Summer transfer window: The market closes as European divide stretches

When the stadiums shut last March, football was allowed to pause for once. The time away from the pitch and terraces temporarily gave football a moment to breathe and reflect. People concluded football needed a reset, and this was the moment to enforce it.

“Coronavirus in itself will change the face of football economically,” Gary Neville examined in March last year.

“But outside of that clubs want real action. They want to reset the game. This is not going to be pleasant for players and agents in the next 12 months, 18 months, or two years.”

Neville’s analysis came from a genuine belief that football had to change. We need to remember that it was a popular, view before we use hindsight to call out Neville’s naivety.

That is because it made logical sense. When the sport was, for so long, speeding off a cliff due to its instability, the crisis could have become an unlikely solution to finally stop the inevitable train crash.

Rightfully there were plenty of fears of clubs collapsing, but it did offer a reality check. The environment was shifting radically. There was nowhere for football to hide this time. The sport, it was believed, needed to adapt to survive.

This meant stopping the endless financial instability and backdoor deals. Ensure the untouchable elite are touchable. Firmly address how fans and the sport’s governing bodies admire and promote oligarchs and abusive governments. Fix the broken administrative mechanics. And change the sport’s never-ending pursuit for more at the cost of everything.

It turns out these ideas will stay ideals in the long run. The past 18 months have radicalised the problems that have rooted themselves as football’s modern foundations. Football needs the transfer swagger. The money men. The diversion of interests. The eternal lust for ultimate glory, no matter what that said glory is.

The sport was thought to be under recession when Premier League clubs spent £1.3bn on transfer fees alone last summer and concluded their business with a net spend of £1bn (the next highest in Europe was Serie A who did not pass the £100m mark).

The recession was the narrative again when this summer’s window began. These views heightened because austerity fears caused Project Big Picture and the Super League, France’s TV crisis, and Serie A’s and Bundesliga’s TV rights value reducing. La Liga’s personal civil war increased further when their deal with CVC Capital Panthers was struck, and the fallout began.

It became apparent these were precursors to the type of summer transfer window. An opportunity presented to stretch the gulf between the poor and the rich further.

Unsurprisingly then, we have seen the European divide open further as different leagues work with different templates. And the best place to start with this is the second-tier of English football.

The Championship template

Often the gun-slinging league in England, the Championship is renowned to have an eat or be eaten ethos. Clubs typically splash the cash in pursuit of the Premier League money. And this is just not on transfer fees, but wages too.

Using the data football financer @SwissRamble worked out, four out of the 23 clubs who have published their 2019/20 accounts, only three made a pre-tax profit and Barnsley cut even.

Sticking to the pattern, every Championship side made an operating loss, and the vast majority were spending more on wages than their turnover could handle. Fulham topped the operating losses with £73m and Reading had the largest wage to turnover ratio with 211% (for every £1 they gained they spent £2.11 on wages).

While these accounts consider the original impact of Covid-19 on the clubs, they show the state many clubs find themselves in. This, of course, meant very few Championship clubs could look to the Premier League for recruitment if they were selling a player for no less than £5m as they would do in the past.

There was only one Premier League to Championship transfer for a proportionate fee: Harry Wilson to Fulham for £12m. Wilson’s transfer fee was the only double-figure in the division and was twice as much Fulham’s other big signing, Rodrigo Muniz from Flamengo, and Middlesbrough’s Martin Payero.

The vast majority of Championship business was either small transfer fees (even they were few and far between), free agents, and loans. Exuberant unsustainable spending was squashed. This summer, the league spent £35m collectively. In 2019, it was £160m.

Now, the Championship is a second division. That cannot be forgotten. You cannot expect them to meet the financial demands of out-of-favour players who are not required by the top tier. Likewise, you cannot expect players to be lining up to drop down a division.

However, what is important is their template and philosophy. The reality is they could not commit to the merry-go-rounds we are accustomed to. And that was the climate across Europe. To put it bluntly, teams simply did not have the money.

According to Deloitte’s figures, the Premier League has greatly pushed ahead of the other major European leagues. It is a divide that is symbolic. England’s top tier is working within its own world in comparison to elsewhere. The Bundesliga is the most impressive example as they are the only league to have a positive net spend in a covid affected market.

The blockbuster transfers of Ronaldo and Messi were part of a busy transfer window. But spending is down across European football after the pandemic. And free transfers and loan moves have squeezed income at smaller, more hard up clubs.

The @FT analysis: https://t.co/EafRVCm3ws pic.twitter.com/DKBAlHc7yz

— Murad Ahmed (@muradahmed) September 1, 2021

Despite this, the reduction to stabilise the template came with consequences that were perhaps foreseen. Those that can still afford to make losses in this environment would be the ones to take advantage of the vulnerable clubs.

The Premier League’s success and struggle

Whilst Europe reduced their transfer expenditure as a result of the pandemic’s impact, the Premier League got out of third gear and capitalised knowing they had secured the domestic TV money for the coming years.

The league managed to roll over their current deal, meaning there was no threat of a similar circumstance happening to them as it did with Ligue 1, Serie A, Bundesliga, or La Liga. For once, there was a bit of broadcasting stability.

Therefore, the gung-ho approach continued for the division. The top tier hit £1.1bn this time around. It was as if their apparent austerity never existed, albeit this is the second consecutive year the league’s spending dropped.

The circumstance was summarised by i’s Chief Football Writer, Daniel Storey. “While European football licks its wounds, the Premier League continues its voracious hunt of new imports”, he wrote on Deadline Day.

For Premier League fans – and perhaps even journalists – they will enjoy seeing these incomings as they are the next big thing to be talking about. Jadon Sancho, Rafael Varane, Cristiano Ronaldo, Romelu Lukaku, Boubakary Soumaré, Saúl Ñíguez and Ibrahima Konaté all stick out by name alone. In the drive for endless content, the arrivals will contribute their fair share.

Nevertheless, what cannot be scratched over is the peculiar lack of outgoings to Europe. Only Tammy Abraham, Rui Patrício, and Fikayo Tomori were significant departures from the Premier League. Toby Alderweireld, Moise Kean, and Felipe Anderson never made an impact and left either on a loan or a small fee.

What it shows are two things: the Premier League can allegedly afford to bring more expensive stock in despite the financial climate, and their unwanted or other occupied stock was close to impossible to move on for their value.

On one side you have big players wanting to leave their respected clubs, but the club’s valuations ensure they cannot. Four Manchester City star players asked to leave the club during the window, but none were sold because nobody could afford to meet their demands.

One of the alleged players, Bernardo Silva, was valued at £60m. Only a Premier League club with money to burn, Paris Saint-Germain or Real Madrid could have purchased Silva. Nonetheless, it is unlikely City would have been willing to sell to a Premier League side. PSG were busy with Messi and their other star recruits. Real Madrid were busy elsewhere too.

Even Raheem Sterling was allegedly on the market. Again, no one had the capabilities of buying him. If these sales were feasible, then maybe City would have felt more inclined to pay Daniel Levy what he wanted for Harry Kane.

Spurs’ record signing Tanguy Ndombele fell under the same remit. The midfielder asked to leave, preferably to a European giant, but his £60m price tag found no suitors. After three windows of attempting to move Serge Aurier on, Spurs only managed to do this because both parties agreed to a mutual termination.

Elsewhere, Chelsea had to settle again for loan moves for Danny Drinkwater (to Reading of all teams) and Tiemoue Bakayoko. Jesse Lingard stayed at Manchester United because no club valued him at – or could afford to meet – the reported £30m price. Arsenal’s Lucas Torriera went on loan again while the majority of their squad ended up on the market at some point. Cenk Tosun and James Rodriquez are still at Everton and Newcastle ended their business with ten classified midfielders.

In summary, no matter how desperate clubs were, this was not the summer to sell unwanted or want-away players. Raising finance by selling players overseas, or to the second-tier, was either incredibly difficult or not worth it.

Consequently, the internal Premier League deals attracted greater focus. For Chelsea, it forced them to sell a collection of their academy star players (albeit not all to English sides) to make up the difference in the Lukaku fee and open the gates for Saúl to join. They hoped the departure of Kurt Zouma to West Ham would have allowed them to secure Jules Koundé, but talks stalled and broke down with Seville.

Certain sections of the market were closed-off for good. If your name was not Paris Saint-Germain in France, the deal was going to be hard to conclude. It got to a point for Lyon where they decided to put numerous first-team players on the market and Burnley were one of the teams to pounce.

While Europe was looking to balance its spending more vigorously, the Premier League was seeking to capitalise regardless of their outgoings roadblock.

As a result, an even bigger financial divide opened this summer. Regardless of the outgoings roadblock to Europe, the Premier League sought to capitalise rather than navigate similarly to their colleagues.

While they were not alone, they were ready to take advantage of situations and the starkest was the return of Cristiano Ronaldo in Manchester.

A power shift

At the beginning of the summer, it was believed Manchester United were willing to purchase one marquee player. That player was Jadon Sancho for £76m. But as we see with this volatile market, situations change fast. Suddenly, Rafael Varane was available for a discounted price and the Manchester club did not want to pass on the opportunity.

With each passing day, United fans became desperate to see a defensive midfielder arrive at Old Trafford. To balance their solid starting defence and attack, it made sense. That issue was put to one side once Ronaldo was reportedly on his way to the blue side of Manchester. As we all witnessed, his former club caught the bait.

Whether Ronaldo had every intention of going to Manchester City or he simply wanted to get United’s attention is a matter of discussion. What is important is what these signings represent. Manchester United bought three high calibre players from three different clubs.

Sancho’s move was planned and expected well in advance as Borussia Dortmund promised the player they would sanction a deal this term. On another note, the club needed it after posting a €44m loss for 2019/20 and a €72m loss for 2020/21.

Similarly, Juventus and Real Madrid needed to sanction the sale of their key assets for financial reasons. The Turin club realised a rebuild was in order and it was difficult to conduct it with Ronaldo. Meanwhile, Real Madrid’s debt stands at around €900m.

However, Madrid’s situation was more complicated as president Florentino Perez is “obsessed” with Kylian Mbappe. For the last two years at least, Perez has built a Mbappe fund to contribute towards his signing. Their desperation resulted in a final €200m bid on deadline day, which was ignored by the Parisians.

Whilst their rivals were financially vulnerable, United understood this was the right time to catapult themselves back towards the top. To do so is priceless to the fans, Ole Gunnar Solskjær, and the Glazers.

On another note, the non Mbappe deal showed a power shift between two European giants. Typically what Perez wants he gets. Despite the final bid being ludicrous in every sense, placing such a deal on the table ensures Perez sets himself on a win-win course.

Out of all the major transfers this summer, the Mbappe non-deal was perhaps the most symbolic of the power shift in Europe. PSG could calmly reject an enormous fee for a player who is out of contract in 12 months. That is because, of course, money is not valuable to PSG, and keeping Mbappe to team up with Neymar and Lionel Messi is. It is significant to the club, their project, and Qatar.

Normally the same can be said of Manchester City, but for whatever reason, they were twiddling with their thumbs for the majority of the summer after the blockbusting Grealish transfer. How costly their lack of movement for Kane, Ronaldo, or another striker will be determined in the next 12 months.

However, it shows the state of the game when a club can spend £100m on one player during a financial crisis and it can be discussed as not enough.

On the other hand, Barcelona worked to cut as many costs as possible. There is little doubt they will be left behind at the top of the game. The journey back will be long and painful, but their case will be one for other clubs to consider before they sanction expensive transfers on an enormous scale.

The power shift between Europe’s elite and the domestic leagues highlight that to no end. With the market now closed, Europe braces itself for an extension of the divide that was already bare to see.