Big money transfers, cause for concern in club soccer

The Summer 2017 transfer season has ushered in a new age of massive spending on the part of the world’s richest soccer clubs. In the short period from June to the end of August, British clubs alone spent a total of 1.5 billion euros on new players.

This does not even take into account the gigantic sums put forth by European giants FC Barcelona, Real Madrid, Paris Saint-Germain and Bayern Munich. In total, the five largest leagues in Europe have collectively spent over 5 billion euros this summer. This pattern of increased spending is a recent phenomenon and has left the soccer community both excited and alarmed at the massive financial risk-taking on display.

The new race to the top between rival clubs all over the world began last season, when big money Chinese clubs came out of obscurity and began offering European players massive transfer fees to move to China to play soccer. These hefty monetary incentives were over-priced, and forced European teams to increase their own spending in order to compete with their Chinese challengers. Ever since this surge in spending from China, players have been selling for astronomical amounts of money.

Audiences all over the world were stunned when 25-year-old Brazilian superstar Neymar was sold to Paris Saint-Germain (PSG) for a record-shattering 222 million euros. Because Neymar’s contract with Barcelona had not yet expired, PSG were forced to buy it out, a move that will cost the club nearly 500 million euros over the next several years. To put this insane price in perspective, the most expensive player prior to this deal was sold at a fee of only 105 million Euros.

Aiming to become the first great club of the digital era, PSG knows it cannot buy the prestige or tradition of excellence of Barcelona, Real Madrid or Manchester United, but it certainly can buy the right players. However, this mission will come at an unprecedented cost to the club, as putting great strain and pressure on both the managers and players to succeed will raise the prices of players all over Europe.

When PSG bought Neymar from Barcelona, a chain reaction was set off in which Barcelona spent $173 million on French prodigy Ousmane Dembélé to fill the hole in their attack, and Real Madrid offered French youngster Kylian Mbappé over $200 million to compete with their Spanish rivals.

As of September 2017, 12 of the 50 most expensive deals in soccer history were made in this summer transfer season. In effect, the buying and selling of players has become a sport of its own, and clubs are making more money than ever before on investments. With soccer currently at peak popularity, spending increases seem more justified.

However, with players selling for sums far above their real value, a complete crash could occur in the future if club revenues begin to fall. The head of FC Bayern, the fourth richest club in the world, voiced these concerns in the past.

Another important issue raised by the surge in club spending is that of wealth inequality between larger and smaller teams. Because large teams regularly take in more revenue than their less wealthy counterparts, they can afford to purchase star players off of the smaller teams. This widens the imbalance in talent between teams of unequal wealth. In turn, these star players bring in more money for their clubs, perpetuating the cycle of inequality between the clubs. Because of this, several of Europe’s top leagues are dominated by a single massive club, making the game less competitive and far less compelling for fans.

Controlling the massive spending sprees in club soccer will undoubtedly be a top priority for the game’s administrators in the years to come.

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