teams are willing to pony up astronomical sums to acquire.
ESPNFC.com reports that Paris St. Germain is willing to meet the €222 million buy out clause in Neymar’s contract. Paying more than a quarter billion dollars for a single player isn’t out of reach for the Paris club any more than is paying the player almost $35 million a year after taxes plus a signing bonus reportedly greater than his annual salary.
The Sun reported this week that Real Madrid, home of Cristiano Renaldo and Gareth Bale, are on the verge of signing Mbappe for a record sum of £120 million. Despite assurances from Monaco that the player isn’t going anywhere, The Sun claim Mbappe has already agreed terms with the Galacticos.
The deal would be partly financed by sales of Alvaro Morata (Chelsea – £58 million rising to £70 with add ons) and Danilo (Manchester City – £32.3 million).
From Where is the Money Coming?
So, where is all this money coming from? First of all, global soccer generates more money than all American sports combined, according to a report by global consulting firm AT Kearny. They said in a 2011 report, that football, as the world calls “soccer”, accounted for 43% of all spending globally on sports.
In a 2016 study, Statista, an online marketing and business development portal, said that global sponsorship for football would exceed $60 billion, while sponsorship for NFL Football would reach $1.2 billion.
On top of corporate sponsorships, teams in the English Premier league got a major boost when the league signed a deal for television broadcast rights that exceeded £10 billion pounds. Half that amount was for foreign rebroadcast rights of live matches in England.
Players in the Premier League benefited greatly from the increased revenue generated by the deal that runs through the 2018/19 season. Already paying players more than the Spanish La Liga and the German Bundesliga combined, the Premier League increased salaries by more than 7% after the deal was signed.
Salaries reported amount to more than 70% of the revenue generated by Premiership clubs, but accounting firm Deloitte reported they expect revenues to increase by more than 20% a year due to the new TV deal.
English teams aren’t the only ones benefiting from an increase in revenue. China’s Super League is destroying all records for amounts paid to players to come join their teams. Carlos Tevez, the 33-year-old former Manchester United, Manchester City and Juventus player, joined Shanghai Shenhua for a world record £615,000 a week, the equivalent of nearly $800,000.
Players in the prime of their careers, ones like Oscar, Alex Teixeira and Paulinho also left teams playing at much higher levels to take offers for sums once granted only the world’s best players to join teams in the Super League.
China is becoming a real option for top players thanks to the vision of Chinese President Xi Jinping. In 2015, he announced a 10-year plan to more than double the size of the Chinese sports industry to exceed £600 billion in revenue generated from investments from both the Chinese government and private investors.
The president is a passionate soccer fan himself and his plan is designed to turn China into a soccer superpower by adding 20,000 football schools and 70,000 new football pitches that will generate more than 100,000 new players by 2020.
China is now ranked 77th in the world in men’s soccer, behind countries like Uganda and Armenia, nations that have only a fraction of Beijing’s resources, but President XI’s goals are for China to qualify and, some day host and win the World Cup.
With investment pouring in from sponsors eager to capitalize on the world’s love affair with the most popular sport on the planet, it does seem likely that wages for top players and prospects will come back to Earth any time soon. In fact, it is likely the wages and fees breaking records today will be shattered in the years to come as more corporations and governments see real value in associating with The Beautiful Game.
