What's The Future of Football Transfer Market?

As much as I hate to admit it, it's true and goes without saying that most clubs today, despite having excellent youth systems, rely heavily on Transfer Windows to augment their troops. The obvious reason for this is, that through transfers, fully developed players can be sought, that, as soon as they're landed, can take to the pitch to fulfill the club's goals (long term or short). Meanwhile also pleasing the fans in case of big-money moves.

However, the post-pandemic era raises a lot of questions in this regard. The economic position, in each and every industry, is down in the gutter. The financial complexities will no longer, for sure, allow clubs to splash the cash. Part of the reason I did not include this in my previous column is that I find this subject too engaging to be just a subheading, and I felt it deserved a separate day.

For those who haven't read my previous column, click here before getting started with this one!

Whats Leads To A Transfer?

Any club, generally, has a list of expectations that they look to fulfill through a transfer. When those expectations are not lived up to by the player, that is where the club considers a little change. While some clubs strive to attain future security through decorated young prospects, some clubs bring proven players for short term needs. So it's a given that a lot of points of view are considered, but they're mostly governed by what the club wants to achieve, with the resources they're willing to put on the line.

A signing can be a priority, sporting wise, but a financial load at the same time. The ideal signing would be, that an incoming player is financially feasible, brings a sporting edge over competitors, is a solution to the club's short term woes, and is a long term asset as well, all while also being liked by the club's fans. Much like the way a common man raises his family. However, there have been signings in the past that the sole purpose of which was to get a boost in 'shirt sales' or generate more revenue from sponsorship deals. One prime example is the transfer of David Beckham, from Manchester United to Real Madrid in 2003. The signing cost Real Madrid a hefty €37 million but they went on to generate much more from this transfer. 

Fans Donning David Beckham's Shirt

Ultimately, what leads to a transfer can vary across dozens of reasons. Like the feeling of unfulfillment at a particular club, difficulty in adjusting to a foreign country, just to name a few. However, the reasons as to why a player is brought in, more or less, remain the same.

How Do Transfers Work?

If Club A is interested in a player, they have to contact the team that owns the player, Club B. If B is willing to sell, they will name their price which may then be negotiated. If a price is agreed upon, A will be given the permission to talk to the player to negotiate a salary. Assuming the player agrees, the agreed sum is then paid to B.

A player can also be sold for free, if not more than six months are left in their contract. However, a different procedure is followed otherwise. Suppose a player has signed a five-year contract at a new club. Now technically, that binds him for five years at that club. But let's say, that into the first two years itself, he starts getting more recognition and wants a move to a bigger club, and hence, puts in a transfer request. What happens then? What about the remaining three years in his contract? That's where the Release Clause plays a key role. 

The Release Clause is nothing but a clause that's put into a contract, the sole purpose of which is to protect the interests of the parent club in case the player shows an unwillingness to fulfill his term. For example, Barcelona's release clause of Lionel Messi is a ridiculous amount of money. But it doesn't mean they need the money, rather it's the services of the Argentine that they need. What it does is, keep the competitors at bay, while also ensuring a reasonable compensation if they were to lose him. Whereas, if the club itself wishes to release the player before the end of the contract, they have to compensate the player, in whichever way it's specified in the contract.

Neymar's PSG Presentation

The Neymar-to-PSG-Fiasco is the world's most expensive transfer. The deal saw Paris Saint-Germain pay the Brazilian's €222 million release clause, since he was still in contract with Barcelona at the time. 

Will The Transfer Market Melt Down?

Coronavirus, ever since it's outbreak, has meant destruction on a mass scale. It has impacted football games all over Europe, with postponements, domestic and cup games taking place behind closed doors, and has lead to major sports tournaments like the Euros and Copa America to be rescheduled. It has largely disturbed travel. All major activities have come to a standstill. 

Football clubs operate on a very huge level behind the scenes for their transfer business. Clubs, big or small, have scouts all over the world to inspect young talents, and potential signings for their respective clubs. But as European leagues have denied any sort of access inside stadiums, it renders any travel, by club scouts, pointless. And consequently, clubs are struggling hard for carrying out basic transfer activities. All this raises serious questions about how youngsters from foreign countries will make it to top-flight again, or at least until scouting can be done again. 

Matches Behind Closed Doors

Another alarming issue, well, of course, is Finance in football. The present market condition has drastically shrunken clubs' most revenue streams, and there are serious concerns on how most clubs will conduct business in the coming Summer Transfer Window 2020.

One obvious solution is to make transfer payments on an installment basis, as clubs at all levels are likely to suffer from a financial crunch. This way, clubs can get players more easily by paying in small amounts, which can help them in making extra money. Be it corporates and organizations, or the common man, it is always preferable to make deferred payments so there's enough cash on hand for interest income. However, in the current market scenario, the interest income won't be great, but even then it'd be advisable to keep cash.

Clubs will be more desperate for cash the longer football is suspended or forced to take place behind closed doors. Meaning swap deals could come up as a straightforward way to overcome the cash problems. In fact, it could potentially dominate the transfer window amid the worldwide pandemic.
And, as per reports, a lot of clubs across Europe will be looking to offload more players than bringing them in. Barcelona, Juventus, Atletico Madrid, Arsenal, and Manchester United are already making the headlines in this regard.

As per loans, we could see a lot of deals come to a premature end, simply because most deals only run legally until the end of the normal season, i.e., until the end of June. One high profile example is that of Shanghai Shenhua's Odion Ighalo, who is currently on loan at Manchester United. His deal expires on June 30, and the expectation is that he will return to his parent club in China, unless of course, the English club tries to extend his loan deal.

The whole course of the sport is going to be affected by these changes. Prices of players, the financial cost of a contract renewal, salaries, and wages of staff and players, all of it is going to plummet. While a lot of clubs will be able to purchase players at a cheaper price, the selling clubs will be forced to undersell their best players for carrying out normal operations. As it is insolvencies are not rare in football, but with all this, I doubt clubs will be with a penny to their name.