Sunday, July 24, 2022

The Weekly Take, Issue 220: Deflation Has Arrived

In a transfer which not many would have seen coming, Lyon signed Argentine left-back Nicolás Tagliafico from Ajax on a three-year contract. Tagliafico left the Dutch capital after spending four-and-a-half seasons at the Johan Cruyff Arena. During this stint which was highlighted by an underdog run to the 2018-19 Champions League semifinals, Tagliafico established himself as one of the more underrated full-backs in world football and became the starter at that position for his country.

With these facts in mind, it is astonishing to think that Lyon signed Tagliafico for just €4.2 million. One would ordinarily have expected a player of his level to have gone for somewhere in the range of €20 to €30 million.

Those who have been paying attention to the current transfer window will note that Tagliafico's transfer for such a low fee appears to be part of a trend. Transfer fees appear to be dropping all at once. Already in this off-season's transfer window, we have seen Erling Haaland sign for Manchester City from Borussia Dortmund for €60 million, Sadio Mané join Bayern Munich for €32 million following his departure from Liverpool, and Robert Lewandowski acquired by Barcelona from Bayern for €45 million. Clearly, the average transfer fee is on the decline. But why is this so and why has it begun to happen so suddenly?

While no one has outright confirmed or denied anything, I do have two theories regarding this. The first is the impact of the Covid-19 pandemic and its associated lockdowns. For many months, clubs missed out on much revenue through lost ticket sales when fan attendance was either banned or limited. This lost revenue made a dent in every club's finances, making many of them less willing to shell out the big money to sign players.

It is somewhat ironic that while Covid-19 served to exacerbate inflation for the everyday person, the inverse appears to be true as far as transfer fees are concerned. However, the pandemic alone does not explain the sudden movement of multiple superstars for essentially discount prices.

This is where the second factor comes in: player empowerment. The term "player empowerment" originated from the NBA but is equally applicable to describe this growing phenomenon in European football. There is more player empowerment with regard to players controlling their own transfer destiny than there has ever been in football history.

Consider the case of Haaland, for example. If Haaland had played 20 or even 10 years ago, it would not have been particularly likely for Dortmund to have dealt him to City at that point of his career, let alone for a transfer fee worth about half of his expected transfer value. However, dissatisfied with the situation at Signal Iduna Park, Haaland played an active role in engineering his departure from Dortmund. This also served to drive his own transfer market value down; Dortmund would have been less inclined to play hardball with regard to a player who clearly wanted to leave.

When combining the effects of the pandemic and player empowerment, it should not be all that surprising that transfer fee values have slumped this off-season. However, those who would hail such an occurrence as a harbinger of greater parity in European football would be sorely mistaken. The clubs which have made an absolute killing in this transfer window have been many of the usual suspects: City, Bayern, Barça. Bayern might not even be done yet - they are reportedly considering making a move for Tottenham striker Harry Kane.

Ever since the beginning of the Covid-19 pandemic, the phrases "unprecedented times" and "new normal" have been thrown around on countless occasions. However, in the context of transfer fees, the two phrases are diametrically opposed - it remains to be seen if transfer fees will end up stabilizing at this level or if this dip is an outlier. If these lower transfer fees do end up being the "new normal", it will fundamentally alter how every club approaches future transfer windows in their pursuit of desired players.

In any case, the trend exists now, and that only means one thing: expect more of the unexpected over the rest of this transfer window, and thus the season itself when play begins next month.

No comments:

Post a Comment