top of page

January transfer window passed you by? Here’s why:

Sam @ PannaBloggers

Updated: Mar 5, 2021

Fernando Torres, Luis Suarez, Virgil van Dijk, Bruno Fernandes. These are the kind of one-off high profile transfer arrivals that we have become accustomed to in the January transfer window. But this year’s top names? Amid Diallo, who had already agreed a contract with United in October, and £15.5m Morgan Sanson. The decline of the January transfer window has been an abrupt one, and you won’t be surprised as to why:

Sky Sports presenter Jim White had a quiet transfer deadline day this January. Image taken from Sky Sports Main Event’s deadline day coverage.

Essentially, the pandemic has resulted in several knock-on effects to Premier League spending in 2020, and thus on the January transfer market. Team’s spent a combined £84.2m in January this year, down from £230m last season, as a result of the pandemic’s impact on gate receipts, transfer inflation, and Brexit complications.

A graphic showing the Premier League’s transfer spending (red) and transfer income (green) from January 2020 to January 2021. Chart lifted from Sky Sports, ‘Deadline Day: Liverpool sign Ben Davies and Ozan Kabak but January transfer window shuts quietly’.

Gate Receipts:

Whilst gate receipts are a huge reason for most lower league clubs staying afloat, few realise the importance of fan income to the big boys in the Premier League. A staggering 22% of player wages in England’s top flight are financed off the back of matchday revenue every year. This is as high as 40% for Arsenal and Tottenham, whilst Manchested United were estimated to be the biggest hit with around £3.96million lost per match due to an empty Old Trafford. The absence of this income since March 2020 has meant that funds usually allocated toward the transfer budget have to be moved to sustain the wage bill, meaning the biggest spenders have been forced to buy smart.

Manchester United’s Old Trafford is not used to being this quiet as a result of the lack of fans. Image taken from Mula Miszczu via pixabay.com.

The lack of gate receipts and matches played toward the end of the 2020 season meant that £330million in TV money, usually allocated around the league, had to be rebated to broadcasters despite the fact the season was ended. Clubs wont see this money until next season, as the funds have been backdated. Thus, it is estimated that as much as £700m has been lost by clubs last year as a result of the pandemic, with plenty more lost in atmosphere as fans are forced to watch from the sofa. In short, the pandemic-enforced empty stadiums have led to a decrease in clubs’ income, and therefore a larger percentage of wealth has had to be spent on keeping players rather than buying others. Such a lack of income and money circulation has resulted in lower inflation rates.

Lower Rate of Inflation:

As a result of the lack of income from gate receipts and TV money, Europe’s usual rate of transfer inflation for similar players has halted: 6% from Summer 2019 to 2020 compared to an average of 15% each year from 2015-19. With the Premier League the biggest importer of foreign talent in Europe’s top 5 leagues, it is reasonable to suggest this trend is pushed by England. The table below shows you a visualisation of just how much of a drop off there has been from 2020-21.

Some graph numbers taken from CIES Report, October 2020.

The CIES Football Observatory Monthly Report is very useful in plotting this decline, dating back to summer 2020. During both transfer windows last year, Europe’s top 5 leagues spent €4622m, the lowest total since 2016. More interesting, however, is the ratio of winter to summer spending. For reference, in most years the January transfer window accounts for around 12-15% of total transfer spending, dating back to 2010. In fact, a steady incline had been occuring, with winter windows seeing a gradual increase every year to €835m in 2019 (if you ignore the anomoulous Neymar transfer of 2018).

However, the €1308m spent in January across Europe accounted for a whopping 28% of all 2020 transfer spending, signalling a huge decline in Summer transfers and therefore an inflated January 2020 percentage. For reference, the previous high was 22% in 2011, and can be seen as an anomaly above. The figure of €1308m would suggest that the Summer transfer market was set for its usual pattern of progressive figures, and perhaps something in the region of 6500m would have been spent on players. Yet, as the graphic below shows, something closer to 3300m was forked out.

A graph depicting the transfer spending of Europe’s top 5 Leagues during the Summer window, sourced from CIES Report, October 2020.

The impact of the pandemic is clear to see in the pattern of summer spending by clubs since 2020. The drop off in last year’s purchasing market has been replicated this January, though even tougher lockdown restrictions in England have ensured a bigger downturn than previously expected. Although some clubs needed obvious incomings, noticeably with an experienced central defender at Liverpool and a fit striker at Manchester City, it seems that teams are more likely to wait until the summer for permanent fixes. By this time we hope to see a light at the end of the Covid tunnel, and the resumption of fan attendences, and therefore spending power. But the pandemic alone has not been the only limitations to transfers.

Yep, Brexit again

Whilst Brexit has somewhat gone under the radar in football terms, it has affected the transfer market for the first time this January. The ending of the free movement of labour due to Britain’s departure from the EU means it is more difficult to purchase football talent from abroad. There is now the requirement of a points-based system, the governing body endorsement (GBE), for players to meet before they are allowed to apply their trade in the UK. This is a similar regulation that has always existed for players arriving from non-EU countries.

As well as this points-based system, which takes into account the level of a player’s talent by reviewing their matches played, substitute appearances and team contributions, clubs are no longer permitted to buy any players under the age of 18 from Europe. Whilst a loophole means that clubs with EU affiliates can have players signed on their behalf (like Manchester City with Spain’s Girona and French Ligue 2 side Troyes AC), this leaves most clubs unable to purchase young foreign talent.

Former Birmingham City’s Jude Bellingham’s transfer to Borussia Dortmund would not have taken place under Brexit’s impact on transfer rules. Photo by Borussia Dortmund, taken from Bundesliga News.

News outlet ‘iNews’ suggests that clubs may therefore have to look elsewhere for this talent pool, and specifically to South America. But this is where the pandemic steps in again, leaving the issues of scouting, transport and player relocation to heavily impact the likelihood of incomings from far-flung areas like South America. It is difficult enough to send a scout to Amsterdam during the pandemic, let alone Sao Paulo.

Conclusion

Many people have been affected by the impact of the Covid-19 pandemic, including the football community. The lack of fans in stadiums has resuled in a decreased income for clubs, alongside the absence of some of 2020’s TV money. This lack of funds has meant a heavy decline in the purchasing power of many across Europe’s top 5 leagues, resulting in a quiet Summer 2020 and Winter 2021 transfer period. Brexit has also impacted transfer negotiations, as a new points system has limited incomings and outgoings, whils the pandemic has made the formalities of scouting and player relocation a real concern. Thus, clubs have favoured domestic loan moves instead of their usual cherrypicking of foreign talent.

After 10 months and two transfer windows of difficulty, one thing is for certain: add football to the list of things that will feel more normal when this is all over.

Articles Consulted:

Dr Raffaele Poli, Dr Loic Ravenel and Dr Roger Besson, ‘The Real Impact of Covid on the football players’ transfer market’, CIES Football Observatory Monthly Report, No. 58, October 2020.

Dr Raffaele Poli, Dr Loic Ravanel and Dr Roger Besson, ‘Financial Analysis of the Transfer Market in the Big-5 European Leagues (2010-2019), CIES Football Observatory Monthly Report, No. 47, September 2019.

Frank Dalleres, ‘Premier League set for its lowest January transfer window spend since 2012, barring unexpected deadline day splurge’, City A.M., 1 February 2021.

‘Premier League 2020/21 Commercial Guide: Every Club, Every Sponsor, All the Major TV Deals’, Sports Pro Media, 11 September 2020.

Joshua Law, ‘Brexit could see influx of players from South America to fill void left by EU players unable to gain permits’, INews, 29 December 2020.

Jamie Gardner, ‘How will Brexit affect the January transfer window?’, The Independent, 5 January 2021.

Tom White, ‘How much will Premier League clubs spend in the January transfer window?’, The Independent, 5 January 2021.

‘Deadline Day: Liverpool sign Ben Davies and Ozan Kabak but January transfer window shuts quiety’, Sky Sports, 2 February 2021.

1 view0 comments

Recent Posts

See All

Comments


bottom of page